Bad News for Democrats
According to the article, "Gasoline prices are falling fast and could keep dropping for months."
"The only place they have to go is down," says Fred Rozell, gasoline analyst at the Oil Price Information Service (OPIS). "We'll be closer to $2 than $3 come Thanksgiving."If that happens, the only thing that democrats have been able to point to as they have continued to perpetuate the myth of a bad economy will no longer be a problem for Americans.
Not only will Americans be feeling better about gasoline prices, but the lower prices will themselves help to further stimulate the rest of the already strong economy.
It's good news for consumers and the economy. Continued lower prices "may act like a tax cut" and stimulate spending, says Richard DeKaser, chief economist at National City in Cleveland. He calculates that higher energy prices the first six months cut growth of consumer spending 1 percentage point.Now, before leftists start shouting, "Of course gasoline prices are gonna go down right before the elections; Bush is gonna lower the prices so that republicans can get elected," pay attention to the reasons the prices are going down.
The end of summer. Driving slows, reducing demand for gasoline. And federal requirements for clean air, summer-blend gasoline end next month, making gasoline cheaper to refine and import.
Sluggish demand. Gasoline use in the first eight months of the year is up 1% vs. a year ago, less than the 1.5% to 2% growth that's typical, says Michael Morris, analyst at the U.S. Energy Information Administration. "Wholesalers are trying to get rid of product. The growth in demand for gasoline has really tapered off," he says.
Wholesale prices are falling faster than retail gasoline prices, meaning stations are making more money than when prices were $3. Wholesale prices Tuesday ranged from $1.77 to $1.79 a gallon, well below the $2-plus prices typical until recently.
Petroleum traders, worried that prices are too high to last, are selling their holdings. That pushes prices down. They also believe hurricanes won't disrupt Gulf of Mexico production, OPIS senior analyst Tom Kloza says.
Crude oil, which accounts for roughly half the price of gasoline, ended New York trading Tuesday down 90 cents, at $69.71 a barrel. That's the first time it's closed at less than $70 since May 4.
Notice that there is nothing there about George Bush sitting in the Oval Office waving a magic wand and lowering gasoline prices for the election.
President Bush cannot lower the price of gasoline any more than he had the power to cause it to rise in the first place. But the price is coming down, and that's bad news for Democrats.