Posted on 08/04/2008 1:14:16 PM PDT by 300magnum
Oil prices fell below $120 a barrel Monday, touching levels last seen in May, as investors began to rethink the idea that crude is on an inevitable march to $200.
Light sweet crude oil fell as low as $119.50 on the New York Mercantile Exchange amid increasing evidence of falling U.S. demand and ample worldwide supplies. That helped drag down the shares of energy firms like Exxon, which fell 3% to near its 52-week low of $77.26 and oil-services giant Schlumberger, down almost 5% to $95.
The pullback is vindication for analysts who for months have been saying that oil prices had entered bubble territory on a mix of financial speculation, worries about a military attack on Iran and rapidly increasing Asian demand. With hefty new supplies hitting the global market from Saudi Arabia, Libya and even Iraq, those analysts say, oil is likely to fall below $100 soon.
"This fall is a reaction to overshooting over the past couple of months," said Daniel Ahn of Lehman Brothers, which has issued several reports suggesting oil prices were unjustifiably high. "The fundamentals of new supplies suggest prices will be in double digits."
Saudi Arabia apparently hit its target of 9.7 million barrels a day in July, silencing skeptics who suggested the kingdom was running out of crude. The Saudis were pumping 8.5 million barrels a day this time last year, said oil-markets analyst George Littell with Groppe, Long & Littell in Houston, as they anticipated increases in non-OPEC production that failed to come through.
Now, Littell says, "they're running flat out."
All that new Saudi oil is hitting the market amid steady recovery in oil production from the Gulf of Mexico, where Hurricane Katrina demolished rigs and set back plans by months and in some cases years. BP's Thunder Horse platform
(Excerpt) Read more at forbes.com ...
All the same, we need off shore and ANWAR drilling, shale oil production, coal utilization, nuclear power generated electricity, and other alternative energy sources to freeze out the Arabs and Iranians.
Wait a year into an Obama administration and $200 will seem cheap.
We still need to drill now. We can’t let the Democrat party keep us dependent on terrorist oil. Keep the pressure on, hot and heavy. This is the one issue that the general public may start to understand.
We don’t need no OBAMA!!!!!!
OPEC thinks prices are too high. They do NOT like all talk in the US about tapping domestic supplies. They would like to see prices fall, and will run flat out until they do, big time.
They also need to discourage any financial modelers from showing a decent return on alternatives.
If you look at the idiots on Marketwatch.com on their forums, you’ll see them saying “if it broke the 120 support level, why did it immediately rally? It should have spiraled out of control to 110 or less if it broke that support level!”
I heard somewhere that if it broke 130, look for it to retreat to 100. Obviously, it wouldn’t happen over night, but the slide has been percipitous. It’s going to test these support levels quite a few times before it finally finds a balance. The point? What goes up, must come down, just the question is on the rate of decline.
P.S. JUST REMEMBER, ALL THIS HAPPENED, THE PRICE COMING DOWN, WITH STINKING, STUPID, @$$HOLE POLITICIANS NOT GETTING INVOLVED!!!!!!!!!!!!!!!!!!
Aren’t you lucky, in my area in CA it has dropped 30 cents to 4.31 for unleaded regular(do I really need to put in the 9/10). That is the absolute lowest here, but in Sacramento it is lower but still over 4 bucks per.
Silly citizen. Who are you to decide what you do or do not need?
That’s what the Government is for.
but...but...but...PEAK OIL!!!!11!
Speculation works both ways. I agree it pushed it up, but now we are seeing it work to bring it down too.
In what way? Nothing happened to the speculators. They're still there.
The price change happened when your President made it plain that America was going to get serious about its future oil supply. As oil is heavily pre-brought, the perceived change in the future oil-supply had an immediate effect on price.
I feel your excitment”DUHH accepted...”
Mkts do NOT make major moves in a straight line. Ever. Crude is certainly not an exception, and the idiots (a very apt description, btw) on Marketwatch should know better...but quite obviously do not.
>> This PROVES that the driving force in this scandalous rape of the public was generated by speculators. <<
Not really. It sounds like there are solid reasons for a reversal in price: increased production in the Persian Gulf; Thunder Horse back on line...
(I’m only saying what is and isn’t proven. I do agree with your basic point.)
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