Oil prices continued to drop in early morning trading in markets this morning after reassuring words from Saudi Crown Prince Abdullah that Saudi plans to keep production levels high and take it higher still with renovations on their oil production facilities over the next decade.
Light sweet crude started down 72 cents a barrel in Asian trading this morning and Brent crude trading in London is already down 40 cents and gasoline dropped a penny in the early morning.
The Saudis say that while they will continue to ramp up production and prepare for long-term increase in the future, current oil inventories are high enough to support demand. It’s refineries in the high consumption countries that create the problems..
U.S. refineries have been plagued with problems during the season when they are expected to ramp up production to build stocks for the summer demand. A number of facilities dropped production for a week because of unscheduled maintenance and the ConocoPhillips facility in Louisiana remains down a second week.
Demand remains high worldwide though as economic indicators in China show growth levels remain high and a new report from the U.N. showed India’s projections look strong for the future.
President Bush said, “One thing is for certain: The price of crude is driving the price of gasoline. The price of crude is up because not only is our economy growing, but economies such as India and China’s economies are growing.”
Reports are surfacing however the prices at the pump are beginning to drop. The Louisville Courier-Journal reported this morning that prices in Louisville, Kentucky have dropped below $2.00 a gallon and the average prices has dropped about 4 cents in the last week.
John Stith is a staff writer for Murdok covering technology and business.
