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Oil settles below $40 on demand jitters

After climbing near $42 a barrel, crude prices tumble as investors remain wary of weak demand.



NEW YORK (CNNMoney.com) -- Oil prices fell Monday, erasing earlier gains, as the market remains confined to a narrow trading range by concerns about waning demand and ongoing production cuts.
U.S. crude for March delivery rose 61 cents to settle at $39.56 a barrel, marking its lowest close since Jan. 20, when oil settled at $38.74 a barrel.
Earlier in the session, prices rallied to a high of $41.77 a barrel after the Organization of Petroleum Exporting Countries said it continued to cut crude supply and hinted that more cuts may be coming.
But oil retreated in afternoon trade as investors refocused on the dour economic outlook and waning global demand for energy.
"The market lacks direction right now," said Stephen Schork, energy analyst and publisher of oil industry newsletter The Schork Report. "We're trading in a very tight consolidation range."
Crude prices have bounced between $40 and $42 a barrel over the last eight trading days. A dour jobs report pushed oil prices down $1 to $40.17 a barrel on Friday.
OPEC: Abdullah al-Badri, secretary-general of OPEC, told reporters that about 80% of the previously agreed-upon cuts were complete. In December, the cartel's member nations decided to cut 4.2 million barrels a day in oil production, but some countries that rely on oil exports have been reluctant to trim supply.
Analysts said that OPEC's aim was to stabilize the price of oil, which has leveled off since mid-December, but is down sharply from last year's all-time high above $147 a barrel. Still, al-Badri said that the group may take more action at its meeting scheduled for March 15.
"If we think we still need more action,[more]
http://money.cnn.com/2009/02/09/news/economy/oil/index.htm?postversion=2009020915
 
HA! greedy bastards:mad:


I would like to see CRUDE OIL taken out of the Commodities Market, placed in a WELL regulated and price controlled way of managing it..I haven't a clue how....Gotta be a better way than how it's managed now..:confused:
 
nnuut said:
Too much MONEY and POWER involved!! View attachment 5695
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Well, if the USA ever fickin decides to DRILL for our own OIL..It will just go into the big sludge pit like everyone else anyway...What's the point then?
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Just a tidbit to add to the conversation. My dad spent bulk of his fed career in DOE oil shale R&D end of things. I asked him the other night how long it takes to develop a new oil field once it's been proven to be worth exploiting (example Williston Basin/Bakken formation-which he says they've known for years and years already that there was oil there-not really news) and economic conditions support company investment in new infrastructure. He said it takes about 10 years-that's how long it takes just due to normal development process, nothing to do with enviros holding anything up.
 
alevin said:
Just a tidbit to add to the conversation. My dad spent bulk of his fed career in DOE oil shale R&D end of things. I asked him the other night how long it takes to develop a new oil field once it's been proven to be worth exploiting (example Williston Basin/Bakken formation-which he says they've known for years and years already that there was oil there-not really news) and economic conditions support company investment in new infrastructure. He said it takes about 10 years-that's how long it takes just due to normal development process, nothing to do with enviros holding anything up.
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Good info Alevin, yes it doesn't happen overnight, but not doing it in the past made it worse and starting now to help us through the energy crisis is better than not doing it at all, Just do something!!!:cool: I mean the government do something, I doubt the Oil companies will just dive in and start drilling like crazy with the price down. The Gov't has to give them profitable incentives to get them going, but you can see that the current administration will just sit on it and nothing will happen, and we Ill be in a much bigger jam in the years ahead. Getting late, think I'll hit the hay!!:cool:
 
Good info from the inside..I believe L2R also said something like this once or even twice as to how long it takes..IMHO..there is too much bureaucratic BS involved (which includes the tree hugging greenies)..The red tape needs to be cut, to get these OIL producers in there and start drilling NOW!!!!

How would this look?..A house is burning to the ground, but the Fire Dept has to wait on the Mayor and all the leaf lickers to say it's okay to go ahead and put some water on it from a near by pond (the only source of water) that has rare toads living in it ...Makes as much sense as taking ten years to get after the oil..:suspicious:
 
Umm, I believe Nnuut caught my drift a little quicker Buster. It's not all about regulation and enviros. There are serious capital investments and companies don't sink their funds until econ conditions indicate that longrange there will be sufficient profit to make it worth their while. Nnuut may have something with the comment about fiscal incentives for oil companies to invest more and faster, but even so, Technology and geologic formation characteristics limit how accessible many oil deposits are, ie the Canadian oil sands. Same is true in the Bakken-and it all depends on where you drill in the Bakken. The Oil Drum has an extended article and commentary on the Bakken. Most of the commenters seem to be pretty conversant with oil economics and logistics, didn't notice any of them ranting about regulatory holdups. Take a look.

http://www.theoildrum.com/node/3868
 
YES WE CA... (uh, I meant) NO, WE CAN'T DRILL!

Salazar puts coastal drilling plans on hold
Tuesday, February 10, 2009

President Obama is shelving a plan announced in the final days of the Bush administration to open much of the U.S. coast to oil drilling, including 130 million acres off California's coast from Mendocino to San Diego.

On Tuesday, Interior Secretary Ken Salazar ordered the plan be put on hold while his agency conducts a 180-day review of the country's offshore oil and gas resources. Salazar's critical comments about the plan signaled that the new administration will seek to rewrite it, if not completely scrap it.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/10/MNB015R7TQ.DTL&tsp=1
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budnipper1 said:
YES WE CA... (uh, I meant) NO, WE CAN'T DRILL!

Salazar puts coastal drilling plans on hold
Tuesday, February 10, 2009

President Obama is shelving a plan announced in the final days of the Bush administration to open much of the U.S. coast to oil drilling, including 130 million acres off California's coast from Mendocino to San Diego.

On Tuesday, Interior Secretary Ken Salazar ordered the plan be put on hold while his agency conducts a 180-day review of the country's offshore oil and gas resources. Salazar's critical comments about the plan signaled that the new administration will seek to rewrite it, if not completely scrap it.

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Well, ain't that just peachy?...:mad:
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KevinD said:
They claim demand is up.
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Not sure who is saying that. "This week in Petroleum" says that demand is down from the same period last year, and leveling out, but stockpile of crude is still piling up:

Gasoline demand down over last year, and leveling week-to-week
gtpsusm.gif

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----- While we're still seeing crude stocks pile up:

crstuss.gif


Could mean even lower prices ahead, at least for a while, unless production tapers off as refineries shut down for maintenance, which they like to do around this time of year...
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Global oil demand to sink

According to a report from the International Energy Agency, weakness in economies around the world will cut into demand for energy by 980,000 barrels per day in 2009.

February 11, 2009: 6:49 AM ET

LONDON (Reuters) -- World oil demand will contract by far more than previously expected in 2009 due to extreme weakness in the global economy, the International Energy Agency (IEA) said on Wednesday.
Demand is expected to fall by 980,000 barrels per day in 2009 to 84.7 million, the agency said in its monthly market report. The IEA's forecast last month was for demand to contract by 500,000 barrels per day this year.
The forecast adds to evidence that the financial crisis is sharply eroding fuel use. The IEA, which advises 28 industrialized countries, said the latest reduction to demand may not be the last.
"The bottom line is that 2009 looks like a pretty weak year," David Fyfe, head of the IEA's Oil Industry and Markets Division, told Reuters.
"It's far too early to say if this is the end of the downward demand revisions because the financial and economic spillover is still unfolding. We're hostage to any further weakening in the overall economy."
World oil demand is now expected to average 1.4 million bpd less than it did in 2007, before crude's price spike and the slowdown in the global economy started to cut demand.
The IEA said it was revising its oil demand forecast lower after the International Monetary Fund sharply cut its estimate for global GDP growth in 2009 to just 0.5%.
"The continued -- and dramatic -- revisions of the past few months underscore the extreme weakness of the global economy," the IEA said.
"The slowdown in industrial activity and consumption is the unavoidable sequel to the financial meltdown."
Supply impact
Oil prices pared gains after the IEA report was issued. U.S. crude was up 24 cents at $37.79 a barrel as of 6:17 a.m. ET.[more]
http://money.cnn.com/2009/02/11/markets/world_demand.reut/index.htm?postversion=2009021106
 
Oil falls slightly on bigger crude supply

Bigger-than-expected rise in crude, but government report shows a surprise decrease in gasoline stockpile.

By Julianne Pepitone, CNNMoney.com contributing writer
Last Updated: February 11, 2009: 10:38 AM ET


oil_pump_pipes_zoom.03.jpg


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NEW YORK (CNNMoney.com) -- Oil prices fell slightly Wednesday after the government said crude supply increased more than expected and gasoline stockpiles showed a surprise decrease.
Light sweet crude for March delivery fell 35 cents to $37.20 a barrel. Oil traded up 29 cents just prior to the report's release.
In its weekly inventory report, the Energy Information Administration said crude stocks increased by 4.7 million barrels in the week ended Sept. 12. Analysts were looking for an increase of 3.4 million barrels, according to a consensus estimate of industry analysts surveyed by Platts, a global energy information provider.
Stockpiles of gasoline decreased by 2.6 million barrels, while analysts were looking for an increase of 900,000 barrels.
Distillates, used to make heating oil and diesel fuel, decreased by 1 million barrels. Analysts were looking for a decrease of 1.8 million barrels.
http://money.cnn.com/2009/02/11/markets/oil/index.htm?postversion=2009021110
 
nnuut said:
Oil falls slightly on bigger crude supply
Bigger-than-expected rise in crude, but government report shows a surprise decrease in gasoline stockpile.
By Julianne Pepitone, CNNMoney.com contributing writer
Last Updated: February 11, 2009: 10:38 AM ET

oil_pump_pipes_zoom.03.jpg



NEW YORK (CNNMoney.com) -- Oil prices fell slightly Wednesday after the government said crude supply increased more than expected and gasoline stockpiles showed a surprise decrease.
Light sweet crude for March delivery fell 35 cents to $37.20 a barrel. Oil traded up 29 cents just prior to the report's release.
In its weekly inventory report, the Energy Information Administration said crude stocks increased by 4.7 million barrels in the week ended Sept. 12. Analysts were looking for an increase of 3.4 million barrels, according to a consensus estimate of industry analysts surveyed by Platts, a global energy information provider.
Stockpiles of gasoline decreased by 2.6 million barrels, while analysts were looking for an increase of 900,000 barrels.
Distillates, used to make heating oil and diesel fuel, decreased by 1 million barrels. Analysts were looking for a decrease of 1.8 million barrels.
http://money.cnn.com/2009/02/11/markets/oil/index.htm?postversion=2009021110
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View attachment 5711
Those pictures of oil rigs look like big peckered birds to me.
I think it's discriminatory that they're always painted black. :suspicious:
:D
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View attachment 5710

http://icantseeyou.typepad.com/my_weblog/birds_with_passive_peckers/
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