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KingPriest2
07-14-2005, 02:53 PM
Oil plummets more than $2

Prices fall as inventories rise; Emily predicted to miss Gulf rigs.
July 14, 2005: 4:30 PM EDT

Special Report full coverage


Oil plummets more than $2

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LONDON, July 14 (Reuters) - Oil prices dropped more than $2 to $57.80 Thursday, driven by higher inventory news, weaker demand forecasts and relief that Hurricane Emily would miss oil facilities.

U.S. crude for August delivery sank $2.21, down more than 3% percent, to $57.80 a barrel, extending a loss of 61 cents Wednesday. Crude reached a low of $57.50, before recovering a bit.

"With Emily's projected path appearing to veer away from the production areas ... the short-term volatility is now on the downside," said Nauman Barakat of Refco brokerage.

Hurricane Emily strengthened on Thursday but passed well north of OPEC producer Venezuela's oil operations.

Weather forecasters also expected it to steer clear of U.S. oil and gas fields off the Texas and Louisiana coasts.

Their predictions added to the bearish impact of data from the U.S. Energy Information Administration (EIA) Wednesday.

The data signaled a 3.2 million barrel increase in distillates, including heating oil and diesel, bringing stockpiles into the upper half of the average range for this time of year, the EIA said.

Overall crude stocks fell by 3.9 million barrels after storms in the Gulf of Mexico delayed offloading of imports, but they were still well above the upper end of the average.

Bearish sentiment was underpinned Wednesday after the International Energy Agency, energy adviser for 26 industrialized nations, downgraded its projection for world oil demand this year.

The agency said growth in the United States and China, the world's two biggest oil consumers, was slower than expected, with Chinese oil demand turning negative year-on-year in June.

The EIA believes demand will be strong. But the International Energy Agency says demand will slow. Click here for the full story.

Valiant
07-14-2005, 02:54 PM
Great so it will take us a good two weeks plus to see it at the pump instead of instantly like price raises...

ChiTown
07-14-2005, 02:58 PM
Great so it will take us a good two weeks plus to see it at the pump instead of instantly like price raises...

if ever.

Electric
07-14-2005, 03:03 PM
Great so it will take us a good two weeks plus to see it at the pump instead of instantly like price raises...

You are being optimistic. I don't think that it will impact the price at all. The current push is to get gas up to $3.00 a gallon by the end of August. Why would they let a little price drop have an effect on overall pricing?

Calcountry
07-14-2005, 03:05 PM
Great so it will take us a good two weeks plus to see it at the pump instead of instantly like price raises...Its called "the ratcheting effect", its an economic reality and really nothing that can be done about it.

HemiEd
07-14-2005, 03:18 PM
Plummets and $2 per barrel do not seem to go together for me. Now if it was $20 that would make some sense.

TEX
07-14-2005, 03:24 PM
Now even though the price per barrel dropped, wonder if the price at the pump will... :hmmm:

StcChief
07-14-2005, 03:27 PM
Plummet $2, wow. less than 5%.

Big deal considering how much it went up in the last year.

kcfanintitanhell
07-14-2005, 03:28 PM
Plummets and $2 per barrel do not seem to go together for me. Now if it was $20 that would make some sense.

No kidding. When I step out my back door and take that one step onto my deck I'm not exactly plummeting.
Unless I'm on my 9th vodka and soda.

Calcountry
07-14-2005, 03:55 PM
Plummets and $2 per barrel do not seem to go together for me. Now if it was $20 that would make some sense.If you had 100 July puts with a strike of 60 bbl, it would be PLUMMETS.

HemiEd
07-14-2005, 04:02 PM
No kidding. When I step out my back door and take that one step onto my deck I'm not exactly plummeting.
Unless I'm on my 9th vodka and soda.
ROFL

If you had 100 July puts with a strike of 60 bbl, it would be PLUMMETS.

I had not thought about it that way, sounds like my individual stock success lately. :cuss:

Dayze
07-14-2005, 08:13 PM
You are being optimistic. I don't think that it will impact the price at all. The current push is to get gas up to $3.00 a gallon by the end of August. Why would they let a little price drop have an effect on overall pricing?

If it goes to $3...I'm using that as a catalyst to by my Triumph Speed Triple or XB-9

gblowfish
07-14-2005, 08:22 PM
Plummets and $2 per barrel do not seem to go together for me. Now if it was $20 that would make some sense.Exactly. It's up from $40 a barrel to $60 a barrel in less than three years, so a $2 drop is nothing.

It sucks to pay $2.10 a gallon and feel like you got a "good deal."
The "Golden Age of Refining" and a Texas Oilman in the big house means no relief in sight. Pay up, soccer mom!!!

HemiEd
07-14-2005, 08:30 PM
Exactly. It's up from $40 a barrel to $60 a barrel in less than three years, so a $2 drop is nothing.

It sucks to pay $2.10 a gallon and feel like you got a "good deal."
The "Golden Age of Refining" and a Texas Oilman in the big house means no relief in sight. Pay up, soccer mom!!!


I have heard that refinery capacity is the real issue, not so much the raw crude.

Valiant
07-14-2005, 08:34 PM
Its called "the ratcheting effect", its an economic reality and really nothing that can be done about it.


I think a class action lawsuit should be done about it.. hell everybody else is getting away with them... At least this one would have merits... The cost of a barrel makes up only 10% of the cost at the pump... But yet when it goes up, the price reflects more around 90%...