and there it is: this says 2.50...Chronicle is reporting it's down $2.74 at close http://money.cnn.com/2006/11/16/markets/oil/index.htm?cnn=yes Oil hits its low for the year Crude plunges over $2 as traders say swelling inventories leave no place for storage. By Steve Hargreaves, CNNMoney.com staff writer November 16 2006: 3:42 PM EST NEW YORK (CNNMoney.com) -- Oil prices sank over 4 percent Thursday, hitting a new low for 2006, as swelling inventories and the December contract's expiration on Friday forced traders out of the market. On the New York Mercantile Exchange, December crude tumbled $2.50 to settle at $56.26 per barrel. Crude hit a low of $56.20 during trade, its lowest since November 2005. "The storage at Cushing is full, if you're long you would have to take delivery." said Nauman Barakat, an energy trader at Macquarie Futures, the trading arm of Macquarie investment bank. "Basically this is confirming that inventories are very high." Dems versus oil, part 2 Barakat was referring to the storage tanks at Cushing, Okla. where oil is stored until it is shipped to an industrial user, like a refinery. But with the February crude contract currently trading higher than the December contract, there is no incentive for traders to sell their product, said Sal Gilbertie, an energy trader at Fimat in New York. Instead, they are just keeping it in Cushing. Besides, said Gilbertie,"If you take delivery and there's no place to put it, what are you going to do? You're dead. No one's buying." Crude inventories have been growing for weeks as the summer driving season came to an end in the United States and domestic production escaped damage from a hurricane season that never materialized. The swelling inventories have helped push oil prices down over the last several weeks. Crude has fallen nearly 25 percent from a trading high of $78.40 reached in July. Concerns over a slowing economy and easing of tensions in the Middle East were some of the other reasons for crude's decline, followed by a bail out of big money investment funds that further depressed prices. However, the slide had been stemmed until recently. Crude has been hovering around $60 a barrel for the last several weeks as OPEC talks of a production cut and the general supply and demand situation remains tight - crude is three times more expensive now than it was at the start of 2002. Traders will still be paying close attention to weekly inventory reports to see if OPEC is making good on their threat to cut production by just over 1 million barrels. But with inventories so high, even that might not be enough. "Even a cut of 1.1 million isn't going to do the job," said Barakat. Stocks of major oil companies such as Exxon Mobil (Charts), ConocoPhillips (Charts), Chevron (Charts), Royal Dutch Shell (Charts) and BP (Charts), which often track the price of oil, were all lower in early afternoon trading on the New York Stock Exchange Thursday.
The Republican administration is still jawboning oil prices down. 1.Less income for Iran 2.The overall value of the stock market is at stake, the consumer has to feel secure to fuel holiday spending. 3. Only chance to secure a positive legacy. Every time we get freaked enough to really make some headway on conservation and alternative fuels we get pulled back in. There are going to be a bunch of little guys losing their ass on their energy futures. I wonder how The Carlyle Group is positioned?
I LOVE this quote!!!! http://www.breitbart.com/news/2006/11/16/D8LEDFB80.html But Michael Guido, Societe Generale's director of commodity strategy, said traders are no longer responding to the kind of geopolitical news that once reliably sparked buying, including frequent kidnappings of oil workers in Nigeria and threats by Iran to pursue its nuclear program over the objections of Western power. "Too much money has been lost on what-if scenarios," Guido said, and that has pushed many institutional investors, including hedge funds and pension funds, to the sidelines of the energy market.
I guess I'm just paranoid, but I absolutely see how a cabal of Sultans and Billionaires (The Carlyle Group?) could manipulate the energy futures market. All you have to do is influence the perception of the market information. If the market appears just a little tight,(because of a 10 hurricane season projection?) you start bidding up the futures to start a fenzy. If you own the oil in the ground, there is no real risk of getting caught long, you let your contracts expire. You just took your premium from your right pocket and put it in your left pocket and you sell the same oil again later. A corn farmer or pork belly processor would have to deal with what to do with the product but you just turn off the pump on an oil well. (see /\ , Guido thinks somebody has cried "wolf' just too many times)
What Guido is saying is EXACTLY what I was saying would happen when you and others were telling me I was nuts. It just seems that conspiracy theorists on this sort of stuff see conspiracy no matter the outcome....price goes up?? it's driven by "them." price goes down?? it's driven by "them." I just see it as a highly irrational market that's still subject to the same fundamentals of nearly every other market.
OK you are a market genius. How much money did you put into shorting energy futures? People that put significant amounts into futures plays are either irrational about their prognositcation skills, inveterate gamblers or have inside information. I think I said energy prices would come down also, because the stakes in the election were so high for those who have to power to influence the market. Bailing on Iraq, tariffs on China that slow their economy, windfall taxes on Big Oil, a national emphisis on alternative energies, all possible changes on the political scene that could have huge impacts on oil profits going forward. Once the herd is turned, they will run in the same direction until they are turned again.
No, I'm not a market genuis. I got lucky. But I did feel like the fears were over-inflating price, significantly. That's only because we've seen that sort of over-inflation based on nothing sooo many times before in other markets. Remember, big funds were getting in the oil game. They sold off because they started seeing the fears dissipate, too...they were really all hoping for another killer hurricane season, frankly. Once those big funds pulled out, it all started to topple.
I always thought the same thing as well, that the price of oil was irrationally based on fears of what <i>could</i> happen. What if a hurricane hits the coast again like Katrina, what if the violence in the Middle East cuts off major oil supplies, what if Nigeria shuts down production due to kidnapping, etc. etc. etc.
Another prediction...price is gonna keep falling: stronger than expected el nino effect helped temper the hurricane season. now the NOAA is saying the north will be expecting a warmer than usual winter, which means less consumption of heating oil.
This from the same guys that somehow missed the El Nino and predicted 5 major hurricanes in Gulf last Spring starting the upward panic. Who do they work for?
Max, were this a few hundred years ago, you would be burned at the stake! D&D... More Valuable than Oil!
Being wrong about this doesn't feel too bad. Hopefully this will influence interest rates. I've been reading that the Fed has gone from pro-increase into making amibivalent comments of increases and decreases going either way.
Traders don't care if the price goes up or down as long as they are ahead of the curve. In fact for a trader immune from risk, it's easier to money off of panic than it is greed. People will hold in the face of dwindling profit but people will sell when they are losing principal. In leveraged markets this amplifies the downward spiral. The threat of losing your house, your company or your life make just losing some money look pretty tame.
For predicting all this! I meant it as a compliment, using the context of religion (which I thought fit) going after people as demonic who made predictions and were right. Or something like that. Anyway, it was meant as a pat on the back for your prognostication skills! D&D. Better than a Three Car Garage!
hi five! by the way our shell is consistently higher than other places. i need to find a cheaper station i can get to on the way to work.
