One of the more exotic elements drifting down in the fallout of the Congressional mortgage bailout implosion is that oil has dropped $10 a barrel

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Bailout Fails + Global Recession = Cheaper Gas?

One of the more exotic elements drifting down in the fallout of the Congressional mortgage bailout implosion is that oil has dropped $10 a barrel after the measure died in the House this morning.

The price is down about $25, a drop of 20 percent over the course of a week, down to $96 a barrel.

Speculators in the oil markets are betting that a global economic downturn will result in a decrease in consumption.

At one point the price of crude reached nearly $150 a barrel.

Increased demand by China and India, the weakening of the U.S. dollar and environmental/political regulations limiting the exploration and exploitation of new reserves have all been cited as major factors contributing in the record price of petroleum.

During the so-called gas crisis of the past year, oil speculators who have been thought to work the market in order to artificially inflate the commodity’s price, were also scape-goated as one of the nasty bugaboos to explain why the prices at the pump were so high.

Bouts of fisticuffs between politicians, government regulators, free market enthusiasts and generally clueless talking heads and pundits on cable news networks ensued.

But the fact that oil fell so far, so fast over the course of a week does lend a little credence to the notion that speculators are, and have been, able to game the price of oil. To what extent remains to be seen.

Topping off the tank: If the price of crude continues to fall, does that mean Democrats seeking election, environmental activists and media types will no longer get to wave the bloody shirt of evil oil companies making windfall profits at the expense of the American public? And will Congress bail Big Oil out when the companies start losing money?

 
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