Posted on 09/27/2006 8:35:41 AM PDT by Signalman
NEW YORK (CNNMoney.com) -- Oil prices plunged Wednesday and headed toward the $60 a barrel mark after the government said supplies of crude oil fell far less than expected while gasoline stocks surged.
U.S. light crude for October delivery lost 51 cents to $60.50 a barrel on the New York Mercantile Exchange, having traded as low as $60.10. Oil traded up 60 cents just prior to the report's release. Special Reportfull coverage
In its weekly inventory report, the Energy Information Administration said crude stocks slipped by 100,000 barrels last week. Analysts were looking for a decline of 1.7 million barrels, according to Reuters.
Gasoline supplies swelled by 6.3 million barrels, while distillates, used to make heating oil and diesel fuel, rose by 2.6 million barrels. Analysts were looking for a 500,000 barrel increase in gasoline supplies and a 2.3 million barrel build in distillates.
EIA attributed the surprisingly strong build in gasoline supplies to higher imports and strong production at U.S. refineries.
The agency said gasoline supplies are now above average for this time of year, while crude and distillate stocks are "well above average."
(Excerpt) Read more at money.cnn.com ...
I just saw that. Currently 60.55/bbl.
http://www2.barchart.com/mktcom.asp
Looks like W cranked open the gasoline valve in the WH basement a little more. Best thing Rove ever did was get those valves installed.
It's probably Nov futures contract.
Supply and demand works! Also glad to see all those speculators taking a bath!
I hope everyone takes not of the gas supply and understands why they aren't rushing to build new refineries.
Oops, that's "takes note of".
Those speculators are not taking a bath because they have hedged their portfolios. They are in pig city as long as any trend continues. They sell hi and buy low and just keep on makin a big profit on the margin, dont kid yourself.
Between the economy and oil-prices,The DemonRats must be beside themselves!This just isn't working out at all!!!!!!!!
BTTT
The propagandists on ABC Radio were just crowing with glee over the fact that crude prices had "skyrocketed" by $0.69 per barrel earlier this morning. Guess they popped the champagne corks a bit early.
Why? Can you explain that?
The folks investing in the hedge funds are discovering what the Treasurer of Orange county discovered doing the same thing ~ that is, that sometimes you really can lose everything.
I guess you missed this (one of many hedge funds that lost big on declining energy prices):
Amaranth, a big hedge fund, suffered huge losses last week on bad bets on natural gas trading. Observers said the revelation may explain some of the recent volatility in energy markets.
"We anticipate our year-to-date losses might be in excess of 35% as we near completion of the disposition of our natural gas exposure," the hedge fund said in a letter to investors obtained by TheStreet.com. The letter is signed by the hedge fund's founder, Nicholas Maounis.
Amaranth at one point was up $1.5 billion for the year. But in recent weeks it may have lost as much as $4 billion. The fund, assuming it is down 35% for the year, now has about $5 billion in assets under management.
A person familiar with Amaranth says the fund lost about 60% of its value in a single week because of the bad natural gas bets. The losses were magnified by the fact that Amaranth's bets were leveraged, using borrowed money. This source says the natural gas trade was levered at a ratio of 5-to-1.
Yes, people think that refiners should be building more capacity. They are under the false impression that refiners could be making more money if they could refine more gas when demand is high. This isn't the case. When demand spikes the most cost effective thing for refiners to do is handle the spike by raising the price because they know demand will fall off in the Fall as it always does.
I don't hear Schumer screaming about opening up the reserves anymore.
The truly stupid thing is that hedge funds are supposed to be so radically diversified that this could never happen.
I would be surprised if investors did not try to sue.
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