Sun Sentinel Palm Beach Edition
Gas gets cheaper
Average price $2.28 in SoFla
The trend is driven by American producers increasing output.
Increased U.S. oil production pushed gas prices down further over the past week, and consumers are reaping the windfall as the summer driving season kicks into high gear.
Prices for a gallon of unleaded regular are dropping below $2.10 at gas stations throughout Florida. In several markets, competition has created clusters of stations luring customers in with prices below $2, according to the price comparison website GasBuddy .com.
“Lower gas prices will make it more enticing for Americans to take extended, or more frequent, road trips this summer,” said Mark Jenkins, spokesman for travel club AAA. “And when travelers spend less at the pump, they are left with extra cash to spend on lodging, shopping and dining out.”
The average per-gallon price in Florida fell seven cents over the past week, from $2.27 to $2.20. Monday marked the 23rd consecutive day of falling prices, travel club AAA said in its weekly gas price update. Pump prices dropped an average 12 cents during that time.
AAA says the lower prices, combined with rising incomes and lower unemployment, will spur a record 44.2 million Americans to travel over the Independence Day holiday spanning from Friday to July 4. About 2.3 million Floridians are expected to travel, a 4.8 percent increase over last year, AAA said.
The downward trend in gas prices is driven by U.S. producers increasing output over the past seven months in response to November agreements by OPEC and non-OPEC nations to cut production to try to stabilize prices.
The increased production has created an oil glut in world markets, which in turn is driving down — rather than stabilizing — prices for crude oil. So now the market has to figure out how far prices can drop before U.S. producers determine it’s no longer profitable to activate new rigs.
Experts agree the breakeven point is lower today than it was in 2014, when tumbling global crude prices choked off the burgeoning shale oil boom in North Dakota, Montana, Wyoming and elsewhere.
Domestic producers have figured out how to cut production costs by up to half over the past two years, and some projects are now profitable if crude oil falls as low as $40, Reuters reported in late April.
U.S. energy firms added 11 oil rigs last week, bringing the total to 758, most since April 2014, according to Baker Hughes, a Houstonbased oil field service company.
Meanwhile, the price of West Texas Intermediate crude oil closed below $43 a
barrel on Wednesday and Thursday before rebounding on Friday. The price closed Monday slightly up at $43.38 on the New York Mercantile Exchange.
In South Florida, where higher taxes and a higher cost of conducting business keep gas prices above the state average, Broward County motorists were paying $2.27 on Monday, four cents higher than a week ago. Palm Beach County’s average price of $2.30 was six cents lower than a week ago, while the $2.28 average in Miami-Dade County was also four cents less than the previous Monday.
South Florida motorists heading north for vacation this week will be pleasantly surprised to find gas prices hovering around $2 a gallon or below in several metro areas, including Orlando, Palm Bay, Vero Beach, Fort Pierce, Tampa-St. Petersburg, Clearwater.
Just two South Florida stations had breached the $2 barrier on Monday, according to GasBuddy.com: a Gas Xpress station and a Rocket Fuel station, both in West Miami at the intersection of Northwest 57th Street and West Flagler Street. Both were selling for $1.97.
The lowest reported price in Broward County was $2.06 at Speedway on Pines Boulevard and Northwest 77th Way.
Palm Beach County bargain hunters can head to Rocket Fuel on Federal Highway just south of Northlake Boulevard in North Palm Beach if they want to pump $2.01 gas.
Gas was selling for $2.02 at several stations in West Palm Beach, west of Interstate 95, particularly along Belvadere Road and Okeechobee Boulevard.