Oil prices increased by $3.49 to end the session at $81.19 a barrel for November delivery, as leaders presented a unity to the world in an effort to shore up confidence in the global marketplace. Oil basically rose on that euphoria, rather than any change in fundamentals.
Brent North Sea crude in London gained close to light sweet crude in the U.S., as it increased by $3.37 a barrel to $77.46.
Even so, the slowing demand for oil hasn't changed, and nothing, other than the possibility that the emergency meeting by OPEC next month may result in resistance to downward price pressures, will stop the price of oil from continuing to fall. They would attempt to do that by lowering production levels.
If they were to do that, there would probably be significant international pressure for them to keep production levels close to where they are.
In other financial news, the Dow Jones Industrial Average recorded its highest one-day point gain in history, gold continues to fall, and the U.S. dollar fell against many major currencies, even though an unprecedented unlimited dollar fund auction will be held by the central banks of several nations.
Showing posts with label Government Bailout. Show all posts
Showing posts with label Government Bailout. Show all posts
Monday, October 13, 2008
Monday, October 6, 2008
Economic Fears Spread to Europe as Oil Continues to Tumble
Oil continues its nosedive as demand continues to slacken in response to economic fears spreading in Europe.
Oil consumption in the U.S. fell by 7.1 percent over the last four weeks in contrast to last year during the same time. Use is now at about 19 million barrels a day in the U.S.
Crude had dropped as low as $87.56 a barrel in the afternoon, while settling at $87.80 for November delivery of light sweet crude. That was a fall of $6.07 for the day.
Brent North Sea crude also fell significantly, settling at $83.68 a barrel for November delivery, dropping $6.57 for the session.
The lagging participation of the European economy in the economic downturn is now over, and what has happened in the U.S. is now emerging in Europe. That has also caused the U.S. dollar to strengthen significantly against the euro, while also causing gold to be held back for now as a safe haven.
For oil, the new world of bailouts and economic fears leaves it in a place of probable continued decline in price as demand slows around the globe. India and China demand will slow as well, with China now exporting some gasoline because of slow domestic demand.
As far as the U.S. bailout by the government, it didn't do much to placate investors, as they have started to pour their money into short-term dollar-denominated financial instruments like U.S. Treasuries.
Oil consumption in the U.S. fell by 7.1 percent over the last four weeks in contrast to last year during the same time. Use is now at about 19 million barrels a day in the U.S.
Crude had dropped as low as $87.56 a barrel in the afternoon, while settling at $87.80 for November delivery of light sweet crude. That was a fall of $6.07 for the day.
Brent North Sea crude also fell significantly, settling at $83.68 a barrel for November delivery, dropping $6.57 for the session.
The lagging participation of the European economy in the economic downturn is now over, and what has happened in the U.S. is now emerging in Europe. That has also caused the U.S. dollar to strengthen significantly against the euro, while also causing gold to be held back for now as a safe haven.
For oil, the new world of bailouts and economic fears leaves it in a place of probable continued decline in price as demand slows around the globe. India and China demand will slow as well, with China now exporting some gasoline because of slow domestic demand.
As far as the U.S. bailout by the government, it didn't do much to placate investors, as they have started to pour their money into short-term dollar-denominated financial instruments like U.S. Treasuries.
Thursday, September 25, 2008
Oil Prices Fluctuate on Demand and Economic Concerns
Uncertainty is the word floating around concerning oil prices, as investors await the decision concerning the government bailout plan, the decreasing demand for oil, and the time it will take to bring platforms and rigs back to production from recent storms.
Other factors in the mix are the cut in production announced by OPEC earlier in September, as well as the continued threat to Nigerian oil procution by regional terrorists.
The potentially serious consequences on the value of the dollar from the ill-advised financial bailout is also on the minds of oil investors going forward.
Fear and uncertainty keep oil and other commodities in an unpredictable mode. We'll see continued fluctuation in prices going forward until things settle down. Early morning trading on the NYMEX had November deliver for sweet crude dropping to $105.57, although they continue to move up and down from positive to negative territory.
Other factors in the mix are the cut in production announced by OPEC earlier in September, as well as the continued threat to Nigerian oil procution by regional terrorists.
The potentially serious consequences on the value of the dollar from the ill-advised financial bailout is also on the minds of oil investors going forward.
Fear and uncertainty keep oil and other commodities in an unpredictable mode. We'll see continued fluctuation in prices going forward until things settle down. Early morning trading on the NYMEX had November deliver for sweet crude dropping to $105.57, although they continue to move up and down from positive to negative territory.
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