difleha Posted October 15, 2008 Share Posted October 15, 2008 LONDON (AFP) — The price of oil fell below 71 dollars on Wednesday, its lowest level for more than 13 months, as recession fears raised concerns about a prolonged drop in energy demand, analysts said. The global financial crisis is hitting world demand for oil, although the effect on emerging economies is unclear, OPEC said on Wednesday. The Organization of Petroleum Exporting Countries slashed its estimate of growth in demand this year and shaved its estimate for 2009, largely because of an "excessive" easing of demand in the United States, the single biggest energy market. Prices also fell Wednesday on news that a Nigerian court had ordered Anglo-Dutch energy giant Royal Dutch Shell to hand over land to locals, a key demand of armed rebels camped in Nigeria's oil-producing region. Brent North Sea crude for November delivery fell to 70.70 dollars a barrel -- the lowest level since late August 2007 -- before recovering to 70.93 dollars, down 3.60 dollars compared to Tuesday's close. New York's main contract, light sweet crude for November, shed 3.40 dollars to 75.23 dollars a barrel after hitting an intra-day low point of 74.92. Brent crude has fallen by more than half from a record high 147.50 dollars in July, when prices rocketed on fears of supply disruptions. Oil prices are sliding on "concerns that the coordinated action by central banks over the last week will not be enough to rescue economies from falling into a global recession and hence weighing on oil demand," Sucden analyst Nimit Khamar said. A top US central banker, Janet Yellen, said Tuesday that the United States "appears to be in a recession." There are also growing fears Japan and Europe are heading for a spell of economic stagnation or recession. The German economy is heading for a slowdown but the downturn will not be a long-lasting one, Chancellor Angela Merkel said Wednesday. Meanwhile a Nigerian court ordered Shell to hand over land around its giant Bonny oil terminal to the local population, the multinational said Wednesday. "The ruling was given some months ago but we have appealed," Shell's spokesman in Nigeria, Precious Okolobo, told AFP. He did not say whether oil lifting and export activities at the terminal, considered to be the largest in Africa, would be affected by the ruling. Markets were meanwhile awaiting the latest weekly snapshot of US energy inventories due Thursday for a lead on the state of demand for oil in the world's biggest consumer of crude. The Department of Energy's latest data on inventories has been delayed a day owing to a public holiday in the United States on Monday. Oil traders were also looking ahead to an extraordinary meeting of OPEC on November 18 as member countries fret over falling prices, with some calling for cuts in output as a result. Link to comment Share on other sites More sharing options...
RichC82 Posted October 15, 2008 Share Posted October 15, 2008 sweet, gas prices should continue to fall then thats more $ I can blow on Skins tickets....NICE Link to comment Share on other sites More sharing options...
DeanCollins Posted October 15, 2008 Share Posted October 15, 2008 that should translate to about $2 per gallon, based on $4 at $140 per barrell. Link to comment Share on other sites More sharing options...
Smoot Point Really Posted October 15, 2008 Share Posted October 15, 2008 It's all because of Obama... Pretty soon the waters will start receding. Link to comment Share on other sites More sharing options...
Zguy28 Posted October 15, 2008 Share Posted October 15, 2008 that should translate to about $2 per gallon, based on $4 at $140 per barrell.Yeah right! Not on your life. Link to comment Share on other sites More sharing options...
aREDSKIN Posted October 15, 2008 Share Posted October 15, 2008 Why am I still paying $3.25????? Link to comment Share on other sites More sharing options...
81artmonk Posted October 15, 2008 Share Posted October 15, 2008 yeah and why aren't we seeing gas prices fall just as sharply?? When they went up, the prices mirrored that, yet it isn't happening the other way. and the oil companies aren't price fixing:doh: Link to comment Share on other sites More sharing options...
endzone_dave Posted October 15, 2008 Share Posted October 15, 2008 This is where the oil companies will clean house. Oil prices will drastically fall but they will keep gas prices high. At least until the election. Link to comment Share on other sites More sharing options...
Zguy28 Posted October 15, 2008 Share Posted October 15, 2008 This is where the oil companies will clean house. Oil prices will drastically fall but they will keep gas prices high. At least until the election.Do you know for sure that the oil companies haven't lowered prices and its the resellers that are cleaning house? Or both? Link to comment Share on other sites More sharing options...
SkinsNut73 Posted October 15, 2008 Share Posted October 15, 2008 Why am I still paying $3.25????? We're under $3 here in CT for the first time in a long time. On the drive into work the station I normally stop at was $2.82 a gallon. ...time to check the home heating oil prices...two weeks ago they were telling me it was $3.74 a gallon if I locked in then... Link to comment Share on other sites More sharing options...
PiLfan Posted October 15, 2008 Share Posted October 15, 2008 Why am I still paying $3.25????? It's still around $3.40 almost everywhere i look. Funny how whenever oil jumps up in price, like it did from March - July this year, gas was so quick to jump in cohesion you'd think there was some real time synch-up between oil prices on the NYMEX and the gas station price signs across the flippin' continent. Now that it has gone down from nearly $150 to $70 (a 53% decline), gas prices in my area, for regular unleaded, have gone from $4.15 to $3.40 (a 18% decline). Funny how an oil price increase can take a matter of days, or even hours to be reflected in the price of gas...as if the attendants were on fast forward as they went out to adjust the numbers on the signs (took all of seconds when hurricane Ike struck houston).....but when it's been going down as it has the past month or so, you'd think those same attendants had just took a big whiff of ether. Anyway, here's to gas prices coming down to levels they were at in, maybe February. Whoo haa Link to comment Share on other sites More sharing options...
DeanCollins Posted October 15, 2008 Share Posted October 15, 2008 It's still around $3.40 almost everywhere i look.Funny how whenever oil jumps up in price, like it did from March - July this year, gas was so quick to jump in cohesion you'd think there was some real time synch-up between oil prices on the NYMEX and the gas station price signs across the flippin' continent. Now that it has gone down from nearly $150 to $70 (a 53% decline), gas prices in my area, for regular unleaded, have gone from $4.15 to $3.40 (a 18% decline). Funny how an oil price increase can take a matter of days, or even hours to be reflected in the price of gas...as if the attendants were on fast forward as they went out to adjust the numbers on the signs (took all of seconds when hurricane Ike struck houston).....but when it's been going down as it has the past month or so, you'd think those same attendants had just took a big whiff of ether. Anyway, here's to gas prices coming down to levels they were at in, maybe February. Whoo haa Maybe when an Oil Man is no longer in the white house, things will change. What gets me is how republican voters somehow feel compelled to defend the oil companies, presumably, toting the party line Link to comment Share on other sites More sharing options...
Zguy28 Posted October 15, 2008 Share Posted October 15, 2008 Maybe when an Oil Man is no longer in the white house, things will change. What gets me is how republican voters somehow feel compelled to defend the oil companies, presumably, toting the party line Can we not have one thread that is soiled by people's political partisanship? Link to comment Share on other sites More sharing options...
Heidenreich Posted October 15, 2008 Share Posted October 15, 2008 Gas was 2.91 at the station by my office when I got to work this morning. 2.89 when I passed it at lunchtime..... Link to comment Share on other sites More sharing options...
HOF44 Posted October 15, 2008 Share Posted October 15, 2008 It's still around $3.40 almost everywhere i look.Funny how whenever oil jumps up in price, like it did from March - July this year, gas was so quick to jump in cohesion you'd think there was some real time synch-up between oil prices on the NYMEX and the gas station price signs across the flippin' continent. Now that it has gone down from nearly $150 to $70 (a 53% decline), gas prices in my area, for regular unleaded, have gone from $4.15 to $3.40 (a 18% decline). Funny how an oil price increase can take a matter of days, or even hours to be reflected in the price of gas...as if the attendants were on fast forward as they went out to adjust the numbers on the signs (took all of seconds when hurricane Ike struck houston).....but when it's been going down as it has the past month or so, you'd think those same attendants had just took a big whiff of ether. Anyway, here's to gas prices coming down to levels they were at in, maybe February. Whoo haa In all the debates on ES over gas prices and their relationship to crude prices I have never had anyone explain to me why this difference exists in the up versus down price moves. Link to comment Share on other sites More sharing options...
Heidenreich Posted October 15, 2008 Share Posted October 15, 2008 In all the debates on ES over gas prices and their relationship to crude prices I have never had anyone explain to me why this difference exists in the up versus down price moves. Basically, no matter what the price of a barrel of oil, the gas stations #1 priority is making money. Here's my theory. The gas station buys 1000 barrels of oil for gas for whatever time period (a week, 2 weeks? Who knows) at $113 a barrel. I think I read somewhere that a barrel of oil makes 37 gallons of gasoline. For sake of argument I'll use that number. So this gas station now has this oil that it purchased, and to break even, it must sell the gas for $3.05 per gallon. Two days later, the price spikes to $125 a barrel. Now, to break even, the gas station must sell the gas at 3.38 per gallon. In an effort to make some money, the gas station immeadiately raises prices, even though their current inventory was purchased at $113. Not necessarily all the way to 3.38, but maybe halfway, to 3.20 or so. This is done quickly to A) help with future purchases, and get some profit from the sale of gas. Now, the other way. Gas was purchased at 125 a barrel, so the station is now selling gas at $3.38 per gallon. Almost overnight, the price drops to 100 a barrel. At $100 a barrel, the station can sell at 2.70 & break even. If you drop your prices immeadiately to reflect the new rates, the gas station is losing money on this transaction. So you drop the prices in small incriments. Maybe to 3.15, or 3.10. However low you can go to still make some money on your purchase of the current oil. When you buy the next shipment of oil at 100 a barrel, you know your break even point is 2.70. Since you lost some on the last shipment when the prices went down, you keep the prices around 2.90, or 3.00 and so on. With oil dropping, expect to see the prices go down anytime you see a gas truck at your local station. But this is just my theory...... Link to comment Share on other sites More sharing options...
HOF44 Posted October 15, 2008 Share Posted October 15, 2008 But this is just my theory...... Ok, I could go with that, it's the fact that it takes MUCH longer for the price to drop than to rise. Thats the discrepancy I can't get the answer to. Link to comment Share on other sites More sharing options...
Heidenreich Posted October 15, 2008 Share Posted October 15, 2008 Ok, I could go with that, it's the fact that it takes MUCH longer for the price to drop than to rise. Thats the discrepancy I can't get the answer to. Because the gas companies care more about the bottom line than passing along savings to the consumer. Drops in crude is a chance for gas stations to cash in...... Link to comment Share on other sites More sharing options...
HOF44 Posted October 15, 2008 Share Posted October 15, 2008 Because the gas companies care more about the bottom line than passing along savings to the consumer. Drops in crude is a chance for gas stations to cash in...... Thats the theory I have, but I believe it is the people that own the refineries and sell the gas to the stations that are actually the ones reaping these profits. Link to comment Share on other sites More sharing options...
RememberOsaka Posted October 15, 2008 Share Posted October 15, 2008 I paid $2.83 near Annapolis this morning ~~~ Link to comment Share on other sites More sharing options...
skinfan2k Posted October 15, 2008 Share Posted October 15, 2008 I just paid for gas at 2.69 per gallon Link to comment Share on other sites More sharing options...
Capt Rich Fla Posted October 15, 2008 Share Posted October 15, 2008 Why am I still paying $3.25????? Your paying less than we are down here. I wish someone would tell the people that set the pump prices down here that they must have missed that memo. It aint changing down here, for some reason. Link to comment Share on other sites More sharing options...
Burgundy Burner Posted October 15, 2008 Share Posted October 15, 2008 The $71 figure is for Brent Crude - the European market, so to speak. The New York Merc. is currently hovering around the $74 mark. Gas is down eleven cents a gallon right now - around $1.77 a gallon. Here in South Jersey, that would put gas at the local pumps at around $2.15 in about three weeks. Link to comment Share on other sites More sharing options...
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