Dropping! Dropping! Dropping! Oil keeps falling

Looks like the $50 per barrel oil as predicted by Lindsey Williams is coming to fruition.

Oil traders made their biggest bet yet that the Organization of Petroleum Exporting Countries will fail to prevent crude prices from plunging below $30 a barrel.

www.bloomberg.com...

Will the Arabs soon get to know their camels better or will the western world beat them to it (getting to know mammalian transport, that is?)

All I know is that I certainly appreciate a bit of relief at the pump. Kind of locked into my current vehicle for another 6 months or so, not so easy to just go out and pick up a hybrid...

My prediction: the price of oil will continue to drop until we quit discussing conservation and alternative fuels.

At that point, it will go up again.

Of course

The fundamental reason it dropped is because wallstreet thinks there is going to be a huge decline in demand. Which doesn't exactly spell out good things for the economy. However it can only benefit the economy if you think about it, a lot of costs should go down. Which will make things a tad more affordable again.

The only question is, when are things like the price of food gonna reflect this?

reply to post by djpaec


I've been wondering if the election might have been one of the reasons the cost of fuel went down?

And I'm like you...I want to know when food costs going to go back down? It's funny how when the price of gas went up, rising food costs seemed to follow shortly thereafter but not vica versa. I keep waiting for the price of food to go down since fuel has been so much cheaper, but it still hasn't happened.

reply to post by cornblossom


Doubt it will happen, with food and other stuff. The dollar is worth less, therefore it takes more of them to buy stuff, I think. Am I right?

reply to post by cornblossom


The rate of food prices declining will depend on the amount of suppliers. If you live in an ag based city like myself, you have already seen prices go down, albeit slowly. If the farmer next door is selling more at lower prices you have to compete by lowering your prices as well. If you live in a highly urbanized area, there are probably fewer, larger business that don't have to compete as aggressively so they can maintain high prices longer and milk the profits as long as they can.

I think oil was a bubble just like the housing market and the nasdaq. It was artificially inflated and now it is returning to a balance on the market.

reply to post by djpaec

good point, they told us that food prices had to increase in direct relation to gas prices because of transporting costs...so where are the savings? should it not go DOWN as a direct result also? excellent point. star!

i don't see food prices going down until the price of corn falls some more. there is still a large portion of the corn crop going to ethanol which is keeping the price of corn inflated once corn deflates the prices on everything else will come back down

Originally posted by djpaec
The fundamental reason it dropped is because wallstreet thinks there is going to be a huge decline in demand. Which doesn't exactly spell out good things for the economy. However it can only benefit the economy if you think about it, a lot of costs should go down. Which will make things a tad more affordable again.

The only question is, when are things like the price of food gonna reflect this?

low oil prices are bad for the US economy in a world wide recession/depression.
Oil is bought in US dollars, with more and more countries going into recession the demand for oil is dropping. less demand for oil and lower prices = less income for the US as well as the oil producing countries.

The US would do better if oil rose over $200 dollars a barrel, even with reduced consumption they would get a higher return.

Food prices went up because
1. corn raising in value because of ethanol production
2. the price of oil was over $100 a barrel
3. the price of diesel fuel went thru the roof
4. farmers had to pay more for fertilizer
5. ranchers had to pay more for feed for the cows

reply to post by chickenshoes


Well inflation will definately play a huge factor. But the dollar is doing fairly well again currencies that were stomping us before.
finance.yahoo.com...

Also to what SuperSecretSquirrell said here's a link to back him up. I forgot about this article that I read 3 weeks ago.

consumerist.com...

reply to post by munkey66

Heh, I didn't know the petrodollar played such a importent role. I mean shoot 10 years ago oil was at $20 a barrell and we were doing fine.

Originally posted by djpaec
reply to post by munkey66

 

Heh, I didn't know the petrodollar played such a importent role. I mean shoot 10 years ago oil was at $20 a barrell and we were doing fine.

10 years ago you didn't have a sub prime mortgage problem.
10 years ago economies where booming.
10 years ago China and India started booming as economies and had an insatiable thirst for oil meaning that sales where strong.
10 years ago bread was half the price it is now.

strangley enough it was around 10 years ago that Suddam Hussein started selling oil for Euros rather than the US dollar.
You may want to also find out when Iran swapped from US dollars to euros to sells oil, because you may find that that was the same time Iran became a nuclear threat to the west.

Oil plays a very big role in the US economy, why do you think that oil is brought with US dollars from OPEC and not in other currencies like the Russian ruble or Chinese yuan?

This is great news for my stupid gas guzzlers. I have been trying to fashion some sort of cart to attach the dogs too, but until it is perfected I will have to rely on my darn V8's. How fast can three mutts pull a cart?!