Do lower oil prices mean more driving?

Thanks to a world supply glut that has sent oil prices tumbling, average U.S. Gasoline prices could drop to $2 a gallon by this weekend. Although, probable that U.S. Oil prices are approaching their bottom, it may still take two to three weeks before we feel the full effect of declining prices. there’s a correlation between oil and gas prices, but what buyers pay at the pump depends on refinery and distribution costs, federal taxes, corporate profits and their place. The cheapest gasoline is usually in states with bigger supplies of gasoline and southern state taxes like South Carolina, Alabama and Arkansas.

Regionally, the price of gasoline to the consumer includes the quality of gasoline they are buying and whether the total federal and state taxes go into that retail price. In addition, the direction of oil price swings affects gasoline prices. One of the major reasons gas prices rise or fall is the fluctuation in the price of crude. U.S. Refineries purchase millions of barrels of oil every day, so a small change in price can make a difference in what they can charge buyers for gasoline.

But in the summer prices may increase again as more people are driving, so enjoy it while it lasts.