Analysts Ponder If Oil Bubble's Burst

Oil Recorded Another Drop Friday, Placing It Almost $20 A Barrel Lower Than Its Peak

(AP)  The price of oil recorded its biggest weekly drop ever, and a gallon of gas finally pulled back from its record high. So is it time to declare the energy bubble popped?

Experts won't go that far just yet.

"It's too early to say we've seen the worst of it," said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, New Jersey "We would be Pollyannish if we believe one week represents a trend."

Still, with oil recording yet another drop on Friday, some industry experts who just days ago thought there was more juice left in oil's meteoric run are reconsidering.

"If this is not the bubble's implosion, than it's a reasonable facsimile," analyst and trader Stephen Schork said in his daily market commentary. "Time will tell. Nevertheless, for the time being we no longer care to hold a bullish view."

Light, sweet crude for August delivery fell 41 cents Friday to settle at $128.88 on the New York Mercantile Exchange - well below its trading record of more than $147 a week earlier.

The average price of a gallon of regular gas fell about a penny for the day, to $4.105 according to auto club AAA, the Oil Price Information Service and Wright Express. Diesel prices dipped three-tenths of a cent to $4.842 a gallon.

Some analysts said a nationwide average of $4 or even lower could be in the offing - almost unthinkable in a summer when there has seemed to be no relief at the pump - although they cautioned that there is no guarantee prices will stay low.

"We're going to see some relief from that relentless march higher," Kloza said.

Gas may be getting just a bit cheaper, but major changes in how Americans live and drive are already in motion.

Car buyers have been fleeing to more fuel-efficient models. U.S. sales of pickups and sport utility vehicles are down nearly 18 percent this year through June, while sales of small cars are up more than 10 percent.

While slashing production of more-profitable trucks and SUVs, automakers have been scurrying to build their most fuel-efficient models faster.

Toyota Motor Corp., which hasn't been able to keep up with demand for its 46 mpg Prius hybrid, said last week it will start producing the Prius in the U.S. and suspend truck and SUV production to meet changing consumer demands.

Ford Motor Co. and General Motors Corp. also have announced plans to increase small car production, and GM has said 18 of the 19 vehicles it is launching between now and 2010 are cars or crossovers.

Some brave traders used the week's pullback in oil prices as a chance to buy barrels that suddenly seemed to be on sale. But oil analysts were advising investors to beware.

"Buying here is an opportunity if you are a deep believer in $200 (a barrel), otherwise we think that caution would be better applied," analyst Olivier Jakob of Petromatrix in Switzerland said in a research note.

If oil buyers sense that the slide was overdone, you'll probably notice at the pump quickly.

"If (oil prices) rebound, you're going to see a quick reaction at the gas station, because their profit margins are so stretched," AAA spokesman Geoff Sundstrom said. "They may be very fast bringing prices back up."

In other Nymex trade, heating oil futures fell 5.23 cents to settle at $3.6915 a gallon while gasoline futures edged up 0.73 cent to $3.1709 a gallon. Natural gas futures rose 3.3 cents to $10.57 per 1,000 cubic feet.

In London, Brent crude futures for September delivery rose 88 cents to settle at $130.19 on the ICE Futures Exchange.

[sistatee-2009]

"..experts who just days ago thought there was more juice left in oil''s meteoric run are reconsidering."

In other words, the experts don''t have a clue whether the price of oil is going up or down. But, we''ll have to listen to them day after day after day anyway.

[oneamerican-]

Now that they have less to whine about, the drop in oil prices is just one more thing to make the liberal whiner''s heads *pop*.

Not a good week for the liberal Bush-basher moonbats!

Yippee!

[rudy654-2009]

Oh please. Stupid article and then stupid people (fascists) commenting. The fact is Americans cut their use dramatically and now the speculators are regrouping to see what they can do. Prices have not gone down at the pump, as I was just there. Furthermore, this is typical of the last 8 years of price gouging. Just up the price to where the consumers are about to choke, then back off a little bit for just a few months. Then wait for a natural disaster, a potential threat of war, some politically shopped photos of scary missiles, or some other crackpot thing and then start the prices moving upward again. Yep, we''ve been here before folks, every year for last 8 years.

[rudy654-2009]

"Gas may be getting just a bit cheaper, but major changes in how Americans live and drive are already in motion."

There it is folks. Now, in a little while big oil will begin to cut production and claim there is an oil shortage caused by liberals and that more drilling on the moon will solve the problem. Oh, and don''t look our profits. We are just accidental victims of all that profit and blame the liberals anyway.

[timothyone-2009]

"Not a good week for the liberal Bush-basher moonbats!"


Bush-basher moonbats???? I know of not a single man, woman, or child, either here or abroad, who isn''t bashing Bush. Even the most retarded Republicans I know have seen the scumbag for what he is. People like you are the reason Germany outlawed Nazi apologists after WWII. We now need to tattoo TRAITOR across the faces of people who can''t give up their addiction to greed and fascist power. You better go wash your face, scum!

[samthetvcat]

pt 2


Like what if airlines who have been scrimping on fuel to save costs start to have to make emergency landings such that the FAA is forced to enact fuel minimums which thereby bump up demand? How easy is it going to be to retrofit homes with heating alternatives to oil this Winter (ie how much more can people curb demand)? What if transit companies start raising fare prices to take advantage of the boom in demand? What if talks break down with Iran or they try to play hardball at the bargaining table? What if China starts flooding the international market with US bonds such that the dollar tanks?

Also, what other industries are making money right now, so doesn''t that make oil relatively speaking more attractive? Who else here thought gold was peaking at $700 in 2006? There''s just not many other places for those fund managers to go . . . so like if demand starts to rise again rather than decline, then doesn''t it seem like probably the investors are going to the the blip into a flare?

I don''t know . . . maybe it''ll go down way down before it goes way up again, but how is it not going to eventually go up in the long run? :(

[samthetvcat]

pt 1
Aren''t oil prices a reflection of actual demand with the speculators just exaggerating the highs and lows because they follow actual demand? There was a 3 million barrel surplus last month which means that yeah people (and like the airline industry) ARE drastically cutting back. And yet yeah prices AREN''T yet decreasing to reflect the shift. And as well inflation has creeped into other areas of spending. And Bush finally diffused the situation with Iran. And the dollar has made gains against the Euro now that Bernanke''s stopped the rate-cutting.

I kind of feel like it may be a negative bubble because it''s like the perfect calm (as opposed to the perfect storm) of all the things that could have possibly gone right that seemed like it would never happen - cutting demand and Bush resorting to diplomacy. But oil is such a valued commodity, and there''s so much that makes the chain of supply vulnerable to shocks.

[stick1770]

rudy654 your a moron. simple as that. you have absolutely no idea of how anything works. Go put your head back in the sand. IDIOT!

[txgrouch2006]

It''s a little early to say the bubble has "burst." A burst bubble is indicated by a PRECIPITOUS and CONTINUED drop. I wouldn''t call it burst until the price drops by at least one-third. If it''s below $100/bbl next week, I''d say burst.

Based only on the past three days, all you can say is that there''s been a respite in the rampant run-up of the price. But it''s too soon to say it''s burst.

But it''s nice to see the question being taken seriously. Just a few weeks ago, there were so many "speculation deniers" who claimed there IS NO BUBBLE. Asking if the bubble burst at least acknowledges that there IS a bubble.

[rudy654-2009]

IDIOT!


--------------------------------------------------------------------------------

Posted by Stick1770 at 10:53 PM

Expert? LOL! See, if you have to come up with that kind of answer, it usually means you don''t know the excrement comin out your azz.

[edward1975-2009]

With so many eyes now on the oil speculation business, maybe it will continue to drop. Still alternatives have to be sought, why hasn''t ethanol been mentioned, this made from anything green, and with sugar cane dropping, this is the eprfect green for making ethanol, this isn''t the savior of fuel problems, but it could add more relief.

[whiskyrocker]

Minus any major hurricanes and after the Olympics are over crude oil will drop drastically.

[incog-nito]

Yippee! After this drop in oil prices, gas MIGHT go down all the way to $4! Think of all the savings you''ll get.

[beehive21-2009]

keep riding the bikes,walking,it''s going down and the world is watching ,how is it ChevronTexaco,took over the White House ?

[randynason]

Finding out what is really important, people are changing their habits and doing without excess. The "powers that be" are coming to the slow realization that they need us a lot more than we need them.

[samthetvcat]

---"Just a few weeks ago, there were so many "speculation deniers" who claimed there IS NO BUBBLE. Asking if the bubble burst at least acknowledges that there IS a bubble."---
Posted by txgrouch2006

I did say they weren''t speculators in the sense that they were hoarders who had a demand parasitic to actual demand and that they couldn''t be reigned in via market regulation. I still stand by that assessment - like if it was Barack''s belief that the speculation was being caused by the ''off-shore dark markets'' and the ''Enron loophole'' which hasn''t been closed, then why wouldn''t the market still be going up?

[samthetvcat]

PPS I also said it wasn''t ''speculation'' but rather hedging when countries were stocking up on oil to get rid of their US$ - like a stop-loss. Like even if demand stays constant and the dollar starts tanking, oil prices ought to still go up - it has nothing to do with market regulation.

[samthetvcat]

PPS I also said it wasn''t ''speculation'' but rather hedging when countries were stocking up on oil to get rid of their US$ - like a stop-loss. Like even if demand stays constant and the dollar starts tanking, oil prices ought to still go up - it has nothing to do with market regulation.

[jimfinster]

Might be a short term break. However, oil will remain high in the long term.

[whitemale08]

It never was an "oil bubble".

Our economy is full meltdown.

The ''PLANNERS'' are engineering a controlled demolition of the global financial system.

They are about to erect fascist hedge fund cartel Financial Empire where we are in debt from the day we are born to the day we die by carbon footprints.

Instead of inheritng money from your parents you will inherit debt through carbon footprints.

this temporary drop in oil prices is so that Nigeria (who Exxon said today that they''re cutting production) can justify reducing supply so prices can go back up.

Remember folks, that these gamblers on Wall Street have no place to put their money except in oil and commodities.

Also today was a good "profit taking" day for these hedge fund clowns.

[shanev137]

Oil is still up 700% since 2002. This $20 buck drop in prices is not even a blip on the radar screen.

[ofbyfor1]

Remember folks, that these gamblers on Wall Street have no place to put their money except in oil and commodities.

Also today was a good "profit taking" day for these hedge fund clowns.

Posted by whitemale08 at 01:32 AM : Jul 19, 2008

Scary, but true. And isn''t it pathetic that these hedge-fund clowns make millions, but their income tax rate is lower than the average Joe, because it isn''t classified as regular income.

How come is it that people shell out big bucks for a gas saver car - then take off down the freeway in it 80 - 90 miles an hour? Doesn''t that kinda defeat the purpose?

[ofbyfor1]

How come is it that people shell out big bucks for a gas saver car - then take off down the freeway in it 80 - 90 miles an hour? Doesn''''t that kinda defeat the purpose?

Posted by hadenough43 at 02:15 AM : Jul 19, 2008

LOL, yes. Glad I drive a stick-shift Honda Civic at 55 mph. More than 240 miles per 8-gallon fill-up!

I saw a news story today about some lawmaker proposing to bring back the 55 mph national speed limit. Now, if $4.75 a gallon gas ain''t gonna slow us down, what the hell makes ''em think a law will??

[ofbyfor1]

I saw a news story today about some lawmaker proposing to bring back the 55 mph national speed limit. Now, if $4.75 a gallon gas ain''''t gonna slow us down, what the hell makes ''''em think a law will??

Posted by hadenough43 at 02:31 AM : Jul 19, 2008

Good point. But the speeding fines might do it.

[brianbwb-2009]

It has been obvious to most that the price of oil and gas is controlled by a few oligarchs. It is most probable that they have decided to ease up a bit, so that McSame can have a better chance of gaining office, to continue Bush''s work.

Then its back to "bomb Iran" and extend the Iraq genocide, and $250 per barrel oil, amd meltdown of the US economy, which won''t matter to the Bush family,as they have already secured their South American hiseaways, and their Dubai business offices.

[incog-nito]

The 55 mph will NOT work. People just won''t drive that slow, especially in the West. The problem is that cars nowadays have terrible aerodynamics. Those blocky cars and SUVs are like a barn door when it comes to drag coefficient. It used to be that automakers design cars with aerodynamics in mind, but no longer. I used to have an old Saturn that is slow as hell in the city, but has a pointy, sloped profile and can get 35 mpg doing 85 mph all day long.

[shanev137]

It''s really amazing that people can''t figure out they''re being lied to by the media about oil prices.

Then again, it shouldn''t shock me since the masses voted for Bush twice.

[oneworldusa]

Funny, I don''t see an ExxonMobil ad anywhere on this page that happens to refer to fuel prices going down.

[marcosis78]

Prices are fixed in my opinion. Fixed by speculation, the oil companies, and most of all, I REALLY think Bush has something to do with it whether it has something to do at home (ie sucking the reserves for government use) or abroad (ie making deals with the Saudis). I think that people are getting jipped with the bill so Bush and his cronny oil tycoons and his REALLY good friends in Saudi Arabia are getting billions of dollars richer.

[daysrnumbrd]

Drop the prices enough to calm the "fears" of Americans, hopefully enough to prevent the lawmakers from attempting to remove the Enron loophole.

Wait awhile and then go back to raising prices once the mass of Americans become complacent about oil and gas prices once again.

It''s a simple two-step program the elites have played on us for years. They know how to play it well.

Drop the prices enough to calm the "fears" of Americans, hopefully enough to prevent the lawmakers from attempting to remove the Enron loophole.

Wait awhile and then go back to raising prices once the mass of Americans become complacent about oil and gas prices once again.

It''''s a simple two-step program the elites have played on us for years. They know how to play it well.

Posted by DaysRnumbrd
----------------
Not me, when gas gets back down to two bucks a gallon, then call me.

[patriot12436]

How come when someone breathes about something the price shoots up, now the price drops 20 dollars a barrel and gas only drops a penney a gallon ? *** ?

[patriot12436]

I never thought Gor was smart enough to do anything, but i read his energy plan and like it. Get away from opec and tell them where to stick it.

[patriot12436]

I thik the speculators just need to be moticated. Hang a few publicly and see what happens with the price of oil. I wouldn''t mind if we started the hanfings with bush and congress and worked our way to the oil speculators.

[patriot12436]

I have always said it was a direct conflict of interest for a president to own oil wells. This should be illegal.

[juwboy]

brianbwb said:

"...the price of oil and gas is controlled by a few oligarchs" i.e. OPEC.

I`ve said it here before and I`ll say it again. Cartels have been broken in the past by targeting a member with a weak economy and offering to buy more product from them at a lower price so they`ll make more money.

The weakest member of OPEC is probably Nigeria. Most OPEC countries, acting in collusion, are not producing at full capacity, a strategy intended to keep supplies low and oil prices artificially high. So, if one or more of them could be persuaded to increase production and sell at a lower price, they would still make more money.

In Nigeria`s case, they are under-producing mainly because of rebel attacks on oil facilities.

It hasn`t been reported here, but the Brits could be laying the groundwork for carrying out my suggestion. In the past week, they`ve been in talks with the Nigerian government about providing military protection for their oil wells, pipelines and storage facilities.

By way of return for this protection, they could very well be bargaining with Nigeria for the purchase of oil at below the OPEC price.

[pepperwood2]

(AP) The price of oil recorded its biggest weekly drop ever, and a gallon of gas finally pulled back from its record high. So is it time to declare the energy bubble popped?

Just how long is it going to take for Mr. & Mrs. America to see some relief of the price of Gasoline & Heating Oil? Heating Oil & Gasoline have & continue to rise in the last week here. It makes the Al Gore Global Warming crowd happy, But come on now these people don''t contribute to or pay for my Gasoline or Heating Oil.

Its time to start passing these savings on to the people. Personally I really don''t care if the Oil Companies are going to make record profits this quarter. The Gouging goes on thanks to our Liberal Congress being bought off by the Oil Lobbyists. Its time for a Real Change.

[patriot12436]

If the price of gas drops back to $3.50 a gallon , the American public will sigh with relief and the gouging will continue as always.

[patriot12436]

incognito
I am returnig to the states in Septemeber. I have to drive from New York to Kansas City, KC to SanAntonio, SA to Tampa, Florida, back to SA, then drive from Sa to Las Vegas. I already decided my top speed will be 55 to save on gas. I am also looking at every way possible to increase my gas mileage.

[jmurrieta1]

But the Bush administration told us repeatedly that no speculation was involved in the oil price run up!

Is it possible that the Bush administration is stupid, lied, or both?

Could it be?

[ajaxtheleast]

My this IS different this election!

The rise and fall of gas and oil before
the last presidential election was NOT, ,NOT
PONDERED by the analysts. If memory serves
I do believe that analysts at that time, ,
ANALYZED it.

Probably have to google that.

[babooph]

If the price stays up,the middle class will not be able to pay back the Chinese for the war debt.The poor, we call poor because they have no $-that leaves no one to pay the tax!!!The price then must come down,or there will have to be a troop reduction & a lie about victory.

[fiberglass3]

"Light, sweet crude for August delivery fell 41 cents Friday to settle at $128.88 on the New York Mercantile Exchange - well below its trading record of more than $147 a week earlier."

Let''s see - if oil falls $ 18.12 in one week, then the price per gallon at the pump goes up 1 cent. Hmmmm??

Starting to see why we are heading toward electric vehicles......

[obama8years]

President Bush lifted the Ban on drilling for Oil. That sent the Oil Market plummenting. Just imagine if the Democrats and Obama jump on this opportunity and start drilling while simultaneously investing in alternative energys. Look at France they have nucleur power and there doing fine.

If Obama and the democrats do not change there position, we will be living a Jimmy Carter era with Obama as President.

[rudy654-2009]

But the Bush administration told us repeatedly that no speculation was involved in the oil price run up!

Is it possible that the Bush administration is stupid, lied, or both?

Could it be?


--------------------------------------------------------------------------------

Posted by jmurrieta1 at 07:36 AM

Exactly!

[elz523]

President Bush lifted the Ban on drilling for Oil. That sent the Oil Market plummenting. Just imagine if the Democrats and Obama jump on this opportunity and start drilling while simultaneously investing in alternative energys. Look at France they have nucleur power and there doing fine.

If Obama and the democrats do not change there position, we will be living a Jimmy Carter era with Obama as President.


--------------------------------------------------------------------------------

Posted by Obama8years at 09:48 AM : Jul 19, 2008

Yeah I am sure Bush''s oil friends, who are holding he country and world hostage so that they can get drilling rights, will lower the cost of oil at any sign they are getting their way, but that doesn''t make it right. Let''s let the next Congress and President make these decisions. Let''s not let Bush and his friends manipulate the country one more time so they can line their pockets.

[buttonjockey]

: President Bush lifted the Ban on drilling for Oil.
: That sent the Oil Market plummenting.

Ridiculous. The problem is the bubble that the analysts already have talked about and that it may be popping. It''s a bubble, not a supply problem. Bush did nothing of any effect. The U.S. stopped being a swing producer of oil in the 1970s. You can''t manipulate the world markets when your ace-in-the-hole is less than 2% of the world potential.

Also, Americans reduced their driving and fuel consumption over the summer enough that the tourism industry took a big hit. Yet some want to claim that we still had a supply problem? Yeah, right.

We should keep our oil in the ground and be one of the last countries on earth to have it because in 20 years we might find out that the biggest military on the planet is useless if it sits idle on the runway.

[txgrouch2006]

Here''s the good part - the sooner people realize it''s a bubble, the sooner it will BURST when buyers refuse to pay the inflated price anymore.

That will cause the price to fall sooner, and cause a sooner end to the harm to the economy from the high price.