Franc,

I don't think that the opening of U.S. sources to exploration and eventual drilling was responsible for much of the fall in oil/gas prices. Psychologically, it may place some downward pressure on prices in the near term, but it will be a decade before that oil is harvested where it can meaningfully impact supply. As Inferno stated, demand is a big factor. Demand for gasoline is down 6% from the same time last year. The reduction in demand is not linear in relation to the price. A 6% reduction in demand causes a price drop of way more than 6%. That is because with the reduction in demand there is no longer as much competition for the current supply, even with the OPEC cut. There's no longer as much need to secure future oil when it is more plentiful so the speculative bids decrease. Since the financial crisis and recession/depression will likely affect many parts of the global economy, there isn't nearly the demand for oil as if only the US was experiencing economic troubles. Another huge contribution to the fall in gas/oil prices is the flight to dollar denominated assets, mainly bonds. The dollar has strengthened by approximately 25% vs. most other currencies (except the yen) over the past few months. Oil is priced in dollars, so even though oil has fallen in price by 50%, the fall isn't as great when measured in the currencies of the oil exporters. Once the dollar resumes its fall as the inflationary actions of our Fed take hold, foreigners will once again demand more dollars for their oil.