Up $15 dollars in just two days to a new record $138 and change.
Stated reason? “The dollar fell against the Euro.”
Gee did the dollar lose 11% of it’s value in the last two days? Lets see. U.S. dollar, from the fifth to the sixth... -1.087 % that is ONE percent, one tenth of the required drop to account for the gain in , in... what was that? SPECULATION.
Sure the $US went up 2 cents against the $EU. This was not the cause of much of anything, although it did happen at about the same time. The cause of the increase in the price of crude is being investigated now and any suggestion is as good as the next.
I’ve said before that the dollar definitely plays a part in oil prices, but it’s in no way the whole picture.
At this point, it is demand and speculation more than anything...although there have been days where the dollar fell and oil fell too and vice versa...
WERD...I hope all those speculators throw themselves out of windows when the oil bubble bursts.
The truth, the whole truth, and nothing but the truth.
How much do you want to bet that once the election is over, oil prices will drop?
Oil inventories are actually up according to the lastest report dated 4 June 2008.
Government data scheduled for release Wednesday is expected to show that crude-oil inventories rose last week after unexpected drops in the prior two periods.
The Energy Department’s forecasting arm, the Energy Information Administration, publishes petroleum inventory data for the week ended May 30 at 10:35 a.m. EDT.
Analysts expect oil stockpiles grew last week by 2.7 million barrels, according to a survey by Platts, the energy research arm of McGraw-Hill (nyse: MHP - news - people ) Cos. For the week ended May 23, crude-oil inventories fell by 8.8 million barrels, or 2.7 percent, to 311.6 million barrels, which were 9.7 percent below year-ago levels.
Meanwhile, gasoline inventories fell by 3.2 million barrels, or 1.5 percent, to 206.2 million barrels, which were 2.5 percent above year-ago levels. Analysts expect stockpiles of the motor fuel grew by 900,000 barrels last week.
Demand for gasoline over the four weeks ended May 23 was 0.7 percent lower than a year earlier, averaging more than 9.3 million barrels a day.
At the same time, U.S. refineries ran at 87.9 percent of total capacity on average, unchanged from the prior week. Analysts expect capacity rose by 0.6 percentage point last week.
Inventories of distillate fuel, which include diesel and heating oil, rose by 1.6 million barrels to 109.4 million barrels for the week ended May 23. Analysts expect distillate stocks rose by 1.6 million barrels last week.
At the pump, gas prices rose less than a penny overnight to a record-high national average of $3.98 a gallon Tuesday, and are well above the year-ago average of $3.16 a gallon, according to AAA and the Oil Price Information Service.
Light, sweet crude for July delivery fell $3.45 to settle at $124.31 on the New York Mercantile Exchange Tuesday.
It is partly speculation, yes. But understand that speculation is not based on whims or wild guesses. Futures market traders place puts and calls and make long- and short-term position decisions based on real-world information. The ability to "move the market" is limited to a small handful of operators - but is extremely risky. No one, even George Soros, puts half a billion dollars at stake without calculation.
The underlying, larger causes of high oil prices are increasing global demand and stagnant, insufficient supply. The other primary cause is political risk, which manifests itself in the markets as fear. There are two branches of political risk in this case: domestic (controllable) and international (relatively uncontrollable).
As long as Congress stands in the way of drilling, exploration and refinery construction (and the markets know this all too well), we are locked into higher energy prices. As for the situation in the Middle East and elsewhere, there is an undercurrent of fear regarding the Presidential intentions of one B. H. Obama, and one that in my opinion is not at all unreasonable.
Soros found some more “liquidity...”