Posted on 06/10/2008 3:21:15 PM PDT by Flavius
NEW YORK (AP) -- Oil prices fell Tuesday, giving up an earlier advance as the dollar held its gains against the euro and the Energy Department slashed its oil consumption projections. Retail gasoline prices rose to a new record over $4.04 a gallon.
(Excerpt) Read more at biz.yahoo.com ...
maybe its an currency related bubble, could that be it, i'm sure not
ping
Not really. It looks like there has been a shift in demand. Look at the responses by United and Continental Airlines. United are grounding all their 737's, and Continental is grounding most of its 737-300's. Consumers are responding to increases in fuel prices and figuring out ways to decrease their demand even more in the future.
Four bucks a gallon, even five, isn’t that bad. Consider what we paid under Carter and account for inflation. Or heck, people still buy coffee and bottled water for way more per gallon than gasoline. We should be thankful that we’re getting fuel for four dollars a gallon.
/* How’d that sound? Did I sound like I meant it? */
Oh yeah, and if it hurts you, you should have planned on having more money or oil stocks by this time.
Not odd... many factors can affect oil price.
1. Increased production or the threat of it.
2. Increased value of the dollar against foreign currency.
3. Regional instability.
4. Decreased demand.
5. Governmental regulation.
6. Changes in affiliated market prices. (Coal and natural gas go down, oil price can act in a sympathetic manner)
7. Changes in other commodity prices. Gold goes down, oil may track as the gold price tracks global uncertainty.
8. Changes in the geopolitical makeup, ie politics.
9. Covering of open futures market postitions.
10. Additions of new energy sources to the market. (the 50 new nuke plants outcry)
These are just the ones I could think of off the top of my head.
Take into consideration that China has suffered a huge hit on their infrastructure....their need for oil and gasoline will be hign until their dams are fixed and many many repairs are met. China’s earthquake has a huge affect on the world’s oil and gasoline/diesal supply.
You also have five million homeless people who are NOT consuming their previous amounts of energy. If anything, that's a wash.
US demand is down. Demand forecasts for 2008 keep dropping as consumers dramatically scale back oil consumption. Something else is going on here.
If you can get a guy trying to support a family on less than $30,000 to say it without gagging on his gorge THEN we’ll toss the flowers and strew his path with rose petals.
The market always overshoots and then overcorrects.
I don't have to buy 20 gallons of coffee or bottled water every week.
A lot of people in this country don't live in major cities.
Grateful? Grateful that fuel costs are significantly higher than they need to be because our government restricts production of a vital commodity? And over taxes it?
The issue here is not what gasoline costs, but why it costs what it does.
Not really. Oil prices are set on the commodities markets in New York, Europe, and Asia. Speculation and rumor drive a lot of the prices. Speculation about demand, rumor about unrest in oil producing areas. Next time someone in Israel makes a speech about not tolerating an Iranian bomb and oil goes up 5 bucks a barrel, guaranteed.
Really? at this point gas is higher (adjusted for inflation) than during the Carter years.
Try some research.
The last time I looked I wasn't running my car on coffee.
Oh and BTW, screw D.D. and Starbucks, only fools pay those prices for a cup of coffee.
On the demand side - India (the biggest one yet) and some other Asian nations have recently either lowered or quit their subsidies on the domestic retail price of gasoline and similar retail fuels. China has not yet quit theirs but know they must because of the future inflationary pressure those subsidies are building into their economy.
On the commodity value/price side - a higher dollar can have the affect of lowering prices on any dollar denominated commodity traded on the world’s commodity exchanges. Todays dollar traded higher. Maybe recent Fed and Treasury comments have boosted the belief in the commodity markets that a higher dollar will be supported. If so, some future’s contracts for oil at $138 dollars may not seem as future-profitable to some of the present owners of contracts so valued.
This may have had some effect on it, too.
Remember when President Bush asked the Saudis to increase their output? They said no, but did it anyway.
“Remember when President Bush asked the Saudis to increase their output? They said no, but did it anyway.”
And when is it that the Saudis DO NOT say one thing for their public and “the Arab street” while they do the opposite in reality????? The Saudis are nothing if not duplicitous.
Seriously, $3-4 for a cup of coffee?
I can get a CAN of Chock Full o’Nuts for $10.
Actually, I fully expected they would. They have to look tough to their Arab neighbors, but GW looked mighty pleased when he left SA.
They might even increase it more as soon as they can say that GW had nothing to do with it.
The price of oil is not only determined by current demand and supply, but also expectations of future demand and supply.
That's why prices move all the time on news like this.
The move wasn't all that big, anyway. It's just normal market volatility.
Of course, that doesn't make for a sexy headline, so the media sensationalize it, like they do everything else.
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