The Peak Oil Myth

[ThatHawaiiGuy]

Oil Prices Fall as Contract Expires

http://online.wsj.com/article/SB122459681676753917.html?mod=googlenews_wsj


NEW YORK -- Crude-oil futures retreated from the previous day's gains as the market's attention shifted back to the weak economy.

Light, sweet crude for November delivery expired at $70.89 a barrel, down $3.36, or 4.5% on the New York Mercantile Exchange. Trading was light in the expiring contract, with heavier activity seen in December crude, which settled at $72.18 a barrel, down $2.21, or 3%. December Brent crude on the ICE futures exchange closed down $2.29 at $69.74 a barrel.

Meanwhile, copper futures dropped below $2 a pound for the first time in nearly two years on worries that global demand for the metal will slow. Copper is heading for the biggest yearly drop in 20 years. Gold futures fell 2.8%.

Oil prices ended a two-day move higher as renewed concerns about the weakening global economy replaced speculation about a production cut by the Organization of Petroleum Exporting Countries.

The dollar hit a 19-month high against the euro, in the latest sign that large speculators are abandoning markets viewed as high risk. Oil has seen its share of fund outflows, and futures took an additional blow Tuesday as investors sold oil priced in U.S. currency to compensate for the strengthening dollar. The euro recently traded at $1.3124.

Market participants are also expecting further evidence of declining demand with the release Wednesday of weekly U.S. oil and product inventory data. Oil and gasoline stocks have risen sharply in recent weeks, as Gulf Coast refiners return to service following Hurricane Ike, even as the economic downturn reduces consumption.

Analysts gave an average forecast of a 2.4-million-barrel build for oil, a 2.8-million-barrel gasoline inventory increase and a 100,000-barrel rise in distillate stocks.

"Expectations are factoring into trading today of another big build in crude stocks and another big build in gasoline stocks," said Andy Lebow, with MF Global.

The stronger dollar and demand concerns temporarily shifted the market's focus away from the Oct. 24 meeting of OPEC, where the group is expected to cut production.

OPEC is widely seen announcing a reduction of at least one million barrels a day, but questions remain about whether the world's largest exporter, Saudi Arabia, will comply, or if the cut will be enough to counter sinking demand.

OPEC hasn't yet decided whether to cut production, Secretary-General Abdullah al-Badri said Tuesday in Moscow.

The group has limited options, as too great a cut will force demand even lower, while a small reduction would do little to raise prices, said Phil Flynn, an analyst with Alaron Trading Corp.

"They're really caught between a rock and a hard place," Mr. Flynn said. "The market is showing a lack of respect for what they can actually do in this type of environment."

Front-month November reformulated gasoline blendstock, or RBOB, settled 2.82 cents, or 1.6%, lower at $1.6919 a gallon. November heating oil settled 3.28 cents, or 1.5%, lower at $2.1771 a gallon.
Copper Tumbles

Copper for December delivery fell 5.2% to $2.0070 a pound. Earlier it touched an intraday low of $1.9920, falling to below $2 for the first time since November 2005.

Copper has lost 34% this year, the biggest yearly percentage loss since 1988, when trading data first became available on the Nymex. Copper is heavily used in cars, homes and appliances, so it is seen as an economic barometer.

China, which accounts the bulk of growth in copper demand, reported Monday that its economic growth decelerated more than expected in the third quarter, marking the fifth-straight quarterly slowdown.

Gold for December delivery lost $22 to end at $768 an ounce on the Comex division of the New York Mercantile Exchange.
—Moming Zhou and Nick Godt contributed to this article.

Write to Brian Baskin at [e-mail]






That was yesterday: (Hey there's a song in there somewhere.)

Crude oil prices advance as market speculates Opec will trim output

http://businessmirror.com.ph/index.php?option=com_content&view=article&id=782:crude-oil-prices-advance-as-market-speculates-opec-will-trim-output&catid=51:world

Tuesday, 21 October 2008 23:01

NEW YORK AND LOS ANGELES—Crude oil rose for a third day on signs that the Organization of Petroleum Exporting Countries (Opec) will reduce production to halt a 50 percent drop in prices since July.

Opec may decide to pare production by 1 million to 2 million barrels a day in stages at an October 24 meeting to stabilize prices, said Chakib Khelil, the group’s president.

Deutsche Bank AG cut its 2009 crude-oil price estimate by 35 percent to $60 a barrel, citing the possibility of a “major world recession.”

“The main reason for the rise is the impending Opec production cut,” said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. “It’s not a question of if, but of how much they will cut production at Friday’s meeting.”

Crude oil for November delivery rose $1.44, or 1.9 percent, to $75.69 a barrel in morning trading on Tuesday in Sydney on the New York Mercantile Exchange. On Monday, oil rose $2.40 to settle at $74.25 a barrel.

“Oil is following the equity markets higher,” Barakat said. “The fate of energy markets has been very closely tied to the Dow Jones Industrial Average lately.”

US stocks rose on Monday, adding to the Dow Jones Industrial Average’s best weekly gain in five years, after Halliburton Co.’s profit topped estimates and Federal Reserve chairman Ben S. Bernanke endorsed an economic stimulus package.

Opec, supplier of about 40 percent of the world’s oil, brought forward to this week a Vienna meeting planned for November to discuss output levels.

“Opec is the focus,” said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. “We are all waiting to see what Opec does on Friday. A 1 million or 1.5 million barrel cut looks most likely, but as much as 3 million barrels is a possibility, although done in stages.”

Goldman Sachs Group Inc. and Merrill Lynch & Co. said a 1 million barrel cut is possible. Oil may fall below $60 a barrel if Opec limits the cut to 1 million barrels a day, Goldman analysts said in a report dated October 17. Merrill analysts said Opec may trim supplies by 2.4 million barrels a day over 12 months if economic conditions deteriorate.

Opec’s 13 members produced 32.2 million barrels a day in September, according to a Bloomberg News survey of analysts and producers.

“The West is going to be angry because the drop in oil prices has been just about the only positive economic news,” Fitzpatrick said. “Falling gasoline prices have been a great help to consumers.” (Bloomberg)