Experts say dropping gas prices may be short-lived

by Sarah Rice (srice@wsbt.com)

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Prices dipped over the weekend at many area gas stations. (WSBT Photo)

By WSBT News1

Story Created: Oct 11, 2008 at 8:50 PM EST

Story Updated: Oct 15, 2008 at 10:14 PM EST

SOUTH BEND -- Stations across the area are keeping busy as gas prices continue to drop. WSBT saw some places as low as $2.84 a gallon and experts say drivers should take advantage of it.

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For college student Kayley Havener, filling up can be down right frustrating.

"It's about a 40-minute drive from work to school. So I was putting in a little over $120 in gas every week," said Havener.

But not anymore.

"I'm excited that I only had to put $19 in my car," said Havener.

Oil prices plunged to a 13-month low Friday. This caused gas prices across the area to dip below the $3 mark.

"I can't believe it. It's amazing. Thank goodness," said driver Kris Sieko.

So what's behind the drop in prices? Saint Mary's economics professor Jerome McElroy points to the struggling economy.

"Current prices of oil are influenced by current future expectations. And they see this U.S. meltdown of the stock market going global as it has happened. And as a result they're concerned about a global recession and that means lower demand for all kinds of commodities," said McElroy.

But McElroy doesn't think prices like these will last for long. He says low crude oil prices may discourage companies from drilling because it's expensive.

"In the short run this is good for the consumer. But in the next couple of years when demand picks up and the economy gets going again we're going to have the shortages like we did last year and the beginning of this year," said McElroy.

But for now, many people are taking advantage of the savings.

"It's leaf season and it runs right into snowblower season. So we're getting them all filled so I don't have to worry about it for the rest of the year," said driver Ken Kwieran.

And drivers like Havener are leaving the pump a little less frustrated.

"I can actually afford to go to class now," said Havener.

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