Monday, November 10, 2008

Gas Prices Going Down

Over the past weeks gas prices have been falling. I was shocked this weekend that they fell below $2.00/gallon for the first time in what seems like ages.

This begs the question, why did they have to go up at all? You hear all kind of weasel speak about supply shortages, OPEC, etc. but if gas can be less than half the price it was earlier this year when it went above $4/gallon. I challenge our legislators to keep the prices reasonable going forward!

Of course this could all be a move by OPEC and the oil companies to stall and delay the wave of alternative energy initiatives that people had been talking about since the higher gas/oil prices. Let's hope they are not lulled into a false sense of security by these low prices and continue to explore alternative methods of energy.

I wonder if this means lower costs over the winter for heating as well. While I use natural gas, if heating oil prices fall steeply the gas rates may go down too in an effort to retain customers.

On the one hand this would be great, on the other hand I have to wonder just what is behind this.

2 comments:

Anonymous said...

Chris,
Several factors drive gas prices - production, demand, refinery capacity, price, and the currency exchange rate. Notice how the dollar faired against the yen, yuan, and euro recently. Notice how the price of oil has gone down in relation to the large drops of the worlds financial markets. Also, we didn't have the hurricanes that the futures markets were betting on.

David M.

Chris said...

David M;
The bulk of Oil production is controlled by OPEC, price, whatever the market can bear....refinery capacity not an issue here as people were buying less gas across the board as the prices went up....it was too expensive, not a case of demand being too high for the refinery to keep up.....

I heard this morning that our new president elect is already talking about stopping a lot of the efforts called out earlier in the year such as opening up drilling in areas previously banned and research into alternative fuels. In 3 to X months we'll be right back at this point where the prices go high and people start looking at alternative energy.

Curiously I heard a talk show on the way in this morning along these lines of the stalled energy efforts.