For years, government has tried to get americans to use LESS oil and gas. So now its here- cars get better mileage, homes are better insulated, and demand drops. At the same time, supplies increase through innovation. The government's response is to try to increase THEIR income through a $1 tax per gallon. I say they can go fu&& themselves.

It's the same scenario if prices were rising. They should state their personal favorite price.

I saw the stock market in China went up when they reported their worst growth in 25 years. The expectation is they will do their version of QE. It seems government pumping on bad news is considered normal now. Wonder what happens if they do nothing???

I am somewhat worried because the actual amount of increase in supply doesn't justify this fast and deep a drop. There has been a very large decrease in demand. Why? I am not sure of all the why details but one very large part is that China is starting to reap the results of its top down command and control version of "capitalism". Its misinvestments and printing of money are coming home hard. A lot of the Chinese explosize growth is slowing and this is hitting commodities across the board including oil. It is also rippling out to other banks and businesses and countries deeply dependent on Chinese high demand. That imho is no small part of what is happening.

I feel a bit like one does standing at the ocean seeing the water line much much further out than normal. Beware.

Oh sure. Taxes will go up.

True, he likely is enjoying that.

All retail numbers are down. Great timing too. The actual numbers were reported the day after the State of the Union when Obama told us how great things are. Most people heard that and will listen to nothing else.

Good point. Could just be dramatic effect to get an audience.

I think I would be in shock if government spending declines but likely for a different reason. :)

I was thinking of the damage to the fracking industry. Oil is too cheap to make it profitable right now.

Those pundits would be totally freaked out of government spending declined.

Not sure if Obama is enjoying. He wants energy high so we can all go solar and save the polar bears. But then again cheap oil will make it easier to tax per Michael's point.

I have heard that idea floated. The administration seems to be at a loss as to why the retail numbers are so bad. It's so cheap now to drive to the mall and spend our gas savings the numbers should be up according to government sources.

Hi Abaco. I keep worrying that I am a conspiracy theorist. I wonder if someone is pulling the strings and causing this for nefarious reasons.

They shouldn't be too worried. I've had to study this a bit. Some people find negative in everything. The low oil prices are not a cause, but a result. They have resulted in a glut of production and drop in demand. The drop in demand, largely, is from a slowing economy. I could say a few things about how this could affect those seeking high-yield, fixed-income products....but I won't.

The drop is hurting Russia and our fracking industry. Two things the Obama administration must be enjoying.

I have the idea that it is both normal because demand is down and political maneuvering. Other factors include fracking & sanctions lifted on Iran. I'm sure there is more but cannot think of them right now.

Good reasons. I was thinking if the price was actually market driven that occasional dips would increase demand and the price would go back up. Oil is so manipulated I can't figure out if this is normal price fluctuations or high stakes political maneuvering.

My guess is there are at least 2 reasons.

First, many people have bought paper oil at $80 a barrel or greater and are losing big on it now.

Second and the bigger issue is the governments that set budgets on selling $80 oil and will not have the money to fund all their handouts with low oil prices. Not much different than our own government that spends every single dime + it takes in on programs that we cannot afford.