Oil Continues to Plummet
Crude oil dropped below $50 per barrel in trading this morning -- nearly one-third of its summer highs, when it was selling for $147 per barrel and gasoline was $4 per gallon.
The global economic slowdown is killing demand for oil, and the price drop can be seen at the pumps.
According to AAA, the current national average for regular is $2.02 per gallon, which means there are plenty of places in the United States where the first number in gas prices is a "1."
Unlike other commodities, though, oil producers can drive up the price of their product by simply closing the tap a little, reducing demand.
The falling oil prices no doubt drive down the ransom value of the supertanker hijacked by Somali pirates earlier this week.
Today, the pirate spokesman(!) said they are demanding $25 million for the Sirius Star and its 2 million barrels of oil.
"What we want for this ship is only $25 million because we always charge according to the quality of the ship and the value of the product,'' a man who identified himself as Abdi Salan, a member of the hijacking gang, said in a telephone interview with Bloomberg.
Some analysts predict oil will fall below $40 per barrel next year.
The bad news is, no one will have enough money to drive anywhere on vacation and enjoy the low gas prices.
The good news is, it'll be cheap to keep the heat on when you're living in your car.
-- Frank Ahrens
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November 20, 2008; 10:52 AM ET
Categories: The Ticker | Tags: gas prices, oil
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Posted by: jameschirico | November 20, 2008 9:21 PM | Report abuse
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