News Donger on Suicide Watch: Oil Nears $100 a Barrel - Page 4

Frazod · 09-02-2008, 09:54 AM

http://apnews.myway.com/article/20080902/D92UIA0G0.html

SINGAPORE (AP) - Oil prices fell below $106 a barrel Tuesday in Asia - $10 below its close Friday before the Labor Day weekend - as investors shifted their focus to slowing global demand after worries about Hurricane Gustav subsided.

Light, sweet crude for October delivery was trading at $106.03 a barrel in electronic trading on the New York Mercantile Exchange midafternoon in Singapore, and at one point dropped as low as $105.46.

On Monday, when U.S. trading was closed for Labor Day, the contract had plunged $4.34 to $111.12 a barrel in late electronic trading. On Friday, the contract settled at $115.46 a barrel.

Traders were relieved that Gustav weakened as it approached the offshore oil rigs and Louisiana refineries, and appeared to have caused less damage than expected in New Orleans and surrounding areas.

But they quickly turned their attention to slowing global economic growth, speculating that will dampen demand for crude oil, even in developing countries such as China and India.

"The market continues to be weighed down by worries of a global economic downturn and slowing oil demand in developing markets," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "Action by OPEC and supply side concerns should put a backstop to any sharp price drop."

The Organization of Petroleum Exporting Countries is scheduled to meet Sept. 9 and has indicated it may take action to defend the $100 a barrel level.

There was some disruption to oil supplies as oil companies shut down production and evacuated facilities ahead of the storm. Altogether, about 2.4 million barrels of refining capacity had been halted, roughly 15 percent of the U.S. total, according to figures from Platts, the energy information arm of McGraw-Hill Cos. (MHP) The Gulf Coast is home to nearly half of the nation's refining capacity.

It could be a day or more before oil and natural gas companies can assess the damage to their drilling and refining installations. Louisiana Gov. Bobby Jindal said as much as 20 percent of oil and gas production that was stopped because of Gustav could be restored by this weekend, stressing that it was a rough estimate.

Traders are also keeping an eye on other storms brewing in the region.

Hurricane Hanna was predicted to come ashore in Georgia and South Carolina late in the week, and Tropical Storm Ike formed late Monday in the Atlantic Ocean and may become a hurricane in the next 36 hours as it approached the Bahamas.

"September is the peak of the Atlantic hurricane season. After Gustav, there are two more now on the radar screen. The storms are likely to provide some upside risks to the oil futures market," Shum said.

In other Nymex trading, heating oil futures fell 15.44 cents to $3.0375 a gallon, while gasoline prices lost 16.92 cents to $2.685 a gallon. Natural gas for October delivery fell 47.3 cents to $7.472 per 1,000 cubic feet. In London, October Brent crude was down $2.01 to $107.40 a barrel on the ICE Futures exchange.

xbarretx · 09-02-2008, 01:44 PM

Quote:

Originally Posted by Iowanian

COME OOOOOOOOOOOOOON DOOOOOOOOOOOOOOOOOOOOWN!

Until the PRICE IS RIGHT

REP

MOhillbilly · 09-02-2008, 01:45 PM

Quote:

Originally Posted by Deberg_1990

We will never see gas below $2 a gallon ever again. Maybe not even $2.50

paid 3.29 all lastweek. went up 20 c over the weekend, down 10 c this morning.

xbarretx · 09-02-2008, 01:46 PM

its funny, how in such a market speculators can make money BOTH when the prices spikes as well as when the bottom drops out

**chasedude** · 09-02-2008, 01:50 PM

It has stayed 3.59 here in NE KS for 4 weeks straight, yet the price of crude continues to plummet. I think there's some gouging going on somewhere.

**Donger** · 09-02-2008, 01:52 PM

Quote:

Originally Posted by Hydrae

It would if the arguement for it going up as soon as the crude price goes up wasn't so that they can afford the next load. So the price goes up immediately to cover the next shipment but the price stays up to pay for what they have in the tank already.

That's precisely what happens. If they see crude going up, they know that they have to raise prices immediately, because their next shipment is going to cost more.

It's the replacement cost.

And, the price isn't staying up. It has dropped.

**Donger** · 09-02-2008, 01:56 PM

Quote:

Originally Posted by GoBo

Sure is funny that when prices are going up, it's about the replacement cost, and when it's going down it's about what he paid for what is in the tank. Why don't you just call it what it really is?

I have explained it as best I can.

**Lzen** · 09-02-2008, 01:57 PM

Quote:

Originally Posted by GoBo

Sure is funny that when prices are going up, it's about the replacement cost, and when it's going down it's about what he paid for what is in the tank. Why don't you just call it what it really is?

Greed?

**Iowanian** · 09-02-2008, 01:58 PM

This makes sense.....but it also solidifies my anger that when the gulf storm farts...the gas, already in those tanks goes up that night.....

Quote:

Originally Posted by Donger

Because retail prices drop more slowly than they increase. Think of it this way:

When gasoline prices are dropping in response to crude dropping, the retailer is still selling gasoline that he bought when crude was higher. So, in order to not lose too much money on the inventory he has in his tanks, he drops his prices as slowly as possible.

Make sense?

**Lzen** · 09-02-2008, 02:00 PM

Quote:

Originally Posted by Donger

That's precisely what happens. If they see crude going up, they know that they have to raise prices immediately, because their next shipment is going to cost more.

Yes, because everyone knows that those Cstores are just skimping by from week to week.

**Bugeater** · 09-02-2008, 02:00 PM

Quote:

Originally Posted by Lzen

Greed?

Well, in Donger's words, it's "maximizing profits".

Hydrae · 09-02-2008, 02:02 PM

Quote:

Originally Posted by Donger

That's precisely what happens. If they see crude going up, they know that they have to raise prices immediately, because their next shipment is going to cost more.

It's the replacement cost.

And, the price isn't staying up. It has dropped.

But when the price is dropping they are not charging the replacement cost, they are charging the current cost. It definitely feels like they are working both ends of the situation.

**Donger** · 09-02-2008, 02:04 PM

Quote:

Originally Posted by Hydrae

But when the price is dropping they are not charging the replacement cost, they are charging the current cost. It definitely feels like they are working both ends of the situation.

Absolutely, it is both.

"What did I pay for what is in my tank now? What do you I need to charge in order to not lose money?"

and

"What is the price of crude doing now? What should I be charging in order to cover my next purchase?"

RJ · 09-02-2008, 05:00 PM

Quote:

Originally Posted by eazyb81

My only concern with the drop over the past month or so is that we will put all these wonderful energy plans on the back burner because we think everything is back to normal. We still need to push for off-coast drilling and searching for alternative fuels.

I have the same concern. Hopefully everyone will remember the $4 gas and stay on the elected officials to get some things done.

RJ · 09-02-2008, 05:10 PM

Quote:

Originally Posted by Donger

That's precisely what happens. If they see crude going up, they know that they have to raise prices immediately, because their next shipment is going to cost more.

It's the replacement cost.

And, the price isn't staying up. It has dropped.

Yes, I see. If next week's gas is going to cost more than this week's gas I need to pay more for my gas this week so the station can pay for next week's shipment.......even though I don't want next week's gas and in fact just want to buy this week's gas. But if the price of crude drops then the price of next week's gas might go down, even though it's the same gas.

Do I have it right?

**Skip Towne** · 09-02-2008, 05:15 PM

Quote:

Originally Posted by RJ

Yes, I see. If next week's gas is going to cost more than this week's gas I need to pay more for my gas this week so the station can pay for next week's shipment.......even though I don't want next week's gas and in fact just want to buy this week's gas. But if the price of crude drops then the price of next week's gas might go down, even though it's the same gas.

Do I have it right?

You're confusing next week's gas with last week's gas. How can they keep setting record profits if things aren't confused?

09-02-2008, 09:54 AM
Frazod Did you hear what I said? Join Date: Aug 2000 Casino cash: $-796615	Donger on Suicide Watch: Oil Nears $100 a Barrel http://apnews.myway.com/article/20080902/D92UIA0G0.html SINGAPORE (AP) - Oil prices fell below $106 a barrel Tuesday in Asia - $10 below its close Friday before the Labor Day weekend - as investors shifted their focus to slowing global demand after worries about Hurricane Gustav subsided. Light, sweet crude for October delivery was trading at $106.03 a barrel in electronic trading on the New York Mercantile Exchange midafternoon in Singapore, and at one point dropped as low as $105.46. On Monday, when U.S. trading was closed for Labor Day, the contract had plunged $4.34 to $111.12 a barrel in late electronic trading. On Friday, the contract settled at $115.46 a barrel. Traders were relieved that Gustav weakened as it approached the offshore oil rigs and Louisiana refineries, and appeared to have caused less damage than expected in New Orleans and surrounding areas. But they quickly turned their attention to slowing global economic growth, speculating that will dampen demand for crude oil, even in developing countries such as China and India. "The market continues to be weighed down by worries of a global economic downturn and slowing oil demand in developing markets," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "Action by OPEC and supply side concerns should put a backstop to any sharp price drop." The Organization of Petroleum Exporting Countries is scheduled to meet Sept. 9 and has indicated it may take action to defend the $100 a barrel level. There was some disruption to oil supplies as oil companies shut down production and evacuated facilities ahead of the storm. Altogether, about 2.4 million barrels of refining capacity had been halted, roughly 15 percent of the U.S. total, according to figures from Platts, the energy information arm of McGraw-Hill Cos. (MHP) The Gulf Coast is home to nearly half of the nation's refining capacity. It could be a day or more before oil and natural gas companies can assess the damage to their drilling and refining installations. Louisiana Gov. Bobby Jindal said as much as 20 percent of oil and gas production that was stopped because of Gustav could be restored by this weekend, stressing that it was a rough estimate. Traders are also keeping an eye on other storms brewing in the region. Hurricane Hanna was predicted to come ashore in Georgia and South Carolina late in the week, and Tropical Storm Ike formed late Monday in the Atlantic Ocean and may become a hurricane in the next 36 hours as it approached the Bahamas. "September is the peak of the Atlantic hurricane season. After Gustav, there are two more now on the radar screen. The storms are likely to provide some upside risks to the oil futures market," Shum said. In other Nymex trading, heating oil futures fell 15.44 cents to $3.0375 a gallon, while gasoline prices lost 16.92 cents to $2.685 a gallon. Natural gas for October delivery fell 47.3 cents to $7.472 per 1,000 cubic feet. In London, October Brent crude was down $2.01 to $107.40 a barrel on the ICE Futures exchange.
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09-02-2008, 01:46 PM	#48
xbarretx The Freeze! Join Date: Apr 2007 Location: Prosper, TX (DFW) Casino cash: $9765000	its funny, how in such a market speculators can make money BOTH when the prices spikes as well as when the bottom drops out __________________ p.s. - VonneMarie is ALL woman!
Posts: 2,860

09-02-2008, 01:50 PM	#49
chasedude Supporter Join Date: Sep 2005 Location: St. Joe Casino cash: $9994900	It has stayed 3.59 here in NE KS for 4 weeks straight, yet the price of crude continues to plummet. I think there's some gouging going on somewhere. Last edited by chasedude; 09-02-2008 at 01:51 PM.. Reason: typo
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