FuelClub Discount

Crude oil prices fell to a three-month low on Friday, briefly touching the $111 level after the Dollar muscled higher. OPEC predicted the world’s thirst for fuel will next year fall to its lowest point since 2002.

Light, sweet crude for September delivery fell $1.24 to settle at $113.77 a barrel on the New York Mercantile Exchange after falling to $111.34, its lowest since May 2 and more than $35 - or 24 percent - below its July 11 trading record above $147.

An OPEC forecast of lower demand put downward pressure on prices. In its monthly oil report, the organisation forecast world appetite for oil this year overall will fall by 30,000 barrels a day.

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The lights are dim, the mikes are off, and the television cameras dark in the US House of Representatives. But minority Republicans – sensing traction with voters on the issue of offshore drilling – aren’t giving up the floor.

Nearly 90 GOP lawmakers, about 40 percent of the Republican caucus, have come back to Washington since the House voted to adjourn on Aug. 1 to protest Speaker Nancy Pelosi’s refusal to allow a vote to lift a moratorium on offshore drilling.

“The American people deserve more access to American oil, and Congress should be in session until we vote,” said Rep. Mike Pence (R) of Indiana, speaking to a chamber half-filled with tourists, escorted by GOP lawmakers to break off their tours of the Capitol and take a seat on the floor. He urged the tourists, many of whom seemed astonished to find themselves on the floor of the US House of Representatives, to “call to a Democratic member of Congress from your state” to demand a vote.

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Democratic presidential candidate Barack Obama’s plan to release oil from the U.S. Strategic Petroleum Reserve may lower crude and gasoline prices in the short term, but it could also leave the United States more vulnerable in a supply emergency.

Obama called this week for easing fuel prices by releasing some 70 million barrels of light, sweet crude from the nation’s stockpile and swapping it for less expensive heavy, sour oil.

The hope is that putting more oil on the market will push down crude prices and those savings will be passed on to consumers at the gasoline pump.

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Crude oil prices, which have fallen by a fifth after touching a peak of $147 per barrel on July 11, is not only likely to provide relief for oil marketing companies but also result in substantial savings in country’s import bill by as much as $20 billion, if the prices stay at the current level.

For the three public sector firms- Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL)- the sharp drop in oil prices would mean corresponding reduction in loss for the petroleum products they sell below the production cost and more cash in hand to smoothly run their day-to-day operations.

At the current price level of US$116.9 per barrel for the Indian basket of crude oil, the under-realization loss for oil marketing companies is pegged at Rs180,000 crore for the financial year ending March 2008, around 25 per cent lower than the estimate when the price of oil nearly touched US$142 per barrel.

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Earlier in the presidential campaign, when John McCain and Hillary Rodham Clinton called for a summer holiday on the 18.4-cent-per-gallon federal gasoline tax, Barack Obama dismissed the tax-vacation as an election-year gimmick that offered financially-squeezed families “just pennies.” I wrote that, unlike Clinton and McCain, Obama “stood tall in opposing the gas-tax holiday.”

Now we know why. Obama must have seen the gas-tax holiday as a chump-change in the wondrous store of campaign gimmicks. When Obama panders, he panders big-time. Witness his proposed “emergency energy rebate” that - on the heels of this year’s $600 per taxpayer stimulus package rebate sent to taxpayers this year - promises additional $500 checks for American workers or $1,000 per family “as soon as this fall.” (Is there an income cap for how Obama defines eligible “working families?” The campaign did not get back to me on that by my deadline.)

To hear Obama, the check is practically in the mail.

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Oil settled down $US2.24 a barrel at $US119.17 - almost $US30 below its highs in July.

After the Federal Reserve left rates unchanged, investors charged into stocks that suffered most during oil’s rise. The Amex Airline Index rallied 2.12, or 9.6 per cent, to 24.20, reaching its apex of the northern hemisphere summer.

American Airlines parent AMR surged $US1.26, or 13 per cent, to $US10.95. Ford Motor added US28 cents, or 5.8 per cent, to $US5.09, and General Motors rose US59c, or 5.8 per cent, to $US10.69, although the latter was down 57 per cent for the year to date.

Owing to the spikes in oil and petrol prices this summer, malls have lost customers, airlines have turned in massive losses and the auto market is such that a recent review of EBay showed sports utility vehicles less than five years old selling for a fraction of their purchase price.

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