Donger on Suicide Watch: Oil Nears $100 a Barrel

[Frazod]

http://apnews.myway.com/article/20080902/D92UIA0G0.html

SINGAPORE (AP) - Oil prices fell below $106 a barrel Tuesday in Asia - $10 below its close Friday before the Labor Day weekend - as investors shifted their focus to slowing global demand after worries about Hurricane Gustav subsided.

Light, sweet crude for October delivery was trading at $106.03 a barrel in electronic trading on the New York Mercantile Exchange midafternoon in Singapore, and at one point dropped as low as $105.46.

On Monday, when U.S. trading was closed for Labor Day, the contract had plunged $4.34 to $111.12 a barrel in late electronic trading. On Friday, the contract settled at $115.46 a barrel.

Traders were relieved that Gustav weakened as it approached the offshore oil rigs and Louisiana refineries, and appeared to have caused less damage than expected in New Orleans and surrounding areas.

But they quickly turned their attention to slowing global economic growth, speculating that will dampen demand for crude oil, even in developing countries such as China and India.

"The market continues to be weighed down by worries of a global economic downturn and slowing oil demand in developing markets," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "Action by OPEC and supply side concerns should put a backstop to any sharp price drop."

The Organization of Petroleum Exporting Countries is scheduled to meet Sept. 9 and has indicated it may take action to defend the $100 a barrel level.

There was some disruption to oil supplies as oil companies shut down production and evacuated facilities ahead of the storm. Altogether, about 2.4 million barrels of refining capacity had been halted, roughly 15 percent of the U.S. total, according to figures from Platts, the energy information arm of McGraw-Hill Cos. (MHP) The Gulf Coast is home to nearly half of the nation's refining capacity.

It could be a day or more before oil and natural gas companies can assess the damage to their drilling and refining installations. Louisiana Gov. Bobby Jindal said as much as 20 percent of oil and gas production that was stopped because of Gustav could be restored by this weekend, stressing that it was a rough estimate.

Traders are also keeping an eye on other storms brewing in the region.

Hurricane Hanna was predicted to come ashore in Georgia and South Carolina late in the week, and Tropical Storm Ike formed late Monday in the Atlantic Ocean and may become a hurricane in the next 36 hours as it approached the Bahamas.

"September is the peak of the Atlantic hurricane season. After Gustav, there are two more now on the radar screen. The storms are likely to provide some upside risks to the oil futures market," Shum said.

In other Nymex trading, heating oil futures fell 15.44 cents to $3.0375 a gallon, while gasoline prices lost 16.92 cents to $2.685 a gallon. Natural gas for October delivery fell 47.3 cents to $7.472 per 1,000 cubic feet. In London, October Brent crude was down $2.01 to $107.40 a barrel on the ICE Futures exchange.

[PastorMikH]

I haven't read the thread, but I imagine this question hasn't come up yet...

Why hasn't my gas costs at the pump gone down in similar fashion????

[Bugeater]

Originally Posted by PastorMikH

I haven't read the thread, but I imagine this question hasn't come up yet...

Why hasn't my gas costs at the pump gone down in similar fashion????

This is when the retailers do their cash grab.

[Donger]

Originally Posted by PastorMikH

I haven't read the thread, but I imagine this question hasn't come up yet...

Why hasn't my gas costs at the pump gone down in similar fashion????

Your gas costs have gone down. When crude was $147, gasoline was $4.11.

Last week, crude was $118 and gasoline was $3.67.

[Frosty]

Originally Posted by Donger

Your gas costs have gone down. When crude was $147, gasoline was $4.21.

Last week, crude was $118 and gasoline was $4.04.

Fixed your post for my area.

[Skip Towne]

We haven't seen $4 gas yet.

[Iowanian]

[Iowanian]

COME OOOOOOOOOOOOOON DOOOOOOOOOOOOOOOOOOOOWN!




Until the PRICE IS RIGHT

[Donger]

National average, boys.

[PastorMikH]

Originally Posted by Donger

Your gas costs have gone down. When crude was $147, gasoline was $4.11.

Last week, crude was $118 and gasoline was $3.67.

Actually, when oil was $147 a barrel here, gas was $3.99

Now that Crude is under $110 a barrel, gas is still $3.65


Our prices have gone down less than a penny per gallon/dollar per barrel. When the price per barrel was going up, gas prices were jumping close to a nickel per gallon/price per barrel locally.

Oddly, oil was at the $100-$110 a barrel price at the start of 2008 and you could buy gas at just under $3 a gallon locally. Now that oil prices are coming back to that, gas is still over $3.60 a gallon locally.


The price may have come down, but not in proportion to how it went up.

[PastorMikH]

Originally Posted by Skip Towne

We haven't seen $4 gas yet.

Actually out here, it was at $4.05 for a day or so then dropped back down to just under $4.

[Donger]

Originally Posted by PastorMikH

Actually, when oil was $147 a barrel here, gas was $3.99

Now that Crude is under $110 a barrel, gas is still $3.65


Our prices have gone down less than a penny per gallon/dollar per barrel. When the price per barrel was going up, gas prices were jumping close to a nickel per gallon/price per barrel locally.

Oddly, oil was at the $100-$110 a barrel price at the start of 2008 and you could buy gas at just under $3 a gallon locally. Now that oil prices are coming back to that, gas is still over $3.60 a gallon locally.


The price may have come down, but not in proportion to how it went up.

That's why the relationship between local retail pricing of gasoline and crude are not linear.

Retailers can charge whatever they want.

Where are you located, BTW?

[Hydrae]

Originally Posted by PastorMikH

I haven't read the thread, but I imagine this question hasn't come up yet...

Why hasn't my gas costs at the pump gone down in similar fashion????

That has been my question for several weeks now. Since the price of crude dropped by about 30%, why hasn't my price at the pump dropped accordingly? We absolutely should be under $3 a gallon if the speculation market is what drives the price I am paying.

[Donger]

Originally Posted by Hydrae

That has been my question for several weeks now. Since the price of crude dropped by about 30%, why hasn't my price at the pump dropped accordingly? We absolutely should be under $3 a gallon if the speculation market is what drives the price I am paying.

Because retail prices drop more slowly than they increase. Think of it this way:

When gasoline prices are dropping in response to crude dropping, the retailer is still selling gasoline that he bought when crude was higher. So, in order to not lose too much money on the inventory he has in his tanks, he drops his prices as slowly as possible.

Make sense?

[Hydrae]

Originally Posted by Donger

Because retail prices drop more slowly than they increase. Think of it this way:

When gasoline prices are dropping in response to crude dropping, the retailer is still selling gasoline that he bought when crude was higher. So, in order to not lose too much money on the inventory he has in his tanks, he drops his prices as slowly as possible.

Make sense?

It would if the arguement for it going up as soon as the crude price goes up wasn't so that they can afford the next load. So the price goes up immediately to cover the next shipment but the price stays up to pay for what they have in the tank already.

[Bugeater]

Originally Posted by Donger

Because retail prices drop more slowly than they increase. Think of it this way:

When gasoline prices are dropping in response to crude dropping, the retailer is still selling gasoline that he bought when crude was higher. So, in order to not lose too much money on the inventory he has in his tanks, he drops his prices as slowly as possible.

Make sense?

Sure is funny that when prices are going up, it's about the replacement cost, and when it's going down it's about what he paid for what is in the tank. Why don't you just call it what it really is?