Just a Quick Note About Oil Prices

Down and down she goes and where she stops nobody knows. According to this story:

http://news.yahoo.com/s/afp/20081203/bs_afp/commoditiesenergyoilprice

The price of oil fell below $45 briefly today. That is Brent Crude fell below $45, not Light Sweet Crude with a GI of 30. Brent has an API Graviety around 38, and higher sulfer content. It is a good source material for gasoline, though.

Light Sweet Crude finished the day at $46.79. The current price in over-seas markets sits at $46.99 according to Nymex.com. This means the price of Light Sweet Crude is down more than $100 USD per barrel from the historic highpoint of $147.27 this summer. Wow... Wow...

Agent K claims that the price of LSC is going to drop to $10 per 55 gallon Barrel. I am very skeptical, even if the new Saudis {Brazil} begins to compete vigorously with the old Saudis. Still, I believe $30 per barrel LSC is attainable. This would mean 1 gallon of regular unleaded gas should return to about $1.00 in many parts of the country.

The most interesting angle on this story is the stimulus reduced gas prices may lend to our economy. Oil is a vital input to just about every form of commerce and production in our land. The very high price of Gasoline and Diesel fuel must have had something to do with the current recession we are in. Massive cost reductions in this area must be of some help, particularly in the transportation section.

In the San Fernando Valley of Los Angeles County California, you can already find several gas stations where all grades of gasoline are below $2.00 per gallon. This was much more prevalent in Fresno California during the Thanks Giving Day weekend. A drop to $30 per barrel could put us $1.15 per gallon.

Seems just like old times.