Summer Non-Driving Means Oil Prices Take Big Dip
By Michelle Krebs July 30, 2009The price of crude oil dropped six percent Wednesday to around $66.50 per barrel, oil's biggest
slide in almost three months -- a decline that flies in the face of historic trends that typically see oil prices jump in the summer travel months.
But drivers clearly are curtailing travel as the economies in most developed nations continue to drag, and their reduced gasoline and diesel use is driving down the price of oil and ballooning crude oil inventories.
The U.S. Energy Information Agency said the nation's crude-oil stock is 18 percent higher than at the same time last year, a summer that will be long remembered for volatile spikes in gasoline and diesel-fuel prices. Even inventories of gasoline are bloated, despite uncharacteristically low prices.
The Associated Press reported gasoline inventory rose by 11.4 million barrels in the past six weeks. Consumers' marked cutback in driving also has prompted state and federal officials to begin studying alternative methods of taxation to replace or bolster today's fuel-based taxation system. -- Bill Visnic
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