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May 30, 2008
I have no idea.
Gas prices traditionally spike upward ahead of the summer driving season as refineries shift their production runs from heating oil to gasoline, and level off after the Memorial Day weekend.
In addition, the recent run-up in prices to more than $4.00 a gallon has forced people to cut back, with overall driving down this past weekend for the first time in years.
And crude oil prices have fallen off from last week’s highs of $135 a barrel to the mid-$120s, although they are edging back up today.
But the drop may have wrung some of the speculative dollars out of the price, although no one knows what percentage of the run-up is due to speculation.
As to whether gas prices have peaked, maybe someone will emerge at the end of the year having made millions/billions of dollars by betting the right way – just as hedge fund manager John Paulson made a whopping $3.7 billion last year by betting subprime mortgage securities would fail.
But the operative word is betting, and for all the billions Paulson made, there were plenty of ‘smart’ losers who bet the other way. Remember all the billion-dollar write-offs at the beginning of the year?
Personally, I think high gas prices are here to stay. Certainly that’s the way I would bet if I could afford to buy a new car!
But what do I know?
- Peter C.T. Elsworth
Posted by Peter C. T. Elsworth 
at 11:06 AM to commentary
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