Headline: ‘Cheap oil is here to stay’ – when did it arrive?

By Money Matters Editors

CNNMoney.com published a story Thursday entitled “Cheap Oil Is Here To Stay.”

Question - Oil closed at about $75 per barrel Thursday: Money Matters Editors want to know, when exactly did cheap oil arrive?

The CNNMoney. com article goes on to say that a combination of conservation, increased engine efficiency, and an existing glut of oil will keep the price of oil “well below $100 a barrel.”  How comforting.

Pardon us, but oil below $100 per barrel, or even trading at/near $60 is not cheap! Oil below $30 per barrel – roughly its average, real price over the past 150 years - is cheap. We’re no where near that level, and it’s hard to envision a scenario amid U.S. and global GDP growth in which prices would drop below $50 per barrel, let alone $40 or $30.

That said, any dip in oil prices should not deflect the Obama Administration and the United States from increasing federal vehicle gas mileage requirements, nor distract businesses from increasing efficiency throughout the commercial system. Simply, the surest way to reduce oil prices and the nation’s oil bill is for the U.S. to use substantially less of it, on a per person basis.