Friday, September 01, 2006

No tin foil hat required - Gasoline prices could keep falling
Gasoline prices are falling fast and could keep dropping for months.

"The only place they have to go is down," says Fred Rozell, gasoline analyst at the Oil Price Information Service (OPIS). "We'll be closer to $2 than $3 come Thanksgiving."
It's good news for consumers and the economy. Continued lower prices "may act like a tax cut" and stimulate spending, says Richard DeKaser, chief economist at National City in Cleveland. He calculates that higher energy prices the first six months cut growth of consumer spending 1 percentage point.

OK, let's review a few fundamentals, shall we?

Prudhoe Bay? Offline.

Iraqi output? Far below pre-war levels.

Alberta tar pits? Expensive, and built to stay that way.

Demand in China? Exploding.

So all of the fundamentals seem to point in the opposite direction from that indicated by Mr. Petropundit.

What, I wonder, could be pushing prices down now? Let me think.... Could there be a political angle? Cui bono?

You don't suppose... nah... the coming election couldn't possibly have anything to do with the drop in gasoline prices (by a whopping dime where I live) and the rosy predictions, could it? I mean, just because prices are predicted (hyped?) to trend downward through the very month the elections take place doesn't mean they are connected, right? It isn't like the Administration has much at stake, or has connections to the oil indistry or anything.

Nah. Couldn't be. Mr. Rozell says the only direction prices could possibly go is down, and why wouldn't we believe him?


Blogger Eric Soderstrom said...

That's what's so great about our free markets! They work! People have been conserving fuel so demand has decreased and like sunshine follows rain, prices are falling.

9:08 PM  
Anonymous Anonymous said...

The prices have fallen a whole 10 cents!! Well, here in Central Ohio (I know, I know, Ken 'Cheatem' Blackwell, Mike DeWine, blah, blah, blah)...gas prices have gone from $2.87 to $2.43. I wondered why the price fell so hard so fast. It's not like anything in the Middle East has changed, and that always seems to be the excuse for higher prices.

4:02 AM  
Blogger bluememe said...

Interesting that prices have fall much further in the state where Mike Dewine and Ken Blackwell are running. maybe if Ah-nuld vetoes the greenhouse gas law, our prices will come down too.

3:39 PM  

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