Low gas prices are a last gasp effort to bolster the economy until Boosh leaves

[live love laugh]

And it's still not working as the markets tank to new lows daily.

Does anybody really believe that people who have gotten $4.50 a gallon for gas are going to keep selling it for $2?

I doan theen so.

[GrizzlyMan]

1. No, it's a symptom of an economy that's grinding to a halt

[live love laugh]

2. So you expect the prices to remain low? nt

[GrizzlyMan]

3. I expect them to remain low as long as the current climate holds up

Demand is lower. Businesses are cutting back on a host of things that impact oil prices. People are traveling less. The prices will go back up when demand begins depleting stocks again. Right now that ain't happening.

[GliderGuider]

9. Low oil prices are bringing exploration and new production projects to a standstill.

Right now the world is draining its existing stockpiles and using production from existing wells. As the stockpiles drain and the producing wells run dry the supply will fall, and prices will begin to rise again.

Then the real fun starts:

The combination of low oil prices and the economic crisis will have constrained exploration and new production, both of which have long lead times and high capital requirements. That means that there will be little new oil to replace the stuff we've burned while prices were low. As the economy tries to recover it needs more energy, and oil prices are low, so demand goes up. But there isn't enough supply to meet the renewed demand (supply constraints have by now gotten quite severe because we're already past the point of Peak Oil). The supply shortfall then causes a true super-spike in oil prices, which deals a body-blow to the struggling economic recovery.

What we may see is a series of spikes and drops in oil prices. The spike happens when demand outstrips supply, and the drop happens when the high prices knock the economy back onto the mat, thereby lowering demand. Then the low price re-stimulates demand, causing another bump into the supply limits, another price rise, another body blow to the economy, and a drop in oil prices and around and around it goes. Each time the price spikes higher and the subsequent price drop doesn't go down as far. We're at the very beginning of this scenario, because we just passed Peak Oil last year..

Of course, the combination low oil prices and the economic crisis that are constraining petroleum exploration and production are also preventing investment in renewables, so when TSHTF there will be no new new oil AND no significant alternatives. That's a recipe for $50/gallon gasoline within 10 years.

[Javaman]

11. Man, you have gotten a lot of mileage out of that post. ;)

I've seen it a few times today.

Still worthy info, though. :)

cheers.

[GliderGuider]

12. Don't want to wear out my fingers typing new stuff all the time

And unlike Robert Hirsch, I think people need to be a little scared by this.

[Javaman]

13. people should be very scared. Concidering that the EIA report stating

a 9 percent drop off year on year of the worlds oil reserves after 2010. Some very different times are ahead of us.

[dkofos]

14. With more than $100 billion in profits last year, the oil companies

can afford to continue to explore and drill.

They just choose not to.

[jmg257]

4. Do you think the people who have gotten 4.50/gal give a rat's ass about Bush? Or his legacy? nt

[live love laugh]

7. Actually I do think he could call in a favor after all he did for them--they owe him. n/t

[slackmaster]

5. No, the current gasolne prices are the result of the collapse of a speculative bubble

And they are not really low. People are easily conditioned - Get them used to paying $4 and thinking it's going to keep going up, and $2 sounds like a real bargain.

[OKNancy]

6. No conspiracy here

Believe me, if the oil companies and suppliers could get it, they would be getting $150.00 a barrel. As others have said - Bad economy... it's basic supply and demand.

[This One]

8. If it's Obama's fault the stock market crashed, doesn't he get credit for low gas prices?

[bluecollarcharlie]

10. More Neo-Liberal conspiracy theroy clap trap

Boy you peole make me sick. it's getting to sound like the Freeps have takin over.