Oil Prices Fall on Weather Woes, Supply (Good weather is bad at AP)

AP/Yahoo! ^ | Thursday January 11, 2:01 pm ET | Madlen Read, AP Business Writer

[rightinthemiddle]

Oil Prices Fall Below $53 a Barrel on Warm-Weather Forecast, Fund Liquidation

NEW YORK (AP) -- Oil prices plunged below $53 a barrel Thursday as funds resumed betting that commodities would continue on their sharp decline. The tumble was stoked by forecasts of more warm weather in the United States that could leave heating fuel supplies barely touched this winter.

Still, the energy markets were marked by some indecision Thursday: crude dropped to below $53 a barrel in pre-market electronic trading, rose to nearly $55 a barrel in morning trading, and then fell again. Factors that could cause oil to rise once more are the possibility for escalating tension in the Middle East, and rival weather forecasts predicting colder weather to come.

"Trying to predict the weather's like trying to figure out this wacky market right now -- it's very volatile," said Alaron Trading Corp. analyst Phil Flynn.

However, most analysts agree that the mild Northeast winter has already been priced into the market, and the question now is whether factors such as global energy demand, turmoil in the Middle East, violence in Nigeria and production cuts by OPEC will reignite the energy markets.

"The impact of the weather should not be overstated. Heating demand is a comparatively small part of global consumption," said Antoine Halff, an energy analyst at Fimat. "There's potential for a rebound."

Light, sweet crude for February delivery plummeted $1.83 to $52.19 in early afternoon trading on the New York Mercantile Exchange, after dropping as low as $52.07. The commodity, trading at new 19-month lows, has fallen more than 11 percent since the beginning of the year.

[rightinthemiddle]

Ah, the "business writers" at the AP.

The only business they know anything about is selling dime bags from their "attic gardens."

[Patrick1]

Weather woes..LOL

[Loyal Buckeye]

Our local reporterette said that mild weather was being blamed for falling oil prices.

[Conservativegreatgrandma]

Maybe they haven't heard the forecast for this weekend.

[AxelPaulsenJr]

Wonder if Exxon will still make record profits with these falling crude prices?

[2banana]

"Funds seem to be selling as aggressively as they once had bought. They have accumulated a large line of shorts, and it continues to grow," wrote Peter Beutel of Cameron Hanover in a research note. "Commercial accounts were buying, but they also sold new shorts. There was no long liquidation and that could lead to huge losses for longs who have not yet taken losses. They seem to have doubled up their long positions, which could be deadly."

Going down like the Titanic...

[rightinthemiddle]

Perhaps the falling oil prices can be blamed for the mild weather.

They'd probably believe it.

[Ben Mugged]

"Global Warming" drives down the price of oil. They don't know how to report it, as an unintended consequence or benefit.

[Anti-MSM]

Since liberals say the warm weather is because of global warming and they think Pres. Bush is the cause of global warming, then it must be his fault that oil prices are down!

[rightinthemiddle]

You got it. That's what they are thinking.

The want oil to be HIGH and the temperature to be LOW, so the Democrats can bail out all the people in the Northeast who can't pay their heating bills, thus ensuring a Democrat majority until the end of time.

That's honestly how these idiots think.

[RightWhale]

52.14 NYMEX crude. It was supposed to be over $100 now and we were supposed to be thinking certain things. Now it is half that and we are not being instructed what to think. Was the one who tells us what to think among those run out of Congress last fall?

[rightinthemiddle]

That is SO funny...the world was coming to an end! Our oil is GONE!

It'll go back up sometime, but if it breaks $50, we may see some real running for the exits.

It had support at $55 for quite a while, it seems.

[aculeus]

In my yooth I worked at a major oil co and learned from the senior guys that the 'best' winter weather was cold (sell heating oil) but no snow (which limited gasoline usage).

Not everything AP writes is wrong.

[montag813]

I continue to laugh at those who predicted doom at the pump and the destruction of the dollar. Euroheads have certainly taken it on the chin the past few weeks.

Above: "Euro Blast-Off"? Not so fast.

[Sicon]

Good weather is bad at AP

Unless of course, there's bad weather, which is also bad. Other things that are bad, according to the DBM:
* Unemployment below 5%
* $4 prescription drugs
* Add your own "bad" thing here... don't be scared, there are NO wrong answers! (because "journalists" are, after all, products of our education system, in which there are also no "wrong" answers)

[rightinthemiddle]

GOLD! BUY GOLD!

:-)

[SomeoneNeedsToSayIt]

It's not just the warm weather that's increasing supply.

The Saudis are ramping production in a big way to offset the lose from Iran.

[misterrob]

In VA we are supposed to get back into the 60s....

[AZRepublican]

Let's hope W doesn't get a runny nose. Traders might use that as a sign of pending supply imbalance (W needs to have the WH thermostat turned up).

[hubbubhubbub]

The weather had nothing to do with it. The media is insanely dumb.