Will gas prices fall even more?
The release of 60 million barrels from reserves is pushing crude oil prices down. Will that mean less pain at the pump?
The move had an immediate impact on oil prices, as benchmark crude in the U.S. dropped $5 a barrel to $90. And in the futures markets, gasoline fell 14 cents a gallon.
So does that translate into cheaper gas? Unfortunately, that's a little iffy.
Gas prices have already been tumbling, and no one's sure how much more they can drop. Today's nationwide average for a gallon of regular is $3.61, according to the AAA Fuel Gauge Report. That's down from $3.69 a week ago and $3.83 a month ago.
One analyst discusses the news and what that means for oil prices and Libya in the following video.
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Gas prices had been pushed up by oil speculators who continued to place bets that the price of crude would rise. But unleashing 60 million barrels has struck at speculators' hearts. "The speculators will have to change their positions," an oil analyst told MSNBC.com. "Instead of betting on higher prices they have to bet on lower prices."
Lower oil prices should mean lower fuel prices -- which is exactly what the U.S. economy needs. Suddenly, money that was forced to go to gas budgets gets freed up. Consumers can spend more in other areas. Companies see transportation costs fall, giving them more money to hire.
But 60 million barrels isn't really that much. The entire world uses about 89 million barrels a day, The New York Times reports.
But the message to speculators is loud and clear. There are plenty of barrels of oil in reserve -- the U.S. alone has 727 million -- and betting on an uptick in oil prices is risky. The U.S. is providing about half of the 60 million barrels to be released from reserves, and the rest will come from other countries in the International Energy Agency.
At least for now, the speculators seem to be running for cover. The price of crude oil fell below its 200-day moving average of $92.58 a barrel -- the first time the price has fallen through that mark in nine months, the Times reports.
Politics is certainly at play here, of course. The Obama administration would love to see the economy improve before the next presidential election. But one source told the Times there were other factors at work as well, including the expected bump in demand from summer vacationers and frustration at OPEC, which failed to agree to increase oil production.
Kill oil prices and food prices, clothing, cost of homes, cars everything that is a petroleum based product will have a most positive impact on consumer prices thus sentiment. The speculators at the CBOT pit, investors, big oil and people like Congressman Paul Ryan have made millions from aritificially inflated petrol pricing. Now it is time for the little guy to get even.
By the way I just watched the manipulative commercial arguing for Social Security reform by Paul Ryan Multi-millionaire who can already retire with full government pension and benefits after his very short years in congress. His commercial which lacks any detail makes the final statement that Social Security reform will mean that that average working person will be guaranteed a retirement just like Congress. What they faill to mention is that they get full retirement after working 6 years, not 35 or 40 years like us and they do not mention that they get a 25% booster while we will probably be forced to take a 25% cut in our benefits.
Clinton used Social Security to balance the budget. Bush used it to fund part of his acursed wars. If the government left OUR money alone there would be no problem with Social Security, as I feel there already is not....more lies. As it is there is enough money to fund benefit payments as they are currentl until about 2036. I think the next time Congress creates a budgetary shortfall the money should come from their pension plan not our Social Security.
Put yourself in the oil companies shoes for just a minute...If you knew that the entire country wanted alternative energy sources whether it be alternative fuels, wind energy, solar energy, etc, wouldn't you try to maximize the most of your profits for the limited number of years that you had left until these other sources become full blown energy suppliers? They know we will eventually convert over to these other sources so they have no interest whatsoever to lower prices to help consumers. Oil companies are raping us every single day and the government is just sitting there lubing up the probe that is penetrating our....wallets.
Gas prices will only continue to rise, regardless of what some schmuck on wall street or in Washington says! It a Money thing. And the public knows good and well that the Big Oil and Gas Co's OWNS Washington and Wall Steet and all of it's worthless stuffed suits!!!
Now that's nice! Instead of regulating speculators, we shortchange our national emergency stash?
Meanwhile, the price drop indicates the speculators are already moving on to the next harvest. But it does seem to indicate that demand and supply play a lesser role in prices than speculators do.
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