Crude-oil prices have fallen about $14, or roughly 17 percent, from their July 14 peak of $78.40. After falling seven straight days, they rose slightly Wednesday in trading on the New York Mercantile Exchange, to $63.97, partly in reaction to a government report showing fuel inventories a bit lower than expected. But the overall price drop is expected to continue, and prices could fall much more in the weeks and months ahead
As it stands now, the recent oil-price slump has brought the national average for a gallon of unleaded gasoline down to $2.59, according to the AAA motor club. In the Seattle area, prices per gallon have fallen to $2.856 currently from $3.071 a month ago, a decline of 7 percent, according to AAA.
Should oil traders fear that this downward price spiral will get worse and run for the exits by selling off their futures contracts, Verleger said, it's not unthinkable that oil prices could return to $15 or less a barrel, at least temporarily. That could mean gasoline prices as low as $1.15 per gallon.
Other experts won't guess at a floor price, but they agree that a race to the bottom could break out.
"The market may test levels here that are too low to be sustained," said Clay Seigle, an analyst at Cambridge Energy Research Associates, a consultancy in Boston.
On Monday, the oil-producing cartel OPEC hinted that if prices fall precipitously, OPEC members would cut production to lift them. But that would take time.
"That takes six to nine months. If we don't have a really cold winter here [creating a demand for oil], prices will fall. Literally, you don't know where the floor is," Verleger said. "In a market like this, if things start falling ... prices could take you back to the 1999 levels. It has nothing to do with production."
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4 comments:
This is one of those distraction stories. The real story is...the DJIA passes all-time high...which will probably happen next week. And the libs thought they had even a chance at the house.
Mike...2-yd rushing touchdown to point out the obvious
By the way, DJIA all time high...11,723...DJIA as of friday close...11,560. For those who may not know, it is not uncommon for the DJIA to pick up 100 points in one day.
So, what does the DJIA mean to average joe? It is commonly referred to as a lagging indicator. That means that it follows the economy. To clarify, it does not lead, it follows. Basically, if I were you...sell all your gold today. Thinking about buying in??? Look at roth IRA's, a tax shelter for retirement funds and index funds, which are extremely low cost funds. They are attractive for the same reason your stock broker would not sell you on them...very low expense...and hence, essentially no commission.
Mike...do you think Russ likes poor jews?
Nobody cares what you think or say (except one fool who need not be named here). You and your gaggle of long-necked neglects serve no purpose. All you little retards need to do is go to bed by 10, so you can get a job in the morning, move out of your mommys' womb, and die (or you can die in her womb, I couldn't care less). Don't you know how stupid it sounds when you constantly try to get on air just to say stupid shit? Doesn't it concern you that you are not stopping yourself?
Anne on a Moose
Likewise.
Mike
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