Oil prices are down, and they’re likely to stay that way for now, writes Ronald Bailey for Reason. Not only did the recent spike in gas prices drive down demand in the US; it also heightened the effect of domestic and local production. Government mandates, made in response to the surge in oil prices, are likely to curb demand in the US for years.
OPEC, sensing the effect of high prices, has curtailed production in an effort to boost profits. Analysts worry this response will lead to a shortage when fickle US consumers return to the pump. And proponents of alternative energy are scared that sinking gasoline prices will lead to less funding for their projects. So cheap oil might not be such a good thing after all.