Could Gas Prices Drop To $1 a Gallon?

Prices at the pump have been falling for some time in the Rockford area, with a gallon of regular going for about $1.90 per gallon these days. The statewide average sits at $1.96 right now, according to GasBuddy.com. But how far could those prices fall?

According to a piece at 24/7 Wall Street, some analysts believe the price of gas could reach $1 a gallon in some areas, a level last reached in 1999. The entire states of Alabama, Arkansas, Missouri, Oklahoma and South Carolina have the lowest gas prices now and could be the areas to first reach the $1 mark.

Why are gas prices dropping so low?

The recent decision by Saudi Arabia to continue to keep its oil exports high essentially has dissolved the OPEC cartel...This ongoing supply glut guarantees oversupply of crude. At the same time, slowing national economies in the largest countries, including China, will lower demand....The cost of producing oil from shale deposits, particularly in the United States, is greater in some cases than what it can be sold for. Nonetheless, parts of this industry continue pumping, increasing supply...

Pretty amazing when you consider a former gas company executive predicted earlier this year that gas could reach $5 per gallon by the end of 2015. Things change very quickly.