Gasoline below $3, OPEC decides 2009 price

The Good News for recession consumers:

The average price of gasoline nationwide fell below $3 per gallon last weekend and looks poised to fall a bit further from the current level ~$2.92 at the pump.

The Bad News for recession consumers:
OPEC is in control of our price now that non-OPEC oil production is stagnating. No matter how hard non-OPEC countries “drill, baby, drill,” most new production will only offset declines from older fields rather than create a surplus of supply. In this context, the oil price is determined by OPEC as they choose their level of production going forward. They will hold an emergency meeting in Vienna this Friday to choose a cut in production likely between 1 million barrels per day (Mbd) and 2 Mbd. If they choose 1 Mbd, the price will probably stabilize ~$70-$80. But if they lower production by 2 Mbd, prices would likely rise above $80. As frost hits around the northern hemisphere, we will soon enter the season of maximum global oil demand so the healthy inventory levels could fall quickly in the latter scenario. We will be at the mercy of OPEC decisions and the weather — two factors we have no control over.

What we can control to a greater degree is our consumption. We in the US and other oil-importing countries can focus on conservation and efficiency to continue to reduce oil demand and reap the resulting sub-$3 gasoline price.

I just added a Resource Links page to the SET website (on the right) so that you can find more information and tips to make the best sustainable energy decisions in your home and at your institution. Especially relevant this winter is the federal Energy Star program website that gives tips for insulating spaces to keep them warm without over-consuming oil, natural gas, propane or electricity in the process. I hope you find the resources helpful. Please let me know if there are other issues you would like to be covered or links you recommend.

Until tomorrow-
Dennis

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