xcel
11-16-2006, 07:15 PM
Market gets mixed news about OPEC supply and American demand. (http://www.msnbc.msn.com/id/12400801/)
http://www.cleanmpg.com/photos/data/501/Crude_Oil_-_Pump_Jack.jpgAP - Nov. 16, 2006
WASHINGTON - The price of oil sank by more than $2 a barrel Thursday, settling at its lowest level in a year as traders focused on the bearish aspects of conflicting market trends. OPEC is cutting output, but the U.S. economy is slowing; winter is near, but the country has an abundance of home heating fuels.
These mixed signals help explain why crude futures have settled in a range roughly between $57 and $61 since the beginning of October.
The retail price of gasoline, which fell sharply at the end of summer, has also stabilized in recent weeks. Nationwide, pump prices average $2.23 a gallon, or six cents below year ago levels.
The Organization of Petroleum Exporting Countries last month announced its intention to cut production by 1.2 million barrels a day - 4 percent of its output - to shore up oil prices, which have tumbled by more than $20 since a mid-July peak above $78 a barrel. The cartel has said it will cut output further at its December meeting if prices continue to fall.
Still, some market skepticism persists about how serious OPEC members are about actually reducing their oil sales at a time of historically high prices. To make matters more complicated, traders must sift through often conflicting reports from consulting firms that attempt to track shipments of OPEC crude.
At the same time OPEC is trying to tighten up the market, economic growth is slowing in the United States, the world’s largest energy consumer. The International Monetary Fund forecasts gross domestic product for the U.S. to grow by 2.9 percent in 2007, a decline from an estimated increase of 3.4 percent in 2006.
In its monthly oil market report, released Wednesday, OPEC signaled particular concern about weakness in the U.S. housing market and its potential to spill over into other areas of the economy.
In other Nymex trading, gasoline futures declined by 5.25 cents to settle at $1.5296 a gallon, while heating oil futures fell by 3.19 cents to settle at $1.6605 a gallon.
On Wednesday, the U.S. Energy Information Administration said in its weekly report that inventories of distillate, which include heating oil and diesel fuel, fell by 3.6 million barrels last week to 135 million barrels. That is 6 percent above year ago levels.
The EIA reported that demand for distillates over the last four weeks has been the highest four-week average ever for any period that doesn’t include January or February, when cold weather usually causes heating oil demand to peak. The EIA noted, though, that the high demand numbers could be caused by retailers and consumers buying fuel to pad their own inventories ahead of winter.
“This week’s petroleum data can be interpreted by different analysts to reach totally different conclusions,” the EIA said.
http://www.cleanmpg.com/photos/data/501/Crude_Oil_-_Pump_Jack.jpgAP - Nov. 16, 2006
WASHINGTON - The price of oil sank by more than $2 a barrel Thursday, settling at its lowest level in a year as traders focused on the bearish aspects of conflicting market trends. OPEC is cutting output, but the U.S. economy is slowing; winter is near, but the country has an abundance of home heating fuels.
These mixed signals help explain why crude futures have settled in a range roughly between $57 and $61 since the beginning of October.
The retail price of gasoline, which fell sharply at the end of summer, has also stabilized in recent weeks. Nationwide, pump prices average $2.23 a gallon, or six cents below year ago levels.
The Organization of Petroleum Exporting Countries last month announced its intention to cut production by 1.2 million barrels a day - 4 percent of its output - to shore up oil prices, which have tumbled by more than $20 since a mid-July peak above $78 a barrel. The cartel has said it will cut output further at its December meeting if prices continue to fall.
Still, some market skepticism persists about how serious OPEC members are about actually reducing their oil sales at a time of historically high prices. To make matters more complicated, traders must sift through often conflicting reports from consulting firms that attempt to track shipments of OPEC crude.
At the same time OPEC is trying to tighten up the market, economic growth is slowing in the United States, the world’s largest energy consumer. The International Monetary Fund forecasts gross domestic product for the U.S. to grow by 2.9 percent in 2007, a decline from an estimated increase of 3.4 percent in 2006.
In its monthly oil market report, released Wednesday, OPEC signaled particular concern about weakness in the U.S. housing market and its potential to spill over into other areas of the economy.
In other Nymex trading, gasoline futures declined by 5.25 cents to settle at $1.5296 a gallon, while heating oil futures fell by 3.19 cents to settle at $1.6605 a gallon.
On Wednesday, the U.S. Energy Information Administration said in its weekly report that inventories of distillate, which include heating oil and diesel fuel, fell by 3.6 million barrels last week to 135 million barrels. That is 6 percent above year ago levels.
The EIA reported that demand for distillates over the last four weeks has been the highest four-week average ever for any period that doesn’t include January or February, when cold weather usually causes heating oil demand to peak. The EIA noted, though, that the high demand numbers could be caused by retailers and consumers buying fuel to pad their own inventories ahead of winter.
“This week’s petroleum data can be interpreted by different analysts to reach totally different conclusions,” the EIA said.