Posted on 12/03/2004 8:59:04 AM PST by Ernest_at_the_Beach
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U.S. crude oil futures fell by $1 to $42.25, while London Brent fell $1.15 to $39.
Over the past three sessions, prices have fallen nearly $7, the fastest fall since January 1991, during the first Gulf War.
Since October's record peak of $55.67, prices have sunk by more than $13 and U.S. prices are back to levels last seen in September, while Brent is hovering around prices hit in July.
The renewed sell-off on Friday followed U.S. Labor Department data showing only 112,000 new U.S. jobs were created in November -- the weakest performance since July and well below Wall Street economists' forecasts.
The indication of slowing U.S. economic growth suggests falling demand for oil, which has already sunk in value as high OPEC production rebuilds inventories and high fuel costs bite into demand.
But more bullish analysts say growth in the United States is still robust and a sudden snap of cold weather would revive concerns about thin stockpiles.
"I still think the States is doing well economically, especially if you consider that we had $50 oil last month," said Edward Meir of Man Energy.
"Not that much has changed. Things could turn around quite quickly if we get a cold snap."
SYNCHRONISED GROWTH
Oil's rally this year was driven by synchronised economic expansion in the United States and China. This generated the fastest fuel demand growth in a generation, running down inventories and squeezing spare capacity.
While the supply cushion remains relatively low, mild weather in the U.S. Northeast -- the biggest regional heating oil market in the world -- and higher output from refiners coming out of maintenance has soothed worries about supplies of winter fuels.
This week's sell-off was triggered on Wednesday by a U.S. government report that showed distillate stocks, including heating oil and diesel, rose by 2.3 million barrels, helping to narrow the supply deficit compared with last year.
Overall crude stocks are already well above last year's levels as OPEC oil nations produce at the highest rate in 25 years.
The Organisation of the Petroleum Exporting Countries is to meet in Cairo on December 10 to decide output policy for the first quarter of next year.
Some members want the output spree to continue, though the cartel's second biggest producer Iran has advocated a clampdown on production above official quotas to avoid a winter stock-build.
OPEC's reference crude basket fell to $35.42 a barrel on Thursday from $38.03 the day before, OPEC said on Friday.
The fall takes OPEC's crude to just $3.50 a barrel over the top of the $28-$32 target, identified by OPEC's President Purnomo Yusgiantoro on Friday as an acceptable range for the cartel's crude.
Other ministers have indicated a basket price around $30-$35. The current target is $22-$28 a barrel, but most officials have said this range is now outdated.
The basket, made up mostly of heavy high sulphur crudes, is valued at a large discount to benchmark low sulphur grades like Brent and U.S. crude.
The election was over after the re-inauguration of Reagan, and the elitist media was still adamant in shunning anything Reagan did.
I was reading somewhere that a $1 drop in the price of a barrel of crude would translate out to a little over a 2 cent drop in a gallon of refined gasoline..... at 42 gallons of gasoline per barrel.
Based on that any drop will not be dramatic unless winter goes away very quickly....
I think I will begin to see unleaded in the $1.60 range here real soon. Nice.
Wow, I am seeing mostly unleaded basic at $2.19 here....
Well, we're at $1.89 now, but I have a quickie formula I use for gas prices in my area: spot crude / 25.
Could it be a famous billionaire dem? Maybe a George S? Were dems were willing to tank the economy to defeat Bush? Would anyone put it past them?
What we do know -- if true -- is it won't be a MSM story. Anyone?
"The Real issue to be investigated is how the price was artificially raised to $60.00 during the month immediately prior to the Election."
You hit the nail on the head, dude.
In addition to that, most people don't stop to think that with the dollar going down in value if all things were equal a commodity like oil would correspondingly go UP in cost. The falling oil prices are even more dramatic than they look to us here in the U.S.
We have gone from an economic "perfect storm" a few years ago to an incredibly good position....keeping in mind where we came from just a short time ago. No, not perfect, but pretty damn good & getting better!
What's going on?
Regular unleaded is allllll the way down to $2.09 here in the SF East Bay at the Arco stations. I got gasoline at Costco last week for $2.03. Whooo hooo!
We saw a 10 cent/gallon drop in N California during the Thanksgiving Weekend which was amazing.
Over the last six months I have consistently seen stations pop up prices right away when the media announces per-barrel cost hikes. No matter that the gas they are pumping is from lower cost oil. Now crude prices are dropping but the gas stays at ~$2 per gallon. Other than oil companies ripping-off the consumer can anyone explain it?
The election is over.
That was the old one. The new one began November 3rd.
Over the last six months I have consistently seen stations pop up prices right away when the media announces per-barrel cost hikes. No matter that the gas they are pumping is from lower cost oil. Now crude prices are dropping but the gas stays at ~$2 per gallon. Other than oil companies ripping-off the consumer can anyone explain it?
Reuters will spin anything to make GW's administration look bad.
The dirty little secret is that there never was a shortage of oil during the $orea$$ run up on oil prices.
Now that reality is hitting home like a ton of bricks dropping on those artificially high prices.
Bad news for Hooters/Reuters, AP, and the MSM is good news for American business and the rest of us.
Maybe the markets were horrified that a President Kerry would f*** everything in the middle east. Keep in mind, the oil market took off as Kerry started to do better in the polls.
Yeah, FUTURES are dropping, not the price of gasoline. The oil has to be purchased, hauled, refined, and distributed, and only then does the gas station guy get lower prices, but he still has the expensive stuff in his tank.
Yes, they will raise gas prices when they know it'll cost a lot to replace what they've got. They don't mind waiting to sell the stuff they got cheap. But they do mind selling cheaply the stuff they paid a lot of money for.
Wait a few weeks. The prices will come down.
I read this as so much doublespeak. The selloff is due to speculators unloading their positions. Was that in the article anywhere?
This is one of the worst-written opening paragraphs I've ever seen in a news article. What the heck does it mean?
Battered oil prices have dived another doller. So far, so good -- except, whatever happened to "dove," the correct past tense of dive. ("I dove into the water." Not, "I have dived into the water.")
...after weak U.S. jobs data deepened a slump... What slump? The oil prices drop? Is that really a "slump?" Lower costs of oil are good thing, right?
...a slump driven by easing worries... If worries are easing, why is this bad? What does the easing of worries about winter supplies (oil supplies, one presumes) have to do with weak U.S. jobs data?
...weak U.S. jobs data deepend a slump driven by easing worries... Ummmmm...yeah, whatever.
Economics 101. In a free market, price is determined not by the cost of the product, but what the market will support.
If the market will support $40.00/gal for gas, then that's what the price will be, regardless of the cost of the product.
Think about it, how much does 1 liter of drinking water cost? What is the price of 1 liter of designer drinking water?
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