Oil Down $10 per Barrel

[dollardaze]

A spokesperson for the Federal Reserve, warned of economic risks and accelerated inflation Tuesday. Wall Street saw stocks churning, and oil plummeting. The Dow Jones industrials was down 200 points after the opening bell, but surged back into positive numbers then fell again slightly.

The dollar also fell against the euro, to a new low. A report showed consumer spending slowed more in June than economists had predicited. General Motors said it would be slashing jobs and would suspend its dividend.

Oil prices, previously trading at record high levels, suddenly plunged by $10 per barrel. One analyst said that the only times moves like this was seen was during the first gulf war. This move led to the early mid-morning rally seen in the stock market, which then came back into positive numbers, and oil was trading at $137.63, which is down $7.75 in the early afternoon. An analyst said that if you talked to all the experts, you wouldn't find out what was going on. That they just couldn't decide what the impetus was for the drop.

The overall stock market moved higher on the oil news, but the pickup didn't help Fannie Mae and Freddie Mac, shares of which were down 15%, even after the Treasury Department plans to help the mortgage finance giants.

Worries that the American government has taken on too much of the nation's financial risks had the dollar falling to the new record low against the euro.

[moneysense]

So by the people in the know not knowing what caused the price of oil per barrel to fall, we have no indications whatsoever as to whether or not this will continue to fall, remain constant as is, or will be rising again.

I am wondering how much the new oil wells that are being drilled here in the U.S. have to do with the drop in prices? Or is it some other reason entirely. Perhaps demand is falling, making supply higher due to people not driving as much.

I will be watching the news with much interest in seeing where oil prices will be heading next and whether or not we will see a significant drop in prices at the pump.

[dollardaze]

I just read that due to the fear of further war in the oil bearing countries, that oil prices are rising once again. I'm not sure how much of a rise in cost, it wasn't stated in the article. It seems we are becoming mired in those higher costs, these days. The price drops for just a few days or a week and then rise once again...........the reasons though vary (or so the experts say).