We're getting a big time break at the gas pump as we head into the holidays, News Radio 1200 WOAI reports.
The average price in San Antonio is down to $2.36 a gallon. That's down seven cents in the past week and down a quarter a gallon just in the last month, according to new figures from AAA Texas.
“With the market anticipating and reacting to the pending Iran sanctions throughout the summer they have remained calm and drivers continue to see gas prices falling across Texas,” said Daniel Armbruster, AAA Texas/AAA New Mexico spokesperson. “With Thanksgiving around the corner, motorists could pay the lowest prices for gas since April just as millions of Texans will drive 50 miles or more to their destination.”
The price drop comes as the price of crude oil reaches 'bear market' territory, down 20% just in five weeks.
In early October, the price of WTI, the U.S. benchmark crude, was approaching the $77 a gallon level, and several OPEC nations were rubbing their hands in expectation of $100 crude. One analyst even speculated that crude oil at $400 a barrel was not out of the question.
Today, the price of WTI is barely above $60, and if it slips through that support level, analysts say a continued fall is a possibility.
Several factors have led to this turnaround in gas prices.Foremost, much of the runup of the past summer has been due to expectation that sanctions against Iranian crude would lead to sharply lower inventories, prompting speculators to bid up futures prices.
As it turned out, the White House grated waivers to eight of the largest oil importing countries, including China and India, and, since oil is a global commodity, that means far more oil is on the world market than expected. Add to that the fact that Russia and Saudi Arabia agreed to increase production, and there are always plenty of countries which are ready to violate the sanctions if they can get a good deal on a barrel of oil.
This is also the weakest time of year for oil consumption, due to a combination of lower travel and the recent switch to cheaper 'winter blend' gasoline by refineries. Oil prices generally bottom out in January, and then begin a long climb to the peak of the year, which usually takes place in July.