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Oil Drops Below US$92

September 25, 2012 Webmaster

Worries about weaker economic growth dragged down oil prices Monday.

Oil has now fallen five of the last six trading days. It fell more than six per cent last week.

Benchmark crude fell 96 cents, or one per cent, to finish at US$91.93 a barrel on the New York Mercantile Exchange. Prices for other petroleum products dropped, too.

In London, Brent crude dropped US$1.61 at US$109.81 a barrel on the ICE Futures exchange.

Germany delivered the latest dose of gloomy economic news, with its index of business confidence falling for the fifth month in a row. Germany is an economic powerhouse, but 43 per cent of its exports go to its euro partners. And growth is stalling across the other 16 countries in the Eurozone.

Slower economies mean less demand for oil, pushing prices down.

Phil Flynn, a senior market analyst for Price Futures Group, said he’s surprised prices haven’t fallen further. He said one reason could be that commodity funds have not been bailing out of oil.

demand destruction

Still, oil prices have been under pressure from worries about Europe. The dollar has been stronger, which makes oil cheaper for holders of other currencies.

“You’re seeing demand destruction around the globe,” he said. “You’ve got Saudi Arabia saying they’re going to pump oil until the cows come home.” All of that drives down oil prices, he said.

Heating oil dropped 2.2 cents to US$3.0987 per gallon, wholesale gasolene decreased 2.49 cents to US$2.9176 per gallon and natural gas ended down 4.8 cents to US$2.837 per 1,000 cubic feet.

– AP

Oil Takes Sudden Plunge

September 18, 2012 jrobinson

Oil plunged suddenly Monday afternoon, dropping more than US$4 per barrel at one point in a dramatic end to an otherwise quiet trading day in New York.

Benchmark crude fell $2.38, or 2.4 per cent, to finish at $96.62 on the New York Mercantile Exchange. That’s the biggest percentage decline since July 23. Oil plunged below $95 per barrel during the sell-off.

Traders were unsure of the cause of Monday’s price drop. Some questioned whether an errant trade or another rumour about a release of oil from the Strategic Petroleum Reserve was to blame.

The White House has been considering tapping the Strategic Petroleum Reserve to stem the rising cost of crude and gasolene. A little over a week ago, Reuters reported the Obama administration was considering a release much larger than the 30 million barrels from last year.

Oil rose 2.7 per cent last week after getting a boost from the US Federal Reserve‘s latest plan to boost the US economy. It held to slight gains above $99 for most of Monday.

Brent crude, which is used to price international varieties of oil, fell sharply as well. Brent lost $2.91, or 2.9 per cent, to $113.77 on the ICE Futures Exchange in London.

– AP

News Oil

Oil higher for 2nd day, still buoyed by Fed

September 17, 2012 Webmaster

Oil rose for a second day on the back of the Federal Reserve‘s aggressive plan to boost the US economy. More gains are expected, but that might not translate into a spike in prices at the gas station.

After earlier topping US$100 for the first time since May, benchmark oil was up 72 cents to US$99.03 per barrel in midday trading in New York.

Analysts say the Fed’s plan to keep interest rates at extraordinarily low rates into 2015 gives investors the incentive to put their money into riskier assets like stocks and commodities. The expectation that the Fed’s moves will help the economy should also boost oil prices because demand for energy should pick up.

But the higher oil and other commodities rise, the greater the chance they’ll curtail consumer spending in an economy where unemployment is stuck above 8 per cent. That’s why analysts think the gains should be limited.

“Higher commodity prices are going to put a dent in spending as they give consumers pause when they’re spending more at the (grocery) store or the gas pump,” said Andrew Lipow of Lipow Oil Associates in Houston.

An increase in the price of oil usually means a rise in pump prices. But fundamentals favor a decline in the price of gasoline, said Tom Kloza, chief oil analyst at Oil Price Information Service. The end of summer driving season means less demand for gas. And refiners are about to switch to making winter blends, which are cheaper than summer blends formulated to cut down on pollutants.

Kloza thinks gas might rise a penny or two from its current average of US$3.87 per gallon, but should decline during the period between late September and Thanksgiving. He sees gasoline falling to between US$3.50 and US$3.75 per gallon in October.

The wild card for oil is the unfolding unrest in the oil-rich Middle East. Protesters angry over an anti-Muslim film ridiculing the Prophet Muhammad began assaulting a string of US embassies in the region four days ago.

Brent crude, which is used to price a number of international types of oil, rose 74 cents to US$116.62 in London. Kloza said an escalation in the Middle East situation could push Brent up as high as US$125 per barrel and the US benchmark as high as US$120. That would limit the decline in gasoline prices, he said.

News Oil

Oil prices fall on Isaac watch

August 27, 2012 jrobinson

NEW YORK – Oil prices dropped Friday amid renewed talk about the release of strategic reserves and as traders kept an eye on a tropical storm that could disrupt offshore operations in the Gulf of Mexico.

New York‘s main contract, light sweet crude for October, shed 12 cents from Thursday to close at US$96.15 a barrel.

In London, Brent North Sea crude for delivery in October dived US$1.42 to settle at US$113.59 a barrel.

Rich Ilczyszyn, an analyst at iiTrader, said that New York market sentiment was tense throughout the session and in the last half-hour traders shuffled their portfolios before the weekend.

Weighing on the market was a report by the Petroleum Economist that Western consumer countries could release strategic oil stocks as soon as early September in response to soaring oil prices, citing “several sources.”

“The loss of supplies from sanctions-hit Iran will be used to justify the move, which could unleash as much or more oil as last year’s 60 million barrel stock releases,” the London-based industry journal said on its website.

One of the sources said the International Energy Agency asked the United States not to proceed alone with a release, but to wait for IEA-wide participation to avoid undermining IEA credibility.

Gulf of Mexico operators were bracing as Tropical Storm Isaac headed toward Haiti and was on track to threaten oil and gas offshore operations.

BP said it was evacuating its Thunder Horse platform, the world’s largest offshore production and drilling facility.

“With forecasts indicating the storm could develop into a hurricane and enter the eastern side of the Gulf in coming days, we are taking additional steps to respond,” the British oil giant said.

Shell said it was preparing for evacuations of non-essential personnel from platforms and had suspended some drilling operations but that no production had been impacted.

News Oil

Oil Slips After 3 Straight Gains … Pump Prices Rise

August 9, 2012 jrobinson

The price of oil dropped a bit Wednesday after three days of increases.

Benchmark oil fell 53 cents to $93.14 per barrel Wednesday in New York.

Oil prices had increased more than $6 per barrel since Thursday following a positive report on the US job market. In addition, quarterly earnings for many companies have been stronger than expected.

Yet, the overall economy continues to struggle, which has fuelled speculation that the Federal Reserve may take action to promote economic growth.

A stronger economy means more demand for oil and other energy products. Oil demand is better than it was earlier in the year but hasn’t recovered to year-ago levels, said Michael Lynch, president of Strategic Energy & Economic Research.

Oil got a temporary boost Wednesday from a bigger-than-expected decline in US stockpiles. The Energy Department said oil inventories fell 3.7 million barrels last week to 369.9 million barrels. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a much smaller decline of 300,000 barrels.

But the economic news from Europe remains grim. The Banque de France said it expects the French economy to slip into recession in the third quarter. German industrial production and exports fell in June.

Traders will closely watch fresh economic data from China Thursday on inflation, factory production and retail sales. China is the world’s second-biggest economy and a huge importer of oil.

At the pump, the national average price of gasolene rose about one penny to $3.647 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That’s up nearly 27 cents from a month ago. It’s about two cents less than a year ago.

Brent crude, which is used to price international varieties of oil, gained 28 cents to $112.26 per barrel in London.

– AP

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News

Price of gas and other petroleum products inches upwards

August 7, 2012 jrobinson

There’s more worrying sign that Jamaicans will be seeing higher prices at the pumps.

Oil prices rose for a second straight session yesterday, closing at the highest level in 11 weeks, as U.S stock markets rallied to a three-month high and traders eyed ongoing turmoil in the Middle East.

The gains extended Friday’s strong rally after U.S. jobs data calmed concerns about a slowing economy and on hopes that Europe can address its debt crisis.

In London, Brent September crude rose 61 cents to settle at 109 dollars 55 cents, the highest close since May 16.

U.S. September crude also closed higher for a second straight session, gaining 80 cents at 92 dollars 20 cents, the highest since July 11.

The prices of

News Oil

Oil prices fall on Europe’s woes

July 25, 2012 jrobinson

The price of oil is dropping on fresh concerns about Europe‘s economy.

Benchmark oil fell US$1.44 on Friday to US$91.53 per barrel in New York. Brent crude, which is used to price international varieties of crude, was down US$1.42 to US$106.38 in London. A decline would be the first after seven straight gains.

The main focus for traders was Spain, where the government predicted that the country’s recession will extend into next year and the region of Valencia said it needed help from the central government to pay its bills. But Germany was also a concern as finance officials there said growth in Europe’s strongest economy likely slowed somewhat in the second quarter. Meanwhile, in the UK, the government said it had to borrow more than expected last month.

Europe’s lengthy battle with a massive government debt crisis has affected industries in other countries, such as the U.S., that do business there. It also has cut demand for oil and other energy products.

Oil had risen about 10 per cent since July 10 on concerns that renewed tensions between the West and Iran could result in a disruption of oil supplies from the Persian Gulf.

“After the long run-up in prices we’ve had the last 10 days or so, I think (events in Europe) kind of reminded people that the demand picture is still not very rosy,” said Michael Lynch, president of Strategic Energy & Economic Research.

Meanwhile, natural gas prices hit the highest level since early January as businesses and consumers cranked up air conditioning systems to stay cool in the hot weather. Natural gas rose three cents to US$3.01 per 1,000 cubic feet.

The price of natural gas fell below US$2 for the first time in more than a decade in April after a production boom boosted inventories. At the same time, a mild winter kept demand in check. The cheaper prices prompted many utilities to switch to natural gas from coal to fuel their generators.

In other energy trading, heating oil fell 3 cents to US$2.91 per gallon and wholesale gasoline prices fell 3 cents to US$2.91 per gallon.

News Oil

Oil Price Spikes

July 4, 2012 jrobinson

Renewed tensions between Iran and the West pushed oil to its highest level in more than a month.

Iran is again threatening to block a critical Persian Gulf shipping route in response to a European embargo of Iranian oil. Iran has sparred for months with the West over its nuclear programme.

Benchmark US crude added US$3.91, or 4.7 per cent, to end at US$87.66 per barrel in New York. That’s the highest price since May 30.

Brent crude, which sets the price of oil imported into the United States, rose above US$100 for the first time in three weeks, adding US$3.34, or 3.4 per cent, to finish at US$100.68 per barrel in London.

Iran said Tuesday that it test-fired several ballistic missiles, including a long-range variety meant to dissuade an attack by Israel or the US.

The New York Times

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