Oil prices down

iVillage Member
Registered: 01-02-2008
Oil prices down
22
Tue, 05-27-2008 - 5:01pm

Oil drops below $129 a barrel on demand concerns

By JOHN WILEN, AP Business Writer 1 hour, 44 minutes ago

NEW YORK - Oil prices dropped below $129 a barrel Tuesday, falling sharply on a growing sense that soaring gas and oil prices have cut demand for fuel during the normally busy summer driving season. At the pump, meanwhile, retail gasoline prices rose, but only slightly, leading to renewed speculation that gas may follow the normal seasonal pattern of peaking around Memorial Day and then declining over the summer.
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Although Energy Department data showing demand for gasoline over the Memorial Day holiday period won't be released until next week, Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J., said "it definitely was lower than (previous) Memorial Day weekends."

Tuesday's oil price decline was notable in that it came in the face of news of supply problems in Mexico and Nigeria that could have driven oil prices higher. That's an indication that demand concerns are weighing on the market, giving investors reason to pull back from record high oil prices set last week, said Stephen Schork, an analyst and trader in Villanova, Pa.

"I would be surprised to see that the (demand) numbers were stronger ... than had been anticipated," Schork said.

Light, sweet crude for July delivery fell $3.34 to settle at $128.85 a barrel on the New York Mercantile Exchange, but fell as low as $128.18 in after-hours electronic trading. It was oil's biggest one-day decline since March 31. Prices peaked at $135.09 a barrel Thursday.

Last week's surge in oil prices drove gasoline prices sharply higher just before the long Memorial Day holiday weekend. But those increases appear to be tapering off. The average national price of a gallon of regular gas rose only 0.1 cent overnight to a record $3.937, according to a survey of stations by AAA and the Oil Price Information Service.

"I think that we're going to see that that is the peak or very close to it," said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Winchester, Mass.

Lynch thinks energy investors are selling on recent data showing that Americans are driving less due to high prices — including weekly Energy Department reports that demand for gasoline is falling, a Federal Highway Administration report showing Americans drove fewer miles in March and a AAA survey released before Memorial Day predicting that fewer people would hit the road over the long weekend.

"If present trends continue, we could be heading for the first annual drop in gasoline consumption in some 17 years," said Edward Meir, an analyst at MF Global UK Ltd., in a research note.

If oil prices continue to fall, gas prices may not reach $4 on a national basis as some analysts have predicted. Still, prices are already above $4 in many parts of the country, and average more than $4 in 11 states and the District of Columbia.

Diesel prices also rose slightly Tuesday to a new record national average of $4.768 a gallon, according to AAA and the Oil Price Information Service. High diesel prices are part of the reason prices for consumer goods and food are rising.

Oil prices were also pressured Tuesday by the dollar, which gained ground against the euro. Investors who buy commodities such as oil as a hedge against inflation when the dollar falls tend to sell when the greenback strengthens. Also, a rising dollar makes oil more expensive to investors overseas.

Investors shrugged off a number of events that could have sent oil prices higher, including reports that crude oil production in Mexico fell by 13 percent in April compared to the previous year, the temporary shutdown of a North Sea oil platform and the latest in a spate of oil-pipeline bombings in Nigeria.

In other Nymex trading Tuesday, June gasoline futures fell 1.3 cents to settle at $3.383 a gallon, and June heating oil futures fell 6.64 cents to settle at $3.7992 a gallon. June natural gas futures fell 5.6 cents to settle at $11.801 per 1,000 cubic feet.

In London, July Brent crude futures fell $4.06 to settle at $128.31 a barrel on the ICE Futures exchange.

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iVillage Member
Registered: 01-02-2008
Tue, 05-27-2008 - 5:03pm
For the first time in my life, I really am cutting out driving experiences because of gas prices. We won't be going up to NorCal to visit family this summer, and we stay in town for all shopping and entertainment needs.

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iVillage Member
Registered: 08-18-2005
Tue, 05-27-2008 - 6:01pm
I too am cutting out alot of my driving. I'm walking around town
iVillage Member
Registered: 08-16-2005
Tue, 05-27-2008 - 7:06pm
Off topic, but where in NC?


iVillage Member
Registered: 01-02-2008
Tue, 05-27-2008 - 7:44pm
You are in NorCal!? Too funny! Santa Rosa/Napa area :)

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iVillage Member
Registered: 08-16-2005
Tue, 05-27-2008 - 7:48pm
We are in the Triangle....work from Myrtle Beach most of the summer :)


iVillage Member
Registered: 03-19-2003
Tue, 05-27-2008 - 8:31pm
NOw a PA resident but used to be a NC resident in Davidson County near Winston-Salem

iVillage Member
Registered: 08-16-2005
Tue, 05-27-2008 - 8:34pm
Awww, I went to ASU for undergraduate and drove to the mall there all the time!!!




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iVillage Member
Registered: 04-10-2008
Wed, 05-28-2008 - 12:30am
I am sure your not talking about Arizona State University??
iVillage Member
Registered: 08-16-2005
Wed, 05-28-2008 - 5:17am
Appalachian :)




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iVillage Member
Registered: 03-19-2003
Wed, 05-28-2008 - 6:42am
A lot of kids that lived our way go there.

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