Gas prices to go down?

Rita didn't cause the damage that was expected and some industry analysts have forcasted a significant decline in crude oil prices for the future. In fact, they say that we will not see oil prices at this level in the next five years. Peter Beutel, president of Cameron Hanover, is the leading analysts making these predictions. According to Beutel, if oil prices were to continue to be as high as they are now, they would spark a global recession which would eventually reduce oil demand significantly. Although these predictions sound great, and they provoke a positive image of the future, can we believe them? Crude oil traded at $68 (per barrel) last wednesday, Beutel is predicting oil prices to fall between $25 and $35 in 2006 and 2007. Do these numbers seem far-out to you or is it just me? Simple, economic, explanations and very risky, future, forcasts seem a little to shakey to believe!


maddy said...

I'm pretty sure that gas prices, no matter what the forecasts may be, will not decline as significantly as Mr. Beutel may think. It is true that many have began to think of alternative forms of transportation. Scooter sales are up, and last week I took up a new sport--walking! I figured the weather is great and if I don't have to drive, hey, that's a buck or two more in my pocket. "Go ahead and drive less, if you can" taunts the New York Times as they report that mass transit usage has had some of the biggest increases in the past month. Subway anyone?

Dan said...

I think that I would rather pay $3 a gallon for gasoline than see a global recession. $1.50 for gas doesn't mean much if there are no jobs to be found. I think that new technology is the only answer to reduce oil prices while at the same time avoiding any major economic problems.

Liz said...

I have a hard time believing that the price of fuel isn't just as volatile to the rate of inflation as anything else. Yes I think that the price of fuel may drop because of certain economic conditions, but I also don't think we will ever see fuel prices under $2 - $2.50 again. Its part of life and the world will just have to adjust.

Connor said...

Wow! Those forecasts are very attractive, however I personally do not believe that we will ever see such a significant drop in gas prices. I have wondered for quite some time as to why we haven't seen more progress in the automotive industry in terms of alternative fueled cars. Who is to blame for that...the automotive industry or government?

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