Falling Gas Prices Expected to Continue
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iStock/Thinkstock(NEW YORK) — While Americans are not yet having a party at the pump, they are happy about the price of gasoline these days. The price is expected to drop even further in the wake of Thursday’s news that crude oil price fell to below $60 a barrel.
West Texas Intermediate crude fell to $59.36, its lowest level since July 2009.
In past years, Saudi Arabia would reduce production to prop up prices, but apparently not now. The world’s no. 2 oil producer, after the U.S., suggested Thursday it would not be cutting production.
Meanwhile, Bank of America has forecast that crude oil prices could fall to $50 a barrel in 2015 as North American output, along with increased production from Iraq and Libya, enters an oil market overflowing with supply.
The national average price of gasoline is now $2.62 a gallon, down 30 cents from just a month ago.
Falling oil prices is good for you, but not so good for Alaska. The Alaska Department of Revenue projects the state will bring in $2 billion in oil revenue this fiscal year, compared to nearly $5 billion in the previous year.
This past spring, Alaska lawmakers passed a budget that accounted for a deficit of $1.4 billion. That deficit for the same budget has now ballooned to $3.5 billion.
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