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Oil's back to square one, and back to reality - market's turmoil helps highlight demand destruction
MarketWatch ^
| 3:49 p.m. EDT Oct. 2, 2008
| Myra P. Saefong, MarketWatch
Posted on 10/02/2008 1:38:56 PM PDT by Ernest_at_the_Beach
SAN FRANCISCO (MarketWatch) -- The oil market's been hit with a dose of reality in the form of genuine fear over demand destruction -- and prices show it.
Prices on Thursday fell below where they began the year, after ending the month of September with a loss of almost 13% and finishing the third quarter down 28%.
It's been a true gambling experience for traders trying to gauge the world's need for energy during troubled economic times.
Crude futures prices gained about $50 in the first seven months of this year, then lost it all over the course of just two months, dropping to a low of $90.51 a barrel on Sept. 16.
"Oil traded for the last five years on fear of supply interruptions," said James Williams, an economist at WTRG Economics. "It is now trading on fear of economic collapse."
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The U.S. financial rescue plan's failure on Monday fueled the worst point drop on record for the Dow industrials. And if anything, that historic day on Wall Street taught oil traders a thing or two about reality.
"In the past, minor supply disruptions caused major price swings" for oil, said Charles Perry, president of energy-consulting firm Perry Management. "But what I see now is the traders in oil futures are looking at supply and demand much more realistically."
(Excerpt) Read more at marketwatch.com ...
TOPICS: Business/Economy; Extended News; News/Current Events
KEYWORDS: energy; oil
To: gusopol3; NormsRevenge; thackney; BOBTHENAILER; Fred Nerks; BIGLOOK; Grampa Dave; SierraWasp; ...
To: Ernest_at_the_Beach
Uh, that the drilling ban expired yesterday might have had something to do with it too.
3
posted on
10/02/2008 1:43:48 PM PDT
by
Argus
(Obama: All turban and no goats.)
To: Ernest_at_the_Beach
Most gas around here is about 10-15 cents lower than before the big “sky is falling!” at around $3.54-.59. One station had it at 3.34 against it’s neighbor at a never heard of $3.97 (not to be confused with his nearly $5 diesel).
4
posted on
10/02/2008 1:46:15 PM PDT
by
itsthejourney
(Sarah-cuda IS the right reason)
To: Ernest_at_the_Beach
I filled up in Omaha today for $3.12 (10% Ethenol) and thats AFTER the new fuel tax went into effect..I bet Iowa is even cheaper...
To: Ernest_at_the_Beach
Sorry Myra P. Saefong but the reality for oil is around $40 not $90. The beginning of a calendar year is not a gauge for anything...except a calendar year.
6
posted on
10/02/2008 1:51:12 PM PDT
by
lewislynn
(What does the global warming movement and the Fairtax movement have in common? Disinformation)
To: conservativehusker
When it gets back down to the low $2 range I’ll think we’ve made progress. About 2 Thanksgivings ago it was $1.35 in Seattle. Not that we’ll ever see that again....
7
posted on
10/02/2008 1:54:31 PM PDT
by
Aria
("An America that could elect Sarah Palin might still save itself." Vin Suprynowicz)
To: Aria
Maybe, $2.81 in Mass. today during gas station price war.
8
posted on
10/02/2008 2:13:43 PM PDT
by
norraad
("What light!">Blues Brothers)
To: Ernest_at_the_Beach
I predict $55 a barrel by Christmas.
9
posted on
10/02/2008 2:31:16 PM PDT
by
yazoo
To: Aria
Back in 2002, I remember getting it for 99.9 at the AM/PM just east of Northgate. Sigh ... those were the days.
10
posted on
10/02/2008 2:59:31 PM PDT
by
RainMan
To: Ernest_at_the_Beach
The author says:
"The U.S. financial rescue plan's failure on Monday fueled the worst point drop on record for the Dow industrials. And if anything, that historic day on Wall Street taught oil traders a thing or two about reality."
But then I can go to the Intraday Futures Prices Market Data (NYMEX) for light crude oil composites for the next year and see only a gradual price increase of three dollars into the end of next year.
HERE And I don't believe the charts shown here changed over the past few days.
11
posted on
10/02/2008 5:39:15 PM PDT
by
Marine_Uncle
(Duncan Hunter was our best choice.)
To: Marine_Uncle
Well....very interesting....
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