Gasoline could drop 50 cents/gallon by spring

With the economy slowing down there is little doubt the price will falls some over the short term. How much and for how long is something the economists can debate. Without viable alternative sources of energy, the price will eventually climb, unless the world's economy completely tanks, in which case the cure is worse than the disease.

Tom

 

You might be right, but I think even the so called 'experts' would have a better chance predicting if a Roulette ball will land on black or red rather than predicting the price of fuel.

I do understand the laws of supply and demand, but the oil companies would be doing themselves a great disservice to both themselves and their shareholders if they concentrated on efforts to lower the price of fuel (such as building more refineries, etc).

American consumers have eagerly paid $3.00 per gallon for quite some time now with little if any decreased demand. Oil companies should continue to press for higher prices to increase their bottom line (and they have been VERY successful at this for the past few years). It is very clear the average American consumer (or any worldwide consumer for that matter) will do little if any to reduce oil consumption even if the price of fuel increases to far over $100/bbl.

Rick
#4 2006

 

Supply and demand perhaps.
More than likely gas prices might drop because a lot of politicians want to get re-elected!

 

Gas could drop 50 cents, GM could make a car worth buying, but I wouldn't bet any money on either of those happening any time soon.

 

I laugh and curse at you already, but not about this. If this truly happens, we're all screwed. But if it does happen, it sure as hell can't be for long. Remember that supply and demand that you're so thrilled about? Doesn't work when there is no supply. We're getting a large percentage of our oil from tar sands now!? Do you know what it takes to support that as an economical solution to the energy problem? Not cheap gas, that's for certain.

 

Its to the Republicans advantage ,to have cheap gas for months before the November election.
Oil market can be manipulated .Bush bribed the Saudis recently with a major arms deal.(Perhaps the Saudis cant pump much more ,but they can influence OPEC and manipulate the futures market)
Mojo predicts $60-70 barrel oil Gas $2.25 by labor day.
Heres a less likely prediction.After the election ,Israel bombs Iran.
Oil $100 barrel overnight.

 

There are extremists among those raising the alarm about peak oil to be sure. There's still a lot of oil out there, and we are finding more, including reserves that were previously "not proven", because to be proven, it has to be recoverable with current technology at current prices. But we're not finding as much of the "good" stuff as before, so we're turning to expensive things like heavy crude and tar sands of Canada. (1/5th of the U.S. imported oil).

So the prices will edge up as the light sweet crude and land-based or moderately deep-water wells dry up. (The "Jack" well two years ago and the Brazilian finds last year are in water that are miles deep and then another mile or more below that). Long story short, this isn't the end of the world for us, but the pain will continue to increase. Maybe not this summer (I'm going to go on a limb and predict $3.20/gal), but during the lifetime of my current Prius I still expect to see $5/gallon, and probably more. To waste gas is definitely short-sighted and unamerican (trade imbalance, funding unfriendly countries/terrorists etc.)

Currently, the only way a lasting drop in gas price could happen is with a recession. With a new presidency, we could start taking real steps towards a good energy policy, and a decade later actually reduce consumption meaningfully without economic hardship. By then I expect peak oil will definitely be noticeable.

 

well is us not heading for that?

 

Oil prices will drop soon due to the end of the Northern winter and reduced demand for heating oil. But the continual upward trend Will continue due to falling reserves, increasing recovery costs and increasing demand in a rapidly developing third world. The only way the man on the street can help to lower the price is to spend less on it which I would encourage however due to increasing prosperity in China and India demand will continue to increase but at a slower rate than would otherwise be the case.

If Chinese and Indians look to the first world for inspiration we can inspire them to more moderate future oil consumption but using less ourselves.

 

True, dat.

 

If oil drops too low, the Iranians will simply stage an incident or series of incidents in the Straits of Hormuz until the price is back where they want it. Oil traders freak out whenever Iranians fire up their speedboats and head out into the Persian Gulf.

As gasoline gets cheaper, more Chinese and Indians can afford to drive, so there is a built-in increase in demand right there.

Harry

 

Today's news from Yahoo business news (last sentence is on wholesale gasoline prices):

Light, sweet crude for March delivery jumped $3.66 to settle at $91.77 a barrel on the New York Mercantile Exchange.

Oil exports from Nigeria, Africa's biggest oil producer and a major U.S. supplier, could fall by as much as a million barrels a day due to the nation's deteriorating security situation and planned maintenance.

Prices also rose on news that North Sea oil production was cut by 280,000 barrels a day because of technical problems at a Total SA oil field, and that Russian crude output could fall this year with the depletion of a large oil field.

Add to that a forecast for colder weather moving into the Midwest and the Northeast over the next few days.

March heating oil futures rose 9.56 cents to settle at $2.5541 a gallon on the Nymex, and March gasoline added 8.94 cents to settle at $2.3572 a gallon.
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Let's not forget that somehow Gas prices don't seem to follow the standard supply and demand logic.
1) The demand is virtually constant and varies more on seasonal forces then high prices.
2) The supply is easily manipulated to create shortages.

Here is another recent example of a how they are using a shortage of an additive as a reason to keep prices high.
A new cause of gas costs

 

The first half of that sentence is laughably false, and there's no reason to believe the second half of that sentence isn't, too.