Oil settles above $119

The falling demand for oil, perhaps the reason why oil price continuews to decline and it hits three-month low since it surged up. The current trend in oil trading is giving more relief to Americans, as they are one of the biggest consumer of oil.

The Federal Reserve, in a move most observers expected, left the fed funds rate unchanged for the second straight meeting, citing the need to balance a weak economy with rising inflation.

Starting last year, the U.S. central bank engaged in a months-long rate-cutting campaign aimed at juicing the markets. It has recently halted the cuts as pressure from inflation mounted. One member of the Federal Open Markets Committee voted to raise rates Tuesday.

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Oil Hits Seven Week Low; Now at $124/Barrel

for seven weeks' trading, the price of oil continue to slide. today's trading is now down to $124 per barrel. From its peak of $147 per barrel last July 11, the price drop has seen and estimated to $23 for seven weeks now.

The decline came after data late on Wednesday showed a larger-than-expected increase in domestic U.S. gasoline stocks last week, together with weak implied demand. U.S. crude stocks dropped after a sharp decline in imports.

"We do not see any factors to push up prices at all at the moment," said Tetsu Emori, a fund manager at Astmax Co Ltd in Tokyo, adding he expected oil to move towards $117 or $118 a barrel this week.

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Oil Price Update: Below $130/barrel; drops for 3 Straight day

From near $150 per barrel last couple of weeks, oil price now is trading below $130 per barrel. The sharply decline in oil price was due to the slowdown demand for oil in US and other neighboring big countries in Europe and some part of Asia. Some analysts believe that the decline will continue in the next coming months.

The downward dash also hit other energy futures, such as natural gas, which fell more than 7% after a government report showed a larger-than-expected increase in U.S. inventories. Oil stocks also tumbled.

The fall in oil prices helped propel the stock market to its second straight gain.

The Dow Jones industrial average rose more than 200 points amid hope that suddenly lower energy costs could give a much-needed boost to struggling consumers and help the economy avert a severe downturn.

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Oil Price Records Historical Biggest Decline

Historically, some analysts said that the latest $9 decline in oil price is said to be the biggest decline for 17 years of oil trading. The decline was due to snailed-pace US economy as it reportedly needs to lower its oil demand from the world oil markets.

The drop in oil was the largest single-day slide in dollar terms since Jan. 17, 1991, when oil fell by $10.56. On that day, President George H.W. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War.

But in 1991, oil was trading at just $32 a barrel, so the more than $10 slide in dollar terms represented a record 33% drop. Oil fell 4.4% Tuesday, which does not even crack the top 100 price declines in percentage terms.

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Oil Settles Above $145, OPEC Expect Lower Demand

Oil price did not climbed higher, yet it remained at above $145 per barrel in the world oil markets. Meanwhile, OPEC is expecting a lower demand of oil in the oil stock market, despite prediction of $8 increase in petrol.

Tensions flared up in the Middle East as Iran test-fired missiles this week, including one type capable of reaching Israel. The U.S. Secretary of State Condoleezza Rice warned on Thursday that the United States will defend its allies, and Iran responded with another missile launch.

Nigeria's main militant group said on Thursday it would resume attacks in the country's oil-rich region. Traders are concerned that the crude production will be disrupted in Africa's largest oil exporter.

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Is Ethanol A Miracle?

On alternative energy....

While ethanol may soon make up 5% of the gas at Ontario's pumps, it certainly isn't matching that in capital investment dollars. Total investment in Canadian ethanol production to date is about $1.2 billion — chump change compared to the $6.2 billion invested in 2004 in Alberta's oilsands, with $2.3 billion more in oilsands development capital projected this year. Recent oilsands projects from the likes of Shell, Chevron or Suncor have already eclipsed cost targets by amounts greater than the capital expenditure costs of all Canada's current ethanol projects. Ethanol producers say production costs are dropping, but at 35¢ to 45¢ per litre, they are still steep compared to Alberta oil, which can cost less than 24¢ per litre to extract and refine. Governments can try to create an ethanol market, but international investors see green only in oil.

After reading the American study, more will be tempted to see ethanol funding as another farm subsidy in disguise. Even with oil on a tear, ethanol producers may encounter more weeds before harvest time.

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Oil Price Gushes on US Reports of Inventory Backslide

At present trading, US crude oil price landed on $111 a barrel. In an instant, oil price has upswinged high after the US government released a reports of declining oil supplies. What's next? A $200 a barrel crude oil?

"The surprise draw on crude was due to the big drop in imports. If that is due to the fog in the Houston Ship Channel, then next week we may see an increase," said Mark Waggoner, president of Excel Futures in Huntington Beach, California.

Commercial gasoline supplies, meanwhile, fell 3.4 million barrels to 221.3 million barrels.

Still, that left them more than 10 percent over year-ago levels, according to the data.

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oil price fall for 3-week might put oil demand at risk, traders says

The rebel acts of some "concern" individuals around the world have alarmed the global market and responded to the ailing oil industry. These acts, such as bombings, were their way of protesting against the over accelerated oil price. And these resulted to gradual lowering of oil price for almost three weeks. But, some claimed that the trend would harm the demand and supply of the oil.

Reports of Turkish artillery fire inside oil-producer Iraq, part of an ongoing campaign against Kurdish rebels operating there, also did little to hold up prices.

Instead, traders worried over the implications of slowing demand for oil in the US, which consumes a nearly a quarter of world oil supply, as a parade of economists suggest an economic slowdown or a recession is imminent.

"If anything, the market's failure to rally on events like the tanker attack, or the prospect of future interest rate cuts to forestall an economic downturn, helps underscore the extent to which the market has turned bearish," Citigroup energy analyst Tim Evans said in a client note.

Federal Reserve chairman Ben Bernanke said on Thursday he saw "more pronounced" risks to the economy, though he doesn't expect a recession, and signalled he's open to aggressive interest-rate cuts.

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Bhutto Assasination results oil price hike

Was the assassination of Pakistan's number one opposition leader, Bhutto has a direct effect on oil price hike? Or was it incidental? Find out....





Despite thin trade volumes due to the Christmas and year-end holiday, prices were edging ever closer towards recent record highs near $US100 a barrel struck in November.

The market was already well supported by geopolitical jitters between Turkey and Iraq yesterday, when news broke that Benazir Bhutto was assassinated in a suicide attack in Pakistan, a key ally in the US-led war on terror.

The slaying stunned leaders around the world who urged calm and warned that extremists must not be allowed to destabilise the nuclear-armed nation before a parliamentary vote scheduled for early next month.

There are “rising geopolitical tensions in Pakistan ... and that is supportive for the crude market,” said AG Edwards analyst Eric Wittenauer.

Ms Bhutto's death “highlights the geopolitical tensions, because it's not a major oil exporting region, but it is important in terms of geopolitical impact,” Mr Wittenauer said.

Oil price stops at $97 a barrel

Possibility is near enough that the oil price may not go up$100 a barrel as spectators claimed. Since thursday last week, oil price stopped at $97 per barrel. This may sounds good to retailers and small-time investors....




Crude stocks at the delivery point for U.S. crude futures in Cushing, Oklahoma, rose 1.2 million barrels to 14.6 million barrels last week, overshadowing an overall drawdown in U.S. crude stocks.

"The inventory increase at this key physical delivery point of the NYMEX crude oil contract obviously caught the market somewhat flat-footed, leading to the price pullback," First Energy Capital said in its daily market statement.

The U.S. government showed a larger-than-expected 2.4 million-barrel drop in distillate stocks, which include heating oil and diesel fuel, ahead of chilly winter in the U.S. northeast.

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China asks 30% increase in oil imports from Saudi

Two new refineries in China will operate soon in 2008. The operation will need additional oil from Saudi, the reason why the government of China is asking additional 30 percent imported oil from Saudi. The agreement is still pending since Saudi government has still to study china's proposal. But this would surely build friendship between the the countries.


China is keen to secure more long-term fuel supplies while the Saudis are building a refinery in China and looking to invest in a second one.

"(The increase) is to supply the two new refineries," said the trading source, referring to a 240,000 barrel per day Fujian refinery in the southeast coast in which state-run Saudi Aramco owns 25 percent, and a 200,000 bpd plant in Shandong province designed to process Saudi oil. Both refineries are due for completion next year.

China, the world's second-largest oil user, also appeared unfazed by growing political tensions over Tehran's nuclear programme and wants to raise imports of Iranian oil further next year, after a 17 percent rise in the first nine months of this year.

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