Oil and gas prices are heading down

There is mounting evidence that highly volatile oil prices are retreating. Can gas prices be far behind?

Oil prices hovered near $98 a barrel Thursday in Asia as investors anticipate the likely end of an aggressive U.S. monetary stimulus, Associated Press reports.

That’s quite a decline from a 30-month high of almost $115 on May 2, AP reports.

The second round of a Federal Reserve program of buying Treasury bonds, known as quantitative easing, has helped boost the money supply and weaken the U.S. dollar, AP writes. That makes commodities such as oil more expensive here.

The bond buying program is scheduled to end next month.

“The major policy that has shaped oil prices is winding down,” Cameron Hanover said in a report. “As long as the Fed does not come up with a third round of quantitative easing, the major reason for oil price strength will be gone.”

A third round is unlikely now. In fact, Atlanta Fed President Dennis Lockhart told me that in a recent interview.

On the gas front, recent stories have quoted some analysts predicting a decline of as much as 50 cents a gallon over the next few months.

The Energy Information Administration said Wednesday that U.S. gasoline demand dropped 2.4 percent last week — the largest drop in seven consecutive weeks of declines, AP reports. Meanwhile, oil supplies grew last week by 3.8 million barrels — more than twice as much as what analysts expected, AP writes.

“The world economy is clearly slowing,” said Capital Economics in a report. “Rather than being in the early stages of a super-cycle, the prices of many industrial and agricultural commodities seem more likely to be forming bubbles which are set to burst.”

- Henry Unger, The Biz Beat

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80 comments Add your comment

Shudow7071

May 12th, 2011
6:42 am

Fill er up! Ding, Ding…

Farmer

May 12th, 2011
7:07 am

Raise it $2 and cut it $.50 and they think we will be happy? Where is G Bush and his “oil cronies”. When GW was helping his oil buddies gas was $2.

dixie

May 12th, 2011
7:10 am

This total ignores the oil refinery situation in La. due to flooding. If those refineries are off line all summer then expect another Katrina like event to kill the summer vacations. It feels like lately if it were not for bad luck we would have no luck at all.

Bone

May 12th, 2011
7:10 am

Well, apparently the oil companies are finding other ways to raise prices, as to the “expected” flooding in New Orleans. Oil goes down, then gas prices goes up 14 cents/gallon in ONE DAY!

I’ll see it when I believe it!!

Ramguy

May 12th, 2011
7:12 am

Funny how when the price of oil goes up, gas goes up immediately. When it drops it takes a while for it to drop. It will go up more than once a day! We know why and everyone from the Prez on down should say it!

CP

May 12th, 2011
7:13 am

Farmer: I would rather pay the current gas prices than have George in office. George Bush LIED to all of us, that will never be forgotten or forgiven.

Nana

May 12th, 2011
7:15 am

Ever since they announced it would go down about $.50 by June, it’s steadily gone up! So what else is new. Never will understand why it can go up 7 cents overnight but when oil drops per barrel it takes weeks to reduce it. Anyone have an idea why? Crock of crap is what it is.

Nana

May 12th, 2011
7:17 am

To CP: Do you honestly believe that Dumbama hasn’t lied!!! The main qualification for being in office is “do you lie well”! Get a grip.

Nobama

May 12th, 2011
7:24 am

Obama lies as well. You will know when he is lying. His lips will be moving.

Nate

May 12th, 2011
7:24 am

Tell that to the gas stations right off I-20 on Lee Road. The price has jumped from $3.89 on Monday morning to $4.09 this morning. I think that qualifies as a rising trend.

What The?

May 12th, 2011
7:25 am

“Oil and gas prices are heading down”…On what planet?

Mary

May 12th, 2011
7:36 am

I think we need to start flooding the governor’s office again with calls, something is NOT right when the barrell drops this far in a week but the prices at the pump keep rising??? Not right!!!

Rubix's Cube

May 12th, 2011
7:42 am

The flood is real. You watch as in a few days when the flood waters reach Baton Rouge. If they affect the refinery in any way not only will prices keep going up there will probably be shortages in parts of the southeast. Prices will come down at some point in the 60 days ahead of us depending on the effects of the flood to the refinery. If you had told me I would be happy with $3.50 / gal. 4-5 months ago I would have had a good laugh.

Danny G

May 12th, 2011
7:43 am

Too many politicians getting paid in Washington. Oil companies think that Americans are real stupid and believe anything they say. Do you really believe that the price of a barrel of oil today is what they paid for the gallon you put in your car? Do you realize that when gas goes up, the State and Fed’s make more money off of you? Do you know what the gross profit of Exxon was last quarter? Trust me. The more you learn about this oil bs, the more you will want to march on Washington, if we could afford to drive there.

Ackshun

May 12th, 2011
7:43 am

This “weak-dollar” stuff is a bunch of crap. The price is higher because WE let the oil companies know that we would by gasoline not matter what it costs. Remember back when Katrina hit the gulf coast the a relatively unaffected oil raise prices to nearly 6 bucks a gallon. That was a test. A test of market price tolerance and guess what? we failed miserably. We had people lined up around the block to pay nearly six-bucks a gallon, in fact they sold out of gas at stations due, not to Katrina, but increased demand. People still pumped gas into the cavernous tanks of their SUVs. Still piled the family in the car and drove thousands of miles to see a stupid cartoon rat or a hole in the ground in the Arizona desert. And Big Oil was listening. I mean why sell gas for two bucks a gallon when people will pay four (or six). So now they push the prices up. They push the price up until you show them you have cut back on consumption and then they throw you a .50 cent bone to shut you up until next year when they will do it all over again but you will tolerate a price that’s a bit higher. The goal sell gas for as much as the general public will pay for it and not one penny less. And it’s working and they are making billions and it is OUR fault.

Leary

May 12th, 2011
7:48 am

Let’s keep the demand down. Drive less, drive more fuel efficient cars and drive the gas price down. We can’t depend on government to do anything and the oil companies are going to charge as much as supply and demand allows. It is up to us!

Ghostrider

May 12th, 2011
7:59 am

What a crock of Sh!t this is, Gas Tuesday night was $3.78 at kroger in Dallas on Wed. morning it was at $3.99 a .21 cent increase over night. Yeah Gas is going down all right, after they raise it up another buck. Effing crooks, I hate the effing Govt.

Gary

May 12th, 2011
8:12 am

Yeah….just last week oil had a big sell off down to around $97 a barrel and then shot back up to over $102 a barrel. Until the dollar is stable we will continue to have this problem. It is not speculators. Investors put their money into commodities when the dollar is weak. That is why oil and gold are at or near all time highs.

Will

May 12th, 2011
8:16 am

3 of the top 5 oil refineries are in Louisiana. Why would some of our most needed commodities be constructed in a place that is, for the most part, below sea level. I understand it makes sense to place the oil refineries closer to the crude but shouldn’t we try to place them a little closer inland and in a more stable environment? We have one oil refinery in Savannah, Georgia…it produces 28,000 gallons per day as compared to LA which produces around 1.3 million gallons per day. The state of Georgia should become more proactive in regulating our own supply and demand. The last oil refinery was built in 1976!!!!! We don’t have a shortage of oil we have a shortage of refineries, which in turn restricts our supply..

Julie

May 12th, 2011
8:22 am

That’s not true. The price of gas went UP yesterday in my neighborhood by 10 cents. I expect it to go up again too, not down.

C'ville Driver

May 12th, 2011
8:30 am

I am getting tired of hearing this story on the news and now reading it in the AJC. The price has gone up 20 cents since Monday here. In ‘08 it was W’s fault. Who’s fault is it now? You know it will never be Obama’s fault.

Bob D

May 12th, 2011
8:37 am

You people have no idea how he oil market works.

sladersaan

May 12th, 2011
8:37 am

Well stated Leary….if we keep buying it at $4.00 a gallon, they will sell it at $4.00 a gallon. If you want to get mad at someone, yell at the reflection in the mirror.

Oh gasp, personal accountability…how dare I?

R is for Recession

May 12th, 2011
8:39 am

And why are metro Atlantans clamoring for more roads and road improvements to be built? We just be investing in mass transit so there are alternatives to gas-powered transportation. We need to build our neighborhoods with sustainability in mind.

JIm tavegia

May 12th, 2011
8:51 am

I urge you all to boycott gas on May 29, 30, and 31 and try and send a message in a small way that gas price gouging is not acceptable. Go to church and then stay home and enjoy some family time. $4 gas is killing any chance of a recovery. No none in Washington, D or R, cares about the middle class anymore. No one!!!!! Take a stand in a small way.

sladersaan

May 12th, 2011
8:55 am

Mr. Tavegia…that only works if you boycott USING gas. You will need to buy it sometime and they have the patience to wait. Boycotting the purchase only causes mass purchases just a few short days later causing a panic and price increases.

Homer

May 12th, 2011
8:58 am

How about some sidewalks so that Mr. and Mrs. Fatazz America can walk or cycle on short errands? There are parks and plazas within a mile of my suburban subdivision and not one interconnecting sidewalk.

It looks like the gas stations are making up for what they lost over the last few weeks. The report is that they held prices down below $4.00 a gallon while the gas was getting more expensive. I think they know it is headed down so they jacked the price up overnight by ten cents a gallon in an effort to recoup some profits.

don’t blame the resellers, I blame the politicians for the lack of a short term and a long term energy policy, and the lack of a viable means of transportation other than the auto.

don

May 12th, 2011
9:07 am

Evidently, Henry hasn’t filled up his car lately. How could you even write this article? Typical of todays journalism. Read a blurb yesterday stating Obama’s rating was up due in part to falling gas prices…..uh, did I miss something? Falling gas prices? Really? Atl gas prices are up 20% in the last 2 days, Henry.
And to those of you w/ your various ideas, it is quite simple. Unless and until we safely harness OUR OWN natural resources (something the current administration refuses to do, while typically getting a pass from the media…see Henry’s article above…), we remain at the mercy of others with less than good intentions towards us.

Sandy

May 12th, 2011
9:13 am

I don’t understand why the price goes up everyday. To whom, should one complain? I can’t hardly pay my bills, the cost of food, etc. I’m very disappointed in my government.

Farley Hartsworth

May 12th, 2011
9:16 am

I recall this scene as a teen as I pulled into the filling station: “Fill it up and check the oil. Could you get that windshield please?”………”Will that be all sir? ‘$4.50 PLEASE.”

Enry Hunger

May 12th, 2011
9:19 am

Price drop? That’s only at Wal Mart. MEGA OIL CONTROLS THIS COUNTRY AND THUS…..PRICES.

G

May 12th, 2011
9:23 am

I’ll believe when I see it. Gas prices to go down this summer? I thought gas prices allways rise during the summer. Oh, and my gas station in Chamblee was at $3.83 Monday and now $3.99 this morning!

Honky Talkin'

May 12th, 2011
9:27 am

And why do Republicans want to give subsidies to big oil companies?

Richard

May 12th, 2011
9:29 am

Gas went down? Where? Oh someone is reporting from the capital city of Fantasyland. Gas isn’t going anywhere but up. I love the fact that oil went to below $100 a barrel and then gas soared to $4.10 a gallon for the cheap stuff. Yes I understand the whole flooding thing, but come on, has it happened yet? No. don’t jump the prices before the crisis even happens. At least let the disaster happen and THEN raise my gas prices. That makes more sense than, “well the floods might damage production in Louisiana, so in anticipation we have raised the price of gas a whole dollar.” That’s kind of like preparing for death at age 5. Well I will eventually die anyway, so why not go ahead and make arrangements now for an event that might happen tomorrow or 70 years from now.

Gail

May 12th, 2011
9:35 am

Have you bought any gas lately? The price of a barrel may have gone down, but as others have said, gas prices are going up not down in metro Atlanta. My local station went up 11 cents Tuesday to Wednesday. I don’t care what “they” say. I heard that Atlanta’s average price is 2 cents above the national average.

jo

May 12th, 2011
9:42 am

Are you serious? Oil has fallen 10% in the last week yet gas has rised from $3.70 to $4.09 at my local station. Absurb. Change the title to “Oil has fallen, gas risen”.

Oil101

May 12th, 2011
9:46 am

Oil companies profit margins are quite low. We have an entitlement attitude in this country. Cheap gas, cheap airfare, govt. handouts etc. etc. If you do not like the price, do not buy the product. Take the bus, car pool, ride a bike, live close to work. We all have options.

B

May 12th, 2011
9:50 am

Gotta love how the price has gone up $.20 in the past 2 days alone just so they can “take it down $.50″ (or so they say) in a few weeks. No matter what, we are still going to be paying $3.50+

jd

May 12th, 2011
10:05 am

Record profits for oil companies and they complain about margins???? There are lies, damn lies, and oil company profit calculations!

al.com

May 12th, 2011
10:08 am

Come next year I hope we have a change. Why are we put up with obama and his clueless policy of blocking drilling and closing coal companies THANKS OBAMA!

Fred

May 12th, 2011
10:21 am

Man, you people are some kind of dumb and ignorant. This country is totally scruuued.

oil101 hahahaha

May 12th, 2011
10:22 am

I’d like some of what you have been smoking! Oil companies all have reported record profits but somehow margins are quite low. Riiiight!!!!!

TC

May 12th, 2011
10:26 am

All you nobama, Obama haters need to shut the hell up. It’s President Obama to you morons. You idiots want the President to fix the ills of this country when it took dumbush eight years to screw it up. The President has done a great job, and he will be elected for another four, so get over yourselves.

luangtom

May 12th, 2011
10:44 am

One of the local network stations told us last night that even though the price of a barrel of oil is falling, the local prices are still rising for gasoline due to speculation that refinery operation MAY be interupted due to flooding along the Mississippi River. Is this not what the so-called panel of experts that was appointed by the President to investigate over-charging and speculation were to help quell and not allow to happen?

Big oil will never be slapped on the wrist to cease their price-gouging and speculation. As long as they control the Congress and White House via campaign-funding, either directly or indirectly, there will be nothing done to stop them from their high-profits and high-prices. The President and Congress give mere lip-service to placate the masses.

Staycation is the answer

May 12th, 2011
10:51 am

I agree…how do we get everyone to stay home for Memorial day weekend? Only travel local and don’t use your SUV’s if you have a more eco friendly type car.

GApeach

May 12th, 2011
10:58 am

@TC please list 3 good things Obama has done for the American people…

Now get of the libraries computer and go back home to the projects and keep collecting your welfare check and stop posting. Thank you.

Sell food stamps for gas money

May 12th, 2011
11:15 am

GApeach-LOL~ I am soooo sick of people who collect free money and sell their food stamps for gas money, weed, cigarettes, beer, whatever they want. Always have a sad poor me story, and constantly have their hands out for free electric, gas, water, whatever the agencies will give them. Then after they sell their food stamps go to the food banks!

bufbox

May 12th, 2011
11:19 am

Need a few more refineries … not in Louisiana. When existing refineries are fully on-line, their capacity just matches U.S. needs.
Pump prices are effected by more than barrel price. The ability of refineries to meet the need figures heavily. Or should I say the desire of refineries to match the need.

Lobosolo

May 12th, 2011
11:21 am

Wow, GApeach, not too racist or anti-poor folks are we?

Now, get your head out of your sorry azz, get to the libraries and garner some knowledge, and stop posting… F.., I mean, thank you…

1. Started the long and arduous process of cleaning up the total wreck of a country GeeDubya left behind…

2. Tracked down the perpetrator of 9/11, who Gee Dubya decided he didn’t really care about getting, as long as he could lie his way into starting turmoil for the benefit of his oil buddies…

3. Proposed that the tax breaks for oil companies be discontinued…

That’s just three quick ones, Genius… I’d write more, but people of your ilk tend to get testy when faced with reality…

Lobosolo

May 12th, 2011
11:24 am

Sell food stamps… have you ever actually seen this happen, yourself, or do you just accept this notion as total fact based on the hysterical commentary of your heroes?