Lower Gas Prices Coming Soon - Oil Prices Drop $1 Per Barrel

[streetsoldier]

I'm not necessarily championing Alaskan drilling, but Kerry's "plan"
to use up our strategic oil reserves is unconscionable...those reserves are finite, and once consumed, "they ain't no mo' ter git".

And the Saudis only made an OFFER...OPEC has the leverage to squash that offer, and don't think for a New York minute that they won't.

[CaluWxBill]

I'm not necessarily championing Alaskan drilling, but Kerry's "plan"
to use up our strategic oil reserves is unconscionable...those reserves are finite, and once consumed, "they ain't no mo' ter git".

And the Saudis only made an OFFER...OPEC has the leverage to squash that offer, and don't think for a New York minute that they won't.

Too bad I can't stand Bush, because Kerry is dense in many ways. we need a really good third party or independent candidate.

[j]

Hopefully we can build a new refinery or two, hasn't been one built in a while.

That's right...6 years to be exact (from memory...I've read it some where)

[Brent]

Here's the article:



Recession fears rise with cost of gasoline
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Saudis' extra oil won't help much

Martin Crutsinger
Associated Press
May. 24, 2004 12:00 AM


WASHINGTON - Consumers and businesses are feeling the pinch from record-high energy prices, and worries already are cropping up that the country could fall into recession if gasoline prices keep going up.

Oil-price shocks have played a role in four of the past five U.S. recessions over three decades. Analysts fear that attacks on oil facilities in Iraq and Saudi Arabia and the threat of further disruptions will keep prices volatile for some time.

"It could cause a recession if oil prices go high enough," said David Wyss, chief economist at Standard & Poor's in New York.

The price of light crude oil hit a record $41.85 in New York trading early last week before settling at $39.93 Friday. The markets reacted to the announcement that Saudi Arabia will begin pumping 600,000 more barrels of crude a day, beginning in June.

That decision will have little immediate effect on pump prices in the United States, analysts said. The additional supplies will not reach this country until mid-July, after the demand for refineries to produce gasoline for the peak driving season has ended.

The U.S. average retail price for self-serve gasoline rose 14 cents in the past two weeks to a record $2.07 a gallon as of Friday, Trilby Lundberg said, citing a survey of 8,000 gas stations by her research firm.

In another development Sunday, Energy Secretary Spencer Abraham said the Saudis had promised to raise their daily production by an additional 2 million barrels to about 9.1 million.

Also, Abraham said in a news briefing in Amsterdam, Netherlands, that Saudi Oil Minister Ali Naimi told him in a private meeting that the kingdom was willing eventually to "meet all requests up to their full capacity of 10.5 million barrels a day."

But higher energy prices are still a concern because they could crimp consumer spending.

The prices act like a tax: If people pay more to fill up their cars, they have less to spend on other things.

Crude oil prices have risen about $10 a barrel since late last year. If that increase were to be sustained for a year, it would shave about $50 billion from consumer spending and reduce economic growth by about half a percentage point in 2005.

The optimists among forecasters point to the drop of nearly $2 a barrel in oil prices at the end of last week to support their view that the run-up will not last and say that prices should return to about $35 a barrel by fall.

Of course, events in the Middle East could prove the optimists wrong. More attacks on oil facilities, especially those in Saudi Arabia, could lift prices to $50 a barrel or more.

Although economists think oil prices will moderate in the months ahead, they said the recent sharp jump needs to be kept in perspective. The price of nearly $42 a barrel was a record in current dollars. But, after adjusting for inflation, oil prices are far lower than the peaks of previous crises.

Most analysts are not worried that the spike in energy prices will feed into sustained inflation pressure.

The threat concerns wages. If Americans see their purchasing power eroded by higher energy costs over the long term, that affects what economists call people's "inflation expectations," and they begin to demand larger wage increases to counter inflation.



Dennis

Not the R word...

The White House cannot be happy about that with the election 5 months away.