Could gas hit $1 a gallon? Party like it’s 1972!

With global demand continuing to decline, some energy analysts are predicting the price of oil will bottom around $25 a barrel with $1 a gallon of gas.  Oil closed on Monday at $43.71 a barrel, with average gasoline prices at $1.70, the lowest since February 2004.

Oil held steady yesterday on the hopes that the Obama stimulus package could restore demand and that OPEC might bring additional production cuts.

Echoing a sentiment we’ve expressed, the LATimes quotes a more skeptical energy analyst, who notes, “Some of the same clowns who were predicting $200-a-barrel oil a few months ago are in the crowd predicting $25 a barrel. But just as we believed that oil above $100 was not sustainable by market fundamentals, oil below $30 isn’t sustainable either.”  He added that he predicts that the global economy will eventually improve, placing a greater demand on supplies.

Pickens, on the other hand, has a slightly more aggressive prediction, noting that if the economy recovers, he expects oil to be above $100 a barrel in 2009.

Either way, there is no doubt that the price of oil will return to high levels.  What we must do is make sure we don’t fall back into the classic panic-and-complacency cycle that has defined American energy policy for 40 years.

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