Today’s fuel price musings - will oil keep falling?

August 5th, 2008 at 10:25am Thomas V. Bona

Oil dropped as low as $118 today, and  has fallen for four straight weeks for the first time since December. The causes continue to be falling demand, a strengthening dollar and what I’ve referred to before as the “accelerating effect” of speculation. Speculators don’t seem to be the ones that move the market, they just accelerate the direction, and now they’re pulling out and accelerating the decline.

The main questions today, though, are what affect will the latest Chinese earthquake have on oil prices, and at what point do prices drop enough that demand starts going back up?

Here are the prices, at least as of this morning (courtesy of AAAs fuelgaugereport.com).

Gasoline: Rockford dropped a fraction of a cent to $3.90 a gallon as retailers wait to see if the oil drop is for real this time. We’re still fourth in the state in gas prices. The Illinois average dropped a cent to $3.97. The national average dropped  a cent to $3.87. Illinois has the 13th-highest gas prices in the nation (including the District of Columbia).

Diesel: Rockford  dropped more than a cent to $4.51 a gallon, down 27 cents in the past month. We’re tied with the ninth-highest diesel prices in the state. The state average remained at $4.66, down 16 cents in the past month. The national average dropped a cent to $4.64, down 15 cents in the past month. Illinois has the 22nd-highest prices in the country (including the District of Columbia).

Entry Filed under: Fuel price musings