US FUEL - CHEAPER THAN WATER! Demand for crude oil is now so low in the US that petrol is now cheaper than bottled water. Image: AP / Elaine Thompson
NEW YORK - The sight is so surprising that Americans are sharing selfies of it, along with all those cute Hallowe'en costumes, sweeping vistas and special meals: The fuel station sign says petrol at less than $3 a US gallon for the first time in four years.
That's the equivalent of only R8.60 a litre...
"It's stunning what's happening here," says Tom Kloza, chief oil analyst at the US Oil Price Information Service. "I'm a little bit shocked.
DEMAND DOWN, CRISIS GONE
The national average price of petrol in the US fell by $0.33 a US gallon (3.785 litres) on Friday (Oct 31),according to the American Automobile Association, and it sure wasn't blamed on the Hallowe'en witches. It's expected to fall further in coming days.
When the national average went above $3/gallon in December 2010 consumers weren't sure if they would ever see $2.99 again. Global demand for oil and petrol was rising as people in developing countries bought cars by the tens of millions and turmoil was brewing in the oil-rich Middle East.
Now demand isn't rising as fast as expected, drillers have learned to
tap vast new sources of oil, particularly in the US, and crude continues to flow out of the Middle East
SELF-SERVICE SELFIES
Seasonal swings and other factors will likely send gas back over $3 sooner than drivers would like but the US is on track for the lowest annual average since 2010 - and the 2015 average is expected to be lower still.
Trisha Pena of Hermitage, Tennessee, recently paid $2.57/gallon (R7.37/litre) to fill up her Honda CRV. Like many across America these days, she was so surprised and delighted by the price she took a photo and posted it on social media.
"I can't remember the last time it cost under $30 to put 10 or 11 gallons in my tank," she said in an interview. "A month ago it was in the $3.50 range and that's where it had been for a very long time."
A few things to know about cheap petrol:
• Crude prices came off the boil. Oil fell from $107 a barrel in June to near $81 because there's a lot of supply and weak demand.
• The world's biggest consumer of oil and petrol is now driving more efficient vehicles and driving less. The peak was in 2004.
• The drop from last year's average of $3.51/gallon will save the typical household the equivalent of about R540 a month. • It will take an extra 1.5 years of savings on fuel to make buying a Toyota Prius instead of a Toyota Corolla worthwhile. • Petrol in the US is now cheaper than milk again. And bottled water costs $8.20 (about R90) a gallon.
No comments:
Post a Comment