Posted on 11/09/2004 8:54:06 AM PST by Tumbleweed_Connection
LONDON, Nov 9 (Reuters) - Oil prices slid more than a dollar to 7-week lows on Tuesday as growing signs of ample supply eases concerns over fuel stocks for the northern winter.
U.S. light crude (CLc1) dropped $1.14 to $47.95 a barrel, more than $7.50, or 13 percent, below the all-time peak at $55.67 struck on October 25.
London Brent (LCOc1) was down even more sharply, falling $1.87, or 4 percent to $44.05 a barrel, the lowest level since September 22.
Oil's 50 percent rally this year has spurred the OPEC oil cartel to produce at the highest level in 25 years, gradually helping to rebuild low fuel inventories, and weaken prices on physical spot markets.
Oil's slide in the last two weeks has seen hedge funds cut their net long positions to the lowest level in a year in a switch to other financial markets, particularly equities.
The U.S. Energy Information Administration's weekly report on Wednesday is expected to show a seventh straight rise in U.S. crude inventories, and a small increase in low distillate stocks, which include heating oil.
Output in the U.S. Gulf of Mexico, which is still recovering from damage from Hurricane Ivan in September, have hindered the winter stockbuild.
As of Monday, Gulf of Mexico crude production remained at 87.5 percent of the normal rate of 1.7 million barrels per day (bpd).
WEATHER WATCHING
Tight heating fuel supplies in leading consumers the United States, Japan and Germany, means a cold northern winter could send prices shooting back up, analysts say.
"The oil price is going to stay at historically high levels," said Robin Batchelor, Director, Global Energy and Energy Technology at Merrill Lynch Investment Managers.
The threat of instability in the Middle East and potential supply disruptions from the oil-rich region, as well as a looming strike in Nigeria could also help push prices back up.
Nigerian authorities have threatened to sack workers who join next week's planned general strike over rising fuel prices, which unions say may hit oil supplies from the world's eighth-largest exporter. Nigeria pumps about 2.4 million barrels per day.
Edmund Daukoru, Nigeria's Presidential Adviser on Petroleum, predicted that prices would not fall far in the near term because of the instability in Iraq but would eventually stabilise somewhere about $35.
U.S. Marines and Iraqi troops on Monday launched a full-scale assault on the rebel stronghold of Falluja, while Baghdad saw the biggest wave of bombings in the capital in weeks.
An oil tanker stranded in Egypt's Suez Canal has been shifted by tugs and shipping in the waterway is expected to resume on Tuesday.
Navigation came to a standstill late on Saturday when the Liberian-flagged vessel Tropic Brilliance ran aground while passing through the canal. More than 100 vessels inside and outside the canal had been waiting to pass through the waterway.
In Charleston WV, gas has dropped from 2.09 a gallon to 1.99 in a week.
Market manipulation in an attempt to influence the election. I hope the manipulators are taking it in the shorts. Unfortunately, they are probably raking it in because they knew that the prices would drop regardless of who won the election.
Buy those futures back Soros, buy them all LOL!
Oil prices will also drop, unless the market has already figure on this happening, if the fed raises interest rates (Higher IR = Stronger Dollar = lower oil prices), since oil contracts are settled in dollars.
Uh huh, no manipulation to influence the election. Evil Dums just stuck it to the American people, in the pocket book, for several months. They are the worst of the worst. Makes Jeff skilling look like a piker.
Looks like it.
Soros cut AND RAN WEEKS AND WEEKS AGO W/
hefty profits.
So, will we see 40$ oil by Xmas???
MV
Either one of two things happened:
(a) US citizens stopped driving as much after Bush was re-elected, or;
(b) George is having to unload all the oil he bought in attempt to drive oil prices through the roof and hurt George Bush.
I'll bet a bottle of fine Washington wine that the answer is (b).
Lucky you!
It is still $2.40-2.50 here in the San Diego area.
Regular was below $1.80 in Macon, GA over the weekend. But Georgia has exceptionally cheap gas anyway (low taxes).
}:-)4
Here in the Detroit area, we paid $2.05 per gallon before W's reelection and $1.83 yesterday. They have been putting the squeeze on us so we would elect Kerry. Didn't work.
Knowing that the price of gas never drops in pennies as fast as the dimes and nickels it goes up, the consumers will be lucky to see the price below $1.95 during the winter months. Guess the oil companies want to squeeze out that last few pennies by keeping the price artificially high.
It didn't work; we Americans picked who we wanted; too hell with those cheaters and their high prices. ;o)
Gee, it's amazing how that Chinese demand for oil is dropping so rapidly right after the U.S. election (eyeballs rolling up to the ceiling).
Are went from $2.11->$2.09...Diesel is high at $2.45..
Time for the locals to crop change and get into the Bio-D business...
ouch
Yea, Soros sold, but since he was driving the trend I'd bet he also started the selloff at the best time. As such, he just financed next election cycle's manipulation with the profits from this one.
Soros is a rat but he's a clever rat.
I was getting the same impression (oil prices soar until Kerry defeat then the price collapses)
But manipulating oil prices with billions of dollars can't be done, it takes trillions. What I'm thinking now is that people buying oil futures realized that if Kerry got elected the economy would tank, the middle east would plunge into chaos, middle east production would either hold back or get blown up, and the Chavez types would freeze up.
All that changed on Nov.2-- but IMHO it wasn't the oil that manipulated the election but rather the other way around.
Maybe gas prices ought to be based on the amount of oil produced in each individual state. The more oil you produce, the cheaper your gasoline.
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