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Old 06-28-2017, 10:06 PM
 
Location: Knoxville, TN
894 posts, read 475,400 times
Reputation: 1241

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I would imagine fuel will stay cheap like this for at least 3-5 years due to general trends, supply and demand, etc. Maybe even a decade.

But wondering what others think, or if any professionals in the industry can chime in.

It's funny. The gas guzzler, body-on-frame SUVs (Tahoe, Expedition, Yukon, etc.) are everywhere again. I remember how back when gas was $4 they were piled up on dealer lots.

When I started driving (1998) gas was .89, .99., and .$1.09 for premium. Then it crept up at the turn of the century, became ridiculous another 7 or so years later, then leveled back down a bit but in general stayed high. Now, in 2017, it's downright cheap.

Hoping gas will remain cheap for the next decade or longer.
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Old 06-28-2017, 10:10 PM
 
Location: State of Transition
72,817 posts, read 64,258,962 times
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You do realize, don't you, that what's making it cheap is all the fracking going on?
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Old 06-28-2017, 10:57 PM
 
Location: Knoxville, TN
894 posts, read 475,400 times
Reputation: 1241
Can we please not turn this into an Al Gore treehugger speech?
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Old 06-28-2017, 11:06 PM
 
4,554 posts, read 2,027,387 times
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It's not cheap where I live.
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Old 06-28-2017, 11:26 PM
 
Location: Knoxville, TN
894 posts, read 475,400 times
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Quote:
Originally Posted by tangelag View Post
It's not cheap where I live.

The national average is in the low $2 range. That's cheap.

Gas hasn't been this cheap on 4th of July weekend in 12 years.
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Old 06-29-2017, 05:32 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
28,436 posts, read 50,666,198 times
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Anything below $3 is cheap, and I last paid about $2.50, so yes, it's cheap. Instead of the usual 4th of July holiday/summer spike, it has gone down for the first time in ages. This is great for drivers, bad for the car manufacturers, because they have many economy cars, hybrids and electrics sitting on their lots. Despite the brisk sales of pickups and SUVs, all of that inventory costs them. I can't predict how long it will last, but we will take advantage of the opportunity to take a long road trip vacation. For 2-3 people, even with motels along the way it's cheaper than flying, and more fun on a scenic trip.
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Old 06-29-2017, 08:11 AM
 
Location: North Idaho
21,014 posts, read 25,807,125 times
Reputation: 39444
I suspect that it will remain cheap as long as America can extract oil form the Dakotas. OPEC dropped prices below the profitability level to run the American oil fields out of business.

But, hey, they can open those puppies right back up if gas prices go high enough to make them profitable.
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Old 06-29-2017, 09:14 AM
 
8,297 posts, read 3,461,858 times
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I think gas will be cheap for years. I've been surprised just how little it seems our low priced energy has not pushed up our economy. Gas prices are not nearly so important as back in the '70's.
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Old 06-29-2017, 09:29 AM
 
Location: WA
5,293 posts, read 20,717,188 times
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Keep in mind that many governments see this as an opportune time to raise fuel taxes. It won't stay cheap forever.
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Old 06-29-2017, 09:46 AM
 
3,977 posts, read 1,603,769 times
Reputation: 12430
Quote:
Originally Posted by AJT123 View Post
I would imagine fuel will stay cheap like this for at least 3-5 years due to general trends, supply and demand, etc. Maybe even a decade.

But wondering what others think, or if any professionals in the industry can chime in.

It's funny. The gas guzzler, body-on-frame SUVs (Tahoe, Expedition, Yukon, etc.) are everywhere again. I remember how back when gas was $4 they were piled up on dealer lots.

When I started driving (1998) gas was .89, .99., and .$1.09 for premium. Then it crept up at the turn of the century, became ridiculous another 7 or so years later, then leveled back down a bit but in general stayed high. Now, in 2017, it's downright cheap.

Hoping gas will remain cheap for the next decade or longer.
Gas prices used to be determined at the pleasure of OPEC, the cartel of oil-producing countries. The problem was that oil came from the world's most volatile region of the world. So every time a war broke out or some despot was mad at the West, they'd jack up the prices.

The past ten years have been nothing short of revolutionary with fracking, allowing the United States to return to its status as a major producer. Considering that total petroleum production in North America has increased by more than 50% since its trough in 2008, the Law of Supply and Demand applies here. There's a lot of supply, so the price has gone down.

If you look at it, that's likely a good thing, considering the turmoil of the region. If you look at the continued instability in Iraq, the problems in countries such as Qatar, the mischief of countries such as Venezuela, Russia, and Iran, then we would have been facing severe economic shocks due to the heightened price of oil resulting from those problems. I heard an interview recently that said that if it weren't for the increase in domestic petroleum production, we'd be seeing gas prices at somewhere close to $6.50-$7.00 a gallon.

At the same time, average fuel efficiency in cars continues to climb, from somewhere around 23 mpg in 2005 to about 25 today. That's about an 8% increase. Couple that with increased sources not subject to uncertainty, interruption, and the caprices of tinhorn dictators and that's why the prices should remain at this level for the foreseeable future.
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