Here’s how you know there’s global energy boom: Buying gasoline is only one-fifth the price of buying Bud Light.
With the U.S. average gas price slightly below $2 a gallon, Americans can now buy gasoline more cheaply than many other everyday items, including milk, Starbucks coffee and Absolut Vodka. The Wall Street Journal has put together a chart detailing how much cheaper gas is than many other everyday items:
Gasoline is so cheap you could drink it (but don’t!) https://t.co/XtvUsoY2rD by @EricMorath pic.twitter.com/P2mvV0EMJp
— Nicole Friedman (@NicoleFriedman) December 21, 2015
When priced by the ounce, gasoline is cheaper than many other common liquids, with the exception of Nestle bottled water — but gas is still cheaper than more expensive bottled water brands, like Evian or Fiji. The Journal notes at “$2 a gallon, gasoline cost 1.6 cents an ounce. Milk costs about 2.6 cents an ounce.”
“A 99-cent, two-liter of Coca-Cola, costs about 3 cents an ounce,” the Journal reports. “A Starbucks cup of coffee runs about 14 cents an ounce. And you’d be hard-pressed to find a drinkable beer at less than 10 cents an ounce.”
So why are gasoline prices still so low? That’s because global oil production is still high and demand is lagging behind. Saudi Arabia has continued to pump out more oil, despite prices being so low, as part of its strategy to price out U.S. shale oil production.
To an extent, Saudi’s strategy is working and U.S. oil production has tapered off slightly in the last year. The U.S. Energy Information Administration expects oil production to decline from 9.3 million barrels per day in 2015 to 8.8 million barrels per day in 2016.
And don’t expect oil prices to jump anytime soon because Congress’ budget bill actually lifts the ban on crude oil exports. This means oil companies can dump more oil in international markets which could drive the price down even further.
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