Oil Rises Above $142 for First Time as Investors Spurn Stocks
June 29th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Welcome to the public participation phase on oil… UPDATE: Actually, no. I take that back. I just looked at the charts and the daily interval doesn’t show the tell tale gap of public participation. Check back later for look at oil from a technical perspective.
Via: Bloomberg:
Crude oil rose above $142 a barrel for the first time as falling stock markets spurred investment in commodities.
Oil has climbed 46 percent this year as the U.S. dollar declined against the euro and the MSCI World Index of global equity markets dropped 12 percent. Oil may extend gains if the European Central Bank boosts rates on July 3, further weakening the U.S. currency.
`The trend to hard assets, and energy in particular, is unabated,” said John Kilduff, vice president of risk management at MF Global Ltd. in New York. “There’s a lack of confidence in stocks and other markets right now, which has investors looking for safe havens.”
Crude oil for August delivery rose 57 cents, or 0.4 percent, to settle at $140.21 a barrel at 3:05 p.m. on the New York Mercantile Exchange, a record close. The August contract rose $4.85, or 3.6 percent, this week.
Prices, which are up 38 percent this quarter, are heading for the biggest quarterly gain since the first three months of 1999, when oil traded between $11 and $17.
“This market is very volatile,” said Justin Fohsz, a broker at Starsupply Petroleum, a division of GFI Group Inc. in Englewood, New Jersey. “Prices fell from almost $143 to $140 between 2:00 p.m. and 2:30 p.m. on nothing. There’s very little volume, which makes it a lot easier to move the market.”
Futures advanced to $142.99 at 1:58 p.m. today, the highest since trading began in 1983.
Yesterday, the contract jumped $5.09, or 3.8 percent, to $139.64 a barrel as Libya threatened to cut output and the president of the Organization of Petroleum Exporting Countries said prices may reach between $150 and $170 within months.
Continuing Rally
“I don’t know when this rally will end because there are too many folks in the finance community betting on prices to rise,” said Rick Mueller, director of oil practice at Energy Security Analysis Inc. in Wakefield, Massachusetts. “Gains have nothing to do with the physical market.”
Yes well, here are some reasons why “speculators” might be rallying around freaking fossil fuels.
http://articles.moneycentral.msn.com/Investing/Dispatch/080630markets.aspx
The Dow was off 10.2% for the month, its worst June since 1930, and off 7.1% for the quarter, modestly better than its first-quarter loss of 7.6%. Since peaking on Oct. 9, the blue-chip index is down 19.9%; the popular definition of a bear market is a loss of 20%.
Energy prices — New York close Mon. Fri. Chg. Month chg. YTD chg.
Crude oil (NYMEX) (per barrel) $140.00 $140.21 -$0.21 9.93% 45.86%
Heating oil (per gallon) $3.9029 $3.9066 -$0.0037 6.44% 47.31%
Natural gas (per million BTU) $13.3530 $13.1980 $0.1550 14.10% 78.44%
Unleaded gasoline (per gallon) $3.5015 $3.5012 $0.0003 4.58% 40.58%
This is getting interesting.
Many theories, but no one talks about how the DEREGULATION of the utility industry, thanks to Darth Cheney.
http://www.peakoil.com/modules.php?name=News&file=article&sid=40416
“Energy” and all its woes is something I’ve spent almost 20 years studying.
The repeal of the PUHA is reaching its desired end goal. Money earned on selling electricity, natural gas, home heating oil, etc., no longer needs to be put back into replacing infrastructure or maintaining it.
Its now a free for all. Sheesh. I wonder how many public utilities invested in mortages?
Hard to say whether there are really shortages of the actual fuels, or we are going to be paying, and people freezing to death over bad investments in the months and years to come?