11 January 2007

Cheap To The Last Drop

Oil prices fall on weather woes, supply (Madlen Read, AP, 1/11/07)
Oil plunged below $52 a barrel Thursday to its lowest price since May 2005, extending a sharp decline that has been led by dampened heating oil demand, but which could save consumers money on a more widely used fuel: gasoline.

Crude oil has tumbled by 15 percent so far this year in a huge sell-off that was kicked off by investment funds last year, and then stoked by a historically warm U.S. winter that has left supplies of heating fuel barely touched.
But don't worry, $100 gasoline will solve all of the problems caused by cheap oil.

(Interestingly, the oil companies were mostly up today.)


Oroborous said...

That analysts are attributing the fall of oil prices to the warm weather is interesting, since heating oil only accounts for ~7% of oil use in America during the winter.

joe shropshire said...

But it's still 25% of a barrel of crude as a fraction of yield. This looks like a bunch of refiners got caught on the wrong side of the crack spread.