Prices are rolling back on some of the more visible things in life, gasoline for one. But it won’t last. Remember Katrina and the price run up? The price per gallon shot up so fast and so high, people thought it was never going to end. But public outcry and resistance lowered it back to a manageable level. But it was still substantially higher than it was before. The same thing is happening now, with the current drop in oil prices. Having closed on the futures board at just under $115.00 a barrel yesterday, the pump prices will follow along in suite, but never again shall we see gasoline under $4.00 per gallon. Unless something really radical occurs.
The Washington Post has an article today examining the relationship of the global commodities markets and the effect they actually have on our wallets. And like I’ve constantly hammered, the game is about supply and demand. Because of lowered consumption of petroleum based fuels, the demand is reduced, leaving plenty of supply, causing the suppliers to reduce prices, enticing us to buy more fuel. And that’s where a danger lies.
If we return to our excessive consumption of petroleum based products, the demand will rise, and thus prices as the available supply will shrink. It’s also possible that the oil producing nations will also cut back on production, causing the prices to rise, even if we don’t return to using as much as we had grown accustomed to using.
The super sized SUV’s and luxury cars really need to be taken off of the broad based market and replaced with smaller, more fuel efficient models. We need to walk more, ride bicycles or whatever, but we need to keep our consumption levels down. I’ve noticed that the market seems to be flooded with luxury boats and gas guzzling toys lately. That’s probably a good thing, but I wonder if the trend will reverse itself with these lower gas costs? Probably so. We have a hard time learning form our past. Remember the ‘70’s?
The embargo of the day pinched our pockets pretty badly those days, and fuel efficiency became an automatic buzzword. What happened? Greed came back home to roost, that’s what happened. Easy, grand living is the American way today. Fueled by aggressive marketing campaigns, the lure for bigger and better returned to the automotive marketplace where today, muscle cars of the sixties and seventies have been replaced with the monsters on the road today. What urban family really needs a one ton four wheel drive pick up?
And are those SUV’s that won’t fit into a normal parking place necessary? Not really. They just make the little woman more dangerous behind the wheel. Almost got hit yesterday while walking downtown by one of those tanks. Stupid broad comes down the street, doesn’t stop for me, even though I’m in the cross walk, and there is a stop sign. Of course, she’s yakking on a cell phone with one hand while trying to steer a vehicle that’s really too big for her to handle. To top it off, she used no turn signal indicator. And she had kids in the back seat.
Those behemoths of the road. Glad we got ‘em.