Why Are Gas Prices Falling?

I was pumping gas yesterday, and pondering this question:

Why are gas prices falling? In a little over a week, gas prices have fallen by more than a dollar a gallon (here in south Texas, at least). It was at $3.98 . . . now it is $2.78. What is going on? Any specific reason for this?

I think it's because the refineries that went down during Ike are coming back online. That's only speculation on my part.

I think Texas has some of the lowest gas prices in the nation anyhow, so I think prices are returning to normal.

Coupled with a lower demand for gasoline because of lower household disposable income, it could mean the prices will fall even further.

It's a signal of the weakening economy. The demand is down. People are driving less, so the oil companies are lowering the price to entice people into buying more. So, while it's a nice experience, it's a sign of the volatile and erratic economy.

Fears of an economic slowdown in the US, and a consequent spread of the crisis to Europe and other parts of the world, resulted in oil prices falling over 12 per cent since Monday, the largest weekly fall since early 2004.
...
“It’s difficult to say where oil prices will be in the near future. It’s just very volatile. But there seems to be consensus that prices will fall in the near future because weakening economies cannot afford to buy oil at higher prices,” said a Mumbai-based analyst with a global advisory firm.
Source

[edit on 6-10-2008 by Benevolent Heretic]

I'm sure it has absolutely nothing to do with the elections coming up in less than 30 days. Nothing whatsoever.

In fact, I bet you would find no correlation between gas prices and the month of October in election years if you look.

My theory is the energy cartel is doing the best it can to stifle the emergence of new technologies. They know that cheap gas is a factor in people's aquisition of viehicles and generators and they don't want the development of electric and hydrogen alternatives, which are picking up pace.

That and big oil fields outside the US are coming online and Russia and Iran are doing their best to destroy the dollar.

It's not just one factor, but the trend will be cheaper oil imo. I just hope people don't fall for it and piss away their clean energy future for a few dollars saved on prehistoric technology. If we get off oil we will tend to have a depression proof economic system, as it will be all but impossible to impose energy scarcity.

reply to post by Benevolent Heretic


Absolutely on the money.

There is no demand. People are pinching a penny so tight these days thats heads and tails are on the same side, justifiably.

AB1

reply to post by Benevolent Heretic


BH; as usual, you nailed it!

You can take the drop in oil price as an indicator of how much damage the Banks have done to the market.

"Controlled Demolition" indeed!

I think gasoline is dropping, for the same reason the stock market is falling and housing is devaluing. It was well overinflated to being with. Once this bailout money starts pumping into our economy, watch the prices go right back up.

Simple economics. No conspiracy. Those who are posting rationally and non-sensationally are right-on the money.

I for one am happy I bought premium for 3.51 a gallon a dollar less then a few months ago,could be the speculators futures they bought came and they had to unload,maybe that T Bone Pickens guy heard he lost 1.5 billion on speculation

Would this not have anything to do with the price of crude falling as well?
I trust that it has also to do with the economic storm we are in, as well.