Crude oil prices may fall to $80

Crude oil prices may fall to $80
Muklis Ali
Tuesday, 29 July , 2008, 16:30
Last Updated: Tuesday, 29 July , 2008, 16:41


Jakarta: OPEC should not consider cutting production after oil's steep two-week decline as markets are now balanced, OPEC President Chakib Khelil said on Tuesday, adding that prices could yet fall another $50 a barrel.
Khelil, who is also Algeria's oil minister, said oil prices could fall to $70 to $80 in the long-term, if the dollar continued to strengthen and geopolitical anxieties eased.
"The price today is abnormal at $123 a barrel," said Khelil, speaking to reporters on a visit to Jakarta to meet Indonesia's energy minister. 'Oil stocks are still slippery' | 'Arctic holds 90 b barrels of oil'

He did not elaborate, but OPEC ministers have said repeatedly that they believe the surge in oil prices is not being driven by a shortage of supply.
Asked if OPEC members should cut supply if oil prices continue to decline, he said: "No, I don't think so, why should they cut production? They always want to make sure there is good supply and demand and to satisfy the demand."
US oil prices have fallen by $22 from a record high above $147 a barrel earlier this month amid growing concerns that high prices and slowing economic growth are causing a decline in demand, but prices are still up 30 per cent on the year.

"We are not worried about any price, because we don't decide the price. We just meet the demand," he said.
Khelil said he did not see any signs of demand destruction from high prices.


"I think there is a good supply, there is a balance in the market."
Asked if there was an option to cut production at OPEC's September meeting, he said: "It is up to the conference in light of the market at that time. The market changes so much."
Khelil said later on Tuesday after giving a lecture to energy officials that recent price moves did not reflect supply issues.
"And I think it is obvious to you that in the last week for example, you could not expect the price to come down by $25 because of a lack of supply or oversupply in one day," he said.
Khelil also said that biofuel mandates in Europe and the United States had aided the run-up in prices. Tips to book profits in stock markets! Click here

"I strongly believe bioethanol, because it's very expensive, it had an effect on the price per barrel of products," he said.
Indonesia is Asia-Pacific's only OPEC member but it has seen oil production slump since the 1990s and said in May that it planned to quit the cartel because it was unhappy with high oil prices after becoming a net importer. Energy Minister Purnomo Yusgiantoro said that Indonesia had not yet officially submitted to withdraw from OPEC, but said the country's interests were no longer in line with the cartel. "President (Yudhoyono) has explained that we are a net oil importer. That means there is a difference in objectives from OPEC as producer countries," said Yusgiantoro.

Copyright 2004 Reuters Limited

I traded this "rumor news" today and made a few bucks as the DOW shot up a tad on these "opinions".

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NEW YORK, July 29 (Xinhua) -- Crude prices declined to a 10-week low Tuesday as the U.S dollar strengthened against the euro. Oil prices were down more than 4 dollars to trade below 121 dollars.
The dollar strengthened about 0.8 percent against the euro Tuesday morning, limiting the appeal of commodities as an inflation hedge. Crude for September delivery fell more than 4 dollars to 120.42 dollars a barrel on the New York Mercantile Exchange. Oil has fallen more than 18 cents since its July 11 record of 147.27 dollars as the dollar has strengthened against the euro and worries about economic woes would curb global demand.

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I don't see it going much below $100/barrel but I'm just a hack. What do I know?

and prices are still 4.00 a gallon

Prices down to 3.70 in Champaign...was 4.09 not too long ago.

Get back down to about 3 bux and no one will really complain

Brock Landers said:

Prices down to 3.70 in Champaign...was 4.09 not too long ago.

Get back down to about 3 bux and no one will really complain

Click to expand...

3.79 at Hess today here in Tampa.......lowest I've seen in quite awhile.

3.97 outside of Philadelphia

I'm sure food prices will follow. :missingte

down to $80?! Keep dreaming...

down to $4.59 here

Wow, in Minnesota saw it down to $3.569 driving home yesterday!

Oil Falls More Than $2 as Fuel Demand Drops to Three-Year Low

By Mark Shenk



July 31 (Bloomberg) -- Crude oil fell more than $2 a barrel, capping the biggest one-month decline since December 2004, as a slowing U.S. economy caused fuel consumption to weaken to the lowest in three years.
The economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, curbing fuel demand. Consumption averaged 20.7 million barrels a day in the past 12 months, the lowest for the period since 2004-2005, according to U.S. Energy Department data.
``Expectations about the economy have deteriorated, which is weighing on the oil market,'' said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky. ``With demand so poor, we have to re-examine price expectations. The market will be guided by the economic outlook here, in Europe and in the emerging markets.''
Crude oil for September delivery fell $2.69, or 2.1 percent, to settle at $124.08 a barrel at 2:54 p.m. on the New York Mercantile Exchange. Prices are up 59 percent from a year ago and are down 11 percent this month.
Oil prices have slipped more than $23 a barrel from the $147.27 record on July 11 on signs of declining demand in the U.S., which consumed about 24 percent of the world's crude in 2007, according to BP Plc.
``A weak economy and high prices don't usually coincide with demand growth,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``It's becoming clear that demand should be depressed through the end of the year.''
The U.S. economy expanded less than forecast in the second quarter as the drag from housing and rising unemployment blunted the impact of federal tax rebates.
Economic Contraction
The economy grew at a 1.9 percent annualized rate after expanding 0.9 percent in the first quarter, the Commerce Department said in Washington. The report also showed a recession may have begun in the final three months of 2007, as gross domestic product was revised to show a contraction in the period.
Energy-company profits have climbed with the price of oil. Exxon Mobil Corp., the world's biggest oil company, posted a smaller increase in second-quarter profit than analysts estimated after production slid the most in at least a decade. Record prices allowed Exxon Mobil to achieve the highest profit ever for a U.S. company without one-time gains.
Royal Dutch Shell Plc, Eni SpA and Repsol YFP SA, posted higher second-quarter earnings, boosted by record oil prices which countered slower production. Shell is Europe's biggest oil company and Eni and Repsol are the biggest Italian and Spanish oil companies respectively.
Gasoline for August delivery fell 8.71 cents, or 2.8 percent, to settle at $3.048 a gallon in New York. Futures reached a record $3.631 a gallon on July 11.
Pump Prices
Pump prices are following changes in futures. Regular gasoline, averaged nationwide, fell 1.7 cents to $3.909 a gallon, AAA, the nation's largest motorist organization, said on its Web site. Pump prices reached a record $4.114 a gallon on July 17.
U.S. automakers have lost money and market share because of higher gasoline prices. General Motors Corp., Ford Motor Co. and Chrysler LLC had their credit ratings lowered one step further into junk status by Standard & Poor's today.
Brent crude oil for September settlement declined $3.12, or 2.5 percent, to close at $123.98 a barrel on London's ICE Futures Europe exchange.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
Last Updated: July 31, 2008 15:35 EDT

FairWarning said:

I'm sure food prices will follow. :missingte

Click to expand...

amazing how those NEVER come down

His Is The Hand said:

amazing how those NEVER come down

Click to expand...

i guess they have to keep up with inflation like we all do.

It's kinda holding at $120+ per barrel, which is only $25 off of an all-time peak.

Still not good, but better than $160+ per bbl.

$3.86 out in Maryland sticks. US troop deaths down in Iraq with promise of
immediate tour reductions. Stock market stabilizing and I have been waiting for this Alice in Wonderland Rabbit Hole News to pull the plug and order my 250 gallons of winter oil. Thank godness for this election year, amen.

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<!-- // .ad-btyb --><!-- // #title-bar -->Oil price 'abnormal' but $US78 achievable

July 30, 2008 12:01am

<!-- // #article-title -->
$US120 a barrel are "abnormal" and could fall to about $US78 under the right circumstances, OPEC president Chakib Khelil said in Jakarta yesterday.
<!-- // #article-intro -->"If the dollar continues to strengthen and the political situation (regarding Iran) improves, then the long-term prices will be about $US78," Mr Khelil said, adding the market was well supplied with oil.
Crude prices have doubled over the past two years but have fallen from record highs of $US147 a barrel earlier this month.
They were trading at around $US125 yesterday.
"There's a balance in the market," Mr Khelil said. "I would say stocks are at a good level and there hasn't been any disruption in demand."
Asked whether any members of the Organisation of the Petroleum Exporting Countries should cut production if oil prices continued to fall, he said: "No, I don't think so. Why should they cut production?
"They always want to make sure there's good supply and demand and to satisfy the demand."






OPEC will meet in Vienna on September 9 to review output after maintaining levels at its past three meetings in December, February and March.
Crude oil for September delivery rose as much as US86, or 0.7 per cent, to $US125.59 a barrel on the New York Mercantile Exchange yesterday.
Libya's top oil official said yesterday that oil prices slipped from a record as concerns over an escalation of tensions between the US and Iran eased.
"Probably it's about geopolitics, the US and Iran," said Shokri Ghanem, the head of Libya's National Oil Corp.
"Oil prices will go up again because of speculation."
OPEC's 13 members will increase production by 200,000 barrels a day, or 0.6 per cent, to 32.9 million barrels a day this month compared with June, according to estimates by industry consultant PetroLogistics.
Saudi Arabia - the world's largest oil exporter - pledged on June 22 to increase output by 200,000 barrels a day in July, on top of a previous 300,000 barrel-a-day boost scheduled for June.
Iran's Oil Minister Gholamhossein Nozari was cited as saying by the state-run Shana news agency on July 22 that OPEC shouldn't raise output when it met in Vienna.
OPEC members are Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.
Indonesia, the only Asian member of OPEC, has said it will not renew its membership of the oil cartel at the end of the year because it has turned into a net importer in recent years.

OIL PRICES AT 3-MONTH LOW, JUST OVER 118 DPB


AGI) - Singapore, 6 Aug - Oil prices are at a three-month low on Asian markets. September contracts on crude oil are traded at 118.10 dollars per barrel. Weighing down markets are concerns over the world economy, which is having a negative effect on demand. The explosion of an oil pipeline in Turkey may, however, push prices back up.


Oil 'heading back to $100' as recession fears pull price lower
Published Date: 06 August 2008

By Hamish Rutherford


NEW fears over a looming recession and a rise in production left the price of oil at a three-month low yesterday – prompting predictions it could fall below $100 a barrel within weeks.

In a move that will ease the inflationary pressures in the economy, prices of other heavily traded commodities followed the downward trend.

News of a rise in production among Opec nations – which produce about 40 per cent of the world's oil – crude prices tumbling below $120 a barrel in both London and New York.

Dropping as low as $118 a barrel during trade yesterday, crude oil prices have fallen by about 20 per cent from the $147 a barrel peak in mid-July.

Angus McPhail, a natural resources analyst at Dundee-based Alliance Trust, said hedge funds, blamed for driving up oil in recent months, were now taking profits.

Asked how far prices could fall, he said: "Probably to about $100 within the next month if you keep on getting weak demand data."

Other experts were less certain about the movements. "We don't know if this is a turning point. We'd like to know but we don't have an answer yet," said Nobuo Tanaka, executive director of the Paris-based International Energy Agency.

Yesterday's falls came despite supply concerns that had previously spooked the market, such as fears of a US-Iran conflict, and a storm in the Gulf of Mexico that was expected to hit production in the coming days.

MF Global analyst Edward Meir said the market was now focusing on larger economic issues.



"It seems that the market is losing interest in geopolitical and weather-induced 'props', and instead is becoming more aware of growing supply demand imbalances," Meir said.

Despite high crude prices, petrol prices at the pump in the US had already fallen to an 11-week low this week as demand from the oil-addicted nation tumbled. A price war is also brewing among British supermarkets to lure in customers.

Elsewhere in the US, moves by Congress to rein in speculation in crude oil markets, previously blamed for the sudden rise in prices, helped to accelerate the sell-off.

Baring Asset Management's Andrew Cole said the fall was a "correction".

"There is the threat of legislation to stop speculation … weak economic data and signs of demand destruction in the United States," he said.

There were also reports yesterday that Opec, which recently relented to pressure from the West to raise production, would not move to cut output unless oil was to retreat to about $80 a barrel.

Commodities directly linked to economic growth, such as platinum and copper, also extended losses of last week.

The Reuters-Jeffries CRB commodity index hit a three-month low of 401.85 points, having fallen 15 per cent in the past month.

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Gas prices fall for 20th day

Average price of gasoline down more than 25 cents a gallon from record high.


NEW YORK (CNNMoney.com) -- Gasoline prices fell for the 20th straight day, pushing the nationwide average down more than 25 cents, according to a survey of gas station credit card swipes released Wednesday.
Regular unleaded gas fell 0.9 cent to a nationwide average of $3.862 a gallon, said motorist advocacy group AAA.
Prices hit a record high of $4.114 at the pump on July 16. Since then, gasoline - and the future contracts of crude oil - have declined on signs that high prices have caused Americans to consume less.
Still, the price of a gallon of regular gas remains more than $1 higher than it was a year ago.
Ethanol. Faced with rising fuel costs, many drivers have turned to ethanol, which is made primarily from corn and is increasingly available in regions with strong agricultural industries such as the Midwest.
The price of E85, an 85% ethanol blend that also burns cleaner than straight gasoline, fell a penny to $3.132 a gallon on average, AAA reported.
While ethanol is derived from renewable sources, it is less efficient than gasoline. As a result, a car running on E85 would pay the equivalent of $4.122 per gallon to get the same mileage as gas, the AAA survey estimated.
Diesel. The average price of diesel fuel, which is used to power most trucks and commercial vehicles, fell to $4.633 a gallon from $4.644 the previous day, according to AAA.
Diesel prices have climbed more than 56% in the last year, driving up costs for businesses and inflating the prices of the goods and services those businesses provide.
State prices. The AAA survey, which averages data from credit card swipes at 85,000 fuel stations around the country, showed that gas remains above $4 a gallon in 11 states and the District of Columbia.
Gas in Alaska, the state with the highest prices, fell to an average of $4.63 a gallon from $4.646 the previous day. Hawaii, the state with the second highest prices, saw average prices rise slightly to $4.468. California, the state in third place, saw prices slip to $4.189 on average.
In Oklahoma, the state with the cheapest gas, prices rose slightly to $3.613 a gallon. In Missouri, the next cheapest state for gas, drivers paid $3.628 on average, followed by Minnesota at $3.642 a gallon.
Drivers in Hawaii, the state with the most expensive diesel, paid $5.391 a gallon for diesel. Diesel, on average, was cheapest in Oklahoma at $4.414, according to the AAA survey.

Have high gas prices spurred you to change your habits? Tell us how gas prices are impacting your life. Send us your photos and videos, or email us to share your story. First Published: August 6, 2008: 6:50 AM EDT