I'm not sure how confident I am in these recent predictions, because I remember reading Steve Forbes making a similar one just over a year ago:

Forbes said the high oil prices currently dampening the US economy, which peaked at more than 70 usd a barrel yesterday as Hurricane Katrina headed for the US Gulf Coast, would fall to 30-35 usd a barrel within a year.

'I'll make a bold prediction... in 12 months, you're going to see oil down to 35-40 usd a barrel,' he said, according to Agence France-Presse.

'It's a huge bubble, I don't know what's going to pop it but eventually it will pop -- you cannot go against supply and demand, you cannot go against the fundamentals forever.'

I had cautious optimism about Forbes prediction, but have obviously been disappointed. While most Americans are being told that this is "supply and demand" because China and India are using so much oil now, anyone who's actually paying attention knows that is absolute crap. Speculation in the market drives prices up. Bad week in Iraq? Jack it up a few dollars per barrel. Unrest in Middle East, 'uh... could run off in to neighboring oil rich nations... jack it up more'. "Global Warming! Hurricanes! JACK IT UP! GONNA BE SUPPLY SHORTAGES!" The list goes on. But this is all crap, and not reflecting the realities. We've heard for literally over 100 years that the planet was running out of oil in a couple years and it's always proven wrong. Supply has kept up with demand all the way, and all this speculation is just that, wild speculation that doesn't reflect what's really going on.

Anyway, Forbes may have been wrong, or perhaps should have just said "in 18 months" instead of 12, because as we've seen oil prices start to sink significantly and some of that speculation has come out of the market, others are making some equally shocking predictions:

WASHINGTON — The recent sharp drop in the global price of crude oil could mark the start of a massive sell-off that returns gasoline prices to lows not seen since the late 1990s — perhaps as low as $1.15 a gallon.

"All the hurricane flags are flying" in oil markets, said Philip Verleger, a noted energy consultant who was a lone voice several years ago in warning that oil prices would soar. Now, he says, they appear to be poised for a dramatic plunge.

Crude-oil prices have fallen about $14, or roughly 17 percent, from their July 14 peak of $78.40. After falling seven straight days, they rose slightly Wednesday in trading on the New York Mercantile Exchange, to $63.97, partly in reaction to a government report showing fuel inventories a bit lower than expected. But the overall price drop is expected to continue, and prices could fall much more in the weeks and months ahead.

With fear of supply disruptions ebbing, oil prices began sliding. With oil inventories high, refiners that turn oil into gasoline are expected to cut production. As refiners cut production, oil companies increasingly risk getting stuck with excess oil supplies. There's already anecdotal evidence of oil companies chartering tankers to store excess oil.

All this is turning financial markets increasingly bearish on oil. "If we continue to build inventories, and if we have a warm winter like we had last winter, you could see a large fall in the price of oil," said Gary Pokoik, who manages Hedge Ventures Energy in Los Angeles, an energy hedge fund. "I think there is still a lot of risk in the market."

Should oil traders fear that this downward price spiral will get worse and run for the exits by selling off their futures contracts, Verleger said, it's not unthinkable that oil prices could return to $15 or less a barrel, at least temporarily. That could mean gasoline prices as low as $1.15 per gallon.

$15 a barrel!? I think that's a bit extreme, considering Forbes wasn't even going that far. But, I'm going to hold out hope, while thinking realistically.

More of the good...

Other experts won't guess at a floor price, but they agree that a race to the bottom could break out.

"The market may test levels here that are too low to be sustained," said Clay Seigle, an analyst at Cambridge Energy Research Associates, a consultancy in Boston.

And now the bad...

On Monday, the oil-producing cartel OPEC hinted that if prices fall precipitously, OPEC members would cut production to lift them. But that would take time.

"That takes six to nine months. If we don't have a really cold winter here [creating a demand for oil], prices will fall. Literally, you don't know where the floor is," Verleger said. "In a market like this, if things start falling ... prices could take you back to the 1999 levels. It has nothing to do with production."