Oil falls from record high above $74

ABC/al-Reuters ^ | 4/20/2006

[B Knotts]

LONDON (Reuters) - Oil prices fell on Thursday after setting a fresh all-time high above $74 a barrel as some investors took profits across booming commodity markets.

Prices also slipped as Royal Dutch Shell said it expected to restart a key Gulf of Mexico oil and gas field by the end of May, ahead of plan. The 140,000 barrel-per-day Mars platform was damaged by Hurricane Katrina last year.

London's Brent crude was down $1.24 at $72.50 a barrel by 1610 GMT, having earlier in the day hit an all-time high of $74.22. U.S. May crude was down $1.27 at $70.90, having hit an all-time high of $72.49 earlier.

"It's not surprising, given the levels that we've got to, that there is some profit-taking going on," said Kevin Norrish, an analyst at Barclays Capital in London.

Prices had hit new peaks after the U.S. government on Wednesday reported a larger-than-expected drop in gasoline inventories, adding to concern created by supply losses in Nigeria and the row over Iran's nuclear program.

[RayChuang88]

They can't maintain those prices for long--period. Recent US government statistics show that the increase rate in gasoline usage normal at this time of the year is quite a bit lower than what happened last year, which tells me gasoline is more an economically elastic (e.g., price sensitive to consumer) product than people think. If the trend continues of lower gasoline usage expect price cuts by mid-summer because the petroleum companies can't keep all that high-priced crude oil sitting around.

[gogogodzilla]

That makes perfect sense in a free market.

However, we currently see high levels of oil stocks in America... which means that the demand for crude oil is lower... which is somehow increasing the price of oil?

So, I don't expect the price of oil to drop on the sound free market principle of a reduced demand reducing prices.

Elsewise, we'd be seeing it happen in the right here and now.

:-(

[Old Professer]

Spoken like a true Chinese water-torture victim with a new paper towel.

[SunkenCiv]

FReep this poll:

http://www.freerepublic.com/focus/f-news/1618602/posts?page=11#11

[thackney]

Senator Mike DeWine has voted against drilling in ANWR four times

Bill Pierce, US GOP Senate Candidate to Unseat Mike DeWine in Ohio, on ANWR and Energy
http://www.freerepublic.com/focus/bloggers/1618628/posts?page=1

[Convert from ECUSA]

Poll FReeped. Thanks!

[Lunatic Fringe]

Yes, some people don't realize that "adjusting for inflation" doesn't take into account that many of us don't get wage increases that match inflation.

According to inflation calculators, the salary I make today is a couple thousand dollars below the salary I made in 1998.

[SunkenCiv]

...if every auto would burn just a gallon less per week (that means the driver of course)...

http://www.onlineconversion.com/volume.htm

42 gallon [US, liquid] = 1 barrel [US, petroleum]

2,000,000 barrel [US, petroleum] = 84,000,000 gallon [US, liquid]

There are in excess of 200 million vehicles; if only 84 million burned one less gallon per week...

Bush warns looters, urges Americans conserve gas
Reuters | Sep 1, 2005 | Steve Holland, Caren Bohan, and Adam Entous
Posted on 09/02/2005 6:26:15 AM PDT by grundle
http://www.freerepublic.com/focus/f-news/1475533/posts

[http://www.freerepublic.com/focus/news/1473964/posts?page=169#169]

[pctech]

I don't know if this is worse, but right now my income level puts me below poverty level. What does that say??

:-))

[iThinkBig]

"$80/barrel?

I expect to see $90-100/barrel by the end of summer..."

We'll see, I hope your wrong.

[iThinkBig]

"However, we currently see high levels of oil stocks in America... which means that the demand for crude oil is lower... which is somehow increasing the price of oil?

So, I don't expect the price of oil to drop on the sound free market principle of a reduced demand reducing prices."

Your are correct. What is really messed up is heating oil. $2.50 a gallon here in the North East. Thank God we had a mild winter, I burn about 200 gallons a month when it's cold. Their is a MAJOR surplus of heating oil this season, but the price went UP!

[iThinkBig]

"the difference is in the 70's there was a savings rate. so many people today live on the edge of financial disaster plus these high prices are sustained not a spike like happened in the 70's i'm in sales and i see peoples discretionary spending going out the window. this whole mess is going to hit the economy soon"

Yes it is. I made $94k last year, live in Maine and have low debt. I live comfortably, but 3 years ago I would have considered myself almost wealthy. Now our family is just paying the bills and I can only save about 5% for savings and vacations vs. 15% three years ago. I can't imagine how families who make less then $60k a year are even making it up here in the Northeast. Guess you can always eat bologna, rent videos and have no health insurance...

[gogogodzilla]

Well, oil hit $75/barrel today... and it doesn't look like the trend is stopping.

Figure it'll hit $80 within the next 2-3 weeks.