Gas should continue to fall says AAA

Published 10:08 pm Thursday, October 9, 2008

Alabamians can expect the price of gasoline – which skyrocketed over $4 per gallon in the wake of Hurricanes Gustav and Ike – to continue its downward spiral, said Clay Ingram, spokesperson with AAA Alabama.

Average price for gasoline per gallon on Thursday afternoon in Butler County was $3.48, according to AAA.

“We can expect some very significant price drops in the future and I wouldn’t be surprised to see gas selling for under $3 a gallon come as early as next week,” said Ingram.

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Oil fell to an 11-month low on Thursday, trading at $86.59 a barrel on Wall Street. Since a record-high of $147.27 on July 11, oil has fallen 41 percent thanks in large part to a stalled economy and less consumer demand.

Ingram said a colleague from Missouri told him gasoline was selling for $2.79 a gallon.

“Our state right now is a little bit higher than the national average,” said Ingram. “Usually, that’s the other way around.”

Ingram said the hurricanes, specifically Hurricane Ike which shut down refineries along the Texas coast, is probably still contributing, if only slightly, to the price at the pump.

“I’d say the pipelines are about 90 percent up,” said Ingram. “We pretty much have everything back to normal, but there may still be a few small towns in the state who are having some trouble.”

Economists fear the global economy is, at best, on the brink of a recession, forecasting a sharp decline in growth next year. Even a $700 billion bailout of Wall Street by the U.S. government will do little to halt a recession, say financial experts.

Stocks fell even harder on Thursday as the Dow Jones industrial average lost 675 points in trading, pulling it below 9,000 points for the first time in five years. The Dow Jones average consists of the 30 of the largest and most widely held public companies in the U.S.

“I think it’s pretty clear we’re heading into a recession,” Judson Edwards, an associate professor of economics at Troy University told the Troy Messenger. “I think it’s far from just a financial crisis.”

Should oil fall further – to around $60 per barrel – Ingram estimated gas prices could drop to $2 per gallon.