The Gas Price Limbo: How Low Can it Go?
Photo credit to Tim Patterson
What a ride it has been folks... The price of gas in the U.S. was teetering on the $4 mark just a short few months ago, and here some states stand today with $1.90... $1.70... $1.60... dare we say soon to be $1.50. We are making history right now with gas prices having plummeted over half its original value in just the last six months. You'd think folks would be happy, which many of them are, but gas is not quite selling like hotcakes, even at these outrageous prices.
This is because there is another force at work. Many experts are telling us that the good news at the pumps is unfortunately due to some pretty bad news on Wall Street. Among other reasons, much of the amazing drop in gas prices is that old factor of supply and demand. People are staying home more these days, finding their own brand of entertainment, and saving their money for what could become quite a steady length of rainy days.Currently as things stand, consumers have been driving approximately 78 billion less miles over the past 10 months than what was expected. That certainly creates quite a surplus that we did not expect. To go along with the surplus, the price of crude oil is now under $100 a barrel, which makes the playground for speculators not as fun for gambling as it was several months ago.
While this is actually good news for the earth, as she can at least breathe a little easier, it is bad news for much of the world's economy, which is going South faster than most of the ducks around this time of year.
Also faltering under supply and demand right now is E85, which is just sitting in inventory tanks. The price of regular gas and diesel has made a lot of folks forget about E-85. Some people are even forgetting about what the price of gas was several months ago and have fallen right back into their old cozy surroundings of $20-something for a tank full of gas.
Each month we reach a new low in the price of gas we thought we'd never see again, which brings the question on everyone's mind, how low will it actually go before leveling off, or skyrocketing back up? Well, some people seriously doubt that we will ever see $1.10 gas again, but $1.50 or maybe $1.40 is certainly possible.
Other folks say we could be seeing less than $1.00 in a matter of time. How low gas prices will go is actually a tricky question, as much of it depends on where the current recession will go from here.
Hard times will mean less driving and subsequently cheaper gas. If the economy begins to loosen up a little and allow some money to once again start flowing through, consumers will start driving more, and we can kiss the possibility of less than $1.00 gas goodbye. With these kinds of options it makes gas prices a double edged sword. Gas is currently inexpensive and the air is slightly cleaner because the consumer is suffering, which is both good and bad for obvious reasons.
What do you all think about the current gas situation, and where do you think we will find ourselves within the next six months?
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