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Old 05-05-2011, 05:19 PM   #1 (permalink)
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Default Ever think you'd see a positive oil thread?

Oil Prices Plunge In Record Sell-Off


NEW YORK -- Oil prices took a nosedive Thursday in a historic selloff, erasing weeks of gains and indicating that the months-long climb in energy prices may have hit a ceiling.

Crude oil plunged 10 percent as startled investors unloaded their positions and a weeklong decline accelerated into an outright freefall. The price of U.S. crude went from triple digits to double digits, falling below $100 after opening at close to $110. Brent crude, a European benchmark, lost $12 at one point in a sell-off that exceeded the one following Lehman Brothers' collapse, Reuters reported.

An oil correction is underway, experts said, as the price is moving toward what fundamental economic factors dictate it should be. For the American consumer, plagued by weeks of rising energy prices that have begun to weigh heavily on the economy, a bit of respite may be at hand.

"This is just a market that rolled over and started feeding on itself," said John Richards, head of North American strategy for the Royal Bank of Scotland.

It's difficult to say what exactly caused the fall. After the news broke Sunday evening that Osama bin Laden was killed, stocks rose and oil prices declined. Stocks later came down from that high, but oil kept declining. On Thursday, the news broke that applications for unemployment benefits jumped last week by the largest degree since August, indicating that high unemployment still drags on the economy. But experts said it's impossible to pin the oil price decline on any single factor.

"There was no triggering single event of news that would account for this. It's just much more the market's own internal dynamics taking prices down here," Richards added.

The price of oil has shot skyward in recent months, as fighting escalated in the Middle East and investors feared a supply shortage. Even as the Organization of Petroleum Exporting Countries pledged to correct any oil supply disruption, the price of a barrel of crude continued to rise. As of the recent peak on Friday, Brent was up 50 percent compared to this time last year. Oil prices had reached levels not seen since the summer of 2008, when months of record-high energy prices helped drag the U.S. economy into recession.


And the price of gas followed. A gallon of regular gas in the U.S. now costs an average of nearly $4, according to the American Automobile Association. That has strained the economy in myriad ways, increasing transportation costs for consumers and businesses and generally making people feel poorer. As prices continued to rise, economists slashed their forecasts for U.S. economic growth.

Almost half of Americans in a recent survey said they had cut back spending or canceled vacation plans due to high gas prices, according to the Royal Bank of Canada, which released its latest U.S. Consumer Outlook Index on Thursday. As energy prices have pushed up transportation costs across the board, a fifth of Americans have scaled back plans because of high air fares, RBC said.

But that trend appears to be reversing.

"Prices can't go up forever," said Mark Vitner, a senior economist at Wells Fargo. "The threat was very real, but it's also very self-correcting."

The effect of Thursday's market move on gas prices remains to be seen. But experts said it's a correction that was long overdue.

"Clearly these markets were overblown," said Nariman Behravesh, chief economist of IHS Global Insight. "We've been saying all along the fear factor has probably added 10 to 15 dollars to the price of a barrel."
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Old 05-05-2011, 10:46 PM   #2 (permalink)
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While that sounds great in theory there are a myriad of major issues with that. Interfering with corporate rights in that manor would almost certainly cause the USD to tank in every currency pair bringing the cost of oil and everything else to far beyond what Europe is paying (we'd still need to import most of our oil). Honestly, I think that'd be the end of the USD as a reserve currency and the United States as a super-power. We'd be crushed by the weight of our bloated government....
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Old 05-06-2011, 07:20 AM   #3 (permalink)
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Prices at the station down the street from me went from $4.29 for premium at 6 am to $4.15 for premium at 7:30 am. They changed the sign about 4 times already.
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Old 05-06-2011, 07:46 AM   #4 (permalink)
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It's still cheap compared to Canada. It's still at $1.37/L CAD this morning, which is $5.37/gal USD. For regular... And over here every damn station in the city will sell for the same price...

Can't wait for it to go down!!! That V6 likes gas...
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Old 05-06-2011, 05:57 PM   #5 (permalink)
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I paid 4.53 this morning for 91. I only put in 2 gallons because they raise the prices instantly but take forever to lower it. I was under the impression that it was a generally accepted accounting principle that if you use LIFO or FIFO you have to use it all the time. The gas stations seem to use LIFO when prices are rising and FIFO when it's falling. Then again, I'm not an accountant so maybe I'm misunderstanding the application.
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Old 05-06-2011, 08:34 PM   #6 (permalink)
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Quote:
"Prices can't go up forever," said Mark Vitner, a senior economist at Wells Fargo. "The threat was very real, but it's also very self-correcting."
Prices may stabilize, but it is an inconvenient truth that fossil fuel commodities will only increase in price. Conservative estimates are seeing oil as being depleted by 2050, a mere 39 years from now, and natural gas even sooner around 2030-2040. In a capitalistic society that might seem like quite a ways away, but the reality is that because our consumption is so massive, demand is going to overtake supply very quickly - in under 10 years likely. Scarcity skyrockets prices, creates wars, instability, and rich/poor gaps. Fossil fuels and oil industry are not answers to anything, and should simply be treated as backups as we transfer to renewable domestic energy.

It's too bad that that won't happen, and we will dick around until prices and supply are insane, and then the corporations will magically save us with their renewable technology they have been suppressing for years. Meanwhile coastal towns will be submerged and we will all have cancer. The future has never been brighter!
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Old 05-07-2011, 01:53 AM   #7 (permalink)
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it's way more expensive here in canada. and the prices stayed the same. now i longboard and take transit more than i drive my little car.
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Old 05-07-2011, 08:55 AM   #8 (permalink)
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Quote:
Originally Posted by mangtarn View Post
it's way more expensive here in canada. and the prices stayed the same. Now I longboard and take transit more than i drive my little car.
The one good thing is that rising fuel prices should theoretically promote an increase in public transportation services and maybe the rise of high-speed passenger trains (hopeful)
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Old 05-09-2011, 02:38 PM   #9 (permalink)
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This post looked a lot better before I clicked "POST." Click the link to get a better look...

Crude Oil and Total Petroleum Imports Top 15 Countries

Crude Oil Imports (Top 15 Countries)
(Thousand Barrels per Day)
Country Feb-11 Jan-11 YTD 2011 Feb-10 YTD 2010
CANADA 2,193 2,149 2,170 1,897 1,889
SAUDI ARABIA 1,114 1,099 1,106 881 922
MEXICO 998 1,216 1,112 996 1,015
NIGERIA 948 968 958 896 948
VENEZUELA 878 951 916 913 868
ANGOLA 357 294 323 312 289
IRAQ 263 470 372 540 522
ECUADOR 242 178 209 145 182
BRAZIL 175 259 219 192 233
COLOMBIA 175 303 242 371 330
ALGERIA 138 378 264 282 306
KUWAIT 118 147 133 228 143
RUSSIA 97 105 101 214 174
EQUATORIAL GUINEA 52 32 41 0 28
CHAD 51 55 53 0 24

Total Imports of Petroleum (Top 15 Countries)
(Thousand Barrels per Day)
Country Feb-11 Jan-11 YTD 2011 Feb-10 YTD 2010
CANADA 2,831 2,826 2,829 2,490 2,544
SAUDI ARABIA 1,114 1,102 1,108 898 932
MEXICO 1,104 1,366 1,242 1,134 1,132
VENEZUELA 989 1,030 1,011 1,009 957
NIGERIA 978 1,007 993 932 975
RUSSIA 437 531 486 423 444
ALGERIA 394 565 484 461 480
ANGOLA 370 316 342 326 302
IRAQ 263 470 372 540 522
ECUADOR 242 178 209 152 185
COLOMBIA 211 332 275 386 353
VIRGIN ISLANDS 182 276 232 187 251
BRAZIL 177 274 228 226 293
NETHERLANDS 129 101 114 126 121
KUWAIT 118 147 133 228 149

Note: The data in the tables above exclude oil imports into the U.S. territories.
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Old 05-16-2011, 10:54 AM   #10 (permalink)
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Meh, gas price is still rising here .
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