Gas Could Hit $1, Oil CEO Says

The CEO of Gulf Oil predicts the price of a barrel of oil could go as low as $20, with gas prices hitting a bottom of $1 a gallon by early next year. Gas is currently at $1.77 a gallon nationally, according to AAA.

This is mind-boggling information from an oil insider considering that fewer than six months ago gas was at a record high of $4.11 a gallon.

While many in the media point to low gas prices as a silver lining to a dismal economy, it’s actually the canary in the coal mine foretelling a severe recession and deflation.

In the real world, though, it may simply mean that the gas bill won’t be a pressing matter for the next few months, while many in the population are worried about jobs and housing.

Oil to Plunge Below $25 Next Year, Merrill Lynch Says (FoxNews)

Comments

I don't know. Regardless of what it heralds, I'm not gonna complain about being able to fill my tank for $30 when it was $60 just a few months ago. Seems like a huge boost in disposable income for the American public.

Now would be a great time to start drilling, expand the Strategic Petroleum Reserve, and build more refineries, putting in place a low-price structure before the inevitable uptick in demand takes us back to more "normal" prices.

All these are only a short term activities that happens because of recession. Once if the economy recovers or summer comes, gas prices will shoot past $3/gallon.

Best thing is to follow the Boone Pickens plan.
Replace gas fired power plants with wind and use the gas to run the vehicles. This way we can ensure that gasolene prices does not increase again.

Also the truck's should be replaced with CUV's, wagons & hatchbacks, since these vehicles offer good utility and also decent mileage.

I don't see how the T Boone Pickens plan solves anything with gas prices till we have plug in vehicles. What is to say that the economy will come back? More than half the people here want the Big 3 to die, and won't drive a domestic made auto.

won't hold my breath on that!!

Gas is $1.35 in Kansas City, Missouri.

One of the cheapest places in the nation.

$1.57 in Laurel, MD.

Not gonna complain; let the prices fall! We're already so screwed up financially, forget the future!!!

No, but really, we are screwed.

great. i'll save that money just incase we have another mid-crisis again.

oil price is a cartel for all the oil giants..opec is there to do the pricing.. supply and demand does have to do with the price, but not much

I think OPEC will definitely reduce supply. Some countries already have the oil locked in on the short term like Mexico (article in WSJ). This is a bigger stimulus packet then the government could ever do. We are getting back some of the money we were overcharge. My personal belief is gas should of never topped $4 this year but stayed in the 3.50-80 range at the peak. Now next year before the recession I thought was when it should of topped $4

I am enjoying these low prices, knowing very well that is only temporary, but enjoying them none the less, its a nice Holiday bonus.

I certainly hope that due to the low gas prices the american consumer does not see it as the opportunity to buy another huge suv to hall around their 2 kids. The one positive thing that came out of the high gas prices is that everyone realized that they did not need these types of vehicles and began consuming more fuel efficient vehicles. This did hurt US car companies, as their high profit vehicles were large vehicles that the US consumer traditionally enjoyed and demanded. I do find it funny how 'americans' blame the US car companies for their issues when in fact it is was these same consumers demanding the big vehicles. We are the only country in the world that drives these vehicles and why because historically we have enjoyed low fuel costs. Believe me if gas in Germany wasn't so high, they would be rolling around in escalades too.

Matt.

1. haul. sorry, but that was bugging me.

2. We are not the only country that drives around in huge SUV's. Land Rover is English, and its one of the thirstiest brands out there. Audi's Q7, VW's Touareg, and Porche's Cayenne are pretty large SUV's also. dont forget the R-Class, M-Class, GL-Class, and G-Class from Mercedes, or the X5 and X6 from BMW. none of those vehicles can even remotely be considered efficient, even with the least powerful engines (ok, maybe the Bluetec). All of those big SUV's are acctually more popular over in Europe than they are here. People in Europe dont drive nearly as mcuh as Americans do, simply for the fact that everything is closer together there, and the public transportation system is much more developed. In addition, people in Europe are accustomed to high gas prices and therefore buy big SUV's or gas-guzzling sedans/coupes because they like the cars, not because it is some fad.

So no, people in Germany dont rool around in Escalades, or Navigators, or H2's. They one-up the Amercian car companies by getting more luxurious cars like the Q7, GL450, X5, and Range Rover. In fact, VW is keeping the Touareg R50 with its super powerful V10 TDI and the V8 and V12 TDI versions of the Q out of the US because they are afraid people wont buy them because of gas prices. Both have been selling in Europe.

Diesel fuel is not dropping as fast. We have $1.49 gasoline, and diesel is $2.79 or higher.

Shall I believe anything that Merrill Lynch says?

I don't think anybody has a mind control device on you J, so you shall not have to believe them if you don't want. But they had a big stake in the whole Enron deal a couple of years ago, so it might not be a good idea to bet the farm.

JM - head over to Germany or France - seeing these cars is extremely rare and most of them were designed for the US market and almost none of the cars you mentioned are true body on frame heavy cars.

The joke in Europe is give a 10 cents of gas and 90 of taxes... gas is an easy and quick way to make money for European Governments.

Bloke,

The statement that I made was sarcastic.