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Home Front Economy

Oil futures fall on forecasts of lower fuel consumption

2009-01-20

Crude oil futures fell, approaching $35 a barrel in New York, on forecasts faltering global economic growth will drive down fuel consumption for a second year.

Goldman Sachs Group, while forecasting a recovery in prices later this year, said demand will decline by 1.6 million barrels a day. That's more than three times the drop forecast by the International Energy Agency last week.

The Organisation of Petroleum Exporting Countries (Opec) may have to cut output again should prices fall further, Algerian Oil Minister Chakib Khelil said over the weekend.

"The world recession is continuing to dampen demand," said Christopher Bellew, a senior broker at Bache Commodities Ltd. in London. "Cuts by Opec members will probably stabilise the market, but it may take some time before they translate into any upward price move."

Posted by:Fred

#12 $1.67 at a Valero I passed in Richmond, Va., this evening.

Expect it's a little lower at Sam's Club, but won't be out that way before this weekend.

I can live with it.

Posted by: Barbara Skolaut 2009-01-20 20:17

#11 In California the price today at Shell in sacramento was $2.14/gal. It has been steadily rising in the past month. Can someone check the re-emergence of the hedgefunds? If they are back in this, Obama, how about some SEC oversight right out of the gate?

Posted by: Grolump Bonaparte9472 2009-01-20 19:35

#10 the price of oil (and ag. commodities)have been fluctuating with the strength of the dollar. Dollar up today, oil down.

Posted by: bman 2009-01-20 14:25

#9 Our gas price is hanging tough at $1.49, was as low as $1.34 a few weeks ago.

Posted by: Rednek Jim 2009-01-20 13:39

#8 Anguper,
We've been taking advantage of low gasoline (& other refined product) prices and demand to do necessary or desired maintainance on a lot of our refineries. If you are going to have to postpone making a gallon of gas doesn't it make more sense to postpone it when demand is low and the revenue you would get from it is low, and then have it available to sell later, when demand will presumably be higher, and thus revenues higher? The likely effect will be somewhat smaller price increases in May and June than would otherwise have been the case.

Posted by: Glenmore 2009-01-20 13:06

#7 I've crossed most of the US since 12/11/08. Price of gasoline has risen 30 cents/gal (~20%) during that time while crude oil has continued to fall.

Posted by: Anguper Hupomosing9418 2009-01-20 12:15

#6 I like it. They cut production. Prices fall. Now they've got less product to sell at lower prices.

Posted by: Fred 2009-01-20 09:16

#5 The Organisation of Petroleum Exporting Countries (Opec) may have to cut output again should prices fall further, Algerian Oil Minister Chakib Khelil said over the weekend.

When will these guys stop dicking around and just go with the market? They are about to run out of floating storage, having already run out of terminal storage. I even read on piece about them filling up old pipelines and using them as storage. I guess when you are out of storage, you DO need to cut production, but not to support prices, because you have nowhere to put it.

Posted by: bigjim-ky 2009-01-20 09:02

#4 There is still a lot of activity of futures contracts for $75-$100 a bbl. this year. And I hope they lose their collective arses again.

They never learn, do they?

Posted by: bigjim-ky 2009-01-20 08:58

#3 Patience, grom.

Posted by: Spike Uniter 2009-01-20 07:43

#2 I'm still waiting for food riots in Soodia.

Posted by: g(r)omgoru 2009-01-20 05:45

#1 Wasn't Goldman Sachs among those chirping about $250/bbl oil back in July?

Posted by: AzCat 2009-01-20 00:19

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