I got you plunge right here pal.
Posted on 03/22/2005 12:52:31 PM PST by ambrose
Associated Press
Crude Oil Prices Plunge on Profit Taking
Tuesday March 22, 2:48 pm ET
By George Jahn, Associated Press Writer
Oil Prices Decline Sharply on Profit Taking, Possible OPEC Initiative to Cool Market
VIENNA, Austria (AP) -- Traders chalked up a sharp decline in oil prices Tuesday to profit-taking ahead of the U.S. government's next petroleum supply report.
With little news to push prices higher Tuesday, trader said the markets also may have keyed on a key OPEC member's reiteration that the group is considering raising its daily production quota by half a million barrels after a similar move last week.
Light, sweet crude for May delivery fell $1.41 to $56.05 per barrel in afternoon trading on the New York Mercantile Exchange.
"People have buying this market all the way up," said Mike Fitzpatrick, a broker at Fimat USA Inc. in New York. Tuesday's late-day selloff came at the end of what had been a relatively quiet day for the market and reflected the impulse of some traders seeking "instant gratification," Fitzpatrick said.
Fitzpatrick said these traders may get back into a buying mood Wednesday depending on the details of the Energy Department's weekly petroleum report.
Oil is roughly 50 percent more expensive than a year ago but still well below the inflation-adjusted peak above $90 a barrel set in 1980. Prices have risen by about a third so far this year, fueled by a late cold snap across the world's largest energy consumer, the United States.
They also have been underpinned by a weak dollar, which has made OPEC more comfortable with higher prices, and rising global demand at a time when there is very little excess supply available. These factors could set the stage for a more pronounced spike in prices if there is a production outage.
The Organization of Petroleum Exporting Countries, however, has indicated that it is willing to move to try to lower prices from current levels. Last week, the 11-member oil group said it was raising its daily output quota by 500,000 barrels in preparation for high-demand next winter in the Northern Hemisphere. Markets shook off the move, however, because it did not actually add more supply to the market.
On Monday, Saudi Oil Minister Ali Naimi said OPEC, which produces around 40 percent of the world's oil needs, was deliberating raising daily output by an additional half-million barrels.
Naimi, whose country is the organization's main producer, also said Saudi Arabia was prepared to unilaterally increase its output from the present 9.5 million barrels a day to 11.5 million barrels "if we have a customer."
Purvin & Gertz oil analyst Victor Shum said OPEC's decision last week to increase output in the second quarter, when demand typically drops because of warmer spring weather, will result in a much-needed global supply cushion.
"As the cushion expands from the current level, some market participants ought to start taking profits," he said in Singapore. "Pricing should ease a bit."
Some analysts, however, remain wary that there would be no actual addition to OPEC production, as the cartel was already producing above its quota.
Shum also cautioned that OPEC's zeal in increasing output might backfire, as it leaves little leeway in the supply chain for any output glitch.
Associated Press Writer Wee Sui Lee in Singapore contributed to this report.
This was just an extra one hour action, with an extra $300 million budget
Crude dropped all the way to $56.05 a barrel, eh?
Whoop-de-effing-doo!
That should drop my local price of regular from $2.15 all the way down to $2.10
WHAT A STEAL! *Rolling my eyes*
One sure way to ease the production crunch; drill and build here!
$2.15? I'd KILL for $2.15 ($2.30 with a guaranteed increase on April Fool's Day here in south suburban Milwaukee).
its going to take more then that to take out the speculative positions. the traders probably have stop loss orders ganged up from 50-52, take that price out, and the automatic sell orders will kick in and drive it back into the 40s.
what is happening to the oil price is not about supply and demand, its about the brokerage houses and hedge funds using oil as the new "tech stocks" - its money chasing money.
And, of course, the reason China's buying so much more oil, is because the various economic improvements that come from outsourcing manufacturing to China has made them energy-hungry.....
The Law of Unintended Consequences at work...
Did you see this article?
Rumor Mill Makes Oil
http://www.nypost.com/business/22329.htm
George W. Carter.
Its about $2.01 here in MN.
But I/people waste more money going out to eat and dont seem to care about it...I choose not to worry constantly about gas prices.
We should export some nuclear energy to China.... and North Korean, Syria, Iran, and France.
Heck, that would make me smile even if I had to pay $3.00 for a gallon of gas!!!
Why are we buying oil, for the reserve, @ $56/bbl?
Isn't that foolish?
Most of the commodity analysts have been saying the market is overbought.
I got you plunge right here pal.
You don't have to kill for it. My son said it was $2.15 in Beaver Dam as of Sunday. $2.09 in Columbus.
The market has been overbought for sometime. But I don't look for a drastic correction. Got to be some support sitting around the 50 mark.
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