Gas Prices

Its 11/02/06. One week to elections and the psychology is HOT. Gasbuddy.com is reporting the national price average of one gallon of petrol at $2.204 from $3.90 in 08/2005. The NYMEX Crude Oil Futures is listed at $58/bbl giving us no direction from the current levels of $56 - 58 /bbl.So is the current downtrend wave (apparently approaching its end-cycle) more of a factor of government/corporate manipulation, a pull back reaction from the $70/bbl hype-spike in the crude oil market from what was it - 6 months ago, or are consumption/demand factors adjusting quickly enough to force the powers that be to keep things calm enough and not prompt people to cancel trips and actions that drop overall revenue at the pump and makes it harder for the owners to meet overhead expenses.Despite all the political flak G. Bush picked up for Gas coming with in a hair of $4/gallon and Exxon-Mobil reporting $60 Big-Bs profit, I really doubt the guy even gave it much thought (that a good thing, isn't it ?). China, India and a host of developing countries are gonna need a whole lotta gas-feeding frenzy in the future. American trucking lifestyles is probably even bigger. Demand IS on the up and up. Prices need to rise and tame it.But how soon is now anyway ? Not that soon. Demand is going to rise substantially but not too sharply. The momentum to structure alternative fuels is sharp too. In the short term lifestyles can adjust and hybrid vehicles can build serious volumes (as they operate on the existing fuel delivery infrastructure). In the longer term, a host of alternatives will wage war and some choices like possibly hydrogen and electricity will prevail. Fossil fuels by no means are an endagered species. My bet is they are here to stay for some generations albiet not in domination. Global geo-political instability will play some part but it usually looks a lot bigger than it really is. And don't forget refining. Refining capacity should rise as some existing infrastructure is plugged back in. OPEC is talking about cutting back production again to stabilize price but perhaps there's more to life for them than just stuff like that. Low gas prices are a short term economic boost. If they take motivation away from alternatives then its not healthy. Look for prices at the pump to start re-scaling towards $3/gallon for the summer of 2007. Its a good level. Good for both sides. Good for me ? We'll find out in the summer.Links for this blog entry.....

http://www.gasbuddy.com/gb_retail_price_chart.aspx?time=24

http://www.americasmpg.com/EIA.aspx

And now, to let it loosen a bit, enjoy.............