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It's Coming: $65 Oil

The sudden collapse in gas prices is a mix of good news (energy production is up, all over the world) and bad news (there is no good economic growth story, anywhere).
Derek Thompson Oct 28 2014, 2:26 PM ET

Gas prices are falling below $3 a gallon across the United States for two big reasons: (1) the world economy is growing slower than we hoped, and (2) global oil production is improving faster than we expected.
"India and China are slowing down,” said Charles K. Ebinger, director of the Energy Security Initiative at Brookings. "The IMF just downgraded Europe’s growth to less than 1 percent, and they're already quite energy efficient. Brazil’s a problem, too. All around the world there is no great growth story, and expectations are that things will stay that way or get worse."
There is also unanticipated supply. A few years ago, political turmoil was taking up to 2 million barrels a day off the market. Now production is roaring back in Libya, southern Sudan, Yemen, Nigeria, and even Iraq, and the global price of crude has fallen about 25 percent in the last five months. It's the same old story: low demand, high supply, etc. [more]
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It's Coming: $65 Oil - The Atlantic
 
nnuut said:
$10 ????:suspicious:
E10 averaging $2.63 a gallon down here!
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I'm glad for you that you can enjoy some lower prices..But E10 is still $2.89 here..and that is just stupid when a week ago it was $2.67, or is just frickin greed here.?
 
The gas stations in my normal driving area have all jumped up to $2.99 a gallon. Yesterday one of them was at $2.77. I was going to stop and fill up last night but figured I would do it on the way home today. Dang it!!!
 
Gas 'round here now going for as low as $2.799.

I have a question, though. See there was a whole lot of selling the public on raising prices for everything since it was tied to the price of fuel. I thought that was understandable. I got it. What I want to know is: How come prices haven't started coming down? Everything from the price of meat, milk, veggies, utilities, energy, etc. went up real quick and has not stopped. Shouldn't those prices come down now that the price of fuel has dropped? Just thinkin' out loud.
 
Yes transportation costs are down due to the lower fuel prices, but it will take a while for the transporters to lower their prices but it will come if the price stays lower. That will reduce the price of most commodities, when I don't have any idea.
They are linked.
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Minnow said:
Gas 'round here now going for as low as $2.799.

I have a question, though. See there was a whole lot of selling the public on raising prices for everything since it was tied to the price of fuel. I thought that was understandable. I got it. What I want to know is: How come prices haven't started coming down? Everything from the price of meat, milk, veggies, utilities, energy, etc. went up real quick and has not stopped. Shouldn't those prices come down now that the price of fuel has dropped? Just thinkin' out loud.
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Hang in there bud..it's now $2.70 here today...

I agree, since fuel prices have come down, the shipping costs, etc. should decline a little too I would think..
 
Oil prices hit 4-year lows after Saudi discount
By PAN PYLAS
Associated Press
Nov 4, 7:43 AM EST


LONDON (AP) -- Oil prices sank to four-year lows on Tuesday following reports Saudi Arabia, OPEC's largest oil producer, is cutting its prices for customers in the U.S.
By early afternoon London time, a barrel of benchmark crude was down $2.07, or 2.6 percent, at $76.79, its lowest level since September 2010. Meanwhile, Brent crude, the international benchmark, was down $2.14, or 2.5 percent, at $82.63 a barrel, its lowest level since October 2010.

The market was shaken by news that Saudi Arabia was cutting prices for the U.S. to compete with the surge in oil production there.
"A snowballing effect is what we are seeing in crude oil price today," said Fawad Razaqzada, an analyst at Forex.com. "News that Saudi has cut its asking price to customers in the U.S. suggests even the largest OPEC producer is now worried about its market share. This does not bode well for the future of the cartel."
OPEC members are due to meet on Nov. 27 in Vienna, Austria, but investors doubt the cartel will agree to cut production to raise prices. That is another reason why oil prices have remained under pressure.[more]

News from The Associated Press
 
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