JACKSON, Miss– Gas prices dropping may have more people on the roads for less money, but in the grand scheme of things dropping below two bucks a gallon could i indicate some big problems.
Maybe you’ve heard through the grapevine that gas is dropping to below two dollars a gallon by 2015. It doesn’t seem too impossible since gas prices have plummeted from nearly four dollars a gallon in some places to a mere $2.22 a gallon, like in Hattiesburg today.
While these low prices have people feeling more comfortable about that holiday road trip, there are big costs to big savings.
“The last time we saw gas below two dollars a gallon was in December 2008, at one fifty-nine a gallon,” says Don Redman with AAA. The big problem? The gas prices were linked to the recession, which at that time was at its height.
“Crude oil was at forty-two dollars a barrel, says Redman, “analysts agree that to break even, companies need to sell the oil for about eighty dollars a gallon.”
Some analysts will say as low as sixty dollars a gallon, but Redman says the mid-seventies range is ideal.
Redman says the drop in gas is good for the drivers on the short term, but is an indicator of bigger problems.
“With prices that low, that’s a sign of a problem in the global economy,” says Redman.
Redman credits the drop in prices to the abundant oil production in the United States coupled with the lessening of sanctions in the Middle East.