Posted on 03/20/2008 9:04:47 AM PDT by rightinthemiddle
LONDON -- Nymex light, sweet crude oil futures fell more than $3 to below $100 a barrel in London Thursday, as a further recovery in the dollar and renewed concerns over the health of the U.S. economy prompted investors to liquidate crude and other commodity positions.
Following a week of volatile trade and steep price declines, analysts suggested Thursday that a turning point in investor sentiment is underway, one that could herald a stronger focus on fundamentals.
"Severe seesaw price action over the past several days reflects investors questioning the logic that commodity prices should rise every time the macroeconomic picture in the U.S. worsens (and the dollar weakens)," said Adam Robinson, analyst at Lehman Brothers in New York.
The front-month May Brent contract on London's ICE futures exchange was down $2 at $98.72 a barrel. The front-month May light, sweet, crude contract on the New York Mercantile Exchange was trading $2.82 lower at $99.72 a barrel.
(snip)
"Commodity players seem to be coming round to the notion that the deterioration in the U.S. macro picture cannot be ignored on the pretext that commodities are a 'weak dollar play' or an 'inflation hedge', and thus immune from downward pressure," said Edward Meir, analyst at MF Global in New York.
(snip)
While Wednesday's U.S Department of Energy inventory data was seen as bullish for crude prices -- oil stockpiles rose less than expected and gasoline inventories unexpectedly slid -- an implied 3.2% reduction in implied U.S. fuel demand appeared to have captured the attention of the market.
"This time the bears seem to have some evidence of demand destruction to support their argument," said Michael Davies, head of research at Sucden in London.
(Excerpt) Read more at online.wsj.com ...
Liberals.
The next question is “Are we going to start drilling here in the US? Nawwwwww...........makes too much sense.”
My take lots o hedge funs are being squeezing on their credit line due to the crappy collateral in their vaults. So hedge funs dump what they got and that’s oil and oil is dragging down AU
Yes, there's “conservation” — but, most of that is due to market forces, rather than government interventions or the hand-wringing of the chicken-little Gorebots. The price of oil is very inelastic in the short term — but, it eventually follows the law of supply and demand.
The next question is “Are we going to start drilling here in the US? Nawwwwww...........makes too much sense.”
::::::::
Our fantastic energy policy will certainly TAKE CARE OF US, in one way or another. Washington is a party joke, as is any vestige of anything that even resembles of a protective, intelligent energy policy. No drilling, no exploring, the dollar keeps sinking on the world money market....and we are looking at $4.00 per gallon for gas — nice job on the economy Washington.
Gold also continues its severe retreat. Got some long options?
Buddy can you spare a Krugerrand?
Silver sure is in pain today. Good thing I bought all I can carry in my Himilaya backpack Monday at $20. That was most fortunate.
Nah, I have no oil or gold options either way.
I simply believe there are severe speculative “bubbles” in oil and gold which are hurting businesses, people, the economy, and the opportunity for Republicans to be elected in the fall.
I find it amazing that there has been practically NO calls from the Media for drilling of our own oil in ANWR and off the coasts.
The Left and the Media want high oil prices for a number of reasons.
Both Alaska’s Senators called for drilling in ANWR just this week. Made the local news.
They’re always calling for drilling in Alaska. But, why would Alaska’s senators know what’s best for Alaska?
/sarc
Additional drilling will not cause the price to drop, the price run up has ZERO to do with supply and demand. It has everything to do with hedge funds and others manipulating the market.
This is a speculative bubble, and its one on an inelastic good... There is no shortage of oil, just a greed tax being placed on every barrel of about 60-70 a bbl.
Actually has nothing to do with Alaska since it’s on Fed land. Alaska gets zilch from that and the offshore, etc. That’s how much Alaska cares, too. Zip.
Gold was $20 the ounce before Franklin Roosevelt got in and pegged it at 35. I believe our USD cash in your wallet was partly gold backed until the depression. Some of your cash actually that was called “gold certificate”
Yeah we know. Everybody knows. Could talk about the weather. It’s zero again today. How about your neck of the woods?
It’s clear as anything possibly could be, as the dollar strengthens commodity prices will fall.
Great. Since the price per barrel is declining I’ll drive down to the gas station and fill up since I’m sure gas prices have dropped quite a bit already.
Oh wait I forgot . . .gas only changes prices that fast when prices go up.
My guess too. There’s too much meat on commodities as the best assets of the otherwise squeezed funds and banks to not take some profits now.
Exactly.
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