It was less than a month ago where I wrote an article about oil and why (based on analyst's opinions) the price has increased so much, going up to $147 per barrel back in July.  You gotta love the stock market, including mutual funds and commodities, because they never cease to amaze or surprise anyone.  In just four short weeks, oil has come down to under $108 per barrel.  How in the world does oil spike up so quickly?  More importantly, how does it plummet so drastically?  Oil prices have decreased over 25% in the last four weeks, which makes me laugh when I think about all of those big shots from Goldman Sachs and such who predicted that oil will hit $200 by the end of summer.  If you want to find some of these articles, simply go to www.104oil.com and you'll find hundreds of them and others that are related. 

The thing that I get tired of is the amount of speculation there is about oil, with "experts" giving their "expert opinions" on things.  There are many reasons (based on analyst's opinions from articles I found on 104Oil.com) as to why the price of oil has decreased so much.  The economy of "powerful" countries, such as China, is weak and in jeopardy of a recession.  Demand for materials and other goods have decreased due to these countries having weak economies and reducing their output.  Furthermore, specifically with China, the currency there has increased in value, which obviously makes exports less desirable, hence, causing a decrease in the output of products.  Yet, the average person would conclude that if a county's currency appreciates in value, why would it be having economical problems?  For that, stay tuned for another article...we're talking about oil here. 

If that doesn't make much sense, keep reading and you'll get an idea of other "expert" speculation.  The demand for gasoline is weak, which makes oil less appealing to investors.  This further drives prices down, considering consumers of gasoline are finding other means of transportation, a phenomenon that is not all that phenomenal.  It was only a matter of time for people to start getting sick of paying over $4.50 at the pump for a gallon of gas.  Another reason why the price of oil has decreased is because of a stronger dollar in the last few weeks.  Our currency is on the rise (yippie!), and this is causing investors to pull out of commodities (such as oil).  Investors usually purchase commodities in order to hedge against inflation, and if the dollar is increasing in value, well, there isn't as much hedging necessary.  You can find many articles relating to this by either going to 104Oil.com or www.104finance.com.

Okay, so even the stuff I just mentioned still sounds Greek to most of us.  There are many other factors involved, including hurricane Gustav not having the impact investors had anticipated for it to have.  Also, refineries are starting to slowly come back online after being shut down for various reasons.  So then, is it safe to say that the oil bubble has finally burst?  Or is it just leaking for now but getting ready to grow larger again?  Some analysts believe that prices can spike again due to unforeseen geopolitical events (could they be any more vague?) or OPEC deciding to cut back production (basically them saying,"We need to drive demand up, so we should decrease supply and drive prices up because this year I want to make $2 Billion instead of only $1 Billion"). 

I don't necessarily care what reason there is for oil having dropped in value so much.  All I personally care about is that gas prices are decreasing, which they have gone down in the past month from a national average of $4.11 to $3.67 according to AAA, then I'm a happy camper.  Might I add that just because prices have gone down about $0.45 doesn't mean I'm satisfied.  It wasn't too long ago that I could fill up the gas tank of a gas guzzling Camaro for no more than $35.00.  I'd like to see those times again, very soon, so I can drive more like Jeff Gordon rather than Ms. Daisy.