Supply and Demand
If you drive, you’ve surely noticed that the price of gas has fallen lately. Here in the Bay Area, gas was about $4.70 or so at its highest, and now it’s closer to $3.25. (That graph there shows that the price of oil has fallen by 50%…so why hasn’t gas fallen as drastically?) (Cherry said she got gas the other day for $2.99, at Costco) The reason for falling oil prices is lower demand. It’s not that there’s suddenly any more oil out there, it’s just that with fears of a global recession, the demand has fallen. And, of course, people are conserving a lot more than they used to, because who can afford to take long Sunday drives with gas pushing $5 a gallon? Not me.
The Chronicle reports that the falling price of oil may mean that alternative energy sources may be in less demand than they were just a few months ago. Which is frustrating, because if true, it just goes to show how short sighted people are, and what short memories we have. Why would it be true that just because prices have come down lately, they won’t go up over $4 a gallon again? I don’t know about you, but my paycheck doesn’t vary depending on the price of gas. I don’t get extra money when prices go up, and I don’t get docked when they go down. I think we need to put money and effort into finding alternative fuel sources.  If I worked for a huge oil company, I’d be researching alternative fuels, which would keep my company strong as technology progresses.
One thing I’m wondering is, with the price of gas going down, will food prices come down accordingly? They raised the prices due to the cost of gas…will they lower them? And lowering prices can exacerbate a recession, so while I like to see lower prices at the grocery store, prices falling too far, too fast could be bad for the country, bad for jobs, bad for all of us.  How do we win in times like these?
7 Comments
Ted
Well, it’s possible that the cost of living will come down as a result of falling fuel prices, but will it matter much if more and more people are losing their jobs? Some predictions are 9% unemployment, so I’m guessing we’re in for a lot of volatility from now ’til … oh, a year from now?
Nance
j.–let’s hope the price of food drops, too. a great deal of people have lost jobs around here in ohio, and the bottom has yet to completely drop out. btw–i filled up at $2.38 here. !!!!!!!!!!!!
Starshine
If the price of food went up due to gas prices going up, I hope they will adjust with the drop of gas prices. It is only fair to the consumer.
This whole situation is so disconcerting. It seems so unstable. I’m looking forward to the day when it all stabilizes for the sake of everyone in our country, and in the world, for that matter. When I was in Europe, my European friends told me that they are dealing with a difficult economy abroad as well.
John
I wish there would be a stronger and more consistent push for alternative energy sources. As you say, I think people are short sighted with this.
I’ve been glad that costs have been going down lately, though I think its sad that I get excited about prices that are over $3. I guess it would be far worse if we lived in other parts of the world. I used to pay $6 a gallon when I lived in Australia.
J
Nance, don’t rub it in! The cheapest I’ve seen here is $3.19. Sigh. But still, that’s a heck of a lot better than what we were paying just a few months ago.
apathy lounge
I wish I knew.
Joan
I think our gas prices have fallen to about $2.50 but as I’ve posted before it is the grocery that gets me. I’m going to write more about it after I tally October’s totals.