NPR logo Oil Prices Continue to Drop

Oil Prices Continue to Drop

The price of oil continues to fall. At the end of the day Monday, the price was under $66 dollars a barrel. According to analysts, today's decline was caused by Iran's suggestion that it would consider halting its enrichment of uranium, which eases concern it might cut off oil flows. Last week, the declines were linked to new oil discoveries in deep water in the Gulf of Mexico. Analysts have also been citing a slowing world economy and less demand as a reason for the decline the price of oil.

Whatever the reason, the price of oil has fallen about 17% from its peak reached a couple of months ago. Thankfully, gasoline prices at the pump are declining, too. But prices at the pump tend to be a bit sticky... that is, they fall more slowly than raw crude prices. That's partly because the gas in the pipeline was refined from more expensive crude and partly because gas station owners just want to hang on to profits as long as they can.

The price of gasoline at the pump is viewed as an important factor in the mid-term elections this year and a negative for the party in power, the Republicans. Paying $50 plus to fill the tank of the family vehicle contributes to a feeling of economic insecurity. It will be interesting to see if the decline in prices is fast enough — and deep enough — to remove gasoline from the election equation.