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Relief at the Pump: Oil Prices Slip Below $100

Will fuel prices fall before summer break?

by on May.07, 2012

Declining oil prices are showing up at the pump.

While it’s not officially the summer travel season, American motorists are getting a bit of a break as oil prices continue to dip, benchmark crude falling below $100 in recent days and taking another tumble in the wake of the political shake-up in Europe.

Crude prices have fallen nearly 15% since peaking in late winter and with U.S. motorists driving less even as inventories rise the equation suggests prices could keep falling.  Adding to the downward momentum: sluggish job growth and other weak economic news.

According to the AAA’s Daily Fuel Gauge Report, prices have been falling steadily in recent weeks and are now down almost 16 cents since early May for a gallon of self-serve regular unleaded.  Diesel prices, on average across the country, have dipped about eight cents.

Pumping Out the News!

Nonetheless, there are plenty of reasons to remain concern, the International Monetary Fund recently warned.  Pointing to the ongoing debate over Iran’s nuclear program it issued an advisory cautioning that, “in case of supply disruptions, oil prices could increase by $20 to $30 a barrel. A cut in Iranian exports could be exacerbated by below average oil stocks in many countries.”

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What if the Pumps Run Dry?

Warnings about "peak" oil are growing again.

by on Nov.30, 2009

Even some of the petroleum industry's top leaders now are warning we may be reaching a peak for global oil production.

Some of the petroleum industry's leaders now are warning, not without self interest, we may be reaching peak global oil production.

Peak oil is a controversial theory that suggests oil production is peaking and will invariably decline over the coming years, leaving the industrial world facing short supplies.

In its own way, the theory is more controversial than climate change and rests on interpretation of arcane numbers.

Indeed, there are those who point to recent finds of giant oil reserves off places like Brazil and argue that there’s far more oil left in the ground than we can imagine.  However, the peak oil advocates are now picking up support and their warnings ought to be of at least passing interest to auto industry planners, some of which have already embraced it, notably General Motors.

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In the past, anyone speaking out about oil supply challenges was usually stereotyped as a fringe element with little knowledge about the oil industry, notes a Denver-based organization called the Association for Study of Peak Oil & Gas.

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