Sidebar

[raybo]

I have a feeling that once "domestic barrel prices" reach about $50 (plus or minus) we will see a leveling off of "at the pump" prices. The cost to produce oil surely has increased along with the price of everything else, and what was a $20 benchmark for shutting down pumps years ago, has probably increased to at least double, and probably more than double that $20 price. So, while we may see $2.00 at the pump in many of domestic markets, going much lower than that may not happen.

As gasoline prices decrease, people will not be so inclined to buy more fuel efficient autos, and will not feel that they cannot afford those long trips anymore, and the usage of gasoline (and other petroleum products) will probably increase. The only way to allow the increased usage of petroleum products is to increase oil exloration, and THAT takes lots of money. So, if prices decline and usage increases as a result, profit per barrel will start to decrease, meaning that there is less money available for more exploration.

I just don't see any way that we will not see a leveling off of prices, and production, in the near future. And, increased gasoline prices at the pump. Call me a skeptic, or negative, but the past has been an excellent forecaster, and that is the way it has worked in the past. As demand goes up, prices go up too. And, I don't see demand going down anywhere around here. The number of vehicles waiting in line for gas here is higher than it was a few months ago.