Oil and gas prices hit four-year lows

Oil prices fell to $43.67 per barrel and average gasoline prices dropped to $1.789 per gallon on Dec. 4, reaching their lowest prices in four years, according to www.yahoo.com. The decline occurred during a time when unemployment benefit claims have hit a 26-year high, major companies are shedding jobs and the National Bureau of Economic Research has said the U.S. economy has been in recession for a year.

Four months ago, oil prices increased to almost $150 per barrel and the average gasoline price was more than $4 per gallon. The price of a barrel of oil has fallen almost $27 in one month, and the average gasoline price has dropped 60.2 cents since November.

Fewer jobs, fewer factory orders and slowing construction have led to a sharp decrease in energy use, which has caused oil prices to plummet. Some analysts say demand could diminish even more in early 2009.

"People are waking up to the fact that there may not be much demand," says Phil Flynn, an analyst at Alaron Trading Corp., Chicago.

In fact, Flynn says though people are able to drive more because of lower gas prices, he doesn’t see significant increases in oil and gasoline prices in the near future.

"We have entered a new era of lower gasoline prices and oil prices," he says.

Date : 12/8/2008