Wednesday, May 11, 2011
Oil Prices Drop Below $100 a Barrel: Gas Continues to Go Up
An odd fact recently, is that gas prices continue to go up, but the price of the oil used to make gas goes down. Hawaii has the highest gas prices in the world still today, but unfortunately the heartland of the U.S. is catching up to Hawaii in gas prices. For example, Illinois’ average price for gas is $4. 32 for a gallon. Another example is the average gas price in Idiana. They have an average gas price of $4. 24. For the first time since March 16 the price of a barrel of oil was lower than one hundred dollars. Miraculously, oil prices have gone down. The oil price went down because there was lower consumer demand for gasoline and a concern about slowing global growth. The latest government measure of demand for gasoline in the U.S. shows that overall, drivers have cut back gas purchases by almost 2 percent in the past four weeks compared to a year ago. That kind of significant downward move in demand, coupled with rising stockpiles of oil in the U.S., mean prices of crude should be headed downward. Gasoline fell further after trade resumed, breaking technical levels. Total volume reached a record 240,000 lots.Brent crude settled down $5.06 to $112.57 a barrel. U.S. crude fell $5.67 to $98.21 a barrel, after touching as low as $97.50 a barrel.U.S. gasoline futures suffered the biggest daily drop since September 2008, with the June contract settling at $3.1228 a gallon, losing 25.69 cents, or 7.6 percent. It was the biggest loss in dollar terms since September 2008.Rising fuel costs this year have fueled calls by U.S. lawmakers to cut down on speculation in oil markets.