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.
winter gasoline blends, are easier to make,
so usually cost less.
related, but not discussed here,
is that the price of fuel ethanol
has dropped a bunch,
from five bucks, to 2.28 September future
What does it mean?
Is it?
Watch that Natural Gas, as well....
http://www2.barchart.com/mktcom.asp
$3.199 yesterday in the Coachella Valley...down from 3.299 around 3 weeks ago.
We'll see about that. There is no fundamental reason for oil to be $70+ a barrel, and the only surprise is that such prices were sustained as long as they were.
:)
It's Bush's fault!
I realize that this question considers only the demand coming from the US consumer and does not consider demand from emerging markets, like China, which may still increase despite the rising prices. Thoughts?
Using my Kroger card I can get gas for $249. Not that the media will ever admit that prices have come down.
That is one heck of a drop.
A younger relative who does a lot business with gasoline refineries said that there should be another significant drop after Labor Day.
Have you been checking the prices that other Freepers have been posting in other states.
We are still paying for the MTBE and botique gas blends as well as paying California sales tax on each gallon, which may include federal taxes.
Welcome. I don't think you're going to be particularly happy on this forum. We don't like nanny states.
The price variance is incredible. We have all types of State taxes for road work which never gets done.
Then we have a Ca sales tax 7.5%+, and that may be based on the gas plus state and other taxes.
Oil is down again today. The topical question should be whether this price drop will eventually cause a recession in the oil industry.
Off topic but has anyone noticed that Mobil has started to change their price spread on regular to super? My local station was charging a .32/gal difference today.
Twenty a gallon is a rip. Thirty-two cents is thrust the blade in a turn.
... exacerbated by evil George W. Bush's draconian economic policies, thereby further punishing minority children and senior citizens!!
How's that? I'm auditioning for a position with the DNC writing press releases.
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