Who hasn’t driven by a gas station lately and seen prices hovering around $2 a gallon and not felt positively giddy? It’s as if motorists have awakened from a bad dream where the price of a gallon of gas was almost twice that and our car-loving culture and fragile household budgets were being strangled.
But before you dance a jig at the gas pump and then motor off into the sunset, stop yourself.
Gas is cheaper – not cheap – for now. It is no time to abandon those good habits most of us developed when we got sticker shock at the pump.
If you started driving less to conserve fuel, keep doing that. If you found out you could ride the bus to work or carpool with a friend, keep it up. If you ditched that gas-guzzling, oversized SUV for some snazzy little hybrid, don’t feel foolish.
These good gas prices are not going to last for long. And the only way to protect yourself from future price surges is to use less.
Gas prices are down because the worldwide tradingprice of a barrel of oil is down on fears a global recession will slow demand. The global credit crunch means that China and India’s booming demand for oil to fuel their factories, build infrastructure and introduce millions of people to the joys of automobile ownership are no longer chugging along at an unbridled clip.
When the world uses less oil, the price goes down. And when demand goes up and reserves dwindle, prices will go back up again.
And don’t think that’s not going to happen.
OPEC, the group of oil-producing nations, is discussing reducing production in an attempt to stop prices from falling. Political turmoil in key oil-producing countries – like Nigeria and Venezuela – has not gone away and will continue to influence trading in crude oil futures.
The International Energy Agency has predicted that in the long-term, oil prices are going up and predicts the average U.S. price of a gallon of gas will be about $2.37 next year. Americans must consider their oil consumption habits in the long-term – not just this week or next year- and face the reality that demand in places like China and India will surge again.
Remember, Big Oil is not your friend. And neither is OPEC. Consumers can only hope that, in the price run-up, oil producers learned that there is a limit to how high prices can go before they cause worldwide economic damage.
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