Saturday, November 19, 2005

Captain Holly was right again, as usual

It's official: Gasoline is below $2.00 per gallon in Utah.

I blogged about this last month, and in that post I predicted the price would below $2.00 by the end of the year. I even had a friendly bet with a co-worker that we would be paying that much before Christmas.

I shouldn't have been so pessimisstic. Gas prices have fallen even faster than my cheery free-market prediction. We reached that point before Thanksgiving. And here's the proof, from the gas station by my house where I filled up today.

Where do they go from here? Well, I would predict the price will eventually stabilize around $1.75 per gallon in late December or January, and then slowly begin to rise in the spring. Expect to pay an average of $2.25 per gallon next summer.

But then again, I'm assuming that demand will rebound as well. However, if this is truly a 1986-style market correction, and there has been a permanent shift in demand, then we will be paying less than $2.00 per gallon for some time.

Ain't the Free Market great?


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