Oil prices down as Gustav leaves Gulf
Although assessments of the derricks and refineries in the Gulf are only just beginnng, the expectation is that Hurricane Gustav left minimal damage. Oil futures dropped on the assumption. Steve Henn reports.
Oil traders work on the floor of the New York Mercantile Exchange in New York City. (Spencer Platt / Getty Images)
More on The Economy, Oil
TEXT OF STORY
Renita Jablonski: Oil prices are down sharply today. Traders around the world appear convinced Hurricane Gustav has spared the Gulf Coast infrastructure. So with the wind easing and the dollar at a 10-month high, oil prices fell more than $8 to just under $108 a barrel. The last time prices were in this range was in early April. Steve Henn has more.
Steve Henn: Barbara Shook is the Houston Bureau Chief for the Energy Intelligence Group. She says inspections of platforms and pipelines in the Gulf and around New Orleans are just beginning.
Barbara Shook: The oil companies will be sending out their surveillance planes and helicopters and what have you.
But energy traders aren't waiting for official damage reports to filter back. They're selling off oil futures this morning and oil prices are dropping.
Shook: The assumption is whatever damage may have occurred will be minimal.
Shook says a oil price plunge was only a matter of time.
Shook: What's going on is that you finally have prices catching up with supply and demand. The over-inflated prices that we had during the summer and spring were never justified.
Shook believes slowing economies around the globe and reduced use of gasoline here at home has meant there was never really enough demand for oil to support prices near $150 a barrel. And she blames this summer price spike on speculation.
In Washington, I'm Steve Henn for Marketplace.
Comments
Comment | Refresh
09/02/2008
lower the gas prices to 1.00
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