[barbara23]

Hi guys! It seems that Oil will be falling these days and probably we will see a barrel for less than $100, just like a year ago.
Oil fell below $120 a barrel , for the first time after May on Monday, as new data showed that consumers are slowing down their consumption of energy to curb high inflation costs. The Federal Reserve's meeting on Tuesday also cause some anxious moments for investors who may be expecting a rise in borrowing rates to curb inflation, but analysts feel that it may not be an option.

US crude for September delivery fell $3.69 to settle at $121.41 a barrel on the New York Mercantile Exchange.
Cheers!
Barbie

{link removed by Shannymara per CoC 3.1.7}

[heroineworshipper]

Time to get an RV.

[timbo]

It may be demand destruction causing the drop in price but it is more likely to be part of the series price spikes to be expected during the plateau phase of peak oil.

The other factor here is the collapse in value of the $US.

The number of factors involved complicates the picture but there definitely seems to be an upward trend over time.

[jackal42]

Something to do with the Olympics?

[Ferretlover]

Enjoy it while you can.

[alokin]

That's what I'm thinking since some days there's something with the Olympics.
The Dollar is up why - the Chinese?
At least around Peking they're using less fuel as lots of factories were shut down and cars were taken off the roads.
But maybe there is a manipulation of the Chinese as well as they want to give a perfect show. (And they could show the world who is in charge of the oil price and the dollar). But this is pure speculation, I have no facts to support this.

We will se after the games - besides when are they over?

[heroineworshipper]

China did shut down half its gasoline consumption for the olympics. You can't say that in the media because it might slow down advertising sales.

[mefistofeles]

Personally I think the US data is simply too different from the rest of the world and is skewing oil pricing downwards. Iran and Saudi Arabia have suspended fuel oil exports.

For some reason we had build ups of diesel inventory here in the US, yet other countries at least Saudi Arabia and Iran seem to be running into shortages.

Personally I think this has created a "false picture" of what's really happening to the energy markets.

Saudi Arabia and Iran suspend fuel oil exports

[Starvid]

Call me when we return to the $22-28 price band.

Remember when prices collapsed last summer after reaching the "ridicuolus" level of $78?

[DantesPeak]

For some reason we had build ups of diesel inventory here in the US, yet other countries at least Saudi Arabia and Iran seem to be running into shortages.

US refiners have stepped up prodcution of diesel as much as possible, and reduced gasoline output, due to higher profit margins on diesel vs. gasoline and normal seasonal accumulation to prepare for the winter heating season.

[frankthetank]

Starvid hit it... I still remember a year ago from this past Feb when i filled up some jugs when gasoline was $2/gallon. LONG ways to go.

[energycity]

China did shut down half its gasoline consumption for the olympics. You can't say that in the media because it might slow down advertising sales.

China shut down half its gasoline consumption? If that's true it's big news. I thought it was just Beijing banning one million vehicles to help clean the air.

LINK

[dunewalker]

Hi guys! It seems that Oil will be falling these days and probably we will see a barrel for less than $100, just like a year ago.
Oil fell below $120 a barrel , for the first time after May on Monday, as new data showed that consumers are slowing down their consumption of energy to curb high inflation costs. The Federal Reserve's meeting on Tuesday also cause some anxious moments for investors who may be expecting a rise in borrowing rates to curb inflation, but analysts feel that it may not be an option.

US crude for September delivery fell $3.69 to settle at $121.41 a barrel on the New York Mercantile Exchange.
Cheers!
Barbie

Barbara says she's a British woman living in Spain. She comes across more like an American male living near Cambridge, Ma.

[Lanthanide]

Something to do with the Olympics?

I had been idley wondering for a few months now if the ramp up towards $147 was contributed to by the Olympics and all of the construction etc that China was putting into it (and stockpiling fuel to ensure the electricity would go out, etc). Any ideas? Or is even the Olympics too small of an individual event to make an impact on world markets?

[DantesPeak]

Something to do with the Olympics?

I had been idley wondering for a few months now if the ramp up towards $147 was contributed to by the Olympics and all of the construction etc that China was putting into it (and stockpiling fuel to ensure the electricity would go out, etc). Any ideas? Or is even the Olympics too small of an individual event to make an impact on world markets?

On the price run-up to $147 - this was probably caused by buying of futures contracts by SemGroup. Sem had bet on prices to fall and was forced to close out losing positions by buying at higher prices:

Mon Jul 28, 2008 9:10 pm Post subject: Re: So why did the price of oil drop $20?

--------------------------------------------------------------------------------

Cashmere wrote:
Disagree wholeheartedly that a 20$ drop is a sign of "demand destruction," particularly given the dramatic run up.

This is a sign that the market moved too quickly.


The price spike before the drop of $20 also had much to do with SemGroup.

There appears to be a strong possibility that their traders who bet on falling prices did not follow company trading guidelines. When the loss was discovered, the short positions had to be closed out, driving up the price to a level we now call a price spike.

This has almost nothing to do with long term supply/demand. So far in 2008, net oil + product imports are dropping faster than 'demand destruction'. Demand destruction is just another (erroneous) way of saying that demand must drop somehow to available levels of supply.

http://peakoil.com/post733897.html#733897

[Forney2008]

China did shut down half its gasoline consumption for the olympics. You can't say that in the media because it might slow down advertising sales.

If that is true, then no wonder U.S imports have improved slightly from their sharp downward drop around early spring. I wonder once the olympics are done, and Chinese consumption of gasoline rises, will crude oil resume its next leg up in its long bull market run, or will the slowing economy win out via demand destruction? Thoughts to ponder. Since gas is down now 20 to 30 cents here from its peak where I live, I think I am going to go buy a hummer tomorrow. See folks, the coast is clear, everyone is fine. (sarcasm).....

[Forney2008]

On the price run-up to $147 - this was probably caused by buying of futures contracts by SemGroup. Sem had bet on prices to fall and was forced to close out losing positions by buying at higher prices:

So basically what Semgroup caused was noise in the charts, and now oil has fallen to what it would have otherwise been without Semgroup's effect on futures market, Correct? Cause I remember one day a month or so ago, oil surged like 12 and then fell like 8 dollars just as quickly. Semgroup had to get skull-f*cked if they bet wrong on trades like that.

[DantesPeak]

On the price run-up to $147 - this was probably caused by buying of futures contracts by SemGroup. Sem had bet on prices to fall and was forced to close out losing positions by buying at higher prices:

So basically what Semgroup caused was noise in the charts, and now oil has fallen to what it would have otherwise been without Semgroup's effect on futures market, Correct? Cause I remember one day a month or so ago, oil surged like 12 and then fell like 8 dollars just as quickly. Semgroup had to get skull-f*cked if they bet wrong on trades like that.

That's bascially it. SemGroup lost more than $3 billion on futures trading, probably made worse by betting against the market just when it was thought Israel was planning some kind attack against Iran.

[nobodypanic]

so in other words speculation does affect the price of oil?

[DantesPeak]

so in other words speculation does affect the price of oil?

In the short run, in the long run it should have almost no effect - unless physical inventories were someone changed by speculators in a significant manner.

For the time being, it looks like most speculators are betting on the price to fall:

Producers scramble to lock in oil prices
By Javier Blas in London

Published: August 5 2008 21:31 | Last updated: August 5 2008 21:31

Crude oil and natural gas producers are scrambling to “lock in” prices by buying insurance against further drops in prices, as oil on Tuesday hit a fresh three-month low of $118 a barrel.

Traders said strong buying of put options – contracts that give holders the right to sell crude oil at a predetermined price and date – might be exacerbating the fall in oil prices. The options’ originators, such as Wall Street banks, need to sell futures – pushing down prices – to hedge their option positions.

The number of financial bets providing insurance against a fall in prices below $100 a barrel before the end of the year has more than doubled in the past six weeks, according to the New York Mercantile Exchange.

FT