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Location: Midessa, Texas Home Yangzhou, Jiangsu temporarily
1,506 posts, read 4,273,430 times
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You never know because oil prices have always been volatile, but I don't expect them to increase much in the second half of year. We may even see a decrease.
...this may be as good as it gets for the oil market. The realization that the market's fundamentals are weak could be behind the losses during the past three weeks, including Thursday's 4% drop to $66.73 a barrel.
The International Energy Agency last week lowered its oil-demand growth forecast. Inventories, while off their peak, are still large, and demand remains weak.
Isn't it part of the President's green agenda to have gas prices rise to European levels so he can force you into his toy cars? I mean, we can blame the speculators, too, just don't expect Washington to react. They're liking it.
My projected fuel oil bill for the heating season last year was $350/month. This year it's $180/month, both figures include a maintenance/service contract, subtract $20/month without that. I also have a price cap this year of $2.99/gallon. The fuel oil companies are anticipating stagnant or declining prices.
I don't know where it will be by the end of this year but I wouldn't be surprised to see it find its way back to $4 over the next couple of years and have that become the new floor.
If the gas prices had risen more slowly it would have been digested better by the general economy. The rapid move up in a slowing economy was the death nail as fuel surcharges and oil-based dependent commodity prices spiked to the point that their input costs adversely affected the saleability of the end products since wage increases were insufficient to cover the increase in product prices.
A perfect example was found in imported products made from steel last year. Not only did the products themselves see large price adjustments but in many cases the shipping cost quadrupled resulting in price increases which exceeded 30%.
The high cost of gas, diesel, heating oil and other distillates last year was the death blow to an economy that was already on the ropes.
OPEC is well aware of this and appears to have been trying to control the increases in prices. This time the economy is working against them because demand is down for pure macro economic reasons. Once the economy improves and countries like China and India resume their growth objectives the U.S. will face the realities of higher demand-based pricing. OPEC will most likely keep control of supply in an attempt from letting prices rise too fast with growing demand.
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