Oil Hits Seven Week Low; Now at $124/Barrel

for seven weeks' trading, the price of oil continue to slide. today's trading is now down to $124 per barrel. From its peak of $147 per barrel last July 11, the price drop has seen and estimated to $23 for seven weeks now.

The decline came after data late on Wednesday showed a larger-than-expected increase in domestic U.S. gasoline stocks last week, together with weak implied demand. U.S. crude stocks dropped after a sharp decline in imports.

"We do not see any factors to push up prices at all at the moment," said Tetsu Emori, a fund manager at Astmax Co Ltd in Tokyo, adding he expected oil to move towards $117 or $118 a barrel this week.

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Oil Price Records Historical Biggest Decline

Historically, some analysts said that the latest $9 decline in oil price is said to be the biggest decline for 17 years of oil trading. The decline was due to snailed-pace US economy as it reportedly needs to lower its oil demand from the world oil markets.

The drop in oil was the largest single-day slide in dollar terms since Jan. 17, 1991, when oil fell by $10.56. On that day, President George H.W. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War.

But in 1991, oil was trading at just $32 a barrel, so the more than $10 slide in dollar terms represented a record 33% drop. Oil fell 4.4% Tuesday, which does not even crack the top 100 price declines in percentage terms.

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Are Energy Wars Possible?

Historically, oil price data shows that it has reached the maximum price since oil trading became one of the most important business trading in the world. There are futuristic analyses, that oil price may ramp up to $200 per barrel in the coming next few months. With this oil price possibility, oil trouble or energy wars could possibly happen.





Oil drives so much of the global economy, it's almost impossible to fully imagine the world of $200 oil. No question, the shock will force nations to go greener much faster than now, particularly by conserving energy and developing and adopting new non-fossil fuels. But none of this can happen full stop in six to 24 months. So the predictions tend to be gloomy: some analysts see a shift toward regional trade, and even a major reversal of globalization itself, as rising transport costs make it too expensive to ship many kinds of goods long distances.
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A Good News on Still Climbing Oil Price

What the good news? The still escalating oil price is definitely not a good news. As of today, oil price is still at $118 per barrel but the sight of going $120 next month paused. Why? Here comes the good news: the US inventories of oil are said to have a positive response. Find out why....


But U.S. Energy Secretary Sam Bodman has rejected both suggestions, saying the tax revenue is needed to help build and repair U.S. highways and bridges and that the nation needs to build its emergency oil stockpile so it can replace 90 days of crude imports if necessary. The reserve now has only about a 55-day supply now.

Americans spent $100 billion on gasoline in the first quarter of this year, according to a recent survey done for the Consumer Federation of America -- up from $40 billion in the same quarter of 2002. The works out to an increase of about $600 per household, the group said.

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