Thursday, October 18, 2007

Bubbling Crude

90 dollar oil:

NEW YORK - Oil prices surpassed $90 a barrel for the first time Thursday as the falling dollar drew new foreign investors and speculators to dollar-denominated energy futures.

Light, sweet crude for November delivery hit $90.02 in electronic trading Thursday evening before returning to around $89.60. Earlier, prices had risen $2.07 to settle at a record $89.47 on the New York Mercantile Exchange.

While oil prices have risen sharply in dollar terms in recent days, the steadily weakening dollar means oil futures are seen as a bargain overseas. Data released in recent weeks shows speculative buying of oil futures is on the rise. Buying by foreign investors sends prices up, which draws more speculators into the market.


Many analysts feel that the underlying fundamentals of supply and demand do not support oil prices of $90 a barrel. On Wednesday, the Energy Department reported that oil and gasoline supplies rose more than expected last week, countering suggestions that supplies are tight.

You keep hearing it's a bubble and prices will fall back to a $60-$65 dollar range.

So is 90 bucks the top or will it still go higher?

And remember when oil was $18 dollars a barrel?

I do - it was back in 1999.

Funny how oil has skyrocketed since the oil men took power in the Butterfly Ballot Putsch back in 2000.

g to respond to your comment on PT, then you did a full blog here. Not sure the oil price really worries me in some ways. But it sure as hell rattles the economics. Good catch.
If it translates to higher heating costs for the winter, I'm worried. Con Edison wants 20% higher rates as it is. With 90 dollar oil, maybe they'll want 30%.

If it is a bubble and it goes back to $60, however...
Did you read the article in the Sunday NYT about Hugo Chavez and Citgo subsidizing heating oil costs in the South Bronx?

I didn't read that particular article, kid, but I've seen where Uncle Hugo has been spreading the free heating oil up in Boston.

You know, if George, Dick and the rest of the anti-terrorism guys wanted to stop terrorism, they'd get us off oil and drain Iran, Saudi Arabia, Venezuela, etc. of all that oil money.

But clearly they want a multi-generational War on Terror to replace the old multi-generational Cold War.

It's just good business.

Good to hear from you again.
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