Dropping Energy Prices to Save the Day?

All that gloom and doom in the housing sector may mask a ray of hope according to some analysts. This ray comes from lower oil prices and thus energy not taking such a big bite of the consumer budget.

At the pump, meanwhile, gas prices also extended their declines,
falling 2 cents over the weekend to a national average of $2.838 a gallon,
according to AAA and the Oil Price Information Service. Retail prices, which
typically lag the futures market, peaked at $3.227 a gallon in May. At that
time, gas futures were rallying on concerns about the refining industry, which
struggled all spring with maintenance issues and unplanned outages.

Maybe the consumer will be able to ReFi their loans so that they can absorb any rate increases. Or if they are able to get out from under those expensive homes and possibly sell them they will be in the clear. They may need to rent or buy a condo or something but at least it will help them not go bankrupt and lose their homes. However these oil guys are hopelessly split according to that article though.

In any case I wonder if we will see another 30% drop in oil prices from now until October like we saw last year? Someone placed a $7 million bet on 9000 contracts of Oct 2007 OIH Puts today. This person is betting on a 14.9 point drop from the current levels in the Oil Services HOLDR by October to break even. The OIH dropped about 20% last year from August to October (A 20% drop would put OIH at about 132.) Finally there is an almost 3 to 1 Put to Call ratio in that series as well. Could all this option positioning mean people are hedging for a drop in OIH (and oil prices) from now until October? It seems reasonable.