The prices of a barrel of oil and a gallon of gasoline have eased in recent weeks, amounting to a de facto tax cut putting more money in the pockets of consumers. A gallon of West Texas Intermediate crude oil delivered at Cushing, Okla., which peaked this year at $109.39 per barrel on February 4th, slipped to $93.97 this past Tuesday, a 14% drop. The price of a gallon of regular gasoline rose in 13 of the first 14 weeks of 2012, reaching a peak of $3.877 the week of April 9th, but it has fallen in each of the past five weeks to $3.658. Prices have declined on rising inventories combined with softer economic data in the U.S.
The long-term outlook is downright rosy as reported in Wednesday’s headline story in USA Today (click here). The article notes:
“The U.S. Energy Information Agency says U.S. oil imports will drop 20% by 2025. Oil giant BP projects the U.S. will get 94% of its energy domestically by 2030, up from 77% now, as oil imports fall by half… Most enticing, a team of analysts and economists at Citigroup argues that the U.S., or at least North America, can achieve energy independence by 2020, as more domestic production and doubling down on conservation produce a virtuous cycle.”
Citigroup notes that more energy independence could add 3.6 million new jobs and cut the unemployment rate by two percentage points – not to mention the potential for reducing or eliminating U.S. dependence on the volatile Middle East for its energy supplies.