Oil prices are dropping -- down significantly from this past winter.
The price of a barrel of Alaska crude closed at about $94 Monday. It was around $128 dollars in February.
The decline helped drive gas prices as low as $3.99 a gallon in midtown Anchorage and came as welcome news to drivers like Sheryl Chapman, visiting from Massachusetts.
“We’re happy it’s going down and not up,” she said.
But in Alaska, prolonged low oil prices can spell trouble for the state budget.
Lower prices mean less tax revenue for the state government and less money to pay the bills.
“The state isn’t going to run out of money suddenly, but still it’s a warning shot,” said Tim Bradner, a reporter who covers the energy industry for the Alaska Journal of Commerce.
“Either we increase oil production and revenues, or we cut spending. That’s going to be a dilemma that’s going to be facing us in a couple years,” he said of a scenario where low oil prices persist beyond 2012.
A number of factors from world politics to the weather influence the price of oil.
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