I just saw Mr. Steve Forbes on CNBC predicting oil prices will fall back to the $35/barrel range within a year. His rationale: supply will pick up and demand will fall (for instance, he says China has overbought on the market and its consumption won’t keep growing at this rate).
Oil prices have been very volatile recently. And I cannot see into the future any better than Mr. Forbes. But I’d be “shocked” to see oil back at $35 again.
I saw an interesting comment somewhere (and damn me for not remembering where), to the effect that now that retail pump prices have broken the $3/gallon psychological barrier, it may be the case that oil companies wil NOT let pump prices fall below that price, regardless of what the per barrel price may fall to.
So far, here in Memphis regular gas is (at the few stations I see on my daily commute) below $3/gallon, but not by much.
Yeah. Now it’s hard to tell how much of the discrepancy between crude and pump prices is due to the hurricane damage, and how much of it is due to profits.
I’ve seen gas as low as $2.75 the past few days. Someone on CNBC today said it could drop as much as 30 cents/gallon in the coming weeks.