Why did the Oil prices "tumble" ?

[George]

Oil prices tumble in biggest weekly drop ever

NEW YORK (AP) - A stunning sell-off dragged oil prices to their biggest weekly drop ever and gas prices at the pump slipped by the more than they have at any point since February, giving consumers a rare breather in a year of record fuel prices.

The national average for a gallon of regular fell by the most since February, AAA data show, and could ease further in the days to come.

http://www.breitbart.com/article.php?id=D920GS884&show_article=1

Does anyone here know the reason behind the steep drop? I don't know much about how this works? is it just a reaction to the recent rises or did someone do something? :scratch

Thanks for the info :thumb

[savedatcamp]

I personally think it has to do with the fact that most Americans (around 70%) are wanting to DRILL, DRILL and DRILL some more. Many Democrats are being inundated (sp) with calls from voters in their home States, and many are starting to say yes we should use the resources here in the USA. Plus, Presidfent Bush lifted that one ban on drilling. Also, for quite a while with the price so high, folks are using less (we sure have used less) and that is the supply and demand thing that Democrats don't understand. Speculators may see that the US is SERIOUS about finding supplies here if we are willing to drill or explore in our own country. Lots of variables in there. I think the American people are awaking from their long slumber and are gonna tell the Environmentist wack jobs to take a hike or climb a tree maybe.
That's what I think and I am sticking to it!:hat
Blessings to all,
savedatcamp

[BornAgain123]

Here's what I don't understand...

It's the crude oil prices that's dropping, NOT the prices at the pump.(the latter remained constant all week)

[heybales219]

Here's what I don't understand...

It's the crude oil prices that's dropping, NOT the prices at the pump.(the latter remained constant all week)
Sorry about your luck, but I'm visiting Ohio and after paying 4.09 a gallon in northern Kentucky on the way here, I about fell over when I saw a gas station here in Columbus selling regular for 3.81.

[raptureme]

I think it's more related to the fact that the entire market was driven away from fundamental pricing factors by rampant speculation on wall street. It's a bubble, and at some point it's going to burst. They all do.

It's no different from the late 90s dot.com stock market bubble or the more recent housing market crash. Fundamentals around supply and demand always reasert themselves.

I'm not sure that the American decision to drilling more has that much of an impact on prices, any increased production is unsure and years away.

I think people are less concerned about an israeli attack on iran this summer

Based on supply and demand, a fair price for oil would be about $65 just now.

Heres a list of the top 20 producers just now, interesting reading.

#1 Saudi Arabia: 9,475,000 bbl/day
#2 Russia: 9,400,000 bbl/day
#3 United States: 7,610,000 bbl/day
#4 Iran: 3,979,000 bbl/day
#5 China: 3,631,000 bbl/day
#6 Mexico: 3,420,000 bbl/day
#7 Norway: 3,220,000 bbl/day
#8 Canada: 3,135,000 bbl/day
#9 Venezuela: 3,081,000 bbl/day
#10 United Arab Emirates: 2,540,000 bbl/day
#11 Nigeria: 2,451,000 bbl/day
#12 Kuwait: 2,418,000 bbl/day
#13 Iraq: 2,130,000 bbl/day
#14 United Kingdom: 2,075,000 bbl/day
#15 Libya: 1,720,000 bbl/day
#16 Angola: 1,600,000 bbl/day
#17 Brazil: 1,590,000 bbl/day
#18 Algeria: 1,373,000 bbl/day
#19 Kazakhstan: 1,300,000 bbl/day
#20 Indonesia: 1,136,000 bbl/day

[BornAgain123]

Sorry about your luck, but I'm visiting Ohio and after paying 4.09 a gallon in northern Kentucky on the way here, I about fell over when I saw a gas station here in Columbus selling regular for 3.81.

It's the national average itself that hasn't changed.

Either way-good for you.:hat

[Issachar]

The Shell station by my house in NW Ohio that I use for a reference went clear down from $4.09 to $4.07. :) Across town today though, I saw one at $3.94.

Issachar

[Bernardd]

I personally think it has to do with the fact that most Americans (around 70%) are wanting to DRILL, DRILL and DRILL some more. Many Democrats are being inundated (sp) with calls from voters in their home States, and many are starting to say yes we should use the resources here in the USA. Plus, Presidfent Bush lifted that one ban on drilling. Also, for quite a while with the price so high, folks are using less (we sure have used less) and that is the supply and demand thing that Democrats don't understand. Speculators may see that the US is SERIOUS about finding supplies here if we are willing to drill or explore in our own country. Lots of variables in there. I think the American people are awaking from their long slumber and are gonna tell the Environmentist wack jobs to take a hike or climb a tree maybe.
That's what I think and I am sticking to it!:hat
Blessings to all,
savedatcamp

I agree pretty much with your sentiment. However, I think we'll see the price continue to rise for some time after this small sell off.

[Debbie M.]

As long as the US continues rallying for more drilling and more production in our own country, the more the Saudi's will start loosing their grip on the oil they sell. When we sit around wringing our hands over the price of oil and doing nothing about it, that's when the Saudi's see us as a bunch of wimps and cry babies , probably laugh to each other and jack up the price again. But when we get out of our cribs and start thinking realisticly about how we can fix this problem, that's when the smirk is wiped off their faces. They like having us by the gayoons.

[Issachar]

Does anyone here know the reason behind the steep drop? I believe it is due to market manipulation; not necessarily the oil market directly (though that is possible), but the economy in general. In a fiat system, the only strength of the currency, not being backed by anything, is quite literally, how people feel. Talk about fickle! :) So when things get too alarming, such as the failure of a major bank like Indymac and people talking about saving money and cutting back on spending and all the other fallout, something that makes people feel good must be implemented. Something like falling prices of something that everyone uses/needs, is just the ticket. When people feel good (or at least better), they are likely to spend more and thereby, keep things going a little longer. The longer this charade continues, the more transfer of wealth can occur.

Issachar