Crude Hits Ten-Month Low; Gas to Follow

As investors grappled with the potential ramifications of a looming global economic downturn today, oil prices fell to levels not seen since late 2007. The dive was precipitated by a growing sense that in the coming months, businesses and individuals around the world will drastically cut oil use, and that a spike in demand from emerging economies is about to plateau.

In July, oil hit record highs near $147 a barrel, leading many energy analysts to predict that it might never again dip below 100 dollars. But in less than four months, markets around the world have declined significantly, leading to a collapse in the projected demand for crude in the coming months. Today’s low was near $86 per barrel, a decline of more than 40 percent since July.

How will lower prices at the pumps affect consumer attitude toward hybrids and other fuel-efficient option? Will Americans become lukewarm about the growing selection of more efficient vehicles scheduled to hit the market in coming months and years? A marketing study released by Kelley Blue Book a few weeks ago indicates that they won’t. Fifty-eight percent of drivers who plan to factor fuel efficiency heavily in choosing their next car say they wouldn’t revert back to gas guzzlers even if the price of gas fell to $1.00 per gallon.

It’s unlikely however that gas will fall very far below $3.00 per gallon, even if crude prices continue to hover near 90 dollars. And new federal regulations increasing the average fuel efficiency each carmaker must meet will continue to drive the production of greener cars—regardless of fluctuations in oil prices, gas prices, and consumers’ ability to buy a new car.


  • Bryce

    All of us here want something efficient.

    I wonder if we are the majority though?

    We will see.

  • srland

    Very interesting indeed.
    Either the big brokers are screw thing around again or OPEC and other oil exporters want to slow or stop the move away from oil.
    Or
    Oil just isn’t all that after all.
    The goverment should have never allowed oil to take over via Prohibition.
    The sooner we all start distilling again the better things will be.

  • qqRockyBeans

    Actually, gas has fallen to below $3.00 a gallon
    in central NJ, many stations are 3.0x
    I’ve seen highest recently 3.19

    but yea it is possible to be less than 3.00
    especially near cherry hill and camden, south jersey

  • ssatan

    It’s unlikely however that gas will fall very far below $3.00 per gallon, even if crude prices continue to hover near 90 dollars.

    Gas is already in the 2.50s in parts of Oklahoma
    http://www.gasbuddy.com

  • Todd C

    How soon before OPEC holds a summit and announces plans to drastically cut production to counter falling prices? (they might not be able to get any OPEC member to actually do it, but they’ll announce it regardless) Our thirst for fuel-efficiency is based on a desire to take control of our finances. It’s here to stay.

  • ssatan

    It originally was set for December, but…
    http://www.guardian.co.uk/business/feedarticle/7847209

  • Need2Change

    In Northern Virginia, regular gasoline peaked around $4.10/gallon. It’s now about $3.40/gallon. That’s a decline of 17%.

    The price of oil peaked around $146/b and is now $86/b. That’s a 41% decline.

    Looks like the oil companies feast on both increases and declines in oil prices.

  • Need2Change

    In my opinion, hybrids will continue to sell well, but the demand for hybrids will drop, waiting lists will disappear, and one won’t need to pay above MRSP to buy one. And maybe the resale value of non-hybrids may increase. Right now, some dealers are offering 50% of the trade-in value for gas guzzlers.

    So, maybe the next year or two may provide a good opportunity to buy a hybrid or plugin–if one can get a loan.

  • Paul Rivers

    Being that I make a decent income, I kinda enjoy the news about gas prices. If they go down, I pay less. If I go up, there’s more motivation for fuel efficient cars, hybrids and electric cars. No matter what happens, I can feel good about it. :-)

    On another note – I’m not surprised this is happening at all. Did anyone else notice that the gas prices also magically dropped in the year surrounding the presidential election last time around?

  • Samie

    Don’t be shocked by low prices in a weak economy. OPEC would not mess too much with reducing production. Why? They are like many others having investments in other business that are linked to our slow economy.

    As I say always we would not beat the drum only when gas prices are high or think about those giant SUV’s and luxury speedster vehicles when prices are low. But that is how many consumers think at one end you have fuel economy and environmental factors, the other comfort, power, and status which usually depends on stable or low price of gasoline. When we get to plugins and EV’s we can have a different conversation. But the fact is it is very important to push for long term solutions and planning w/c involves these new technologies when consumer choices shifts or prices of gasoline become low.

  • HydroMan

    Hydrogen is the way to go and it last longer than an Electric vehicle. If your an avid laptop users, you may go through batteries every two or three years and it could be the same for Lithium batteries in EV’s! We need to build Hydrogen stations infrastructure and run it off clean Solar and wind. Also build more Nuclear plants and ones to reprocess rods. Boone Pickens has the right idea to get off oil from foreign countries. We need an all of the above approach, not just Obama’s limited choice’s!

  • Samie

    Don’t really mind other opinions but I have to ask why is all this “Hydro” talk all of sedan is popping up on this website. I have to say I’m not really crazy about people self promoting things. Anyways Hydro’s remember like any new technology that it has to over come some big hurdles before a mass amount of people leap frog to it. Most of the people here already know this. We could say the same thing for development of centrifuges and disposal of nuclear power.

  • Bryce

    lol, we could just skip the hydrogen and drive electrics powered by EEstor’s ultra caps. Hopefully they work as they are purported to, or else Zenn (and its stock) or screwed. Somehow I think they are on to something because if Lockheed-Martin has signed on, then in all likelihood, there is something there.

  • J

    Oil is at a 13 month low.

    Gas today in San Jose = $3.63
    Gas 1 year ago in San Jose = $2.75

    Does not equal.

    That is nearly a $1 difference and the gas prices above were not taken from a full 13 months ago. Ridership is WAY up on public transportation this year and over the course of a year, one would assume there are more gas stations in San Jose now than there was a year ago. So much for f-ing competition. Gas stations more north on the Peninsula are $3.80.

    Thanks, gasbuddy.com

  • Dude

    And it was as if a million Prius owners cried out and were suddenly silenced.

  • Bryce

    ROFL

    nice Dude

  • Limitedslip

    “It’s unlikely however that gas will fall very far below $3.00 per gallon”

    My V8 F150 was costing me less per month than anyone I know with a hybrid when gas was over $3.00/gal, no payment, low maintenance costs, and gas will be under $1.50 by next week making it dirt cheap to drive and, I just paid $1.83. When my truck finally wears out and gas prices start riding, I’ll buy that 2012 hybrid when they have finally figured out how to give them 100 MPG and 300 horsepower, instead of these current overpriced 45 MPG dogs that any rusty Geo Metro could blow off the road while getting the same or better mileage. darn, I think that Prius just scratched my differential…