Gas prices expected to fall further!

[Dan]

Analysts see gas prices falling further as crude prices plummet and hurricane season enters a lull.

 If there's one bright spot in a bad economy, it's that gasoline prices have fallen, and they're expected to drop even further.

As the global economy falters, demand for oil has dropped. And since the price of oil makes up about half of the cost of a gallon of gas, analysts see more relief ahead at the pump.

"We ought to see prices drop pretty quickly," said American Automobile Association spokesman Geoff Sundstrom. "We're well on our way to $3 gas within the next week or two."

The national average price for a gallon of regular, unleaded gasoline fell 2.4 cents to $3.480 from $3.504, according to a daily survey released Tuesday by AAA. That's down 18% from an all-time high of $4.114 a gallon hit on July 17.

Gas prices rebounded last month when hurricanes Ike and Gustav passed through the Gulf Coast where the bulk of the nation's oil refineries are located.

While the damage was not as extensive as some had expected, the storms caused a short-lived spike in oil and gas prices.

On Sept. 17, after Hurricane Ike passed through the Gulf region, the national average gas price was a full 35 cents higher than Monday's price.

"But now that refineries are back online and more product is available, prices have no where to go but down," Sundstrom said.

"Demand seems to be drying up week by week," he added. And given the challenging economic environment and the strains on household budgets, Sundstrom expects American drivers to remain conservative.

Crude tumbled more than $6 on Monday to close at an 8-month low of $87.81 a barrel. That's down 40% from its July peak of $147.27 a barrel.

"Since crude makes up about 50% of the price of gas, gas prices should go down," said Ray Carbone, president of New York commodities trading firm Paramount Options.

Carbone added that gas prices have not fallen as dramatically as crude prices because refinery utilization has been low due to last month's hurricanes.

Still, hurricane season does not end until November and oil prices are notoriously volatile, notes AAA spokesman Troy Green. He cautioned that gas prices will continue to fall "only if conditions continue to improve in refinery capacity and oil continues to retreat."

http://money.cnn.com/2008/10/07/news/economy/_prices/index.htm

[briann]

I think its too little too late... but its a nice perk to an otherwise depressing week.

[Dr. Dan]

anyone here think it's Bush and Cheney's way of making money during their 8 year term? and now that it's finishing, they're influencing the drop of oil prices?

I don't think so, but it is an interesting conspiracy theory.

[briann]

anyone here think it's Bush and Cheney's way of making money during their 8 year term? and now that it's finishing, they're influencing the drop of oil prices?

I don't think so, but it is an interesting conspiracy theory.

You know better than that Dr. Dan.  Oil is a commodity just like any other... its effected by worldwide demand and supply... and there is very little that a U.S. president can do to affect this, especially since we control only about 3% of the total supply, and have only about 1/5 of the total demand (and shrinking).

BTW... I have another conspiracy...

The economic turmoil of the last 2 weeks was 15 years in the making... and by an extraordinary coincidence... it occurred right before a major historic election.... and just when it looked like McCain was the favorite.

Any ideas on this?

[muman613]

Shalom,

All I can say is Hallelujah! I pay through the nose for gas, up to $200 a week. Just a 20 cent change makes a big difference in my wallet.

I can't wait for $3/gal gas... May it be tomorrow!

muman613