Oil prices headed for 3.5-year low

[itaskol]

May 30, 2012 3:37 PM
Oil prices headed for 3.5-year low
NEW YORK - The price of oil is headed for its biggest monthly decline since December 2008.

Benchmark U.S. crude has dropped nearly 16 percent so far in May. There are growing expectations that the world won't use as much oil this year as previously expected. On Wednesday, the futures contract fell $2.99, or 3.3 percent, to $87.78 as global stock markets also sank.

Europe's financial crisis is the most immediate concern, but there have been plenty of signs of weaker demand.

Analysts point to weak U.S. jobs numbers and a slowdown in China's manufacturing sector. The U.S. and China are the biggest oil consumers in the world.

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Earlier this year, energy economists mostly agreed that world oil demand would hit a new record in 2012, probably around 89 million barrels per day. But with demand not growing in China and declining in the U.S., those expectations are starting to change.

"I wouldn't be surprised if demand was lower this year," said Michael Lynch, president of Strategic Energy & Economic Research.

Experts also are concerned by a banking crisis in Europe that may pull the eurozone into recession. The European Commission added to those concerns Wednesday, reporting that economic confidence has plummeted this month to the lowest level in two and a half years.

Fears about Europe's financial stability sent ripples through world markets. Major stock indexes slipped 1 percent to 2 percent.

The euro fell near a two-year low against the dollar, helping to push oil prices even lower. Oil, which is priced in dollars, tends to fall as the dollar rises and makes crude barrels more expensive for investors holding foreign money.

Brent crude, which is used to price oil varieties that are imported into the U.S., fell by $3 to $103.68 per barrel in London.

Meanwhile, U.S. retail gasoline prices fell by a penny to $3.626 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded has dropped by 31 cents since peaking in the first week of April. Gasoline is now 16 cents per gallon cheaper than it was at this time last year.

In other futures trading, heating oil lost 6.4 cents to $2.745 per gallon while wholesale gasoline lost 5.7 cents to $2.85 per gallon. Natural gas fell by 7.7 cents to $2.408 per 1,000 cubic feet.

......

Oil prices headed for 3.5-year low - CBS News

 

[Ignited Mind]

Well, major economies all over the world are slowing down. It's only a matter of time before the demand for crude took a dent.

The oil producer companies and the speculative traders of crude bit more than they could chew. Now deal with a global economic slowdown.

 

[Mosamania]

You guys are free to say thank you. Now invest in KSA and support our industry that's the deal.

 

[itaskol]

Well, major economies all over the world are slowing down. It's only a matter of time before the demand for crude took a dent.

The oil producer companies and the speculative traders of crude bit more than they could chew. Now deal with a global economic slowdown.

unfortunately india goverment hike the petro price in indian, even the international oil price drops very low.

 

[longyi]

The lower the merrier if I may say. It's going to be a bad year and more people around the world are going to lose their job, so sit tight.

 

[Hulk]

Well, major economies all over the world are slowing down. It's only a matter of time before the demand for crude took a dent.

The oil producer companies and the speculative traders of crude bit more than they could chew. Now deal with a global economic slowdown.

I see a direct relation of economy and oil prices and even in 2008 same thing happened. It went to less than 2 $ a gallon.

 

[jbond197]

good news!

 

[Marxist]

unfortunately india goverment hike the petro price in indian, even the international oil price drops very low.

to help private companies like Reliance

 

[Chinese Century]

this is good news for the chinese economy.

high oil prices have contributed greatly to inflation, both energy and food.

transportation costs have gone sky high due to high oil prices and hurt chinese companies margins and manufacturing competitiveness.

high oil prices have also contributed to high food prices as agricultural machinery uses oil to operate and high transportation costs adds to the retail food prices.

food and energy prices were hurting the chinese economy, and now that oil prices have come down, it should easy food and energy inflation.

because of the high inflation, businesses have raised the wages of workers thus eroding the competitivenes of the labour-intensive industries.

labour costs, transportation costs, energy costs and raw material costs were the main reasons given for the slowing manufacturing sector and overall slower growth in the chinese economy.

it will also help the consumer as fuel costs will take up less of their disposable income and hopefully increase consumption.

oil prices going down will help china and other emerging economies.

it will hurt russia since they depend on oil revenues for their fiscal revenues and growth.

 

[itaskol]

to help private companies like Reliance

why?

 

[Skyline]

IOC has asked to increase oil prices in Sri Lanka yesterday.

 

[itaskol]

this is good news for the chinese economy.

high oil prices have contributed greatly to inflation, both energy and food.

transportation costs have gone sky high due to high oil prices and hurt chinese companies margins and manufacturing competitiveness.

high oil prices have also contributed to high food prices as agricultural machinery uses oil to operate and high transportation costs adds to the retail food prices.

food and energy prices were hurting the chinese economy, and now that oil prices have come down, it should easy food and energy inflation.

because of the high inflation, businesses have raised the wages of workers thus eroding the competitivenes of the labour-intensive industries.

labour costs, transportation costs, energy costs and raw material costs were the main reasons given for the slowing manufacturing sector and overall slower growth in the chinese economy.

it will also help the consumer as fuel costs will take up less of their disposable income and hopefully increase consumption.

oil prices going down will help china and other emerging economies.

it will hurt russia since they depend on oil revenues for their fiscal revenues and growth.

and it is also good for pakistanis economy. because around 80% oil consumption of pakistan depends on their oil import.

 

[Ignited Mind]

I see a direct relation of economy and oil prices and even in 2008 same thing happened. It went to less than 2 $ a gallon.

Crude is a major input in production of goods and services. Lower economic growth or recession mean less production => lower demand of crude => lower price of crude.

 

[third eye]

Would somebody please tell this to the Oil companies & Govt of India ?

 

[SamranAli]

and it is also good for pakistanis economy. because around 80% oil consumption of pakistan depends on their oil import.

here in Pakistan prices are being decreased too by Rs. 4 and some paisas. Anyway good news. Enjoy