[Flumper Barflusterbutt]

Its happening.

[cLaY]

Just saw this...don't think it will matter. I think by next week we'll hit another record.

NEW YORK (CNNMoney.com) -- Oil prices plummeted by the second-largest margin on record Tuesday as investors feared a further decline in U.S. demand after hearing comments from Federal Reserve Chairman Ben Bernanke.
Light, sweet crude fell $6.44 to settle at $138.74 a barrel in trading on the New York Mercantile Exchange.
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.
On Tuesday morning, Federal Reserve Chairman Ben Bernanke warned that high energy prices have helped to limit the purchasing power of U.S. households. High energy costs will remain a drag on the U.S. economy for the rest of the year, Bernanke told the Senate Banking Committee Tuesday.
That could result in businesses pushing a greater percentage of their high fuel and commodity costs through to consumers, he warned.
Immediately following Bernanke's speech, prices dropped more than $9, sinking below $136 a barrel, before recovering some.
"There's more demand destruction than people first perceived," said Neal Dingman, senior energy analyst at Dahlman Rose & Co.
Inflation: The weakened dollar, which Bernanke named as one of the reasons Americans can't spend as much, has been blamed for much of crude's runup.
Investors have been buying oil and other commodities to hedge against inflation, but that behavior may be changing as many begin to see it weighing on demand.
There's "definitely a reverse of what the rationale was even 2 to 3 weeks ago," said Peter Beutel, oil analyst with Cameron Hanover.
Federal Reserve: The Federal Reserve, which has the power to quell runaway inflation by raising a key interbank lending rate, has its hands tied, since the banks and other institutions that prop up the U.S. economy need the liquidity, according to Tom Orr, head of research at Weeden & Co.
In recent days, the government has unveiled a plan to bolster mortgage financing companies Fannie Mae and Freddie Mac, and has taken control of mortgage lender IndyMac Bank.
"They've got to keep rates as low as they can, though they really should be tightening... They know they need to tighten, but they just can't," said Orr.
"This is starting to feel like Jimmy Carter and the 1970s all over again," he added, describing a time when inflation was high due in large part to soaring energy prices.
OPEC demand: Internationally, the Organization of Petroleum Exporting Countries mirrored Bernanke's concerns. The oil cartel lowered its demand forecast for 2008 to an increase of 1.2% from 1.28%, blaming economic strife and high fuel prices.
Concerns about lower demand even overshadowed the tight supply picture, which has been at the forefront of oil's price surge.
Brazil: The five-day strike by Brazilian oil workers in the Campos basin at 33 offshore rigs operated by state-run oil company Petrobras entered its second day, cutting into supply.
Petrobras stated that only two rigs had been totally shut down, but that production had been reduced by 4%, according to the Associated Press.
Iran: Investors also remained concerned about tensions between Iran, the second-largest exporter in OPEC, and the United States and Israel over its nuclear program.
Iranian president Mahmoud Ahmadinejad blamed high oil prices on threats from the West in an interview with state television, according to reports. However, he said that talks with the United States were possible.
Gas prices: Gasoline prices in the U.S. maintained record highs at $4.109 a gallon Tuesday, according to a daily survey from motorist group AAA.
First Published: July 15, 2008: 9:22 AM EDT
Pricey gas: Fewer cops, more potholes

Why the Fed has to ignore inflation

The new new world order

[quint]

international politics will drive this more than our next president.

[Anhil8tor]

lets hope it stays at about 100 a barrel

[cLaY]

what are you talking about? oil will never be at 100 a barrel again?

[Anhil8tor]

what are you talking about? oil will never be at 100 a barrel again?

100 or over I can deal with...

[Flumper Barflusterbutt]

what are you talking about? oil will never be at 100 a barrel again?

sure it will. you wait.

[Anhil8tor]

sure it will. you wait.

I know it will.

I hope it stays over $100 a barrel... all this bitching and moaning about $4 a gallon gas... Hey lee.. how much is gas a gallon there?

[quint]

there are always shifts, we are in a high one now

[Flumper Barflusterbutt]

Crude prices plummet 4.0% to $133.32 per barrel on news of the unexpected increase in crude and gasoline inventories. Crude prices are now down more than 8% over the last two days.

[leeman]

I know it will.

I hope it stays over $100 a barrel... all this bitching and moaning about $4 a gallon gas... Hey lee.. how much is gas a gallon there?

~$14

[Flumper Barflusterbutt]

I just read that at a price of $140/barrel of oil, the entire US is worth about 400 billion barrels of oil.

That is almost exactly how much Iran and Saudi have combined in estimated reserves.

[BIRD33]

I know it will.

I hope it stays over $100 a barrel... all this bitching and moaning about $4 a gallon gas... Hey lee.. how much is gas a gallon there?

Thanks for the righteous indignation guy who makes money because of inflated gas prices.

[BIRD33]

I kind of remember telling all of you gas would decrease in the run up to the election.

[Anhil8tor]

Thanks for the righteous indignation guy who makes money because of inflated gas prices.

no problem bird.

[Flumper Barflusterbutt]

And the tumble continues. Oil today at $128 per barrel.

It will be interesting to see what monday brings after everyone has a full week-end to plan their strategies. If this has really been a speculatory run-up, caused by investors, then they should be jumping ship about now.

Monday, could be a Black Monday for oil traders.

[BIRD33]

God I hope so.Fuck you 8.

[Dagger]

I hope the speculators take it up the ass.

[Flumper Barflusterbutt]

I hope the speculators take it up the ass.

Not only financially, but i hope they get busted if it turns out that is the cause of the past year or two.

[Dagger]

Not only financially, but i hope they get busted if it turns out that is the cause of the past year or two.

Exactly. Much like the mortgage companies have had their sheep thrown to the wolves. The speculators have driven crude prices through the roof with disregard to the effects only to fatten their wallets. Fuck them, let them reap what they have sowed.