Oil prices in free fall

In case you haven't noticed, the economy is in a free fall as well, decreasing demand dramatically.

Oil prices dropped from $140 to 100 on "speculation" but I'm fairly confident that this drop is pure economics.
 

ozone

Well-Known Member
So, how come aviation gas and jetA are still over $5/gallon?!? And how come my flight school hasnt lowered their hourly rate of $122?!?! Whine, whine, whine.....hmmmm wine!
 

surreal1221

Well-Known Member
Along with considering a developing country isn't in the process of building single use facilities for a global sports competition.
 

Barty

Well-Known Member
So, how come aviation gas and jetA are still over $5/gallon?!? And how come my flight school hasnt lowered their hourly rate of $122?!?! Whine, whine, whine.....hmmmm wine!
Because FBOs (in my opinion) operate on an inefficient business model.

I have no idea what the going contract rate for a gallon of Jet-A is, so I can't speak to what the airlines are currently paying.
 

WAFlyBoy

Well-Known Member
Crude oil trading at $68 right now (12 noon). Yeah, speculators had nothing to do with that oil price run-up. :sarcasm:
Good news for oil prices, but I'm not sure it's reasonable to attribute the price drop purely to speculation activity. There's a lot of volatility in the market right now, and oil prices will likely be in flux until the economy stabilizes.
 

pullup

Homewrecker
I can't remember who it was, but someone said that oil would be $70 a barrel by Christmas and people laughed at him like there was no tomorrow. Would he please stand up and take a bow?
 

wrxpilot

New Member
I can't remember who it was, but someone said that oil would be $70 a barrel by Christmas and people laughed at him like there was no tomorrow. Would he please stand up and take a bow?
On the other end of the scale, "Aerospacepilot" smugly thought it was going to be over $200 or some ridiculous thing.
 

tonyw

Well-Known Member
Look, this is nothing more that overshooting on both the upside and downside. We had a bubble in oil. And just like every other bubble, it means that on the way up, it goes way too far and on the way down, it goes way too far.

There are a bunch of books that cover many of the bubbles we've seen in the history of investing. But this non-academic can tell you one thing about bubbles.

They always have someone saying "this time it's different."

We had people saying that during the dot com bubble. Then we had people saying that during the housing bubble. And we just had people saying that during the oil bubble.

People never learn, do they?
 

SpiraMirabilis

Possible Subversive
We have an increased supply right now due to the refineries and platforms which were shutdown for Gustav/etc are now on full production again, combined with a stark decrease in demand.

OPEC has an emergency meeting in the next couple of days. Expect supply reductions, or heavy calls for them. Venezuela's entire economy is now petroleum based and state-run and it can not realistically survive low oil prices again. To show you how far things have gone there the state oil company is now growing crops/food.
 

SlumTodd_Millionaire

Evil Landlord Capitalist
In case you haven't noticed, the economy is in a free fall as well, decreasing demand dramatically.
Oil prices have fallen by more than half, and you want to attribute this to a decrease in demand? Are you kidding me? There was never a demand justification for the run-up in the first place. Energy experts have been consistent in this from day one: the demand-justified value of a barrel of oil is around $60.
 

Trip7

Well-Known Member
Oil prices have fallen by more than half, and you want to attribute this to a decrease in demand? Are you kidding me? There was never a demand justification for the run-up in the first place. Energy experts have been consistent in this from day one: the demand-justified value of a barrel of oil is around $60.
Didn't you say way earlier in the year that oil would be back to $70/barrel by the end of the year and got ridiculed for it? I think somebody even put your quote in their signature:D
 

AMH

Well-Known Member
Fox news was saying earlier that the fall in crude is good in the short term for us at the pump.. but in the long run it's bad for the economy because the oil companies will be paying less taxes.

I can see their point.. but talk about taking the creme out of someone's twinkie.
 

SeanD

Well-Known Member
How about that $2.50 a gallon here in Vegas? Hurry up! Im still at $3.30 ish out here. WTF ? ;)
 

HeyEng

NAHB Doesn't Give a Crap
Yes...suppy has a lot to do with it. They forecasted a surplus of 3.1 million barrels and it's actually more like 5.6 million barrels...almost double. The increased value in the dollar has helped as well. Of course, OPEC will want to curb production, so the "drop" will stop.
 

Derg

New Arizona, Il Duce/Warlord
Staff member
Still in the $3.40 range in PHX. But then the price of oil and the price of gasoline aren't necessarily directly related. I'll bet you prices stay high for gasoline regardless of oil prices because fuel has always been a loss-leader for the corner store and now the margins are better.

And I'm talking out of my ass. I really have no idea what I'm talking about and that's just blind internet speculation.
 
Top