Suck It, OPEC.

Apparently a lot has happened since my last post.

The stock, credit and housing markets have been in shambles; the price of oil has now fallen over 50% from its record highs set this past July; and the price of gasoline has dropped well below the psychologically important $3 mark.

As of this afternoon, the national average price of a gallon of regular unleaded gasoline stood at $2.88, which is about 30% below this summer’s peak prices.  Over the past month alone, the price of gas has fallen nearly 23%.  Additionally, the price of gasoline is now only 7% higher than what it was at this point last year.

Currently every state is reporting an average price below $4 per gallon, and there are only 13 states with average prices above $3 per gallon.  Hawaii has the highest state-wide average price at $3.77 per gallon, while Oklahoma has the lowest state-wide average price at $2.40 per gallon.

Unfortunately, this record price decline might be nearing an end.  The Organization of Petroleum Exporting Countries (OPEC) will be holding a meeting this coming Friday to discuss massive production cuts in order to protect oil prices.  It is widely speculated that OPEC will announce daily production cuts of between 1.5 million and 2 million barrels.

Given the world’s current economic state, it is very doubtful that this production cut will cause oil prices – and subsequently gasoline prices – to shoot back up towards their record highs.  However, it’s not unreasonable to expect prices to, at the very least, stay at their current levels or rise slightly.

Comments

  1. Nice article. Thanks. 🙂 Eugene

  2. paulwesterberg says:

    So the current downtrend will yield 3-6 months of slightly lower gas prices allowing consumers to return to docile acceptance of our reliance on oil. People stop downsizing their vehicles forget about carpooling and the solar/wind industry declares bankruptcy.

    Once the “summer driving season” hits we will be the ones sucking on $4 gas again.

  3. This made the front page on Digg.com but I’m only submitting the 2nd comment?!

  4. Lindsy Williams said this would happen back in 2007…..I say this time it’s going to hit the $5 a gallon mark…..

  5. Raising prices around an election?

    I thought the main reason for the low amount was the election… but to raise them just before?

  6. Predicting the future is the business of Shamans. OPEC is meeting to begin the arrangements for a natural gas cartel as part of their negotiations. The huge price swings come as the result of Hedge Fund manipulation, whose capital comes from OPEC sources to a very large degree. Note with some analysis you see the impact of the negative swing in oil prices is three fold:
    1) It kills off any alternative energy companies that were created during the “Surge” (no pun intended)
    2) By taking off the pressure of high gas prices, it gives impetus to McCain’s candidacy, whose win portends a continuing drain and waste of US resources fighting wars against phantoms
    3) It sets the stage for hyperinflation on the next surge, where prices can go higher than anyone can imagine for BOTH OIL AND GAS!

  7. Who are you? Why don’t you post any identity information as to your institution.
    Your credibility is greatly reduced by your anonymity.

  8. I found the Video it’s called “The Energy Non Crisis http://video.google.com/videoplay?docid=3340274697167011147

  9. @John,

    Who are you talking to? Me?

  10. Jimmy P —

    I wish that the guy in the video was right. The government is not stopping the oil companies from drilling on the North Slope. If there were 200 years’ worth of oil there they would be drilling like crazy. Over half of the oil and gas leases in the US are not being used at all.
    If you look at the production data from the North Slope, you will see the truth. We are running out. If the gas from there were to be put in a pipeline instead of being re-injected, the oil production rates there would drop precipitously. The gas injection is what keeps production going as is!
    And, BTW, drilling to over 40,000′ in depth is expensive, especially if you miss! It costs ten times as much as drilling to 20,000′, and the wells in Saudi Arabia are only 5,000′ deep. That’s why their oil is ten times cheaper than ours and our oil companies prefer to buy from them.

    It’s simple economics — aka capitalism.

  11. this summers’ prices were not caused by peak oil that is a ludicrous argument

  12. the comments are not true!..

Trackbacks

  1. […] Oil, Gas Prices Fall – OPEC Expected to Step In | Daily Fuel Economy Tip […]

  2. […] kas tad tā bÅ«tu par saldo dzÄ«vi un ekonomisko krÄ«zi, ja cenas kristos. OPEC džeki Å¡o piektdien rÄ«koÅ¡ot sanāksmi, kurā apspriedÄ«Å¡ot lÄ«dzÅ¡inÄ“jās naftas produkcijas samazināšanu pa 1,5…2,0 miljoniem […]

  3. […] Seems that OPEC is thinking the same thing, because they’d really like to keep oil up to $100 a barrel – more profit for them, weeee! […]

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