It has been quite an amazing decline from the record high prices we had in July 2008. In just the past 6-7 months we have seen oil come from upwards of $140 per barrel to as low as $33 per barrel. Likewise, gas has come from almost $4.00 per gallon (where I live) down to almost $1.50 per gallon. That's roughly a 75% decrease in oil prices and a 60% decrease in gas prices.
As I had
said in the past, those high prices were well beyond the normal market changes for supply and demand. Likewise, this massive decline is probably more radical than supply and demand principles would dictate. While the massive rises in the past couple years have been fueled by fear of supply shortages and speculative buying, the recent declines, I believe, are also being exaggerated by fears of the global economy slow down.
It is my guess (granted, I'm not expert) that oil and gas prices will come back up until they find a point of stabilization. In my opinion, that will probably be around $75 per barrel for oil and $2.10 per gallon for gasoline.
That said, I'm definitely not complaining about the cheap gas. I'm just going based on what I've seen and read. I will be watching to see how these predictions turn out and I'm sure you'll see another post from me on the subject in the future. Until then, buy that gas while it's still cheap!
By the way, what's the lowest gas made it in your area? I think I saw about $1.55 here.
