Remember last summer when oil prices reached a high of $146/barrel? As a result, on June 24, 2008, gas prices hit a record high average per gallon, at $4.591. A year ago at this time, we were at $3.93/gallon, and yet today we sit at $2.52/gallon on average. Ah, fluctuation! You can never fully predict what oil prices are going to do! Consumers complain about fluctuation, and it keeps producers in a certain state of uncertainty. A book I'm reading, Spindletop Boom Days, shows that fluctuation in oil prices is no new story. In 1859 the price of a barrel of oil was $20; in 1861 it was $.10! Prices soared to $14 in 1864 but fell to $4 at the end of the Civil War. By 1870 oil prices had roller-coastered between $1.35 and $7.00, and stood in 1870 at a mere $2.70 -- hardly enough to encourage speculators. Imagine $.10/barrel oil! It's inconceivable! But a fluctuation from $20/barrel to $.10/barrel is much more dramatic than the fluctuations in oil prices we've seen in the last few years, so perhaps we should be thankful that we aren't living in the early days of oil production.
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