[agentsmith2]

Thankfully, Gustav didn't do much damage. So is Oil finally on its way down ?

Oil-how longer can it go ?

"The fact that oil has come down is a sign that perhaps the worst is over. Predictions that oil would go to $200 a barrel now seem more like a fleeting possibility," said Kenneth Kim, economist with Stone & McCarthy Research Associates in Princeton, N.J..

If Oil recedes, it will ease pressure off inflation as well. And that's showing signs. Inflation eased marginally to 12.44 this week.

So - for the Bhpians - is the worse over yet [for economy, high inflation] ? Have we bottomed out ? Are we on our way towards recovery ?

Personally - yes, I think so. I see hope. If Obama is elected in Nov, we will see massive positive sentiments building up.

[iraghava]

I think it's too early to say anything, the market is still to volatile to comment on whether the bulk of the crisis has passed or not. I would wait till the hurricane season passes over before commenting.

[theMAG]

Oil prices dropping will now constitute a temporary phenomenon only. Consumers only grow while stocks remain the same.

[snaronikar]

This is only temporary correction. If this trend continues for another 2~3 months, then we can say that we have come out of this problem. Till then its a temporary correction in the crude market. But whatever said and done, the Petrol and Diesel prices will not come down in near future. This is very clear from the MOP, as Deora has declared this 2 days back.

[joshguy]

I read in some news paper that government is going to stop subsidizing diesel for cars.Only public transport will get it.

then what happens to we diesel car owner?


We pay 67Rs for 1 litre of diesel

[blue_pulsar]

Don't worry, oil companies will not get the prices down.

[aaggoswami]

The current market situation is very volatile and this is mostly temporary. And our oil companies will never make the things better. Even if it remains here and is stable in the given range, the price in India wont go down.

And the further bad situation will mostly come.

Edit : I voted for " No: The worse is yet to come ".

[METISWHG]

IMHO the demand is still going to go up and production will go down to keep oil prices to the recent highs. & diesel too will go up. in UK diesel is already expensive than petrol and i hear so is the case in thailand(where it was earlier subsidized). also read some reports on oil production to be reduced.

[Steeroid]

Too early to comment, and winter's just around the corner - they need a lot of fuel to keep warm in the colder countries.

[nickatnite]

My understanding is that the price of oil skyrocketed due to speculation and not because of availability. Prices will hover around the $90-100 mark for a while and then start to drop a bit.

[lambuhere1]

I have been tracking crude for sometime and it shows that there is a support for it at $100 which is a very strong one. If thats broken, which is a BIG IF, then we can see $60 range soon. If not, we may be seeing again $130 odd again

[kpbhatt]

The North American region will have its share of oil stock taken care of with winter approaching. This means that the prices can remain in the range of 100-120 rather than going down south. However with Gustav not having done any damage to the oil refineries or wells in the Gulf of Mexico , the prices can yo-yo between 80-120 range too.

[joslicx]

From IBNlive.com on petrol prices

New Delhi: The Government on Monday ruled out reducing petrol and diesel prices though international oil prices have slumped.
"Where is the scope for reducing prices? Oil companies are still making losses," Petroleum Minister Murli Deora told reporters here.
State oil companies Indian Oil, Bharat Petroleum and Hindustan Petroleum are making losses worth Rs 400 crore every day compared to Rs 450 crore a fortnight back.
"Oil companies continue to lose money on sale of petrol, diesel, (domestic) LPG and kerosene. There has not been so much reduction in global prices to warrant a price cut," Petroleum Secretary R S Pandey said.
The basket of crude oil India buys averaged $111.09 a barrel in the second fortnight of August as compared with $117.37 per barrel in the first fortnight of the month. Based on an average price of the second fortnight of August, retailers are losing Rs 6.31 per litre on petrol, Rs 13.69 on diesel, Rs 31.39 on kerosene and Rs 312.58 per 14.2-kg LPG cylinder. Till last week, they were losing Rs 7.07 per litre on petrol, Rs 16.22 on diesel, Rs 39.55 on kerosene and Rs 348.89 per LPG cylinder.
The three firms are now projected to lose Rs 165,300 crore in full 2008-09 fiscal, down from Rs 184,801 crore projections of last week. A month back the losses were projected at Rs 205,740 crore.
Pandey said the revenue loss of retailers would be fully compensated, through a combination of oil bonds and assistance from upstream firms like ONGC.
The Indian basket of crude oil averaged $ 113.12 per barrel in August, down from $ 121-122 a barrel average price when the June 4 hike in petrol, diesel and domestic LPG prices was announced.
IOC, the company that controls about 54 per cent of the market, is projected to lose Rs 90,630 crore on fuel sales this fiscal.
The company loses Rs 11 crore per day on sale of petrol, Rs 112 crore daily on sale of diesel, Rs 63 crore per day on kerosene and Rs 32 crore per day on LPG.
Fuel prices in India are pegged at $ 68 per barrel; much lower than $ 112.19 a barrel price on Friday.

[DCEite]

In the short-term, may be yes.

But in the long term, there is no other way for crude than to go up. Reason? Commonsense. Non-renewable resource-> Demand/Supply gap -> Increase in cost.
Period.

[bblost]

The gustav spared the refineries.
The refineries were shut down. They were hence not consuming crude.

So naturally the demand for crude was down. The price dropped.

The refineries will get back online. They will need crude. The price will go up.

Am I missing something or have I got the whole thing wrong.