As the EU announces they are officially in a recession and US indicators continue to fall (such as the record retail sales decline last month), gas prices continue their slide. The average pump price for gasoline nationwide has now fallen to $2.125 per gallon. We may see nationwide prices fall to ~$2 before it finally stabilizes from its two-month collapse.
The EIA weekly reports for oil and natural gas show fuels in a healthy equilibrium for the winter. The only fuel in a significantly worse supply situation than last year (based on current demand days of supply) is propane. But the ample fuels situation sector-wide means it would take a seriously cold winter to trigger much worry for propane. So, in the short term, there are few signs of big fuel price increases or shortages. But the low oil prices, now at ~$57 per barrel of oil, are delaying numerous Canadian tar sand expansion projects since the cost of production there is below such a low price. These delays, along with the frozen capital markets slowing future project financing, may trigger a big upward price swing once the economy starts growing again.
But if we base our future growth on an efficient renewable energy revolution, then we can tame the rise in energy prices that awaits beyond 2009. Let’s make it happen!
Tags: gas price, Natural Gas, Oil, recession, renewable energy