Oil Prices Fall Further Below $58 ($57.12/bbl)

Associated Press ^ | November 11, 2005

[RWR8189]

SINGAPORE - Crude oil futures slipped further below $58 a barrel Friday amid reports of rising supply and falling demand.

Light, sweet crude for December delivery fell 9 cents to $57.71 a barrel on the New York Mercantile Exchange in electronic trading in Singapore. On Thursday, the contract fell to $57.80, the lowest level for the front-month contract since July 21.

The U.S. Energy Information Administration released data that showed natural gas in storage grew more than expected last week, surpassing a level that many analysts believe is necessary to meet winter demand.

The Paris-based International Energy Agency said in a monthly report that global oil demand growth in 2005 would be slightly lower than previously expected.

The reports gave momentum to a price decline already underway due to a moderation in gasoline demand and warmer-than-usual weather in the U.S. Northeast and Midwest, key markets for heating oil.

"We don't have any big demand right now. Heating is not upon us yet, cooling is behind us and the summer driving season is behind us," said James Cordier, president of Liberty Trading Group in Tampa, Florida. "If you're going to have a soft spot, this is it."

Cordier said technical charts suggest that oil prices could fall to the mid-$50 range, before finding some support. Moreover, he said the downtrend was likely to be stopped in its tracks by late December, assuming normal winter temperatures.

The drop in the price of natural gas futures followed the release of Energy Department data showing that U.S. storage of natural gas grew last week to 3.2 trillion cubic feet - a level many analysts consider a crucial measure of adequate pre-winter supply.

The IEA lowered its forecast for global oil demand growth in 2005 by 70,000 barrels a day to 1.2 million barrels per day. The agency also said that OPEC's production capacity could rise by 1.2 million barrels per day to 33 million barrels per day by the end of next year.

On Wednesday, the federal Energy Information Administration said crude-oil inventories rose 4.5 million barrels to 323.6 million barrels in the week ended Nov. 4 from a week earlier. Crude stocks are about 13 percent higher than they were a year ago.

With energy prices falling despite the continued loss of output of oil, natural gas and gasoline in the aftermath of hurricanes Katrina and Rita, Cordier said it is a clear indication that the market is being driven by a dropoff in demand.

He added that demand should pick up again later in the year, assuming normal winter weather patterns.

[RWR8189]

Light, Sweet Crude Oil

11/11/2005 Session Contract Detail for Dec 5

	Last				57.12
	Open High				57.80
	Open Low				57.80
	High				57.85
	Low				56.93
	Settle				57.80
	Change				-.68
	Open Interest				144022
	Volume				0.00
	Last Updated				11/11/2005 05:03:30

Unleaded Gasoline

11/11/2005 Session Contract Detail for Dec 5

	Last				1.4794
	Open High				1.5050
	Open Low				1.5050
	High				1.5050
	Low				1.4794
	Settle				1.5068
	Change				-.0274
	Open Interest				46616
	Volume				0.00
	Last Updated				11/11/2005 05:05:38

Heating Oil

11/11/2005 Session Contract Detail for Dec 5

	Last				1.7208
	Open High				1.7425
	Open Low				1.7425
	High				1.7450
	Low				1.7175
	Settle				1.7435
	Change				-.0227
	Open Interest				45301
	Volume				0.00
	Last Updated				11/11/2005 05:06:46

Natural Gas

11/11/2005 Session Contract Detail for Dec 5

	Last				11.370
	Open High				11.409
	Open Low				11.409
	High				11.474
	Low				11.370
	Settle				11.380
	Change				-.010
	Open Interest				56114
	Volume				0.00
	Last Updated				11/11/2005 04:52:14

 

[Casloy]

Oh my God, the free market actually works!

[cynicom]

A free market that is not prone to manipulation does indeed work.

[OldFriend]

OH NOOOOOOOOOOOOOOOOO, the old folks won't have to eat cat food in order to heat their homes after all.

Gasoline prices in our area are over a dollar less than their highs just about a month ago.

[BallyBill]

I blame George Bush!

[Straight Vermonter]

What is with the myth of poor old people? They are by far the wealthiest segment of the population and they will be wealthier by far now that the young/poor will be paying for their drugs.

< /tangentical rant>

[ExSES]

Data website link?

[cloud8]

Hooray! I paid $2.19 for gas Wednesday, but $2.44 for heating oil two weeks ago. (Boston area)

[RWR8189]

New York Mercantile Exchange

[Born Conservative]

But I thought that natural gas was going up more than 50% for the winter? The media said so; surely, they can't be wrong?

[ExSES]

Thanks! Saved me a search (bookmarked now)...

[azhenfud]

NO! We need government intervention!!! < /s >

[moose2004]

Does anyone know how many barrels of oil Iraq is currently producing each day? Also, where are they shipping their oil? Lastly, have we been buying Libyan oil since we restored diplomatic relations?

[ex-Texan]

Perhaps Congress ought to have hearings on oil prices every month? There are no coincidences. The same people who bid up prices for crude own the oil companies. Big Profiteering Mystery . . . Not!

[Texas Jack]

I went to an electronics store in North Dallas (Plano) yesterday morning and noticed that the price of gas at the station across the street was $2.16 when I went in. When I came out of the store about 45 minutes later, the price was $2.14.

Who would have thought that burning a few French cars would create so much less demand. They must have gotten really bad gas mileage.

[OldFriend]

If the dems aren't using the 'elderly' as political props they're using the 'children'.

[leprechaun9]

On November 1, we went to Atlantic City for a day. When we traveled along Rt 30 toward the marina area, EVERY gas station was selling Regular Blend for $2.15 to $2.17/gallon.

On the same day, in Union County (about 95 miles north) along Rt 22, the price of Regular Blend was $2.35 to $2.42/gallon.

I would like to know how this happens!

[airborne]

$2.11 for regular unleaded here in PA.

[Terabitten]

"We don't have any big demand right now. Heating is not upon us yet, cooling is behind us and the summer driving season is behind us," said James Cordier, president of Liberty Trading Group in Tampa, Florida.

I can't believe that this guy's trying to pass it off as basically seasonal variation. This time of year should *always* mean that winter's not on us yet, and cooling and summer driving are behind us.

Do they think we're ALL fools?

[Trust but Verify]

Sorry, but the weather at this time of the year is unusually warm throughout most of the country, thus delaying the start of the heating season. It is November 11th, and I live in Wisconsin and heat with natural gas. I have still not turned my heat on, and I know I'm not the only one. High temps here today and tomorrow are expected to be around 60 degrees.