Posted on 08/29/2006 7:07:13 AM PDT by shrinkermd
LONDON (AP) -- Oil prices fell below $70 a barrel Tuesday as Tropical Storm Ernesto veered away from the oil and gas region of the Gulf of Mexico, easing concern that output would be disrupted. Light sweet crude for October delivery on the New York Mercantile Exchange fell 85 cents to $69.76 a barrel in electronic trading by afternoon in Europe. It last traded below $70 on Aug. 18.
The fall extended a $1.90 drop on Monday, when it settled at $70.61.
October Brent crude at London's ICE Futures exchange dropped 86 cents to $69.96 a barrel.
Royal Dutch Shell PLC said it plans to return workers to rigs and platforms in the Gulf of Mexico after Ernesto, which struck southern Cuba yesterday, moved northeast on its way to Florida and South Carolina. That means the storm will bypass the eastern and central gulf, where most U.S. offshore oil and natural-gas facilities are located.
Concerns about threats to supply were further eased when BP PLC said it had restored output from its Prudhoe Bay field in Alaska to about 200,000 barrels a day, half the daily production capacity.
The partial production shutdown at the giant Prudhoe Bay field in the U.S. state of Alaska is expected to make an impact on U.S. oil inventory statistics due Wednesday.
U.S. commercial crude stocks are expected to have fallen by an average 1.2 million barrels in the week to Aug. 25, a Dow Jones Newswires survey of eight analysts showed.
Gasoline inventories likely drew 900,000 barrels as the country approaches the end of the summer driving season, while distillate stocks, comprising heating oil and diesel, probably rose 1.2 million barrels, the survey showed.
Traders also remain watchful of other market movers, such as Iran's stand-off with the West over its nuclear program.
Traders are concerned that Iran, the world's fourth-biggest oil producer, could block oil exports if the United Nations imposes sanctions over its nuclear program. Tehran faces a Wednesday deadline to halt uranium enrichment or face possible economic and diplomatic sanctions, but has so far refused any immediate suspension of its nuclear program.
"Moving in the international framework is not a matter of concern for us," government spokesman Gholam Hossein Elham said Monday.
Iran is a leading global oil exporter and has made threats in recent months to choke off the Strait of Hormuz -- where some 20 percent of the world's supply passes through every day -- in retaliation for sanctions.
In other Nymex trading, natural gas futures declined 28.2 cents to $6.190 per 1,000 cubic feet, while gasoline futures rose marginally to $1.7910 a gallon, and heating oil futures rose 0.1 cent to $1.9660 a gallon.
We've got tons of energy sources HERE!
If all else fails, hang the environazis and invade Canada and Mexico.
Hell, let's hang them anyway.
Of course I say that metaphorically, as a former petroleum engineer.
No... really. Let's hang them with the finest organically grown metaphorical hemp rope from the tallest old growth oak we can find.
This was beyond commentary, beyond eloquent...it's artistry.
I'm not going to go trade in my Explorer because gas prices went up. When I finally do, sure, I'll buy a vehicle with better fuel economy. Lots of people think like I do; they may already have their current vehicle paid for. It's cheaper to buy more gasoline.
Guy down the street, now...he drives the hand me down vehicle, his wife gets the new one. His old daily driver was an Expedition; his wife's new vehicle is a Liberty.
I think people are reacting in ways that make financial sense. Toyota is importing every Corolla it can because they can't keep up with demand; Ford is cutting thousands of trucks out of the production schedule.
Does the acronym OPEC mean anything to you?
I think world demand wlll continue to grow, even if the US market levels off or drops. World supply is growing, also. In a few year's time we may be back to the point where OPEC decides what the price should be. Several years ago, their target price was $22-$25 per barrel. I think you can expect them to keep the price in the neighborhood of $50.
You can run regular in a car designed for premium, and the knock sensor will dial back the ignition advance so that it doesn't knock.
Check your mileage. I think you'll find it's lower when you use regular grade.
...directly below the occupied nest of a spotted owl.
I doubt the oil companies need any real excuse to raise prices as they see fit.
I was surprised, however, to see prices go DOWN after the threatened upswing when they found the corrosion in the Alaskan pipeline.
Bush... So all-powerfull and all-knowing. heh If he could do half the stuff they blame him for...
THIS JUST IN:
"Oil Prices Drop Below $70 a Barrel, Democrats Hardest Hit."
It's $2.40 in DSM,IA tonight.
Well this was predicted to happen when school started and summer vacation driving was over; happens EVERY YEAR...LOL
>>$69.76 a barrel
Now, that's a price I can live with and survive.
In a stable ME, perhaps you are right. I predict that Iran will threaten and drive futures higher in the next six weeks or so.
Above comment is typical of the thinking of many, on both left and right. But consider -- what were the oil companies thinking when oil was way down? Had they all read Mother Teresa that day? Or forgotten to read the conspiracy memo?
The truth is that supply and demand, tempered by fear and greed (which can lead you to either buy or sell) sets prices, but you can't keep prices either above or below current fundamentals forever.
Also, note for those who say gas prices always lead crude going up, but lag going down. Around here I'm seeing $2.69, down from $3.05 two weeks ago, which is 36 cents per gallon, which is over $15 per barrel (42 gal per bbl). And crude hasn't come down anywhere near that much. In other words, all the big bad companies can do haven't been able to hold gasoline from falling a good bit more than crude.
@#$% oil companies. /s
I'm not going to trade in my powerboat either! And gas is even higher at the pier than on the street. :(
I'm not suggesting that people make draconian changes in their lifestyles or do anything that does not make financial sense. However, if we could all make some small efforts to reduce needless fuel consumption it could help keep a lid on gas prices and reduce dependence on foreign oil. It just seems to me that everyone is complaining about high gas prices but not that many people are actually doing something to help reduce those prices. Then again, I live in the suburbs of a major metropolitan area so maybe my view is distorted.
I am trying to be more efficient in my driving (and boating) habits. By the way, one of our cars is a Corolla.
Yeah, the same guy that the Dems once thought too dumb to be president is now the puppet master behind every conspiracy. They can't have it both ways. Oh....wait a minute, I guess they can since the liberal media won't remind us that the Dems used to portray Bush as a simpleton.
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