August 11, 2008 4:24PM
Good News for Oil… for Now
By Alexis Glick
The Georgia-Russia conflict could have serious implications for oil prices and the United States. This morning Chuck Nash, Fox News military analyst, and Phil Flynn, an oil expert and Fox Business contributor, joined me to discuss the ramifications for the oil markets, the European Union (as it is the main recipient of the pipeline), and the risks to the United States’ support of Georgia.
Despite the Russia-Georgia tension, oil prices continued to move lower today. Had it been one month ago, this engagement would have had ripple effects on the markets. This just goes to show you that the commodity bull trade has seen some of the bubble burst. It may only be a short-term move, but to date, oil prices have declined 22% off their early July peak. According to the Lundberg survey, the average price of regular gasoline in the U.S. is now $3.85; the effects of falling oil prices take several weeks to show up at the pump. Crude oil accounts for 74% of what you pay at the pump. Lundberg also said that U.S. demand for gasoline is at the lowest level since 1981. Who says we don’t how to conserve and that the U.S. cannot have a material impact on oil prices?
Even AAA is forecasting a national average of $3.81 down from $4.11. Not bad, given the fears we had just five weeks ago. The issue now is twofold: one, will the conflicts in Russia and Iran escalate, and two, when will refiners switch from gasoline to make heating oil and other fuels which will likely prove to be much more profitable? Once they do the latter, will we see a pinch and don’t forget the risk to pipeline and rig disruptions if hurricane season heats up?
In the meantime, enjoy this moment. Oil does feel like it’s going lower. We can thank the dollar and declining demand for that!
Comment by chuck
Aug 11th, 2008 at 5:08 pm
With the tensions between the two countries I expected the commidity price to rise. I have an idea for all you journalist. Harrass Nancy Pelosi to fully explain her anti-drilling policy and why she’s going against the will of the American People. Since she’s a know-it-all-leftie what’s her beef against oil? Senator Durban too should be put in the crossfire for his weak explainations too. Becouse he was on Fox yesterday meekly explaining why go after the oil compainies which have a 8.5% over other companies. Still no matter Democrats need who oppose drilling need to be freaked out. A wing of the party,any political party that intentionally goes against the will of the people should be punished. Worst isolated. What they don’t get is that the public is perturbed and the biggest mistake the Democrats made they upset thier own rank and file on the issue.
Honestly they need to be tought a real severe lesson.
Comment by Dave Swiderski - "Happy Valley"
Aug 11th, 2008 at 5:57 pm
What concerns me the most is if and when gasoline prices drop to around $3 a gallon, Americans will think this a “good deal” and fall into this false sense of security and the debate to drill will fall by the wayside. With all the oil we have at our fingertips right here, we should be paying no more than $2 a gallon. These out-of-touch millionaires in Congress are costing each and every one of us every time we fill up at the pump.
The writing is already on the wall for a joint US/Israel hit on Iran later this year (we have 3 aircraft carrier battle groups sitting there in the region), and I can’t imagine the short term hit oil prices will take after that. I’m glad Bush isn’t caving into the Dem’s demands to release oil now from the Strategic Reserve. We may need it later on.
Comment by chuck
Aug 12th, 2008 at 12:46 pm
I came across an interesing story in an energy blog which I found by a Blog Google search on Speaker Pelosi. The blogger has uncovered an interesting conflict of intrest which should be in the news. The O’Reilly Factor can get involved. Well Madam Speaker Peolosi bought $50,000 to $100,000 of stock in T-Boone’s company CLNE. The brave blogger commented that it smells of conflict of intrest but he realley hammered her on her poor stance of cleaning up the “culture of corroption.”
Now is the speaker acting hypricital with her stance on anti-drilling? I watched her Larry King last night and she appeared to real nervous and worried. But to blantly buy stock in CLNE raises ethical questions about the Speaker of the House on energy issues.