With a new administration preparing to take over Washington, it’s fair to wonder how energy policy will change and how that change will affect the price of oil. After a year of skyrocketing oil prices, a barrel of oil is now returning to Earth. Gasoline is following the price of oil, also at 20 month lows.
CNNMoney: U.S. crude for December delivery fell $4.19 to $66.34 a barrel in electronic trading. Oil prices, which bounced above $70 on Tuesday, had been down $1.56 to $68.97 just before the report’s release.
…A report on gas station credit card swipes by MasterCard also showed that demand for gasoline at the pump had declined by 3.9% last week compared to the same period a year ago…Falling demand for fuel due to the ailing economy has helped drive oil prices down from their peak of $147.27 in July. Gasoline prices have followed suit, falling to $2.365 by Wednesday, according to a report from motorist group AAA.
So what will President Obama do to these prices? Don’t expect anything to happen soon.
Worries about higher gasoline prices Wednesday followed the election of Barack Obama to the presidency the night before.
Obama’s ascent puts the Democratic Party in control of the White House, as well as both houses of Congress, and it could spell major changes in energy policy that could raise the price of gas.
A democratic Washington is “probably bullish for [gas] prices as certain steps are taken to clean up the environment and reduce emissions,” said Cordier.
He pointed to the possibility that the new government might levy taxes on refiners, which would probably be passed along to consumers, as well as a possible direct tax increase on gas at the pump.
Experts agreed that changes in energy policy will likely take a back seat to repairing the economy in the short term. But if the economy improves over the next four years, said Mark Waggoner, president of Excel Futures in California, demand for oil could return, along with higher crude prices as Americans resume their consumption of gasoline.
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