Americans Are Paying the Least for Gas in 4 Years … But Will OPEC Stand for It?
Mike Larson | Monday, November 24, 2014 at 4:30 pm
|Crude Oil |
| -$0.78 to $75.73 |
It’s official: We’re paying the lowest prices for gasoline in four years!
The long-standing Lundberg survey found that regular gas now sells for an average $2.84 a gallon, down a dime from the previous week. It hasn’t been this cheap since November 2010.
Albuquerque, NM registered the lowest in the continental U.S. at $2.47, while San Francisco was the highest at $3.14.
That’s good news considering how many of us hit the nation’s highways during the Thanksgiving holiday week. AAA predicts that just over 46 million Americans will drive at least 50 miles from home for the holiday. That would be a 4.2 percent rise from a year ago, and the highest since 2007.
Over 46 million Americans are expected to hit the road this week.
You can thank the domestic energy renaissance for some of the relief, and slowing economic growth in other parts of the world for the rest. The first factor has driven U.S. energy production much higher, while the second force has driven global demand down.
But will the good times keep on rolling? That likely depends on the next move by the OPEC oil cartel.
Officials from the 12-nation group are meeting in Vienna on Thanksgiving Day to decide whether they should cut production to shore up crude oil prices. Analysts say a cut of at least 1 million barrels per day (BPD) is likely necessary if OPEC wants to stem recent declines. Its current quota is 30 million BPD.
The good news for us — and bad news for OPEC — is that we’re getting much more energy independent. We relied on OPEC nations like Saudi Arabia, Venezuela, Kuwait and Iraq for only 40 percent of our oil imports in August, the least since 1985. At the same time, our domestic production has surged to around 9 million barrels per day — the highest in three decades.
My strategy here has been to focus less on the absolute level of oil prices, and more on who is winning and losing thanks to the domestic energy boom. That means buying shares of companies that are making a killing from rising energy production, transportation, storage, and processing HERE — and shunning those reliant on the “old” energy market dominated by the likes of OPEC.