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.)

2 comments:

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.