Oh THANK YOU, DUBYA!! For saving us from Daddio's eeeevil speculators and market cornerers and monopolies!! My you are so huge!!

From the NYT:

November 21, 2008
Oil Closes Below $50, Lowest Price Since May 2005
By JAD MOUAWAD

After rising to dizzying heights this summer, the price of oil is in the middle of a hair-raising drop.

Oil prices fell to their lowest level in more than three years, dropping below $50 a barrel on Thursday, after shedding close to $100 since July as an ailing global economy pared consumption.

Just as an economic boom had driven up commodity prices for six years, the present slowdown means the world needs less oil, which is depressing prices. Thursday’s drop came as a spate of new indicators showed how badly the economy was faring amid fears about the health of the financial system.

The sudden reversal has startled many experts. Oil futures on the New York Mercantile Exchange settled at $49.62 a barrel, down 7 percent, their lowest since May 2005. They have lost more than two-thirds of their value after settling at a peak above $145 a barrel in July.

Some analysts predict that oil could fall to $30 to $40 a barrel as the world economy worsens.

The pillars that had pushed up the price of oil and other commodities seem to be crumbling all at once: the American consumer is in full retreat; the Chinese economy is sputtering; financial markets are collapsing; developing countries are trimming their energy subsidies.

The speed of the falloff is a testimony to the world’s dire economic straits. As growth slows in the United States, Japan and Europe, many analysts say they believe global oil demand is headed for its first annual decline in 25 years.

The drop in prices could not have come soon enough for consumers. Gasoline prices are down about half since July, easing some inflationary pressures. Falling energy costs are also providing some breathing room for the economy, although they have also ignited fears of deflation — a broad drop in prices across the economy.

For oil producers, the collapse is dire news. The downturn will probably herald a depressed cycle for the energy industry as markets shrink and prices drop. Dozens of large-scale projects have already been canceled or delayed because of the fall in prices and financing constraints. They include refineries in Saudi Arabia, offshore fields in Brazil and projects to exploit tar sands in Canada.

Some experts warn that lower energy prices could set the stage for a new phase of higher prices when the economy eventually recovers, as companies are now cutting back their investments in future supplies to cope with the downturn.

As much as four million barrels of future oil production capacity could be jeopardized if prices remain below $60 a barrel, according to estimates by Cambridge Energy Research Associates, a consulting firm. This means that the sharper the drop in prices now, the steeper the rebound might be when the economy picks up again. “Sub-$50 oil means a lot of investments are not going to be made,” said Philip C. Adams, an energy and utilities analyst at Gimme Credit. “What you’re probably doing is setting the stage for the next price spike.”

In the short term, exporters are feeling the sting, and some producers are becoming desperate to stop prices from falling further. The OPEC cartel, whose members draw most of their income from oil exports, has called another emergency meeting in Cairo next week — less than a month after its members agreed in an emergency session to trim production, to little effect on the price of oil.

There does not seem to be much else the Organization of the Petroleum Exporting Countries can do as demand for oil declines. Adam Sieminski, a Deutsche Bank analyst, said prices could fall as low as $30 to $35 a barrel next year. The last time oil was at that level was in December 2003.

In the United States, retail gasoline prices, which had risen above $4 a gallon during the summer, have plummeted to $2.02 nationwide, according to AAA, the automotive group. Gasoline is selling for less than $2 a gallon in 23 states, including Michigan, Ohio and Nebraska.

The drop-off in consumption has been particularly acute in the United States, the world’s top oil consumer.

Gasoline demand, which accounts for more than half of the nation’s oil use, fell sharply during the summer as higher prices forced Americans to scale back their driving. The cutback has persisted as broad economic anxiety has displaced worry about gasoline prices.

According to a weekly survey by MasterCard, gasoline consumption was down 2.8 percent last week compared with the same week a year earlier, its 30th consecutive weekly drop.

The Energy Department has estimated that domestic oil consumption this year will have its steepest drop since 1980, falling by more than 1.1 million barrels a day, or 5.4 percent. The government expects oil demand next year to fall by an additional 250,000 barrels a day, or 1.3 percent.

“Clearly the market does not need the oil because demand has collapsed,” said Francisco Blanch, a commodity strategist at Merrill Lynch.

But the underlying factors that drove prices to their records in recent years have not really disappeared.

Many producing countries remain mired in trouble. Nigeria seems incapable of resolving a long-running insurgency in its main oil producing region that has forced oil production to be slashed by a third.

In Mexico, political squabbling between the governing party and the opposition has frozen efforts to open up the oil sector to foreign investments while the country’s largest oil field is declining at an alarming rate. Oil production is also declining in Russia, Norway and Iran, for a variety of reasons.

The speed with which companies are reacting to the difficulties is beginning to worry energy experts since it often takes a decade or more for oil fields to be developed and start production. Analysts at Morgan Stanley estimated that as of Nov. 5, 19 industry projects had been delayed or faced cutbacks; by Nov. 18, that had jumped to 44 projects.

“The risk is that 2009 cuts to investment plans increase these longer-term supply risks,” the analysts said in a report.

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Cordially,
Rush

elrushbo2@theobviousgmail.com
Remove the obvious...

Oh THANK YOU, DUBYA!! For saving us from Daddio's eeeevil speculators and market cornerers and monopolies!! My you are so huge!!

Take the $25B going to the Big 3 and put that towards ANWR drilling! Drill, baby, drill!

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me@rescam.org

I think oil demand will increase. My reasoning? Driver habits. When prices were cheap idiots in 7500 pound SUVs were driing on local interstates at 80+ mph. Drivers actually slowed to 60 mph enmasse when the prices hit $4.00 a gallon for gas. Now that the prices have come down around $1.65 a gallon the morons are back to their racing on the freeways. My personal habits have been consistent throughout the price ranges. I drive a Saturn Ion so my MPG isnt going to change all that much with speed changes. I normally drive at or slightly above(10mph) the posted freeway limits. I am once again getting passed with regularity by mastadonic vehicles.

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

I noticed the gas prices here today, and they are lower than a week ago, they are down under 8 DKK per liter. When they were at their highest, they were over 13 DKK per liter.

So the prices are definitely going down. Weird to see, that something are getting cheaper, that's very rare here.

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"I'm trying to maintain a shred of dignity in this world." - Me

In the US its one of the major parts of the nation having deflation.

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

Paid $1.94/gallon here this past Sunday

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I noticed the gas prices here today, and they are lower than a week ago, they are down under 8 DKK per liter. When they were at their highest, they were over 13 DKK per liter.

So the prices are definitely going down. Weird to see, that something are getting cheaper, that's very rare here.

And yet food prices are still going up.

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me@rescam.org

food prices are on the back end of the price drops. The food prices rose long after the price of fuel did. for the main reason of stock piles. Most food warehouses charge their prices on what was paid to deliver their product. since warehouse house goods over a long time the prices won't go up until the products that are currently coming in get shipped out. Also Grocers do the same thing. Prices go up as their cost goes up they stock their shelves in a lesser but similar fashion to warehouses. expect some drops in the next few months as the high shipping prices goods leave the warehouses.

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

Providing they bother to lower their prices instead of leaving them unchanged and taking the extra profit.

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me@rescam.org

More on Energy market manipulation for those who don't think it is being done. Quote: From a book on the Uranium Cartel--Gulf Oil was part of this deal as well.

"In 1976, the Australian chapter of Friends of the Earth obtained documents that showed that the major uranium producers outside the U.S. had secretly formed a "club" for the purpose of dividing up the world market and "stabilizing"-actually raising-yellowcake prices. Canadian producers, representing the largest share of production, were to get 27 percent of the world market; South African 21 percent; French 20 percent and Rio Tinto Zinc, the British-based mining giant, 10 percent. When a utility would request bids on a yellowcake supply contract, the club would assign it to a producer who would "win" the bid by offering the cartel's floor price. East Asian countries and "middlemen"-i.e. reactor manufacturers-were to be charged higher prices than other buyers."

Daddio

Economics and politics are such a morass of interconnections and deadends that it would take a supercomputer to even determine that it was unknowable.

Most folks end up picking and choosing the facts to support conclusions, yours truly no exception.

Go Raving Loony Party!

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Atlanta Bankruptcy, California Bankruptcy, or moral Bankruptcy -- choose your poison.

Gas prices up 20 cents in last two weeks.

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me@rescam.org

Gas prices up 20 cents in last two weeks.

Lucky me.
We are again late in germany.
Price is still falling.

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With each crime and every kindness we birth our future.

More on Energy market manipulation for those who don't think it is being done. Quote: From a book on the Uranium Cartel--Gulf Oil was part of this deal as well.

And yet, right before your very eyes, the price of barrels of oil has dropped by 2/3 in recent months, from about $150, to less than $50.

You figure what, that likely the largest and greatest manipulator on Earth (OPEC) what, just missed it? Called in sick to work? Forgot to make sure the price stayed at $150? Oops?

But in case you missed it (again and again and again and again), no one said that people don't try to manipulate markets, they do. Just like you would try to manipulate the market for your used car. And almost universally they fail miserably. Why? Because they cannot force the other party in the transaction to act. They cannot force others to either buy or sell when they do not want to.

That some people commit fraud? Duh. Some people ALWAYS will do that, no matter what laws you enact.

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Cordially,
Rush

elrushbo2@theobviousgmail.com
Remove the obvious...

I have to agree in most cases.

When i look on the difference of gas an oil price in the last month the gasoline price have to be much lower.
Even in europe.

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With each crime and every kindness we birth our future.

Well,I don't want Obama or other democrats to ever mention wind fall profit tax on the oil companies again.

He never mention it for the wind fall that the bailouts gave!

i was under impression that obama is not acting president yet.

Well,I don't want Obama or other democrats to ever mention wind fall profit tax on the oil companies again.

He never mention it for the wind fall that the bailouts gave!

I'm not for the bailouts either, but I can't seem to make the connection that no one is allowed to complain about the large profits seen by the oil companies because those same people agreed to bail out companies that are not turning profits. There is no logical connection between the two.

The Coke-A-Cola company has a higher profit margin than the big oil companies.

Don't you think that the bailouts are the real wind fall gains?

The government gains on gas is more that of the oil companies.
Shouldn't the government give back some as wind fall returns.

Obama doesn't need to be president to jaw bone.

Isn't he the first president elect to have an office called the presidential elect office?