The price of oil recorded its biggest weekly drop ever and a gallon of gas finally pulled back from its record high.
So is it time to declare the energy bubble popped?
Experts won’t go that far just yet.
“It’s too early to say we’ve seen the worst of it,” said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, New Jersey “We would be Pollyannish if we believe one week represents a trend.”
Still, with oil recording yet another drop on Friday, some industry experts who just days ago thought there was more juice left in oil’s meteoric run are reconsidering.
“If this is not the bubble’s implosion, than it’s a reasonable facsimile,” analyst and trader Stephen Schork said in his daily market commentary. “Time will tell. Nevertheless, for the time being we no longer care to hold a bullish view.”
Light, sweet crude for August delivery fell US$0.41 on Friday to settle at US$128.88 on the New York Mercantile Exchange — well below its trading record of more than US$147 a week earlier.
The average price of a liter of regular gas fell to US$1.08 the Oil Price Information Service and Wright Express said. Diesel prices dipped to US$1.277 a liter.
Some analysts said a nationwide average of US$1.055 or even lower could be in the offing — almost unthinkable in a summer when there has seemed to be no relief at the pump — although they cautioned that there is no guarantee prices will stay low.
“We’re going to see some relief from that relentless march higher,” Kloza said.
Gas may be getting just a bit cheaper, but major changes in how Americans live and drive are already in motion.
Car buyers have been fleeing to more fuel-efficient models. US sales of pickups and sport utility vehicles are down nearly 18 percent this year through last month, while sales of small cars are up more than 10 percent.
While slashing production of more-profitable trucks and sports utility vehicles (SUV), automakers have been scurrying to build their most fuel-efficient models faster.
Toyota Motor Corp, which has not been able to keep up with demand for its 19.56km per liter Prius hybrid, said last week it would start producing the Prius in the US and suspend truck and SUV production to meet changing consumer demands.
Ford Motor Co and General Motors Corp have also announced plans to increase small car production, and GM has said 18 of the 19 vehicles it is launching between now and 2010 are cars or crossovers.
In other NYMEX trading, heating oil futures fell to US$0.974 a liter while gasoline futures edged up to US$0.836 a liter. Natural gas futures rose US$0.033 to US$10.57 per 300 cubic meters.
In London, Brent crude futures for September delivery rose US$0.88 to settle at US$130.19 on the ICE Futures Exchange.
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