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Home Front Economy
Oil prices drop to seven-month low
2008-09-16
Weaker energy demand and turmoil in the US financial system have caused oil prices to drop to a seven-month low of nearly 91 dollars.

Brent North Sea crude for October delivery tumbled 4.84 dollars to 92.74, the lowest level since February while New York's main contract, light sweet crude for October, lost 4.24 dollars to reach 96.94 dollars.

The weekly average of the Organization of Petroleum Exporting Countries (OPEC) also hit its lowest in the last seven months, dropping to 97.40 U.S. dollars per barrel last week.

Meanwhile, a stronger dollar also contributed to the current drop in oil prices. This is while tensions were somewhat eased after Hurricane Ike, which slammed into the US Gulf Coast on Saturday, did not damage oil platforms as expected.
Posted by:Fred

#19  drill drill drill here at home..

And boyz and girlz, Why don't we???

Because the demoC'RAPS REFUSE TO!!

OVER and OVER we must repeat the message.

Because the demoC'RAPS REFUSE TO!!

OVER and OVER we must repeat the message.

Because the demoC'RAPS REFUSE TO!!

OVER and OVER we must repeat the message.

Because the demoC'RAPS REFUSE TO!!

OVER and OVER we must repeat the message.
Posted by: Red Dawg    2008-09-16 23:41  

#18  Why the hell is gas still $4.15 a gal. here in Cincinnati? Is the electricity back on for all the stations after your big Sunday wind storm? Are they getting their usual supplies? Circumstances do count.
Posted by: Anguper Hupomosing9418   2008-09-16 18:55  

#17  Bigjim,
The same reason they're charging $5 for a bag of ice (if you can find any).
Posted by: KILOWATTKID   2008-09-16 16:51  

#16  Why the hell is gas still $4.15 a gal. here in Cincinnati?
Posted by: bigjim-ky   2008-09-16 15:55  

#15  The oil was sold because there refineries that were out of crude and could not get any. In light of the situation, it probably makes sense. With a total capacity of 727 million barrels, I doubt 380,000 make a significant dent and can reduce shortages resulting from acts of God.
Posted by: Nimble Spemble   2008-09-16 14:30  

#14  A little perspective regarding releases from the SPR and damage to a few rigs:

According to this source, there are over 800 fully-manned oil rigs off the coast in the Gulf of Mexico and they produce about 1.5 million barrels per day.
http://www.cccarto.com/gulf_platforms.html
Posted by: Darrell   2008-09-16 14:11  

#13  Oh -- and he also said 1 gallon of every 4 gallons we use, comes from the Gulf.
Posted by: Sherry   2008-09-16 13:29  

#12  This guy I heard yesterday, said releasing from the SPR would make very little difference.
Posted by: Sherry   2008-09-16 13:28  

#11  Looks like a good arbitrage to me.
Posted by: Nimble Spemble   2008-09-16 13:20  

#10  We are forgetitng one factor. Now that we've release a oil from the reserve, we have to fill it back up. Read: There is now a demand for a half million barrels that there wasn't a month ago.
Posted by: Mike N.   2008-09-16 13:18  

#9  380,000 barrels to be released from SPR
Posted by: Nimble Spemble   2008-09-16 13:01  

#8  Timing works out pretty well. Gas prices stay high into October, and the drilling ban expires of its own accord on September 30.

So, all the R's have to do is ... nothing ... Let the ban expire, prices fall, take credit, vote in November.

Any questions?
Posted by: Iblis   2008-09-16 12:30  

#7  I heard a guy on radio yesterday, (he is with a group that had oil and pricing in it) Very good explanation for what is happening across the country about the various prices. Extremely knowledgeable.

But basically, he said they work on a "just in time" inventory, which is a 20 day supply -- he compared the oil industry to a lung -- Gustav caused one lung to collapse, and Ike caused the other to collapse.

They hadn't recovered from Gustav when Ike made his appearance.

He said to expect it to be tough through September -- gas will be short -- you will probably have to wait in line -- you will be inconvenienced.

By November, all will be back to normal, October is iffy -- but will begin the working out of it period.
Posted by: Sherry   2008-09-16 11:12  

#6  There is a twofold problem wrt gas prices.

Due to the Hurricanes, the refineries in the TX/LA area are not operating. This causes wholesale gasoline prices to rise as inventory drops. And I totally forgot about the switching to winter blends. That's going to happen soon, I think.

Also due to the hurricanes is the shutting down of several GOM oil rigs that were either in the path of the storms or even in the projected path. This lowers oil production capability.

I've seen tickers somewhere (but never a full story) that the DOE is releasing about 200,000 (or so) gallons of crude from the strategic reserves.

Hurricane season is only half over. Pray that another one doesn't enter the gulf. Heh, I think all the gulf states have been hit or strongly affected by hurricanes this year.
Posted by: Anon4021   2008-09-16 11:01  

#5  Aren't we about to head into the annual festival of shutting down refineries to make the Winter Blend gasoline?
Posted by: Grenter, Protector of the Geats   2008-09-16 10:40  

#4  While the drop in oil prices hasn't translated to the pump just yet, I read a good blog posted here just the other day that attributed it primarily to the recent hit job hurricanes Gustav and Ike have done on our levels of current domestic supply and refining capacity, which was a double-whammy in many ways. Now that the dust has finally settled, and assuming we don't get hit with any more whoppers, I would expect to see prices at the pump begin to fall as Autumn comes around. At least I'm hoping for that.
Posted by: eltoroverde   2008-09-16 10:35  

#3  This can only be due to the Hope surrounding the Obama campaign. Bless him.
Posted by: Chris W.   2008-09-16 10:28  

#2  Station down the street was selling regular for $3.38 7 days ago, now wants $3.99.
Posted by: Anguper Hupomosing9418   2008-09-16 10:23  

#1  This is a good article, it reinforces almost all the lame-ass excuses that they "analysts" came up with for the unexplainable rise in oil prices, even though we had oil coming out our ears at times.
Posted by: bigjim-ky   2008-09-16 09:32  

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