Why are gasoline (and oil) prices so low -- and where are they headed?

Interesting comments and charts here, though I think there is a lack of understanding of the nonlinear nature of credit vs. money. Continued credit collapse does not imply continued price decline of gasoline or oil or any other commodity or asset. Credit has ruled markets for the last few years (in fact very unstable forms of it), but this may not continue. It is entirely possible that money could move into bidding up oil or homes (though unlikely) to arrest their price declines. In fact, it is inevitable for each; the question is "when".

Note for example that physical gold and silver are doing quite well in terms of price -- many common forms of bullion are up handily year-over-year. If all buying were driven by credit, then their prices should be down. But clearly the money to buy is being found somehow.

In the oil/gas market, there is probably some "as low as you can go" level where consumption buying puts a floor on the price, especially after production cutbacks.

It is apt that the author notes the need for devaluation. However, a devaluation event of the dollar may or may not be needed to levitate prices of oil or anything else. The goal of a devaluation should be to monetize debt and to rebalance trade -- while Bernanke would be more interested in the inflationary ramifications, prices can still go up for supply and demand reasons otherwise.