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Slipping and Sliding

Oil is still dropping according to an article on CBS: Analysts Ponder If Oil Bubble’s Burst

Light, sweet crude for August delivery fell 41 cents Friday to settle at $128.88 on the New York Mercantile Exchange – well below its trading record of more than $147 a week earlier.

The average price of a gallon of regular gas fell about a penny for the day, to $4.105 according to auto club AAA, the Oil Price Information Service and Wright Express. Diesel prices dipped three-tenths of a cent to $4.842 a gallon.

So, oil comes down over $18/barrel while gas drops a penny. Not only that but:

If oil buyers sense that the slide was overdone, you’ll probably notice at the pump quickly.

“If (oil prices) rebound, you’re going to see a quick reaction at the gas station, because their profit margins are so stretched,” AAA spokesman Geoff Sundstrom said. “They may be very fast bringing prices back up.”

Stretched? Retailers make a dime a gallon, regardless, and the oil companies are enjoying record profits, so whose margins are stretched?

You should have heard about the latest deadly collapse of a large crane: Crane Collapse Kills 4 At Houston Refinery.

The reporting notes that:

Aerial views of the site weren’t immediately available; air space around Houston was restricted because President Bush was in town raising funds for a congressional candidate.

I guess political fund raisers will always trump a disaster in the world according to the Hedgemony, but keep this in mind:

Lyondell Chemical, a U.S. company, and the Dutch firm Basell were rivals until they announced a $12.1 billion deal last July to create one of the world’s largest chemical companies.

On the chemical side, Lyondell produces ethylene, a crucial precursor to a range of other chemicals, as well as propylene oxide, which is also used in producing a variety of chemical products. Basell focuses on polyolefins, common types of plastic.

If they try to jack up prices at the pump based on “that refinery accident”, this refinery is used to produce plastic, not gasoline.


1 Michael { 07.20.08 at 9:37 pm }

Must be something about your locality, then, because gas prices here are now below where they were when the price last went up. Before that last big spike, a gallon of regular unleaded here was averaging $4.13. It spiked up to $4.25, and now it’s back down to about $4.09.

2 Bryan { 07.20.08 at 10:30 pm }

$4.09 was our spike, but it has persisted at just below $4.

As soon as it drops I have my gas cans ready, as I use it in my Mother’s generator.

3 Michael { 07.21.08 at 11:18 am }

Still dropping here. On my way to work this morning, the low price I saw was $4.04, and the high price was $4.15.

4 Bryan { 07.21.08 at 1:33 pm }

You can forget that, Mexico is shutting its Gulf facilities because of Dolly which is going right over the top of them.