Now we shall see how this game played by a few very wealthy Americans plays out. There was a reason Glass-Steagel was put in place in the 1930’s The belief was that some commodities were too important to ALL Americans. Food, housing and fuel were deemed the “Basics of Life”. So the market was regulated to make sure people could not gamble on those commodities futures. Well as we have seen with Housing. The genius of Wall Street came up with an unregulated way to get around the prohibitions in the housing market. When they got bored with that, and the US dollar plunged they decided to buy Long in the Futures Market (something prohibited until 1999) and prices skyrocketed. Well to every up THERE IS A DOWN. As the Saudi’s warned that DOWN could be way down. We could have oil fluctuating between 150$$ and 40$$ a barrel for the next few years. I think at some point in those wild swings Industry comes to a stop.
These people are just spoiled rotten filthy rich dummies. They all should be in jail.
Price of oil falls more than
$5 below US$67 on
US recession fears
Wed Oct 22, 3:26 PM
By Madlen Read, The Associated Press
NEW YORK – Oil prices tumbled below US$67 a barrel to 16-month lows Wednesday after the government reported big increases in U.S. fuel supplies – more evidence that the economic downturn is drying up energy demand.
The Energy Information Administration said crude inventories jumped by 3.2 million barrels last week, above the 2.9 million barrel increase expected by analysts surveyed by energy research firm Platts. Gasoline inventories rose by 2.7 million barrels last week, and inventories of distillates, which include heating oil and diesel, rose by 2.2 million barrels.
Over the last four weeks, the EIA said, motor gasoline demand was down 4.3 per cent from the same period last year. Distillate fuel demand was down 5.8 per cent, and jet fuel demand was down 9.2 per cent.
“The main theme here that’s driving this market into new low ground is demand deterioration,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. “As we begin to see evidence that demand is levelling – it doesn’t have to increase, just level – then we can start discussing a possible price bottom. But it appears premature at this point.”
In mid-afternoon trading, light, sweet crude for December delivery fell $5.52 to $66.66 on the New York Mercantile Exchange. The last time a front-month contract traded below $67 a barrel was June 2007.
The energy markets have also been weighed down by the weak stock market, as investors grow more pessimistic about how long it will take the economy to recover from the current global financial turmoil.
On Tuesday, DuPont, Sun Microsystems and Texas Instruments reported disappointing earnings and bleak forecasts, sending the Dow Jones industrials average down 2.5 per cent. The Dow was down another four per cent by Wednesday afternoon following more gloomy reports from the soon-to-be acquired bank Wachovia Corp., drugmaker Merck & Co., and insurer Travelers Cos.
“Oil is now highly correlated with the stock market,” said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore.
Americans are not the only one worried:
Crude futures dip below $70 on demand concerns
|www.chinaview.cn 2008-10-17 06:45:59|
| NEW YORK, Oct. 16 (Xinhua) — Crude futures dipped below 70 U.S. dollars a barrel on demand concerns Thursday after the U.S. government reported a unexpected rise in crude stockpile. Light, sweet crude for November delivery plunged 4.69 dollars to settle at 69.85 dollars a barrel on the New York Mercantile Exchange after hitting 68.57 dollars, a level not seen since June 27, 2007. Crude prices have declined more than half its July record high of 147.27 dollars a barrel due to investors’ increasing concerns that a global economic recession could curd energy consumption.
“The price of a barrel of oil continued to decline today as fears of declining demand among market participants persist,” Wall Street Strategies’ senior research analyst Conley Turner told Xinhua.
The weakening global economy and turmoil in the credit markets have clouded the outlook for world oil consumption.
The Philadelphia Federal Reserve said regional manufacturing conditions weakened in October. The bank’s regional index came in at a negative 37.5 compared with a positive 3.8 for September.
On Monday, Goldman Sachs cut its year-end forecast of oil to 70dollars a barrel from 115 dollars and lowered its price outlook for the end of 2009 to 107 dollars from 125 dollars per barrel amid global financial crisis.
“The fact of the matter is that demand destruction is taking place in the United States as for the rest of the G7, for that matter as these economies teeter on the brink of recession,” said Turner.
“While there may be some ebbing in the demand pressures out of India and China, it not going to be as much as what is occurring in the Unite States,” he added.
Even the Saudis and the Russians are concerned:
The Organization of Petroleum Exporting Countries, which accounts for about 40 percent of global oil supply, has signaled it plans to announce an output quota reduction at an emergency meeting Friday in Vienna.
But investors are skeptical about how much of the cut will be implemented, given the history of OPEC members exceeding their production quotas.
“There should be a short-term boost to prices when they announce a cut on Friday,” Chu said. “But OPEC production has always been above their quotas, so there’s a credibility problem.”
Crude oil is down 53 percent from its peak of $147.27 reached in mid-July.
A stronger dollar this week has also pushed oil prices lower. Investors often buy commodities like crude oil as an inflation hedge when the dollar weakens and sell those investments when the dollar rises.
The euro fell below $1.28 for the first time in nearly two years on Wednesday. The 15-nation euro dipped as low as $1.2736 in morning trading before rising slightly to $1.2873, down from $1.3003 late Tuesday in New York.
Investors are also watching for signs of slowing U.S. demand in the weekly oil inventories report to be released Wednesday from the U.S. Energy Department’s Energy Information Administration. The petroleum supply report was expected to show that oil stocks rose 2.9 million barrels last week, according to the average of analysts’ estimates in a survey by energy information provider Platts.
The Platts survey also showed that analysts projected gasoline inventories rose 3.0 million barrels and distillates went up 600,000 barrels last week.
The Russians are threatening to go along. What if they were actually to join OPEC! Way to go Wall Street geniuses. Bravo!
Members of the Opec oil producers’
cartel have decided to cut production
by 1.5m barrels a day from November
in a bid to stem a collapse in prices.
By Russell Hotten, Industry Editor
Last Updated: 4:14PM BST 24 Oct 2008
This latest Opec meeting, brought forward from next month because of the severity of the slide in prices, comes as Russia shows increasing interest in cooperating with the organisation.
Russia, the world’s second largest oil producer after Saudi, has traditionally had representatives at Opec meetings but has never publicly tracked the organisations cuts and increases in production quotas.
But on Wednesday Russia’s Deputy Prime Minister Igor Sechin said his country may build a margin of spare oil production capacity as a means of influencing prices. However, he said Russia would not join Opec.
Nick Day, chief executive of the risk management consultancy Diligence, warns that any move by Russia to cooperate with Opec is fraught with political dangers. “One of Russia’s objectives might be to counter America’s influence on Saudi Arabia’s control of Opec. You could see Russia driving a wedge between Opec, with support from Iran and Venezuela.” He believes that if Russia’s oil revenues are reduced, Moscow might try to recoup money by raising the price of gas it exports to Europe.
Opec comprises 12 members: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The thirteenth, Indonesia, is due to leave the organisation at the end of 2008.