NEW YORK (AP) - Oil prices plunged to a seven-month low Monday as the Gulf Coast energy infrastructure appeared relatively unharmed after Hurricane Ike and traders bet that Lehman Brothers’ bankruptcy could ignite a massive liquidation of commodities.
Light, sweet crude for November delivery fell $5.67 to $95.64 a barrel in pre-market trading on the New York Mercantile Exchange, after earlier dropping to $94.41, the lowest level since Feb. 14.
Crude has fallen more than $50 - or 35 percent - from its all-time trading record of $147.27 reached July 11 as a global economic slowdown continues to weigh on demand for energy.
U.S. officials said Sunday that Ike destroyed at least 10 oil and gas platforms and damaged pipelines in the Gulf of Mexico. But that represents only a small portion of the 3,800 production platforms in the Gulf and pales in comparison to the catastrophic damaged doled out by Hurricanes Katrina and Rita three years ago.
Full Story Here:
Oil plummets as Ike largely spares energy output
OK, let me see if I fully understand this. The damage to off shore oil production is much less than expected. The damage to ON shore oil facilities is much less than expected. Refineries are coming back on line in a timely fashion.
So, WHY is gasoline still running $3.59 to $3.66 a gallon here in the Dallas area?? Why is gasoline rumored to be as high as $5.00 a gallon in some parts of the nation? I would love for someone to explain to me HOW and WHY we are still paying so much for gasoline when the price for crude oil is lower than it has been in months.
Another thing I would love to hear a clear and concise explanation of; WHY did the price of gasoline spike, daily, sometimes more than once a day even, every time oil took a jump in price? If the media announced that the price of crude oil had jumped by however many dollars a barrel, as soon as the announcement was made all you had to do was look at the sign in front of your favorite gas station and watch it roll over to at least .20 a gallon more.
BIG OIL COMPANIES saw the opportunity to gouge the consumer, and they took it, has anyone noticed gas stations dropping their prices by .20 a gallon on a daily basis now that oil is selling for $95.64 a barrel?? No?? I didn’t think so.
Mr. Bush and the Federal Trades Commission claim that they are not going to tolerate price gouging due to Hurricane IKE. Maybe they need do something about the very unnecessary price gouging that has been taking place prior to Hurricane IKE?
Of course they won’t do a thing about the price of gas, they can’t, the oil companies already own Bush and Company, bought and paid for! Talk is cheap, and that’s ALL we’re gonna get!
Profit is great, that’s what business is all about, but we can Drill Here and Drill Now until HELL freezes over, if there is nothing done to bring about some kind of control, and fiscal responsibility to the BIG OIL companies, it won’t matter where they get the oil, here or abroad, the American consumer is still going to be the victim of monetary rape!
It’s not gouging, it’s supply and demand.
The price you pay at the pump is the price it will cost the retailer to buy his next load of gas. That is, you are paying the replacement cost per gallon, plus a 5 cent or so per gallon profit for the gas station.
So, when the price of oil jumps, the spot market for gasoline follows suit, and the retailer is forced to raise his prices.
Oil is dropping below $100 per barrel but refining capacity is still offline due to Ike so there still isn’t enough gas in the pipeline to satisfy the current demand. Ergo, the price goes up to compensate.
Once the refineries in Texas come back on line you will see the price of gas go down, probably in a week to 10 days.
BULL SHIT! It IS gouging, I don’t care HOW you cut it… And the prices weren’t going down BEFORE Ike came thru, what makes you think the BIG OIL companies are going to lower prices now??
The goodness in their hearts maybe?
Here is my cynical answer, the masses have a short memory. A lot of people where happy to be only paying $3.40/gal, thump (as I fall over).
Companies have made lots of money, agreed?
Companies will be better off with McCain/Palin in office over Bambi and company, no?
So would it not make sense to allow prices to relax through election season, give the illusion that the party in the White house is fixing the problem? Thus they will be able to make more in the future?
By this logic, the current fall in prices was almost predictable, as the rise in the winter/spring. Now to believe this you have to believe that companies can actually look more than 1 quarter forward, which from what I have seen is pretty hard to believe.
Just thought I would throw out to y’all.
Tom
I don’t know if the gouging is being done by the oil companies or individual station owners. Our gas prices jumped .20 cents overnight as Ike was making landfall.
It’s amazing how prices jump .20 cents overnight but it takes weeks to drop .20 cents.
IMO this is just a beginning crack in the long term downturn of the world economy. Oil is going to continue to slide down the slippery slope….the economy of US and the world will follow.
I predicted a month ago that oil prices would fall to $90 a barrel. Its real simple. Most domestic oil Independence solutions won’t hold up unless oil is above $85. Most wont bother at $90. The high mark is over. Americans have spoken and Drill Now is the Direction demanded. Getting the price down to $90 will pacify the majority. The Drill Now crowd will quiet down.