Third Quarter Oil Price Drop Largest in 17 Years

Oil experienced one of its largest price swings in history during the third quarter as prices fluctuated within a range of $56 a barrel. From its record high of $147.27 a barrel on July 11, it went a low as $90.51 a barrel on September 16.

Overall in the quarter oil futures fell by 28 percent, the largest fall since 1991.

Along with the obvious economic factors which have slowed down oil demand, there is also the strengthening of the U.S. dollar during that period as well.

November delivery for crude oil fell to close to $40 during the quarter to settle at $100.64 at about 3:00 p.m on the NYMEX. That's the first time it has fallen in seven quarters. It went up by $4.27 in today's trading.

When you take into account OPEC announcing they're cutting production, and the two hurricanes recently hitting the south and disrupting oil flow, it's really an amazing event that the black liguid has stayed this low. Add the ongoing Nigerian attacks on their pipelines and rigs, along with the conflict between Russia and Georgia and it's even more astounding.

It seems like oil futures are completely driven by demand at this time, as according to Deutsche Bank the price of Oil for 2009 New York will probably drop by 23 percent to around $92.50 a barrel. At this time U.S. demand for petroleum has dropped about 4 percent from the same period last year.

Although gas prices increased by almost 9 cents today, overall its followed the decline in oil for the quarter, dropping by 11 percent to end at a nationwide average of $3.633 a gallon, according to AAA.

Oil Drops on Bailout Uncertainty

Oil settled about $1 lower on Friday as the unknown concerning the bailout package continues to paralyze investors across the board.

Crude in the U.S. settled at $106.89 a barrel, while Brent crude in London slipped by $1.06 to $103.54.

With demand for oil slackening because of consumers tightening their wallets, oil would probably be much lower if the hurricanes hadn't disrupted production in the Gulf of Mexico. That has helped support the commodity in otherwise difficult circumstances.

Shell Oil said it will take about two more weeks to get all its offshore fields in production again. Shell is the largest oil producer in the Gulf.

About 25 percent of U.S. crude production is in the Gulf of Mexico.

Oil Prices Fluctuate on Demand and Economic Concerns

Uncertainty is the word floating around concerning oil prices, as investors await the decision concerning the government bailout plan, the decreasing demand for oil, and the time it will take to bring platforms and rigs back to production from recent storms.

Other factors in the mix are the cut in production announced by OPEC earlier in September, as well as the continued threat to Nigerian oil procution by regional terrorists.

The potentially serious consequences on the value of the dollar from the ill-advised financial bailout is also on the minds of oil investors going forward.

Fear and uncertainty keep oil and other commodities in an unpredictable mode. We'll see continued fluctuation in prices going forward until things settle down. Early morning trading on the NYMEX had November deliver for sweet crude dropping to $105.57, although they continue to move up and down from positive to negative territory.

Light Sweet Crude Oil in big $6.01 Increase

Investors continued to move their money out of equities and put it in commodities, as oil was a beneficiary of the recent economic bad news which has hammered the financial companies. AIG was the main culprit today in moving commodities up.

October delivery for light sweet crude in New York surged by $6.01 dollars to finish the session at $97.16.

Across the pond Brent North Sea crude also moved upward by $5.62 to end at $94.84.

The U.S Department of Energy says that over the last month oil-based product use has fallen by 4.4 percent over the same time last year.

Recent bad weather has also caused a drop of 6.3 million barrels in the U.S reserves.

Even with the gain today, prices have dropped by $55 a barrel since the July 11 high of $147 a barrel.

Oil Drops to 5-month Low on Weak Demand, other Factors

Oil continues to plunge from its record high which reached $147 a barrel in July, as it dropped by over $2 a barrel, after settling the lowest on Thursday since April 4. Brent crude followed suit in London as it declined by over $2 a barrel as well, finishing at $103.95.

With China decreasing imports after the Olympics and consumers driving less, oil prices will probably continue to fall. Other factors include the ongoing storm season and the unknown decision by OPEC on what it will do going ahead. The weak U.S and world economy will continue to affect the price also.

The rise in value of the U.S. dollar will also continue to drive down oil prices.

With the Louisiana Offshore Oil Port, (largest oil-import terminal in the U.S.) saying they started offloading oil tankers early Thursday morning, it's also thought it could help keep oil prices down because of the quick resumption of delivery.