CHESSNOID

The price of crude oil has almost fallen by 50% from its high of $147 a barrel.  At that same time of its skyrocketing price, the cost of gasoline was almost  $5 a gallon in California.  Less than 2 years ago, I remember the price at the pump was only $2.50.  Why isn’t the price of gasoline falling as fast as it went up to coincide the moves of the oil market?

LONDON (Reuters) - World oil prices are likely to fall further if the rush to cash across global financial markets continues but crude is unlikely to dip for long below the oil industry’s $50-a-barrel average operating cost, analysts said.

Benchmark U.S. crude has fallen 45 percent from July’s record $147.27 a barrel to trade at $81 a barrel Monday after settling at $77.70 on Friday, its lowest close in 13 months.

“We believe the deepening banking sector crisis and the significant slowdown in global growth that lies ahead will continue to put downward pressure on commodity prices,” said Deutsche Bank in a report released on Friday.

“A combination of fear, de-stocking and disruptions across the supply chain owing to frozen credit markets is currently depressing oil demand far below where underlying economic fundamentals would suggest,” Goldman Sachs said on Monday in a note to clients.

Goldman said it expected crude to average $75 in the fourth quarter and end the year at $70, but added: “Should the financial and economic crisis cut deeper into demand, the market could fall as low as $50 a barrel.”

There are reports the price of crude may go down to the $50-$60 per barrel range.  Gas should definitely fall back in the low $2 range. If they don’t, then it will confirm what we all know.  The gas companies fix the prices just like an illegal monopoly and screw the American people.  They made record profits in the last couple of years when oil shot up.  I bet they will make record profits even when the price continues to plummet.