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Why cheaper oil signals trouble

Inflation appears less menacing, but the U.S. export boom could soon face strong headwinds.

By Colin Barr, senior writer
September 4, 2008: 6:45 AM EDT

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The decline in commodities prices is linked to a global slowdown that could spell trouble for U.S. exports.


NEW YORK (Fortune) -- The commodities bubble appears to have popped, but keep the champagne on ice.
Food and energy prices are coming down in part because of a global growth slowdown that could also cool the red hot U.S. export sector - the major bright spot in an economy still struggling with a massive housing bust.
The prices of energy, metals and food have tumbled this summer after a yearlong surge. Crude oil, after racing toward $150 in July, recently fetched less than $110 a barrel, while the price of natural gas has tumbled 41% over three months.
A big commodities trader, Ospraie Management, is shutting its biggest hedge fund after a 38% loss tied to wrong-way bets on natural gas and other materials.
The commodities selloff is welcome news to consumers who have seen the prices of gasoline and milk slip back under $4 a gallon, easing fears that inflation is on the loose.
If prices keep sliding, year-over-year inflation numbers - after hitting a 17-year high last month - could soon look much healthier, reducing fears that the Federal Reserve may have to raise interest rates to stamp out rising inflation expectations.
But if an ebb in inflation fears is welcome, the source of that shift could be more problematic.
'The brink of recession' [more]
 
U.S. grants Citgo 250K barrels of oil from reserve

Venezuela's oil company had supplies cut to its Louisiana refinery when ship channel closed after Hurricane Gustav.

September 3, 2008: 11:48 AM EDT

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NEW YORK (AP) -- Citgo will be allowed to pull 250,000 barrels of oil from the Strategic Petroleum Reserve because of its inability to secure crude in the aftermath of Hurricane Gustav.

Venezuela's government-controlled Citgo Petroleum Corp. said Tuesday that supplies to its refinery in Lake Charles, La., were cut off when the Calcasieu Ship Channel closed.
The U.S. Energy Department granted the request late Tuesday, so far the only request for fuel from the Strategic Petroleum Reserve.
The reserve is an emergency depot maintained by the Energy Department and can hold as much as 727 million barrels of oil in salt caverns along the Coast of Mexico.
The Calcasieu channel opened Tuesday, but larger ships were not allowed to pass through.
As expected, energy companies that operate on the Gulf Coast were discovering Tuesday that damage to their platforms, rigs and other equipment caused by Hurricane Gustav was less extensive than that from Katrina and Rita three years ago.
The U.S. Gulf Coast is home to nearly half the nation's refining capacity, while offshore, the Gulf accounts for about 25% of domestic oil production and 15% of natural gas output.
http://money.cnn.com/2008/09/03/news/international/citgo_reserve.ap/index.htm?postversion=2008090311
 
Ike 'Extremely Dangerous' Category 4 Hurricane
Thursday, September 04, 2008
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MyFoxHurricane.com

Sep. 4: The official National Hurricane Center forecast predicts Hurricane Ike will remain a dangerous storm as it approaches the Bahamas.
Sep. 4: The official National Hurricane Center forecast predicts Hurricane Ike will remain a dangerous storm as it approaches the Bahamas.

Hurricane Ike was upgraded to an 'extremely dangerous' Category 4 storm by the National Hurricane Center late Wednesday as the system roared west across the central Atlantic.
The latest advisory from the National Hurricane Center, issued at 5 a.m. Thursday, increased Ike's maximum sustained winds to 145 mph, with higher gusts. Hurricane-force winds extended 35 miles from the storm's center of circulation.
The hurricane center's official forecast puts Ike on a path toward the south Florida coast sometime early next week, though the storm's path and strength can change without warning.
Other storms in the Atlantic have become less of a major threat. Hanna, once a hurricane, weakened to a tropical storm near the Bahamas, and is foercast to strike the southeastern U.S. as a Category 1 hurricane by the end of the week. [more]
http://www.foxnews.com/story/0,2933,416261,00.html
 
Fake numbers are all we have, here are the details:
Oil prices turn downward

Futures sink $2 after a government report shows a surprise decline in crude supplies.

By Catherine Clifford and Ben Rooney, CNNMoney.com staff writers
Last Updated: September 4, 2008: 11:46 AM EDT

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NEW YORK (CNNMoney.com) -- Oil prices remained lower Thursday after the government's weekly supply report showed the nation's crude stockpiles shrank unexpectedly last week, but investors appeared to remain focused on longer term trends.
Light, sweet crude for October delivery was down $2.02 to $107.33 on the New York Mercantile Exchange.
Crude was down 69 cents to $108.66 just before the report was released.
"The overall inventory situation weakened," said Tom Pawlicki, an oil market analyst at MF Global in Chicago. And that would normally be "somewhat bullish for the market."
"But the fact that we're trading lower on a slightly positive inventory number suggests that the underlying trend is negative and that we'll continue to trade in that direction," he said.
The Energy Information Administration said in its weekly inventory report that the nation's crude stock piles shrank by 1.9 million barrels last week.
Analysts surveyed by energy research group Platts had expected stocks grew by 500,000.
Gas inventories fell by 1 million barrels, slightly less than the 1.8 million barrel decline forecast by Platts. And supplies of distillates, used to make diesel and heating fuel, fell by 400,000 barrels; analysts expected an increase of 1.1 million barrels.
On Wednesday, the crude futures contract for October delivery fell 36 cents to settle at $109.35 a barrel, marking the lowest close since the $109.09 finish on April 7, and following a $5.75-a-barrel drop on Tuesday.

[more]
http://money.cnn.com/2008/09/04/markets/oil/index.htm?postversion=2008090411
 
That's right, look in my signature!!! Or open Oil Slick Stuff home page, it has today's history.:D
 
nnuut said:
That's right, look in my signature!!! Or open Oil Slick Stuff home page, it has today's history.:D
Click to expand...
What are you talking about?..it brings me back to this right here :confused:

Back to my question..what did it settle at YESTERDAY?
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OH I see go to post #1, your setup for viewing threads is sending you to the last when you click My signature. You have never seen the Oil Slick Stuff Home Page? I hope someone has seen it, I've been updation this thing daily for a couple of years for nothing?:confused:
 
What silly oil investors, of course supplies went down temporarily. They had to shut down the refineries and production in the Gulf, it will take a bit to start them up again. Sigh. They are more skittish than this bird. :rolleyes:
 
nnuut said:
OH I see go to post #1, your setup for viewing threads is sending you to the last when you click My signature. You have never seen the Oil Slick Stuff Home Page? I hope someone has seen it, I've been updation this thing daily for a couple of years for nothing?:confused:
Click to expand...
Okay..now I see it..thanks

But this is what it settled at yesterday 09/03/08..$109.35...and you posted today..at 12:01 $107.78 +1.57


Unless you are using that hillbilly math L2R uses...my slide rule says it should be a - $1.57 down from yesterday:confused::confused:

 
Buster said:
Okay..now I see it..thanks

But this is what it settled at yesterday 09/03/08..$109.35...and you posted today..at 12:01 $107.78 +1.57


Unless you are using that hillbilly math L2R uses...my slide rule says it should be a - $1.57 down from yesterday:confused::confused:
Click to expand...
Yep you're right my Quote in my Signature was wrong, but right on the OSSHP! Thanks, I do make mistakes but usually catch them myself. You are the first to catch one, Congratulations! :D
 
Buster said:
Unless you are using that hillbilly math L2R uses...
Click to expand...
Buster...I don't know what the hell your problem is but knock it off. I've had enough. I'm not going to lower my standards and trade insults with you on the MB, I respect myself and the others here too much for that. Take it to your own thread where I don't have to see it. :mad:
 
Oil prices edge off their lows

Crude futures are still more than $40 below the record high set nearly two months ago as the economic slowdown cuts into demand for energy.

By Catherine Clifford, CNNMoney.com staff writer
Last Updated: September 5, 2008: 9:03 AM EDT



NEW YORK (CNNMoney.com) -- Oil prices edged off their early morning lows Friday as market participants remained focused on how a global economic slowdown will chip away at demand for energy.
Light sweet crude for October delivery was down 39 cents at $107.50, after dipping as low as $105.76 early in the session.
The drop in oil prices "seems like a continuation of what we have had here - the stronger dollar, demand destruction and the weakening of the economy," said Peter Beutel, president of Cameron Hanover.
On Thursday, oil fell $1.46 a barrel to settle at $107.89 on the New York Mercantile Exchange, after being down as much as $2.83 barrel to $106.52. The last time crude settled below $108 a barrel was on April 4, when it closed at $106.23.
As oil prices have been falling, the dollar has been gaining steadily against the euro. The greenback has been trending higher against the European currency in recent weeks, receiving a fresh boost on Thursday after the European Central Bank and and the Bank of England left interest rates unchanged.
Because crude oil is traded in U.S. currency around the globe, a stronger dollar lowers oil prices.
In a sign of slackening demand, the Energy Information Administration reported Thursday that imports of crude were 200,000 barrels a day below the same four-week period last year.
The report also showed the nation's crude stock piles shrank by 1.9 million barrels last week, a much bigger-than-expected decline, but concerns over demand overshadowed the draw down in supply.
Oil prices have fallen more than $40 from the record high of $147.27 a barrel set July 11, nearly two months ago, as a struggling economy has cut into demand for energy.
"At some point we will get back to some level where we will see the fundamentals will matter again," said Beutel.
Oil marched to $147 a barrel without significant supply disruptions or geopolitical disasters to explain the jump, according to Beutel. "Now that prices are dropping," he said, the market "is ignoring fundamental factors that are happening because the price is still too high."
Given that prices have fallen so drastically, the oil market will be listening closely for any announcements of a change in oil production quotas from the Organization of the Petroleum Exporting Countries meeting next Tuesday. If OPEC were to cut production, oil prices would likely increase.
On Monday, Hurricane Gustav slammed the Gulf Coast of Louisiana, threatening oil rigs and refineries. As of Thursday afternoon, 95.2% of crude oil production and 87.5% of natural gas production in the Gulf of Mexico remained shut down, according to a report from the U.S. Department of the Interior's Minerals Management Service.
Tropical Storm Hanna, Hurricane Ike and Tropical Storm Josephine were all brewing in the Atlantic, but none of the storms appear on track to enter the Gulf Coast.
http://money.cnn.com/2008/09/05/markets/oil/index.htm?postversion=2008090509
 
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