Drivers across the country are experiencing record low prices for gasoline. The decline, which has lasted over 100 days according to AAA, puts the national average at $2.20 per gallon.
Many different factors played a role in causing this consumer-friendly pricing including an increase in suppliers of oil, a decrease in demand and a stabilization of countries in the Middle East which temporarily reduced their production.
America and Canada have provided competition for countries such as Russia, Saudi Arabia and Iran – members of OPEC, a group of the world’s top oil-producing countries – by drilling for oil in places such as North Dakota, Texas and Alberta. As the North American countries have increased their output of oil, their dependency on oil from the Middle East and countries in OPEC’s group has gone down.
OPEC considered reducing their production of oil in order to increase their prices since there would be less oil to go around, but after lobbying by Saudi Arabia, the countries decided not to go that route.
There is also a decrease in demand for oil as fuel-efficient cars become more common, public transportation becomes more popular and renewable energies such as solar power are being used more often worldwide.
Libya and Iraq’s respective conditions have also helped gas prices go down. After an ongoing civil war that has lasted since 2011, Libya recently re-opened two oil ports which exported oil to other countries and were previously shutdown. Despite Iraq’s battle to keep control of it’s country away from ISIS, they too have increased production in certain parts of the region.
It is not known how long this honeymoon will last but enjoy it while you can.
Quick reminder: Gasoline is made from crude oil. Check out the process behind this magic in a YouTube clip.