CHESSNOID

I have noticed that the price of gas has been falling and is now closer to $2.00 a gallon.  Thank goodness.  I know economists may argue that issue, but bottom line it is good for consumers.  The recession is so bad, that people don’t want to waste money on gas and have created more frugal habits to help their wallets.

Anyways, crude oil has literally collapsed from its $147 price tag and is now closing in on $50 a barrel.  Some analysts believe it may fall even more.  Let’s hope they are right.

LONDON (Reuters) –

World oil prices could easily fall below $50 a barrel and might even slip toward $40 or perhaps $35, but they will recover and could do so fairly quickly, analysts and economists say.

Benchmark U.S. crude futures dropped to a 22-month low under $55 on Thursday as evidence mounted that the deepening recession would have a severe impact on demand, reducing the use of oil by industries and individuals alike.

Oil has now fallen more than 60 percent from July’s record $147.27 a barrel and is moving close to what is widely considered to be the average operating cost, or “cash cost,” for the world’s oil major oil companies around $50 a barrel.

Many analysts think the market is likely to fall further, breaching the psychological $50 barrier before recovering.

“How low prices go is rather random: $50, $40, $35? It could be any of those numbers,” said Kevin Norrish, analyst at Barclays Capital in London. “All we would say is that the lower it goes, the further out of equilibrium the market is headed.”

The oil price collapse over the last four months has reflected several factors hitting the market at the same time.

I think it is safe to say most of us don’t own oil stocks. The lower prices reflected at the gas pumps are highly appreciated and is relief long overdue. If gas prices fall closer to $1.00 a gallon by the time Bush leaves, then I might start forming my own conspiracy theories of why it went up in the first place.