[freshnezzz]

Oil falls as economy falters

http://money.cnn.com/2008/10/02/markets/oil/index.htm

NEW YORK (CNNMoney.com) -- Oil prices fell more than $4 a barrel Thursday as investors worried that the ailing U.S. economy would continue to weigh on fuel consumption, despite Senate approval of a plan to unfreeze the credit markets.

U.S. crude for November delivery ended the day down $4.56 to $93.97 a barrel in New York - the lowest settle price since Sept. 16 when oil closed at $91.15 a barrel.

Concern that businesses and consumers would reign in their spending on petroleum-based fuels has played a major factor in oil's fall from a record high of $147.27 a barrel in mid-July.

Economy and demand: As money becomes tight, energy spending is often one of the first areas to see cuts.

"Demand has come in so weak that prices in excess of $100 a barrel are becoming questionable," said Amanda Kurzendoerfer, commodities analyst with Summit Energy

A series of pessimistic economic reports overshadowed the approval by the Senate of a $700 billion rescue plan designed to jump-start the slow economy by encouraging banks to lend to one another.

The Labor Department said new jobless claims spiked to a 7-year high last week, while the Commerce Department said orders for manufactured goods slipped in August by the largest percentage in nearly 2 years.

The Dow Jones industrial average fell as much as 310 points during Thursday trading.

Investors were also concerned about whether the House of Representatives, which rejected the sweeping $700 billion bailout bill Monday, would approve it in a second vote.

Best case scenario: Approval could be positive for oil. Supporters of the intervention say it is a critical first step in stabilizing the financial markets and reinvigorating the nation's economy.

"I think anything that is perceived as having the ability to shore up demand" will improve investor sentiment, said Kurzendoerfer.

However, any benefits to the oil market may take a while to appear.

"Even the bailout isn't going to affect demand real soon," said Michael Lynch, president of Strategic Energy & Economic Research, Inc.

The decline in fuel consumption has already had a drastic effect on consumer and business behavior, as indicated by the manufacturing report.

Auto sales have also plunged for the past several months as buyers spent less and favored more fuel efficient vehicles over high-margin light trucks and SUVs.

"The sense is we're going to see weakening fundamentals for at least the next quarter and beyond," said Lynch.

Failure to pass a bailout plan would likely send crude even lower as investors retreated to defensive investments such as treasurys and gold, he added.

Dollar: Oil also fell Thursday as the dollar gained strength.

The U.S. dollar had been climbing steadily against the 15-nation euro as nervous banks raise the price of lending. The euro slipped dramatically on Thursday, falling below $1.40 in the currency markets.

Because oil and other commodities are traded in dollars, a stronger dollar makes crude more expensive for foreign investors.

Gas: As the economy faltered, the retail price of gasoline continued to slide Thursday.

The national average price for a gallon of regular gas fell to $3.598 from $3.619 the day before, a daily survey by motorist group AAA showed Thursday.

Gas prices have plummeted from mid-summer's highs and are now 13%, or nearly 52 cents, less than the record of $4.114 a gallon set July 17.

Diesel prices, which affect many businesses, fell as well to $4.076 from $4.087 a gallon.

[freshnezzz]

week old but hope its true, i'm feeling the lower gas prices

[just4kickz]

3.80 for premium here... but that's still a lot.

[darkphantom]

it's coming almost close to 80~ guys...I filled up regular for 3.34 today (Beater) ...premium at 3.54

[Nyulak]

Regular (87) is $3.09 near my home; premium (93) is $3.39.

[Seminole]

Regular is $3.49 by me.

[asdflkijd]

its the first time since feb that its been so low, I read that it was lower than like $90 a barrel

[E. Honda]

gas is goin down...woot

[toofasttooslow]

It might be nice at the beginning to pay less for gas, but believe me it is NOT a good sign that oil is falling.

[shift330]

Time to buy all that crap you want from Europe while the Euro is down!

[freshnezzz]

Yes! filled today at $44 i was 56 miles to empty. when i was pumping it clicked and i was thinking, what its not done. saw on news today predicted to be under 3 by thanksgiving. wonder if airlines will lower prices now? i overpaid for Christmas tickets.

[oldaccount]

Originally Posted by shift330

Time to buy all that crap you want from Europe while the Euro is down!

Eastern European mail order bride on the cheap.