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See the original image at money.cnn.com —

Oil tumbles on surge in crude supplies

money.cnn.com — The build in crude stockpiles was "way more than what the market was looking for and as a result we have come off our highs."

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  • Surferess, on 08/20/2008, -1/+11That is one "high" I am happy to come down from.
    • nycmac247, on 08/21/2008, -2/+1-
    • vilago, on 08/21/2008, -0/+1cheeb
    • imnojezus, on 08/21/2008, -3/+2It's kinda bittersweet for me. A lot of people, myself included, all but abandoned our cars for alternate forms of transportation. Dropping gas prices are going to put people back behind the wheel of their gas-suckers.
    • mcquitty, on 08/21/2008, -0/+1Why is it bittersweet?

      Are cars evil?
  • user500, on 08/20/2008, -10/+4wow this story is out of date oil actually ended UP!!!!!!!!!!!!
    I guess its got to be buried as its no longer accurate.
    • arcticsoft, on 08/21/2008, -0/+10wow, I guess you didn't read the article. It was from yesterday. But one thing I don't get it is supply and demand. The price of oil drops 35% but gasoline only drops 10%. But if oil goes up 10% gasoline goes up 10%.
      • dorkino, on 08/21/2008, -0/+2It's because the demand for gasoline doesn't go down when the price goes up. We're a society addicted to driving, and goods still have to be shipped no matter the cost. The price increases are passed along to the consumers via the products themselves. Enter inflation.
      • GRTWHT, on 08/21/2008, -0/+1Actually it's because that's how the game is played.

        Look at gasoline, heating oil, etc pricing for the last several years and you'll see that it's been following the exact same pattern - up in the spring/summer, down in the fall/winter. Of course, the lowered prices later in the year are still well above the starting point at the beginning of the year.

        The net result is much higher prices each year, but the 'average American' says that prices are good because they are lower than they were a few months ago.
      • TheGuruStud, on 08/21/2008, -0/+1It's election year. Of course prices are going to drop for the neos.
  • bcrich999, on 08/21/2008, -4/+11One day supplies are high...the next day supplies are low... the market is like an extremely moody chick.
    • thcobbs, on 08/21/2008, -1/+9"the market is like a chick." There, fixed.
    • prophetpimp, on 08/21/2008, -0/+3except moody chick is a bitch 3 3 to 4 days a month. the Suppliers are bitches 24/7
  • masterstanf2k, on 08/21/2008, -5/+4I'm trying to understand this industry.
    "Supply" is up... then it's down... now it's back UP.
    Isn't oil effectively a limited source?
    What kinda BS is this.
    How were there "supply" worries just a few weeks ago.
    Just blame Bush, I mean, the dollar.
    • suckanucka, on 08/21/2008, -4/+2I mean, the brown people.
    • vilago, on 08/21/2008, -1/+4it's called a monopoly. and OPEC is the culprit.
      • nalen33, on 08/29/2008, -4/+2Umm...right. It's called environmentalists, and OPEC isn't even our largest importer.

        http://www.eia.doe.gov/pub/oil_gas/petroleum/data_ ...
      • jemman, on 08/21/2008, -1/+3The problem was with the speculators. When the democratic congress closed the 'Enron Loophole' with the 'CFTC Reauthorization Act of 2008' this put the speculators under limited regulation, making it harder for them to play the games that have been playing for the past year.
    • mcquitty, on 08/21/2008, -1/+2Would you please explain how oil companies set the price of oil?

      Or how farmers set the price of corn?

      If oil companies had the ability to set the price, why would they have let it get down to $30/barrel a few year ago.

      But, it's oil a commodity. And aren't commodity prices set by the market and market traders?

      Can you please explain to me how oil companies directly set the price?
  • airwalkery2k, on 08/21/2008, -7/+28Just when people were talking about electric cars, hydrogen, and renewable resources becoming economically viable, Big Oil realized it was too risky to make such profit and is trying to juggle making lots of money, but keept it for as long as they can milk it out.
    • KennMac, on 08/21/2008, -2/+1dugg for precision.
    • cheezy321, on 08/21/2008, -9/+5Yes, big oil determines the price of oil.

      Kindly STFU right now because you have no idea what you are talking about
    • drmobutu, on 08/21/2008, -0/+9We can expect the price of gasoline to gradually decline, from now, until about mid-November, just like in 2006.

      Big Oil prefers a Republican in the White House...
      • GRTWHT, on 08/21/2008, -3/+2"We can expect the price of gasoline to gradually decline, from now, until about mid-November, just like in 2006."

        And in 2007 and 2005 and.....

        This isn't politics, it's economics mixed with some psychology.

        They're playing games with inflating, then slightly deflating the cost of petroleum products to give a net increase that doesn't result in destruction of their industries due to consumer outrage - it has nothing to do with that sham that is called an election.
      • drmobutu, on 08/21/2008, -1/+2Sure, they're playing games with the price of gas, and if they want to KEEP playing those games, they're going to need one of their own in the White House...the price of gasoline has everything to do with the elections, which may, or may not, be a sham again, this year...

        Economics + Psychology = Politics...
      • biotch, on 08/22/2008, -0/+1Grtwht,
        I dont know about 05... but in the last congressional election, weeks of declining gas prices ended the day after the election and rose soon after.
    • mcquitty, on 08/21/2008, -1/+1Would you kindly please tell me how oil companies set the price of oil?

      Can you please explain why oil was $30 a barrel a few years ago? Why didn't they rise the prices then?
      • biotch, on 08/22/2008, -0/+1For one there are many designated drilling fields in America which they have chosen not to drill on. That keeps supply lower which raises prices.
        BTW a few years ago, oil was double what it was when Bush took office; in the realm of $60 a barrel.
        When Bush took office the price of a barrel of oil was in the $30 range. It has climbed to around $130/ barrel since and just suddenly started declining within 100 days of the election down now to around 114. This isnt rocket science whats going on here.
  • smoger, on 08/21/2008, -2/+10buried innacurate. the story flip flopped.
  • amightywind, on 08/21/2008, -3/+5I see a Chevy 350 in my future! I have always said on this forum that the high price would attract massive new supply and drive down demand, and so it has. Wanna make money? Short oil.
    • dewbieZ, on 08/21/2008, -1/+1You're an idiot. Don't give "Market" ideas on Digg you ***** toolbelt, Not the Time Or the Place.
      • Her3t1k, on 08/21/2008, -1/+3ROFL. I've heard people being called tools. Even toolBOXES but never before a toolBELT. That's just awesome.
    • zacharytelschow, on 08/21/2008, -0/+1You were half right.
  • gamalicious, on 08/21/2008, -3/+7I have to say, even though I don't mind a few more bucks in my wallet, I hate the idea of people dusting off their SUVs and burning 10mpg. Even though high prices suck, they put a necessary focus on renewable energy (ps. Prices will go back up)
    • biotch, on 08/21/2008, -0/+1aint happening any time soon bud...
      Oil has jumped 5 bucks today so far.
    • gandhii, on 08/21/2008, -0/+2just because prices went lower than they were doesn't mean they aren't still freaking way too high.. They are still higher than they were last year.. and prices then were still way too high. Am I the only one who remembers how much gas cost before Bush got into office?
    • mcquitty, on 08/21/2008, -0/+1Why does it bother you for people to drive SUVs?

      I don't own one, but I have. Where's the hatred for cellophane? Polyester? Plastics? And the myriad of other oil based products?
  • AsusMobo, on 08/21/2008, -2/+26The oil industry also added, "So please stop developing electric cars. kthx"
  • sablowsky, on 08/21/2008, -0/+6I remeber a week or so ago when it was actually tumbling to numbers as low as $112, and I had faith that maybe it would keep dropping. Maybe things would return to normal, with no insanely expensive gas prices.

    I was wrong, its back at $121 and flying up. *****.
  • aal432s, on 08/21/2008, -1/+9Dugg down for current events making story irrelevant.

    www.nymex.com
    • KennMac, on 08/21/2008, -0/+4It was fun while it lasted. Back into the $120's today.
  • diggerphelps, on 08/21/2008, -6/+2Tide comes in, tide goes out.
    Oil goes up, oil comes down.
    I'm stickin' with Jesus.
  • Robart, on 08/21/2008, -3/+5The consumer should get the credit for oil prices dropping. We've changed some of our habits and now we are consuming less. I personally know speculators who are taking a bath. They gambled. They won for a while but now they are walking away from the table. Many of them are broke. Consumers FTW!
    • Dumbledorito, on 08/21/2008, -2/+2If Bush would close the "Enron Loophole" allowing speculators to trade on foreign exchanges in ways that are illegal in the U.S., a lot of this commodity roller-coaster stuff would cease.
  • coustoe, on 08/21/2008, -3/+7Price of oil will probably stabilize around $100 to $70 in the next few years. This will be a combinations of increased supply, but aslo falling demand from the US (more hybrids, carpooling, public transportation, and the chevy volt) counterbalanced by rising demand from China.

    I would say though in 5 year timeframe oil will collapse almost completely, because Every Car maker is going to have some type of hybrid fuel sipper, electric vehicle on the market and most americans buy cars used or new every 5 years whether its the current 2008 Prius or the new All electric Prius 2012.
    • xmykro, on 08/21/2008, -0/+4I agree with you. These high gas prices will actually hurt big oil in the long run. It gives car makers more intensive to develop electric cars, and the consumers will buy them this time! The domino effect will happen fast, and big oil will be very surprised and devastated.

      It's gonna be great!
    • DeFex, on 08/21/2008, -1/+9wishful thinking!
    • astroslut, on 08/21/2008, -0/+2Coustoe. Increased supply, from Where? US offshore drilling, maybe, but a few years away if they were allowed to start today. Canada oil shell, yes, but how much, and what about the older mature fields.
      And also, a balance of the US decrease to China's increase.
      So tell me, using a legitimate reason, how oil gets to $70, or even $100.
      If you would have said a continuing slowing of the world economy, then I would agree with you, but only after a year or two of slowdown that could be clearly traced to the high cost of energy.

      And 5 years till oil's collapse, really? Only if the world economy fails. The US changing their cars is going to help, but not that much, especially if your electric car is getting it's electricity from an oil burning power plant.
    • falstaff, on 08/21/2008, -0/+3Less than half of the oil used in the USA is for fuel. Of that, huge quantities are used in commercial vehicles that won't be able to go electric until long after consumer cars have. Obviously there are a lot of factors in play, but i wouldn't bet on a significant drop in global demand for a good while.
    • coustoe, on 08/21/2008, -0/+1There was a similar effect during the oil crises in the 1970s people thought we had hit peak oil and there were no new supplies coming online. Well Greed and the market have a way of being able to fill demand when oil is at ridiculous historical highs. Companies developed new technologies rapidly to exploit old wells and search for new sources in a short period of time eventually supply overcame demand and prices crashed.

      A lot of the new supply will come from old oil fields where the cost of extraction or refining was considered to high at $40 a barrel and from Shale and Tar Sands oil Where oil is profitable above $50 a barrel.

      As you see a small decrease in demand over time can cause excess supply and huge swings in the price of oil.

      Only the difference here is that we have increasing demand coming from Brazil, India and the Big one China. So prices will not collapse immediately. Which for the first time in history will give enough time for alternatives technologies to develop and become profitable eventually causing oil to collapse.

      Finally when I say collapse i mean relative price collapse, so a crash would be around $20-$30 a barrel. We will still obviously need oil for a long time to come.
  • j00fek, on 08/21/2008, -0/+12no sense in posting oil news

    http://www.cnbc.com/id/26318888 - Oil Leaps Above $121 on Geopolitical Tensions
  • jakatak, on 08/21/2008, -5/+4In today's news oil is at an all time low of $8.00 a gallon. Hillary Clinton is president and the iPhone has 3G speeds.
  • VoteHillary, on 08/21/2008, -0/+9this is only short term....in the long run it will go UP UP UP...sorry for the oil junks.
  • johnhummel, on 08/21/2008, -1/+14For those who are confused - and I will not claim to be an expert - but remember that there are several things that are influencing the cost:

    1. Supply: Of course, ye olde "invisible hand of the market" comes into play here. Since oil is a set resource in the world - no matter what Mr. Corsi believes that oil is being constantly regenerated - that means that what's on the market is as fast it can be pumped (or pressed, or boiled out of rocks at greater expense, etc). Supply has actually *increased* over the last several years to keep up with increased demand from China and India (as well as the US). Which brings us right to -

    2. Demand: US demand for gas has dropped drastically since gas hit $4 a gallon at the start of the year. Driving is down by nearly a billion miles as people stayed at home rather then drive cross country. More people (who can) have been doing other things, like biking/public transportation. Increased sales of hybrids has helped reduce demand.

    3. Value of the dollar: This is one of the big ones. The value of oil started to jump dramatically as the value of the dollar fell. Why did it fall? Combination of things - huge increase in loans to pay for things like the war in Iraq and Afghanistan (total figures aren't in - but some figures are around $500 billion to $3 trillion when you include costs of treating veterans, lost wages from soldiers being out fighting instead of making things domestically, etc). Then there's the housing crisis - since a lot of the current housing crisis was about making mortgages a commodity on the market, foreign investors got in on the game. Once foreclosures jumped from 2-3% to 15-20% in the sub-prime market (and "prime" loans offered with the same deals from interest only to interest+principal start coming due in about a year, expect something similar), people started dumping on the real estate market, which lead to problems in the financial sector, which lead to the dollar being worse less.

    If the dollar is worth less, then the same amount of oil that used to sell for $75 a year ago now might sell for $130 - $150. The actual value of the oil didn't change, but the value of the dollar decreased - so you need more dollars to buy the same amount of oil.

    So what to do? Some would say increase demand, some would say increase demand by having more alternatives (ethanol, plug-in hybrids so whatever way electricity is produced can compete with gas), increased public transportation (I'm big on this - there's no reason why every major city shouldn't have light rail/huge public busing systems so people have to drive as little as possible).

    On the purely financial front, some have offered more regulation of the oil market and removing the speculation market and turning it back into a pure buy/sell market. Certainly investing in local things would help rather then financing more foreign wars.

    Odds are, things will get better for a bit, people will go "Oh, dang - now I can fill up again and drive to Albuquerque from Tampa!", and then things will be worse until people wise up and stop being ass munches with finances, fuel standards, alternatives, and all of the things that places like Brazil and Europe started dealing with back in the 1970's, during the *last* major oil crisis.
    • AndrewMoyer, on 08/21/2008, -1/+0If the dollar is weaker and can buy less gas, well then the price of everything goes up and makes the dollar even weaker... at least that's what it seems like to me.

      It's kinda like a snake eating its tail.
  • DaviDaviDaviD, on 08/21/2008, -1/+7***** oil, long live alternatives. I'm investing in Solar.
    • xmykro, on 08/21/2008, -1/+1You got that right. ***** oil. These high prices are great for alternatives!
      • fandyboy, on 08/21/2008, -0/+1Ironically, this pushes demand, and thus prices for hybrids up.

        We can't win.
  • dafragsta, on 08/21/2008, -0/+1They concluded their statement by saying their mellow was also totally harshed.
  • yournamehere, on 08/21/2008, -1/+8this is ***** at it's best.. call me when it's back to $1.99 a gallon. Oil didn't fall anywhere near how much it's risen in the past few years. I love how they try to spin this as 'we should be grateful'
  • rholloway, on 08/21/2008, -0/+9up almost $6 today.
    • nalen33, on 08/29/2008, -0/+5At 11:26AM, up $6.40. So much for yesterday's news.
  • david76, on 08/21/2008, -0/+6Is it just me, or does every change in supplies seem to be unexpected? I mean, if week after week you encounter an "unexpected" surge or dip in supply, then your method of estimating isn't very good.
    • Temo1, on 08/21/2008, -1/+1You only hear about the rises and dips that are unexpected.
  • Zippo, on 08/21/2008, -1/+5Now, lower the ***** price of gas.
    • fandyboy, on 08/21/2008, -1/+1Nah, I only pay the blowjob price anyways..
  • jerbaker, on 08/21/2008, -4/+4What we're seeing is the beginning of the price declines for the November election. None of the oil men want to see Obama elected, and they know gasoline at nearly $5 per gallon in major population centers won't help McCain. They want their Artci Refuge drilling and offshore drilling permits, and they're willing to pay for it. Remember the price drop for the 2006 elections? Wake up people.
  • scoottie, on 08/21/2008, -3/+1but nancy Pelosi and the others that are going to make billions with t boone pickens say increasing supply by drilling wont help
  • VitriolAndAngst, on 08/21/2008, -1/+6The price of gas will get cheep right up to the election.

    We've had plenty of oil for a while -- it's just that the refineries have been running at 85% capacity.

    After the elections, there will be plenty of clear, and thoughtful comments on why the price went back up.

    >> This is all so that they can get their oil men back in office to ENRON America some more. Don't fall for this.
  • devinmurphy, on 08/21/2008, -0/+2So in conclusion, the supply could go up, or very well fall. But the price may stay constant as long as it doesn't skyrocket or plummet. Am i right? What a vague story.
  • Fallout911, on 08/21/2008, -0/+1The price will probably go up a bit due to the hurricane scare in Florida.
  • digghasnoethics, on 08/21/2008, -0/+3Congratulations !

    The US gets ready to enter recession, China reduced demand in the run up to the Olympics, and demand drops by enough to move oil down to ~$115. However the Olympics ends soon, other countries aren't as dependent on oil as the US anyway and thus aren't on the verge of recession. So demand rebounds and continues upwards and the price with it. All this without an attack on Iran, no hurricane, etc., quite benign really.

    Only now the easy losses in US demand have been used up, and the only way is further into recession.

    As the prices go back up past $150, what are you going to cut off next?

  • Glassmentality, on 08/21/2008, -0/+2Yay. Now I can spend money on things that may actually help the economy.
  • mpwoodruff, on 08/21/2008, -0/+4Anyone else notice that articles are making it to the front page later now? Digg used to be the first place I saw important news, now I often see things from the day before on digg.
  • dualaudi, on 08/21/2008, -0/+1@coustoe, you're very narrow minded.

    Especially to think carpooling and public transportation in the US will effect anything. The great majority of Americans love to and want to drive their cars, you can add another 500 buses per city and that will still not encourage people to give up on personal transportation. Oil's here to stay for another 20 at the minimum.
  • 6minuteabs, on 08/21/2008, -0/+2Digg title- Oil tumbles on surge in crude supplies
    Article title- Oil ends a volatile day slightly higher

    Buried for poor reading comprehension.
  • dswinscoe, on 08/21/2008, -0/+3"We have to drill here and drill now!" - McCain
  • Homerr, on 08/21/2008, -0/+1BWAHHH? We didn't have to drill in the continental shelf to get prices to go down?!
  • dalittle, on 08/21/2008, -1/+3Amazing this is happening right before the US Presidential Election. No way Big Oil is manipulating the market at all. They clearly have no control over the price of gas. Geez, when are we going to knee cap them.
  • rrife, on 08/21/2008, -0/+0Followed up by this article: http://money.cnn.com/2008/08/21/markets/oil/index. ...
  • JMellissa, on 08/21/2008, -0/+1It's good to know that even at a time when our "elected" officials break laws almost everyday, at least the "law" of supply and demand is still being enforced!
  • skyz, on 08/21/2008, -0/+1'concern about decreased demand'

    that's only a problem for big oil

    for the environment that's a celebration

    and a congratulation to the people who decided to use less
  • Hermmunster, on 08/21/2008, -0/+2Utter *****. Gas prices are just as high as ever.

    If our economists can't figure out why, and come up with policy to correct this apparent abuse, then they are as worthless as many feel they are.
  • amenic, on 08/21/2008, -0/+1More smoke and mirrors. More like the gouging of gasoline costs started cutting into revenues for other industries and caused some uproar and finger pointing at big greedy oil.

    I call *****. If you ask me they are just testing the waters to see what the market will put up with.
  • truck87bp, on 08/21/2008, -0/+1Why in the hell are we Exporting 1,048,000 barrels a day? Thought we were importing way too much? http://indexmundi.com/map/?t=0&v=95&r=xx&l=en
  • thelonegunman, on 08/22/2008, -0/+0ahhhhh, right on schedule - just in time for the elections...
  •  

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