I doubt it will stay low long. cause oil companies cutting production to raise prises plus ppl can afford more fuel now so they're spending more...IMO
They arent spending more thats why demand is way down, even with the reduction in production not only from domestic refineries but also with supposedly reduced output from OPEC.
We have a rare combination that is so far keeping people from ramping back up demand.
1. The rejection of large fuel hungry vehicles like SUV's and such. That alone is major.
2. People have changed and adjusted their habits largely. Their mindsets have changed to find ways to reduce fuel consumption in the form of car pooling, buying more economical cars, telecommuting more, etc. Now, with prices dropping, those same people are equating the drop in oil and gas prices with their efforts. This reinforces the idea in their minds that they have played a role in this and perhaps even taken some satisfaction at the perception that they have 'stuck it to them', OPEC in some way by their efforts. THAT, people are not likely to give up very soon and that will help keep prices down some.
3. Couple all that with the economic situation and the fear of loosing a job or trying to hang on to a home that has adjusted in its interest rate, even if people wanted to get out and drive again they are tempered in doing so in trying to hang onto what they can financially.
The longer this continues the more these mindsets are going to be fixed in people's minds and the more the efforts will continue and the more it will help keep prices down.
I dont think we will see oil prices going up much if at all because of the economic situation. There might be some spikes here and there because large organizations like airlines are going to be stocking up and hedging against future prices by buying oil now on futures trading, much the way Southwest Airlines did a few years ago just before Katrina. They bought LARGE supplies of fuel prior to the price spike and was not hit with the fuel costs that other airlines were. So I think the other airlines have learned from that and will try and stock up as it were now and those kinds of purchases in those kinds of volumes will artificially spike prices.
For the most part I believe the prices will stay under $2/gal for now. But once the economy starts to rebound and people start driving more, I believe the mindset has changed in such a way that they will be hitting the road in much more fuel efficient vehicles and that will help keep demand lower than it has been.