Three dollars a gallon gasoline?
The only things that have dropped faster than the stock market in the past few weeks are the prices of crude oil and the cost of a gallon of gasoline.
Gas prices dropped further over the weekend, and it’s not far-fetched to imagine gasoline reaching $3 a gallon again.
All of which is quite a turn-around from just a few months ago, when experts were predicting nothing but steadily increasing fuel prices. This is from an April entry on The Wall Street Journal’s Market Watch Web site:
“Surging crude prices, which could surpass $200 a barrel in four years on tight supplies, could push gasoline prices to as high as $7 a gallon, CIBC World Markets analysts said Thursday.” The same article said, “Demand is unlikely to fall anytime soon.”
Our crystal ball is no better than anyone else’s, of course. And even those who claim expertise in these matters often can’t foresee things like the global economic crisis that has been pushing world oil prices lower of late.
However, months before the economic situation reached the crisis stage, demand for gasoline was dropping as customers across the world reacted to higher prices. Too many experts, including those in the article mentioned above, seemed to ignore that basic premise of Economics 101.
Hold off on the huzzahs, however. A return to the days when a trip to the gas pump rarely required more than a $20 bill is not likely. Oil prices, which were tracking the stock market, moved upward Monday, to just over $80 a barrel on some markets.