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Gas prices: How low can they go?
gas prices
Gas prices continue to drop. - photo by Photo Contributed

LOWEST GAS PRICES IN TOWN

*As of Tuesday

$2.19/gallon @ Costco, 2955 N. Tegner Rd.; ARCO, 1801 Lander Ave.; and Safeway (cash only), 3051 Countryside Dr.

$2.21/gallon @ ARCO, 2015 W. Main St.; ARCO, 210 N. Golden State Blvd.; ARCO, 2219 Lander Ave.

$2.25/gallon @ Quik Stop, 1260 Geer Rd.; 76, 6001 N. Golden State Blvd.; ARCO, 4700 N. Golden State Blvd.

 

2015 is staring out on a low note — at least when it comes to gas prices. A gallon of unleaded gasoline could be found for $2.19 at three different locations in Turlock on Tuesday, $0.60 less than the cheapest gas in town just two months ago.

Gas prices across the state also continued to drop,  registering at $2.58 on average for a gallon of unleaded gasoline on Tuesday —that’s $0.39 cheaper than prices since AAA Northern California’s latest monthly gas survey of   Dec. 9, 2014.

Northern California’s average price for a gallon of regular unleaded gasoline is $2.56— that’s $0.38 less than last month’s AAA reported price on Dec. 9. The highest recorded price ever registered in the state of California was in October 2012, at $4.67 a gallon for unleaded regular. 

The least expensive average price in Northern California can be found in Marysville, where regular unleaded gasoline is $2.31 per gallon. Of all metro areas tracked by AAA in Northern California, Yreka continues to register the highest price at $2.87 per gallon of unleaded regular.

 “The dramatic slide in retail gas prices has been driven by a similar plummet in global crude oil prices since the end of the summer of 2014,” said Cynthia Harris, AAA Northern California spokesperson. “This decline in the price of oil has been a product of weak demand combined with abundant supply.”

The national average on Tuesday was $2.12 per gallon as the average price for regular unleaded gasoline continues to test lows not seen since May 2009.

While lower gas prices are certainly a welcome relief for consumers, the broad impact of sustained low oil prices are front of mind for many industry stakeholders. In countries like the United States where the cost of oil extraction is more expensive, producers may be forced to reassess their plans to factor in profit margins that are sharply lower or even reversed as markets continue to register multi-year lows.

 The global price of crude has lost more than half its value since mid-2014. OPEC has reiterated that it will not intervene in the market to force prices higher and plans to sustain its current production levels, with the earliest possibility for supply reductions reportedly pushed to their next meeting scheduled for June. Sustained low prices for crude can also potentially influence the way global markets are assessed.

At the close of formal trading on the NYMEX Monday, WTI closed at $48.36 per barrel.