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OilPrice.com Weekly Oil Market Update: 03/15/2010 - 03/19/2010
Submitted by OilPrice.com
Crude oil futures kept falling back from highs even though speculative funds increased their bets that prices are headed higher. The benchmark West Texas Intermediate contract ended the week at $80.68 a barrel, after nearing $83 earlier in the week, compared to $81.24 a week ago.
Saudi Arabia’s oil minister, Ali Naimi, made it clear once again on Tuesday that the world’s largest oil producer prefers a range of $70 to $80 for oil prices. Speaking to journalists in Vienna prior to and OPEC meeting, Naimi said the oil-exporting group, which accounts for 40% of daily oil consumption, won’t let tight supplies push prices too high.
Further bearish factors were the increase of 1 million barrels in U.S. crude oil inventories in the weekly report from the Energy Information Administration and renewed strength of the dollar amid continuing concern about Greece’s fiscal situation.
A report in The Wall Street Journal on Friday suggested that EIA collection methods for the oil inventory data may be flawed, according to internal agency documents obtained by the newspaper. Greece said on Thursday it might have to call on the International Monetary Fund for aid if its efforts to reduce its deficit are not successful.
But bulls were encouraged by the Federal Reserve’s reiteration that interest rates would remain low and by OPEC’s decision to leave production volume unchanged, indicating their belief that prices would remain firm. The benchmark oil contract settled at $82.93 on Wednesday.
However, the move by the Reserve Bank of India to raise its key rates on Friday drove oil prices down amid fears that China and other emerging economies might follow suit and dampen demand for oil.
The U.S. Commodity Futures Trading Commission reported that non-commercial traders increased their net long position in light sweet crude to 109,314 lots in the week ended March 9, compared with 91,417 lots in the previous week. The increase in the net long position indicated that speculative traders expect oil prices to rise.
In the meantime, the Futures Industry Association, a lobby for the big futures and options traders, urged the CFTC not to follow through on its plan to adopt position limits for energy futures.
“FIA is not aware of any convincing or even credible evidence that large traders with speculative positions in energy futures markets have trumped market fundamentals as the determining factor in energy futures prices,” FIA president John Darmgard wrote in a comment letter on the CFTC proposal.
The FIA official went on to say that there is no evidence that position limits in agricultural futures have changed speculative behaviour in any way. Imposing limits on U.S. traders, the FIA says, will only put them at a disadvantage in international markets.
Source: http://www.oilprice.com/article-crude-oil-futures-slip-as-funds-increase...
This article was written by Darrell Delamaide for Oilprice.com who focus on Fossil Fuels, Alternative Energy, Metals, Oil Prices and Geopolitics. To find out more visit their website at: http://www.oilprice.com
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One of the best examples of the divergence of the market from underlying fundamentals. Position limits are absolutely needed. And they can quit with the garbage commercial/non-commercial classification to identify speculators. There are huge investment dollars going into the futures market via the "commercial" traders. It would sure be nice if they could limit the futures market size to the actual amount of oil produced. I would like to see an up-to-date stat that shows the total amount of futures open interest (on all exchanges; not just Nymex) compared to physical oil produced.
Heck with the Chinese and Indian central banks. Gas at $3.19/gal will make free market Americans use less.
Life is a series of cycles, some cycles we only see once in our lifetime, other cycles we see on a 24 hour basis. Right now you are in an up wave of the biggest down wave the world has ever seen since the dawn of Man.
Man has caused the waves within the cycles to become larger and larger with the use of the exponential growth model. The equation can't be bargained with, the equation can't be reasoned with... you either supply exponential growth or the equation will start to consume on you.
The last down wave lasted 22+ years with 100s of millions in death from starvation, disease and war. The end of the last up wave was magnitudes larger than the previous up wave, this down wave will be on a scale that makes the last down wave look like a walk in the park.
Eventually people one day will figure out that China and India are doing the same thing as Europe and North America, there is no seperate system... it's one big system with no backup. Oh yes, there will be blood this time... masses amounts. Humans have yet to figure out basic Math, you can never beat the equation but you certainly can trick people in believing so for about 60-80 years. Tick tock.
3 year down only about 50-80 to go this time. Japan will be in the down wave for probably 80-100 years if Man survives this time so 20 years down for them yet they have just as long to go.
"The equation can't be bargained with, the equation can't be reasoned with"
"It just will not stop until you are dead, Sarah Connor"
Not sure how long we actually have left in this down wave but agreed the up move is sharp enough to make bears nervous. However, what we have in front of us is a very believable scenario of "devastation of global" proportions, mind you that!
As for Crude, well, tough play but for now, it's stuck in range and likely tanks w/upcoming downturn towards $68.
We have barely entered the large down wave... we are just inside an up wave within the largest down wave Man has ever created. The fun hasn't even started yet.
Well, I'd like to witness that. Unfortunately, it's what this country (the world) needs.
$80's are high(ish), until you factor in demand else where...
http://www.youtube.com/watch?v=wYuLjGQQ-jg&feature=PlayList&p=C1B06538A32767DF&index=132
Oil would be 60 bucks if not for all the speculation.
its defo what the environment needs to recover from mans excesses and greed
there are also way to many people
this is natures way of culling us
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