U.S.Gas Price Hit The Lowest in Seven Years

U.S. gas price hit the bottom in seven years. Michigan, Missouri and Ohio are reported as the lowest statewide.

According to Powersource, global oversupply of crude oil has been the central factor of pulling down prices on petroleum products. As Jeffrey Pelton, a senior petroleum analyst for GasBuddy explained, "We are swimming in crude," Mr. Pelton said. "The good news is all these pressure points add up to cheaper gas."

Starting June last year, crude oil prices has plunged 60% from over $100 a barrel to $40 for US crude, and $44 for Brent in Europe. In the U.S., the declining oil price causes the huge stock of crude oil to 488.2 million barrels in November. Previously, GasBuddy have predicted that gas prices in U.S. will reach below $2 per gallon near the end of year, and it really happens.

Gas prices are the best predictors of consumer optimism of the broader economy. Based on the survey conducted by National Association of Convenience Stores, 50% of consumers said they were optimistic about direction of the broader economy. The number goes up from 46% last month.

Time Magazine reported that according to GasBuddy, average gas price all across United States are at $2.04, and nearly two-thirds of 130,000 gas stations all over U.S. are selling gasoline for under $2 per gallon.

There are even some outstanding cases, where price can reach below $1.50 like some gas stations in Texas offering $1.40 to $1.45. The cheapest gas in the U.S is recorded at $1.39 per gallon in Sam's Club gas station in Lafayette, Indiana. The gas price is expected to continue falling to reach $1 per galon, and states in Midwest and Gulf are likely to be the ones seeing $1 gas price, according to Time Magazine.

CNN Money reported that there are only six states: Maine, Vermont, Montana, Alaska, California and Hawaii where it's not possible to find a station selling gas below $2 a gallon. American Automotive Association (AAA) reported that the lowest statewide average is $1.81 in Michigan, followed by Missouri and Ohio.

In the commodity market, oil prices have plunges sharply for November. CNN also noted the declining price has been caused by several factors. The determining factors are oil glut from U.S. production, sluggish demand in Asia and Europe and strong dollar. The end of economic sanctions for Iran will also make price to go lower, because it will start shipping its oil.

The lowest price of gas in the seven years have delighted the customers and bring optimism of the economy. Especially, with crude oil price keep declining, the gas price is expected to go as low as $1 per gallon.