Date registered: Jan 2005
Vehicle: 2006 ML350
Location: Chicago, IL
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Oil Prices Drop Below $56 Per Barrel
But what happens comes summer, are we going to see same high prices of 70$ a barrel next spring/summer??
Oil prices dipped below $56 a barrel on Friday, bringing crude futures about 20 percent below the August peak.
The steady move lower coincided with a recent spate of mild weather, recovery of oil production and refining facilities that were shut down by hurricanes Katrina and Rita and signs that gasoline demand had tapered off.
The average retail price of gasoline in the U.S. is down 25 percent from its early September high of $3.07 a gallon.
Traders are hesitant to declare that oil prices have bottomed out, but said a move higher would not be surprising either given the magnitude of the decline in such a short period of time.
"A lot of the reasons that took us up last year are still there," said oil broker Tom Bentz of BNP Paribas Commodity Futures in New York.
Factors that are supportive of prices include the world's limited amount of excess oil-production capacity, the war in Iraq and the threat of a cold winter, which would drive up demand for home-heating fuels.
Bentz also said that if oil prices continue to slide, OPEC may begin to try to prop them up by talking about, and possibly enacting, a production cut.
Light sweet crude for December delivery fell 74 cents to $55.60 in afternoon trading on the New York Mercantile Exchange. The contract finished at $56.33 a barrel on Thursday, its lowest settlement price since June 15, when front-month crude settled at $55.57. Crude futures hit an intraday peak of $70.85 on Aug. 30.
"The expectation now is that sustained cold weather in the U.S. Northeast is just a matter of time, and that's keeping crude from falling too low," said analyst Victor Shum of Purvin & Gertz in Singapore.
Many parts of the United States experiencing chilly weather in the past few days will see even colder blast next week, according to Accuweather.com.
December heating oil fell less than a cent to $1.695 a gallon on the Nymex while natural gas for December delivery declined by 53.2 cents to $11.41 per 1,000 cubic feet.
Gasoline futures fell more than a penny to $1.448 a gallon.
2006 ML 350 - Black, Appearance Package, Navigation System, Entertainment Package, Sunroof Package, Heated Seats, IPod Integration