Crude tops $115 on surprise fall in U.S. inventories

[UpInArms]

Source: CBS Marketwatch

SAN FRANCISCO (MarketWatch) -- Crude-oil futures rose more than $1 Wednesday to surpass $115 a barrel after data showed a surprising drop in U.S. crude inventories and as the dollar dipped anew, raising oil's attraction as an investment alternative.

Crude oil for May delivery rose to an intraday high of $115.07 a barrel in late afternoon trading, before closing up $1.14, or 1%, at $114.93 on the New York Mercantile Exchange, also a new closing record.

In a report released Wednesday, the U.S. Energy Information Administration said crude inventories fell unexpectedly, down 2.3 million barrels to 313.7 million barrels in the week ended April 11. Analysts surveyed by energy information provider Platts expected an increase of 1.5 million barrels.

This is the second week crude-inventories data countered expectations.

EIA also reported gasoline supplies fell by 5.5 million barrels in the latest week, while distillate stocks rose by 100,000 barrels.

The same analysts were expecting a decline in gasoline stocks of 2 million barrels and a 1.7 million barrel drop in distillate stocks.

Also pushing crude higher earlier was the sliding dollar. The greenback hit a new low against the euro in Wednesday trading, with the euro quoting at $1.5977. The dollar index, which tracks the value of the greenback against a basket of other currencies, fell 1% to 71.37.

Read more: http://www.marketwatch.com/news/story/crude-hits-new-record-high/story.aspx?guid=%7B00C39BF5%2D31FA%2D4B57%2D86D1%2DC1365E8B47E8%7D&dist=msr_3

[NJmaverick]

1. It's highly suspicious that inventories are down

when consumption is also down. Reeks of manipulation. Not that bush is going to do anything about it.

[saigon68]

2. Yikes

[shaniqua6392]

3. It is already $3.50 a gallon here in SE Michigan.

It goes up a few cents every single day around here. What a giant ripoff.

[Zhade]

13. 4.20 for premium in Santa Monica, CA the other day, "down" to 4.15 now.

NT!

[MadinMo]

4. "surprise fall "

SURPRISE!!

[Theres-a]

5. Surprise!!!

:party:

[louis-t]

6. Surprise to whom?

I keep reading how this is a surprise to someone. When your policies devalue the dollar, and your buddies are allowed to manipulate the market for fun and profit, no one should be surprised at the result.

[haymakeragain]

7. Surprise....whatev.

This is criminal, but you gotta believe that the Bushians are clearly seeing that the end is near and want to squeeze out as much profit as they can before their glory days dry up come Jan '09

[lovuian]

8. Someone is stealing those reserves

and selling them top dollar

[cliss]

9. Just the beginning.

Expect oil at $200.00 / barrel. By June, that's what I'm hearing.

Let's see, what will gas be by then?

[dweller]

10. simply unaffordable. n/t

dp

[happyslug]

12. I would say about $5.49 a gallon.

$200 a Barrel (42 Gallons in a Barrel) means $4.76 a gallon Plus the 18.4 Cents Federal Gasoline comes to $4.944 Tax. Then add the cost of distribution which runs about 24 cents a gallon, brings us to 5.184 a gallon. Then add my state's (Pennsylvania) gasoline tax of 26 cents, bring the price to $5.444 a gallon at the pump. Round it up to $5.49 a gallon (more to the increase cost of hauling the gasoline to your local gasoline station then anything else).


Previous threads on this and related issues (i.e. what to do about the price of Gasoline):
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=6560#6586
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=10763#10771
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=19232#19240
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=266&topic_id=257#265
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=5570#5760
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=5570#5649
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=1539#1732
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=3927#4011

[burrowowl]

11. Why is it that

gas goes up 20 or so cents a minute before the barrel goes up!?

[happyslug]

14. Because your local price was set by oil purchased last month.

What we are looking at is the price in the "future" market, what the oil will sell for when it hits New York City one to two months from now (The shipping time for the oil). The oil is sold as it is pumped and loaded into tankers. These third parties buyers are taking the risk the price will go up, not down. When the oil arrives at port, it is processed (Refined if Crude oil, just shipped if already refined). The third parties buyers then sell the oil (Hopefully at a profit). This has been going on since at least the 1970s, as people wanted to get secure price for oil. That secure price is set by the price paid for the oil as it is pumped and loaded. If the price drops over the time period in shipment, these third parties buyers will lose their investment, but if it goes higher they will make a nice profit.

The problem is there has been NO downward pressure of the price of oil. Until you get to a point when no one will buy the oil, it will go upward in price.

My point is the price you see today for oil is what you can expect to pay two months from now (Adding Federal and States Taxes AND the cost of distribution).

Thus there is a one to two months delay in any price increase or decrease. I read a report that stated that in the 1990s it took four weeks for a price increase at well head to reach you at your local gasoline station. It took eight weeks for a price DECREASE to hit your local station. That sounds about right (I do NOT expect a price decrease but I mention it anyway).

[Javaman]

15. but hey the market is up! and honestly, isn't that ll that really matters?

:eyes: