Oil Prices Continue to Drop

Oil prices are continuing their downward trend, declining more than $50 a barrel since February, the Associated Press reported September 15. The seven-month low represents a drop in price of 35 percent, the report said.

The price for November delivery dropped nearly $5 a barrel to just over $96. Part of the reason for the decline in price was less damage to infrastructure from Hurricane Ike than was originally feared.

The AP report says that Hurricane Ike destroyed "at least 10" platforms for oil and gas, and that some pipelines in the Gulf of Mexico were damaged. However, the AP notes, the damage was much less severe than during Hurricanes Katrina and Rita in 2005, and that the 10 oil and gas platforms are only a fraction of the nearly 4,000 such platforms in the Gulf.

There will be no relief at the pump anytime soon, though, because the oil prices are future deliveries in the coming months. Supply disruptions caused by recent hurricanes in the Gulf of Mexico have increased pressure on gasoline prices, and high prices are likely to remain at least through the end of this month.

It is possible that gasoline prices will begin to drop over the next few months, as the peak driving season comes to an end and demand for gas continues to decline. That is, of course, as long as supply holds steady or increases.

A cut in production by the Organization of Petroleum Exporting Countries (OPEC), militant attacks on energy pipelines, or a natural disaster affecting energy infrastructure could cause prices to rise once again.

In the United States, both presidential candidates are focusing increasingly on the economy in the run up to the November election. In the Congress, lawmakers from both parties are working toward a compromise energy bill that would permit some expansion of domestic drilling.

Economic concerns spurred by high gas prices and the housing market crisis have propelled the economy to the number one spot for issues concerning voters. The U.S.-led war in Iraq has largely fallen to the wayside in domestic politics, as progress continues to be made against insurgent elements battling U.S.-led coalition forces and the Iraqi central government in Baghdad.

In the foreign policy debate, Afghanistan has become increasingly important as a resurgent Taliban has stepped up attacks against NATO forces over the past two years, making Afghanistan a deadlier place for coalition troops than Iraq.