Why are gas prices falling?

[Pro2A]

For all you economists out there, what has caused the gas prices to fall? With all this bailout crap, something did something to get the oil prices to drop. I'm guessing it has something to do with the deflation of the dollar, but I'm no expert. Anyone have any input on why prices are dropping like a rock?

[Damage control]

In a nut shell demand is down do to people tightening their belts.


DC

[Emptymag]

Do I have to explain everything?

Isn't it obvious that we've finally shed enough blood in Iraq to make oil profitable, AND affordable.

No blood for oil, my ass!
Who's NEXT?

[spabula]

summer's over!!!!!!!

[Dredly]

My guesses would be:

1. No new "free money" being given out, what over inflated the gas price was huge amounts of money being given away with very generous terms and interest rates so that money was used to buy huge amounts of oil stock, thus driving up the price very rapidly. Now that the money isn't there anymore people are selling to get out of oil as it returns to where it is supposed to be before they lose money. I saw it a 3.07 in Stroudsburg today, pretty amazing since it was well over 4.00 a gallon less then a year ago.

2. Oil companies are tired of being the target of the attacks against corporate America so they are dropping their prices before the election to attempt to get McCain elected so that he can give them the tax breaks that they want and they want to avoid Obama at all costs. By lowering the price they can make the republicans look much better for allowing offshore drilling and make themselves look like the "good guys" going into the winter months.

3. Relatively "stable" world at the moment, Russia isn't causing problems, Iran has been pretty quiet, we are dropping sanctions on North Korea, Taliban is seeking peace instead of war, Venezula isn't making waves (they are stocking up on arms but not using them), China and Tibet aren't fighting at the moment, no real massive terrorist attacks anywhere unusual... basically the entire world is waiting and holding their breath to see what happens in November. With everything "calm" the wild flucations that are normally cited as the cause for rise in price can't happen without really screwing the system up.


Personally I think it is a big combination of all three, I would expect prices to go up very sharply following the election, depending on who wins that is. If Obama wins expect prices to skyrocket, One of his big campaign promises is to basically tell Oil to go fuck themselves we don't need them and invest billions in alternative energy which doesn't pay for big oil.

if McCain wins expect them to go up slightly but not much as big oil can't afford a green push away from oil. McCain is all about nuke power and clean coal but most oil in the US isn't used for power, its used for cars, manufacturing, and heating, if I remember correctly is was less then 5% of Oil was used for electricity (maybe 2%?) but the point is Big Oil will still have a long and prosperous future under McCain so they can't afford to piss off their customers again.

[ALS]

People don't realize that $140 is not the price on 100% of the oil supplied to the market. 95% of the oil is worth $60-$70 a barrel. It's the demand for that last 5% that makes it worth $140. With demand down close to 4% just in the U.S. oil is starting to become more of an excessive supply vs demand situation. This just isn't a U.S. problem this is a World Wide problem. Demand is down through out the E.U. and Asia. Here in the U.S one problem we have is our refinery capacity is extremely tight. Most don't realize that 30% of the gasoline sold in this country is imported.

[bogey1]

we dont have enough money to fund street/highway projects because people aren't buying as much gas as they used too, so the gov dropped the taxes down a bit so we will buy more gas so they have the money to fix the roads. now they wont tell you that, they'll tell you because oil has dropped

[normanvin]

Doesn't the price always fall just before the election?

[Johannes_Paulsen]

Reduced demand, an increase in the strength of the dollar (yes, I'm serious,) and speculators betting that with the looming recession, demand will be even lower in the future.

[vic2367]

summers over ,,

come next spring ,gas will go up again ,,then come next fall gas prices will fall again,,