Gasoline could drop 50 cents/gallon by spring

no pseudonym either ....

 

Where?

 

Guess you taught us!

What's the next foot-in-mouth opportunity?

.

 

I like your new avatar, Malorn.

 

The price elasticity of demand for oil is relatively inelastic

 

Malorn, wasn't your avatar a Volt? I preferred that one, but to each their own

 

Not really, no. I just figure you've been back at school making good on this:

Just for the record - there are several of us who don't give a flying fig about what sort of car you choose to promote/drive/sell. Many of us would love to see the domestics make a roaring come back. What we find abrasive is *how* you post. The above quote is a good example. If we don't agree with you, then we need more education.

 

I liked this as a better response; the one I got in my e-mail.

 

I'll take that bet if we make it the California average price. Because I don't think it will go under $3 ever.

 

I remember that we already covered that about 20 pages back: Although Calif Fuel Tax is not the lowest, there are a few states that are actually higher.

Again, if the Calif Average price for reg unleaded drops below $3 anytime in 2008, I will change my avatar to a GM vehicle for at least a month. I already have the vehicle picked out, but I don't think I will need to use it.

 

Welcome back. We've had a few differences, but it's always good to see what the other viewpoints are.

Gas under $3 by the beginning of the year? Pretty unlikely, but I hate to say never, because gas is pretty volatile and can swing +/- 50% in the short term, while going up over the long term. I'm predicting $3.40 this winter and back to $4 next spring. Unless the Georgia conflict continues, Iran worsens, Turkish rebels keep hitting the pipeline, etc. Right now the market momentum is strong enough to ignore these influences, but it won't last forever.

 

Before you go double or nothing, I think we all could use an explanation as to why (in your point of view) oil/gasoline prices continued to climb when you thought they would decrease. In other words, you made some assumptions and those assumptions turned out to be incorrect. What has happened that you now believe your original assumptions will pan out?

This isn't intended to be a flame, but a reasonable question.

 

... and Chinese demand is down because of the Olympics. Once that's done it will pick up again, I would think. Geopolitics will always have a big impact on the price of oil, but we'll just have to see what happens with that.

 

The price could also go up dramatically. If the Israelis attack Iran as seems likely at some point (given that the latter doesn't seem likely to give up their nuclear program- particularly after having received so much assistance from the Russians to protect it), oil prices will go to $300-400 a barrel with $10-12 a gallon gas (rationed of course).

Hope the pundits are wrong, but as recent events have shown quite clearly, the international community is unwilling/incapable of handling crises.

 

Lots of things could happen.
I would bet against seeing gasoline under $3/gallon by the end of the year with one stipulation.
If the US drivers continue a low level of demand as the price decreases and people continue to buy more efficient vehicles, then I could see it happening.