Saturday, December 06, 2008

Gas prices

I am thrilled about the price of gas here. Jason and I were talking a bit about how some are saying it's not good for the prices to be so low.

We may just be simple minded when it comes to economics but if it costs less to fill my tank then I have more money to spend elsewhere.

During the hurricanes gas was up to 4.09 here, so it costs $77 to fill the van, as of today it will cost $27 to fill it. That is $50 we have to spend that we wouldn't have had a couple months ago.



Deanna said...

Living here in oil producing country I see first hand what happens when oil prices drop too low. Without an adequate financial incentive, producers shut down low producing wells and don't drill new ones. This eventually means less oil being produced here in the U.S. and ultimately means buying more abroad.

On the other hand, responsible producers who are in it for the long haul don't like extremely high prices either. When prices skyrocket, every Tom, Dick and Harry fancies himself an oil producer and you get some real idiots out there.

We have a close friend who has been in the oil business for ages. He says he makes adequate money to operate his business as long as oil remains above $50 a barrel. I've also heard it said that they prefer prices to stay below $100 in order to keep out the flakes. From what I understand, $50-$80 a barrel is about right.

The economy in Oklahoma is closely tied to oil prices. There was a huge boom then bust in the 80s which had far reaching effects here. I do think people were a little more cautious here this time when prices went through the roof. Those who lived through the oil bust knew it could happen again.

Donna said...

I agree that it seems bad when gas prices are so low, but I do enjoy it. It only cost me $25 to fill my van the other day. Our prices were at $1.65 yesterday, and it seems everyday they go a litle lower. It does seem scary when I watch them drop everyday, and seeing as how my DH is in the auto industry (his company is a supllier to the "big 3")it does alarm me a bit, but it is nice to have money for other things besides gas this time of year.