With the price of a barrel of oil today at $68.49 a barrel Oil prices are around half what they were in July this year, when they hit a record price of over $147 a barrel. We will find a small feature on page 2 or 3 but why hasn’t this hit the headlines? Why aren’t the media shouting about this as they are shouting about the “Financial Crisis”?
A drop in the Oil price is just the positive news we need right now as it is more than just a “feel good” factor, it is a major contributor to helping the economy move again. Fuel is needed to transport “goods to market” and for consumers to drive their cars to go and shop for the “goods” they need. Even in an economic downturn there is no alternative to trucks and cars on the road, it is the cost of using these vehicles that is significant.
Asda and Morrisons in the UK have responded and brought the price of petrol down to under the “magic” £1. per litre at 99.9p per litre. What about the rest? More needs to be done; there is a 50% difference between the price of a barrel of oil in July and the price today. This dramatic price cut in the wholesale market has not been reflected in the price the consumer pays at the pump. The Oil Companies will have you believe that they “buy ahead” or that “it takes time for price cuts to filter though” or some other such line, the truth of the matter is that “someone” is profiteering here. Unless Gordon Brown and the government take firmer action to insist or to force the Oil Companies to slash prices at the pump there will continue to be just be the slow trickle of a response that we have seen so far.
On Wednesday, US economic data showed that retail sales fell 1.2% in September, a sign that consumers were tightening their belts – but they still need to put “gasoline” in their cars and we still need to put “petrol” in our cars over here. Car usage remains the same in good times or bad times, consumers are just driving to different places, instead of driving to a restaurant it may be a trip to a supermarket to get the food “in” for a nice meal at home. Behaviour changes, instead of calling in a Tradesman consumers drive to the Do-It-Yourself store to get the items they need for that odd repair or redecoration and businesses in these sectors have seen a marked upturn in their trade.
Also the US central bank's Beige Book report, which reflects the economic conditions, said the economy had showed further signs of contraction, fanning fears that the US economy is already in a recession - but they still need to put “gasoline” in their cars and we still need to put “petrol” in our cars over here.
Some pundits expect OPEC to cut production when it next meets in November, maybe they will – but this still does not get away from the fact that the wholesale market price is 50% lower now than it was 4 months ago and this saving has not yet been passed on to the consumer with the retail pump price only dropping a few pence. The price of the barrel of oil is lower now than at any time in the last 14 months, we need the media to help, we need the media to be shouting this out from the headlines, not burying it on the inside pages.
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Good question although gas in my area is $2.91. One explanation is some stations are still selling gas that was purchased at a higher price and the drop was very quick.
I do not believe that is the case, here in TN we are at 2.77, I know for a fact that these gas stations dont sit on that much gas, it gets used pretty quickly.
I’m not too sure why gas is the price it is, but something tells me that they’re holding back something to make money from it.
Give it time… but the oil companies won’t be rushing to decrease their prices…
Especially as they are now recording record breaking profits.
It always takes a little while before you see the price of oil reflected in the price of gas. The market can be a bit stubborn. It is ruled by supply and demand. When one gas station drops its price the others will follow but they will keep them as high as they can for as long as they can.
Gas here is now at $1.89.
Gasoline prices will only fall when the price is stable… No one knows the stability of oil, let say consistent for a week.
..oil organizations wont able answer you…i guess
We are at $1.59 in OK. It has a lot to do with distribution and tax.
Your guys talking about gallons right?
Don’t go to Europe the gas prices will scare you!
Gas prices seem to have fallen by now (who knows what they’ll do next month), but I’m more concerned with when the food prices will stop raising.
I’m with Carrie, when can we see these savings filter out to other parts of our daily life? I’m loving the low gas prices, but I’d expect that they’d help lower costs throughout the board and we haven’t seen that yet!
Personally i think its because the petrol companies wanted to make as much money as possible out of the situation before people really started to complain. They are exploiting joe public so that they can benifit.
Excellent question.
They say that the stock they have is when the prices were high, but again who knows if it goes up again in future, then they will not say that but increase the prices.
Yeah, the always say it’s because they have to get rid of all those stocks. But when oil prices do come up, they raise petrol prices almost immediately. Not fair…
I think we’re seeing a bit of a staggered effect, as one industry topples another in a dominoes-like effect.
Jeff
I tynk da US are storing oil bought from the Middle East and they release a fraction to the public. As demand is high, price is high. Once Middle East run low on oil, US will release there stock and ppl will be buying oil from US. Awesome idea!