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Economist: Gallon Of Gas For $1 This Spring

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Jan 5, 2009 10:56 pm US/Eastern

Economist: Gallon Of Gas For $1 This Spring

Reporting
Christina Hager
BOSTON (WBZ) ― Don't worry. Keep pumping, say energy analysts.

This week, consumers may notice those falling gas prices come to a screeching halt. Analysts say it's a reaction to the turmoil in the Middle East and oil producing countries threatening to tighten supply.

For the first time in 15 weeks, AAA reports the average price for a gallon of regular self-serve in Massachusetts has not dropped. It remained steady at $1.62.

An economist with the Lexington think-tank, Global Insight, says it's just a small hiccup in what is otherwise a gas price freefall. "You're going to see some improvement in your purchasing power at the pump," says Mary Novak.

She predicts the price will bottom-out at around a dollar a gallon this spring.

The prediction went over big at a gas station in Cambridge. "It's hard to imagine a dollar a gallon, but it would be great!" said one driver, as she filled her S.U.V.

Her excitement is tempered though, when she considers the biggest factor driving prices down…the bad economy. "About 60 percent of gasoline demand is associated with driving to work," explains Novak. "So each and every month, where we have fewer and fewer people employed, we lose quite a bit of gasoline demand."

She predicts pump prices will creep back up as the economy recovers later this summer.

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