I heard a forecast that oil prices will likely drop to $25/barrel sometime early next year. With that in mind, take a look at the chart above from gasbuddy.com. The red line is the price of oil, the blue line is the price of gasoline. The current national average for a gallon of gas is $1.77. If your local price is 30 cents or so below the national average like mine is, it's possible you could see gas sell for under a dollar per gallon sometime early next year.
Some other interesting thing about this chart:
Notice how much faster the oil prices rose compared to the gas prices the last two years. This is why prices are plummeting right now. Oil prices can't sustain a "gap" as large as the one that began in 2007 for very long. What were seeing right now is a price correction - capitalism at work. It's too bad my local government didn't realize this when they signed a contract to lock-in gas prices for local police, fire, and maintenance vehicles at $3.45/gallon earlier this year! Yikes! When a products' price is at a historic high, it's probably not a good idea to lock yourself into that price.
Also, can you believe the national average for gasoline was $4/gallon five months ago?! Next time you buy gas, double the price you pay in your head. You would have thought that price was a great deal in July.
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