Oil price over $147 for the first time-now above $80

[george_r_1961]

Hate to be a killjoy here but im not optimistic at all about oil dropping significantly. They was I understand it this hasnt been a supply and demand issue but a futures issue, where speculators look into their crystal ball and decide what oil should be worth months or even years from now based on how the feel the supply/demand situation will be.

Im not an economist but I did sleep at a Holiday Inn Express last nite

[cycloneye]

U.S. light crude oil for July delivery fell $3.34 to settle at $128.85 a barrel on the New York Mercantile Exchange, retreating as the dollar firmed up. A stronger U.S. currency makes dollar-traded commodities like oil more expensive for international buyers.

Gold also retreated in response to the stronger dollar. COMEX gold for August delivery fell $17.80 to settle at $912.80 an ounce.


We can take this good news.

[gtalum]

Hate to be a killjoy here but im not optimistic at all about oil dropping significantly. They was I understand it this hasnt been a supply and demand issue but a futures issue, where speculators look into their crystal ball and decide what oil should be worth months or even years from now based on how the feel the supply/demand situation will be.

Sure. And tech stocks in 1999 were a guess as to what their value would be years down the road. Just like housing values in 2005. Just because futures go up in price does not mean the asset in question will necessarily follow. Just like in every other speculation market, in the long term there are just as many losers as winners in the commodities markets.

[Dionne]

Reduced demand, finally. I was wondering what it was going to take. That's the only way to force prices down: cut demand.

You got it right. Memorial Day. Read somewhere we recorded the largest drop in oil consumption since WWII.

Supply and demand. I can adjust. How many folks out there will have problems adjusting to fuel prices? Suspect the fixed income elderly will have the rough ride.

[Cryomaniac]

Hate to be a killjoy here but im not optimistic at all about oil dropping significantly. They was I understand it this hasnt been a supply and demand issue but a futures issue, where speculators look into their crystal ball and decide what oil should be worth months or even years from now based on how the feel the supply/demand situation will be.

Sure. And tech stocks in 1999 were a guess as to what their value would be years down the road. Just like housing values in 2005. Just because futures go up in price does not mean the asset in question will necessarily follow. Just like in every other speculation market, in the long term there are just as many losers as winners in the commodities markets.

Oil $40 by the end of the year!!!!

Seriously though, the bubble could be bursting, although I'll reserve judgement until the middle of June at least.

[MGC]

I hope the bubble bursts and the speculators loose their shirts.....MGC

[gtalum]

Oil $40 by the end of the year!!!!

Heh. Even I'm not carzy enough to make that prediction. I wouldn't be shocked to see $80 though.

Keep in mind that yesterday's price drop came in spite of news of major supply issues in Mexico and elsewhere.

[Dionne]

And it's still dropping....NYMEX is currently at 126.26...........

[Ed Mahmoud]

I get the impression, from reading around, that market fundamentals and supply and demand support $80 to $100 oil. There is a little bit of a fear factor built in, about Nigeria, Iran and Venezuela, but I don't think prices now are supportable, unless something bad happens.


Speaking of supply and demand, allowing development of oil shales in the Rocky Mountains would certainly help prices, at least a little, a few years down the line. Jimmy Carter was all over oil shales (part of the syn-fuels project) back in the 1970s. When oil prices dropped in the 1980s, it became uneconomic and the pilot plants shut down, but improved technology and $100+ oil make oil shales economic again.

[gtalum]

Energy policy was one of the very few places that president Carter got it right. Unfortunately cheap oil in the late 1980's and through the 1990's undid all progress on the energy reform of the 1970's. Did you know that there was a version of the Honda Civic CRX that averaged 51 MPG in the late 1980's? That's not a hybrid, or any special technology. Why is it that we're just now getting back to 50 mpg cars, and we have to use hybrid technology to get there? Had we continued the progress, we could easily be getting 50-60 mpg in "standard" cars and 100mpg+ in hybrids.

[Nimbus]

It will take a while to get back to high mileage vehicles. I saw a new Zenn electric car yesterday that plugs in and the estimated annual electric cost was only $210. Zenn is supposed to be coming out with an ultra capacitor powered car that uses military technology with 100 times the power density of lead/acid batteries. That could take a couple years.

The oil and gasoline prices rebounded today and wholesale gasoline was back up 6 cents a gallon. Some oil rallies in the past have ended on Memorial day weekend but apparantly not this one.

[cycloneye]

Oil tumbles more than $4.00

Great news as oil prices falls more than $4.00 and closed at $126.62.Many things happened today that caused the big decline.

[Matt-hurricanewatcher]

4.09 in Portland. Come on come down.

[angelwing]

Meanwhile the BP station by my apartment that was $3.95 last night is $4.03 this PM...go figure

[george_r_1961]

Meanwhile the BP station by my apartment that was $3.95 last night is $4.03 this PM...go figure

Thats probably because the gas refined from the $135 a barrel oil hasnt reached the pumps yet.

[vbhoutex]

Even if the barrel price keeps falling we won't see our highest prices for at least a month more than likely. The last I saw a date with the prices this high per barrel was for July 16th delivery and that was at least a week ago.

[Dionne]

It's a roller coaster ride.....crude prices are all over the place.....under $126 this morning wouldn't surprise me if by this evening it was back in the $135 zone. Hot bed of speculation.

[Cryomaniac]

It's a roller coaster ride.....crude prices are all over the place.....under $126 this morning wouldn't surprise me if by this evening it was back in the $135 zone. Hot bed of speculation.

That would be some jump. I'm not gonna say it's impossible though.

[Stephanie]

To me, commodities trading is no more than legalized gambling.

That's precisely what it is, just like stock trading.

I just hope that this bubble bursts quicker than the tech bubble or the housing bubble.

It's going up a whole lot faster, I suspect it'll crash faster, too. I only hope that when it does crash we don't stop seeking energy alternatives this time, though.

It is imperative that this doesn't happen!! We must develop alternative and clean sources of energy for both vehicles and "normal" consumption.

Amen to that!

MGC - I have a 2008 Honda CRV - I love it too. It's been averaging 25.4 miles to the gallon. I do a lot of highway driving.

I'm hoping that the speculators lose their shirts as well. It was one thing when silver, gold and the tech stocks were being traded at unrealistic prices. Oil speculation, on the hand, is HURTING people and it affects almost everything that we do and need on a daily basis. That's what is so scary. I truly believe that there needs to be some regulations on oil speculation only because it affects so many people and their livelihoods.

[feederband]

$3.95