Gas prices could drop 50 cents by November. Unrelated: Production is up.
A million times we’ve said it. One million. On average, one out of every three posts on Grist (maybe an exaggeration) includes this line: There is no link between increased domestic oil production and gas prices. None. Doesn’t work that way. The Department of Energy provides this detailed explanation of why that is [PDF].
All of that said: Domestic oil production is up and gas prices are going down. I’m sure this won’t be misinterpreted.
First, gas prices. Here’s what they’ve done nationally over the past four months.
USA Today predicts that the decline will continue:
As inventories rise and demand wanes, gasoline prices could plunge up to 50 cents a gallon from October’s $3.86 peak average over the next few weeks, providing a lift for the economy and possibly becoming a factor in next month’s presidential election.
Gasoline, now averaging $3.67 a gallon, is expected to fall to $3.35 or lower by late November. In some regions, prices have already sunk below $3. …
The drop could provide a boost to consumer spending and influence next month’s presidential race, where gas prices have been a hot-button issue for much of the campaign. Several battleground states, including Ohio, Pennsylvania and Wisconsin, are enjoying big price drops.
(As we noted last week, the drop in gas prices hasn’t yet been reflected in the polls.)
Meanwhile, domestic fossil fuel production, including petroleum, will likely reach an all-time high this year. (Warning: That link goes to the American Enterprise Institute, which isn’t big on facts.)
This isn’t exactly news. We noted last month that oil production was at a 15-year high. You know, last month, when gas prices were at their recent high.
We’ve said it before and we’ll say it again: The way to get cheap gas isn’t through more drilling. It’s by living in a swing state and taking advantage of discount gas prices sponsored by a Koch-backed PAC that hopes to defeat President Obama.
Just basic economics.