Econ 101
Market fuel prices drop
By Patrice Hill
THE WASHINGTON TIMES
April 28, 2006
Oil and gasoline prices took another tumble in New York trading yesterday on signs of increasing supplies and slackening demand in the United States and China, adding to an 18-cent drop in wholesale gas prices that likely will produce relief at the pump in the days ahead.
Since peaking above $75 last week, the price of premium crude oil has fallen to just under $71 yesterday on the New York Mercantile Exchange, while gas for delivery in May has plummeted to $2.07 a gallon after touching a high of $2.25.
Pump prices have flattened out at $2.92 nationwide for regular unleaded, 50 percent higher than they were in February but not yet reflecting the declines in the futures and wholesale markets.
The biggest factors causing price drops have been signs that demand for gas is running about 1 percentage point behind last year's level -- most likely in response to the rapid run-up in pump prices since last month -- even as refineries are racing to take advantage of high prices and increase scarce supplies of summer fuels.
[Note by Republicus: In the April 21 post "Dead Dinosaur Gunk Going Gold," Republicus finished by saying:
And that's precisely what happened with the drop in prices.
Unfortunately, the drop will encourage the same old behavior that forced supply to raise prices in the first place.
Americans should understand that.]
By Patrice Hill
THE WASHINGTON TIMES
April 28, 2006
Oil and gasoline prices took another tumble in New York trading yesterday on signs of increasing supplies and slackening demand in the United States and China, adding to an 18-cent drop in wholesale gas prices that likely will produce relief at the pump in the days ahead.
Since peaking above $75 last week, the price of premium crude oil has fallen to just under $71 yesterday on the New York Mercantile Exchange, while gas for delivery in May has plummeted to $2.07 a gallon after touching a high of $2.25.
Pump prices have flattened out at $2.92 nationwide for regular unleaded, 50 percent higher than they were in February but not yet reflecting the declines in the futures and wholesale markets.
The biggest factors causing price drops have been signs that demand for gas is running about 1 percentage point behind last year's level -- most likely in response to the rapid run-up in pump prices since last month -- even as refineries are racing to take advantage of high prices and increase scarce supplies of summer fuels.
[Note by Republicus: In the April 21 post "Dead Dinosaur Gunk Going Gold," Republicus finished by saying:
The good news in all of this is...(2) the fundamentals of supply and demand themselves may preempt any catastrophes by the simple fact that there's only so much consumers are willing--if not able--to pay for anything...
And that's precisely what happened with the drop in prices.
Unfortunately, the drop will encourage the same old behavior that forced supply to raise prices in the first place.
Americans should understand that.]
posted by John | 1:20 AM
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