Going into the year-ending holiday season, you can see for yourself arguably the best news for the Colorado Springs-area business community every time you drive around the city.
Check the signs at gas stations and convenience stores showing prices per gallon. That’s all you have to do.
For several months now, we’ve seen the typical cost per gallon slide from the $3.29 range downward to $3 — and then lower. As November arrived, one could find regular gas under $3 almost anywhere, then down to $2.90 and even lower.
This week began with the best news in several years. According to coloradospringsgasprices.com, with data reported by the public, the best price in town dropped all the way to $2.59 a gallon for regular at the South Circle Station, located at the intersection of Circle Drive and Airport Road. By Tuesday morning, a nearby Kum & Go had matched that, and a Loaf ’N Jug at Pikes Peak Avenue and Circle was at $2.61.
In other areas east of downtown, many other stations were in the range of $2.62 to $2.67 a gallon, with national projections insisting that the trend will continue — not just for a while, but all the way through 2015.
Put it this way: A year ago at this time, the average price per gallon in Colorado Springs was $3.11 a gallon. In mid-October, it was still hanging around $3.05, then suddenly came the precipitous drop. At this rate, we could see gas in the $2.50 range before Christmas, and premium gas around $2.80.
The main reason for this drop, obviously, has been the market for crude oil. It was hanging around $101 a barrel in early August, but then the market began to drop amid reports of much higher supplies than in the past. Crude oil dropped below $100 in August, down to the $90 level in September, then through the $80s per barrel in October, setting the stage for the delayed impact of gas at the pump.
As of Wednesday, Nov. 19, the crude price was down to $74.51 a barrel, with some prominent analysts suggesting it could fall closer to $50 a barrel before bottoming out.
This development is tied directly to depending less on imports. Last week, the Department of Energy’s regular report pegged America’s production at 9 million barrels a day, the most since 1985. With abundant supplies for the biggest U.S. refineries in the Gulf Coast area, the need for imports has dwindled considerably.
We can’t expect this remarkable dip in oil prices to last forever. At some point, the oil and gas industry will take steps to limit production and cut supplies to reverse the markets.
But for the time being, it will make a noticeable difference in the pocketbook for millions of consumers as well as businesses. One recent report concluded that a typical family in the middle class or slightly lower would realize at least $100 in extra money between now and the end of the year.
That should mean a positive ripple effect across the local economy, with many more households able to splurge a little more around the holidays, making it easier for local stores and other businesses to finish 2014 on a high note, while adding a chunk of tax revenue for city and county governments.
And as Colorado Springs tries to build more good economic momentum, that’s the best business news we could hope for right now.