I almost hate to post this, because I know that most Wizbang readers keep up with the news and are well aware of how market forces work, but I have heard quite a few people commenting about how gas prices are “conveniently” going down prior to the elections. From now on, rather than respond to each individual comment making such a reference, I will just refer back to this post.
For those questioning the “timing” of the current drop in gas prices, take a look at the news from the past few weeks and things won’t seem so mysterious. Just a few points to consider…
- Gas prices always go down after the summer — that’s simply supply and demand at work. It even happened when Bill Clinton was in office. How convenient, indeed.
- The market is responding to a milder than expected hurricane season. High prices over the summer factored in warnings about this hurricane season that did not come to pass. Now the market is responding to the reality.
- Tests indicating a new discovery of oil in the Gulf of Mexico hailed as the most significant in a generation, and the largest since Alaska’s North Slope, was announced less than two weeks ago. The news was reflected in the price of oil almost immediately.
The three listed above are only a few factors that may have played into the drop in price. Of course, if you don’t understand market forces, or follow the news, or read a calendar, it might be easier to believe Karl Rove pulled out his magic oil price machine.
The cheapest gas I have seen in my area is $2.30/gallon, but it has been dropping fast. To see what the lowest (and highest) prices are in your area, or anywhere else in the country, visit Gas Buddy.