Oil Going Down

Well if Wall Street is going down (although it was only down 15 points today), Oil prices should come along with it. This actually is a good thing for gasoline customers as well as OPEC. I'll explain.

Lower gas/heating oil prices mean obviously saved money to you and I. However, how does OPEC and other oil exporters benefit?

They benefit because cheap oil means we won't be looking into alternative energy as much. If I was paying $1.80 a gallon like I was just a few short years ago, I certainly wouldn't be looking hard at the plug in Prius or the Chevy Volt.

That means that OPEC and other oil producing countries won't be dealing with a severe lack of demand in the near future. Keep gas prices at $2.65 and higher (which is where it is in my area right now) and I start contact auto manufacturers asking when plug in hybrids will become available.

Because of the high cost of gas, alternative energy becomes more and more attractive, even cheaper then oil. Would you rather pay the additional $10-$20 a month in electricity, or would you rather spend an additional $40-$50 a month in gas? The best part is, is that you can purchase a few solar panels to offset the extra cost of electricity. The added bonus is that it's better for the environment.

So if OPEC were smart (which it doesn't appear that they are), they'd work as hard as possible to keep energy costs to rock bottom prices. Because they are trying to bleed everyone for every penny they have, they are only pushing customers further and further away.

Travis
travis@rightwinglunatic.com