Oil drops below $90 for 1st time since October

[Omaha Steve]

Source: AP-Excite

By CHRIS KAHN

NEW YORK (AP) - The price of oil dropped below $90 per barrel Wednesday, the latest milestone in a weekslong decline brought on by uncertainty surrounding economies from Europe to China.

Benchmark U.S. crude fell by $1.95 to end at $89.90 per barrel. Oil has tumbled more than 15 percent this month and is at its lowest level since Oct. 21. Other commodities such as copper and cotton fell sharply as well. Stocks markets in Asia and Europe fell sharply, while U.S. markets erased most losses with a late-day rally.

Analysts say oil is in an extended slump that should lead to cheaper gasoline and other petroleum-based fuels this summer. Gasoline, which is made from oil, already has dropped by nearly 26 cents per gallon since early April. The national average is now $3.68 per gallon; some experts say it could fall as low as $3.50 by Independence Day. The average price of diesel fuel is below $4 for the first time since February. It's good news for an economy that has slowed down since last year's fourth quarter.

"This is a good thing for the consumer, that's for sure," independent oil analyst Andrew Lipow said.

FULL story at link.



Read more: http://apnews.excite.com/article/20120523/D9UUKMK00.html

[cstanleytech]

1. Cue the doom and gloom predictions from the far right over low oil prices! nt

[strategery blunder]

2. I'm certainly not seeing much in the way of drops around here :(

I wish I could get me some of this mythical $3.68 gas! It's stuck at 4.15 here in Western Washington, seeming completely detached from any decline in oil prices (but of course it goes up immediately when a barrel of oil goes up by one cent!).

[Iliyah]

3. Credit Mittens for the decease in oil prices

that will be the heading in tomorrow's news cycle.....

[SoutherDem]

6. Well FOX already said low oil was a sign of a weak economy

So giving Rmoney credit would be the next step.

[onehandle]

4. I paid $3.30 while driving through Virginia last week. nt

[unkachuck]

5. "Benchmark U.S. crude fell by $1.95 to end at $89.90 per barrel."

....does anyone have a simple formula to reflect what $90 crude should be per gallon at the pump?

....I think my weaselly gas station is charging me more than they should....

[bluesbassman]

10. It should be approx 3% of the barrel cost. Should be at $2.97 for current oil pricing.

So at $89.90 x .0033 = $2.97 a gallon for gas. We are in the formulation change period (summer gas) so the prices generally get a little higher for the change period, but holy cow, we're still paying well over $4 a gallon here in the Bay Area!

[unkachuck]

13. thanks bluesbassman....

....good info....

....$4.09 for premium here (Midwest) and it's usually a dime between mid-grade and another dime between regular....so that puts regular over here at about $3.89, way more than $2.97....

....the big-oil weasels are quick to jack-up their price per-gallon when crude rises but they sure drag their feet lowering the price when crude drops....

[Spider Jerusalem]

12. It's not that simple because oil isn't really $90 a barrel

West Texas Intermediate isn't the benchmark for most of the oil drilled in the US or imported into the US; Brent crude is the global benchmark and it's trading at $106. See here: http://www.calculatedriskblog.com/2012/05/oil-and-gasoline-prices-and-reversal-of.html

[unkachuck]

16. thanks Spider Jerusalem but we have to keep it simple for the mathematically impaired like me....n/t

[Drunken Irishman]

7. DAMN THAT OBAMA...oh wait...

[Grassy Knoll]

8. FOX : lower gas prices is bad....

This has got to be the stupidest fake news organization in the world.

[klook]

9. Thank you, Mr. President!

I got that right, didn't I? The president sets oil & gasoline prices by fiat, correct?

That's what I was hearing from the Republicans a couple of months ago, anyway, so it's gotta be true!

[freshwest]

11. OMG! The sky is falling and it's all Obama's fault!

[jillan]

14. Since it is President Obama's fault when prices go up - shouldn't he be getting credit when they go

down?

Nope - that would mean saying something nice about our President.

[Turbineguy]

15. No.

It's also Obama's fault when it goes down. Remember, when the price goes down, well, it goes down. And some say, that's a bad thing.

[AnotherWyoDemocrat]

22. Yes!! Thanks, President Obama

Another post on DU about the "Progress at Iran on Nuclear Talks" surely must be affecting the oil prices. Good, sensible planning, Mr. President!

[Journeyman]

17. Not helping much here in South California. All around me its $4.15 to $4.35 a gallon . . .

[sarcasmo]

18. Then why are we still at 3.89 in Michigan?

Alabama was 3.31 on Sunday and I get to Michigan and it's 3.89. The taxes in this state must be off the charts.

[Glitterati]

19. 3.36/gal in NGeorgia on Tuesday

We will probably see saw a bit with the holiday weekend, but hopefully it will keep dropping for a while.

[riderinthestorm]

20. Gas just went up .10 at my corner station, still above $4/gal far western Chicago suburbs... nt

[sofa king]

21. "Why Obama's Cracksown on Oil Speculators Won't Work"

Businessweek, April 17, 2012:

http://www.businessweek.com/articles/2012-04-19/why-obamas-crackdown-on-oil-speculators-wont-work

Looks like it was a little more simple than Businessweek made it out to be.

[NickB79]

23. Same thing happened the last time the global economy went into recession

Oil dropped from $140/barrel all the way down to $40/barrel as demand destruction around the world set in.

If you don't see the writing on the wall of what's coming, you really haven't been paying attention.

[Thrill]

24. Yet gas is still well over $3.00

Price gouging

[Hawkowl]

25. $4.13

In Portland Oregon.

[sarcasmo]

26. 3.87 in Michigan, the only thing that makes sense is greed.