Tuesday, October 21, 2008

Gasoline below $3

It happened so quietly I almost didn't notice it, but for the first time since February, the average price of gasoline in the U.S. has fallen below $3.00 per gallon. In an earlier poll on this blog, only five out of 54 respondents predicted that this would happen, so congratulations to those contrarians.

I don't usually try to predict prices based on future world events, but in this case I'm going to make an exception. Even with a slowdown in the economy, I don't think that these lower oil and gasoline prices will last any longer than a few months. The Middle East has been unusually quiet recently, and that reminds me of the optimistic/complacent conditions at stock market tops. The more complacent people feel now, the bigger the effect will be when panic returns.

3 comments:

adventurerneil said...

On the plus side, lower gas should help ease stagflation in the short-term... here's hoping prices stay stable and people stay employed.

Jody said...

Amen.

Dan said...

Oil prices are heavily manipulated by a few in very high places. What drove the price to $147/barrel? Many were trying to figure this out - speculators etc. etc. Now that prices are lower no one is trying to figure it out - they are just so thankful that the prices are lower. The steep rise and now the steep fall did not happen by accident.