Oil drops 15% in week, reviving hopes for lower gas prices

[tridim]

Oil prices fell 15% this week, the steepest decline in two and a half years, and futures prices for light, sweet crude fell below $100 a barrel on the New York Mercantile Exchange.Crude shed $2.62 a barrel Friday after Thursday's 9% drop, falling to $97.18.

After tanking Thursday, commodities prices, including oil, headed back up early Friday, following a U.S. job growth report that showed the economy stronger than many thought. And a stronger economy means higher demand for fuel. But the rally in oil was brief.

Oil sank Thursday after a weak U.S. report on new claims for unemployment benefits. West Texas Intermediate crude plunged to $99.80 a barrel, raising hopes that the soaring price of gasoline had finally peaked. Thursday was the first time oil had closed below $100 since mid-March.

"If these price levels stick, it's great news for the consumer and it could mean we've seen the highs for 2011," said Peter Beutel, president of energy risk manager Cameron Hanover. "There's a 20% to 25% chance we've seen the high for the year."

More: http://www.usatoday.com/money/industries/energy/2011-05-06-average-gas-prices-peak-4_n.htm

So, is everyone enjoying their 15% price drop at the pump? I would, except gas is UP a few cents today in the mid-west.

I've been having trouble locating the data, but some on the financial forums have said that the last time crude was below $100 we were paying $2.40 at the pump. What the hell is the extra $1.60 for besides pure profit?

[Moostache]

1. The extra $1.60 is for executive pay bonuses....

You've seen what Wall Street guys get right? Well the oil bastards want to put THAT to shame now.
As far as I am concerned, they could all be executed Bin-Laden style and I would passively change the channel to check on the sports scores.

[Sherman A1]

2. as you said,

it's about pure profit.

[Duer 157099]

3. Well I heard on the radio that gas fell by one-tenth of a cent

Personally, I haven't even seen that, but that's insulting. It raises by several cents per day but falls by the tenth. It's all bullshit, greedy bastards.

[onethatcares]

4. well it didn't happen here yet.

still a sunny 3.89 a gallon in St Petersburg Floriduh.

someone once told me it takes weeks for the downward flucuation to show up at the pumps.

But on a brighter note, it takes milliseconds for the pumps to be calibrated upwards, even including gasoline already on premise.:wtf:

[tridim]

6. I hope this news permeates the masses and people stop buying gas, waiting for a big price drop.

That'd probably make the drop happen quicker.

[TheWraith]

11. There's a three to six week lag usually, since the price of oil is for future delivery.

For instance, right now they're talking about oil which will actually be delivered to refineries in June, and probably hit the pumps shortly after that.

[progressoid]

12. And yet they manage to go up right after somebody sneezes in the Middle East.

:shrug:

[notadmblnd]

5. it went down 11 cents today in my neighborhood to 4.18

[GSLevel9]

9. curious... the nationwide stats showed a drop of less than one cent. nt

[tridim]

15. Sounds like that station didn't want to get caught gouging.

[notadmblnd]

20. And today, Saturday, it is down again

4.09 at most stations. I saw one at 3.99. So, it must be that only in my little part of the world, it's going down.

[AlabamaLibrul]

22. We're down 7 tenths of one cent. Gasbuddy has the gall to call that a trend of "prices falling" nt

[malaise]

7. Is this all linked to Bin Laden's departure?

What else happened

[GSLevel9]

8. so who ACTUALLY thinks gas prices will come down more than a couple cents? nt

[tridim]

10. Holder does. Which is good for us.

Eric Holder To Fraud Squad: Oil Price Plunge Should Benefit Consumers

http://www.huffingtonpost.com/2011/05/06/holder-oil-price-plunge-obama-fraud_n_858749.html

[Lugnut]

13. There's no drop here.

The station closest to me was still at $3.999.

[mnhtnbb]

14. No change in price at the pump here...

[Arctic Dave]

16. 4.20 here. Should drop a dollar at the end of Summer.

[7wo7rees]

17. Local Gas Prices in the USA -- you know this one right?

http://gasbuddy.com/
It's what Molly Ivins used to call the "Doug Jones Report." Forget the Dow Jones; how's Doug Jones?

[jimlup]

18. Some of it is the climate change surcharge...

The Mississippi cresting which is prevent oil barges from reaches points upstream with oil.

[bhikkhu]

19. Sometimes peculation takes, and sometimes speculation gives.

Not to rain on otherwise good news, but the reason generally given for the price drop is that speculators are betting now on an economic downturn, which will drop the demand for oil below supply levels. If the economy doesn't go in the tank, however, prices are likely to go right back up.

Basically, as long as supply is constrained (which it fundamentally is, by the geology of oil deposits) and as long as demand remains high (which it fundamentally is, due to the size of the global economy), then we'll do this high price-low price, boom-bust thing over and over again.

Planning to be less dependent would be a more intelligent approach.

[AlabamaLibrul]

21. In Feb 2008 crude was roughly $90 a barrel and the average gas price was between 2.94 (Gulf Coast)

and 3.19 in California for regular. Not quite 2.40 but a big difference indeed.

[Initech]

23. The extra $1.60 is for their pocketbooks.