Posted on 06/10/2009 2:40:08 AM PDT by Scanian
But "as oil prices rise, so will big oil companies' profits, creating more importance to pass the legislation," said Daniel J. Weiss, director of climate strategy at the liberal Center for America Progress.
Mr. Weiss added that higher oil and gas prices will soon return to the forefront of the climate and energy debate, helping to push legislation through the House.
At the same time, higher oil and gas prices are likely to slow the economy's eventual revival. Energy Secretary Steven Chu warned last week that gasoline prices in the $3-a-gallon range could require the Organization of Petroleum Exporting Countries to increase production to stabilize the economy.
"There's no question that increasing oil prices slow the economy because it takes more money out of people's pockets," Mr. Felmy said. He added that a $10 increase per barrel of oil subtracts 0.5 percent from gross domestic product.
Still, signs abound that the U.S. economy is no longer in a downward spiral. The Labor Department reported last week that jobless claims and unemployment rolls fell by record levels, sending oil prices above $70 a barrel. AAA reported gasoline demand before Memorial Day rose 2 percent more than it had in the previous year.
The rise in crude prices has paralleled the trajectory in other markets, especially the stock markets, in recent weeks.
Claims from OPEC that the world economy could weather even higher prices, coupled with forecasts that oil could top $95 a barrel this year and investor speculation, have added to oil's rally.
Pump prices are down from this time last year, when gasoline crossed the $4-a-gallon mark and oil pushed toward $150 a barrel, but the prices are still weighing on motorists' bank accounts.
(Excerpt) Read more at washingtontimes.com ...
I'm also convinced that he wanted oil to spike all along because this will be his excuse the “fist” cap and trade up the collective arse of America.
Gas will be ten dollars a gallon.And ratiomed. Five dollars of the ten will be taxes.
The first sentansce isn’t so ridiculous. Dollar worth less = inflation. Inflation = higher oil prices even if everything else remains the same.
Last month the domestic supply of oil/gasoline was high indicating that demand is still depressed. It’s probably safe to assume that supply issues aren’t driving the cost of oil. If supply issues aren’t, then what is? Of course some of it is related to the weakening dollar, but over the last couple of weeks the prices don’t seem to be moving in tandem.
The price of gold is headed downward. It could be that some are cashing it in and going back to commodities hedging, thinking the economy will be recovering soon and supply issues will once again be the main driver behind prices.
“Energy Secretary Steven Chu warned last week that gasoline prices in the $3-a-gallon range could require the Organization of Petroleum Exporting Countries to increase production to stabilize the economy.”
Require OPEC to increase production?????? Excuse me screwball, they don’t take no stinkin’ orders from the likes of YOU! What a testament to the extreme hubris of the Commiecrats in charge. I’ll smile when they give these bums the “bums” rush they so richly deserve.
bump!
Oil prices soared above $71 a barrel today to reach a 2009 high, as investors poured money into crude markets to protect themselves against the inflation risks posed by a weakening U.S. dollar.
Oil, which typically trades inversely to the dollar, has more than doubled in price in three months as traders also cheered news showing the worst of a severe U.S. recession is likely over. They brushed off data — such as a 9.4 percent U.S. unemployment rate in May — that suggest crude demand will remain weak. Even growing inventories have not checked crude’s stellar rise.
http://www.chron.com/disp/story.mpl/chronicle/6468040.html
$ 3.00 by July 4th.
There is no shortage of gasoline nor of oil. This is strictly caused by the stopping of offshore drilling and the revocation of new drilling onshore permits, as well as the Obamantion’s economic policies which are devaluing the dollar compared to other currencies, which the marketsare prediciting as causing upcoming inflation.
Looked at another way, the Dems have caused a doubling in the price of oil and gasoline in five months.
95% of the world's known oil reserves are owned by gubmints, a lot of which are tyrannical.
I paid 2.73 yesterday......and the manager was told his his price is going up over 2.83...So what does that tell you?
The big summer ripoff is on its way driven by speculation in the futures markets.
With the continuing devaluation of the dollar, commodity prices will soar soon too.
The money men (Bildeberg puppets) will make sure this happens as food and energy are daily necessities.
Obama and his super-lib pals in congress are making a dangerous bet. They are betting that Americans will go along with their death-to-oil plans and buy midget cars or ride bicycles. They’re making a bad bet. It’s going to be difficult to say it’s Bush taking care of his oil buddies when it’s The Great Spreader who’s doing the dirty work.
You know what they say about those who assume right? Did you not hear about the new MENA attacks in Nigeria. Didn't you notice that the price of Natural Gas and Oil are as far apart as they have been in a very long time. There is a supply problem (read "security") with oil. Natural gas would also be up if inflation were the cause.
Natural Gas Drops on Concern Demand to Stay Low Rest of 2009
http://www.bloomberg.com/apps/news?pid=20601072&sid=avyw1tHWBaCY
By Reg Curren
June 12 (Bloomberg) — Natural gas futures declined for the third day this week on concern demand for the industrial and power-plant fuel will be below normal levels until the end of the year.
Gas fell along with commodities including crude oil and copper on speculation that a bet on an economic recovery is premature. Demand from factories will fall 8 percent this year as companies scale back production on reduced consumer buying, according to the Energy Department. Industrial consumers account for about 29 percent of U.S. usage.
“Although we’ve seen some firming on the fundamentals for natural gas, it’s not enough to justify a massive move upwards,” said Cameron Horwitz, an analyst at SunTrust Robinson Humphrey Inc. in Houston. “There are just too many unknowns right now for gas to be a conviction-buy.”
Natural gas for July delivery fell 7.6 cents, or 1.9 percent, to settle at $3.857 per million British thermal units at 3:01 p.m. on the New York Mercantile Exchange. Gas has declined 31 percent this year and was down 0.3 percent this week.
Prices rose yesterday after a report showing a smaller- than-forecast stockpile gain.
Supplies of natural gas rose 106 billion cubic feet in the week ended June 5 to 2.443 trillion cubic feet, the Energy Department said. Analysts forecast an increase of 110 billion. The five-year average gain for the week is 91 billion.
Horwitz said it’s too early to determine whether the lower injection reported by the department signals the effort by producers to curtail output is taking hold, or that some demand is returning as the recession eases.
‘Euphoric Feeling’
“There was this euphoric feeling yesterday, people think things are turning and there’s an over-exuberance,” he said. “It’s just premature.”
Investors also sold contracts today on signs yesterday’s 6 percent rise in prices was exaggerated by increased buying from gas investment funds, said Michael Rose, a director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida.
“The main drivers in the market were the exchange-traded funds and people get disappointed,” Rose said. “Natural gas didn’t move on its own merits so you get a downdraft like this today. The only thing different yesterday was that this ETF had to do some business.”
Trading volume for July futures yesterday totaled 193,507 contracts, 64 percent higher than the average for the previous four Thursdays, according to data compiled by Bloomberg.
“The largest force in the current market has clearly become the net inflows into the natural gas exchange-traded fund,” Scott Speaker, JPMorgan Chase & Co.’s natural gas strategist in New York, said in a note to clients.
Gas Fund
The United States Natural Gas Fund, the first and largest exchange-traded fund for the fuel, attracted record volume as futures soared. The fund’s number of outstanding units reached 246.2 million yesterday, more than five times the 12-month average. The number of units on June 10 stood at 224.8 million.
The fund, which invests in the so-called front month contract, was scheduled to begin rolling over its holdings to the next month starting today, according to a posting on the fund’s Web site. The roll period, which is subject to change, is slated to run through June 17 for the current contracts.
“We’ve seen no studies or reliable data that suggest that commodity ETFs that own futures contracts have an outsized impact on the price movement,” John Hyland, portfolio manager and chief investment officer of the fund, said in a telephone interview.
To contact the reporters on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
Last Updated: June 12, 2009 16:18 EDT
Oil, Gasoline, Fall on Record European Industrial Output Drop
http://www.bloomberg.com/apps/news?pid=20601072&sid=aJ2sQxOn2_nE
By Mark Shenk
June 12 (Bloomberg) — Crude oil and gasoline fell for the first time in four days as a record plunge in European industrial production prompted speculation that bets on an economic recovery are premature.
Futures dropped from a seven-month high after a report showed that output in the euro region declined 21.6 percent from a year earlier. The dollar strengthened, undermining the attractiveness of commodities as an alternative investment. OPEC said members raised production in May for a second month, straying further from quotas.
“Crude had such a powerful rally that it was vulnerable to a correction,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “The negative economic numbers from the euro zone got it going. The dollar got stronger on the news from Europe, which has hit crude.”
Crude oil for July delivery fell 64 cents, or 0.9 percent, to settle at $72.04 a barrel at 2:50 p.m. on the New York Mercantile Exchange. Futures have gained 62 percent this year.
Yesterday, the contract rose $1.35, or 1.9 percent, to $72.68 a barrel, the highest settlement since Oct. 20. Prices increased 5.3 percent this week.
Gasoline for July delivery declined 2.18 cents, or 1.1 percent, to end the session at $2.0431 a gallon in New York.
“The market has excessively priced in the idea that a demand recovery is imminent,” said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. “Upbeat sentiment might drive prices higher in the short term, but later in the summer fundamentals will play a larger role and a massive price correction is likely.”
European Output
Production in the 16-member euro region plunged the most since the data series started in 1986, the European Union’s statistics office in Luxembourg said today. Economists expected a 19.8 percent decline, according to a Bloomberg News survey. From March, output declined 1.9 percent.
“Today’s move just shows how this market is getting its cue from the dollar,” said Bill O’Grady, the chief markets strategist at St. Louis-based Confluence Investment Management LLC, an investment advisory and management firm. “Commodities are down pretty much across the board today because of the dollar’s move higher.”
The dollar strengthened 0.7 percent to $1.4017 per euro, from $1.4108 yesterday. The dollar may briefly weaken above $1.50 against the euro before September as central banks sell the currency, Thomas Stolper, an analyst for Goldman Sachs Group Inc. in London, said on June 11.
“Money is coming out from under those mattresses,” Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington, said today on Bloomberg Radio. “A falling dollar can induce people to put money into commodities.”
Technical Analysis
Oil is poised to reach $75 a barrel after rising above $73 yesterday, according to technical analysis by Newedge USA LLC. The next resistance level that oil will meet is at $75, then $78.25, said Veronique Lashinski, a senior research analyst for Newedge in Chicago. Prices last topped $78.25 on Oct. 15 when they touched $79.17.
“It’s still pointing higher,” Lashinski said in an interview yesterday. “The weekly continuation chart is very strong.”
The 11 members of the Organization of Petroleum Exporting Countries bound by production targets, all except Iraq, pumped 25.903 million barrels a day in May, an increase of 118,800 barrels a day from April, the Vienna-based group said in its monthly oil report today, citing secondary sources that include estimates from analysts and news organizations.
OPEC has implemented 75 percent of planned output cuts of 4.2 million barrels a day, compared with 77 percent in April, based on data in the report.
Chinese Fuel Production
China, the world’s second-biggest energy-consuming country, processed a record volume of crude oil in May as higher factory output and a jump in car sales increased fuel demand. Refineries processed 31.2 million metric tons, or about 7.4 million barrels a day, of crude into fuels, China Mainland Marketing Research Co., which compiles data for the government, said in a statement today.
“This is real news that’s pointing to increased Chinese demand,” O’Grady said. “This shows they are actually using all the oil they import, not just putting it away in storage.”
Brent crude for July delivery fell 87 cents, or 1.2 percent, to settle at $70.92 a barrel on London’s ICE Futures Europe exchange. Yesterday, the contract rose 99 cents, or 1.4 percent, to $71.79, the highest settlement since Oct. 20.
Crude oil volume in electronic trading on the Nymex was 373,710 contracts as of 2:58 p.m. in New York. Volume totaled 651,848 contracts yesterday, 29 percent higher than the average over the past three months. Open interest was 1.23 million contracts. The exchange has a one-business-day delay in reporting open interest and full volume data.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
Last Updated: June 12, 2009 15:41 EDT
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