Gas Falls Below $2; Let the Trance Begin

The unthinkable has come to pass: Gas has fallen below the $2 mark hitting $1.989 today. What does this mean? A recovered SUV market? The end of plug-in hybrid development? No, of course not.

But are ultra-low gas prices (so low that over the summer, no one would have believed them possible) a good thing? Well—probably not.

It's true that high gas prices on top of the current economic crisis would spell disaster. However, gas prices have bottomed out largely because of the economic crisis that has lowered demand so drastically.

President-elect Barack Obama hit the nail on the head when he said in his recent "60 Minutes" interview, "This has been our pattern: We go from shock to trance. You know, oil prices go up, gas prices at the pump go up, everybody goes into a flurry of activity. And then the prices go back down and suddenly we act like it's not important, and we start, you know, filling up our SUVs again."

Rest assured, the shock will be back. It's just a question of when.

Comments

Gas is $1.41 in Kansas City.

$1.80 in NWFlorida...never thought I'd see these prices again....

As economy is bad its OK for cheap gas. People have no money to drive around or to buy big cars. But I hope gas will be back to $4-5 as economical conditions improve.

Buy those SUVs - I need another Prius.

$1.75 in suburbs of DC, I thought numbers like those were just a myth anymore!

It is $1.69/gallon here. I have a tiny Scion, so it just takes a few bucks to fill up. I love it!

For the first time ever, my fill ups are under 20 bucks!

I think gas prices will stabilize at just under $3 a gallon. The love affair of having "more than I need" vehicles has disappeared just like the Big 3 cars of the '80's. Investors know now the ceiling the consumer is willing to spend before there is reaction in the market. High mileage cars are here to stay...