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Oil Prices Fall As Storm Misses Rigs

Storm misses oil rigs, prices sink

By Mark Huffman
ConsumerAffairs.com

July 22, 2008

• Why Are Oil Prices Falling? • Labor Day Gas Prices Up a Penny • Gas Prices Fall for 37 Days • Gas Prices Slide 8 Percent from Record • Gas Prices Creep Down • Oil Price Trend May Be Good News For Consumers • Gasoline Drops Below $3.90 a Gallon • Gas Prices Pull Back Slowly • Oil Prices Fall As Storm Misses Rigs • Latest Gas Price Round-Up • 'Run Your Car On Water' Scheme Could Leave Consumers All Wet • Unregulated Energy Trading Blamed for Much of Gas Price Gusher • Airlines Join Effort To Limit Oil Speculators • Questions Raised about MyGallons.com • 'Hypermiling' Is Dangerous, Says AAA • Struggling Drivers Blame Washington for High Gas Prices • What’s Really Fueling Those Sky-High Oil Prices • Credit Card Fees at the Pump are a 'Hidden Tax' on Consumers • Survey: 3 Out of 4 Angry About High Gas Prices • $2 A Gallon Gas Possible, Analysts Tell Congress • Speculators Buy More Oil Contracts Than Oil Companies • Saudis to Pump More Oil • Limiting Oil Speculators Gains Ground • Congress To Probe Oil Price Spike • Oil Market 'Saturated,' Iran Claims • Feds See No Relief from High Gas Prices • High Gas Prices Could Mean Lower Insurance Rates • High Gas Prices Good For Kia, Honda • Gas Prices Rip Past $4 and Keep Climbing • Administration, OPEC See Different Causes Of Oil Surge • Feds Probing Possible Oil Market Manipulation • Beware of Fuel Sippers Sipping High-Test • Retailers Respond to High Gas Prices with Discounts, Promotions • Rushing Into a Smaller Car Too Soon May Not Save Money • Hybrid Sales and Prices Climb in Lockstep with Gas Prices • Truckers Bemoan Burden of High Diesel Costs • Gas Prices Biting into Worker Productivity • Consumers Warned About Gas-Saving Schemes • Is Tony Soprano Controlling Gas Prices? • Oil & Gas: The New Bubble • Critics: New Federal Gas Mileage Standard Falls Short • Consumers Feeling Pain of Skyrocketing Gas Prices • New Gas Price Record Forecasts Expensive Summer Driving Season --- • More ...

Maybe now the smart money is on lower oil prices. A barrel of crude, which topped out at $147.27 on July 11, fell more than $5 Tuesday, hitting $126, a six week low.

Analysts say traders sold futures contracts after weather forecasters reported that the tropical storm in the Gulf of Mexico will bypass the oil rigs. It was the damage to rigs caused by Hurricane Katrina in 2005 that began oil's rapid ascent.

Prices began to fall last week, as more and more traders rushed to sell their contracts. There was little in the news to prompt the wave of selling. Congress has talked about limiting speculation in the oil market, but that threat isn't imminent, since lawmakers are about to leave for a month long vacation. Senate action, however, could come this week.

Perhaps prodding oil traders to liquidate their contracts was a sign last week that the falling U.S. dollar may have found a bottom. The dollar has continued a slight strengthening against the euro this week, reducing oil's appeal as a currency hedge.

At any rate, it all comes at a good time for weary motorists, who are paying in excess of $4 a gas nationwide. While the declines have yet to be felt at the pump, many analysts are hopeful they will. Gasoline for August delivery fell more than eleven cents Tuesday, to $3.10 a gallon. That's down from its July 11 high of $3.63. At a retail level, pump prices hit a record $4.12 a gallon on July 17.

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