That's how much a gallon of regular unleaded costs now at the Kroger down the street from where we live.
Less than ive months ago, when I started writing on this item intermittently, gas was $3.08 per gallon.
A 98-cent drop in the price of a gallon of gas. That "new floor" of $2 I wrote about might not be a floor after all, but a waystation.
Whodathunkit?
I didn't.
Is it a short-term drop or a long-term correction? I don't know. Mideast issues could flare up, storms and hurricans can flare up, terrorist and guerrilla attacks can happen again, but we've also had a huge increase in supply which won't even be on the market for another couple of years and are looking more seriously than ever before at alternative energy resources.
So what will happen?
The only response I have is the one I hate the most - I don't know. If you'd asked me if I thought gas prices would drop a dollar in a few months I would have thought you were crazy.
All I do know is that the lower gas prices will leave the average consumer with a fatter pocketbook. A fatter pocketbook means a happier consumer not inclined to vote people out of office.
Monday, September 18, 2006
$2.10
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6 comments:
You raise an interesting point that I'm sure will be raised again by those with far more investigative resources than ours. I wonder if market forces are being influenced right now in order to make election prospects better for the incumbents? I know, I know. I'm a kook for merely suggesting it, right? But tell me. Did George Bush run an oil company or not? Did Dick Cheney run a construction company with the largest US ties to the Middle East or not? Are these people now president and vice president of the US respectively? Hell, I'm not even blaming them if they did do it. That's their job! I would only question the timing and wonder where were they all year.
But a bigger part of me believes that Bush is too inept to successfully accomplish something like this, so I doubt it. Again, look at his track record. Tell me one thing he has done where we can say "yeah, he did an awesome job at that."
Hey I hope it keeps going down too. We really need the extra money it leaves us in the purse so I am not complaining. But gas is about $2.50 here, which is right at the national average. And the national average was as low as $2.15 last November. So perhaps this is a seasonal thing and linked to a lack of Gulf hurricanes this year.
I won't believe that $2 floor is gone until we're all paying $1.50 gallon for a few months. Then I will glady admit it is.
I don't think this is due to Bush, much as I don't think the run-up was due to him either.
My belief is the decrease is due to external factors - cease-fire in Lebanon, zero Gulf hurricanes, and a major find in the Gulf which substantially increases supply.
Besides, infrastructure companies are still getting absolutely KILLED on the market at the moment - HAL is threatening its 52-week low, so I don't think they are personally lining their pockets at the moment. If anything, they're taking a bath.
As for the rest - you might need some more tinfoil. "Question the timing"?
I agree. Like I said, more than any other reason, I just don't think Bush is effective enough to be behind something like this. But it's still a very interesting coincidence. And, no, HAL is not lining their pockets. It's not that simple and those who think it is are wrong. But that doesn't mean promises are not being made behind the scenes and that's what scares me.
For example, why isn't OPEC cutting supply in response to a falling market? Given their rhetoric of late, I would think they would be doing so. I wonder if we have an influence behind the scenes here. In other words, make your announcement that you're cutting your supplies after November. In return, we'll....fill in the blank.
Remember, Gulf finds of oil are nice and we need all the supply we can get. But don't over-estimate its influence. It helps but that's all. Our market for oil and natural gas is entirely tied to the Middle East, specifically Saudi Arabia.
No no no no no, Big Daddy! It's our Dark Lord and Master KKKarl Rove (peace be upon him) that is controlling the gas prices with his supernatural evil abilities in order to influence the election!
BTW, it's still like 2.50 up here, but I never drive anywhere so what do I care? ;-)
I just found this article. Though ya'll will dismiss or ignore me, I'm far from the only one who merely notes it's an interesting coincidence. Maybe that's all it is. I dunno. But it's worth noting.
http://www.msnbc.msn.com/id/14891597/
BTW, also watch the video on the side of the article which is a CNBC interview with oil trader Eric Bolling. I struggled with my slow connection internet but got the jist of it. Long term, he still sees oil at $100 per barrel with it rising later in the year after falling for a little while longer.
Like I said, interesting. Hey, I want it to be as cheap as possible...but I'm not counting on it.
Um, that article kinda contradicts your arguments.
Long-term, yes, it could go back to $100 a barrel. But this piece was writing about the short term, with the well-thought analysis of long-term price patterns rating an "I don't know".
The moment the Gulf discovery was announced, I think I actually did say to some of my coworkers that gas would drop a quarter based on that expectation alone. Even though it won't be on marketfor 18 months, it's still part of this country's oil supply.
Now, if we have a pissing contest with Iran in the next few weeks, we might see it jump right back up. It's possible. At the moment, it seems most folks do not consider that to be a possibility, at least in the short term.
I didn't mention travel patterns either - less travel in the fall than during the summer months, yet not a need yet for heating oil, so less demand at the moment.
Facilities that were knocked offline a year ago are now back up and running, or close to it, enhancing refining capacity.
No hurricanes this year, either, in the Gulf to knock out some of those refineries or Gulf pipelines.
There are many, many short-term factors that are all contributiong to keep pump prices falling. Are there events that could reverse the course? Yes. But they aren't as likely now as they were two, three, sic months ago.
Dammit - I just wrote another post in the comments section!
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