Look at what is working to lower the cost per barrel of oil.


Oil drops below $129 a barrel on demand concerns By JOHN WILEN, AP Business Writer
1 hour, 44 minutes ago

Oil drops below $129 a barrel on demand concerns - Yahoo! News

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.

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.

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All I have seen teaches me to trust the Creator for all I have not seen.
Ralph Waldo Emerson

NEDA The World watched You die For freedom

The funny thing is that this was predicted when the price went to a hundred...

They're probably sitting at their mahogany desks saying "Wow...I was off by a mile!"...

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"You get the respect that you give" - cnredd

I think rather than demand, it's speculation, and it isn't that significant anyhow. The biggest single day drop since March 31st isn't exactly saying something.

As it turns out, that's yesterday's news.

The short and possibly mid-term demand for oil is relatively inelastic. There is no immediate substitute and conservation only goes so far.

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Man is the only animal that blushes, or needs to.-- Mark Twain

I never thought it would last long... lol

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All I have seen teaches me to trust the Creator for all I have not seen.
Ralph Waldo Emerson

NEDA The World watched You die For freedom

Gas will peak and then drop-but to a higher level. We will never see 3 dollar a gallon gas again even if the barrel of oil drops to 50 cents.

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Huh? Currenty about 70% of the cost of a gallon of gasoline is the cost of the crude oil needed to produce it. By my calculation $.50/barrel oil would equate to gasoline near or below $1.00 considering that transportation of the fuel would be massively cheaper to go along with the cheaper oil.

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Man is the only animal that blushes, or needs to.-- Mark Twain

Have you ever seen the price of anything go back down? Like they find a better and cheaper way to refine sugar or something and then the company directors are going to pass that on to the consumer? Won't happen.

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Well, I suppose you're right because if oil companies earn about 1% more profit than the average company some politician will surely come along and confiscate those 'excess profits'. Oh wait, that already happened.

So to your point, I'm not at which stop along the way to market excess profits will be taken, but I'm sure the government will find a way to tax those profits so that the American public continues to get screwed.

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Man is the only animal that blushes, or needs to.-- Mark Twain

I tried looking up just exactly how much the gasoline is taxed and for what purpose. And I'd like to know what the oil companies themselves are taxed. Maybe I looked in the wrong places, but I came up with very biased statistics one way or another. I'd like to see an official report of just the percentage of tax.

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Good questions, but of course it varies by state and on down...

Taxes on gasoline are much lower than in Europe, but on the flip side many nations actually subsidize it (China, India, and so on). That's the biggest reason that oil keeps rising ... no matter how much we try to 'conserve' here in the US other developing nations will continue to pay whatever investors push the price to because of their rapid growth. China is lending the US money these days. They don't care about higher oil prices, they will use however much they want to use...

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Man is the only animal that blushes, or needs to.-- Mark Twain