Gas Prices Could Hit $2.50 a Gallon by November, Analyst Predicts

thats what he said...now what is Raw Money the LIAR going to say?

not actually running for President, just out selling his books on tour and helping to get the gas prices down.

Such a great American for doing that for us!

LOL

Just in time for the election...


rocktivity

high gas prices at election time would be bad for the president, so I figured the gas companies would start ratcheting the price up.

There goes that killer Keystone pipeline issue, Goopers.

Those "drill baby drillers" look kind of stupid now.

Of course, they always were.

Why aren't the Dems crowing daily about how much Obama's done to bring down the price of gas?

As the article says, it was Saudi overproduction and depressed demand in Europe, neither of which Obama controls. Just as it was never his fault when prices went up, either...

We have some concept of the world as a complex organism that nobody fully understands, and not a black-and-white entity which can be described in a four second sound bite. Blind men and elephant stuff, ya' know.

That being said, when the gas prices went up during Bush's regime, Fox and the GOP fell all over themselves explaining how the president had no control over the price of gas for the reasons you accurately stated.

But...

Whenever the prices dipped -- even a penny -- well, it was due solely to Bush's leadership.

Politics is weird.

regardless of what the GOP talking heads say.

It came down for no good reason. It can just as well go up for no good reason.

Back in April, all at once, federal authorities nailed several hundred speculators with price manipulation charges. Prices have dropped steadily since then.

It would have been easy to miss because the press reported on it practically not at all, except in the business community where they scoffed and claimed that rolling up a few hundred Republicans would do nothing:

http://www.businessweek.com/articles/2012-04-19/why-obamas-crackdown-on-oil-speculators-wont-work

But oh yes, it sure as hell did work, and as usual this President did it by utilizing the powers conferred upon the previous President by the Republican Congress. The bill was passed in 2008 largely to create the illusion that the Republicans wanted to do something about it.

I don't think they ever expected it to be used at all, much less against them.

So the bought press doesn't dare report on this story, because there is more hubris in it than in one of Sophocles' plays. Republicans get busted manipulating oil prices, thanks to a Republican-drafted law, throwing the door wide open to the question of whether or not this exact same manipulation was used in the summer of 2000, when oil speculation pulled it close enough to steal.

Because......the oil companies.....need money.....er or something.

During the second warmest winter on record heating oil prices were at some of their highest rates.

This game is rigged and all winter while prices were up the media hyped $5 a gallon gas like there was a shortage of oil to keep the game going. Just common sense that if the East Coast is averaging 40-50F days then the US is going to be using a lot less oil yet prices stayed high.

Not sure why they are going down now it isn't like Saudi Arabia doesn't keep a tight look on supplies versus demand. I guess they have only so much room for stockpiles.

To make up for it, our utility is raising rates on basic service and transmission. Sure nat. gas prices are LOW, but bills haven't gone down.

Just like when they sold the natural gas power plant south of town. "Oh it's gonna be so awesome, jobs and cheaper electricity for everyone!" 6 months after it was fired up: "We need to raise rates to recover the cost of building the plant." 5 years later, bills have only gone up.

Such a racket.

That's down a bit for us.

Keep it coming down until after the election ~ one less thing for the Rethugs

The poor oil companies might only make 200% profit this quarter! Obama is anti-business!

It will still be much higher than the rest of the country in Nov.

Few placed ever saw regular gas go over $4/gal for a long period of time.

I bet these experts will not be held to account either when gas fails to reach $2.50/gal.

I will be watching ..
with gas @ $3.50/gal here, I doubt they will fall a full dollar in four months.

Which destroyed global demand for oil by throttling economies.

And it looks like we're heading for Round 2 now.....

I recall predictions of $500/bbl oil a half decade ago.

Now the oil producer countries that require it to stay above the $100/bbl to keep the minions happy will have to start beating the straw man

Much like predicting the weather months in advance.

"Maintenence" my ass.

I have a feeling it is going to be well below that by next week. I was pumping and the pump stopped at $32 and I was amazed because it usually takes about $35 or more to fill my tank.

Party time!

If we re-enter a recession, even $2.50/gal will be more than many could afford, seeing as millions more Americans will be losing their jobs. Really, I understand how people think this sounds good at first glance, but if you dig deeper the implications are disturbing.

It's like a doctor telling a diabetic good news about how he'll never have to spend money on shoes again, because his legs are going to be amputated.

Well, I'm sure I find that on one channel, anyway.

Right?

RIGHT?

It's an economic indicator of not so great times.

Fewer gallons burned means a glut of gasoline. AT least the inflation of food prices will remain in check.

who ever thought it up probably thought they were pretty damn cute, but it just goes to show the fact that Americans are staying at home because they don't have money to spend.

For the economy, that's for sure. With oil now below $80 a barrel one wonders why gas prices are still around $3.43. Historically, when oil is at this price gas prices are around $2.90 a gallon. I believe that part of this is due to speculators being allowed into the market as part of deregulation.

They don't need the actual price to rise in order to make political hay.

The price of gas only matters when its high.. then he's doomed.

Unless someone is controlling production and price, strong upward moves in price, followed by strong downward movement in price is typical of any extraction industry UNLESS someone is controlling production to keep prices steady.

Standard Oil provided that control through its monopoly of oil from the 1860s to 1912 (When Standard Oil was broken up AND just before the huge oil findings in Texas).

From the 1930s till 1969, world wide oil prices were set by the Texas Railroad Commission, which had the power to restrict how much oil could be produced in Texas. In 1969, for the first time since the WWII, The Texas Railroad Commission permitted full production of Texas oil. This ability to produce more oil then the world could use AND the Commission willingness to restrict production so that the price of oil would stay stable, was the key to the Texas Railroad Commissions ability to set world wide oil prices. Texas ability to produce more oil then it was (do to Restriction imposed by the Texas Railroad commission, made Texas the "Swing producer" of oil. This loss of the ability to control price (i.e. Texas ceased being the "Swing Producer of oil in 1969) by the mean fact Texas Oil production was less then the demand for oil, Texas was no longer the "Swing Producer" of oil;. This lead to the price instability of oil from 1969-1973. Prices went from 25 cents a gallon to 35 cents a gallon BEFORE the oil embargo of 1973 (which saw the priced go to 60-70 cents a gallon).

By the early 1980s, Saudi Arabia and become the new "Swing producer" of oil. Saudi Arabia set the price of oil from the 1980s till about 2000. I remember Thaxter trying to get a larger share of the world wide oil market with her then new North Sea oil production in the mid 1980s. She tried to sell more oil (So she could have the money to break the British Unions, starting with the miners) but finally after a couple of years, Saudi Arabia taught her a lesson, the House of Saud dropped its production of oil so that the world wide price of oil fell below the cost to produce North Sea Oil. This lasted about three months, then Saudi Arabia's production of oil was reduced to a price just above the cost to produce North Sea Oil and Thacher having learned her lesson, matched Saudi Arab's price, and the House of Saud kept the price of oil stable from that point forward (increasing production when the Soviet Union Collapsed along with Russia's oil production and exports, and then decreasing production with the oil crisis of 1997 when do to massive loss of income in the Far East, oil consumption dropped).

The problem is sometime after 2000 (And the best guess in 2005) Saudi Arabia ability to increase production came to an end (Officially no the House of Saud says it can increase production but several oil insiders do not think they can). If that is true then we are returning to oil prices of the 1850s and the 1970s ups and down (With a general push upward) but massive ups and downs in price.

Coal has always had this problem with price no one ever was able to come close to controlling how much coal is and is not produced. Thus you had massive booms and busts (You had similar booms and busts in the oil industry but overall the prices was more stable then coal do to the actions of Standard Oil then the Texas Railroad Commission and finally Saudi Arabia).

Thus with no one able to control production and thus price oil will go from $5 a gallon one year to $2 the following then $6 the following etc.

The present bust is caused by several things hitting at the same time first US oil consumption has been dropping since 2008. Americans used more oil in 2007 then it has since. People are going slower making less trips cutting out vacations etc. All of this has an effect on the price of oil.

Europe does NOT on a pre capital basis used as much oil as the US, but overall its is comparative. The problems with the Euro has lead to a similar drop in European oil consumption.

Thus the price of oil is dropping till it drops so much people start to buy more of it AND marginal wells are shut down do to the cost to produce oil from those wells exceed the price it cost to produce oil from those wells.

Given the above $2.50 sounds like a good bottoming out price. Might go lower, might stay higher, but sooner or later people have to buy oil for the upcoming winter and that will increase demand to push the price upward. Depending on how cold October and November gets will determine how long this drop in price will last. When temperatures start dropping below 50 degree people buy fuel that will provide a bottom for the price to bounce off of.

A side factor is Saudi Arabia has been using its Oil wealth to support the recent revolutions in Libya, Persian Gulf and Syria. Saudi Wealth is also tied in trying to suppress the revolt in Egypt. To do that AND keep its own people from revolting, oil price has to stay up OR if it does not increase oil production so that total revenue will stay what it has been. Thus you have an addition push for lower prices, increase Arabian OIl Production, even at the cost of future production.

It will be interesting how low the price will go and how fast.

By the 1980s, Saudi Arabia had become the new "Swing producer" of oil, like the Texas Railroad

But that's old news

Ergo, the price falls. This ain't rocket science or conspiracy politics, folks, it's Econ 101.

the voters will remember this come November!!