"Skidding Oil Prices: A Blip or a Trend?"

Heading into this summer, many Americans were dreading this summer's gas prices as expert warned that they would be well over $4 a gallon. In the past few weeks however, prices at the pump seem to be doing just the opposite. Instead of a looming spike in prices this summer, experts now say that by midsummer we could see a national average of $3.50 a gallon. This sudden drop in gas prices has not been seen since 2008 when Lehman Brothers, the 4th largest financial bank in the US, filed for bankruptcy while hurricanes shut down many refineries demanding oil for over a week.

Just like every good deal however, you always have to read the fine print. Allen Sinai, chief global economist and president of Decision Economics, warns that "this is a correction and not a shift in trend". In other words, this drop in price may last for most of the summer, but they will most certain rebound sometime in the near future. This is simply a movement along the supply curve helping to lower prices and not a major shift. And since prices seem to be falling, demand is certain to increase which in turn with drive the price of oil back up over time due to the law of supply and demand.

I think that although many of the experts in today's economy seem to have an idea in the short run of what will happen to our gas prices, no one can really tell what will happen in the long run. With wars in the Middle East threatening supply lines and even damaging some already, there's no telling what or who will affect our gas economy in months to come. Every day more companies, domestic and foreign, are growing and demanding more oil and gas while our supply seems to be risky with countries either dealing with civil wars or simply cutting production. Even Japan after it's national disaster maintained a strong demand for oil, and now that it's recovering from that, it's demand can only increase from now on. I really think that if our government would allow us to drill more on our own land, with the US helping to supply itself and even other countries with oil, our gas prices could be significantly reduced and economy strengthened. Until, we'll simply have to strap in, hold on tight, and hope that these lower prices can last as long as possible.

http://green.blogs.nytimes.com/2011/05/06/skidding-oil-prices-a-blip-or-a-trend/?ref=economics