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.
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Come on $20pb.
I keep reading about barrel prices coming down , but I paid $2.23 at the pump yesterday.
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.
When it costs almost $30 to fill up my wife's Pontiac Sunfire, you know things have gone out of control. I mean, come on, a dixie cup holds more liquid than that gas tank.
Post for us how long it takes for a barrel of crude to be processed into its various components, specifically unleaded gasoline, and then try posting that comment again.
$2.06 in Maryland and $2.19 across the Pennsylvania line.
You're one sick puppy
Eww, it got deleted from the forum but it still shows up under my posts...
Damn, missed it ... got deleted before I returned.
I find it irritating when talking heads say something like "Despite the high oil prices today, this is nothing compared to X years ago when a gallon of gas cost $3.50 by todays standards." I really dont give a flying crap how bad oil prices were 10 or 20 years ago. Gimme $0.75/Gal oil without selling us down the river!
This situation is the shining star of the NIMBY syndrome coupled with the environmentalist agenda. No new refineries or nulcear energy plants in over 30 years! And with strong community and environmental resistance to growing our energy infrastructure, we will not have new refineries or nuclear plants for a very long time.
As demand increases with a constant supply, look for gas rationing to happen long before greater refinery capacity is created and comes on line.
Gimme? Who's going to "Gimme?"
Let the price go where it will and buy Exxon/Mobil
You didn't miss anything.
It was vile and disgusting.
Consider yourself lucky.
But it's true.
A barrel of oil will still have a large impact on the price one pays at the pump - While you are correct about our refinery capacity (that is not the whole equation by a long shot) -
One example being we already import a large quantity of ALREADY REFINED product from the Middle East (and this has been growing since the 80's quite largely) -
We are no where near gas rationing as you suggest either - The fact is a barrel of oil will be back under the $40 price range within the next 12 months -
The one thing the GWB Administration should be doing (and should have long ago) is stop putting $45+ oil into SPR - There is at least $5 to $10 specked into a barrel right now by the energy traders....stop putting into SPR would make them all get honest in a hurry -
On the contrary, consider yourself fortunate. One of those very-tolerant DUmmy-types shat on the thread and left behind something related to his screenname.
I think you've bought into a lot of old complaints. I don't believe that there are any strong desires by refiners to build more refineries. That would just be the SUV drivers that want cheaper gas who believe that there is a big shortage of refineries.
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