Tech & Biz

Oil price slides to 20-month low

by Paul Conneally | November 12, 2008 at 04:35 am

384 views | 67 Recommendations | 10 comments

Despite hope from the oil markets that demand from China would see an end to the oil price slide prices today fell to a 20 month low.

Wether this will be reflected anytime soon in price falls at fuel pumps is still to be seen.

Oil companies such as BP have this year reported massive profits despite the turndown.

Oil prices have fallen to the lowest levels since the beginning of 2007, amid fears over lower energy demand and worsening economic prospects.

US light sweet crude declined by $1.43 to $57.90 a barrel in New York before rebounding to $58.40. Brent crude fell $1.20 to $54.51 a barrel.

Crude oil has fallen about 60% after reaching a record $147.27 in July.

Investors had hoped for solid growth in oil demand from China, but it has been weakening there, as well as in the US.

"We have a pretty good idea that global growth is going to be pretty awful next year and probably not much better in 2010," said Mark Pervan, senior commodity strategist at ANZ Bank in Melbourne.

Most analysts predict the US Energy Department will report on Thursday that US oil inventories have risen for the seventh week in a row, highlighting falling demand.

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Albert Milliron

at 04:40 on November 12th, 2008

Isn't it amazing that we now think in the USA that 2.00 a gallon is cheap now? It feels cheaper as It now cost alf to fill up my car now. If we just look at a graph, gas was about 1.60 a gallon just 4 years ago.

Paul Conneally

at 06:32 on November 12th, 2008

Same here except we pay around 2 dollars (just under) per litre... in Uk

Albert Milliron

at 08:37 on November 12th, 2008

Oh my. I remember when I traveled from Alaska to the lower 48. Gas was 68 cents per litre... I was shocked as gas was less than a buck a gallon. I knew in the UK it was expensive is that about 6.00 a gallon? Wow.

Roberto Alvarez-Galloso

at 08:39 on November 12th, 2008

The law of economics as well as supply and demand are at work. When the economy is in a terrible state, people do not buy enough of a product. The end result is that the prices have to be lowered.

Amy Judd

at 10:45 on November 12th, 2008

Fuel is going down here a bit (which I thought I would never see) but I know in many other coutries this hasn't happened at all.

Rachel Nixon

at 10:56 on November 12th, 2008

Members can track news about gas prices using NowPublic's Scan tool.

Fairbanks

at 11:02 on November 12th, 2008

Wether this will be reflected anytime soon in price falls at fuel pumps is still to be seen.

Prices have been falling substantially in the USA as crude prices have fallen. What about other countries where the system is different from free market?

mgmirkin

at 11:09 on November 12th, 2008

Well, again, from the USA: local prices in my neck of the woods have been falling pretty dramatically. Right now regular runs about $2.19, Plus runs about $2.29-$2.39, and Premium somewhere above that. It seems to have leveled off a bit (at least it hasn't fallen much in the last week, though in the prior 2-3 weeks it had dropped significantly).

Regards,
~Michael

mgmirkin

at 11:07 on November 12th, 2008

And for those who don't think that OPEC tries to manipulate oil prices... It seems they want to artificially inflate prices back to astronomical highs by cutting production:

(OPEC Pushing to Cut Production, Drive Up Oil and Gasoline Prices)
http://www.foxnews.com/story/0,2933,442343,00.html

(OPEC agrees to cut production)
http://www.iht.com/articles/2008/10/24/business/opec.php

Essentially, they're trying to exercise the power of a supply oligopoly to 'fix' prices. Such collusion should be prohibited. Let the market set demand, not artificial steps to keep lining the oligopoly's pockets...

If nothing else, it's good to see them doing this so openly and transparently. If it were just a single US entity trying that kind of cr@p, they'd probably be prosecuted for monopoly and price-fixing... How do we prosecute a group of nations for price-fixing (especially during a recession)? ;o]

Just my 2c,
~Michael Gmirkin

Fairbanks

at 11:11 on November 12th, 2008

It was the reason for forming OPEC in the first place. However, they have only 40% of wold production now and are near maximum production so their power since about 1983 to dominate the market is somewhat constrained. . . .