Posted on 05/22/2006 2:20:17 AM PDT by RWR8189
LONDON (Reuters) - Oil prices fell $1 on Monday to a six-week low as concern that inflation may slow economic growth encouraged selling across commodities markets.
U.S. crude was trading 98 cents lower at $67.55 a barrel at 0819 GMT after falling more than $1 to its lowest level since April 10. Brent crude was down 84 cents at
$67.85.
The drop added to a slide of nearly 5 percent last week after signs that the record cost of many raw materials was pushing up the cost of living and hitting consumers' pockets.
Rising inflation may force central banks to target higher interest rates, in turn slowing growth and cutting demand for commodities.
"This is a continuation of the bubble-bursting in commodities and energy markets last week," said Christopher Bellew of Bache Financial in London.
Other commodities also slipped on Monday. Silver fell over three percent to a four-week low while gold dipped just under three percent.
"Oil prices have suffered a hangover with the fall in other commodities," said David Thurtell, commodities strategist at the Commonwealth Bank in Sydney. "They were too far out of line with fundamentals and could still have further to fall."
RISING GASOLINE STOCKS
Weakness on gasoline futures added to the slide. U.S. gasoline fell over three cents to $2.0069 a gallon.
U.S. government data last week showed domestic motor fuel stocks rose for the third consecutive week. Rising stocks have helped alleviate concern that changes to cleaner-burning fuels might cause supply problems during the peak-demand summer driving season.
The dispute between Iran and the West over Tehran's nuclear dispute rumbled on at the weekend.
The United States said it made no sense for it to offer assurances that it would not try to overthrow the Iranian government if Tehran agreed to a Europe-backed package of incentives to give up its nuclear ambitions.
Diplomats have said that Europe wanted Washington to provide some kind of security framework to back the package but U.S. Secretary of State Condoleeza Rice said it had not been asked to do so.
Iran has said it could not trust such guarantees anyway.
Fears that output from Iran could be disrupted by the row pushed U.S. oil prices to a record of $75.35 in April.
OPEC looks set to keep its output policy unchanged at its meeting next week in Caracas.
The Organization of the Petroleum Exporting Countries has been pumping close to full tilt for a year now in response to buoyant demand, but has been able to do little about high prices.
Iran's OPEC governor Hossein Kazempour Ardebili said on Friday that OPEC supply limits were unlikely to change, even though fundamentals suggested oversupply and that the market could absorb an output cut of up to 1.2 million barrels per day.
Actual OPEC production has been reduced by militant unrest in Nigeria, with attacks taking out one quarter of Nigeria's exports, although Royal Dutch Shell told Reuters on Friday that it expects to return to its abandoned fields "sooner rather than later."
"HELP!!! WE NEED A CONSERVATIVE GOVERNOR WITH A BRAIN!!!"
One that isn't pussy whipped by as shrew Kennedy would help also!
Not really...throughout this latest price boost, we've had close to the lowest prices in the country.
Mind you, I don't have a problem with self-serve being available...it just seems not to be a significant money-saver for the consumer.
Taxes are a much bigger component of fuel prices than attendant labor cost.
Funny how those never seem to get suspended in the face of fuel price "crises."
(Whatever it may be at the moment.)
The map is incomplete and gives the wrong impression. There are 48 different blends in this country. The map shows them grouped so as to lead folks to believe there are only 14 or 15 with some States looking at ethonal mandates. Is truthfull reporting too much to ask???
We don't need no fricken corn whiskey in our gas tanks... We don't want no fricken corn whiskey in our gas tanks... and we don't give a chit what Archer Daniels Midland thinks about it... We want it out cause it ain't doin a danged thang but makin gasoline cost more... PERIOD!!! (just like a whole passel of other EnvironMental/GovernMental mandates)
Then why isn't the media reportin on the new regs that phase out MTBE an the fact that the Clean Air Act continues to require oxygenates? Regional shortages in the midwest..in ADM's backyard no less... have resulted in gas lines. Why isn't this being reported? Why isn't the effect of the new low sulphur diesel fuel regs being reported? Diesel now costs more then gas!
Was watchin C-span and the senators were lamenting, "We knew that the transitition period from MTBE to other oxygenates would cause regional hardship. However, the degree that fuel prices have risen has exceeded our expectations." Why isn't this being reported?
I know that the CA refiners have said repeatedly and almost in unison that oxygenates are not needed to have a clean burning gasoline in this state.
But of course refiners have no credibility because we've all been brainwashed by activists and their media slaves to belive only the crazed EnvirnoMentalists because only what they say is politically correct!!!
Almost all of us despise the MSM because of their selective reporting and efforts to enforce through severely slanted reporting. Even stoney silence when the truth doesn't suite them!!!
It is just crap SW.
Was talkin to my mom on the way back from SF yesterday. She started rantin 'bout how no one speaks up anymore. I said, "Mom, I write letters to the Bee, and they don't publish them. Hell, I know UC professors that write letters and they don't get published 'cuz the Bee don't wanna print stuff that they disagree with politically. I have done several TV interviews on natural resource issues...most have been scrapped. One on the Klamath protest was aired @ 5:00 then pulled. At 11:00 they had an enviro interviewed in the studio rebutting everything I said at 5:00."
Forester, these people are PRIGS!!! I just put the "R" in there to keep from saying PIGS!!!
You have several FReepmails. But if you're too tired to answer them tonight, I'll understand.
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