May 6, 2011 [Opis] - Gasoline, heating oil, and crude oil futures prices are dropping sharply, the fourth straight day that prices have declined. The magnitude of the drop is the largest yet.
West Texas crude has lost almost $4/bbl and sits just above $105/bbl – almost ten percent from its high. Brent crude in London is down to almost $116/bbl, more than $10/bbl off its highs.
The decline in crude prices is reaching over into finished products. Gasoline and heating oil futures are some 10cts/gal. If you tally up the losses over the last several trading days the cumulative losses have been in the 20cts/gal range. Marketers lifting product at the nation’s racks can expect to see some midday price decreases. It remains to be seen whether or not the market will rebound. People are concerned about demand and they are concerned about slower economic growth amid high prices.
Earlier this week Standard Bank projected slower economic growth in both the U.S. and China because of high oil prices. AAA’s national retail average did not hit $4/gal today. It rose modestly to $3.985. Pump prices have climbed for forty-four straight days, the third longest streak of consecutive price increases on record. Given the magnitude of the gasoline price declines in the bulk market AAA’s national average may not reach $4/gal.
