MINNEAPOLIS (WCCO) — Remember analyst predictions that we could be paying $5 per gallon of gasoline this summer? Thankfully, that scenario hasn’t come to pass.
Gas prices have been falling over the past few weeks. This Thursday morning, the average price for a gallon of regular gas in Minnesota was $3.57.
Usually gas prices start to spike for the summer after Memorial Day. But this year, there are really three big reasons gas prices could go down.
The first is that the tensions with Iran have eased. Last year, Iran was threatening to close one if its main oil supply routes, which supplies about a fifth of the world’s oil. That didn’t happen. If it had, oil prices would have shot up.
The second reason is that oil and gas supplies are plentiful right now. Both are at their highest levels in more than 20 years.
The third reason: It’s the economy, stupid. Here in the U.S., experts say the momentum for jobs recovery is slowing down, and economic growth is expected to slow down as well. It’s the same overseas. Twelve countries in Europe are falling into a recession. When economies slow down, analysts say it creates the expectation that oil prices will decrease.
In the end, that means lower gas prices. Since April, gas prices have dropped by about 7 percent in the U.S. Analysts say don’t expect them to drop much more, because this time of year is when refineries switch to a different blend of gas. It’s cleaner, but it does cost more to produce.
Click here to find the cheapest gas prices in town.