Shaping up to be a Bad Week for Big Oil
August 29th, 2006 | by Brian Carr |This week is shaping up to be a not so good week for the world’s big oil companies.
The first item of bad news for “Big Oil” came out of the Middle East this past Saturday when Chad (the country, not some random guy named Chad) has ordered Chevron Texaco and Petronas to leave the county. The reason being, it appears Chevron Texaco and Petronas worked backdoor deals with Chad government officials to help the companies avoid paying taxes.
Considering the two companies account for roughly 60% of Chad’s oil output, it appears the country stands to recoup a lot of lost tax revenue.
The second item of bad news for “Big Oil” came out of America this morning when it was revealed that U.S. federal investigators are looking into allegations that BP has manipulated the markets for crude oil and gasoline. This doesn’t appear to be the best of months for BP thanks to these allegations and the Prudhoe Bay fiasco.
I certainly don’t know whether or not BP or any of the other major oil companies are guilty of fixing the markets, this investigation probably amounts to nothing more than the U.S. government trying its best to appease the outraged public - and BP is the easy target right now.
And, last but not least, the final piece of bad news for “Big Oil” happened today when the price of crude oil fell below $70 - and stayed there - closing at $69.71 per barrel. Today’s drop can be attributed to the fact Hurricane/Tropical Storm Ernesto has steered clear of the Gulf Coast’s oil refineries.
So, what does this all mean for you?
In the short term it means you’re going to pay less at the pump when you go to fill up tomorrow. According to GasBuddy, the average price of a gallon of regular unleaded fuel has dropped $.03 throughout the day, and now stands at $2.81.
In the long term it more than likely means you can expect gas prices to continue to slowly fall. With the end of the summer travel season just around the corner, this is the time of year when we typically see gas prices ease off of their summer highs.
Of course, all of this is contingent on a lot of things like a relatively docile hurricane season, continued “peace” in the Middle East and encouraging news regarding Iran’s nuclear program. But, it appears that for the time being, you can expect gas prices to continue to ease off of this summer’s record highs.
