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mrsquirrel · 09-07-2008, 05:16 AM

Quote:

Oil Tumbles as Signs of Slowing Economy Spur Commodity Selling
By Mark Shenk
July 8 (Bloomberg) -- Crude oil fell more than $5 a barrel, the biggest decline in three months, as signs that the global economy may slow prompted investors to sell commodities.
Oil in New York has dropped more than $9 since reaching a record $145.85 a barrel on July 3. Gold, silver, copper and corn also declined. The U.S. economy has sagged amid credit-market and housing slides. Contracts to buy previously owned homes fell more than forecast in May, signaling prices have yet to bottom.
``All the bad economic news is making people take a second look at commodities,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``Commodities were purchased as a hedge against inflation. A global recession is looking more likely, and it's the greatest weapon in the fight against inflation.''
Crude oil for August delivery fell $5.33, or 3.8 percent, to settle at $136.04 a barrel at 3:02 p.m. on the New York Mercantile Exchange, the biggest drop since March 31. Futures have fallen 6.4 percent over the past two days, the biggest two- session decline since March 19 and 20. Prices are up 87 percent from a year ago.
An index of pending U.S. home resales fell 4.7 percent following a revised 7.1 percent gain in April that was greater than previously reported, the National Association of Realtors said today in Washington. The prospect of further price declines may be discouraging offers, while rising mortgage rates and tougher lending standards make it harder to qualify for loans.
``There is more concern about the U.S. economy,'' said Kyle Cooper, an analyst at IAF Advisors in Houston. ``There was a feeling that the U.S. doesn't matter because of growth elsewhere, but the country is still responsible for about 25 percent of world oil consumption.''
Recession Concern
Sales of services and manufactured goods in the U.K. fell in the second quarter, posing ``serious risks'' that the economy will tumble into a recession, the British Chambers of Commerce said today. An index based on a survey of 4,758 services companies fell to minus 2, the lowest since 1992, from 17, according to the London-based lobby group.
``We have strong concerns about the sharp rise in oil prices,'' the Group of Eight said in a statement today in Tokyo, where the leaders are holding their annual summit. ``The world economy is now facing uncertainty and downside risks persist.''
The U.S. is ``very close to a disaster'' because it imports almost 70 percent of its oil, investor Boone Pickens said during an interview with CNBC, unveiling a strategy to limit the country's dependence on foreign crude.
Pickens, founder and chairman of Dallas-based BP Capital LLC, made his comments as Congress has been investigating the role of speculators in oil's rise over the past year. Pickens said the gains are because global demand exceeds supplies.
Iranian Statements
Oil also fell today as negotiations continued between Iran and western governments over the country's nuclear program. President Mahmoud Ahmadinejad dismissed the possibility of a war with the U.S. and Israel over his country's nuclear work, saying Iran is trying to avoid conflict.
``We're making the utmost effort for providing peace and security at the world level,'' the Iranian president told reporters today in Kuala Lumpur, where he is attending a summit of the Eight Islamic Developing Countries. ``Don't worry, there won't be any war in the future. Mainly they are focusing on some sort of propaganda or psychological war.''
Iran has said it may blockade the Strait of Hormuz, the shipping lane for a fifth of the world's crude, if its nuclear facilities are attacked. The country has the second-biggest proved oil reserves and is the second-biggest producer in the Organization of Petroleum Exporting Countries.
``There's been some reassurance about the dispute with Iran, which is taking some of the risk premium out of the oil market,'' said Rick Mueller, director of oil practice at Energy Security Analysis Inc. in Wakefield, Massachusetts.
Brent Oil
Brent crude oil for August settlement declined $5.44, or 3.8 percent, to settle at $136.43 a barrel on London's ICE Futures Europe exchange, the biggest drop since March 19. Prices climbed to a record $146.69 on July 3.
The UBS Bloomberg Constant Maturity Commodity Index, which tracks 26 raw materials, declined 2.6 percent to 1,633 today, the biggest decline since March 19. Gold fell for a fourth day.
The U.S. dollar rose against the euro, limiting the appeal of commodities as a hedge against inflation. The currency climbed 0.5 percent to $1.562 per euro at 3:13 p.m. in New York, from $1.5726 yesterday.
``Any time the dollar moves higher, you are going to see folks shift away from the commodity markets,'' Mueller said.
To contact the reporter on this story: Mark Shenk in New York at mshenk1[at]bloomberg.net.
Last Updated: July 8, 2008 15:51 EDT

And here is me thinking that it was going to get higher.

Even after Iran said they would fight if they are attacked as well.

Interesting turn of events there.

attaboy · 09-07-2008, 05:23 AM

I think oil is experiencing a bubble just as the US housing market did. The huge pool of investment money is looking for places to park. Right now it's oil. When it falls back the money will look for some other place. Maybe Brazilian real estate. Who can guess?

Spin · 09-07-2008, 05:27 AM

The trend for oil is up, this is just a pullback and in a couple of days its business as usual. 148+ before July14th.

mrsquirrel · 09-07-2008, 08:19 AM

Quote:

Originally Posted by Spin

The trend for oil is up, this is just a pullback and in a couple of days its business as usual. 148+ before July14th.

Does this mean you are planning on impersonating an Israeli in Iran?

Whiteshiva · 09-07-2008, 10:49 AM

Quote:

Originally Posted by attaboy

I think oil is experiencing a bubble just as the US housing market did. The huge pool of investment money is looking for places to park. Right now it's oil. When it falls back the money will look for some other place. Maybe Brazilian real estate. Who can guess?

I guess this ties into the mistaken belief that speculative future trading in oil has driven prices higher? Not the case. The drop in prices are more likely due to a drop in demand, as the high price has eventually started to have an impact on demand, combined with several national governments reducing or removing subsidies on petroleum products such as diesel, petrol and LPG.

britmaveric · 09-07-2008, 11:26 AM

$125 by 14 July.

mrsquirrel · 09-07-2008, 11:40 AM

There was another article on there but I can't find it now that said something along the lines of.

" We shouldn't be surprised by $100 barrels from now on"

Not sure if it meant barrels around $100 or if it meant $100+

Carnwadrick · 09-07-2008, 01:19 PM

You guys are too serious about this stuff..the real deal is the oil world is scared that if Obama gets in he will levy the oill companies with huge winfall taxes that will push gasoline prices so high that nobody in the USA will be able to afford to drive..result drop in demand..drop in profits..better drop prices now and help McCain win...easy speculation for someone like me with only a 10th grade education..and before you say "I know it shows"

Spin · 09-07-2008, 03:28 PM

...........

mrsquirrel · 09-07-2008, 05:45 PM

Up again after Iran test fired a potato gun

Begbie · 09-07-2008, 06:26 PM

Quote:

Originally Posted by mrsquirrel

Up again after Iran test fired a potato gun

Triggered by the drop in the price of oil.

Norton · 09-07-2008, 08:13 PM

Quote:

Originally Posted by mrsquirrel

Up again after Iran test fired a potato gun

Quote:

Originally Posted by Begbie

Triggered by the drop in the price of oil.

Guess this proves the "speculators" have nothing to do with oil price.

Spin · 09-07-2008, 08:26 PM

its back up 2$ now

Butterfly · 09-07-2008, 08:41 PM

a bit early to call that small drop the beginning of the end, it's rebounding already

I am afraid the drop could be slow and long, bringing pain to everyone,

this is assuming that Iran doesn't nuke Israel or the other way around

Boon Mee · 09-07-2008, 08:49 PM

Quote:

Originally Posted by attaboy

Maybe Brazilian real estate. Who can guess?

You can buy a real nice three bedroom/bath condo right near the beach in Fortaleza for <100KUSD at the moment...

Butterfly · 09-07-2008, 08:54 PM

^ damn, sounds like a good deal. Are you there at the moment, Boon ? if yes, take a few pics of the girls on the beach, would make a nice review for the travelling forum

Milkman · 09-07-2008, 09:04 PM

Quote:

Originally Posted by mrsquirrel

And here is me thinking that it was going to get higher.

And I think you're correct. You'll see crude possibly go higher. Wait until tomrrow, and the next day, and the next week.

Quote:

Even after Iran said they would fight if they are attacked as well.

Interesting turn of events there.

Iran attacked could mean $200 per barrel. All speculation at this point.

Boon Mee · 09-07-2008, 09:06 PM

Quote:

Originally Posted by Butterfly

^ damn, sounds like a good deal. Are you there at the moment, Boon ? if yes, take a few pics of the girls on the beach, would make a nice review for the travelling forum

A little north of Rio right now - will take some pics when I get the chance. It's the 'off-season' - winter down here and kinda rainy...

attaboy · 10-07-2008, 02:20 AM

Quote:

Originally Posted by Whiteshiva

Quote:

Originally Posted by attaboy

I think oil is experiencing a bubble just as the US housing market did. The huge pool of investment money is looking for places to park. Right now it's oil. When it falls back the money will look for some other place. Maybe Brazilian real estate. Who can guess?

I guess this ties into the mistaken belief that speculative future trading in oil has driven prices higher? Not the case. The drop in prices are more likely due to a drop in demand, as the high price has eventually started to have an impact on demand, combined with several national governments reducing or removing subsidies on petroleum products such as diesel, petrol and LPG.

That doesn't mean there isn't a bubble occurring. A tremendous amount of wealth is being generated worldwide and it looks for places to generate more money. People are piling onto the oil commodity market. How far it will drop and when I don't know. Who knows where the mob will follow the rumors next.

Whiteshiva · 10-07-2008, 10:18 AM

Quote:

Originally Posted by attaboy

. A tremendous amount of wealth is being generated worldwide and it looks for places to generate more money. People are piling onto the oil commodity market.

OK - enlighten me - how exactly can I pile my fortune on the oil commodity market?

09-07-2008, 05:23 AM	#2 (permalink)
attaboy Elite Member Last Online: 01-11-2009 06:53 AM Join Date: Jan 2006 Posts: 2,908	I think oil is experiencing a bubble just as the US housing market did. The huge pool of investment money is looking for places to park. Right now it's oil. When it falls back the money will look for some other place. Maybe Brazilian real estate. Who can guess? __________________ As a kid I always thought my nickname was "attaboy" until I realized they were rooting for the dog: "Attaboy, get 'em! Get 'em!".

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09-07-2008, 05:27 AM	#3 (permalink)
Spin Would ya? Join Date: Jul 2006 Posts: 10,378	The trend for oil is up, this is just a pullback and in a couple of days its business as usual. 148+ before July14th.

09-07-2008, 11:26 AM	#6 (permalink)
britmaveric nid aur yw popeth melyn Join Date: Mar 2006 Location: Pattaya Posts: 3,921	$125 by 14 July.

09-07-2008, 11:40 AM	#7 (permalink)
mrsquirrel Jarvis fellates goats 4 $ Join Date: Jul 2005 Location: In a rather cold and dark place Posts: 12,437	There was another article on there but I can't find it now that said something along the lines of. " We shouldn't be surprised by $100 barrels from now on" Not sure if it meant barrels around $100 or if it meant $100+

09-07-2008, 01:19 PM	#8 (permalink)
Carnwadrick Chiang Saen Last Online: Today 05:57 AM Join Date: Aug 2007 Location: Dark side of paradise Posts: 549	You guys are too serious about this stuff..the real deal is the oil world is scared that if Obama gets in he will levy the oill companies with huge winfall taxes that will push gasoline prices so high that nobody in the USA will be able to afford to drive..result drop in demand..drop in profits..better drop prices now and help McCain win...easy speculation for someone like me with only a 10th grade education..and before you say "I know it shows"

09-07-2008, 03:28 PM	#9 (permalink)
Spin Would ya? Join Date: Jul 2006 Posts: 10,378	...........

09-07-2008, 05:45 PM	#10 (permalink)
mrsquirrel Jarvis fellates goats 4 $ Join Date: Jul 2005 Location: In a rather cold and dark place Posts: 12,437	Up again after Iran test fired a potato gun

09-07-2008, 08:26 PM	#13 (permalink)
Spin Would ya? Join Date: Jul 2006 Posts: 10,378	its back up 2$ now

09-07-2008, 08:41 PM	#14 (permalink)
Butterfly Suspended Member Join Date: Mar 2006 Posts: 16,848	a bit early to call that small drop the beginning of the end, it's rebounding already I am afraid the drop could be slow and long, bringing pain to everyone, this is assuming that Iran doesn't nuke Israel or the other way around

09-07-2008, 08:54 PM	#16 (permalink)
Butterfly Suspended Member Join Date: Mar 2006 Posts: 16,848	^ damn, sounds like a good deal. Are you there at the moment, Boon ? if yes, take a few pics of the girls on the beach, would make a nice review for the travelling forum

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