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Page added on April 13, 2013
Oil Price Is Getting Whacked
Oil is taking a beating this morning, along with other commodities like gold and silver.
It’s been on a steady downtrend since yesterday, but the selling has really accelerated this morning amid several U.S. economic data releases that missed economists’ consensus estimates.
Most notably, retail sales unexpectedly contracted in March, and consumer confidence plummeted as well.
WTI crude oil futures are down 2.6 percent today, near $91.10 a barrel.
“It looks like the ship is being abandoned,” Addison Armstrong, director of market research at Tradition Energy, told Bloomberg’s Mark Shenk. “This is the second day in which we’ve seen strong selling accompanied by high volume in both WTI and Brent.”
11 Comments on "Oil Price Is Getting Whacked"
econ101 on Sat, 13th Apr 2013 2:19 pm
that chart is telling you our commodities are in ample supply and future prospects are very good indeed.
Cloud9 on Sat, 13th Apr 2013 2:45 pm
You are right. There is plenty of oil left in the tanks when demand collapses. What is happening is across the board. Look at what is happening to gold and silver.
econ101 on Sat, 13th Apr 2013 3:23 pm
gold and silver are experiencing profit taking and the money is being moved to stocks. There is nothing more to that. We are looking at short term trends here not fundamental to the long-term well being of humanity.
If what some say is true: high oil prices are hurting economic development, then low oil prices will help encourage economic development.
The cure for high prices is of course high prices. As they continue the situation will be resolved. Supply and demand will adjust and life goes on.
Demand is only part of the equaition. Supply is on the increase helping prices too. In fact we have provable reserves to last us 100 years right now, even if we dont spend another day exploring for more.
GregT on Sat, 13th Apr 2013 4:28 pm
According to the IEA, we have enough oil left on the planet earth to last less than 40 years, at present rates of consumption. That number includes oil that we have not even found yet.
BillT on Sat, 13th Apr 2013 4:39 pm
If you look that is the WTI price and is only a small percentage of the oil we use. Most of it is imported at Brent prices…or $103/bbl. Did your gasoline price drop 2.6 or about $0.10/gal.? If not then the price you read about is meaningless to your budget. Oil is going to those who can afford to pay the current price. The dip in the news is meaningless unless it signals a world wide depression, not just the one the US is experiencing. If the price drops too far, the wells stop pumping until the price goes back into the profitable range.
econ101 on Sat, 13th Apr 2013 4:44 pm
The IEA is underestimating and neither the 100 year estimate by the Petroleum Concil or the 40 year estimate takes into account the huge shale discoveries on every one of the worlds continents. But why qubble you use 40 Ill use 100. Both of us are taken care of even if they dont explore another day.
rockman on Sat, 13th Apr 2013 4:44 pm
Given that for 16 years, between 1986 and 2002 I sold most of my oil for between $20 and $30 per bbls it’s difficult for me to think of oil being “wacked” at $91/bbl. Guess the perspective is somewhat age dependent. LOL.
GregT on Sat, 13th Apr 2013 5:45 pm
If the last ten years, are any indication of the next ten years, neither of us will be very concerned with how much oil is left in the ground.
keith on Sat, 13th Apr 2013 10:15 pm
When we talk about environment, climate change, pollution, we talk about saving the earth. This is the wrong message, the earth will do just fine after words, just look at its history. Sustainability doesn’t mean saving earth, it means saving humanity. When I hear econo/sos talk, I think how the future generations will look back with such loathing at us. We are or have been such selfish fossil fools.
BillT on Sun, 14th Apr 2013 3:21 am
econ, yes, there is a lot of ‘oil’ and it will still be in the ground a million years from now. You don’t seem to understand that all of that resource is going to be very expensive to get.
We are in a recession/depression now at $100 oil. Use is declining and prices of everything is going up, up and away. When the breakeven cost of oil is $150+, and that doesn’t include any profit, how long do you think oil companies are going to stay in business?
Answer: Not very long. Why? There will be few consumers who can afford to buy it or any of it’s products. Don’t you see that the world economy/financial system has more weight in this discussion than barrels of anything? If not, you are blind to reality.
Beery on Sun, 14th Apr 2013 5:22 am
Econ101 has his script and he’s sticking with it. At least he’s consistent. I wonder how intact his optimism will be 5 years from now.