“The average price of self-serve, unleaded gasoline on Friday in the United States was $1.97,” said Trilby Lundberg, publisher of the Lundberg Survey. “The last time the price was below $2 was on March 4, 2005,” she said.

This is attributed mostly to the drop in crude oil prices.  Last summer, when gas prices were over $4 for most areas of the country, crude oil had risen to over $100 per barrel.  Friday oil futures dropped to just under $50, marking the lowest point in the dramatic drop in the past 4 months.  Of course, the decreased demand for gas, in part due to joblessness and the poor economy, also contribute to the falling prices.

This is all good news, except for the fact that the price drop is probably coming to an end, as the oil market is settling down.  Don’t get too excited about seeing gas drop below $1 gallon next month, it probably won’t happen.

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Gas prices are dropping everywhere across the country, and it’s all due to the dropping price on oil due to recession fears.  The AP reports oil is down to $60/barrel, and they are attributing this to the decrease in demand for energy.  This seems to be a predictable side effect of a slowing economy.

Unemployment is up and retail sales are down, and these factors definitely impact the price of oil.  As oil prices come down, expect gas prices to continue to drop - some expect them under $2/gallon by the end of 2008.

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