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Deckard

Oil Wipes Out 2011’S Gains

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Well, no one posted it yet - so I might as well...

Oil Wipes Out 2011’s Gains

Oil fell to the lowest level in more than five months in New York, erasing 2011 gains amid growing evidence the U.S. economic recovery is stalling and sapping demand in the world’s biggest consumer.

Futures dropped 5.8 percent as a U.S. government report showed limited improvement in the labor market. The Dollar Index gained as much as 1.5 percent, curbing commodities’ appeal as an alternative investment, and the MSCI All-Country World Index of stocks slid 10 percent from the year’s May high.

“What you’re looking at here is concerns about what demand is going to be doing because of the economy,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “The result of all this could be slower growth and the result of slower growth is less oil demand.”

Crude for September delivery declined $5.30 to $86.63 a barrel on the New York Mercantile Exchange, the lowest settlement since Feb. 18. It was the biggest one-day drop since May 5. The contract has fallen 5.2 percent in 2011.

Brent for September settlement on the London-based ICE Futures Europe exchange fell $5.58, or 4.9 percent, to $107.65 a barrel at 2:31 p.m. in New York. For the year to date, Brent is up 14 percent. The European benchmark contract was at a $21.02 premium to U.S. futures, after reaching a record $22.67 on Aug. 2.

2011 Decline

Futures have tumbled 25 percent in New York since reaching a two-year intraday high of $114.83 a barrel on May 2 as European officials struggled to contain a debt crisis, U.S. lawmakers attempted to stave off a default and global economic growth showed signs of slowing.

U.S. gasoline demand, averaged over four weeks, slipped 23,000 barrels, or 0.3 percent, to 9.07 million barrels a day in the period ended July 29, its fourth consecutive decline and the lowest level since a report through May 27, the Energy Department reported yesterday.

Demand destruction, anyone?

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That rather assumes there was demand to destruct.

Inflation, what inflation?

If oil falls and then the VAT rise drops out of the inflation numbers, Merv's going to start looking mighty right.

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Are you, like, defending King & BoE?

Merv's been pointing to a scenario of inflation dropping back to the target 2% without a rate rise being necessary. I understand that without the VAT rise, it's at 2.9% already. If fuel prices start coming down, then it's likely to move the figures closer to the target. I don't like everything that implies, but I'm not ruling it out at all.

Edited by rantnrave

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Is there anyone that is actually trading oil right now with an opinion?

I ask because I dont care for the msm drama, you want to know what is really going on then you want to hear from those that put their money where their mouths are.

Not those assholes in the bbc that get taxpayers money shoved in their mouths to spout drama.

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Some charts.

Some disagreement in the charts on the historical UK petrol price at the end of 2006 etc but it seems clear that since about 2008/2009 the UK petrol price and the oil price have significantly parted company. Similarly UK energy prices of course - perhaps even more so as they didn't come down at all since the oil price peak in 2008, or at least not so that you would notice and now they've just recently announced some more savage increases in energy prices despite the fall in oil price since the peak.

http://www.staveleyhead.co.uk/utilities/petrol-prices/

http://www.whatprice.co.uk/petrol-prices/petrol-oil.html

http://www.whatgas.com/petrol-prices/unleaded-prices.html

http://inflationdata.com/inflation/inflation_rate/historical_oil_prices_chart.asp

http://www.tradingeconomics.com/commodity/brent-crude-oil

Edited by billybong

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If oil falls and then the VAT rise drops out of the inflation numbers, Merv's going to start looking mighty right.

A broken clock is right twice a day, too...

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Is there anyone that is actually trading oil right now with an opinion?

I ask because I dont care for the msm drama, you want to know what is really going on then you want to hear from those that put their money where their mouths are.

One indisputable - the leading US oil benchmark (Cushing hub, OK, I believe) is completely unreliable - it's been messed up by changes in the US/Canada geographic production profile so that it's often completely full, meaning the price gets bid artificially down.

Generally, since circa 2006 there has been minimal spare capacity overall, so we should expect extreme price volatility.

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Merv's been pointing to a scenario of inflation dropping back to the target 2% without a rate rise being necessary. I understand that without the VAT rise, it's at 2.9% already. If fuel prices start coming down, then it's likely to move the figures closer to the target. I don't like everything that implies, but I'm not ruling it out at all.

Plus if interest rates stay low (->low mortgage payments), unemployment stays high and wage hikes stay down... we've had a devaluation-related inflation hit already.

Of course, if QE3 means giving money directly to the general populace instead of shoveling a few hundred billion more into the gaping maw of the banks this might change.

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Merv's been pointing to a scenario of inflation dropping back to the target 2% without a rate rise being necessary. I understand that without the VAT rise, it's at 2.9% already. If fuel prices start coming down, then it's likely to move the figures closer to the target. I don't like everything that implies, but I'm not ruling it out at all.

Mind you, he has been saying that for, what, the last 4 years?

I'd have thought QE3 would have started prices rising again.

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If oil falls and then the VAT rise drops out of the inflation numbers, Merv's going to start looking mighty right.

... and what happens when the effects of the next round of money printing (which we will get in response to this 'crisis') kicks in?

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... and what happens when the effects of the next round of money printing (which we will get in response to this 'crisis') kicks in?

Eon has just announced an increase in gas and electricity from september 18% and 11%.... :blink:

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I'd have thought QE3 would have started prices rising again.

QE3 is not here yet, not by a long shot.

Edit:

If the DOW was another 1,000 to 2,000 points down then you would get QE3 most probably.

Edited by The Masked Tulip

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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