Oil Tumbles After Inventory Report

CNN ^ | September 8, 2005: 10:40 AM EDT | staff

[Betaille]

Okay... so let's come to an economic consensus. Bush controls oil prices for these "oil buddies" the Dems are always talking about, and Cheney controls the weather for Halliburton. Does that pretty much sum up the Democrats economic ideology/platform?

[.cnI redruM]

Pretty much. Although they do squabble over who gets to set off volcanic eruptions. It's undignified for two grown men to carry on like that.

[jw777]

Bushs friends are losing millions. Quick, Bush/Rove/Halliburton, create another hurricane!

[tfecw]

"I bought a bicycle Friday and have been riding 21 miles to work this week. If only more people would do the same and drive demand down..."

If my office builds a shower room i would seriously consider it. It's got to be quicker then sitting in the DC Traffic.

[steveegg]

We're DOOMED

At least we're not domed :-)

[evad]

waiting....waiting.....cursor blinking waiting for update...hello...fading out

[The Foolkiller]

Those +$3/gal prices ought to be tumbling any time now.

Yep, any time.

Yea, right.

---

Only went down a whole PENNY here (Toledo) in the last week. $2.98. Whoopie.

[NavyCanDo]

gezzzzz...there's quite a disparity is gas prices between Tacoma and Spokane...We're paying less in LA & OC than Spokane!



31 cents a Gallon State Tax in Washington explains why the WA averages higher. And much of our gas comes from Alaska.

[Blood of Tyrants]

It ticks me off that the gas stations are quick on the draw to raise prices but they lower them at leisure and begrudgingly.

[Realism]

Higher prices ration supply, supply increases because the sellers have more incentive to to bring in more supply

Less supply = more profit
Less supply = less operating cost = even more profit
More supply = low prices = less profit

Wheres the incentive to have a higher supply?

[HereInTheHeartland]

"Wheres the incentive to have a higher supply?"

Because individual producers will benefit from the higher price, every unit sold will be more profitable.

If one producer has the market power to affect prices then that may not be the case.

But look what we have seen, the higher prices have pulled in refined and crude products that were not normally headed here.
Had the govt acted to keep a lid on prices, these supplys may not have come this way.

[fuquadukie]

I've always contended when a certain price for gasoline is reached a tipping point would occur. People would just say, enough is enough, and quit pleasure driving, become very conservative, walk short distances, buy a bicycle multiple cases of beer at a time, etc and supplies would increase, therefore driving down prices.

That's going to be MY solution to higher gas prices.

[quantfive]

Yeah, this time I do believe the analysts saying we will be at $60 per barrel throughout 2006. Supposedly their are not enough fundamentals to support this kind of price but this market isn't going to cool off overnight.

[Chuck54]

LMAO.

My wife picks up the beer and I must remind her to double the order henceforth.

[misterrob]

Showering with a friend or three will help reduce demand for gas used in water heaters.

[HKMk23]

...and killing millions of poor innocent people because George Bush wants to destroy the world!

EEEEEYYYYAAAAHHHHHHHHH!!!
[courtesy Howard Dean]

[sfimom]

It's 3.29 here in PA (as of 12 am this morning)

[PAR35]

Where do you get your info

The internet, of course.

how does it differ?

While production numbers are still down, platforms are coming back on line, as much as the naysayers and speculators hate to hear it.

From Shell, for example: "Production is now flowing and ramping up from all Shell-operated assets in the Western Gulf of Mexico that were shut in because of Hurricane Katrina. Production resumed from Auger, Brutus, Bullwinkle Cougar, Enchilada, North Padre Island and West Cameron 565. In the Eastern Gulf of Mexico, our Fairway asset and Yellowhammer Gas Processing Plant near Mobile Bay are operating normally. Shell's net GOM production from Shell-operated and outside-operated fields for the first half of 2005 averaged around 450 kboe/d. Currently, Shell's net GOM production has returned to approximately 160 kboe/d."

Some of the platforms directly in the storm's path do require some inspection and work, but the trend is headed the right direction, and the refineries should be able to get all of the crude they can handle.

[The Foolkiller]

Yeah-I'll believe in the "free market working" bit when it DROPS 40-50 cents. ;)

[azhenfud]

http://tonto.eia.doe.gov/oog/info/twip/twip.asp

"Retail gasoline prices are likely to remain very high for some time to come, with as much as 5 percent of refinery capacity possibly being out of commission for a few months. In addition, while crude oil production from the Gulf of Mexico continues to improve, it may be some time before production is back to pre-hurricane levels. But there are some indications that retail gasoline prices may have peaked, or if not, are very close to the peak. While gasoline imports were down during the week ending September 2, this is expected to change over the next couple of weeks. It generally takes about 2 weeks for gasoline imports to arrive from Europe and other sources and get incorporated into the U.S. gasoline supply chain. And with the price jump seen over the last week, there are reports that gasoline shipments are on their way and should begin arriving possibly as early as late this week. Also, an announcement by the International Energy Agency (IEA) that over 30 million barrels of relief was coming from IEA countries outside the United States, some in the form of gasoline volumes drawn from their government-owned and controlled stockpiles, should also aid in adding supply and putting immediate downward pressure on prices. The sale of up to 30 million barrels of crude oil from the U.S. Strategic Petroleum Reserve, in addition to the 12.6 million barrels of crude loaned to refiners earlier to meet more immediate concerns, should also alleviate any concerns refiners might have in terms of crude oil supply over the next several weeks. News that the Plantation and Colonial pipelines are back at full capacity, along with news that some refineries are returning to full capacity this week, should also help supply issues and lower prices. However, it may be awhile before retail prices return to pre-hurricane levels as there appears to be four refineries (ChevronTexaco located in Pascagoula, MS; ConocoPhillips located in Belle Chasse, LA; ExxonMobil located in Chalmette, LA; and Murphy located in Meraux, LA) that are likely to be down for an extended period. These refineries help supply the Plantation and Colonial pipelines and it is unclear how easily and efficiently increased gasoline imports will be able to be inserted into the distribution system. But EIA expects prices to be lower by the end of September than they are now, and they should continue to fall throughout most of the next couple of months, absent any disruptions to supply from other hurricane activity or other factors."