Oil tumbles again; prices fall over $10 in 2 days
NEW YORK (AP) -- Oil prices settled sharply lower for the second time in a row Wednesday, leaving crude more than $10 cheaper in just two days of frenzied trading and prompting speculation that the hard-charging market may be running out of steam.
Light, sweet crude for August delivery fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange, after earlier sinking as low as $132. The drop follows a $6.44 sell-off Tuesday, crude's biggest since the Gulf War.
The two-day slide of $10.58 a barrel marks a dramatic turnaround in crude prices, which as recently as Friday traded at record highs above $147 a barrel. But even with this week's sell-off, prices remain about 80 percent above where they were a year ago and up about 40 percent from the start of the year.
Analysts are unsure whether the drop represents a long-term shift in sentiment or simply a brief correction to crude's monthslong bull run. But the dizzying decline is prompting market veterans to ask how much support remains for such high prices.
"It's a sign that maybe the bull market is losing strength," said Michael Lynch, president of Strategic Energy & Economic Research Inc.
Perhaps just as significant as the declines was the sudden increase in volatility. Prices whipsawed by more than $10 Tuesday and $7 Wednesday ahead of the expiration of options contracts this week.
"I think anyone you talk to would have to be surprised by the magnitude of these huge price swings. This is extreme price volatility that no one can predict," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. Such large up-and-down swings, he added, can indicate the market is nearing its top.
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7 comments:
THREE FACTORS IN OIL'S PLUNGE
1. There has been real demand destruction in the oil market as a result of the high prices.
Demand has gone down dramatically in the United States -- the "break point" has been reached.
This is the supply and demand equation per Econ 101.
2. There is thought in the market that the United States is serious about increasing its own oil production, thus easing supply constraints.
3. The "Peak" oil boogyman is being exposed as a complete hoax. And, those knowledgeable about oil know that oil is a mineral that will not run out anytime soon.
New huge oil finds are being made in areas that promise more huge oil finds, such as the continental margins of the world.
The Oil Is Mastery website is spreading the news that oil is an abiotic mineral, not a remnant of organic detritus.
The "big people" from all over the world are reading the Oil Is Mastery website (let's hope).
Oil is a mineral.
One word: suckkkerrsss!
THE OIL "FEVER" HAS BEEN BROKEN IN THE FUTURES MARKET
Third day in a row that oil has dropped.
Watch out -- this could be a rock.
"The "Peak" oil boogyman is being exposed as a complete hoax."
While it is a hoax, who's exposing it? I don't see that anywhere in the media.
Hopefully people will begin to think for themselves and see the oil companies don't want oil to be seen as a mineral...The less there seems to be, the more money they can pillage from our pockets...
With their record profits, they can surely keep a well funded campaign going to ensure oil is seen as a fossil fuel.
More sites like this need to pop up and help educate people. Too many have fallen for the doomsday scenario depicted by "Peak Oil"....
IMO, it's not such a bad thing that oil prices have risen, as it has made investments into solar/wind/hydro power more economical. To me, every ray of sun, gust of wind, and movement of water that is not harnessed for it's power is a waste. If we invested in alternative energy like we invested in our military, we would probably be energy dependant by now, or even exporting it.
Dennis,
Good point. You are right.
I was stretching my efforts, but in the big scheme of things this website is a "drop in the ocean."
That's regrettable. I have made it my business to know the subject and have successfully debated those who advocate for "fossil" theory.
Yet, because "fossil" theory has been "beaten" into our heads since childhood and, today, strong constituencies have an agends to continue the belief in "fossil" theory, the challenge is that of Sisyphus, rolling the rock up the hill.
Yet, the more detailed, and scientific the arguments, and also readily understandable and concise, the better the chance for truth to win out in the end.
Maybe, I'm naive.
I suppose it depends on how important it is for others to spread the truth.
Thetruthisoutthere,
I appreciate your dedication to the truth. As I've said on Oil Is Mastery more than once: I support alternative energy.
An agenda that fears the truth or sees the truth as an obstacle, has something seriously wrong with it.
Myself, I see nothing incompatible between a correct understanding of nature -- and that's all Abiotic Theory is, and realizing energy from all the different sources that are out there for potential development.
A healthy economy can afford the research & development for alternative energy. There are many people, entrepeneurs, and investors committed to exploring alternative energy.
Oil will never be "cheap" again. There is simply too much demand world-wide for that to happen.
So, there is definitely room for other energy sources.
Actually, alternative energy helps keep petroleum prices in line.
If you want to suppress the truth because it's a threat to your agenda, isn't it time you "look in the mirror?"
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