Gas prices to fall below $1 per gallon Oil prices hit four-year lows Friday as employers cut the highest number of jobs in 34 years. The continuing decline in prices is so dramatic and so sudden that it is raising the prospect that gas prices could soon fall below $1 a gallon.
The worst jobs data in 34 years on Friday just added more fuel to the deepening global recession as U.S. employers slashed a far worse-than-expected 533,000 jobs in November and the unemployment rate rose to a 15-year high of 6.7 percent.
A gallon of gasoline can be had for 50 cents less than it cost just last month, and people are starting to talk about $1 gas.
Granted, gas prices are a long way off from that magic number last seen in March 1999 when prices were at 97 cents a gallon, according to motor club AAA. Prices at the pump fell 1.6 cents overnight to $1.773 nationally, according to AAA, the Oil Price Information Service and Wright Express.
But consider what has happened since July 11 when a barrel of oil hit a record $147.27 and a gallon of gas was $4.117 on July 17. In less than five months, oil has fallen 72 percent.
Just this week, in which the National Bureau of Economic Research determined that the U.S. is in recession, oil has fallen 25 percent.
On Friday, light, sweet crude for January delivery settled at $40.81 a barrel on the New York Mercantile Exchange, down by nearly $3 per barrel. Prices fell as low at $40.50, levels last seen in December 2004.
Gasoline futures for January delivery tumbled to 90 cents.
For gas prices to get close to a $1, oil prices probably would need to fall another $10 a barrel _ something that would have impossible to fathom during first part of this year as oil prices soared near $150 per barrel.
"Just seeing that '1' up there is just hard to imagine," said Kevin Keating, 65, an attorney as he filled up his Volvo S60 at a station in Phoenix that advertised prices at $1.67. "Wasn't that long ago that we worried about the '4' being up there."