The history of gas prices is an influential gauge of future trends. Gas market experts use price history to gain important understanding into the gas markets, regardless of whether they buy or sell physical gas or deal with gas financial futures. Professionals assume an evaluation of the current and historical situations, along with the aspects that give rise to these, and regulate the particular direction of gas price movements.
The spot price or spot rate of a commodity, whether a security or a currency is the price that is cited for immediate (spot) settlement (payment and delivery). Spot settlement is typically one or two business days from trade date. This is in different from the forward price established in a forward contract or futures contract. Contract terms (price) are set now, but delivery and payment will occur at a future date. Spot rates are valued via the bootstrapping method (The term structure of spot returns is recovered from the bond yields by solving for them, this repeating process is called the Bootstrap Method), which uses prices of the securities currently trading in market. The result is the spot curve (the relation between the interest rate (or cost of borrowing) and the time to maturity of the debt for a given borrower, which exists for each of the various classes of securities.
Oil price broke through $110 on March 12, 2008, followed by $125 on May 9, 2008, then $130 on May 21, 2008, $135 on May 22, 2008, $140 on June 26, 2008 and $145 on July 3, 2008. On July 11, 2008, oil prices rose to a new record of $147.27 resulting from recent Iranian missile tests.
However, on October 16, 2008, Oil traded below $70. Followed by $33.87 a barrel on December 21, 2008, less than one fourth of the highest price reached four months earlier. Prices did not recover once 2009 started. Instead, after initially rising above $48, prices run down by mid-February to below $34, hurt by calculations for further drops in world demand. Then on April 2009, oil traded at about $40 per barrel and by August 2009, prices resumed to $70 a barrel.
It was speculated that oil prices could go further to $200- $300 a barrel if Saudi Arabia, the world’s top crude exporter is hit by serious political unrest, as stated by former Saudi oil minister Sheikh Yamani. Yamani has said that basic discontentment remained unresolved in Saudi Arabia. “If something happens in Saudi Arabia it will go up to $200 to $300 per barrel. I don’t assume this, for the time being, but who would have expected Tunisia?” Yamani expressed to Reuters on the sidelines of a conference of the Centre for Global Energy Studies (CGES) which he chaired on April 5th 2011.
With this history, what else can we expect for the future? So, it is up to us how to do something for ourselves as far as gasoline price is concern.
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