THEY DON'T RISE NATURALLY:

Oil, gas prices take a dive (Patrice Hill, September 13, 2006, THE WASHINGTON TIMES)

Oil prices plunged below $64 a barrel yesterday and settled 19 percent below this summer's record highs, bringing a major dose of inflation relief to hard-pressed consumers and the economy. [...]

Some analysts say a sea change is occurring in the oil market, and it will not revisit soon the record high of $78.40 set in July by premium crude in New York. Premium crude prices settled at $63.76 a barrel in New York trading yesterday, the lowest since March.

"We're in the midst of a tectonic change," said Peter Beutel, president of Cameron Hanover Inc., an energy consultant. "The rally that's lasted almost five years may be over. We keep seeing lower demand estimates which show the impact of very high prices."

Yesterday, the International Energy Agency trimmed its forecast for world oil demand this year by 100,000 barrels a day, and by 160,000 barrels next year, citing slackening demand in the United States and elsewhere.

At the same time, Saudi Arabia's oil minister, Ali al-Naimi, told a conference in Vienna that oil producers plan to invest nearly $100 billion in new oil and gas projects in the next five years to meet rising demand -- raising the prospect of a long-sought easing in the tight supplies that have fueled record oil prices.

Feeding the optimism on Monday, Iraq's oil minister said the war-ridden country hopes to double its oil production to more than 4 million barrels a day in the next five years -- a development that could cause further dramatic drops in oil prices. Though it has the world's second-largest conventional oil reserves, after Saudi Arabia, much of Iraq's production has been idled for years because of a lack of investment and maintenance as well as sabotage by insurgents.

It's an ideal time to impose new gas taxes so as to keep damping down demand.

Posted by Orrin Judd at September 13, 2006 9:18 AM