Posted on 01/18/2007 1:07:12 PM PST by NormsRevenge
NEW YORK - Oil prices briefly fell below $50 per barrel Thursday for the first time since May 25, 2005, after the government reported larger-than-expected jumps in crude oil and gasoline inventories.
Oil has dropped 17 percent since the end of 2006 amid weeks of mild winter weather in the U.S. Northeast, a key consumer of heating fuels, and growing energy stockpiles.
"There's no doubt that this is significant," said Phil Flynn of Alaron Trading Corp. "If you're a bull, the only thing you can hold your hat on is they didn't close below $50."
The price for a barrel of light, sweet crude for February delivery fell as low as $49.90 on the New York Mercantile Exchange but spent only a moment below the $50 threshold. It settled at $50.48, down $1.76 from Wednesday's settlement price.
Jim Ritterbusch, president of Ritterbusch & Associates, said prices could continue to fall toward $47 in the next two weeks, unless the Organization of the Petroleum Exporting Countries calls for a meeting.
"The market is still seeking a bottom," he said, "and we had another bearish element tossed at it in the form of these negative weekly statistics."
U.S. crude oil stocks rose by 6.8 million barrels to 321.5 million, according to a report by the Energy Information Administration. Analysts had been expecting an increase of just 325,000 barrels, according to a Dow Jones Newswires survey. The EIA said inventories are above the upper end of the average range for this time of year.
Gasoline inventories, meanwhile, rose by 3.5 million barrels to 216.8 million, above analysts' expectations of a 2.6 million barrel rise. Distillate fuel inventories, which include heating oil, rose by 900,000 barrels to 141.9 million barrels, compared with analysts' expectations of a 1.3 million barrel rise.
The EIA said inventories for both gasoline and distillate fuels are at or above the upper end of the average range for this time of year.
March Brent crude on London's ICE futures exchange fell $1.03 to $51.75.
Heating oil lost 2.9 cents to $1.4707 a gallon while natural gas futures rose 9 cents to $6.324 per 1,000 cubic feet.
Gasoline prices fell 2.3 cents to $1.3553 a gallon.
Earlier in the day, prices were buffeted by a recent cold spell in the Northeast U.S. and forecasts of slow demand growth from the International Energy Agency.
In lowering expectations for this year as well revising last year's figures downward, the Paris-based IEA cited mild winter weather that has crimped energy demand and weaker expectations for U.S. economic growth.
In its closely watched monthly oil market report, the energy watchdog forecast global oil demand growth this year of 85.77 million barrels a day, down 160,000 barrels a day. And it said oil demand growth last year was 120,000 barrels a day lower.
Oil powerhouse Saudi Arabia remans undeterred by crude's recent drop.
Saudi oil minister Ali Naimi, who earlier this week said he opposed calls from other OPEC members for new cuts in production, announced Thursday his country planned to increase its crude oil production capacity nearly 40 percent by 2009 and double its refining size over the next five years to keep pace with growing global demand.
Naimi blamed the sharp rise in global crude prices over the past two years mostly on "insufficient investment and rising energy demand," especially from the booming economies of Asia.
"The rise has been a wake-up call for the industry and for producers and consumers alike, who are now beginning to address deliverability problem head on," he said at an international energy conference in New Delhi.
But Yemen's oil minister, Khalid Mahfoudh Bahah, who was also attending the conference in New Delhi, said he expects oil price to average between $55 a barrel and $60 a barrel in the coming months.
Vienna's PVM Oil Associates said Naimi's opposition to further cuts for now may be a call to other OPEC members "for better compliance with the already agreed output reductions, the second of which has yet to come into effect."
OPEC has committed to a total cut in output of 1.7 million barrels per day, including a 500,000 barrel-a-day reduction set to begin Feb. 1. A survey by Dow Jones estimates OPEC has cut output by little more than half of its pledged levels. Production remains near 27 million barrels a day or about 700,000 barrels a day above OPEC's target.
___
Associated Press writers Gillian Wong in Singapore and George Jahn in Vienna, Austria, contributed to this report.
Re post #2. Exactly.
You said --
Regular 2.13
Plus 2.79
Premium 2.89
Well, the lowest in Tulsa has a price that was about $1.00 more a gallon on Premium than Regular Unleaded. That spread was so bad, I just couldn't see how they would ever sell that Premium...
Regards,
Star Traveler
P.S. -- The low price is $1.72
Been reading thru this this morning:
********************Brief intro************************
The hypothesis of abiogenic petroleum origin holds that most petroleum was formed from deep carbon deposits, perhaps deposits dating to the accretion of the Earth. The ubiquity of hydrocarbons in the solar system is taken as evidence that there may be a great deal more petroleum on Earth than commonly thought, and that petroleum may originate from carbon-bearing fluids which migrate upward from the mantle.
Various abiogenic hypotheses were first proposed in the nineteenth century; most notably, by the French chemist Marcellin Berthelot and the Russian chemist Dmitri Mendeleev. Since that time, these hypotheses have lost ground to the modern scientific consensus that petroleum is a fossil fuel.
Price of gas in Toronto has dropped over 30% (from $113 a litre to 73 cents last evening. Loving it!
Try reading the owner's manual on a BMW X5.
PREMIUM (91 octane minimum) FUEL ONLY
Maybe you should build some refineries there, instead of running them all out of state.
$2.29 for Chevron premium this morning in Dallas TX. Regular was $1.99.
You quoted -- "Since that time, these hypotheses have lost ground to the modern scientific consensus that petroleum is a fossil fuel."
But, it seems to be gaining some more ground these days, from what I've been reading. However, it does come under attack by the "Peak Oil" people. Whatever way it really is, though, I don't think will make a difference to whatever we'll see at the pumps.
Regards,
Star Traveler
I'm not. I *want* it to camp out at around $50-55/bbl, because then all these alternative energy systems will get funded and underway.
Which, if you hadn't figured it out, would cut the props out from under the Middle East and Venezuela.
$1.98 in Dallas.
1.88 in Manchester TN today. Yesterday on the way to Chattanooga from Nashville the same station was 1.97
That's your reward for buying an overpriced SUV with a BMW logo on it. :)
--And what's become of the historical 20 cent spread between Regular and premium?--
Back when regular was 19.9 cents, there was a LOT less that 20 cent spread.
$1.99 in Columbus, OH. yesterday.
--Well, the lowest in Tulsa has a price that was about $1.00 more a gallon on Premium than Regular Unleaded. That spread was so bad, I just couldn't see how they would ever sell that Premium... --
Quick Trip reporting
Regular 1.999
Premium 2.199
"I did see 2.35 at an ARCO station Tuesday....in Huntington Beach or Fountain Valley....that's in Orange County , California....."
shhhhhhhh...now Ernest, don't be spreading our little "bargain" secret around. LOL
Guys, we hit 2.29 this am in FV.
I think it is around $2.30 here in AZ.
I noticed that as well here in Arizona.
i paid $2.05 this morning here in Mobile...though on the front page of the paper it said one case station around her was below $2
I am gonna look again....I think I saw a Mobil station just off of the 405 with regular at 2.65....not sure where I was...maybe Edinger ...
Using an expiring futures contract price in such a way is fragrant opportunism and unworthy of serious journalism although perhaps appropriate to undergrad writers and other sophists.
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