oil is in a free fall ?

[Erikthered]

It feels like oil is in a free fall, after prices dropped to 126 dollars per barrel in late New York trading. Most traders are selling the black gold, after a slow down in demand was seen from the US consumer over Memorial weekend. It seems like the 4+ dollars per gallon has consumers saying no more. We are expecting oil to fall below 125 by the end of Friday.

The FTSE is currently indicating a slightly higher open, mostly on the strength of the Japanese markets. We are expecting a low volume trading day, as most of the important economic announcements were already released this week. The only thing of note is at 12.30 GMT when US releases its Personal Consumption numbers. There is risk that they will come in lighter then expected, this will result in a sell off on the US equity side.

 

[arabianights]

$125.62 now...

 

[Directional]

It seems like the 4+ dollars per gallon has consumers saying no more.

$4 a gallon?? you guys dont know how good you've got it. Try paying $11 a gallon, like we do here in the UK already.

 

[arabianights]

Just wait till cable hits $1.75 :'(

 

[MrGecko]

Platts

Pretty good info for free; excellent info (and data) for an arm and a leg - I think you can get it as an option on some newswires.

 

[Directional]

These short term moves have been less to do with consumers (i.e. demand side of curve) than they have supply (i.e., erm.....supply side).

exactly. you could say British consumers had had enough of paying $6 a gallon at the pump five years ago... the fact is, if you need to drive somewhere, you have to buy fuel and you'll pay whatever the price is at the pump. You dont have a choice, unless you plan to get your cycle out, which for most journey's isnt really an option.

 

[gooseman]

i still think we're heading north from here-this is just a short term respite. there are problems from the supply side, the spare capacity and from the fact that we have real refining capacity problems. crack spreads are pretty hot. perhaps with the summer coming we may continue to see short-term weakness but I am still fairly bullish.

for info i priced a $250 call for Novy last week.

 

[arabianights]

I am now starting to build a kick-@ss set of RSS feeds

 

[RPEX]

oil's rebounding, 'trade the news' is pretty on point with energy and macro news, it's a bit of a rip off though. I see there's quite a few new services doing this audio news thing.

Do you guys have an opinion on the causes on the sustained fall in crude prices from September 06 - about jan 07 ? At the time my uni lecturer gave us some weird but prolific story relating to the Hotelling model of natural resources (1931!), which related rates of price changes to long run global interest rates (i'm talking really long run). Personally i feel inclined to plough my life savings into the crude ETF, but the 06-07 scenario scares me.

 

[Directional]

for info i priced a $250 call for Novy last week.

what was the delta on that?

 

[gooseman]

lets just say small.....