In case you hadn’t noticed, gas seems downright cheap nowadays. It got as low as $1.29/gallon here in KC earlier this week, though it has bumped up a bit in the last couple days. The reason is that the price of oil has continued to drop……

That would be a great band name.

They’ll have to sell as much as possible to keep their own economies afloat at these prices, which means that OPEC is all talk.

Ed Morrissey

Awh… sniff… sniff, some of my very favorite people, Hugo Chavez and the OPECKers, how sad, however will they make it?

Maxx, why would you guess it was Americans doing it? I would guess it was some Arab manipulating the market with derivatives. Somebody was making leveraged positions. This is the unwinding of that trade (whoever, or whatever state sponsored entity it was).

There is plenty of oil and always will be.

ThackerAgency on December 18, 2008 at 10:00 AM

It could have been Middle-East driven, heaven knows Bush and the Republican Party have few friends that that part of the world. I could never guess who or what like-mined group did it, but I think it was politically motivated because of its proximity to the election.

And yes, there is plenty of oil.

Mid-this-year I posted a link to this article that in retrospect, I think nails exactly what happened. It clearly was not a supply problem.

Angry dictators & princes equals wars and rumors of wars.

Fill your tank & gird your loins.

$20-$40 a barrel. Calm before the storm.

44Magnum on December 18, 2008 at 3:46 PM

If we have brains, it will be $14/barrel after the storm. The only problem is that our Precedent-Elect and the moron Congress really want oil back at $150/barrel, so that people don’t laugh at their suicidal, anti-human environmental policies – such as the idiot messiah’s plans to bankrupt our coal industry, for starters.

Wouldn’t this be a good time to restart additions to the Strategic Petroleum Reserve? Wouldn’t this be a good time to increase tax credits for domestic oil exploration?

Bugler on December 18, 2008 at 9:51 AM

Good question. That depends on how much more destruction we need in the economy before it can really grow again. Once we have shed enough deadwood, the money that would be borrowed to do this is actually better off invested in the growth of the health companies that remain.

They’ve already lost most of their planned revenue and have to make up the loss with increased volume. Venezuela has the same problem, only they sell low-grade crude and not the light, sweet crude that barely goes for $40 a barrel now. Hugo Chavez can’t keep electricity going now, and he certainly can’t afford to lose money through a production strike in the short term. He’s having enough trouble selling his crude now.

Inverted supply curves can get nasty–for suppliers.

Someday, we will get some sense and realize that OPEC is an active enemy and an arm of the arab/persian/muslim assault on the world. They lit the sub-prime fuse with their collusion to blackmail the civilized world (over a resource that OPEC countries are among the only ones on Earth who don’t really use) and will continue to attempt to harm our interests (and the larger interests of Man) so long as they are allowed. The public ignorance on this issue is beyond comprehension and the political and military cowardice exhibited by nearly all people towards these enemies is astounding.

Until we get some sense and take the gulf oil fields back from these savages, these enemies will continue to attack us through oil, complementing their brothers’ attacks with the bombs bought with the extorted oil money. The situation has been clear for all to see, for decades, but most have chosen to wear blinders.

When oil is high, they can’t resist the money.

When oil is low, they can’t afford to do without.

Jeez, I love markets.

Waa.. I wish I could pay 1.50 again! And my State HAS refineries.

ugh frustrating… speculation analysts, stupid day trading wannabe’s, finacial economists via oil and gas companies, the government taxing rules and the refineries themselves… beside OPEC lower the cap on oil production are ALL problem of why Oil went High.. and now with everyone bailing.. is now sinking.

I happen to like the idea of NOT using gasoline to drive around. Not for any Green reasons, though. I can’t think of a better future than that of seeing the Arabs peddling oil like a beggar selling pencils on the sidewalk. The sooner we no longer have an interest in the Middle East, the better.

Hey JiangxiDad… $1.59 at the Arco station just down the road from me.. Ya, San Diego County Ca. We usually have the highest gas prices in the continental US….

doriangrey on December 18, 2008 at 8:51 AM

Enjoy it while you can. Our lousy legislators are trying to raise the price of gas here in CA.

Democratic legislative leaders, in an effort to skirt Republicans’ objections, have proposed increases in Californians’ gas, sales and income taxes which will be voted on by the state Senate and Assembly tonight. The Times’ Evan Halper and Jordan Rau explain:

The plan relies on loopholes in the law that allow legislators to increase levies with a simple majority vote – as opposed to the two-thirds vote typically required – under very narrow circumstances. Obtaining a two-thirds vote to pass tax increases would require some GOP lawmakers to break their no-tax pledges.

Democrats would justify implementing the taxes with a simple majority by calling some of the revenues “fees” that pay for particular programs. Such fees can be put into effect without GOP support. They are also planning to take money from existing fee accounts, use it to balance the budget and then replenish the accounts with higher fees.

If that happens the media will face their first dilemma. Go with the doom-and-gloom style of reporting they know get ratings and make Barry look bad. Or, downplay it and tick off OPEC even more and lead some of their member states to start looking at their neighbors with designs on invasion.

It is almost like rock/paper/scissors.

Government subsidies, anyone?

So trying to use he supply and demand argument doesn’t really work with oil. Remember oil was at $10 in 1998. It was at $150 in 2008. Demand didn’t rise by 1000% in 10 years.

So I think oil has just as good a probability to be $20 next year as it does to be $80. It truly is the roulette wheel of investments with no rhyme or reason.