Crude Oil Prices

[Luke]

Perhaps someone wiser than myself, which includes about everyone, can explain why gasoline prices are still around $3.50 per gal? The price of crude has gone to $106 today. I am having a hard time believing Neal Boortz, and other talk show folks line of economic reasoning.

There may be an energy czar position open in the Luke Admins for an answer.

[Beetle]

It seems when something thretens oil and crude goes up, it is reflected at the pump real quick. When oil goes down, it seems it takes some time for it to fall at the pump.

Just my observation.

[Ryan Ruck]

As has been explained to me, it is a simple principal. The prices jump quickly to be able to purchase future supplies at the higher price. It is then slow to come down because the existing stock bought at a previously higher price cannot be sold at a loss.

[Luke]

I suppose that makes some sense, however to this old hilbilly it seems like a good old fashion gouging. I have been trying to find what the price of gasoline was the last time crude was at its current price, but I am not having a lot of luck. I appreciate the replies nonetheless.

[Luke]

Still searching for answers I found these. I know statistics can be deceiving, still......


SO YOU THINK YOU KNOW OIL


Knowing Oil:: MAYBE NOT

By: John David Powell

Here we are with a new week and another round of posturing, politicking, and
punditry regarding the price of petroleum. As happens when folks do a lot of
talking, very little is said.

I hang around educated and talented people. Each individual has at least one
university degree. Most read, watch, or listen to more than one news source
every day. They span generations with ages ranging from the 20s to the 70s.

Yet, not a single person among them knew the answers to some basic questions
pertinent to the growing discourse regarding the rising price of oil. A few
knew some of the answers, and some knew a few of the answers. To be fair, I
had to look up the answers, or else I would have been among the shoulder
shruggers.

For instance, how big is a barrel? Answer: 42 gallons. So, now you know that
when the price for a barrel of crude oil hits $140, that's the same as $3.33
a gallon.

What nation supplies the most crude oil and petroleum products to the United
States ? Answer: The United States . According to the Energy Information
Agency (www.eia.doe.gov <http://www.eia.doe.gov > <http://www.eia.doe.gov/
<http://www.eia.doe.gov/> > <http:// > www.eia.doe.gov
<http://www.eia.doe.gov > < http://www.eia.doe.gov/ >
> >), our country supplied 41 percent of the oil we consumed in March of
this year.

What nation, other than the U.S. , supplies the most crude oil and petroleum
products to our country? Answer: Canada . Our northern neighbor accounts for
12 percent of our nation's oil and 20 percent of all the oil we import. The
rest of the top five include Saudi Arabia (7 percent and 13 percent);
Venezuela (6 percent and 11 percent); Nigeria (6 percent and 10 percent);
and Mexico (5 percent and 8 percent).

How much oil do we import from Persian Gulf countries? I'm glad you asked.
Persian Gulf countries accounted for only 16 percent of our foreign oil
imports each year from 2005 to 2007. In fact, our Persian Gulf imports
declined most of this decade, from a 15-year high of a little more than 1
billion barrels in 2001 to 791.9 million barrels in 2007.

What's the difference between crude oil and petroleum products? Answer:
Crude oil provides, among other products, gasoline, diesel and jet fuels,
heating oil, liquefied petroleum gas, lubricants, asphalt, plastics,
synthetic fibers, detergents, fertilizers, ink, crayons, bubble gum,
deodorant, tires, and heart valves.

One barrel of crude oil (which is 42 gallons, remember?), yields about 19.6
gallons of gasoline. The other 22.4 gallons go into the products just
mentioned.

How much of the cost of oil goes into the price of gasoline? Answer: A
bunch. We consumed about 390 million gallons of gas a day last year in our
cars, trucks, recreational vehicles, boats, farm implements, and
construction and landscaping equipment. Back when crude was $68 a barrel
(that was just last year), it accounted for about 58 percent of the price of
a gallon of gasoline. The rest of the price came from refining costs (17
percent), federal and state taxes (15 percent), and distribution and
marketing (10 percent).

By the way, the price of crude accounts for about 77 percent of the cost of
gas at $4 a gallon.

Here's a little something you may not have considered. What products that
you buy on a regular basis are sold with tax included? Answer: Gasoline. For
everything else, you add the tax at checkout.

The folks in California pay 63.9 cents a gallon in state and federal fuel
taxes, the most in the nation. That's just the base, though. Motorists there
also pay an additional 6-percent state sales tax, with some paying another
1.25-percent county sales tax plus applicable local sales taxes. Same in
Illinois , where Chicago motorists pay 12.75 cents per gallon on top of the
57.9 cents per gallon in state and federal taxes. Some Illinois motorists
also pay a 6.25-percent sales tax.

Politicians, pundits, and other TV talking heads don't like to provide these
answers, because facts get in the way of positions that pander to the mob.
We don't point fingers at Canada , because it's de rigueur to paint the
Saudis with the broad brush of blame. Folks float the idea of a moratorium
on state and federal gasoline taxes without explaining its minimal impact on
gas prices, or without mentioning the $3 sales tax some motorists pay on top
of a $50 fill up. Policymakers don't explain that oil trades in the dollar,
which is weak vis- -vis the Euro, because that would require solutions for
strengthening the greenback.

And, it's easier for simple minds to convince simpler minds to impose
windfall-profit taxes on pension funds and owners of Individual Retirement
Accounts who invest in oil companies than to take on credit card issuers
charging double- and triple-digit interest rates to the millions of people
using plastic to pay for food and fuel. Talk about irony.

And, we sure wouldn't want to impose a windfall-profit tax on someone who
goes from making $56,000 a year as, say, an Illinois legislator, to $165,000
a year as, say, a U.S. senator, an increase of nearly 200 percent (not
counting book deals or real-estate related loans).

And then I found this, Yes that Phillips 66,....

Bill spent nearly 50 years in the US oil and gas industry; most of his
career was with the Phillips Petroleum Company. Bill is a descendant of
Frank Phillips. Frank Phillips, along with his brother Lee Eldas (L.E.)
Phillips, Sr., founded the original Phillips Petroleum Company in 1917 in
Bartlesville, OK. Do you remember Phillips 66 gas stations? Phillips
Petroleum Company merged with Conoco, Inc., in 2002 to form the current
ConocoPhillips oil company.

So, when Bill talks about oil and gas issues, I tend to listen - very
closely. I think that you will find Bill's thoughts and facts very
revealing, very compelling and very difficult to argue with.

As you prepare to cast your crucial ballots this Fall, please think long and
hard about the far-reaching, cumulative effects of the US political
philosophies, policies and legislation that have contributed to the current
and future US oil supply situation.

May 28, 2008
"Big Oil"

Did you know that the United States does NOT have any big oil companies.
It's true: the largest American oil company, Exxon Mobil, is only the 14th
largest in the world, and is dwarfed by the really big oil companies--all
owned by foreign governments or government-sponsored monopolies--that
dominate the world's oil supply.

With 94% of the world's oil supply locked up by foreign governments, most of
which are hostile to the United States, the relatively puny American oil
companies do not have access to enough crude oil to significantly affect the
market and help bring prices down. Thus, ExxonMobil, a "small" oil company,
buys 90% of the crude oil that it refines for the U.S. market from the big
players, i.e., mostly-hostile foreign governments. The price at the U.S.
pump is rising because the price the big oil companies charge ExxonMobil and
the other small American companies for crude oil is going up as the value of
the American dollar goes down. They will eventually bleed this country into
printing even more money and we will go into runway inflation once again as
we did under the Carter Democratic reign.

This is obviously a tough situation for the American consumer. The irony is
that it doesn't have to be that way. The United States --unlike, say, France
--actually has vast petroleum reserves. It would be possible for American
oil companies to develop those reserves, play a far bigger role in
international markets, and deliver gas at the pump to American consumers at
a much lower price, while creating many thousands of jobs for Americans.
This would be infinitely preferable to shipping endless billions of dollars
to Saudi Arabia , Russia , and Venezuela to be used in propping up their
economies.

So, why doesn't it happen? Because the Democrat Party--aided, sadly, by a
handful of Republicans--deliberately keeps gas prices high and our domestic
oil companies small by putting most of our reserves off limits to
development. China is now drilling in the Caribbean, off Cuba, but our own
companies are barred by law from developing large oil fields off the coasts
of Florida and California . Enormous oil-shale deposits in the Rocky
Mountain states could go a long way toward supplying American consumers'
needs, but the Congress won't allow those resources to be developed. ANWR
contains vast petroleum reserves, but we don't know how vast, because
Congress, not wanting the American people to know how badly its policies are
hurting our economy, has made it illegal to explore and map those reserves,
let alone develop them.

In short, all Americans are paying a terrible price for the Democratic
Party's perverse energy policies. I own some small interests in tiny, 4
barrel-per-day oil wells in Wyoming . We have 14 agencies that have
iron-hand jurisdiction over us. If we drop any oil on the ground when the
refinery truck comes to pick up oil from our holding tanks, we are fined.
Yet down the road the state will spray thousands of gallons of used oil on a
dirt road to control dirt. When it rains that oil runs into rivers and
creeks. Yet a cup of oil on the ground at our wellhead is a $50,000 EPA
fine plus additional fines from state regulating agencies. They treat oil
as if it were plutonium that has the potential to leak into the environment.
We are fined if our dirt berms are not high enough around a holding tank,
yet the truck that picks up our oil runs down the road at 60 mph with no
berm around it. People wonder why there is no more exploration in this
country. It's because of the regulators; people who have lived their whole
lives doing nothing but imposing fines on small operators like us for doing
mostly nothing.

So, America enjoy your $4.00 per gallon gasoline. Your dollar is now worth
0.62 Euro-Cents. The lack of American production of GNP, the massive trade
deficit (as labor markets have moved overseas to fight insanely high union
imposed labor costs in America ) and the run away printing of money (backed
by nothing of value here in America ) has caused the dollar to become more
worthless on the international market. And that's where our oil comes from.
It's paid for with dollars that become more worthless everyday. If we had
just kept par with the Euro, we'd be paying $62 dollars per barrel for oil
(42 gallons) or about $1.50 instead of $2.50 a gallon for crude oil.

What the US government also does not tell you is that it is the leaseholder
and royalty recipient of most oil production, and receives 25% of the gross
oil sales before we pay for electricity to lift the oil, and propane to keep
the oil-water separators from freezing in the winters. We pay a pumper to
visit each well everyday plus we have equipment failures all the time. We
pay for that out of our 75% of gross sales. The government does not share
in any expenses to run any production well. So, if the Big Oil Companies
are making record profits, then so is the federal government from it's 25%
tax on every molecule of oil sold to a refinery in this country. Why isn't
the government on the stand for "record" profits? What you don't see is
this 25% of the sales price of crude oil being siphoned away by the
government. That money, plus the road taxes, state taxes, etc., amounts to
over $1 per gallon of gasoline you are buying while the governments only
admit to about 50 cents per gallon.
When you go vote for your candidate, just keep in mind that liberal
spending habits will further decrease the value of the American dollar on
the world market and your gasoline costs will hike even higher. As they
introduce more give-away programs, raise taxes on everyone to pay people not
to produce or work, your dollar will continue to dwindle on the world market
and you will be paying $10.00 per gallon at the next election. Cheap
hydrocarbon fuel is all over. Enjoy! Enjoy the fruits of your decision to
elect these folks when you are there in that voting booth.

William "Bill" Phillips

[Malsua]

Opec voted to cut production in the meeting this week. Expect a small move upward in prices. If congress does vote for offshore drilling this week, expect a huge plunge in prices. Knowing our congress, they'll do the opposite of what needs to be done.

[Phil Fiord]

The state of Virginia apparently put a control in place for hurricane Hannah, that became a Tropical Storm and caused little problems. This control limited fuel supply, according to a source I have in the fuel industry in Virginia. This control limited how much fuel could be loaded at racks per day causing a leaning of supply to stations for 87 and 89 octane, the most popular grades.

My source asked me if I had a full tank yesterday, which I nearly did. That was when he said expect a short term increase in price as the state of Virginia works out distribution controls.

[Toad]

It's still down a dollar so far today, even with the storm approaching. $101.04 right now at 12:54 central time.

[Ryan Ruck]

OPEC had just called for production cuts to try and prop up prices around the $100 mark.

Take a look at this...

The Death of OPEC

Saudi Arabia walked out on OPEC yesterday. It said it would not honor the cartel's production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.

As the world's largest crude exporter, the kingdom in the desert took its ball and went home.

As the Saudis left the building the message was shockingly clear. According to The New York Times, “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate said. “We will see what the market requires and we will not leave a customer without oil."

OPEC will still have lavish meetings and a nifty headquarters in Vienna, Austria, but the Saudis have made certain the the organization has lost its teeth. Even though the cartel argued that the sudden drop in crude as due to "over-supply", OPEC's most powerful member knows that the drop may only be temporary. Cold weather later this year could put pressure on prices. So could a decision by Russia that it wants to "punish" the US and EU for a time. That political battle is only at its beginning.

The downward pressure on oil got a second hand. Brazil has confirmed another huge oil deposit to add to one it discovered off-shore earlier this year. The first field uncovered by Petrobras has the promise of being one of the largest in the world. That breadth of that deposit has now expanded.

OPEC needs that Saudis to have any credibility in terms of pricing, supply, and the ongoing success of its bully pulpit. By failing to keep its most critical member it forfeits its leverage.

OPEC has made no announcement to the effect that it is dissolving, but the process is already over

If this is true, it is big news.

I can tell you that the Saudis know better than to keep oil too high since they do not want to lose money to our domestic exploration. Also, Russia will pump as much oil as it can to sell for military dollars. And with the two biggest dogs out of the OPEC picture, the other smaller member states don't stand a chance of any real credible influence.

[Luke]

Am I blue?

[Jag]

OIL JUMPS RECORD $25; TO $130/BARREL...
http://www.drudgereport.com/

Oil spikes $25 a barrel on anxiety over US bailout

Sep 22 02:29 PM US/Eastern

NEW YORK (AP) - Oil prices spiked more than $25 a barrel Monday—the biggest one-day price jump ever—as anxiety over the government's $700 billion bailout plan battered the dollar and touched off frenzied buying of safe-haven investments including crude.


Light, sweet crude for October delivery jumped as much as $25.45 to $130 a barrel on the New York Mercantile Exchange before falling back somewhat to trade at $123.77,up $19.22. The contract was set to expire at the end of the day, adding to the volatility; the October price began accelerating sharply in the last hour of regular trading.

Crude has gained about $40 in a dramatic four-day rally that has at least temporarily halted oil's steep two-month slide below $100. At this rate, crude is within striking distance of its all-time record of $147.27, reached in July.

The Nymex temporarily halted electronic crude oil trading after prices breached the $10 daily trading limit. Trading resumed seconds later after the daily limit was increased.

The huge rally was poised to shatter crude's previous one-day price jump of $10.75, set June 6.

Oil's sharp gains came as energy traders grappled with the implications of the government's proposed $700 billion initiative to stem the U.S. financial crisis by absorbing billions of dollars of banks' bad mortgage-related securities. Anxiety over the plan also sent stocks sharply lower Monday; the credit markets were calmer than they were last week, but still showing the effects of investors' nervousness.
"They're going to have to continue auctioning off a whole lot of Treasurys to finance these projects, so the dollar is going to suffer," said Matt Zeman, head trader at LaSalle Futures in Chicago. "Right now it's fear and anxiety driving people who want tangible assets.

http://www.breitbart.com/article.php...show_article=1

OUCH!!!!!
Jag

[Ryan Ruck]

Oil has a HUGE spike today...

PETROLEUM ($/bbl)

	PRICE*	CHANGE	% CHANGE	TIME
Nymex Crude Future	117.64	13.09	12.52	14:08
Dated Brent Spot	104.20	6.30	6.44	14:38
WTI Cushing Spot	119.14	14.59	13.96	14:11

That's pretty significant. Not sure what caused this as I haven't heard anything. Perhaps a weakening dollar on news of the financial bailout?

[Ryan Ruck]

Ha, talking on Fox about this right now. Analyst says it has to do with expiration of contracts, the weakening of the dollar, and a little bit of higher demand.

[Malsua]

Today is the end of the October orders...it'll drop about $15 tomorrow.

[vector7]

Oil posts biggest-ever 1-day gain

Futures finish up $16.37 - after being up more than $25 to $130 - on the bailout plan, the falling dollar and the expiration of the October contract.

By Catherine Clifford, CNNMoney.com staff writer
Last Updated: September 22, 2008: 5:40 PM EDT

http://money.cnn.com/2008/09/22/mark...ion=2008092214

NEW YORK (CNNMoney.com) -- Oil prices posted the biggest one-day dollar gain ever Monday as the dollar was punished by the government's $700 billion Wall Street bailout plan and big investors scrambled to fill obligations as the October contract expired.

The October contract surged in afternoon trading, reaching as high as $130.00 - a more than $25 gain. But it dropped back down to settle at $120.92 a barrel, up $16.37 from Friday's close.

The gain eclipsed the $10.75 spike in oil on June 6.

The rally reached a fevered pitch as the session neared its close, partly due to the fact that Monday was the last day of trading in the October oil futures contract, which typically results in volatile trading.

"A lot of the bullish factors that had been in this market that had been ignored are now coming home to roost," said Peter Beutel, oil analyst at Cameron Hanover.

As of Tuesday, the front-month contract will be November, which settled up $6.62 to $109.37.

Late-session spike: Oil prices had been rallying throughout the day, but the late-day spike was due to investors covering their short positions as the October contract expired, according to Ray Carbone, a broker and trader at Paramount Options.

Short sellers bet the price of crude will fall, which helped send oil from nearly $120 a barrel late last month to near $90 at its lowest point. Short sellers borrow crude at one price and then have to pay it back, at what they hope will be a lower price.

When the contract expired Monday, all those short sellers were forced to buy the October contract to pay back their debt, which sent the price of oil soaring.

Carbone seemed to think that it was one company that was responsible for most of the late-day surge.

"This is probably a position that could not be moved due to last week's turmoil. So it happened on the last day of trading for October," said Carbone.

The surge in prices prompted one analyst to focus on how much of the market trades oil for investment purposes.

"It goes to show that we need to have our arms around the speculation," said Beutel. The investors who pushed up the price of oil Monday were the same "people who pushed us from $79 to over $147."

"It is all big investors," added Beutel. "When stocks, dollar go under pressure, they jump into oil and they don't care who it hurts."

Indeed, the role of intuitional investors and the issue of speculation in the oil market prompted a flurry of Congressional investigations when crude prices surged earlier this year.

The Commodity Futures Trading Commission, the government agency that oversees the oil market, issued a statement late Monday saying it is "closely monitoring" the sudden jump in oil prices.

"We are working closely with NYMEX compliance staff to ensure that no one is taking advantage of the current stresses facing our financial marketplace for their own manipulative gain," said CFTC Acting Chairman Walter Lukken in the statement.

As part of its investigation, the CFTC can compel testimony, under oath, and the production of information concerning the crude oil markets, including recent crude oil trading.

In addition, a handful of supply disruptions supported the oil market's late-afternoon rally. Refinery capacity in the Gulf Coast was still limited post- Hurricane Ike, violence in oil-rich Nigeria, and chatter of Saudi Arabia trimming production added fire to the rally, according to Andrew Lebow, a broker at MF Global.

As the price of oil is whipsawed by demand worries, Wall Street's flailing crisis, investors are having a hard time grasping oil's next move. "Traders are trying to catch knives people are throwing from the top of buildings," said Lebow.

Fed bailout: On Saturday, President Bush asked Congress for the permission to spend as much as $700 billion to purchase bad mortgage assets from already struggling financial institutions in an effort to shore up further losses as the credit crisis works its way through Wall Street.

The details of the government's attempt to prop up the financial sector were still being negotiated, but the plan aims to stem any further losses on Wall Street and resume a flow of credit that has become frozen.

"The biggest news is that people are looking at the $700 billion plan as supportive of demand, supportive of the economy," said Beutel. "Everything we are looking at right now says demand has a chance to come back if the economy starts to strengthen."

Oil prices had been trending lower on worries that demand was faltering but those concerns seem to be abating, according to one analyst.

"The fear has waned as far as the demand destruction" in the wake of the bailout news, said Neal Dingmann, senior energy analyst at Dahlman Rose. "The bailout has really stabilized this market."

The government plan "has put in some support levels in there," at least temporarily, said Dingmann. If the economy has a chance to recover, then the oil market hopes demand for energy would recover as well.

Weaker dollar: The Fed bailout "comes at a cost, the weaker dollar," said Phil Flynn, senior market analyst at Alaron Trading. Investors "will look to other currencies to park their money until this entire situation is defined."

The money that the government was planning on spending as part of the proposal "is very debasing to the value of the currency," said James Cordier, portfolio manager of OptionSellers.com.

Crude oil prices were rising as the value of the dollar fell, according to both Flynn and Cordier.Crude oil is traded in U.S. currency around the globe, so as the dollar weakens, oil becomes more expensive in dollar terms.

The plan "sounds very inflationary at first blush," said Cordier, and "it will be detrimental to the dollar while people sift through the intricacies of the bailout."

However, while the surge of liquidity would devalue the dollar in the short-term, if the money for the bailout were "approved and spent, then we think the dollar would firm up," said Cordier, as the bailout money helped restore confidence to the U.S. economy.

Demand: As the nation's economy softened and demand for energy fell off, oil prices have retreated from a record high of $147.27 a barrel, set on July 11. Oil prices have tended to decrease on signs of continued weakness for the economy and rally on signs of economic recovery.

The promise of increased liquidity in the nation's economy was supporting oil prices. "When the market was concerned that the economy was going to collapse, if nobody is lending anybody any money and there is no credit, there is not going to be a lot of energy demand," explained Flynn.

While the promise of the Fed's lifeline to the financial sector may prop up oil prices in the short term, Flynn and Cordier said oil prices were on a downward trend in the longer term.

"We have seen that these high prices are unsustainable," said Flynn. "People are going to be a lot more judicious with their energy use."

Analysts said the bailout plan provided much-needed confidence at a critical moment, preventing crude oil prices from sliding even further. However, "this knee-jerk reaction in commodities due to the U.S. dollar is short termed," said Cordier.

"Demand for energy in the U.S. continues to be weak; globally, demand is weak, too," said Cordier.

Wild week, big moves: As Wall Street was heaved around last week in a series of unprecedented shifts, so were oil prices. After Lehman Brothers (LEH, Fortune 500) announced bankruptcy, Merrill Lynch (MER, Fortune 500) agreed to be purchased by Bank of America (BAC, Fortune 500) and American International Group (AIG, Fortune 500) was resuscitated by a $85 billion loan from the government, oil prices decreased by more than $10.

However, by Friday, oil prices gained back all of those losses and then some on speculation that the government's proposed bailout plan for Wall Street would support the economy and bring demand for energy back to healthy levels.

On Sunday, federal regulators changed the status of Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) to bank holding companies, a move that opens the banks up to greater involvement in retail banking and more funding from the Federal Reserve. The re-classification also means the investment firms will be under the Federal Reserve's supervision.

Hurricanes: The Gulf Coast was still working to get back to full operation after hurricanes Gustav and Ike slammed the production and refinery-rich region.

According to the most recent situation report from the Department of Energy, 89.2% of production in the region remained shut in and 75.4% of natural gas production was still shuttered. With 9 refineries in Texas still shut down, nearly 2.3 million barrels per day less oil have been processed in the region, according to the DOE.

As of Friday, personnel were still evacuated from 225 of 717 - or 31.4 % - of manned production platforms, according to a report from the Minerals Management Service.

With additional reporting by Steve Hargreaves, CNNMoney.com staff writer.

[American Patriot]

Need to combine these threads about Oil.

Please try to keep similar topics in the same threads.

Rick

[American Patriot]

I merged the "Oil Spikes $25" and "Crude Oil under $100" since... well, everyone is talking about it in both threads

I just called it "Crude Oil Prices", left an expiring redirect (1 wk) and placed it in "General" rather than in the "News" area.

So, if you're looking for it, here it is!

[Ryan Ruck]

Went ahead and put this in the Financial forum...

NYMEX Gasoline Futures dropped under $1 today. Here's the current price:

PETROLEUM (¢/gal)

	PRICE*	CHANGE	% CHANGE	TIME
Nymex Heating Oil Future	150.32	-.59	-.39	21:08
Nymex RBOB Gasoline Future	96.95	.00	.00	20:44

Here's petroleum...

PETROLEUM ($/bbl)

	PRICE*	CHANGE	% CHANGE	TIME
Nymex Crude Future	43.66	-.01	-.02	21:08
Dated Brent Spot	41.14	-.24	-.59	20:25
WTI Cushing Spot	43.67	-3.12	-6.67	12/04

As you can see, Dated Brent is pushing the floor of $40. Pretty funny to contrast this chart to the one I last posted above.

[Malsua]

Cheap gas roxxors mostly because libs get apoplectic about it.

[vector7]

Oil falls for sixth day in a row

COLUMBUS, Ohio — Oil prices hit four-year lows Friday as employers cut the highest number of jobs in 34 years. The continuing decline in prices is so dramatic and so sudden that it is raising the prospect that gas prices could soon reach $1 a gallon.

Crude prices plunged immediately, at one point reaching $40.81, after the Labor Department reported a half million people had lost their jobs in November.

Demand for fuel has withered as companies cut back production and slash jobs.

On Friday, light, sweet crude for January delivery settled at $40.81 a barrel on the New York Mercantile Exchange, down by nearly $3 per barrel. Prices fell as low at $40.50, levels last seen in December 2004.

Gasoline futures for January delivery tumbled to 90 cents.

For gas prices to get close to a $1, oil prices probably would need to fall another $10 a barrel — something that would have impossible to fathom during first part of this year as oil prices soared near $150 per barrel.

"Just seeing that '1' up there is just hard to imagine," said Kevin Keating, 65, an attorney as he filled up his Volvo S60 at a station in Phoenix that advertised prices at $1.67. "Wasn't that long ago that we worried about the '4' being up there."

Prices in New York City are well above the national averages, but still well off their highs of nearly $5 this summer.

"When gas prices are OK, we make a little profit," said Mamady Kourouma, 36, a cab driver from Guinea who paid $2.41 a gallon at a station in Chelsea.

The Labor Department reported that employers slashed a far worse-than-expected 533,000 jobs and the unemployment rate jumped to a 15-year high of 6.7%. Analysts were looking for job losses of 320,000.

It was the sixth day of declines for crude prices, with each release of economic data outlining a stunning deterioration for the U.S. economy. Earlier this week, the National Bureau of Economic Research determined that the U.S. has been in a recession for a year.

Since the start of the recession, the economy has lost 1.9 million jobs, the number of unemployed people increased by 2.7 million and the jobless rate rose by 1.7 percentage points.

Crude prices have fallen 72% from record July highs.

"At this point, it's just keeps going, going and going," Peter Beutel of Cameron Hanover.

Crude could soon reach levels last seen in July 2004 when prices were last below $40 a barrel.

Prices at the pump fell 1.6 cents overnight to $1.773 nationally, according to AAA, the Oil Price Information Service and Wright Express. That is down 63.2 cents from a month ago, $1.261 from a year ago and $2.338 from just five month ago.

The jobs numbers suggest that demand for gasoline, which has been running well below year-ago levels even with the cheaper prices in the last several weeks, will fall even more in early 2009 as work-related driving plummets, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

"I believe that January 2009 will represent the most 'challenging' and ugly economic month of my lifetime, and my first memory is of Sputnik," Kloza posted on his blog Thursday.

He said retail prices could reach $1.25 a gallon soon in parts of the Midwest, including Ohio, Indiana, Illinois and Missouri.

In Neelyville, Mo., population 501, prices at one station in the southeast Missouri town hit $1.29, according to gasbuddy.com, where motorists post gas prices.

Kloza does not believe prices will make it to a $1. Gas prices neared a dollar last time on Dec. 18, 2001, three months after the terrorist attacks and the country in its last recession, when prices hit $1.08 a gallon.

Though the weak gasoline prices point how bad the economy is, they also could help it turnaround.

Kloza figures the U.S. gasoline bill at $1.75 per gallon average will be about $20.5 billion this month, down about $16 billion a year ago. Five years ago, the bill was $17.2 billion.

In other Nymex trading, gasoline futures tumbled 6.83 cents to settle at 90 cents. Heating oil slid 8.26 cents to $1.4265 a gallon while natural gas for January delivery shed 24.7 cents to sell at $5.77 per 1,000 cubic feet.

In London, January Brent crude slipped by $2.42 to $39.86 on the ICE Futures exchange.
http://www.usatoday.com/money/indust...l-friday_N.htm

Attached Thumbnails