Oil back below $88 on Monday
Simply put, the U.S. economy is in the crapper. Stocks are yoyoing and our mortgages are a fraction of what they were even a year ago. For all that's fiscally wrong here in the States, there is one pleasant side effect: the price of a barrel of oil is dropping faster than Kimbo Slice against a two bit hack. Oil dropped 6% in trading on Monday, bringing down the price of a barrel of crude to $87.81. Black Gold has been on a downward trajectory since July 11, when it peaked at $147 per barrel. Since then, demand has weakened both in the U.S. and China, with demand slacking so badly that the Communist government hasn't purchased any oil in two months, and it's even selling some of its stockpiles. While demand for oil is down to where it was eight months ago, OPEC is watching with a wary eye. The oil consortium, which on several occasions has increased oil production over the past year, is likely to slash production when it meets again in December. In the short term, industry experts are predicting that gas prices will drop below the $3 mark by November 1, which will make for one piece of good news in an otherwise lousy news cycle.
[Source: Reuters]
Reader Comments (Page 1 of 3)
From My Cube 8:14AM (10/07/2008)
as of 8:13 am its up to $90.80 way to jinx it autoblog
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Fernando 9:19AM (10/07/2008)
Those greedy OPEC bastards are just going to cut production to increase the demand on the short supply. They'll try to keep oil above $100 a barrel and keep ripping us off.
catgirlshyla 8:21AM (10/07/2008)
We wouldn't be in the Economic Mess if it weren't for the Oil Speculators driving up the prices as well. They are much at fault as the banks who stupidly gave home loans to folks who could barely pay them in the first place.
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Dondonel 8:48AM (10/07/2008)
Didn't they say that the oil price went up because the US dollar lost its value? Then how come that now when the dollar is even lower, the oil price went down with it?
It is obvious that the oil prices were inflated by the financial markets, not because the oil demand was higher than the offer.
Joe 8:58AM (10/07/2008)
Actually, the dollar has been up recently against the Euro and the Yen.
I saw regular for $2.99 at a Citgo this morning. Course, I'd never buy from a Citgo station, as the oil is pumped by that communist Chavez. The Sunoco around the corner was $3.07. Eight cents is nothing to pay for terror free oil.
Gregg 9:11AM (10/07/2008)
Excuse me, dondonel, but the dollar has gone UP as oil has gone down. The dollar has gone from greater than $1.50 to the euro a few weeks ago to less than #1.35 today. That means the dollar buys more now, and of course it also buys more oil. That's one factor. Demand is down as well. Oil speculators, like real estate speculators get theirs in the end. Real forces come into play sooner or later.
Flashpoint 9:22AM (10/07/2008)
I'm gonna make this REAL SIMPLE FOR YOU.
The reason we are in this economic mess is NO OTHER than the fact AMERICA HAS HAD NECON REPUBLICANS IN OFFICE SINCE THE LATTER PART OF THE CLINTON ADMINISTRATION.
#1 They have allowed the "trickle down economy" proposed by that evil Reagan, to basicaly become survival of the fittest "class/corporate warfare". Its like large birds eating all the food and smaller birds hoping crumbs fall from the larger bird's mouths.
There is no TRANSPARENCY in government or in CORPORATION at all.
The Corporations privatize their earnings and SOCIALIZE their losses ...to the American tax paper.
look up the video on youtube "John Byrd and fortune Subprime mess". Its funny, but they hit the nail squarely on the head about the subprime mess.
The other major reason we are in economic meltdown is
#2 bush's WAR with IRAQ.
There is no argument that the war has caused oil prices to explode. Commodities ALWAYS increase in price during war - that is a FACT...not to mention WHERE this war took place...the WORLD's OILFIELD.
America has been threatening sanctions against OPEC basically. Not a good idea. Its also not smart to threaten HUGO CHAVEZ who's such a jerk that he figures he can hurt America politicaly by ranting and raving and kicking out our ambassadors.
#3 The Subprime mess is GLOBAL.
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/13/AR2007031301733_pf.html
When Lewis Ranieri dreamed up the idea of allowing securities to be packaged with mortgages, he doomed us ALL. Now Japan, China and other Asian markets (as well as European) share in our downfalls.
This is why Globalization ultimately leads to Communism and single world government.
Japan had a similar crisis like this before and because they waited to long to propose a bailout, they spent an entire decade working things out.
700Billion dollars is THE TIP OF THE ICEBERG. That's just a WIFF of the TRILLIONS we are REALLY indebted for.
Lastly, oil prices are going down because we are coming to election. TRUST ME, home heating oil is gonna jump like MASTER CHIEF after November 4th. Don't get used to this "low priced" $3.50 oil just yet.
Its time to WAKE UP AMERICA.
Seminole 9:38AM (10/07/2008)
Flashpoint,
Please shut up.
TJ 9:56AM (10/07/2008)
Flashpoint:
That is the most absurd piece of drivel I have ever read. I am actually scared that there are a few other mindless talking point idiots like you in this world.
Brian 10:09AM (10/07/2008)
Joe,
Even if everyone stopped buying gas from Citgo gas stations it would not reduce the amount of oil we buy from Venezuela by one drop. You would only be buying Venezuelan petroleum under a different brand name and would mainly be hurting the American franchise owners of Citgo stations.
Assass1n 10:12AM (10/07/2008)
@flashpoint-
Are you Michael Moore?
Sean 1:13PM (10/07/2008)
@Assass1n:
No, Michael Moore presents evidence, no matter how contrived.
SimbaDogg 7:21PM (10/07/2008)
though i have never endorsed flashpoint or condoned his behavior, if you know a little about the financial markets he was somewhat on the ball with SOME of his points.
1) trickle down economy, this can be argued, and again refuted by others
2) bush's war...ehhh...i'm not gonna get into that
3) Global subprimse mess...yes. Asia and japan yes, but china, africa, and latin america not so much. The chinese are VERY suspicious of things that are shady or dont make sense, and the whole leveraging thing didn't make so much sense to them; thus they aren't as tied to us as much as the UK or the EU.
for the most part, flashpoint is kinda like that crazy yokle that is screaming nonsense at the local watering hole. if you can get past his scrambled message, he is making a bit of sense.
PaulPaul 8:23AM (10/07/2008)
1.] and i still pay 4$/gallon in Chicago
2.] I hope we don't go back to buying SUVs/Trucks
3.] once the economy picks up, we'll be back in $150 range soon enough
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MajorGeek 8:34AM (10/07/2008)
1: Chicago may have heavy taxes like NY, although were at about 370 here.
2: Those of us who have ALWAYS driven trucks... never stopped.
3: Were you one of the "$6" a gallon by summers end people? Everyone has predictions on the internet, too bad most of you don't keep them to yourselves.
Casper 9:05AM (10/07/2008)
These prices are for November Delivery. You won't see them till November. And yes, Chicago sucks for gas (I'm there too).
McLovin 12:25PM (10/07/2008)
I'm afraid Paul is right. The only reason oil has dipped is because of the current financial meltdown which is causing people to conserve their cash and pay down debt rather than spending it on travel/new cars. Interestingly, the fact that people are not buying new cars means that the rate of decline of SUVs on the road will probably slow. Not because people are going to go back to buying them, but because people who already have an SUV will not trade in for something more fuel efficient. Why?
1) The panic of $4/gallon gas is no longer present.
2) The economics of trading in a highly devalued SUV for a new Pruis or other hybrid didn't make sense.
3) There won't be a new wave of panicky consumers to trade in $40K for $25K hybrids because of 1.
When the economy does pick up again, oil will shoot back up. I expect $150/barrel by 2010 but when that happens there will be a lot more fuel efficient choices on the market and people who have put off replacing their fuel efficient vehicles during the current downturn will probably trade in then. Anyone who thinks cheap oil is back for a while is dreaming in cloud-cuckoo-land. Go ahead buy that giant SUV at cut rate prices today. Just don't whine about it when gas hits $5/gallon during the first 5 years of ownership.
Avinash machado 8:23AM (10/07/2008)
So will SUV's and Trucks become best sellers again?
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snowcrash55 8:28AM (10/07/2008)
$3 a barrel in November? did i read that right...
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Toy Yoda 8:42AM (10/07/2008)
The sentence talks about gas prices. But, it is confusing taken into context.