Gas prices dip below $2
Gas prices dropped below $2 a gallon Monday morning at some stations in the Medford area, giving local residents a little extra cash in their pockets.
“I never thought I’d see this price again,” said Hugh Crawford, 69, of Central Point. “I’m tickled, but I think it’s going to go back up again.”
Crawford and other motorists stopped at the Valero station on Highway 99 near Beall Lane in Medford, where regular was selling for $1.99 a gallon for cash customers. About a half-dozen stations in Medford had crossed below the $2 threshold as of Monday, according to GasBuddy.com.
The average price for a gallon of regular in the Medford-Ashland area was listed as $2.21 Monday by AAA’s Fuel Gauge Report. Last year at this time, the price of regular was $3.38. The average price for regular in Oregon was $2.34.
Marie Dodds, spokesman for AAA in Oregon and Idaho, said the last time prices were this low was in 2009, a year after they spiked to all-time highs of $4.38 a gallon in Medford.
“The national average was below $2 a gallon in 2009,” she said. On Monday, the national average was $2.06, according to Fuel Gauge Report.
According to AAA, 25 states posted prices below $2 a gallon.
AAA predicts low gas prices will remain for a while, possibly staying below $3 for the remainder of 2015.
Doddss said the low prices are an example of capitalism at work.
“The oil companies are not doing it out of the kindness of their hearts,” she said.
The Saudis have continued to maintain high production in the hopes that it will run some of the U.S. companies out of business, she said.
The price of crude oil continues to trade below $50 a barrel, down from more than $100 last year.
At the same time, several factors are at play in the oil market. The U.S., thanks to the fracking boom, is producing oil and natural gas at levels not seen for at least 30 years. Meanwhile, the gas mileage of American cars has gone up in recent years, resulting in less demand. Also, Americans are driving less, Dodds said.
“It means we have more supply and less demand,” she said.
Cheaper gas hasn’t translated into demand outstripping supply, even though the U.S. saw a record volume of travelers over the holiday period. “The vehicles are much more fuel efficient,” Dodds said. “They use a lot less gas.”
At this point, it’s difficult to say whether the Saudi strategy of maintaining production to keep prices low has had an impact on U.S. oil producers, though there is evidence some companies are looking at cutting back jobs, Dodds said.
She said it typically takes about two weeks from drops in the price of crude oil to be reflected at the pumps.
Whatever the reason for the low prices, motorists couldn’t be happier as they filled up at half the cost of a year ago.
“I’m happy,” said Sarah Cartwright, 20, of Central Point. “I’m just saving for college.”
Joseph Henry, 46, of Central Point, said he was paying $20 a day to fuel his two vehicles that he uses for his construction business. With lower gas prices, he’s paying about $10.
“I hope it keeps going lower,” he said.
With his extra money, Henry said he plans to go fishing over the next two weeks during a bit of down time from his construction business.
Even though he expects a little lull as subcontractors finish up work on an Ashland house, Henry has been busier than normal this winter as well, so the low pump prices are an extra bonus.
“Usually, I never have work this time of year,” he said.
Josh Hogue, a 38-year-old Jackson County resident, said he would be working for a liquefied natural gas company in Arizona right now except the price of oil products has cut the number of workers.
“It was better at $4 a gallon,” he said.
Still, he said he understands how lower gas prices help most local residents.
“I think it’s great for the average guy,” Hogue said.
Terry Parnell, manager of the Valero, said his customers welcome the sight of gas prices dropping and no sign they’re going to go back up.
“Everybody’s saying, ‘Ah, I love it,’ ” he said.
Parnell said he felt some pride about changing the sign at his station to $1.99 a gallon on Monday morning.
“We’re making history,” he said.
Note: Marie Dodds' last name has been corrected from previous version.