Oil set for a 10%+ price decline this week - gas should follow

2lion70

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Oil futures fell Friday, with the U.S. benchmark on track for a double-digit percentage loss for the week, as fears of a global economic slowdown mount.

Price action
  • West Texas Intermediate crude for September delivery fell 49 cents, or 0.6%, to $88.04 a barrel, on track for a weekly loss of 10.7%. The U.S. benchmark closed Thursday at its lowest since Feb. 2.


  • October Brent crude the global benchmark, was down 43 cents, or 0.5%, at $93.89 a barrel on ICE Futures Europe after closing Thursday at its lowest since Feb. 18. Brent was headed for a 9.8% weekly loss.
  • Back on Nymex, September gasoline fell 0.6% to $2.778 a gallon, while September heating oil dropped 3.4% to $3.224 a gallon.
  • September natural gas lost 1.8% to trade at $7.979 per million British thermal units.
Market drivers
Oil has dropped sharply this week, with fears of a sharp global slowdown and its potential impact on demand appearing to move front and center for investors. Worries were amplified Thursday after the Bank of England delivered a half-point rate increase and warned that a lengthy recession would likely take hold later this year.

Major central banks, including the U.S. Federal Reserve, have moved to aggressively tighten interest rates in an effort to rein in inflationary pressures, while also stoking fears of sparking a recession.
“Traders are becoming much less concerned with the supply issues related to the Russia-Ukraine war and instead are beginning to watch demand metrics deteriorate amid a considerable uptick in recession calls. And with gasoline demand in the U.S. currently sitting 9% below last year’s levels and even lower than summer 2020, it is clear that prices above $100/barrel are not sustainable,” wrote analysts at Sevens Report Research, in a Friday note.
 
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LionDeNittany

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Oil futures fell Friday, with the U.S. benchmark on track for a double-digit percentage loss for the week, as fears of a global economic slowdown mount.

Price action
  • West Texas Intermediate crude for September delivery fell 49 cents, or 0.6%, to $88.04 a barrel, on track for a weekly loss of 10.7%. The U.S. benchmark closed Thursday at its lowest since Feb. 2.


  • October Brent crude the global benchmark, was down 43 cents, or 0.5%, at $93.89 a barrel on ICE Futures Europe after closing Thursday at its lowest since Feb. 18. Brent was headed for a 9.8% weekly loss.
  • Back on Nymex, September gasoline fell 0.6% to $2.778 a gallon, while September heating oil dropped 3.4% to $3.224 a gallon.
  • September natural gas lost 1.8% to trade at $7.979 per million British thermal units.
Market drivers
Oil has dropped sharply this week, with fears of a sharp global slowdown and its potential impact on demand appearing to move front and center for investors. Worries were amplified Thursday after the Bank of England delivered a half-point rate increase and warned that a lengthy recession would likely take hold later this year.

Major central banks, including the U.S. Federal Reserve, have moved to aggressively tighten interest rates in an effort to rein in inflationary pressures, while also stoking fears of sparking a recession.
“Traders are becoming much less concerned with the supply issues related to the Russia-Ukraine war and instead are beginning to watch demand metrics deteriorate amid a considerable uptick in recession calls. And with gasoline demand in the U.S. currently sitting 9% below last year’s levels and even lower than summer 2020, it is clear that prices above $100/barrel are not sustainable,” wrote analysts at Sevens Report Research, in a Friday note.

Why didnt you highlight this?


"watch demand metrics deteriorate amid a considerable uptick in recession calls"

Oil is up 80% from when Biden took over. And under Trump oil was NEVER this high despite the strongest economy in the history of the US.

Biden truly sucks.
 

JR4PSU

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Oil futures fell Friday, with the U.S. benchmark on track for a double-digit percentage loss for the week, as fears of a global economic slowdown mount.

Price action
  • West Texas Intermediate crude for September delivery fell 49 cents, or 0.6%, to $88.04 a barrel, on track for a weekly loss of 10.7%. The U.S. benchmark closed Thursday at its lowest since Feb. 2.


  • October Brent crude the global benchmark, was down 43 cents, or 0.5%, at $93.89 a barrel on ICE Futures Europe after closing Thursday at its lowest since Feb. 18. Brent was headed for a 9.8% weekly loss.
  • Back on Nymex, September gasoline fell 0.6% to $2.778 a gallon, while September heating oil dropped 3.4% to $3.224 a gallon.
  • September natural gas lost 1.8% to trade at $7.979 per million British thermal units.
Market drivers
Oil has dropped sharply this week, with fears of a sharp global slowdown and its potential impact on demand appearing to move front and center for investors. Worries were amplified Thursday after the Bank of England delivered a half-point rate increase and warned that a lengthy recession would likely take hold later this year.

Major central banks, including the U.S. Federal Reserve, have moved to aggressively tighten interest rates in an effort to rein in inflationary pressures, while also stoking fears of sparking a recession.
“Traders are becoming much less concerned with the supply issues related to the Russia-Ukraine war and instead are beginning to watch demand metrics deteriorate amid a considerable uptick in recession calls. And with gasoline demand in the U.S. currently sitting 9% below last year’s levels and even lower than summer 2020, it is clear that prices above $100/barrel are not sustainable,” wrote analysts at Sevens Report Research, in a Friday note.
Primarily because of the reduced demand, which is currently even less than pandemic levels.
 

KnightWhoSaysNit

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With every price decrease we should realize that, whatever the price, it would be lower with Republican policies.

Dems want a Green New Deal to make themselves relevant and in good standing with China. As a result of their ignorance (like the Germans who paved the way), Americans will bury themselves while the rest of the world continues to burn fossil fuels.

Only in America would the government subsidize upper class EV owners using lower class wage earners. The corporate tax hikes will cost jobs and increase inflation, i.e., it will worsen stagflation. Who benefits? Follow the money.
 

LionDeNittany

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With every price decrease we should realize that, whatever the price, it would be lower with Republican policies.

Dems want a Green New Deal to make themselves relevant and in good standing with China. As a result of their ignorance (like the Germans who paved the way), Americans will bury themselves while the rest of the world continues to burn fossil fuels.

Only in America would the government subsidize upper class EV owners using lower class wage earners. The corporate tax hikes will cost jobs and increase inflation, i.e., it will worsen stagflation. Who benefits? Follow the money.

The US economy is slowly following the European economy where they wholly support private equity companies and not the common man.

PPP (Public Private Partnerships) are what green energy is all about and only billionaires can get involved.

Zero rates, the Obama Special, enable private equity to buy companies essentially for free, fire people and enrich the PE owners.

It's getting worse and worse, but most people don't see it.

Our banks have become giant PE lending facilities with the US government as the backstop.

LdN
 

KnightWhoSaysNit

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Jul 19, 2010
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The US economy is slowly following the European economy where they wholly support private equity companies and not the common man.

PPP (Public Private Partnerships) are what green energy is all about and only billionaires can get involved.

Zero rates, the Obama Special, enable private equity to buy companies essentially for free, fire people and enrich the PE owners.

It's getting worse and worse, but most people don't see it.

Our banks have become giant PE lending facilities with the US government as the backstop.

LdN

One thing average people might be able to see is how their retirement savings are being pillaged. Not only do we have inflation, but we have siphoning from public equities as "traders" get subsidized by "investors." The so-called "bear market rally" provides clear evidence that this is happening.

If there isn't real growth (production) then one man's gain comes at the loss of another man. The growing money supply then becomes the only way a passive investing strategy -- most IRAs and 401Ks -- produce a return.

The Green New Deal is NOT a net producer. If it were then it would need no government intervention. Markets would choose green energy. Like private equity, this "new deal" will siphon and redirect wealth.

It would not be so upsetting if the rest of the world shared in our Democrat Debacle. Behind closed doors the CCP and Kremlin laugh at the West.
 

LafayetteBear

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Loved the thread title. 2Lion, if crude oil prices drop, the price of gas at the pump SHOULD follow suit, but we all know from experience that the delay in pump prices following suit is always lengthy. By contrast, when crude oil prices go UP, the price of gas at the pump increases IMMEDIATELY. Neither the federal government nor any state government regulates the prices that oil companies charge to their gas station dealers (for dealer operated gas stations), or the price that oil companies charge at gas stations that they own and operate.

Meanwhile, oil company profits are running ad record levels. Wonder how that could be? If you do, I've got a bridge to sell you. These oil companies are no more ethical than Enron. They are all about maximizing profit. There are very few of them given the practical barriers to entry in that business, and they act in concert. That is problematic, to say the least.

But don't forget: it's ALL Joe Biden's fault, at least in Trump World.
 

Lion8286

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Loved the thread title. 2Lion, if crude oil prices drop, the price of gas at the pump SHOULD follow suit, but we all know from experience that the delay in pump prices following suit is always lengthy. By contrast, when crude oil prices go UP, the price of gas at the pump increases IMMEDIATELY. Neither the federal government nor any state government regulates the prices that oil companies charge to their gas station dealers (for dealer operated gas stations), or the price that oil companies charge at gas stations that they own and operate.

Meanwhile, oil company profits are running ad record levels. Wonder how that could be? If you do, I've got a bridge to sell you. These oil companies are no more ethical than Enron. They are all about maximizing profit. There are very few of them given the practical barriers to entry in that business, and they act in concert. That is problematic, to say the least.

But don't forget: it's ALL Joe Biden's fault, at least in Trump World.

Companies want to maximize profits. Thanks for the newsflash, laffy.
 
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olelion

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yesterday it was no fossil fuels no fossil fuels. Today if the price of crude goes down 10 Cents they're slapping their monkeys with joy. So which is it?
 
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NJPSU

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Biden is on a roll and these Wingnuts are having a hard time dealing with it .
 

LafayetteBear

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Companies want to maximize profits. Thanks for the newsflash, laffy.
Enron's primary objective was to maximize profits, too. You probably approved of everything they did. But then again, you're a Trump Cultist and a RWNJ.
 

2lion70

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Primarily because of the reduced demand, which is currently even less than pandemic levels.
True.
But you can't ignore the fact that oil and gas prices have been falling. Energy prices are set on a global stage and China is still having huge problems with Covid without a reliable vaccine.
 

m.knox

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There can be no recession with job growth of 528k and unemployment at 3.5%.
Wait and see the Q1 GDP nun=mbers.

I think you mean 3Q GDP numbers as both the first and second quarters had negative growth.
 

JR4PSU

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True.
But you can't ignore the fact that oil and gas prices have been falling. Energy prices are set on a global stage and China is still having huge problems with Covid without a reliable vaccine.
Absolutely correct. Oil prices are set on a global stage, not by oil producers or gas station owners. That’s why it is nothing more than politics and gaslighting when the left accuses oil producers and gas station owners for fleecing Americans. Also, that the price is coming down primarily because of demand illustrates that Biden isn’t doing anything to lower the price. Biden, from day 1, has been focused on reducing the supply produced in America, which is to affect prices in the opposite direction. He’s done nothing to lower the price, only to increase price. It amazes me that the climate cabal would rather oil be produced by sources outside the US where methods are far more harmful to the environment than oil production in the US. I’m going to fill up my gas tank regardless where it came from. I would much rather it be extracted from US controlled sources than sources outside US control.
 
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2lion70

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I think you mean 3Q GDP numbers as both the first and second quarters had negative growth.
All quarterly GDP numbers are adjusted to account for actual numbers instead of estimates. Same goes for all economic releases. Most economists are expecting Q1 Gdp to be adjusted upward into a positive number. Q2 is also expected to be increased after actuals come in.
 

2lion70

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Absolutely correct. Oil prices are set on a global stage, not by oil producers or gas station owners. That’s why it is nothing more than politics and gaslighting when the left accuses oil producers and gas station owners for fleecing Americans. Also, that the price is coming down primarily because of demand illustrates that Biden isn’t doing anything to lower the price. Biden, from day 1, has been focused on reducing the supply produced in America, which is to affect prices in the opposite direction. He’s done nothing to lower the price, only to increase price. It amazes me that the climate cabal would rather oil be produced by sources outside the US where methods are far more harmful to the environment than oil production in the US. I’m going to fill up my gas tank regardless where it came from. I would much rather it be extracted from US controlled sources than sources outside US control.
Gas prices increase rapidly after an increase in crude oil. Those gas prices are a lot 'stickier' when crude oil prices decline. The same was always true for banks 'prime rates'. It's a normal foot drag to lock in some profits.
 

2lion70

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A brief look at GDP and how it gets adjusted over time.
 

JR4PSU

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Gas prices increase rapidly after an increase in crude oil. Those gas prices are a lot 'stickier' when crude oil prices decline. The same was always true for banks 'prime rates'. It's a normal foot drag to lock in some profits.
That’s irrelevant to the cause of the increase or decrease in price.
 

m.knox

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All quarterly GDP numbers are adjusted to account for actual numbers instead of estimates. Same goes for all economic releases. Most economists are expecting Q1 Gdp to be adjusted upward into a positive number. Q2 is also expected to be increased after actuals come in.

Wishful thinking.
 

junior1

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Loved the thread title. 2Lion, if crude oil prices drop, the price of gas at the pump SHOULD follow suit, but we all know from experience that the delay in pump prices following suit is always lengthy. By contrast, when crude oil prices go UP, the price of gas at the pump increases IMMEDIATELY. Neither the federal government nor any state government regulates the prices that oil companies charge to their gas station dealers (for dealer operated gas stations), or the price that oil companies charge at gas stations that they own and operate.

Meanwhile, oil company profits are running ad record levels. Wonder how that could be? If you do, I've got a bridge to sell you. These oil companies are no more ethical than Enron. They are all about maximizing profit. There are very few of them given the practical barriers to entry in that business, and they act in concert. That is problematic, to say the least.

But don't forget: it's ALL Joe Biden's fault, at least in Trump World.
So, I'm not sure where you get your data, but gas station owners buy their gas and store it in big tanks awaiting sale. If oil prices go down, that has no effect on the cost to the station owner and he will sell based on the original cost to him. Wouldn't you expect there to be a lag in price adjustments?
Now insofar as oil company profits. One thing we all should have learned is that world prices set oil price. Biden tried with his Putin tax cut, greedy corporations and gas station owners. Now all of a sudden, according to "experts" oil cost is coming down because of less demand caused by recessions/inflation (world wide), and continued lower demand because of chinese lockdowns. Biden hit the nail on the head, oil companies make money based on price of oil. But wait, aren't oil prices down? 2Lion has multiple threads on the great job Biden has done reducing the cost of oil. But Biden told us oil companies make more money by producing less. But oil companies aren't producing less. But, according to you their profits are still maximized. Isn't our economic system based on profits and returns to shareholders.
Trump world? Trump is a private citizen. He's got nothing to do with today's cost of oil or gas.
Is it Biden's fault? I don't know, but he's certainly taking credit for reductions in cost of gas from $5 to $4.11. So, in his mind he's got something to do with price of gas. Now whether its ALL his doing or not...I haven't heard him share any credit
 

junior1

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All quarterly GDP numbers are adjusted to account for actual numbers instead of estimates. Same goes for all economic releases. Most economists are expecting Q1 Gdp to be adjusted upward into a positive number. Q2 is also expected to be increased after actuals come in.
At the risk of being referred to as a 2lion "groupie", but, for the third time today, I say you're right. I don't know about your expectation that GDP numbers will be changed to positive, but they will be adjusted.
The economy right now is a little discombobulated, IMO. High inflation, low growth, high rents and home prices, great jobs numbers, and still more jobs open...I said before, doesn't feel like a recession, yet millions and millions of americans can't afford to eat and somewhere around 40% of folks can't come up with a $400 emergency fund.
To fight our current dilemma, the fed is raising the fed funds rate and shrinking it's balance sheet. At the same time the federal government is putting more money into the economy and raising taxes, which seems to many to be just the things you wouldn't want to do.
One thing for sure, the democrats will pass the "fight inflation bill" by the end of august. There will be just over 2 months before the election for americans to see positive improvements in their well being. If there is not, I would expect every republican running for office to hammer this issue. Isn't politics wonderful?
 
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2lion70

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Gas here in SE NC as low as $3.26 a gallon. On top of that I get either a $.10 or $.15 a gallon discount.
On a % basis WTI has now dropped by about 30% which should lead to a 30% drop in gas prices.
 

2lion70

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At the risk of being referred to as a 2lion "groupie", but, for the third time today, I say you're right. I don't know about your expectation that GDP numbers will be changed to positive, but they will be adjusted.
The economy right now is a little discombobulated, IMO. High inflation, low growth, high rents and home prices, great jobs numbers, and still more jobs open...I said before, doesn't feel like a recession, yet millions and millions of americans can't afford to eat and somewhere around 40% of folks can't come up with a $400 emergency fund.
To fight our current dilemma, the fed is raising the fed funds rate and shrinking it's balance sheet. At the same time the federal government is putting more money into the economy and raising taxes, which seems to many to be just the things you wouldn't want to do.
One thing for sure, the democrats will pass the "fight inflation bill" by the end of august. There will be just over 2 months before the election for americans to see positive improvements in their well being. If there is not, I would expect every republican running for office to hammer this issue. Isn't politics wonderful?
You have my permission to form a fan club - call it the Let the truth set you free.
Higher interest rates are bringing house prices down. The price of Canadian lumber is falling - lower construction costs.
Oil and gas prices dropping.
Wheat shipments from Ukraine helping to reduce world price of wheat.

Lots of factors that will help reduce inflation.
 

junior1

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You have my permission to form a fan club - call it the Let the truth set you free.
Higher interest rates are bringing house prices down. The price of Canadian lumber is falling - lower construction costs.
Oil and gas prices dropping.
Wheat shipments from Ukraine helping to reduce world price of wheat.

Lots of factors that will help reduce inflation.
Housing prices are dependent on location, obviously.
Not seeing big reductions here in central fl…too much demand and limited inventory.
 

bdgan

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You have my permission to form a fan club - call it the Let Lots of factors that will help reduce inflation.
I agree that a lot of factors will help reduce inflation.
  • Free market capitalists will work hard to resolve shortages.
  • Consumers will alter purchasing habits.
  • The Fed substantially raising interest rates.
  • Government policies sending us into a recession.
 

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