Oil resumes plunge as dollar strengthens

[xcel]

Price drops $4.82 to settle at $115.20 on demand expectations.

AP - Aug. 8, 2008

Low $3 per gallon may not be such a distant memory after all?

The fuel price relief will come none to soon for wary US consumers… -- Ed.

NEW YORK - Oil prices dove to $115 a barrel on Friday, driven lower by a huge jump in the U.S. dollar, signs of moderating demand around the world and the burgeoning belief that commodities may have peaked.

Shrugging off concerns about a sabotaged oil pipeline in Turkey, investors pulled their money out of commodities and put it back into stocks — giving crude oil a weekly loss of nearly $10 a barrel, and driving the Dow Jones industrial average up more than 300 points.

With energy losing its luster in the marketplace, the cost of roadside gasoline has been crawling lower. The average retail price for a gallon of gasoline slipped to $3.836 Friday. That’s down about a penny from Thursday, and down nearly 28 cents from the record high of $4.114 reached July 17.

“We’re probably going to see gasoline at the retail level around $3.50 for Labor Day,” said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com… [Read More]

[jsmithy]

Sure smells/smelled like a speculative bubble to me.

[jarvek7]

Oil prices drop... let's just call it pre-election politics.

It happened the last few years in the months running up to the election. I checked my afuel ogs to be sure.

But this time you must combine the pre-election effect with steeply decreased demand for gasoline. High gas prices and the fact that American's are spending more $$$ on nearly everything else and you have a reason for us not filling our gas tanks and driving everywhere for vacations.

Most of the people I know are vacationing in their home towns or not taking vacations at all.

BTW My records show a high price of $4.49 and today's price was $3.91. These are costco prices so add about 5 cents to that for the avarage local prices here in SD. Prices seemed to go up a F--- of a lot faster (they were gonig up 15-20 cents every 6 days) than they are coming down.

[Indigo]

I noticd that in 2004 and 2006, the rice of gasoline fell right before the elections. I suppose that Bush thinks that the average Americal is even more stupid than he is.

[ILAveo]

The speculation that I have heard is that the Chinese gov't is waiting until after the Olympics to enact a sharp increase in their domestic consumer prices of fuel. Perhaps the oil market is also anticipating the resulting decrease in Chinese consumption.

[Vooch]

We can expect to see huge swings in the price of oil over the next 18 - 24 months -

- as US & EU price- demand elasticity kicks in with some long term trends in the minus 10-20% range plus Emerging market growth kicks in in the plus 10-20% range. Its difficult to predict demand versus supply ( hence prices) in the face of such profound change in oil consumption patterns.


No matter how wild the short term swings of oil prices will be in the next 18 - 24 months - the underlying issue of peak oil remains - It has been known for decades that the world would experience peak oil in the 2005 - 2015 time frame. The only question is how steep the slope of the back side of the supply curve is - 25 years ? 80 years ?



Oil will either quickly (ie 5 years) or not so quickly (ie 20 years) start to become very, very expensive. People should start arranging their lives to take account of this fact.


For example - people who live in nieghborhoods where the typical household drives more than 50,000 miles a year ( 2 cars at 25,000 miles each) simply running errands and commuting to work; these people need to consider the profound implications of what happens when gas is $7 - $10 a gallon ? Gasoline will cost $10 gallon, the only question is when

Questions people need to start considering:

1) How much will it cost to run my household (heat, a/c, lawn care, lights, etc) if energy costs double in 5 years ? in 7 years ? in 10 years ?
2) What will my property be worth to a buyer if it costs that much more to run it ?

[worthywads]

Originally Posted by Indigo

I noticd that in 2004 and 2006, the rice of gasoline fell right before the elections. I suppose that Bush thinks that the average Americal is even more stupid than he is.

The price of gas falls pretty much every year into the fall. Oh the conspiracies.

[Jimmy]

I don't think the current decline of gasoline prices will continue. IMHO, it will soon (after the November election) go back up into the $4 range or higher.

Not that I want Americans to suffer more from this lousy economy, but higher priced gasoline would certainly put more immediacy on the promotion and development of EVs - something almost every politician and certainly every American automobile manufacturer is trying to ignore. And then there are the oil interests.

[jarvek7]

Originally Posted by Jimmy

I don't think the current decline of gasoline prices will continue. IMHO, it will soon (after the November election) go back up into the $4 range or higher.

Not that I want Americans to suffer more from this lousy economy, but higher priced gasoline would certainly put more immediacy on the promotion and development of EVs - something almost every politician and certainly every American automobile manufacturer is trying to ignore. And then there are the oil interests.

I agree. I see a price increase, too. America is only going to get serious about changing the mode of trnasportation and ending iher oil addiction if it hurts in the pocketbook. History has proved it in the 70s and again in the 80s.