Crude Oil Hits Five-Year Low, Sending Gas Prices Plummeting Nationwide

Crude Oil Hits Five-Year Low, Sending Gas Prices Plummeting Nationwide

By: Julia Deng
NewsWest 9

MIDLAND - Crude oil prices tumbled to a five-year low, dropping about $2.00 to settle at $63.05 per barrel and sending gas prices nationwide plummeting to a four-year low.

The national average for a gallon of gas hit $2.72 Monday, after plunging $0.12 in two weeks.

Prices in Midland fell to about $2.50 per gallon for regular, unleaded gasoline and $3.59 for premium.

"It's good and bad," said Patsy Hoelscher. "It's good because I drive a truck that takes a lot of gas, but I'm also in the [oil] business so that means the price of oil is dropping."

Morris Burns, an oil consultant and the former Executive Director of the Permian Basin Petroleum Association, told NewsWest 9 the plunging crude oil prices are "part of a normal, seasonal trend" and do not signify an oil bust.

"The crude oil market always overreacts to whatever happens," said Burns. "Instead of dropping to $75.00 or $80.00, which would be normal, [it dipped to $63.00] and people panic. [They think] the sky is falling."

He said oil and gas prices take an annual dip around November and early December, when northern hemisphere winters are not cold enough to warrant frequent heating and people in the southern hemisphere haven't hit their peak driving season yet.

"I really feel like [in] January and February, when we get into the hard, cold winter here, we're going to have a lot more demand," said Burns.

However, the current five-year low in crude oil prices is a significantly larger drop than he was expecting to see this year.

"It's gone down more than normal," he said. "I really thought it had bottomed out at $75.00."

Stocks also took a hit, with Chevron (CVX) dropping 3.8 percent to $106.70 and ExxonMobil (XOM) settling at $91.69, after a 2.3 percent fall.

According to AAA, the national price of gas will continue to plunge and could hit $2.50 by Christmas.