in August-- 4 mos ago-- I paid $4.70 for a gallon of unleaded reg gasoline....

[mike_c]

...in my norcal neighborhood. Today I filled my tank at $1.99/gal. There is no way that demand for gas has dropped by a similar amount-- that would be somewhere close to a 2/3 reduction in demand. I honestly doubt that U.S. demand has dropped much at all, although I'm sure that the growth in demand has declined in response to high prices. Nor has production outstripped demand by enough to account for such a dramatic price decline.

This is NOT the ebb and flow of supply and demand in action. I'm convinced that prices were artificially inflated in order to pump the maximum amount of wealth out of working people before the economic crash ended the party.

[sandnsea]

1. Speculation Bubbles

The exact same thing that drove the mortgage writing industry and real estate bubble.

Speculation.

[mike_c]

2. yup....

Bingo!

Unregulated capitalism at its finest.

[sandnsea]

16. And they pay 15% taxes, while working people

pay 28% and 35% and more if you include state and local. And dumb motherfucking JOE THE PLUMBERS worry about raising taxes on the rich.

:argh:

[BrklynLiberal]

3. You are right....There were many who cashed in on the high prices.

[burythehatchet]

13. every dollar of oil company profit for the past 8 years should be seized

[BrklynLiberal]

18. Time for some windfall taxes!!

[Warpy]

4. Here's part of the reason

The other part is that hurricane season is now over and they budget for less spot market gas in the winter than they do in the summer.

However, some of the summer pricing was obvious gouging.

[mike_c]

9. I understand that there are legitimate reasons for seasonal variation...

...in price, including increased summer demand for gasoline that at least partly shifts to demand for heating oil in winter, but unless those factors were off the scale this year it's hard to account for such remarkably high variation without invoking additional driving variables. I think price gouging is exactly what happened. We were fleeced.

[RollWithIt]

5. Futures trading depended on continued high demand and low supply, when the economy tanked, so did...

the Futures market. That's the simple explanation.

[frylock]

8. yarp

[midnight]

6. How can we justify so much for home land security, military,

NSA, CIA, and other expenses to protect America if we cannot be protected from price gouging at the pumps and other types of consumer fraud?

[Paladin]

7. FYI

A few weeks ago, a barrel of oil topped out at around $147 a barrel. When I checked a day or so ago, oil had dropped below $50 a barrel. That's a 2/3 drop in price......

[mike_c]

14. well of course....

But that simply shifts the question from the price at the pump to the price in the commodities market. Either way, it's being driven by factors that are WAY more influential than simple supply and demand, IMO. The primary resource that's being pumped is working peoples' wallets.

[DesertFlower]

10. the price of everything went up

because of gas. are those prices going to come back down? i doubt it.

[GrizzlyMan]

11. Spec bubble collapse and the economy grinding to a halt

[aquart]

12. Yes.

[obiwan]

15. Welcome to "Free Enterprise." Translation: "Bend Over And Spread 'em."

[Skink]

17. Beer's still up.