Will prices at the pump actually decline?

February 23rd, 2008 | Category: China, Consumer Experience

With fuel prices reaching their highest levels since final June, many consumers are worried that by the end of the summer driving season we may actually see $4.00 a gallon. With crude oil moving by $100 a barrel, and with a market driven by speculators and not fundamentals, crude prices moving up are a self-fulfilling prophecy.

But is it possible that the opposite may happen? That prices drivers pay at the pump produce actually decrease? The reply may very well be yes. Why? Inventories. The fact is that we have gas

supplies that have quietly grown to their highest level in 14 years. With such a big supply, prices may drop. that isn’t China, where everything is government controlled, and we have seen shortages on all kinds of consumer staples. In the U.S., the market more or less (except when lawmakers butt in and add taxes on gasoline) sets the price.

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Original post by Aaron Katsman

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