USA Today reports that crude oil is down to $64 per , far shy of the $120 we were seeing just this year. The reason is simple: futures traders are seeing less demand for oil in a slowing global economy. Recent announcements by OPEC of reduced production has done very, very little to slow down the plunging price. For the time being, the anticipation of falling demand is outweighing the outright certainty of reduced OPEC supply.
My hope is that gasoline prices will also continue to fall. In our inflated Southern California area, gas is flirting with $3, going down to $2.90 hopefully soon. If people have less to spend at the pump, hopefully, they will have more to spend in their local economies. I know, awfully demand-side of me to say such things, but I do feel that high gasoline prices are a hideously regressive tax. Let's cross our fingers for $2.50 gas by Christmas.
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Not to break your heart, but last week I paid $1.85/gallon here in Kansas. Gas at the grocery was $2.05 minus a $.20/gal discount for buying $100 in groceries using the big brother shopper's card. And still we're slow to resume excess driving.
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