Oil reaches new overnight record of $103

Posted Sun Mar 2 2008 9:11 PM by Viknesh Vijayenthiran

Oil prices have come down from their latest overnight record of $103 thanks to the greenback recovering some of the ground it lost and military incursions in Turkey and Northern Iraq easing tensions a little. Since February there has been an almost 20% rise in oil prices, mainly due to the weak U.S economy and tensions in the Middle East. The news is welcome relief after the price almost reached the highest point in history during the 1980's Iranian hostage crisis which saw oil reaching $103.76 a barrel (adjusted for inflation).

While many analysts believe the declines in oil prices are only temporary and that speculative buying will push the price of oil higher, other analysts are saying that the prices have reached a critical point and could crash back to pre-February prices, Reuters reports.

Meanwhile, gasoline and diesel prices continue to rise quickly with gas rising 0.3 cents overnight and and diesel jumping by 1.5 cents to a new U.S. record of $3.64 per gallon. Fuel prices aren't the only thing set to increase as oil becomes more expensive - almost every type of manufacturing process and product transport process requires gasoline meaning that there could be an increase in prices across the board, which would increase inflation and lower the value of the dollar.

Reader Comments

Mon Mar 3 2008 8:40 AM
chris says

OH MY GOD. ITS TRUE. AHHHHHHHHHHHHHHHHHH SOME ONE GET ME A GUN!!! I CANT LIVE IN THIS WORLD!!!
Mon Mar 3 2008 9:47 AM
Raptor says

Are you from US? I'm from Europe, you should see prices here:)

You don't need a gun. Look at this from the bright side - how many nice bicycles can you buy if you sell your car? And you don't have to fill it. :)
Mon Mar 3 2008 10:50 AM
Gus says

Oy Vey.
Chris is nuts (we all knew that) and Raptor would rather drive his bicycle in the rain. :)

The reason oil is so high has to do with speculation and the declining dollar. Adjusting for inflation is one thing, but when you factor in the dollar value index, the price is much lower.

The prices of gas in Europe are nothing more than taxes. Here we pay about 30 cents per gallon in tax, there it's more like $4.

So we'll see what happens, but when prices don't reflect actual supply and demand, they don't last.

Invest in the oil companies like I did, then the profits far exceed the pain...
Mon Mar 3 2008 11:15 AM
chris says

raptor, I'm from canada, prices are lower here.. but not quite as low as in the states... were paying 1$ a litre, 4$ a gallon. thats why i love making fun of americans that say "OMFG WERE GOING TO BE PAYING 4$ A GALLON SOON"..... yeah... so?

gus; you got it right on there... nuttier than.. i dunno. but im friggen canadian... of course im goofy. they'd kick me out if i wasnt. then id have to move to so-cal or something.

i must say i really do like your idea of investing in big oil.......... brilliant really.... i must do this... when i have money to invest.
Mon Mar 3 2008 11:37 AM
Raptor says

In Slovenia a litre is 1,6$ (around 6$/gal). But still better than Germany. They have to pay more than 2,2$ a litre (8$/gal) because of their road tax. Taxes and weak dollar, that's our problem.

Oh, and I would rather eat my left hand rather than switch my car for a bike:D
Mon Mar 3 2008 1:58 PM
chris says

ah 1.6$/L... i have seen gas that expensive for a short while, but that was only a week or two.

so germans actually pay more for their petrol than brits? interesting. i wonder whats the deal with all the huge engines in german cars. very interesting.
Mon Mar 3 2008 3:53 PM
Raptor says

Germans and Brits pay roughly the same. Yes, German cars have powerful engines but burn quite less fuel than American (with same power). Plus, a large portion of them are diesels. I belive around half of all new cars are diesels here.
For example, some time ago I drove BMW 530d. A wonderful mashine, lots of power (270 hp I belive?) and torque, runs quietly, and burns around 7 liters/100km (33mpg) of diesel in you drive normally, even less on the highway. Even if you push it hard, you hardly exceed 12 liters (19mpg).

Enjoy cheap gas while there still is any:)
Mon Mar 3 2008 5:22 PM
Gus says

Today I filled up my Mustang GT.

Regular gas is $3.29 in Los Angeles.
Premium is $3.49.
Diesel is $3.75

Which is why diesel won't sell here.

There will be cheap gas again, just look what Shell is doing with the Green River Project...
Tue Mar 4 2008 7:14 AM
Raptor says

After completeing college I will seriously consider moving to us :)

Mustang GT is my dream car, but over here it costs more than 45 000 â‚¬ to get one (for fully optioned GT version that is, at current exchange rate, around 70k$).

Our taxes are stupid. Expensive gas, expensive cars, expensive insurance....

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