Simply put, the U.S. economy is in the crapper. Stocks are yoyoing and our mortgages are a fraction of what they were even a year ago. For all that's fiscally wrong here in the States, there is one pleasant side effect: the price of a barrel of oil is dropping faster than Kimbo Slice against a two bit hack. Oil dropped 6% in trading on Monday, bringing down the price of a barrel of crude to $87.81. Black Gold has been on a downward trajectory since July 11, when it peaked at $147 per barrel. Since then, demand has weakened both in the U.S. and China, with demand slacking so badly that the Communist government hasn't purchased any oil in two months, and it's even selling some of its stockpiles. While demand for oil is down to where it was eight months ago, OPEC is watching with a wary eye. The oil consortium, which on several occasions has increased oil production over the past year, is likely to slash production when it meets again in December. In the short term, industry experts are predicting that gas prices will drop below the $3 mark by November 1, which will make for one piece of good news in an otherwise lousy news cycle.
When a BMW 335i owner in Munich became bored with his black coupe, he hired a team to wrap it in white tape. Two days later, he drove home in his refreshed "Alpine White" coupe (with an M3-appearing black roof). No, it's not normal tape. It's a special 3M wrap, and the process is known as "foiling." Apparently, the German military has been using the process (with an olive drab tape) for some time now. Likewise, the process is popular with race teams and taxi companies. Available in countless colors, the tape itself is thick enough to protect the paint from minor chips and nicks, and it can be left adhered to the surface for 3-4 years without damage (!). Adhesion isn't a problem either, as the tape can even withstand an automatic car wash without peeling off.
Yesterday, two pieces of news conspired to push the price of crude oil to new heights. The first is that U.S. oil inventories aren't as robust as everyone thought, and the second is that OPEC, the Organization of the Petroleum Exporting Countries, decided not to increase production of their black gold, Texas Tea. With these two nuggets of bad news, oil futures climbed $5/barrel yesterday, peaking at $104.95 before closing at $104.52. Even when adjusting for inflation, yesterday's closing price beats the previous $103.76 ($39.50 at the time) record set in April 1980 during the second oil crisis. This was all on the evening news yesterday, so you may have heard your favorite network news anchor get really funky with his inflection talking about it.
That was yesterday. Today things got worse, with the price of crude sky rocketing up to $105.97 per barrel, nearly 106 bucks (!), early in the trading session. Why the panicking? Apparently there was an explosion in New York City at Times Square this morning, and before anyone knew what had actually happened, fear of the unknown pushed prices higher. It turns out that the explosion wasn't that big, no one was injured, and it doesn't appear to be a terrorist attack of any sort, and thus the price of oil has since fallen back to a more palatable but still tough to swallow $104.11 per barrel. For some perspective, we found this post written in October 2005 about the price of oil hitting a 2-month low: $61.36 a barrel.
