Mideast violence. Tensions with Russia. Job growth in America. These are the ingredients for higher energy prices. Except this summer. Instead of a long, hot summer at the pump, this has been the summer of cooling energy prices.
In the next week, crude oil threatens to fall to its lowest price since early February. Pump prices, meantime, have fallen 6 percent since the beginning of the summertime driving season, according to AAA's Fuel Gauge Survey. As Labor Day approaches, signaling the unofficial end of higher summer fuel demand, the national average for gasoline could drop to its lowest price of the year. This has not been the season many predicted at the pump.
It's been estimated that every penny change in gas prices equals $1 billion in spending on energy by Americans. With that rule of thumb, drivers have saved $22 billion at the pump this summer as prices have fallen steadily. In the absence of a pickup in wage growth, paying less at the pump is a welcome boost to household budgets.
The rush of American petroleum fuels the drop in prices. The U.S. produces more oil now than it has since 1986. Foreign oil imports have dropped to mid-1990s levels. And oil refineries are running near record levels turning that American petroleum into gasoline and other fuels. The Energy Information Agency expects American oil production next year to hit the highest annual average level since 1972.
The cooling prices at the pump may continue well beyond summer.
Tom Hudson, financial journalist, hosts "The Sunshine Economy" on WLRN-FM in Miami, where he is the vice president of news. He is the former co-anchor and managing editor of "Nightly Business Report" on public television. Follow him on Twitter HudsonsView.