This week's precipitous drop in oil prices is temporary and not a trend, at least one state industry expert predicts. Sue Ann Hamm, manager of crude oil marketing at Enid-based Continental Resources, said Friday it appears traders are selling off beneficial contracts to cover losses they have experienced in the stock market. "It will be a couple of months before we know for sure, but that is what this feels like,” Hamm said.
Priced to moveThe price of oil is down nearly $20 a barrel in the past week, after trading as high as $147 a barrel last week on the New York Mercantile Exchange, it closed at $128.88 on the same market Friday. Gasoline prices also stabilized Friday after setting two national average records this week. But that could be a temporary pause in a steady climb. Prices climbed into the $3 a gallon range in February, and they've been moving higher ever since. On June 9, they moved into the $4 a gallon range. In Oklahoma, the average price for a gallon of gas has come agonizingly close to that $4 amount, but hasn't yet gotten there.
Refineries boost productionAccording to the U.S. Energy Information Administration, U.S. refineries cut the amount of oil they were taking in to make gasoline, diesel and other products during the week that ended July 11, operating at 89.5 percent of their capacity. At the same time, they increased their production of gasoline and distillate fuels, putting out about 4.7 million barrels a day. The country imported nearly 10.8 million barrels per day during that week, up 1.2 million barrels per day compared to the week before. While commercial crude oil inventories were up by 3 million barrels last week, the agency said the amount still was close to being below average for this time of year. Gasoline inventories, meanwhile, are above average for the time of year while demand for the product is down.
Supply, demand kingHamm said Friday that the nation's inventory of oil is still lean. "It looks like inventories are down around the world because we still don't have the supply we need to meet demand,” she said, "and as consumers, we need to know the markets are going to have this kind of volatility from time to time.” Hamm said she sees the use of alternative fuels as the key to making a lasting impact on the oil market. "We are Americans first. Having to import oil is a threat to our national security,” she said. "People keep looking for hope, and that hope is in alternative fuels.”
Sue Ann Hamm