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Lower gas prices bring sighs of relief

A threat that's been hanging over the economy is starting to look a lot less menacing.

Oil and gasoline prices are sinking, giving relief to businesses and consumers who a few weeks ago seemed about to face the highest fuel prices ever.

President Obama's re-election prospects could also benefit, especially if prices keep falling as some analysts expect. A majority of Americans disapproved of Obama's handling of gas prices in an AP-GfK poll early this month. But that was before the full effect of the recent drop had reached drivers.

The average U.S. retail gasoline price has dropped 21 cents a gallon to $3.73 since hitting a 2012 peak of $3.94 on April 6.

In the Buffalo Niagara region, a gallon of regular averaged $3.98 Wednesday, down 13 cents from a month ago.

The economy could gain, too. Consumers who spend less on fuel have more to spend on other purchases, from autos and furniture to appliances and vacations, that could help drive economic output and job growth.

The price drop will likely boost consumer confidence. It also comes at a timely moment: ahead of the Memorial Day weekend, a busy one for travel and entertainment spending.

Lower oil prices also mean cheaper diesel and jet fuel for shippers and airlines.

Crude oil, which is used to make gasoline, is at a seven-month low of $92.81 a barrel. It's down nearly 13 percent since May 1. Behind the steady drop are larger fuel stockpiles, easing fears about Iran and expectations of lower demand as the global economy slows.

The average national gasoline price is expected to fall as low as $3.50 a gallon this summer. It could even dip near $3 in some states. The national average is being propped up by refinery problems in California that have lifted prices well above the national average there, according to Tom Kloza, chief oil analyst at the Oil Price Information Service.

A 50-cent drop in the gasoline price would save consumers roughly $70 billion over a year.