The July Fourth holiday weekend should usher in gas prices of $3.40 or lower in response to fears that the global economy is faltering and high oil prices are simply creating low demand.
According to USA Today, the catalyst for this plummet in price comes from both the U.S. Strategic Petroleum Reserve and the International Energy Association. The International Energy Association announced plans Thursday to sell 60 million barrels of oil from emergency reserves. More is possible to come later.
The release of the cheaper barrels is aimed at cutting crude prices and boosting the struggling economy by offsetting production declines in Libya and the Middle East. Regular gasoline peaked at $3.98 a gallon in early May. A decline in demand for crude oil dropped the average to $3.61. Some speculate that the reserve sales could drive the prices down another 20 cents or more.
Although the 60 million barrels accounts for less than the daily consumption of oil, the news of the sale sparked a sell-off Thursday whereby Benchmark West Texas crude fell 4.6 percent to $91.02 a barrel demonstrating a four-month low on the New York Mercantile Exchange.
Many politicians pushed for the sale of oil reserves fearing rising gas prices could threaten to derail the economy. However many others argued against using the reserves arguing the action many threaten the ability of the government to respond to genuine national security issue.
Industry analysts however speculate that the U.S. is only releasing a mere 4 percent of the petroleum reserve, which won’t even make a dent in the supply.
According to Christian Science Monitor, there are a few good ways to make sure you save as much money as possible at the pump this summer. First off, make sure your gas cap is tight and undamaged. A loose cap allows fuel to evaporate. Secondly, make sure your tires are inflated to their capacity. Tires filled improperly can decrease your vehicles efficiency, causing gas mileage to drop. Third, change your oil. By reducing engine friction you can improve your car’s engine efficiency by 1 to 2 percent, thus improving gas mileage. Then check out and replace old spark plugs if necessary. Worn-out plugs lead to poor engine performance and lowered fuel efficiency. Next, check your engine air filter. A dirty filter also affects vehicle performance and replacing an old filter may improve fuel economy by 2 to 6 percent.