Wednesday, September 19, 2012
The price of crude oil is down again today, making a seven percent loss for the week so far. This after it hit $100 on Friday for the first time since spring. Right now, it's below $92 a barrel.
So why is this happening? Commodities usually gain or lose value in concert, but gold and silver are holding steady at $1700 and $34-1/2, respectively.
The Associated Press reports that "there have more signs this week that the global economy is slowing down, which tends to push oil prices lower because people and businesses use less energy."
Imagine that. If people's demand for a product falls, the price goes down as well. Who'd have thought? The article continues with "Also' (which should be 'In relation to that'), "crude inventories rose three times more than analysts had expected last week. Crude supplies grew by 8.5 million barrels."
Don't expect the price to fall much further, though. Oil should remain in the $90-100 range for the foreseeable future, and gasoline at $4 or a few cents below. Production costs are a lot higher than they used to be, for one thing, and if the price of crude began to slip radically enough to endanger civilization, a.k.a. Exxon, you can be sure that the petroleum-governmental alliance would do something to stave off disaster, such as increasing the allotment of oil going to the strategic reserve.
As President Calvin Coolidge famously said, "The business of this nation is business," and the business of 47 percenters like you and me is getting by any way we can.