Oil is not a 'partisan' commodity, at least not at this juncture. Democratic or Republican administration, oil continued its march lower, declining another $1 Tuesday to $33.30 per barrel on continued concerns about weakening global demand. Oil fell about $1.70 on Monday.
The other major energy commodities also declined early Monday. Heating oil fell 8 cents to $1.40 per gallon, unleaded gasoline decreased 7 cents to $1.10 cents per gallon, and natural gas dipped 17 cents to $4.62 per million BTUs.
Energy Trader Jim Dietz said Tuesday the weak U.S. economy, a higher dollar, and the resolution of two international energy-related issues points to significantly lower oil in the weeks and months ahead.
"The U.S. economy is showing no signs of recovery, the dollar is firm or rising, and Russia settled its natural gas dispute with Ukraine. That's all bearish for oil," Dietz said. Israel and Hamas also announced a truce to their fighting in the Gaza Strip, he said, "which relieves another minor worry for oil." Dietz added that he was currently short unleaded gasoline, with a monthly contract.
Dietz said unless OPEC announces a special, inter-meeting production cut, oil will test $30 soon. "It's destination $30," Dietz said. "After that, we'll need to see what January demand figures look like from China and the U.S."
Oil Analysis: Weaker demand remains the dominant factor in the oil market, which is causing U.S. inventories to build. If major suppliers due not cut production, oil's price will continue to head south.
Before the bell: Futures higher ahead of housing, jobless data
Nuclear power is on the comeback trail
Apple backs AT&T in continuing spat with Verizon
Reader Comments (Page 1 of 1)
1-20-2009 @ 9:54AM
Frank Gianino said...
oil goes down. price at the pump goes up. did they add a tax ?
1-20-2009 @ 11:01AM
Gary Kurzawa said...
If crude is at $33.00 a barrel right now and has been in the mid to upper 30's for some time now why is gas going up at the pump??? And, don't give me some hog-wash about refineries, supplies, demands and all that crap.... It is because there is presently no president to stop this ripoff. And, the oil companies know it! Gas should be at an all time low right now. Instead I am paying $1.88 at the pump. And, I can just imagine that the oil companies will have another record month of profits. And, just a though to leave you all with. Does anybody out there really think that our new president will address this issue anytime soon??? I think not!!!
1-20-2009 @ 12:17PM
Iridium said...
Oil is falling because far too many people got into the oil trade. That happens when you add thousands of new buyers with no use for actual oil.
Speculative traders over purchased oil and don't have anywhere left to store it. The real buyers of oil, people who actually use the product to make things, were forced out of the market. They had to resort to buying oil, not from suppliers but middlemen traders.
The oil market right now is 100% artificial. The true demand based price per barrel is around $15. It also doesn't help that you have Goldman Sachs saying that oil should be trading at $65 in the fourth quarter 2009.
There is not a demand based case you can make in a million years to justify oil at $65 a barrel. Even at the height of the boom $40 oil couldn't even be justified.
We have no choice we have to start killing oil traders and hedge fund executives. They have put self serving profiteering above the good of the global economy.
Goldman sees their dream of a Dubai based exchange where they could push oil to $500 a barrel evaporating. The company needs to be stopped, they are front and center in the cause of our economic collapse. Every person that lost thier job in the past year can put a lot of the blame on Goldman Sachs.