Oil prices continue to fall
OK folks have at it
Have you noticed that the price of a barrel of oil continues to fall? Light sweet crude is currently at $109.35, having risen slightly due to Gustav. From the same linked MSNBC article:
Crude has dropped about $38, or 26 percent, since surging to a record $147.27 a barrel on July 11, as a U.S. economic slowdown spreads overseas and curbs demand for petroleum products.
“Consuming countries like the U.S. and Japan are facing economic problems,” Emori said. “I think we’re heading toward $100 a barrel and if we break that, to between $88 and $95.”
I mean, there is still uncertainty in the world (Georgia etc), weather (Gustav, Ike, Hanna) and other factors I can’t think of in this quick post.
BUT - what I do know is there has been NO new drilling - as my GOP representative Randy Kuhl wants. None, nada - yet prices continue to fall. In fact, let’s remember that due to Gustav, per Bloomberg article, a portion of which was printed in our very own D&C (this part is only on-line).
Gulf Shutdowns
About 96 percent of crude-oil production in the Gulf and 92 percent of natural-gas output remains halted because of Gustav, the U.S. government said. Producers reported that 91 rigs and 599 platforms are evacuated due to the storm, the Minerals Management Service said today in a statement on its Web site.
About 1.2 million barrels of daily oil production remain shut-in, along with 6.7 billion cubic feet of gas.
So what gives? Both these articles mention demand has fallen off. Hmmmm, lower demand, lower prices. Personally, I’s not sure that the large energy consumers - such as China or India or other developing countries have curbed their demand.
Doesn’t look like new supply solved the problem, does it?
What do you think?
As it is with many commodities, a big driving force here is the futures market and oil futures speculators are selling short.
(sniff…sniff…sniff) What is that smell? Oh wait..I know… an election year gimmick.
Yeah I can’t say I buy this reduced demand here let alone in India or China.
Well, to be continued. Obviously you should think about those storms before you post, and obviously none of you know much about Gulf coast states and the dangers they face every year. Hurricane season does not end until November 30th, and if you haven’t noticed, there are 3 more storms already formed, named, and headed that way. In particular, Ike, a little storm we call a Category 4, is headed straight for the Gulf. The amount of fuel required to both prep your vehicles before the storm, flee the state and flood other states and draw upon their fuel supplies when returning again; the influx of emergency vehicles from all over the country come and draw; the commercial and emergency vehicles removing tree debris, repairing roofs, rescuing flood victims, etc., takes an immense toll on supply. Add to this any upset to our refineries and you have a shortage and a drain on the country, and yes children, rising prices.
Gas Prices fell precipitously prior to the last congressional election as well. They reached a 2006 high of 3.03/gallon in Early August ‘06, then dropped to 2.20 on Nov 6, 2006 before starting to go up again. This year the high was mid-July, and dropping since.
So, is it a seasonal trend … or an election season trend?
Source: http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_history.html
It is because the House republican members skipped summer vacation (most of them) and continued speaking in the House. Seriously, don’t you folks get the memo???
Oil prices dropping without drilling!!! Amazing that we can’t see the truth behind politics
[...] uses the energy situation as an excuse but if you check this post - maybe he doesn’t want to explain how drilling hasn’t contributed to the drop in oil [...]