Sunday, September 17, 2006

Quick Update - Gas Prices

Well, it has happened even faster than I predicted. It only took 5 days for gas to go from $2.65 to the first station I saw at $2.50 per gallon. This must be the result of the Middle East suddenly being in such a grand, peaceful state, with no more fears or pressures on the world oil supply, and our sudden therapy that has gotten the U.S. over its addiction to oil. China and India are also being good stewards of the environment and have cut their demands and use of oil.

I am expecting prices to balance out around this level for the next few weeks, and even go lower heading up to the election. Let's see if that is what happens. And, we'll see if prices just happen to increase after the election. I can't possibly imagine prices will increase significantly, if at all, even if a major event were to occur in the Mideast before the election. Again, time will tell...

Well, prices are down under $2.50, at least in my district where a Republican incumbent, Mark Kirk, has a competitive race with Dan Seals, a Democratic challenger. Now, I want to research something, and anyone who reads this please feel free to chime in. As a scientist, I can't help but to look for and notice patterns. In other congressional districts around the Illinois 10th, where there really aren't major challenges, gas prices are over 30 cents higher than in the 10th district.

I really want to know why this is, because it has NEVER been like that before! Prices are always within 10 cents of each other as long as I have lived here. I would be fascinated to know what the average price is in noncompetitive districts versus in competitive Republican districts around the country. And, the Kirk campaign sends out the occasional email campaign update. One was sent out this morning, and the only topic was his gushing over the fact that within the last 3 weeks gas prices are 50 cents cheaper, meaning things are fine and dandy under Republican leadership. I find this almost laughable, when literally across the street in the 9th district (a safe Democratic district) prices are still over $2.80. It is hard to conclude anything other than something's up! If this is the case, does anyone know the legalities of price fixing in specific areas? All I can say is Go Dan!!


Daral said...

In many respects gas prices have tended to follow Iranian nuclear developments, as Iran is under the largest probability of a future invasion or harsh economic sanctions (not saying it's likely, just the most likely). Personally I haven't been following the Iranian issue that much, and when I have it's really seemed about as intractable as usual, but it's definitely another factor beyond U.S. political issues.

vonny said...

Hi daral,

Yes, Iran is certainly a topic that has and will continue to influence oil prices, and just a wekk or so ago Condi Rice said that the Iranians are looking at getting the UN Security Council into talks about sanctions, etc. That situation is as tense as it has been, and yet gas prices are coming down rapidly. All of the same tensions and worries are still there. I haven't noticed any noticeable drops in traffic jams on my ride home, so I don't think demand has declined substantially. It just does not make any sense to me, at least, why gas is dropping so quickly, which is why I really want to see how inevitable increases relate to the election. And I want to see what the official reasons for the rapid decline are coming out of the oil companies, since the usuals for high prices have not gone away. To be continued...

Tom said...

Looks like you're not alone. There are a lot of articles like this in the news lately.

Business Week Article

The only alternate theory I have is that oil companies oversupplied the market with gas this summer and now that demand is dropping in the U.S. because of the end of the summer driving season, the unsold summer gas stockpile is "flooding" the market. High supply + Less demand = Lower prices.