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.


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...


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.