Posted on 12/03/2004 8:59:04 AM PST by Ernest_at_the_Beach
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U.S. crude oil futures fell by $1 to $42.25, while London Brent fell $1.15 to $39.
Over the past three sessions, prices have fallen nearly $7, the fastest fall since January 1991, during the first Gulf War.
Since October's record peak of $55.67, prices have sunk by more than $13 and U.S. prices are back to levels last seen in September, while Brent is hovering around prices hit in July.
The renewed sell-off on Friday followed U.S. Labor Department data showing only 112,000 new U.S. jobs were created in November -- the weakest performance since July and well below Wall Street economists' forecasts.
The indication of slowing U.S. economic growth suggests falling demand for oil, which has already sunk in value as high OPEC production rebuilds inventories and high fuel costs bite into demand.
But more bullish analysts say growth in the United States is still robust and a sudden snap of cold weather would revive concerns about thin stockpiles.
"I still think the States is doing well economically, especially if you consider that we had $50 oil last month," said Edward Meir of Man Energy.
"Not that much has changed. Things could turn around quite quickly if we get a cold snap."
SYNCHRONISED GROWTH
Oil's rally this year was driven by synchronised economic expansion in the United States and China. This generated the fastest fuel demand growth in a generation, running down inventories and squeezing spare capacity.
While the supply cushion remains relatively low, mild weather in the U.S. Northeast -- the biggest regional heating oil market in the world -- and higher output from refiners coming out of maintenance has soothed worries about supplies of winter fuels.
This week's sell-off was triggered on Wednesday by a U.S. government report that showed distillate stocks, including heating oil and diesel, rose by 2.3 million barrels, helping to narrow the supply deficit compared with last year.
Overall crude stocks are already well above last year's levels as OPEC oil nations produce at the highest rate in 25 years.
The Organisation of the Petroleum Exporting Countries is to meet in Cairo on December 10 to decide output policy for the first quarter of next year.
Some members want the output spree to continue, though the cartel's second biggest producer Iran has advocated a clampdown on production above official quotas to avoid a winter stock-build.
OPEC's reference crude basket fell to $35.42 a barrel on Thursday from $38.03 the day before, OPEC said on Friday.
The fall takes OPEC's crude to just $3.50 a barrel over the top of the $28-$32 target, identified by OPEC's President Purnomo Yusgiantoro on Friday as an acceptable range for the cartel's crude.
Other ministers have indicated a basket price around $30-$35. The current target is $22-$28 a barrel, but most officials have said this range is now outdated.
The basket, made up mostly of heavy high sulphur crudes, is valued at a large discount to benchmark low sulphur grades like Brent and U.S. crude.
So bad news results in good news? I'm confused? Less jobs than expected helps drive down oil prices?
GREAT!
I wonder if we will see prices drop at the pump??
I'd like to see 20 dollars a barrel!
Just because two things happen at the same time doesn't mean one caused the other.
Rooters is always ready to jump at any perception of an administration conspiracy theory. Why do they consider the drop in oil prices to simply be a market adjustment?
That's what I'm sayin..
Oil prices are dropping, not because of bad economic news, but because more oil is flooding in..
Misleading piece, as usual.. This is unbelievable.
The election is over.
Yes. But it will take months.
The Real issue to be investigated is how the price was artificially raised to $60.00 during the month immediately prior to the Election.
Who did what and when did they do it to drive the price to the artificially high level? Why is the price coming down to the real supportable levels of $42 or even the Mid $30's in the next few weeks?
I like low priced Oil just like everybody else, but I would like to have a good explanation for why they went up to $60 when they did, just in time to try to defeat George W. Bush, and why they were not sustained at that level? Why, exactly, are they coming down now?
RamS
So when are my gas prices going to drop?
Oh yeah...that's right...the libs won't let us open up new refineries so we can turn crude into gasoline...
President Bush, we need that energy policy passed PRONTO.
Well it just doesn't make sense to me. I don't see how less jobs would have any effect on the price of oil, much less the price of eggs in China. The stock market is not doing what people thought it would with the job numbers. Right now it is up, and seems pretty stable. So, people just make up reasons?
Well we were blaming it on Soros and his tactics yesterday.
The idiots at Reuters see LOWER oil prices as a negative?!? After being breatlessly aghast at the rising prices for the last 4 months. What morons.
I don't quite understand your hatred for SUVs. I think most people who drive them gas them up. I understand your explanation of the oil prices though.
Good question. I remember months ago some were speculating that Soros was behind the rise in oil. Funny how it is dropping rather quick this soon after it no longer needs to be high.
"When I see a hummer (or any other idiotic large suv) on the road I cringe and have no respect for that person."
People don't need 250 watt stero systems, yachts, or Rolex watches either, but this is America! Let people enjoy the fruits of their labors. Ride your bicycle if you want. That's fine too.
Help!!! Price of oil goes up? Bad. Price of oil goes down? Bad.
Price of seeing the left with egg on their faces? Priceless.
ROFL!
Good one!
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