Posted on 11/18/2004 12:59:08 PM PST by RWR8189
NEW YORK (Reuters) - Oil prices resumed a three-week downturn on Thursday as swelling world crude supplies eclipsed lingering concerns over thin heating oil stocks in the United States, Europe and Asia.
U.S. light crude futures (CLc1: Quote, Profile, Research) settled down 62 cents at $46.22 a barrel, cutting into Wednesday's 73 cent advance. London Brent (LCOc1: Quote, Profile, Research) was down four cents at $42.72.
The losses came after producer group OPEC revised down its expectations of oil demand growth for next year and projected a rare big winter stock build if the group keeps producing at current levels.
Soaring production from producer nations has helped build up crude inventories held by consumers and slice $10 from the price of a barrel since peaks in late October, even as stocks of finished heating fuel lag.
Crude stocks in the United States have grown for eight weeks straight, bringing them into a surplus above last year -- triggering some big money speculators to leave in search of greener pastures in equities and bond markets.
Figures in OPEC's monthly Oil Market Report implied a two million barrels per day increase in inventories during the winter months, a time when heating demand will be peaking during the northern winter.
OPEC also lowered its estimate of world demand growth next year by 120,000 bpd to 1.49 million bpd.
"World oil demand growth estimates for next year have once again been adjusted to account for the lower rate of global economic growth," the report said.
But worries over threadbare heating stockpiles ahead of peak winter demand have been resurfacing, keeping the decline in oil prices in check.
The U.S. government on Wednesday said heating oil supplies were still 16 percent below 2003 levels, with retail prices expected to run 28 percent higher than last year during the winter months.
U.S. commercial stockpiles of distillates like heating oil and diesel fell by one million barrels last week, the ninth straight weekly decline, bringing them more than 14 percent below a year ago.
The problem is soaring demand from both Europe and Asia that has gobbled up much of the world's extra distillates supply to feed roaring economic growth and Europe's trend toward diesel-powered cars.European gas oil futures have surged more than $20 a ton, or 5 percent, in the last two days as strong buying and new diesel fuel specifications due to come into force from January tighten supplies.
Analysts say an early or severe winter could stress inventories, prompting a fresh influx of buying by funds who have shifted money away from oil in recent weeks.
Supplies are still patchy from OPEC producer Iraq, where export flows from northern fields have been at a complete halt for the past one week, a shipping source said on Thursday.
Iraqi officials have said the sabotage-hit northern pipeline could take up to a month to repair after a series of attacks that set fire to several Kirkuk oilwells, storage tanks and pumping stations.
I'm not usually conspiracy minded, but I wonder to what extent if any the oil price spike around the election was timed in an effort to defeat Bush?
Remarkable coincidence, what with Soros, his buddies, the election and all.
It was done specifically to hurt the President, imho. Michael Moore said that Bush had the oil folks in his pocket. Since they tried to kill his re=election, then we can say that fat bast_rd and Hanoi Kerr were wrong one more time.
Every now and then we need a shortage to remind us that we've got to get this oil problem solved. We need new technology that does not depend on oil.
That headline could use a comma.
Gasoline under $2.00 in Milwaukee Area, Bush's Fault
Wish I could say the same of the Chicago area...
I totally agree with you. I think that the high run up in oil prices was definitely meant to hurt the President.
Has anybody seen a graph of oil vs. euros? How much of the rising oil price has been declining dollar value?
But who did it? The Saudis?
HIGH OIL PRICES EXPLAINED BY SPECULATIONS ON WORLD ENERGY ARKETS, SAYS OPEC Novosti (Russia)
MOSCOW, October 29 (RIA Novosti) - OPEC explains the high level of oil and petroleum products prices by a speculative game on the world energy markets, OPEC acting Secretary General Maizar Rahman told reporters in Moscow."We explain the high prices, and this means over $50 per barrel, by certain subjective factors, and first of all, by a speculative game," he said.
Mr. Rahman added that the current level of prices was far beyond the traditional price corridor for oil.
He also said that along with the speculative game on the energy market, one of the factors increasing prices for oil is an increased demand for raw materials. It exceeds the planned figures almost twofold.
The OPEC acting secretary general recalled that in line with the forecast for next year, the demand on oil was to have totaled 1.1-1.4 million bpd. Real demand today is 2.2-2.8 million bpd.
In Mr. Rahman's words, the political situation in the world somewhat influenced the level of prices. The acting secretary emphasized that OPEC made and would make efforts to maintain stability on world oil markets and keep the price within an acceptable price corridor. Mr. Rahman said that if necessary, OPEC might boost oil production by 1.5-2 million barrels.
"However, this is unlikely to reduce oil prices, as today supply exceeds demand by 2 million barrels daily," said Mr. Rahman.
Soros and his cabal of billionaire market manipulators
Is this environmentally sound/consistent with Kyoto?
Then PLEASE tell me why the gas prices are still so freaking high? We are being gouged at the pump!
Anyone have a theory on that?
No more coincidence than the stock market tanking in the months before the election. Maybe investors were afraid Kerry would win.
"Analysts say an early or severe winter could stress inventories"
The problem is, there is no 'early or severe winter' in the making.
The National Weather Service show a 'milder than normal' start to the winter season.
It's Nov 18th, and here is Upstate New York, the Temperature today was in the 60's and expected to remain in the 50 to 60 range through the weekend.
Global warming! It's Bush's fault! </sarcasm>
There are many likely suspects, the Saudis being a prime suspect. But other names come to mind, george soros, oil sheiks in the region who don't want democracy established in their region.
I agree. Gas is down to $1.63 round these parts.
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