Posted on 05/02/2005 3:18:09 AM PDT by RWR8189
SINGAPORE (Reuters) - Oil prices fell more than 1 percent on Monday, hovering at a 10-week low just above the $49 mark as higher OPEC supply and swelling crude stocks in the United States weighed on the market.
U.S. light crude dropped to an intraday low of $49.05 a barrel, the lowest since Feb. 22 and almost 16 percent below the record $58.28 struck on April 4.
At 0810 GMT, U.S. crude was 52 cents down at $49.20. Markets in Singapore and London were closed for a public holiday.
"It's a split market for the time being. Short term it's definitely weak if you look at stocks and OPEC production," said Tony Nunan at Mitsubishi Corp. in Tokyo.
"But medium term, three to six months out, it looks like supply could be really tight."
Prices came under selling pressure last week as U.S. crude stocks jumped by a surprising 5.5 million barrels as imports into the world's biggest comsumer surged to almost 10.9 million barrels per day (bpd), the third-highest weekly volume on record.
The Organization of the Petroleum Exporting Countries has pledged to increase supplies to cool prices down to below $50 a barrel, which has helped to build U.S. crude stockpiles to the highest level since mid-2002.
The cartel has an official production ceiling of 27.5 million barrels per day (bpd), excluding Iraq.
"Since our last meeting in Isfahan (in mid-March) until now, there is 2 million that has been added to the market," OPEC President Sheikh Ahmad al-Fahd al-Sabah said on Monday.
"When we were in Isfahan ... the (OPEC 10) production was 27.7 million and now our real production is 29.7 million."
Including Iraqi production, OPEC's current output would beat levels of over 30 million bpd pumped late last year that took OPEC supply to 25-year highs.
Sheikh Ahmad had said the cartel would add 500,000 bpd of fresh supplies to world oil markets starting from May. But he said "by numbers, we already have more than 500,000 of real production in the market."
OPEC, which controls half the world's crude exports, meets again on June 15 in Vienna to chart production strategy for the second half of the year.
Most of the 10 OPEC members with quotas -- Iraq is excluded -- are now producing at full tilt as the exporter group seeks to encourage stockbuilding in the coming months to create a buffer for strong demand later this year.
But dealers remain concerned over a potential gasoline supply crunch in the peak-demand summer months or a shortage of heating fuel toward the end of the year as the northern hemisphere heads into winter.
Some analysts worry that high commodity prices are starting to dent world economic growth by fueling inflation and prompting a rising trend in global interest rates.
The U.S. economy grew at its slowest pace in two years during the first quarter -- an annual rate of 3.1 percent -- fanning concerns of a possible slowdown in oil demand growth.
Gasoline is probably an almost perfect free market situation. Within 2 or 3 miles from my house, I can fill up at a BP-Amoco, Thortons, Jewels, Citgo, Shell, Mobil, Dominick's, Costco etc. Each of these stations post their pump price on a huge sign, allowing me to make an informed decision on where to fill up. The truth is everyone checks on the competition's prices and ensures they are not vastly underpricing or overpricing their gas. The reason that price goes up more quickly than it goes down is this. Two stations are sharing a corner. Station 1 has 500 gallons of $2.00 gas, Station 2 is empty. Price of gas to the dealer has come down to $1.75. Station 2 fills up, His competitor is charging $2.00 He might lower his price to $1.95, ensuring a nice profit, while stealing customers from Station 1. The price won't come down fully until both stations have the cheaper gas. Scenario 2, Station 1 has 500 gallons of $2.00 gas, Station 2 is empty. Gas price is now $2.25. Station 2 now has to charge $2.25 to break even, Station 1 can charge $2.20 still make a nice profit and still undersell station 2. Obviously greatly simplified, but still is Econ 101, (okay, maybe 201)
It may be about equal to fretting over the fact thay your underwear and tv and toaster are not made by good ole fashion American Union labor.
I was raised by union thugs so I've heard a lot of complaints along that line. Now they just seem silly. They are just Union rhetoric and it is sad that people eat it up.
Confucius says that helps my personal economy.
I've started riding my bike to work three days a week. It's about 40 miles roundtrip.
I've always enjoyed riding and now I have a great excuse for doing it. My boss even doesn't mind if I get in a little late :-)
You know, I have never gone over to DU and posted troll-like messages. It's never even occured to me to do something like that. Why do they come here? Don't they get riled up enough at their own hate-filled site?
If $2.19 or whatever is truely the price of oil and being that there is not really any new technologies out there that is fine with me. But if there were something more that our country could utilize to make our situation a little less expensive wouldnt it be worth it, American made or not? I dont look at it from the labor union point of view, I just think that there are a lot of opportunities out there that are not being used to thier best.
Like what?
Now is the time to really cut back on all unnecessary driving. The storage tanks are full, the need for heating oil is diminishing, and the distributors will either have to sell it or drink it. If every driver cuts back, prices will have to start coming down, and that will certainly help the economy.
Start riding a bike to work if you can and if you live in an area that is getting warmer temps in the morning. Soon as it rises enough around here that's going to be my getting to work option.
Tesla was a loony Genius and I love reading anything I can get my hands on about him. But I don't recall this story. Where can I find some more information on it?
I've just read a bunch of stuff on the internet and some classroom lectures. I did a real quick ask.com search and here's one website you may find interesting:
http://www.rexresearch.com/teslamt/tmtgoogl.htm
Tesla was a great man and in my opinion underestimated in the scientific community in his day. I bet it will be another 100 years before we catch up to his genius.
Thermal Depolymerization. It turns virtually any organic waste products into combustible liquids. Waste products include human feces and anything else you could think of that is nasty. There are a few facilities operating around the US. One i believe is located near Philadelphia. Check it out:
http://www.fact-index.com/t/th/thermal_depolymerization.html
Yup, I remember that one being discussed here before. There is also bio diesel. But, at what end cost per gallon given mass production at today's technology?
I agree, most of the things I have read about him would make someone think they were reading a futuristic Science Fiction Novel, but the man really existed and his genius, even to this day, remains unsurpassed.
Thanks for the Link :)
"But, at what end cost per gallon given mass production at today's technology?"
I'm not so sure i understand your question. If you mean what would be an acceptable price for a commodity such as oil, I would I deally say $0! But realistically i suppose $1/gal would be an acceptable price for gas.
I dont know whether or not you had discussed this in the past either but i guess the French developed an automobile that runs on compressed air. Granted, it is only a commuter vehicle that gets about 93 miles per tank but it is certainly a step in the right direction. I just think something is clearly wrong with the whole oil deal as it relates to technology. We've been using this stuff since the turn of last century.
Well, we have bicycles, diesel engines and hybrids available but right now, at 2.19 a gallon, gas is so cheap people are driving 300 hp suv's and sports cars. At 2.19 it's just darn cheap and the comsumption level far out weighs the few complaints out there. I ride a bicycle to work. It's only 3.5 miles and it's just about the high point of my day.
Well I guess the price of gas is really relative to the person then. I'm only complaining because of not only the aformentioned reasons but because i'm a poor college kid. I'll save my crying though for the bleeding hearts who may want to hear it if i decide to sink that low. (Probably not) Anyways its a point well taken. I just want to see us as a society/human race evolve past where we are but I suppose that's all in due time.
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