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Lower Demand Pushes Oil To 20 Month Low

Mike

Well-known member
Where-O where could the "Speculators" be? :lol: :lol: :lol:
______________________________________________________

Oil futures were in the red Wednesday morning as markets were inundated with mixed reports on the future of the global energy supply and demand.

The benchmark oil contract was recently lower by $1.59 to $57.74 a barrel. This is the first time oil has traded below the $58-a-barrel mark in 20 months, according to Thomson Reuters.

Despite recent reports showing weakening in global energy demand, the International Energy Administration warned today that energy supplies won’t keep up with growth without substantial infrastructure investment.

“We cannot let the financial and economic crisis delay the policy action that is urgently needed to ensure secure energy supplies,” the IEA said in a release. "The credit squeeze could delay spending, potentially setting up a supply crunch that could choke economic recovery.”

According to the IEA, even though energy prices are presently trending lower, this supply squeeze can push energy prices dramatically higher in the long-run.

“While market imbalances will feed volatility, the era of cheap oil is over,” the release said.

In the short run, however, the data are more bearish. Numerous energy consuming countries reported sharply lower economic growth expectations amid wide-spread financial turmoil. The Bank of England corroborated these concerns in its monthly inflation report released today.

“There has been a marked deterioration in the outlook for domestic and global economic activity,” the report said. “Instability in banking and financial markets intensified to levels not seen for almost a century.”

As wholesale energy prices slide, retail energy prices have slowly followed. Drivers paid $2.20 per gallon on average for regular gas nationwide, which is down from $3.21 last month, according to AAA's Daily Fuel Gauge Report.

Other energy markets were slightly lower: Heating oil was recently down three cents to $1.90 per gallon, RBOB gasoline was low by one cent to $1.30 per gallon, and natural gas traded lower by one cent to $6.70 per million British Thermal Units.

Metal markets were mixed: Gold was essentially unchanged at $732.50 per troy ounce, silver traded lower by 13 cents to $9.68 per troy ounce, and copper was also flat at $1.68 per pound.
 

TSR

Well-known member
Mike said:
Where-O where could the "Speculators" be? :lol: :lol: :lol:
______________________________________________________

Oil futures were in the red Wednesday morning as markets were inundated with mixed reports on the future of the global energy supply and demand.

The benchmark oil contract was recently lower by $1.59 to $57.74 a barrel. This is the first time oil has traded below the $58-a-barrel mark in 20 months, according to Thomson Reuters.

Despite recent reports showing weakening in global energy demand, the International Energy Administration warned today that energy supplies won’t keep up with growth without substantial infrastructure investment.

“We cannot let the financial and economic crisis delay the policy action that is urgently needed to ensure secure energy supplies,” the IEA said in a release. "The credit squeeze could delay spending, potentially setting up a supply crunch that could choke economic recovery.”

According to the IEA, even though energy prices are presently trending lower, this supply squeeze can push energy prices dramatically higher in the long-run.

“While market imbalances will feed volatility, the era of cheap oil is over,” the release said.

In the short run, however, the data are more bearish. Numerous energy consuming countries reported sharply lower economic growth expectations amid wide-spread financial turmoil. The Bank of England corroborated these concerns in its monthly inflation report released today.

“There has been a marked deterioration in the outlook for domestic and global economic activity,” the report said. “Instability in banking and financial markets intensified to levels not seen for almost a century.”

As wholesale energy prices slide, retail energy prices have slowly followed. Drivers paid $2.20 per gallon on average for regular gas nationwide, which is down from $3.21 last month, according to AAA's Daily Fuel Gauge Report.

Other energy markets were slightly lower: Heating oil was recently down three cents to $1.90 per gallon, RBOB gasoline was low by one cent to $1.30 per gallon, and natural gas traded lower by one cent to $6.70 per million British Thermal Units.

Metal markets were mixed: Gold was essentially unchanged at $732.50 per troy ounce, silver traded lower by 13 cents to $9.68 per troy ounce, and copper was also flat at $1.68 per pound.

They are cautious right now with the bailout money. :shock: :) You see it just might be monitored-the way they spend it. Did you notice the Federal Reserve refused to tell Congressional leaders whom they gave the bailout money to? I believe it was on Lou Dobbs where one group was going to file a freedom of information act to find out, imagine that. Speculation imo is still going on just not to the degree it was but it will probably flourish again imo as soon as they kmnow they can get away with it again with taxpayer money. :wink:
 

Mike

Well-known member
They are cautious right now with the bailout money. You see it just might be monitored-the way they spend it. Did you notice the Federal Reserve refused to tell Congressional leaders whom they gave the bailout money to? I believe it was on Lou Dobbs where one group was going to file a freedom of information act to find out, imagine that. Speculation imo is still going on just not to the degree it was but it will probably flourish again imo as soon as they kmnow they can get away with it again with taxpayer money.

Makes no sense. Most oil hedgers are the ones that are using oil in their businesses to prevent volatility in the pricing of future use of the product.

Do banks use oil?
 

TSR

Well-known member
Mike said:
They are cautious right now with the bailout money. You see it just might be monitored-the way they spend it. Did you notice the Federal Reserve refused to tell Congressional leaders whom they gave the bailout money to? I believe it was on Lou Dobbs where one group was going to file a freedom of information act to find out, imagine that. Speculation imo is still going on just not to the degree it was but it will probably flourish again imo as soon as they kmnow they can get away with it again with taxpayer money.

Makes no sense. Most oil hedgers are the ones that are using oil in their businesses to prevent volatility in the pricing of future use of the product.

Do banks use oil?

Since we don't know where the bailout money went (according to what I heard on Lou Dobbs anyway) we don't know who got the money. It may have gone to some institutions that use speculation as a way of making money. If not now maybe in the near future if no transparency is established. JMHO
 

Mike

Well-known member
TSR said:
Mike said:
They are cautious right now with the bailout money. You see it just might be monitored-the way they spend it. Did you notice the Federal Reserve refused to tell Congressional leaders whom they gave the bailout money to? I believe it was on Lou Dobbs where one group was going to file a freedom of information act to find out, imagine that. Speculation imo is still going on just not to the degree it was but it will probably flourish again imo as soon as they kmnow they can get away with it again with taxpayer money.

Makes no sense. Most oil hedgers are the ones that are using oil in their businesses to prevent volatility in the pricing of future use of the product.

Do banks use oil?

Since we don't know where the bailout money went (according to what I heard on Lou Dobbs anyway) we don't know who got the money. It may have gone to some institutions that use speculation as a way of making money. If not now maybe in the near future if no transparency is established. JMHO

That is seriously in doubt since the ban on short-selling and the decline in prices..................
 

TSR

Well-known member
backhoeboogie said:
Mike said:
That is seriously in doubt since the ban on short-selling and the decline in prices..................

Pelosi is going to be asking for an Exxon/Mobil bailout in no time.

Heck we need Exxon/Mobil to bail the US out! :lol: :lol:
 

Mike

Well-known member
TSR said:
backhoeboogie said:
Mike said:
That is seriously in doubt since the ban on short-selling and the decline in prices..................

Pelosi is going to be asking for an Exxon/Mobil bailout in no time.

Heck we need Exxon/Mobil to bail the US out! :lol: :lol:

If it weren't for Exxon/Mobil and a few other high tax paying firms, the government would need money. Big money.
 

Hanta Yo

Well-known member
Exxon/Mobile, and all the other oil companies with their record profits should have some of that money stashed away to keep them afloat. Not???
 
A

Anonymous

Guest
Hanta Yo said:
Exxon/Mobile, and all the other oil companies with their record profits should have some of that money stashed away to keep them afloat. Not???

They paid it all out as profits to their management and investors- and did little to invest back into the industry, being with the big Bush tax cuts they no longer needed the deductions to keep them from paying taxes-- which is one reason there are oil fields sitting all over with drilling sites surveyed out- but no rigs to drill or equipment or infrastructure to get the oil....
 
A

Anonymous

Guest
Oldtimer said:
Hanta Yo said:
Exxon/Mobile, and all the other oil companies with their record profits should have some of that money stashed away to keep them afloat. Not???

They paid it all out as profits to their management and investors- and did little to invest back into the industry, being with the big Bush tax cuts they no longer needed the deductions to keep them from paying taxes-- which is one reason there are oil fields sitting all over with drilling sites surveyed out- but no rigs to drill or equipment or infrastructure to get the oil....

Investors did not get much, look at the dividend payout.
 

jodywy

Well-known member
Oldtimer said:
Hanta Yo said:
Exxon/Mobile, and all the other oil companies with their record profits should have some of that money stashed away to keep them afloat. Not???

They paid it all out as profits to their management and investors- and did little to invest back into the industry, being with the big Bush tax cuts they no longer needed the deductions to keep them from paying taxes-- which is one reason there are oil fields sitting all over with drilling sites surveyed out- but no rigs to drill or equipment or infrastructure to get the oil....
Oil companies don't make drilling equipment
 
A

Anonymous

Guest
jodywy said:
Oldtimer said:
Hanta Yo said:
Exxon/Mobile, and all the other oil companies with their record profits should have some of that money stashed away to keep them afloat. Not???

They paid it all out as profits to their management and investors- and did little to invest back into the industry, being with the big Bush tax cuts they no longer needed the deductions to keep them from paying taxes-- which is one reason there are oil fields sitting all over with drilling sites surveyed out- but no rigs to drill or equipment or infrastructure to get the oil....
Oil companies don't make drilling equipment

But they buy them...
 

jodywy

Well-known member
Oldtimer said:
jodywy said:
Oldtimer said:
They paid it all out as profits to their management and investors- and did little to invest back into the industry, being with the big Bush tax cuts they no longer needed the deductions to keep them from paying taxes-- which is one reason there are oil fields sitting all over with drilling sites surveyed out- but no rigs to drill or equipment or infrastructure to get the oil....
Oil companies don't make drilling equipment

But they buy them...
but there not that many being made
 
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