Posts Tagged oil
Obama takes flak for tapping emergency oil reserves
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Июнь 28th, 2011
President Barack Obama took withering fire from the oil industry and Republicans for agreeing to release the nation’s emergency oil supplies, a decision that senior officials said was prompted by the need to prop up the ailing economy.
Critics blasted the release of 30 million barrels of oil — half of a global injection coordinated by the International Energy Agency — as an ill-timed misuse of reserves at a time when U.S. supplies are relatively high, despite the loss of Libya’s exports for the past three months.
Some OPEC officials went further, calling it a political ploy that ignored Saudi Arabia’s promise to step up production and the fact that oil prices had already fallen sharply. But the move fueled questions about the timing and catalyst for releasing the stocks, which in the past have been reserved to address abrupt disruptions like natural disasters.
The Obama administration was also concerned about tight markets ahead of peak demand in the summer, when many Americans take to the roads for vacations. The jump in gasoline prices earlier this year was hurting Obama’s support as the White House was gearing up for its re-election campaign. Read the rest of this entry »
Crude Oil Declines After Stalling at Highest Level Since September 2008
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Апрель 26th, 2011
Crude oil fell from the highest price in 31 months in New York after failing to maintain gains through a technical resistance level.
Oil slipped as much as 1.1 percent after reaching $113.48 a barrel, the highest price since Sept. 2, 2008. The gain breached a previous high of $113.46 set April 11.
“We hit that high, and people said that’s as high as we’re going to go today, so I’m going to take my profits,” said Carl Larry, president of Oil Outlook & Opinions LLC in Houston.
Oil for June delivery tumbled 87 cents, or 0.8 percent, to $111.42 a barrel at 10:15 a.m. on the New York Mercantile Exchange. Futures have risen 31 percent in the past year.
Brent crude oil for June settlement fell 94 cents, or 0.8 percent, to $123.05 a barrel on the London-based ICE Futures Europe exchange. Most European countries have a public holiday today for Easter Monday. Read the rest of this entry »
The Real Reason Gas Prices Are Soaring
Posted by Oksana Grebenjuk in Trading Markets on Март 31st, 2011
Have you ever wondered why when you go to the gas station to fill up the family car, the price of gas at the pump has just jumped 25 cents a gallon over the past three days? Perhaps you thought the oil companies were just being greedy. Or you believed the nightly news pundit who said that gas prices went up because the crisis in Libya was affecting supplies of oil. One professional oil trader says that you’d be wrong on both counts.
Dan Dicker, who has spent nearly three decades in the oil market, has a profoundly disturbing explanation of why the price of oil, and the gasoline that comes from the crude product, has risen so dramatically in recent months. It turns out, Dicker says, that the price has nothing to do with supply and demand for oil. It’s the financial market for oil, filled with both professional speculators and amateur investors betting on poorly understood oil exchange-traded funds, who have ratcheted up the price of gas to such sky high levels.
«There is no supply issue going on here — what you have is the perception of the possibility of a supply issue,» Dicker says. «A whole bunch of people are pouring money into an oil market trying to take advantage of what they perceive to be a real risk in supply. It’s a marketplace that I argue should not be allowed to be wagered on like a stock or bond.»
Dicker notes that Libya produces only 1.3 million barrels of oil a day, just a tiny fraction of the world oil market. Even if Libyan crude were lost to the world market in the current turmoil, and there is no sign that it is, Saudi Arabia has 5 million barrels a day to use in case of an emergency. Read the rest of this entry »
Gasoline, Heating Oil Futures Gain on Airstrikes Against Libya
Posted by Oksana Grebenjuk in Investing on Март 22nd, 2011
Gasoline and heating oil gained as airstrikes against Libyan military targets boosted crude oil prices and increased concerns about supply disruptions.
Futures advanced after the U.S., U.K. and French officials said missile and aircraft strikes have grounded Muammar Qaddafi’s air force and coalition members debated how far they can take military action against his regime. Futures also gained as government forces killed protesters in Syria and Yemen, indicating regional unrest is spreading.
“The market is reacting to the upside on oil on the concerns in the Middle East,” said Phil Flynn, vice president of research at PFGBest in Chicago. Libya is the headline everyone is talking about, but it’s also Syria and Yemen that keep the risks high.”
Gasoline futures for April delivery added 3.69 cents, or 1.3 percent, to $2.9863 a gallon at 1:37 p.m. on the New York Mercantile Exchange.
Libyan oil production halted by the country’s civil war is likely to remain suspended the rest of 2011, according to JPMorgan Chase & Co., Bank of America Merrill Lynch and Barclays Plc. Oil supplies from Africa’s third-largest producer collapsed from 1.6 million barrels a day in January to a “trickle” as of last week and may be halted for months because of international sanctions, the International Energy Agency estimates. Read the rest of this entry »
Why inflation hurts more than it did 30 years ago
Posted by Oksana Grebenjuk in Budget on Март 21st, 2011
Inflation spooked the nation in the early 1980s. It surged and kept rising until it topped 13 percent. These days, inflation is much lower. Yet to many Americans, it feels worse now. And for a good reason: Their income has been even flatter than inflation.
Back in the ‘80’s, the money people made typically more than made up for high inflation. In 1981, banks would pay nearly 16 percent on a six-month CD. And workers typically got pay raises to match their higher living costs. No more.
Over the 12 months that ended in February, consumer prices increased just 2.1 percent. Yet wages for many people have risen even less — if they’re not actually frozen. Social Security recipients have gone two straight years with no increase in benefits. Money market rates? You need a magnifying glass to find them.
That’s why even moderate inflation hurts more now. And it’s why if food and gas prices lift inflation even slightly above current rates, consumer spending could weaken and slow the economy.
Consumer inflation did pick up in February, rising 0.5 percent, because of costlier food and gas. Still, looked at over the past 12 months, price increases have remained low. Problem is, these days any inflation tends to hurt. Read the rest of this entry »
Stocks fall as worries mount over Japanese economy
Posted by Oksana Grebenjuk in Fund Markets on Март 17th, 2011
Mounting concerns over the impact of the massive earthquake in Japan pushed stocks lower Monday. The earthquake and tsunami along Japan’s northeast coast killed thousands and has raised fears of a slowdown in the world’s third-largest economy.
All 10 company groups that make up the Standard and Poor’s 500 index fell. Utilities companies lost 1.5 percent, the most of any group, on worries that the disaster may lead to dimming prospects for nuclear power plants.
The S&P index, the basis for most U.S. mutual funds, fell 12 points, or 0.9 percent, to 1,292.
The Dow Jones industrial average fell 89, or 0.7 percent, to 11,958. The Nasdaq composite fell 18, or 0.7 percent, to 2,697.
«Everything is linked now,» said David Katz, senior portfolio strategist at Weiser Capital Management. «There is no such thing as a catastrophe happening in any major country and it not affecting the global economy.» Read the rest of this entry »
Food prices hit record high in February
Posted by Oksana Grebenjuk in Trading Markets on Март 9th, 2011
Global food prices have reached their highest point in 20 years and could increase further because of rising oil prices stemming from the unrest in Libya and the Mideast, a U.N. agency warned Thursday.
Skyrocketing food prices have been among the triggers for protests in Egypt, Tunisia and elsewhere, and raised fears of a repeat of the food price crises in 2007 and 2008.
Some experts point to key differences compared to those years: for one, the price of rice, an important food security commodity, is much lower today. Still, Oxfam called the hike «deeply worrying.»
The Food and Agriculture Organization said in a statement that its food price index was up 2.2 percent last month, the highest record in both real, inflation-corrected terms and nominal terms since the agency started monitoring prices two decades ago.
It also was the eighth consecutive month that food prices had risen, the Rome-based agency said. In January, the index had already registered a record peak.
The increase was driven mostly by higher prices of cereals, meat and dairy products, FAO said. Sugar was the only commodity of the groups being monitored whose price hadn’t risen. Read the rest of this entry »
Oil shock could push world food prices higher
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Март 7th, 2011
Food prices worldwide continued to rise in February, and the recent spike in oil prices could push food costs even higher in the months ahead, according to a report from the United Nations.
The food price index, which measures prices for a basket of food commodities, rose 2.2% last month, according to the UN’s Food and Agriculture Organization. The index has increased for the last eight months in a row, and is at the highest level since it was created in 1990.
Sugar prices were slightly lower in February, compared with the month before. But prices for cereals, dairy products, meats and all other commodities in the index rose.
The FAO said it expects cereal prices to be sharply higher this year, due to shrinking inventories of wheat and coarse grains on top of growing demand. Export prices for major grains were up 70% last month versus February 2010, the report said.
From bad to worse: Global food prices have been moving higher in recent months as demand from emerging nations increases, and bad weather in certain parts of the world has cut the supply of key agricultural commodities.
But the recent run-up in oil prices threatens to make the situation even worse, the FAO warned. Read the rest of this entry »
Stocks rise sharply after unemployment claims fall
Posted by Oksana Grebenjuk in Fund Markets on Март 3rd, 2011
Stocks jumped higher Thursday after an unexpected drop in new applications for unemployment benefits and higher February sales reports from retailers.
The Labor Department said first-time claims for unemployment benefits fell to 368,000. That’s the lowest level for claims since May 2008. Economists had expected them to rise. Separately, the Institute for Supply Management reported that its measure of hiring by service companies rose to the highest level since April 2006. The index covers a broad range of industries including retail, health care and financial services.
The signs of job growth followed a report Wednesday from payroll processor ADP that said that private employers are added more jobs than expected last month. Those gains are helping to bolster expectations that Friday’s jobs report will show that the unemployment rate fell from its current level of 9 percent.
The Dow Jones industrial average gained 183 points, or 1.5 percent, to 12,250 in afternoon trading. The Standard & Poor’s 500 index rose 19, or 1.5 percent, to 1,328.
All 10 company groups that make up the S&P index rose. Industrial companies had the largest gain, with 2.3 percent. Caterpillar Inc. gained 3 percent, the largest increase among the 30 stocks that make up the Dow average. Read the rest of this entry »
Rising Oil Prices Pose New Threat to U.S. Economy
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Март 1st, 2011
The American economy just can’t catch a break. Last year, as things started looking up, the European debt crisis flustered the fragile recovery. Now, under similar economic circumstances, comes the turmoil in the Middle East.
Energy prices have surged in recent days, as a result of the political violence in Libya that has disrupted oil production there. Prices are also climbing because of fears the unrest may continue to spread to other oil-producing countries.
If the recent rise in oil prices sticks, it will most likely slow a growth rate that is already too sluggish to produce many jobs in this country. Some economists are predicting that oil prices, just above $97 a barrel on Thursday, could be sustained well above $100 a barrel, a benchmark.
Even if energy costs don’t rise higher, lingering uncertainty over the stability of the Middle East could drag down growth, not just in the United States but around the world.
“We’ve gone beyond responding to the sort of brutal Technicolor of the crisis in Libya,” said Daniel H. Yergin, the oil historian and chairman of IHS Cambridge Energy Research Associates. “There’s also a strong element of fear of what’s next, and what’s next after next.” Read the rest of this entry »
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