Posted on 11/01/2004 10:38:32 AM PST by Tumbleweed_Connection
LONDON (Reuters) - Oil prices fell heavily on Monday, taking U.S. crude below $50 on speculation that a U.S. election win for Senator John Kerry (news - web sites) could ease the geopolitical friction that helped fuel this year's record-breaking rally.
U.S. light crude fell as low as $49.40 a barrel before retracing by 1745 GMT (1:45 p.m. EST) to $49.70 a barrel, down $2.06. U.S. crude has spent nearly a month above $50, peaking a week ago at $55.67.
London Brent lost $2.28 to $46.80 a barrel.
Energy analysts said a win for the challenger Kerry in Tuesday's U.S. poll could mean lower crude prices than if President Bush (news - web sites) is re-elected. Opinion polls put the two neck and neck.
"Under a Kerry administration we'd likely have a much more interventionist SPR (Strategic Petroleum Reserve) policy," said Jamal Qureshi, market analyst at PFC Energy in Washington.
"And when you look out a bit further, Bush is more likely to be aggressive in the Middle East, particularly in Iran."
The Bush administration continues to add oil to the Strategic Petroleum Reserve despite high prices.
Kerry says he would stop filling at current prices to keep more crude on the market. That difference is important for the world oil market now suffering a shortage of light, sweet crude, which makes up about 40 percent of the SPR.
MANUFACTURING
PFC is forecasting an average U.S. crude price of $43 a barrel in 2005 should Kerry win, compared to $48 a barrel in the event Bush triumphs. It sees $52 on average in the first quarter 2005 under Bush compared to $45 under Kerry.
PFC says a Bush win could stoke nervousness about U.S. policies in the oil producing Middle East while Kerry is seen as more likely to work through conventional diplomatic channels.
A Kerry victory could also mean more financing for renewable energy source and trigger a push for tighter mileage standards for gas-guzzling sport utility vehicles.
The senator backs a 10-year, $30 billion energy package that includes $10 billion to build cleaner coal-fired power plants and $10 billion to help U.S. auto makers retool to build more fuel-efficient cars.
Traders also are wary of economic data that shows signs higher energy costs are eating into economic performance, curtailing oil demand growth.
A Reuters survey released on Monday showed growth in manufacturing slowed from the euro zone to Japan in October.
The surveys of manufacturers around the world showed a fall in manufacturing for the euro zone, the world's second largest economic bloc, signaling the slowest growth in 10 months.
"Primarily we suspect this is an oil price-induced global downturn which is hitting export growth," said Chris Williamson, chief economist at NTC Research, which compiles the data for Reuters. "Secondly, there has been some evidence of demand cooling in China."
China's surprise decision last week to raise interest rates is thought unlikely to have a major impact on fuel demand from the world's second biggest user, partly because retail prices remain heavily subsidized.
Also undermining oil on Monday was last week's improvement in U.S. Gulf of Mexico output from September's Hurricane Ivan. Production rose nearly 100,000 barrels a day last week to over 80 percent of the normal 1.7 million barrels daily.
In addition, producer Shell said on Monday it would delay engineering work on its 150,000 bpd Gulf of Mexico Mars platform from November until the first quarter of 2005.
Sure - that's the reason...
Says Reuters......
BS.
What a ridiculous stretch -- the MSM will stop at nothing.
Yep - After the first debate, there was a F'ing Rally....
Bull...another wishful thinking.....
According to a story on Yahoo, the Intrade futures have no correlation with any stock group. The markets really don't care who wins; presidents don't have as much influence as they wish. As Eisenhower said, it's like pusing on a rope.
One word - Reuters
Just more crap from the liberal media to try and discourage Republicans and Democrats for Bush.
Now I see December is just below $50. That is still very high. Gold is off a little, too.
Glaringly stupid interpretation. A Kerry win means more oil under radical islamic control and less domestic drilling under US control. That is higher oil prices for sure. Cut an run does not mean lower prices and having the French like us better does not pump more oil. The allies Kerry wants to cozy up to are users not producers.
What kind of report is this anyway?
Bull... price is falling because Soros et al globalists have stopped manipulating the future markets in attempts to keep prices high and get Kerry elected... Period.
Now that the election is here, no reason to continue to pump up the price to keep end prices high. Pure and simple...
Supply and demand will set the price... nothing else matters
I don't see the connection either.
The stock markets are up too. I can't believe Wall Street would be optimistic about having their taxes hiked under a Kerry presidency.
This sounds like Reuters spin to me.
Personal opinion masquerading as analysis.
This is mere pro-Kerry BS from Reuters. The oil market started falling last Tuesday as traders anticipated the end of pre-election price manipulation by China, Soros, and various Eurosocialists.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.