is the gas crisis over?

No, not really. A temporary dip in the price at the pump has some Americans, especially those with short attention spans, rejoicing that we're headed back to normal. Let's start by examining "normal".

graph from gas buddy

Here in Charlotte gas prices are back down to an average of approximately $2.30 per gallon. That's great but $1 more per gallon than prices at the pump only two years ago at the end of 2003. That's a 77% increase discounting the hurricane price spike. If we continue to follow that track we should expect to see prices above $4 per gallon by the end of the year 2007.

And this is normal?

So how have we been getting low priced gasoline in the wake of the damage done to our oil and gas industry by this year's hurricanes? First there's been the helping hand...

U.S. gasoline imports rose 29 percent to an average 1.2 million barrels a day last week, a Sept. 28 Energy Department report showed. European countries such as France and Germany pledged to release oil and gasoline stocks earlier this month to help alleviate shortages caused by Katrina.

graph from George Ure of urbansurvival.com

The IEA, however, has already voted to stop letting us have world reserves beyond what was voted immediately after Katrina... As the international aid comes to an end I would expect the drop in gasoline prices to as well.

Apparently our own suppliers are also helping out...

Moreover it seems our domestic refineries are still deferring maintenance and are still cranking out gasoline rather than switching over to more heating oil production at the end of the summer driving season.

Are you hoping for a mild winter? I know quite a few people who are.

The price of gasoline has dropped over the past few weeks. It may even continue to drop over the upcoming holiday season. I would not however add an SUV to your Christmas list. I think you might want to stick with a new winter coat.