Maybe. See this Reuters story,
NEW YORK (Reuters) - Oil prices slumped on Wednesday, extending a 15 percent slide over two weeks, as dealers focused on brimming U.S. fuel stockpiles.
A U.S. government report on Wednesday showed gasoline inventories climbed to the highest level since 1999, when energy prices were near historic lows.
"This is a situation where you've got a lot of supply on hand, leading to a drop in prices," said Jason Schenker, energy analyst at Wachovia.
...
"The question is where do we go from here? We've fallen so quickly in recent sessions, will there still be momentum to go down to the low $50s?" said Phil Flynn, analyst at Alaron Trading.
The U.S. Energy Information Administration reported Wednesday that U.S. gasoline stockpiles rose 2.2 million to 225.5 million barrels last week, the seventh weekly build in a row, thanks to strong imports and slow demand growth.
Click here for more from the EIA. Retail prices have fallen almost 6 cents in the past week. If oil prices continue to stay low and inventories stay high, there is definitely room for the retail price of gas to fall a little more--maybe a few cents a week for a couple weeks until it finds the new equilibrium. Of course it always seems like the retail price of gas is slow to respond to changes like this. The next few weeks might give us one of the best opportunities in some time to observe the dynamics. Unless, of course, there is another shock.
UPDATE: Maybe not. Spring maintenance at refineries could reverse the trend starting sometime next month. But the fact that prices have fallen during a time of year when prices have tended to rise in the last couple years is worth noting.
UPDATE (2/23/06): Retail prices are down about another 4 1/2 cents from the prices reported when I posted this. This page has the current data.
the major development in the energy market is that this has been an extremely warm winter so demand has been very weak. Heating degree days in january were 662 vs 851 a year ago and 957 two years ago. the biggest impact was on natural gas prices, where they have collapsed.
So the question is what happens to driving and gasoline demand this spring.
Here we are in August, and oil prices have sprung to about $73-$74 per barrel. Gas is around $3 per gallon in most parts of the country. The spring in gas prices appears to be due largely to a spike that occurred in late-March 2006 to mid-April 2006. Since then, the price has been stable, perhaps increasing slightly, only to fall again. The March/April spike was likely due to the problems in Iran and Nigeria, and the war between Israel and Lebanon caused a higher increase in price for a while. If Iran and Nigeria had no problems, the cost of crude oil would probably be closer to the lows it hit in February.