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Oil Prices Plunge – and Could Bring Relief at the Pump

Threat of new global recession and lowered demand.

by on Aug.05, 2011

Crude oil prices have plunged but it remains to be seen how fast consumers will reap the benefit.

You may be out of work but at least you may be able to save money when you fill up the tank to drive to your next job interview.

Crude prices continued to slip on Friday, with some markets slipping to barely $86 a barrel from the year’s $115 peak set in May.  That reflects increasing jitters about the economy both here and abroad – such fears driving Wall Street traders into a frenzy, on Thursday, with a 512-point fall on the Dow Jones Index, the ninth-worst ever.

For the oil industry, the possibility of a double-dip recession raises concerns about demand for petroleum, both for manufacturing and for transportation purposes.  With the U.S. economy stuck in the doldrums there has been a steady decline, in recent months in the number of miles American motorists have been clocking.

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Declining oil prices don’t always – or immediately — result in lower payments at the pump, though industry analysts say that wholesale prices – what gasoline retailers are charged – have dipped by as much as a dime in recent weeks.