Price of a Barrel of Oil has dropped.

kluivert

Price of a Barrel of Oil this morning has dropped to around $112 light sweet crude in NY from a high of $119 on the futures market.

This is an indicate that the market expects oil prices to drop.

But thats a very big swing within a week.

As usual I wonder when or how long this will take to filter down to the pumps.

I understand its up to fuel stations to set their prices, but its a tough enough year within having over inflated fuel prices at the pumps, it serves to increase the profit margins of the fuel pumps and increase inflation as a whole, which has a negative effect.

woodseb

crude's only back down at the level it was two weeks ago, i reckon we won't see much change at the pumps

Stephen

Amusing how an increase in the price of oil has immediate effect on the price at the pumps whereas a decrease doesn't :rolleyes:

NiSmO

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woodseb

NiSmO wrote: »

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yes, that's probably the main reason behind this week's fall

Cionád

NiSmO wrote: »

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Yes, that is the reason why we have been reletively cushioned from a rise of 60$ a barrel or so over the last year. Also our taxes on fuel is a flat rate, not a percentage, and higher than places such as USA, where they are really feeling the pinch of high oil prices. (high to them I mean!!)

I've heard economist predict prices could go as high as 200$ in the future, and the Quatari Energy Minister did not rule this out just yesterday. If combined with a weakness of the Euro (which is possible after years of gains) would be quite disasterous for our fuel purchases

I want solar panels on my roof

http://afp.google.com/article/ALeqM5jJFdCA5IofBqndP0xVgPJwCCxVjw

mike65

The euro has actually lost 4 cents value against the dollar in the last 10 days or so, which no doubt means there will be no reduction in prices.

Mike.

TheBazman

It's a bit early to call a change of trend given there was one day last week when crude dropped from $119 to $114, only to fully reverse the next day on supply concerns. However saying that there appears to be a little of the froth coming out of commodity markets as a whole (gold is $850 from a high of over $1000/oz). Of course given we know that there is a very strong correlation between the currency and oil, which to some extend protected the European motorist from the full impact of the oil price rise, we have to expect that were there to be a decent fall in oil price, we wouldnt feel a massive benefit

NiSmO

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kluivert

NiSmO wrote: »

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Price of oil would drop alot.

OPEC control the amount of oil produced.

China and India are consuming greater quantities of oil each year as their economies grow, thus increasing the price as the demand increases.

If production of oil stops for one week, this reduces the quantity supplied, this increasing the demand on available stocks thus increasing price.

People are afraid there is not enough oil to meet demands thus increasing oil, in reality there is enough oil, just not enough produced on a daily basis.

If they produced more barrels each day, then the price would drop, because the price would drop, we would consume more, thus increasing our demand even higher, which would in turn push prices higher.

Economics is a fine balance between supply and demand.

Victor

TheBazman wrote: »

It's a bit early to call a change of trend given there was one day last week when crude dropped from $119 to $114, only to fully reverse the next day on supply concerns. However saying that there appears to be a little of the froth coming out of commodity markets as a whole (gold is $850 from a high of over $1000/oz). Of course given we know that there is a very strong correlation between the currency and oil, which to some extend protected the European motorist from the full impact of the oil price rise, we have to expect that were there to be a decent fall in oil price, we wouldnt feel a massive benefit

Interesting graph. However, be careful not to assume the euro / dollar / oil graph is a perfect match - the graphs are working off different scales.

TheBazman

Victor wrote: »

Interesting graph. However, be careful not to assume the euro / dollar / oil graph is a perfect match - the graphs are working off different scales.

This chart looked better - I also normalised the charts and the basic correlation is the same. Interestingly it is only the case since around 2003. Before that, there was little to no correlation

who_ru

i read an article online recently where some guy said that high oil prices are actually a good thing because it will force us to conserve energy and come up with new forms of fuel.

if the price of oil fell to $50 a barrel we (the entire world) would just continue wasting a scarce resource because it's cheap again. an interesting point i felt.

on the subject of alternative fuels biofuels need to be scrapped and scrapped asap. very interesting article on rte website today by UN Food Envoy on the terrible effects biofuels are having on food supplies worldwide. indeed a former UN Food Envoy described boifuels as a crime against humanity.

http://www.time.com/time/cartoonsoftheweek/0,29489,1732383_1567588,00.html

astraboy

The forecourts actually make a very small margin on fuel, most of the profit comes from the attached car wash/shop/restaurant etc. Increasing the prices is not profiteering on their part, it is just responding to the market prices they pay.

E92

Astraboy is right. Petrol stations only sell petrol to get us in to buy other things. I know people who own a garage and the profit margin on fuel is around 8 cent a litre. So they're making just €4.80 when you fill up your car if your car has a 60 litre tank.

VH

Or so the story goes.

I know people who own a filling station and I was told their markup is about 15%.

astraboy

VH wrote: »

Or so the story goes.

I know people who own a filling station and I was told their markup is about 15%.

Perhaps the mark up sounds large, however that 15% has to pay staff, insurance, pump maintenance costs and all the other overheads of running a filling station. In the end the actual profit into the owners pocket from each liter sold is fairly small.

NiSmO

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meathstevie

who_ru wrote: »

i read an article online recently where some guy said that high oil prices are actually a good thing because it will force us to conserve energy and come up with new forms of fuel.

if the price of oil fell to $50 a barrel we (the entire world) would just continue wasting a scarce resource because it's cheap again. an interesting point i felt.

on the subject of alternative fuels biofuels need to be scrapped and scrapped asap. very interesting article on rte website today by UN Food Envoy on the terrible effects biofuels are having on food supplies worldwide. indeed a former UN Food Envoy described boifuels as a crime against humanity.

http://www.time.com/time/cartoonsoftheweek/0,29489,1732383_1567588,00.html

Surprising though that starving people most of the time are ruled by the vilest most corrupt dictatorships around who're more interested in glorification of the great leaders and the waging of civil war than they are in feeding their population and getting their agriculture right.

TheBazman

just when you thought things were improving

Cionád

TheBazman wrote: »

just when you thought things were improving

It hit the ouch-ometer!! :eek:

VH

Several analysts, commentators, etc, are saying $200 a barrel before the end of the year is a distinct possibility.

kluivert

Looks like some one has a CFD or a spread bet on the price of oil going ^^^^^ up lol.