Gas Prices Remain Steady as Oil Prices Drop Below $93

Gas Prices Remain Steady as Oil Prices Drop Due to Concerns About the Economy

After news was released of an eleventh hour agreement in Washington to raise the debt ceiling, the markets reacted positively in very early Monday morning trading – for a very brief period. The optimistic sentiment was fleeting. By late Monday morning, the ending of the debt debacle had no more positive impact on the markets. The stock market reversed directions and has been declining for the last several days.

The way the markets have traded since the announcement of the debt deal strongly indicate that the majority of the selling last week was more to do with the struggling economy rather than uncertainty over the US politicians agreeing on a debt solution. There is speculation that the US may still lost its AAA credit rating, and that Europe may be on the brink of a financial meltdown.

Besides the debt problems both here and in Europe, there is also evidence that the US economy is not rebounding as many had hoped.  Investors are also concerned that consumer spending is down and there is weak demand for oil and gas.

On Tuesday, the Commerce Department said consumer spending fell in June for the first time in nearly two years. Meanwhile, MasterCard SpendingPulse’s weekly survey of gas stations across the U.S. showed that drivers bought less gas for the 19th consecutive week.

Typically when oil prices decline, gas prices head in the same direction. But not this summer. Gas prices are remaining level even as oil prices are fluctuating.

The current average for regular unleaded gas is $3.70 per gallon.  One week ago, gas prices were averaging a few hundreds of  penny less at $3.698. One month ago gas prices were 14 cents less and were averaging $3.56 per gallon.

Benchmark West Texas Intermediate crude dropped $1.33 to $92.46 in Wednesday morning trading on the New York Mercantile Exchange. In London, Brent crude lost $1.96 at $114.50 per barrel on the ICE Futures exchange.

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For a fleet of 25 vehicles, idling time reduced by only 15 minutes per day can result in fuel savings of 562.5 gallons at a cost of about $2,081 per year at current gas prices. If you reduce idling time by 60 minutes, it would result in a fuel savings of 2,250 gallons at a cost of over $8,326 per year!