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Oil prices struggle higher
Reuters ^ | Sep 17, 2006 7:41pm ET | Reuters

Posted on 09/17/2006 6:30:20 PM PDT by thackney

SINGAPORE (Reuters) - Oil prices nudged higher for a second day on Monday, struggling to end their steepest slump in more than a decade amid robust winter fuel stocks and easing geopolitical and weather risks to oil supplies.

NYMEX crude for October delivery was up 15 cents at $63.48 a barrel in Globex electronic trading by 2310 GMT, building on Friday's 11-cent gain and again attempting to halt a $9 collapse in prices over the past three weeks and a near 20 percent reversal since mid-July's record high $78.40 a barrel.

From peak to trough, oil prices have fallen by more than $16, the steepest retracement since the first Gulf war in 1990/1991, although deep $15 corrections in the autumns of 2004 and 2005 were followed by new peaks within about half a year.

Oil shed nearly $3 last week after data showed an expanding cushion of U.S. natural gas stockpiles and the highest distillate inventories in nearly seven years, indicating consumers in the world's biggest market were amply supplied ahead of winter.

A wave of profit-taking across the commodities complex has also driven prices successively lower and may push oil into the $50s before relenting as trend-following and technically minded speculative funds wield more influence than ever before.

The RJ/CRB Index of 19 commodities dropped to its lowest in 13-½ months.

"Increased dominance of 'funds' as the incremental buyer of oil futures has induced greater technical traits to the market," said Doug Leggate, analyst at Citigroup Investment Research.

"Our technical analysts believe a critical inflexion point has been breached, and downside risk may lie in the $50s."

Many analysts say a fall below $60 a barrel could galvanize OPEC, which a week ago opted to keep current output steady but left open the door to another meeting soon if prices kept falling, hinting at its first formal output curbs since 2004.

SINGAPORE (Reuters) - Oil prices nudged higher for a second day on Monday, struggling to end their steepest slump in more than a decade amid robust winter fuel stocks and easing geopolitical and weather risks to oil supplies.

NYMEX crude for October delivery was up 15 cents at $63.48 a barrel in Globex electronic trading by 2310 GMT, building on Friday's 11-cent gain and again attempting to halt a $9 collapse in prices over the past three weeks and a near 20 percent reversal since mid-July's record high $78.40 a barrel.

From peak to trough, oil prices have fallen by more than $16, the steepest retracement since the first Gulf war in 1990/1991, although deep $15 corrections in the autumns of 2004 and 2005 were followed by new peaks within about half a year.

Oil shed nearly $3 last week after data showed an expanding cushion of U.S. natural gas stockpiles and the highest distillate inventories in nearly seven years, indicating consumers in the world's biggest market were amply supplied ahead of winter.

A wave of profit-taking across the commodities complex has also driven prices successively lower and may push oil into the $50s before relenting as trend-following and technically minded speculative funds wield more influence than ever before.

The RJ/CRB Index of 19 commodities dropped to its lowest in 13-½ months.

"Increased dominance of 'funds' as the incremental buyer of oil futures has induced greater technical traits to the market," said Doug Leggate, analyst at Citigroup Investment Research.

"Our technical analysts believe a critical inflexion point has been breached, and downside risk may lie in the $50s."

Many analysts say a fall below $60 a barrel could galvanize OPEC, which a week ago opted to keep current output steady but left open the door to another meeting soon if prices kept falling, hinting at its first formal output curbs since 2004.


TOPICS: News/Current Events
KEYWORDS: 2006election; badnewsfordems; bullzogby; dnctalkingpoints; doomandgloom; election2006; energy; gaspricescare; goodnewsforamerica; makingitup; mediabias; oil; timingissuspicious; wishingandhoping; zogbyism

1 posted on 09/17/2006 6:30:20 PM PDT by thackney
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To: thackney
There is a huge glut of both gasoline and fuel oil, reserves are filling up very quickly, natural gas is in the dumps, I'm thinking the $50-55 range is not far away.
2 posted on 09/17/2006 6:34:08 PM PDT by xcamel (Press to Test, Release to Detonate)
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To: thackney
struggling to end their steepest slump in more than a decade amid robust winter fuel stocks and easing geopolitical and weather risks to oil supplies.

Strange wording

3 posted on 09/17/2006 6:35:28 PM PDT by gov_bean_ counter ( I am sitting under my cone of silence, inside a copper wire cage wearing a tin foil hat...)
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To: gov_bean_ counter
strange?

bwahaha,,,

are you surprised in the least? Twisting words is the bizz of the press these days. If it's good for America, it's, well, you know the rest..

4 posted on 09/17/2006 6:41:39 PM PDT by Michael Barnes (May Satan grip the souls of those with American blood on their hands)
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To: thackney

The bullish speculators can try to drive up the price all they want but when storage capacity is as close to full as it is now, where is the product going to be stored? A glut is a real possibility. By late November, we could see a complete collapse similar to the collapse of 1998. I hope it does not get that bad because that much of a collapse will sharply curtail production.


5 posted on 09/17/2006 6:48:47 PM PDT by billndin
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To: Michael Barnes
Just a month ago the headline "Oil skyrockets $0.70 on heavy trading..."

Not a peep [in the MSM] about the $13.00 drop in the last 2 weeks.....

6 posted on 09/17/2006 6:58:19 PM PDT by xcamel (Press to Test, Release to Detonate)
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To: thackney

as soon as the non-movibg tanker ships get filled up,
the price will start to drop


7 posted on 09/17/2006 7:08:59 PM PDT by greasepaint
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To: billndin
we could see a complete collapse similar to the collapse of 1998

If you really believe that, you do not understand what happened in 1998-99. The bottom fell out of the Asia economies dragging the demand way down. Today we are only seeing a slowing growth but still a good pace of growth.

8 posted on 09/17/2006 7:18:17 PM PDT by thackney (life is fragile, handle with prayer)
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To: greasepaint

Tankers are not being held in port. There is more oil on tankers today compared to years ago because there is more oil being exported/imported than every before. Those tankers are carrying product. There has not been a slowdown of imports/exports.


9 posted on 09/17/2006 7:20:31 PM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

I've seen stories that idle tankers
are being used to store crude/product,
cause there is no other place to put it


10 posted on 09/17/2006 7:28:30 PM PDT by greasepaint
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To: greasepaint; thackney
I've seen stories that UFOs land on earth each and every day. There are numerous stories that Elvis is still alive.

''Stories''? Don't waste my time. Check supertanker rates instead. They'll tell you exactly how hot the supertanker mkt is.

Sheesh.

11 posted on 09/17/2006 7:48:08 PM PDT by SAJ (debunking myths about markets and prices on FR since 2001)
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To: thackney

dead cat bounce


12 posted on 09/17/2006 8:09:29 PM PDT by spokeshave (The Democrat Party stands for open treason in a time of war.)
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To: SAJ

since you seem know so much,
what is the crack spread for regular-gasoline these days?

I'd like to know.


13 posted on 09/17/2006 8:13:10 PM PDT by greasepaint
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To: greasepaint
As of ten minutes or so ago, the straight CL-RBOB crack, basis front-month is running 4.625, and, speaking historically, is on its @$$. Note: it is no longer correct analysis to use the CL-RFG crack figs.

The 3-2-1 crack, which many traders prefer to watch, is running 17.592 tonight, basis front-month.

Any other easy questions?

14 posted on 09/17/2006 8:26:41 PM PDT by SAJ (debunking myths about markets and prices on FR since 2001)
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To: xcamel

$60 by the end of this week.


15 posted on 09/17/2006 8:59:24 PM PDT by AFPhys ((.Praying for President Bush, our troops, their families, and all my American neighbors..))
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To: SAJ

LOL... Great response!


16 posted on 09/17/2006 9:02:09 PM PDT by AFPhys ((.Praying for President Bush, our troops, their families, and all my American neighbors..))
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To: greasepaint

why would someone produce crude and keep it in a high priced tanker rather than just keep it in the ground? no logic in it.


17 posted on 09/17/2006 9:05:15 PM PDT by TWfromTEXAS (We are at war - Man up or Shut up.)
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To: AFPhys
Geez, how hard is it to figure ANY crack, assuming one has current prices and knows the components of the crack? (shrug)

;^)

18 posted on 09/17/2006 9:08:30 PM PDT by SAJ (debunking myths about markets and prices on FR since 2001)
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To: SAJ

LOL...


19 posted on 09/17/2006 9:15:19 PM PDT by AFPhys ((.Praying for President Bush, our troops, their families, and all my American neighbors..))
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To: TWfromTEXAS

depends on the futures market.

at some point, it would pay to hold
on to the stuff on a ship.

I suppose it is possible for there to be a supply
imbalance, with too much crude headed this way


20 posted on 09/17/2006 9:21:40 PM PDT by greasepaint
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To: gov_bean_ counter
Not so strange when you realize that News isn't News unless it's bad.

So when prices go up up up, it's bad, and it's also bad when prices go down down down.

For those who write this tripe, it's simply a matter of perspective. Going up it's bad to you and me, going down it's bad for the oil exporters. So just change the perspective and it's always bad news.

Simple eh? ;)

21 posted on 09/17/2006 9:27:26 PM PDT by kAcknor (Don't flatter yourself.... It is a gun in my pocket.)
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