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Crude oil futures hit 3 year low, sub $1 gas could be on the way

12/04/2008, 5:44 PM

By Drew Johnson

There is no doubt the current recession and credit crunch has been hitting Americans’ squarely in the wallet, but there appears to be at least one bit of silver lining to the economic downturn – lower gas prices.

For the month of January, crude oil futures fell to just $43.67, the lowest per barrel price since January 2005. Moreover, many industry experts are predicting that crude oil could fall below $25 per barrel early next year.

“We’ve got the U.S, U.K., Europe and Japan all in recession for the first time since World War II, and the oil market is reacting,” Chip Hodge, a managing director at MFC Global Investment Management in Boston, told Bloomberg. If China starts to feel the effects of a recession, prices could plummet even lower.

To put $25 per barrel into perspective, crude oil hit a high of $147.27 per barrel in July, resulting in a per gallon national average record of $4.11 per gallon. At the current per barrel rate of about $44, national prices are hovering around $1.78 per gallon, meaning a drop to $25 or less could result in gas prices tumbling below a dollar per gallon.

That’s good news for individual families, but a sad commentary on the current state of the world economy.

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12/04, 6:19 PM

posted by:

wideopenthrottle

Yeah the economy sucks, but it forced the oil biz. to finally return to real prices, not unnecessarily inflated price gouging.

12/04, 6:20 PM

posted by:

Impulsive

Doesn’t matter how cheap it is when you have no job.

12/04, 6:21 PM

posted by:

A4

^ exactly

12/04, 6:24 PM

posted by:

jayjc08

Matters how cheap it is when you WANT to stay employed.

12/04, 6:43 PM

posted by:

swamp donkey

Come one, come all, come and get your SUVs (Super Useless Vehicle). Gas is cheap and so is the car.

12/04, 6:54 PM

posted by:

DB9

Cool:-) Steppenwolf anyone?/!…

Get your motor runnin’
Head out on the highway
Lookin’ for adventure
And whatever comes our way….

I like smoke and lightning
Heavy metal thunder
Racin’ with the wind
And the feelin’ that I’m under…

Born to be wild
Born to be wild

DB9;-)

12/04, 7:07 PM

posted by:

DB9

@swamp donkey

Hey dude what’s up bra? What ever happened to that cute chick on overhaulin? She was so purtty :-p

DB9

12/04, 7:15 PM

posted by:

megeebee

Don’t get used to this!

The price of oil is only going one direction, and that’s up…………eventually. China’s economy won’t be slowing forever and niether will ours. Once we’re out of the current economic poop-tank (and yes, sooner or later this-to-shall-pass) oil will begin it’s climb again.
Enjoy this while it lasts.

12/04, 7:20 PM

posted by:

DB9

^^Gottcha;-) So which do you like better SU, CNQ or ECA? Watcha think? Cheap enough yet or hold off on the trigger…

DB9

12/04, 7:22 PM

posted by:

Bimmer

It’s not like oil companies will go broke, they’ll still make a profit!
What happened to analyst predictions that by the end of this year oil will be $200-250 a barrel? They DON’T KNOW A THING! I know a good job for them all, – PSYCHIC. Because that’s all are they good for! Might as well look into a crystal ball.

12/04, 7:24 PM

posted by:

Viktor King

Frankly, I can’t see how this is negative at all. I see this as the manifestation of a self-correcting mechanism.

What was one reason for the economic downturn? Fuel prices affected transportation and the price of goods transported. If you were the owner-operator of your own commercial truck, your operating costs quadrupled and then plummeted in a six-year space. Now, that cost no longer has to be applied to goods transported. That doesn’t necessarily mean the price of goods *will* fall, I’m sure suppliers and retailers will take the opportunity to pocket the falling overhead, at least for a little while; but the point is in our American car culture we are about to find a lot more money left over in a lot more pockets, and people perhaps more daring in their choice of vehicle and their spending habits.

‘Sorry state of the economy’? Oh noes! We have to live within a reasonable means! We can’t take out home equity loans for fruitless holiday trips! We can’t take out any more credit cards! We can’t own nine houses on a variable interest rate and have tenants pay twice what the living space is worth to cover the mortgages! The hedge fund popped!

The fluff deflated, that’s all.

My perspective should be obvious – that paycheck to paycheck income and lifestyle that leaves me too poor to notice the economic downturn besides the price of fuel.

How sorry can I or should I feel for people who shouldn’t have gotten involved with a house suddenly buried under it nose-diving market value and worefully inflated interest rate? Don’t worry about making your money back, get a walk-away deal on the price, get a smaller place.

What sympathy have I left for someone who lost their job? You had no contingency? You have no other marketable skills? You can’t find a job like the one you had elsewhere? Out of state? Outside the country? I love those guys, the guys who can’t see the scope of the planet; who limit themselves to one profession and one location and beeline for the unemployment office when it all goes wrong. Economy kicking your ass? Why? What are you willing to do about? It?

12/04, 7:24 PM

posted by:

carstuff

Wow, we have seen the same thing before. Gas goes up quickly and then is down for 10 years. And then repeats the pattern.

12/04, 7:35 PM

posted by:

elviososa

I still want more green cars on the roads….when the gas price increase again, we will be fine this time.

12/04, 7:37 PM

posted by:

DB9

@swamp donkey

Hey dude, did some checking, Courtney was her name. She be shilling performance parts and crate engines at NASCAR tracks and NHRA meets. Let me tell ya she is sweeeeet:-) Take a look…

>>>www.wallpaperbase.com/wallpapers/celebs/courtneyhansen/courtney_hansen_1.jpg<<<

Don’t be breathing to much of that swamp gas. Peace bra…

DB9

12/04, 8:17 PM

posted by:

jayjc08

I see a face in that picture of a pump. Two eyes, those two white spots at the top, and the mouth, in the middle.

12/04, 8:47 PM

posted by:

justagigilo85

I agree with Bimmer’s quote:

“It’s not like oil companies will go broke, they’ll still make a profit!
What happened to analyst predictions that by the end of this year oil will be $200-250 a barrel? They DON’T KNOW A THING! I know a good job for them all, – PSYCHIC. Because that’s all are they good for! Might as well look into a crystal ball.”

That’s proof that speculating about the price of oil (and therefore raising/lowering prices) should be a crime. How much stock do we put into meteorologists??

12/04, 9:06 PM

posted by:

1c3d0g

This is a temporary relief, if anything. I’d stock up on as many gallons of cheap gas as I can, ’cause sooner or later the prices are going to skyrocket again, and maybe for good.

12/04, 9:41 PM

posted by:

JSurfer1451

I love how it only took the complete collapse of our and other nations economies to lower gas prices.

12/04, 9:50 PM

posted by:

johnnycanuck

This is awesome. I’ll be back as soon as I’m finished checking the classifieds for V10 Excursions.

12/04, 11:21 PM

posted by:

Mutant@DCX

hehe, electric car is dead!

all tree huggers please move over to the global warming sign up table, nothing to see here follks

12/04, 11:31 PM

posted by:

MugenSentraKen

======>>jayjc08 i see that face too…..it looks mean…

12/05, 10:26 AM

posted by:

bigjimid

Now with the gas so low, auto manufacturers should divert spending in R&D on alternative fuel vehicles over better fuel efficiency for current vehicles. You know…..”p-l-a-n…a-h-e-a-d”

12/05, 11:00 AM

posted by:

sxrcamaro

We ned GAS to be something we use because we want to and not because we need to, then the economy will not be so influenced by the price of crude oil. That why I support green cars. We need all small cars to be ultra fuel efficient or electric, trucks to be diesel electric so that gasoline will remian at $1 cuz thats all it is really worth anyway!

12/05, 12:26 PM

posted by:

yarddog82abn

W. ALL READY MADE HIS MONEY, HE DON’T CARE NO MORE…

12/05, 1:48 PM

posted by:

DaSpyda

Unfortunately, OPEC will probably cut production, as it’ll get to the point of them losing money to even move a barrel of oil. Once production gets cut, and then the refineries stop converting oil into gas because of the same reason, we’ll see prices go up again.

Supply and demand…

12/07, 11:18 PM

posted by:

injunraiv

I remember when oil started really spiking, I read in a Kiplingers report that there was really no justification for oil at $60/barrel. Then a few months later they were joining everyone else in this ’shortage’ BS, and calling for futures in the $100 range, then up and up as the price kept climbing.

We were told that China and India were to blame, as their emerging energy needs were driving the market crazy. It’s not funny, but I guess they started wanting oil somewhere around the time Katrina hit? And now they don’t want oil anymore?

And here we are thinking gas at $2/gal is actually CHEAP!! Do you feel manipulated yet?

12/08, 2:48 PM

posted by:

jackjimturkey

I’m glad I got my Vulcan when gas was $4.61 a gallon!

 
 
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