RWSchilz
July 30th, 2008, 03:04 PM
Oil prices fell below $122 a barrel on Wednesday, extending their recent decline on expectations that this year's surge in energy costs is undermining U.S. gasoline demand.
The modest, but continued strengthening of the U.S. dollar also helped push down oil prices. By midafternoon in Europe, light, sweet crude for September delivery had shed 79 cents to $121.40 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.54 to settle at $122.19 a barrel on Tuesday.
Investors expect more evidence of falling gasoline consumption when the U.S. Energy Department's Energy Information Administration releases its weekly oil inventory report later Wednesday, said Mark Pervan, a senior commodities strategist with ANZ Bank in Melbourne.
"People are looking closely at the deteriorating demand for petrol," Pervan said. "The market will probably fence-sit ... ahead of the DOE numbers." Gasoline stocks were expected to rise 400,000 barrels in the petroleum supply report, according to the average of analysts' estimates in a survey by energy research firm Platts.
Crude futures have sharply fallen over the past 19 days. The price of oil has dropped in seven of the last 10 sessions, and is down about 17 percent from its peak above $147 a barrel earlier this month. Prices remain about 60 percent higher than at this time last year.
http://www.newsmax.com/newsfront/oil_prices/2008/07/30/117474.html
What is missing from this story is the reason demand is falling, high gas prices have driven allot of people and businesses out of the market. Example; Airlines, delivery services and lower income people have been forced to cut services or simply quit driving all together. At the same time oil producers are trying to get as much product to market as possible to cash in on the high price per barrel. As price falls consumers will begin to buy again at the lower price this will help those in the futures market to sell off what they have left at the highest possible price. Eventually the push to market will end and the demand will over take supply starting the cycle all over again. What would be great is while the push to market is taking place we as consumers continue to cut back that would help to drive the price at the pump even lower. The problem with that is the consumers are all the people of the world, 6.5 billion of us.:shocked:scratch:thinking
The modest, but continued strengthening of the U.S. dollar also helped push down oil prices. By midafternoon in Europe, light, sweet crude for September delivery had shed 79 cents to $121.40 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.54 to settle at $122.19 a barrel on Tuesday.
Investors expect more evidence of falling gasoline consumption when the U.S. Energy Department's Energy Information Administration releases its weekly oil inventory report later Wednesday, said Mark Pervan, a senior commodities strategist with ANZ Bank in Melbourne.
"People are looking closely at the deteriorating demand for petrol," Pervan said. "The market will probably fence-sit ... ahead of the DOE numbers." Gasoline stocks were expected to rise 400,000 barrels in the petroleum supply report, according to the average of analysts' estimates in a survey by energy research firm Platts.
Crude futures have sharply fallen over the past 19 days. The price of oil has dropped in seven of the last 10 sessions, and is down about 17 percent from its peak above $147 a barrel earlier this month. Prices remain about 60 percent higher than at this time last year.
http://www.newsmax.com/newsfront/oil_prices/2008/07/30/117474.html
What is missing from this story is the reason demand is falling, high gas prices have driven allot of people and businesses out of the market. Example; Airlines, delivery services and lower income people have been forced to cut services or simply quit driving all together. At the same time oil producers are trying to get as much product to market as possible to cash in on the high price per barrel. As price falls consumers will begin to buy again at the lower price this will help those in the futures market to sell off what they have left at the highest possible price. Eventually the push to market will end and the demand will over take supply starting the cycle all over again. What would be great is while the push to market is taking place we as consumers continue to cut back that would help to drive the price at the pump even lower. The problem with that is the consumers are all the people of the world, 6.5 billion of us.:shocked:scratch:thinking