As oil sank to its lowest point in weeks, many investors are still questioning whether crude oil has cooled enough to reflect the serious deterioration in demand. China has stopped its stockpiling of oil as the Olympics near and the price crunch has reduced the global demand somewhat.
Unleaded gasoline prices eased to nearly $4 a gallon, and AAA said a gallon of gas could cost as much as 25 cents less by Labor Day.
Light, sweet crude for September delivery fell $2.23 to settle at $123.26 a barrel in on the New York Mercantile Exchange. Earlier the contract dropped as far as $122.50, its lowest point since June 5.
The U.S. continues to sit on hundreds of billions of untapped oil reserves as OPEC nations continue to demand that America start tapping some of those reserves before demanding increased output from OPEC.
Unleaded gasoline prices eased to nearly $4 a gallon, and AAA said a gallon of gas could cost as much as 25 cents less by Labor Day.
Light, sweet crude for September delivery fell $2.23 to settle at $123.26 a barrel in on the New York Mercantile Exchange. Earlier the contract dropped as far as $122.50, its lowest point since June 5.
The U.S. continues to sit on hundreds of billions of untapped oil reserves as OPEC nations continue to demand that America start tapping some of those reserves before demanding increased output from OPEC.
4 comments:
JMK,
The fact that the prices fell right after Bush signed the order to open off-shore drilling supports my assertion that the markets would react overnight if we even hinted at opening ANWAR. Even if the DEMs were right about it taking 10 years to get oil out of the ground (they're not), the market's reaction would drop the price in a matter of hours.
I also think the market is reacting to the increasing popularity of the concept of drilling.
I predict the price is going to remain in a holding pattern until November...barring any unforseen disasters or global shake ups.
That's absolutely correct, commodities are sold as "Futures Contract," in which investors (speculators, to those who revile them) bid, or, in effect, bet on whether the price of a particular commodity will rise or fall over a given period. Futures contracts can be of varying lengths.
When investors place their bids they take into account many parameters, including WEATHER (a huge impact on ALL commodities, including oil), the likelihood for civil unrest and other things that may disrupt the supply and, of course, ANYTHING (like drilling, new technologies and new sources of supply) that will increase the supply.
Futures markets, like ALL markets run on the primary forces of supply and demand.
There have been a number of factors in the current price run-up, including China's stockpiling oil in advance of the Beijing Olympics. They've now stopped as those games are set to go. Europe and America have reduced their demand somewhat. I think prices will come down significantly thirty to fifty cents at the pump, by Labor Day and it will continue to fall through the rest of the year. Saudi Arabia has increased output by some 500 million barrels and Iraq is producing oil at ABOVE pre-invasion levels!
Gore knows how the commodities (futures) markets work. Ironically enough, while "oilman" G W Bush has only a failed drilling supplies company to link him to "big oil" (the name nitwits give to the energy conglomerates), Gore's family has long been heavily invested in Occidental Petroleum.
In fact, when Gore was VP he arranged to have the Navy's strategic Oil reserves at Elk Hills, CA sold on the cheap to....Occidental Petroleum.
Gore knows how the futures market works, all too well.
In fact, what has been the best thing to happen to the the huge energey conglomerates?
Higher oil prices.
What has been the biggest factor in their rise?
The U.S. sitting on hundreds of BILLIONS of barrels of oil in the midst of huge supply disruptions globally.
Those companies would've committed suicide by lobbying the U.S. not to drill and bring more oil to market, so what's been higher oil prices biggest proxy or supporter?
The environmental movement!
Gore is a vile, greedy, POS, who should be in prison over some of the things he did as VP, like consorting with Jorge Cabrera (Columbian Drug Lord) and raising money in a Buddhist Temple.
Drill more oil now! Stop sending our wealth to our enemies. Start with hybrid and alternative fueled automobiles, nuclear power, wind power, natural gas, and domestic oil drilling and refining. That would put a huge dent in our dependence on foreign oil.
Towns in Canada near oil deposits that are being retrieved are booming right now. It's almost like a gold rush. Hello, Congress!?! Hello, Democratic party and the GOP! Hello, anyone home?
We SHOULD get a lot more of our electric from nuclear and we SHOULD drill now! America's sitting an estimated 800 BILLION barrels of oil!
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