Crude oil plunged $2.77 a barrel in New York, the biggest decline in three months, on speculation that an Energy Department report will show U.S. inventories jumped last week as refiners unexpectedly shut units.
Crude-oil supplies in Cushing, Oklahoma, where oil traded in New York is delivered, surged 12 percent in the week ended March 30, Energy Department figures show. Fires and power outages have forced refiners to shut units, reducing crude-oil demand. Oil prices also fell because release of British naval personnel on April 5 eased concern of a supply disruption in the Persian Gulf.
``Crude oil is pulling everything lower,'' said James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. ``It looks like we will see record inventories in Cushing this week because of all of the refinery outages.''
This makes today's lackluster stock market that much more questionable. Stocks should have loved oil going lower, especially in conjunction with the jobs report from Friday. But the markets obviously weren't impressed enough to rally.
3 comments:
Here is a question that I can never get a satisfactory answer to.
If we look at the charts for crude oil prices and the price for a gallon of gas they seem to be inversely related over the last 6 months or so.
http://www.tfc-charts.w2d.com/chart/CO/M
http://www.gasbuddy.com/gb_retail_price_chart.aspx?time=24
I'm of the belief that the price at the pump is not related to market conditions. Are you aware of any research done on this? Books? I've been told of many reasons why i'm a conspiracist. However, last month there was an article on CNN about rising gas prices. An unnamed gas industry analyst said prices were going up because of daylight savings time. I find that very funny, but not believable. We've had headlights for some time now.
Any thoughts?
I need to correct that the Friday report was actually bearish for stocks, as the market was still anticipating rate cuts, which was a pipe dream.
I can understand the UK inciodend is a good thing - lowe rrisk.
But... if refineries are unable to process crude oil, then the over-supply is due to a kink in the processing of crude into refined products like gasoline. So the price of crude goes down, in part, because it cannot be refined at expected rates due to a drop in capacity.
That under capacity could increase short term gasoline prices and not help the economy.
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