Gas Prices Could Dip Below $2.50, Says Economist

Gas prices are going down, down, down, both locally and throughout the country. But they might get lower still. 

Philip Verleger, an economist and founder of PK Verleger LLC, said that gas prices could drop all the way down to $2.50 a gallon by November during a recent interview with Bloomberg TV.

Saying that Saudi Arabia has ample reason to “overproduce” more oil than the market needs, Verleger said a barrel of crude oil could fall to $40 a barrel—something the US hasn’t seen since 2008.

“There’s no such thing as fair value,” Verleger explained. “Prices will overshoot for every commodity; farmers have been talking about this for a hundred years.”

Verleger has a PhD in economics and has written “over 100 articles and books” on energy economics, according to The Globalist.

At $40 a barrel, gas would be about $2 a gallon. The current WTI price of a crude oil is $79.67 per barrel according to Oil-Price.net.

According to Elliott Gue, of Seeking Alpha, WTI means West Texas Intermediate.  He says, "The oil prices you read about in the newspaper and hear about on television often refer to WTI, the variety of crude oil that underlies futures contracts traded on the New York Mercantile Exchange. WTI typically reflects supply and demand conditions in the U.S. and Canadian oil markets."