lawbreaker2
Virgo
Boat Racer
 
ohio
Posts: 5,429
APPD 0.77
Post Rank: 15
|
 |
Posted: Mar. 20 2008,7:39 pm |
Post # 10 |
   |
Oil continues to slide while diesel soars to record $4-plus
The Associated Press
3/20/2008
NEW YORK — Oil futures extended their declines Thursday, sliding below $100 a barrel at times as concerns about the economy and demand for oil grew and the dollar strengthened. At the same time, diesel rose to a new record of over $4 a gallon, while retail gas prices fell even further below their recent records.
For a second day, the oil market appeared focused on the economy and oil's underlying supply and demand fundamentals — factors it ignored in recent weeks while rocketing to a series of new records. However, some analysts said oil's price swoon may not last for long; most investors expect the Federal Reserve to cut interest rates several more times this year, moves that are sure to put new pressure on the dollar.
Lower interest rates tend to weaken the dollar, driving investors to commodities such as oil that they view as a hedge against inflation. A lower dollar also makes oil less expensive to overseas investors — a trend that reverses when the dollar strengthens, as it did Thursday.
But there are signs the market may be divorcing itself from its focus on the dollar. Prices were pressured Thursday when the Labor Department said the number of people filing for unemployment benefits jumped by 22,000 last week, much more than expected. A sharp slowdown in the economy could reduce demand for oil and gasoline. On Wednesday, the Energy Department said gasoline demand dropped by 1 percent last week.
Light, sweet crude for May delivery dropped $1.32 to $101.22 a barrel on the New York Mercantile Exchange Thursday after sliding as low as $98.65 earlier. It was the first dip by a front-month oil contract under $100 since March 5. On Wednesday, the expiring April contract fell $4.94 a barrel to settle at $104.48.
Oil has fallen sharply, dropping about 10 percent, since setting a new trading record of $111.80 on Monday.
"(Investors) seem to be coming round to the notion that the deterioration in the U.S. (economic) picture cannot be ignored on the pretext that commodities are a 'weak dollar play' or an 'inflation hedge', and thus immune from downward pressure," said Edward Meir, an analyst at MF Global UK Ltd., in a research note.
Word of an unexpected outage at a 100,000 barrel a day LyondellBasell Industries refinery in Houston, according to Dow Jones Newswires, sent gasoline futures higher Thursday, pulling oil off its earlier lows. April gasoline futures rose 1.82 cents to $2.5785 a gallon on the Nymex. The stock market also helped oil come back from a steeper loss; Wall Street advanced after the Philadelphia Federal Reserve said manufacturing activity in the Philadelphia region is falling by less this month than it did in February.
At the pump, meanwhile, the national average price of a gallon of gas slipped by 0.4 cent overnight to $3.275, according to AAA and the Oil Price Information Service. Gas prices followed oil to a number of recent records, but have retreated slightly over the past several days as oil has wavered.
Diesel prices, however, rose 0.8 cent to a new record of $4.033 a gallon Thursday. Diesel followed oil's recent surge, but also faces a different demand dynamic. While U.S. demand for oil and gasoline are tepid, diesel is more tied to the global economy, where demand is growing. Diesel is used to transport the vast majority of the world's goods via rail, truck and ship.
High gas prices are adding to the burdens of American families already facing higher food prices and falling home values. High diesel prices are hurting shipping firms, and pushing up prices of everything else.
If oil prices fall, some of those pressures on U.S. consumers and businesses could ease. But not everyone believes oil prices have begun a long-expected decline.
"We think this is just a correction in the market," said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm.
In other Nymex trading Thursday, April heating oil futures slipped by 5.31cents to $2.9636 a gallon while April natural gas futures rose 13.4 cents to $9.158 per 1,000 cubic feet. The Energy Department said gas inventories fell by 85 billion cubic feet last week, in line with analysts’ expectations.
In London, Brent crude futures dropped 59 cents to $100.13 a barrel on the ICE Futures exchange.
Edited by lawbreaker2 on Mar. 20 2008,7:43 pm
|
11-24-2024 Three Word Post.....The Next Generation.... (Rep.#19,435) from: BigDog
great, my wifes B'day(2nd) 
