From the Cincy Enquirer, re: gasoline prices in Ohio and Kentucky (and, by extension, the rest of the country) in 2007:
Matthew Roberts, an agricultural economist with Ohio State University, predicted gasoline prices in January would dip below $2 in Ohio and Kentucky. While prices might sporadically spike for a few days to $2.50, he forecast costs would top out at $2.30 per gallon in 2007.
He said sustained higher prices have spurred overall oil production and exploration as well as conservation. The three factors have stemmed upward pressure on gas prices.
"There's an old economist's saying that the best cure for high prices is high prices," Roberts said. "High prices have caused demand to soften at the same time there's more efficiency and increased production and exploration."
He noted that production cuts by the Organization of the Petroleum Exporting Countries earlier this month signal there's now excess capacity - contrary to the conventional wisdom that worldwide production is maxed out.
Prediction: If Ohio State loses to Florida in the BCS title game next Monday, we'll see $4 gas prices by January 10. Why? Because it'll be a sign that nothing is right in this crazy world.
Remember the glory days of $3/gallon gas here.