Why are gas prices dropping so fast?

At some point this summer crude oil hit $140 a barrel, so gas prices were high. On Friday, despite an announcement saying oil production would be cut, crude continued to fall, hitting $63 or so. Ergo, gas prices fall again.

I don’t feel the need to explain the crude oil/gasoline connection but I can if someone wants me to.

around here in Boston it’s still at 2.59 lowest, but that’s down from 3.63 last month…thankyou jesus for this, I was only the only person dumb enough to buy a truck when gas prices were at their all time high in history lol.

Up here in Dutchess County (NY) gas prices are super low, in the low-to-mid 2 dollar range. It is so weird.

I dunno but I filled up my suzuki sidekick with $20 today so I’m happy :)

I paid $2.28 for gas yesterday. W00t!

Supply and demand. But not to worry. OPEC has lowered production a modest amount, thinking prices would rise. I’m sure they will keep at it.

The dollar is also up.

Since the declining dollar was one reason the price of gas was so high, I would imagine that its climb would make imports relatively cheaper.

@jvgr: They were hoping. Didn’t really work on Friday. Here’s hoping it continues to not really work.

Does anyone think it will drop under 2 dollars? How cool would that be!?!

I would also add that it isn’t just the direct demand of the typical car driver that is lowering the price. People are scared. Buying less. Companies producing less. Shipping less.

Theoretically, this and similar things are causing the gas price to drop.

My most pressing issue is whether I should pay a surcharge to lock in a guaranteed price for my home heating oil at $4.70 a gallon. I am actually considering not locking in the price w/ the gas prices dropping…...!

I was curious about that as well today, and then CNN did the work for me. :)

OPEC nations cut production by 30% because the demand is down.

@alfreda….I don’t think that is why gas prices are dropping…I think OPEC cut production to tighten the market to make prices rise….

They always go down just before an election hoping you won’t notice how the Oil Barron’s have screwed you.

According to MSNBC, it’s due in part to Americans changing their driving habits within the last year. Apparently Americans drove 5.6% less in August 2008 compared to August 2007, the largest single month decline since they began keeping records in 1942.

i paid 2.58 today. it went down and now is back up in some places.

BP is always higher.

I am sure there is a good finance/statistics based reason for the drop, but the cynic in me agrees with Judi. Gas prices always drop around election time. They assume that the public has such a short attention span, that they will only remember the last few weeks before the election and then think “wow. the gas was certainly cheap under the current government’s term! i would like it to stay that way!”

I asked a friend if he noticed the gas prices had dropped, and his response was, “yeah, I knew the crooks have been screwing us all along.” Perhaps this will be indicative of the population as a whole. I think too much has gone on to think too kindly of the current administration. Bush has an approval rating this week of 23–27% depending on which poll you look at.

“The refining capacity of the U.S.‘s Gulf Coast that was lost as a result of Hurricanes Ike and Gustav is coming back onstream, which will mean a significant increase in gas supply next month.” ...

“The global economy is headed for a serious slump, which is already slashing demand for oil.” ...

“America’s economic slump is the key factor driving down oil prices and giving consumers at least some relief in the midst of a harrowing economic storm. But in time, almost certainly, global oil demand will resume its rise. And prices will follow.”

Source: Time/CNN link

Down to $1.85 whoo hoo!

Oil speculators were driving the price per barrel ever higher, but when the regulators threatened to penalize speculation in oil, the speculators sold off their holdings. This caused the price per barrel to drop rapidly, and in conjunction with the drop in demand caused by the world-wide recession the price per gallon at the pump has dropped to its current low levels.