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Gas down

Gas down

The demand of oil within the United States has dropped 10 percent in the last few weeks. According to the U.S. Department of Transportation, Americans drove 15 billion fewer miles in August, or 5.6 percent less than last year.

“It follows that there’s going to be some spending effect,? said Francisco Blach head of commodities research at Merrill Lynch in London.

With the decrease in demand, American’s driving patterns have been considerably altered.

The current decrease in gas price is a nice relief at our current economical crisis.

With a 10 percent world wide demand for oil off, it is odd that prices have fallen more than 50 percent. Blanch says that it is not a one to one relationship, and that small demand swings can cause large price swings.

One reason why prices have fallen quicker than demand is due to investment banks pulling money out of oil futures.

Sources: Time article- What's Behind (and Ahead for) the Plunging Price of Oil