Oil Prices Slide More Than $1 ($53.10/bbl)

Reuters ^ | March 11, 2005 | Mia Shanley

[RWR8189]

SINGAPORE (Reuters) - Oil prices slid more than $1 to trade well below $53 a barrel on Friday, extending the previous day's heavy losses as funds took profits from a 12 percent gain in the past month.

A big stock build in the United States encouraged selling, although losses were limited by a weaker dollar and longer-term worries that energy demand growth this year would outpace supply.

U.S. light crude fell $1 cents or 1.9 percent to $52.56 a barrel in early European trade, having earlier touched $52.50, the lowest price since March 2. Oil tumbled $1.23 on Thursday, the first decline after a six-day rally.

Brent crude in London traded down another $1.16 cents to $51.50 a barrel after ending 66 cents lower on Thursday. It jumped to a record $54.30 on Wednesday.

Wednesday's U.S. government report showed another build in U.S. crude oil inventories last week -- the fourth in a row -- taking supply to the highest level in eight months.

"The stats were really bearish, so we're seeing some profit-taking. In the longer term though the funds are bullish and could buy up the market again," said Tony Nunan at Mitsubishi Corp. in Tokyo.

Strong global demand and a late-winter cold snap helped send oil prices soaring this week to a four-month high of $55.65 a barrel, 2 cents shy of October's all-time peak.

But OPEC oil producers are keeping a close watch over rising stocks in developed countries ahead of the usual second-quarter slowdown, when temperatures warm up.

"OPEC is keen to prevent a rise in world stocks. So if anything, decreasing, rather than increasing, output is their preferred option," commodities strategist David Thurtell said in a report.

Iran, Qatar, Venezuela and Algeria have come out in favor of keeping production steady.

CHINA DEMAND STEADY More support was seen in China's February crude oil imports, which bounced back from a 14-month low in January, a sign that demand in the world's second-biggest consumer was not slowing.

Analysts had been counting on a rebound in imports after January data showed a steep 24 percent fall, the first annual drop for two and a half years, casting a cloud over expectations that strong Chinese demand will help keep prices high this year.

On the supply side, top exporter Saudi Arabia has told Asian customers it would keep oil supplies steady in April, a sign that OPEC may leave output unchanged at next week's meeting in Iran.

Kuwait also plans to keep crude supply to Japan unchanged for April, traders said on Friday.

But OPEC oil to be shipped in the four weeks to March 26 fell 130,000 bpd to 23.93 million bpd, hit by a slump in spot loadings from the Gulf, a leading oil shipping analyst said.

[RWR8189]

3/11/05 Session Contract Detail for April 2005

	Last				53.10
	Open High				53.60
	Open Low				53.60
	High				53.67
	Low				52.50
	Settle				53.54
	Change				-0.44
	Open Interest				152458
	Volume				0
	Last Updated				3/11/05 05:26:58

[pctech]

I'm too pessimistic to think this will continue. Until my gas prices come down under $1.50 a gallon, I am not going to impressed with this present administration. Though I like Bush, he has done NOTHING to bring down energy costs.

[crz]

Except offer up the most comprehensive energy plan ever..only to have it blocked by the communists in the senate for 4 solid years.

[BB2]

The fact that the congress has done nothing to pass Bush's energy bill, from the first term, including drilling in A.N.W.A.R. doesn't count of course.....

[BB2]

I heard yesterday that the U.S. has shale oil deposits of an estimated over 3 trillion barrels, but that it is only feasible to extract it if the price stays over $30.00 a barrel.

I have a thought, why doesn't someone in congress introduce a bill to buy all of the oil extracted from shale in the U.S. at $35.00 a barrel for a period of 5 years, or 2 years after the world oil prices fall below $30.00. If the prices don't fall, raise the buy price to $37.00 a barrel with the same contract terms for the next 5 years.

(wanna bet that just the introduction of such a bill would dramatically influence the oil cartels to drop oil prices?)

[conservativecorner]

Don't worry because the Saudi Monarchy is a real friend to the US, and they will do whatever it takes to make sure oil comes down in price. END SARCASM!!

[kittymyrib]

Every time you have a Made in China product in your hands, ask yourself if buying it is worth pumping up our Communist enemy's economy and paying more for your gasoline. You might save quite a bit of money that way.

[reformedliberal]

Maybe he could just destroy the economy, thereby bringing down demand. That would help you out, wouldn't it?</sarcasm >

What do you think the POTUS can do to bring down/raise oil prices in today's global economy?

We are about to allow drilling ANWAR. The first hydrogen fuel cell to make electricity went online yesterday. Hybrids are on the road. If you read the article, we have built up our domestic supply, which caused some lowering of the price.

We don't control the price of oil. The global market does. It responds to supply and demand. The OPEC nations can cut supply whenever they wish. Weather is still not controlled by humans. A booming global economy and speculation by those who wish to make money off commodity trading have more to do with the price of gas than any US President.

You can purchase oil company stocks, thereby reducing the net effect of the price of a gallon of gas on your own personal economy.

[ThanhPhero]

$1 out of $50+ is a "slide?" Is $2, then a "collapse?"

[Whispering Smith]

I would rather a private group make such an offer. Getting the Government further into the market is a prescription for disaster.