Quick Hits: $147 Oil Is Sooooo July, 2008
Brief scrutiny of today's headlines.
A stronger dollar and slowing worldwide growth continue to drive oil prices down.
A barrel of oil recently fetched $113.46 on the New York Mercantile Exchange, about 23% below the peak of $147.27 reached on July 11th.
The US Energy Information Administration says gasoline supplies have dropped more than expected, but demand for fuel continues to fall.
Demand for gasoline fell 2.1% through July 31st, the American Petroleum Institute reports. High prices at the pump have forced many drivers to reduce miles driven.
Concern about an economic slowdown in the United States, Europe and Japan are driving oil prices down. Demand for oil falls when the economy slows.
On Thursday, BP (BP) reported that it had resumed pumping gas into the Baku-Tbilisi-Erzurum pipeline through the nation of Georgia, but two oil pipelines remain closed after Russia invaded the nation. Secretary of State Condoleezza Rice has urged Russia to honor a ceasefire agreement with Georgia. Russia refused to leave the country after signing a peace agreement sponsored by the European Union.
The dollar rose to $1.4698 against the euro, the highest level since February. The dollar has climbed about 2% this week. The dollar climbed above 110 Japanese yen on Friday.
But falling gasoline prices don't mean salvation for strapped consumers. Lower gasoline prices will be offset by higher costs for heating oil and natural gas next winter. Residential heating oil is expected to average $4.34 a gallon, up 31% from last year. Households heating with natural gas will pay an average of $15.58 per thousand cubic feet, about 22% more than last winter.
Oil stocks remain strong, but Exxon-Mobil (XOM) and ConocoPhillips (COP), which each posted record second-quarter profits in July, closed slightly down Thursday.
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