Right now Gas prices are up apparently because big money -- funds, institutional investors -- have no where else to go in order to try to eak out some performance for their investors. So they cram in to the commodities futures market because they can get away with it. And seriously, look at the NASDAQ/NYSE... Do you really see a growth sector in there?
Anyway, reality is that if you have a new administration, say Obama or McCain (though I'd tend to say Obama), you are going to probably see a lot of federal manuevers to encourage private investment in industry designed to reduce U.S. dependance on foreign oil, etc. etc. Then: TA DA!, this turns in to a new growth area for everybody to throw capital at including the Funds and Instutitional Investors. Suddenly these institutions and funds pull out of oil futures and invest in new companies designed to reduce foreign oil dependency, all for the sake of stronger capital gains for their investors. Result: Price of a barrel of oil drops dramatically.
We are going to end up back in a situation where gas only retails for $3.00 a gallon or so -- probably less. Nevertheless, there is going to be a general pervasive fear in the public that didn't exist before: "Jeez what happens if gas goes back up to $8 a gallon at the pump...I don't want to get caught on the wrong side of that again. Man, I really better look at investing in alt energy companies, buy a plug in hybrid etc. etc.,."
My call regarding the future retail price of gas is that people will look at any return of prices to $3.00 or less as nice, but far from set in stone. As such they will begin to look at other ways to get around that rely less on gasoline. And I think those ways will be around to cater to this new demand.
