FORT WAYNE, Ind. (Indiana's NewsCenter) - Crude oil prices dropped below $100 a barrel Thursday, marking the largest single day decline in oil prices in more than two years. Indiana's NewsCenter found out why that hasn't translated to a price drop at the pump yet.
Chief Investment Officer for Hefty Wealth Partners, Doug Lockwood, says gas prices are expected to temporarily drop blow $4 a gallon, but it could be another several days, or even weeks, before consumers see any significant price changes.
Lockwood says the cause for the delay comes back to supply and demand.
Oil is used for a wide variety of purposes. April had colder than typical temperatures, which means residents used more oil to heat their homes. In addition, we used more electricity, causing several oil refineries to lose power.
Those refinery power outages have decreased the supply of gas. Lockwood says more time and money is required to process the type of oil currently being found in oil reserves - a lower quality crude oil.
However, Lockwood says if crude oil prices continue to stay between $90 and $100 a barrel, consumers are likely to see prices drop well below $4 a gallon. Historically, he says, it averages around $3.65 per gallon when oil remains between $90 and $100 a barrel.
Although many consumers feel like prices are out of their control, Lochwood says there are steps people can take to drive down demand. One shouldn't, however, expect to see a big change overnight.
"We could carpool more. We could be more efficient in how we utilize our energy reserves and resources, but the bottom line is, can we make a quick change? No. We're accustomed to doing things the way we've always done it," says Lockwood.
He says a continued rise in gas prices isn't likely to lead to a greater dependence on alternative energy sources overnight either. Take Japan for example. People begin to doubt the safety or effectiveness of other energy sources and fall back on what's comfortable. In addition, Americans still worry about competing in a global market. Therefore, any changes are expected to be slow and gradual.
What are your thoughts CLICK HERE to leave us a "QUESTION OF THE DAY” comment.
© Copyright 2016, A Quincy Media broadcasting station. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.