Oil Prices Fall(Surprise inventory build)

money.cnn.com ^ | staff

[kellynla]

Oil prices fall on surprise inventory build. Gasoline inventories rise 2.1 million barrels. Crude oil stocks up 1.7 million barrels.

[thackney]

Yep, taking 0.07% of the oil off the market sure makes a big difference. Politics doesn't have to make sense. People scream "do something" so something gets done. There was no shortage of oil, US oil stocks are much higher than normal, but we needed to stop filling the reserve. < /sarcasm>

[rhombus]

Clearly it's emotion driving things here. I've noticed some good sword rattling drives that price up nicely too. There's no excuse however NOT to increase supply.

[dirtboy]

God bless you, dirtboy. You've solved one of the biggest economic problems of our time. Quick--report your findings to the White House. The evil-doing gas price manipulators will be prosecuted to the fullest extent of federal law and gasoline will once again be priced at a fraction of a dollar per gallon. There is certainly a Medal of Freedom for you in the near future for your ingenious devotion to your country's welfare.

Oh, go stuff a sock in it. I guess you forget the days when the Hunt Brothers manipulated the silver markets. So market manipulation on a large scale is quite possible.

[thackney]

You are right, I am off by a week. It will be interesting to see the updated data next week. I agree analysts monitor tanker traffic, but I don't know they can predict it or know in advance of arival.

Lot of good information being posted here.

[truemiester]

Ok, y'all. Listen up. I don't want to have to say this again, m'K?

When gas prices go up, more people produce gas to cash in on the gravy train. More supplies means that less will be sold and the price will go down.

Class over. (This is for the Rat lurkers, not for the regulars)

[thackney]

Clearly it's emotion driving things here.

Sure, but that is true for oil, gold, homes, cars and airline ticket prices. People pay on what they value the product.

[truemiester]

Wow, man.

Like prices rise; and then supply rises and demand drops; and then prices drop; and then . . .

It's like a cycle of business or something. A curve. A wave, even. Blows my mind.

(yes, sarcasm)

We at the crest everyone. Relax.

DUDE!! You are like some kinna, like, money-gasoline-business genius, man!! I hope I remember this in the morning!

[thackney]

More supplies means that less will be sold

????

Explain that one again...

[Cowboy Bob]

LOLOL....unintended consequences of the illegals staying out of work.

I was saying that a few days ago. Ship home a few million Illegals, and demand for gasoline drops. Prices will soon follow...

[rhombus]

Yup, my oil stock is still showing profit. I guess that makes me a robber baron.

[kellynla]

I've answered 3 of your questions already without any thanks...
you're on your own from here out. LOL

if you have any further concerns you might look at the gas taxes in WA...

[truemiester]

Same number buying the same amount but there is much more supplies than they will buy means it sits in the tank.

Sorry after hearing spanish on TV for the last week, my inglish is good, not so.

[blu]

The next "The REAL really really honest we mean it this time" excuse for oil prices to shoot up:

It is rumoured that the president of Iran has told his barber, who told his wife, who told her burka sewing group, who emailed their sisters...that the Prez of Iran will be changing hairstyles. This is bound to affect his mood, so he *might* get nasty, and so the price of oil shot up $10.00 a barrel.

I think I'll have my preschoolers write scenarios for the futures trading guys...they make about as much sense!

[Ramcat]

How much did it fall, a dime a barrel?

[kellynla]

How much did it fall, a dime a barrel?

PETROLEUM ($/bbl)
PRICE* CHANGE % CHANGE TIME
Nymex Crude Future 73.65 -.96 -1.29 10:53
IPE Crude Future 73.58 -1.06 -1.42 11:13
Dated Brent Spot 73.47 -1.11 -1.49 11:24
WTI Cushing Spot 74.40 -.21 -.28 10:05

[kittymyrib]

Retired people such as I am should be helping the younger generation in this gas rip-off by keeping off the road and letting those who drive to work have the gas. If all you need to do is go to church on Sunday, and go to the doctor and grocery store (one trip) and all retired people did this for just the months of May and June, it would make a significant diffence. We don't have to drive around mindlessly looking for something to do like teenagers do. Save money and save gas, a win/win.

[kellynla]

latest prices

PRICE* CHANGE % CHANGE TIME
Nymex Crude Future 73.45 -1.16 -1.55 12:22
IPE Crude Future 73.49 -1.15 -1.54 12:43
Dated Brent Spot 73.37 -1.21 -1.62 12:53
WTI Cushing Spot 73.05 -1.56 -2.09 11:39

[kellynla]

I did my part in 1979 when I started working out of my house...and never looked back. LOL

[rwfromkansas]

I have to agree with you.

It is becoming clear something is going on.

Note that once the president threatens a price gouging investigation, the prices begin falling.

That is not coincidence.

I believe most of the cause is simple supply and demand, but it is looking more likely that there is more too it.

I heard yesterday that the disconnect between crude prices and gas prices, at least in California, is somewhere along the lines of 150 percent different or perhaps it was even more. In other words, the gas prices are much higher than what they should be for crude oil at this price.

[AmusedBystander]

But two or three key entities can withhold key information and use that to manipulate the futures markets.

Futures markets make for stability in prices overall. You can lock in your fuel costs for some future period or you can go with market prices. Southwest Airlines locked down the price through futures and did reasonably well in 2005 in spite of rising prices while Delta did little and got burned big time.

So do you look at Southwest and accuse them of manipulating the market? No because if prices had fallen Southwest would have been the one to get burned. Nearly every trade in the market is a bet by the seller that the price won't go higher and by the buyer that it will.

Futures make sure that gas and oil will be available at SOME price rather than NONE available at any price.