Prices could plunge:

...many of the conditions that drove investors to bid up oil prices are ebbing. Tensions over Israel, Lebanon and Nigeria are easing. The hurricane season has presented no threat so far to the Gulf of Mexico. The U.S. peak summer driving season is over, so gasoline demand is falling.

With fear of supply disruptions ebbing, oil prices began sliding. With oil inventories high, refiners that turn oil into gasoline are expected to cut production. As refiners cut production, oil companies increasingly risk getting stuck with excess oil supplies. There's already anecdotal evidence of oil companies chartering tankers to store excess oil.

All this is turning financial markets increasingly bearish on oil.

"If we continue to build inventories, and if we have a warm winter like we had last winter, you could see a large fall in the price of oil," said Gary Pokoik, who manages Hedge Ventures Energy in Los Angeles, an energy hedge fund. "I think there is still a lot of risk in the market."

As it stands now, the recent oil-price slump has brought the national average for a gallon of unleaded gasoline down to $2.59, according to the AAA motor club. In the Seattle area, prices per gallon have fallen to $2.856 currently from $3.071 a month ago, a decline of 7 percent, according to AAA.

Should oil traders fear that this downward price spiral will get worse and run for the exits by selling off their futures contracts, Verleger said, it's not unthinkable that oil prices could return to $15 or less a barrel, at least temporarily. That could mean gasoline prices as low as $1.15 per gallon.

I, of course, blame George Bush. Like the booming economy, it's all part of the evil Rethuglican plot to maintain control of the government, and not relinquish power this fall. Speaking of which, maybe I should put up a Bruce Gagnon countdown clock. It would be updated daily, counting the number of days that Bruce remains correct, and the number of days that Bush has continually refused to relinquish his power since January, 2001.

Yes, of course you are right, Rand. Bushitler and his buddies in the oil industry are conspiring to artificially lower gas prices in the weeks running up to the elections. This is supposed to help Repugnican candidates to win, but we shouldn't fall for it. After the elections, they're going to stick it to us again!

Or, it could just be the basic economics of supply and demand at work....naaah, it's evil oil companies and the grand Bush-Cheney-Halliburton conspiracy!

The price of oil will come down because the Trilateral Commission doesn't want to make the Masonic guys mad. Which would get the Illuminati and the Elders of Zion mad, and they would cut off funding to Saudi Arabia, which has to borrow money to pay the date pickers in advance, per their U.N. contract.

It's all very simple.

It was all a ruse to get US automakers to invest in Hybrid technology. Now that Ford and GM are making Hybrids, the price of gas can come back down, and I won't have to worry about buying the new Dodge Charger with the Hemi.

Regular (91) petrol is down 16% here in New Zealand so far in the last week or two, from $1.80 to $1.50 a litre. In US terms that's down from about $4.40 to $3.65 per gallon -- about US$1.95/gal of which is tax.

Regular (87-octane) gasoline has fallen from $3.03 to $2.25 a gallon -- more than 25% -- in KC in the past five weeks.

Peak oil arguments are a joke. It's tailor made for those you lost sleep over the world ending via Y2K. As this post points out, http://tickersense.typepad.com/ticker_sense/2006/09/oil_bubble_band.html
The expert in this piece predicted 100$ not long ago. Hard to say whether he is playing to the headlines, or following his model.

In fact it maybe even necessary to give the oil companies a tax break to help insure continued revenue sunk into resource development. Gas prices maybe falling but we need to continue with finding new fields to get away from middle east oil.

Lower gas prices is a plot by Bush to keep power!

Oddly, I'd say the current administration deserves at least some credit for the slip in gas prices. If they had gone for pandering and done something like impose price controls, we'd now have shortages and gas lines instead. Does any political credit accrue for doing nothing and letting the market work?