Dollar fear sparks rush to oil and gold The $100-a-barrel level was reached as the result of a single trade by two independent traders - known as locals - at the Nymex floor, industry sources said. Before the trade, oil prices were at $99.53 a barrel. In spite of the controversy about the single trade, crude oil closed up $3.64 at $99.62 a barrel in New York. The White House said President George W. Bush would not tap the Strategic Petroleum Reserve and was focused on other ways to boost US oil supplies.
The $100-a-barrel level was reached as the result of a single trade by two independent traders - known as locals - at the Nymex floor, industry sources said.
Before the trade, oil prices were at $99.53 a barrel. In spite of the controversy about the single trade, crude oil closed up $3.64 at $99.62 a barrel in New York. The White House said President George W. Bush would not tap the Strategic Petroleum Reserve and was focused on other ways to boost US oil supplies.
It was not the omnipotent Market if it was only two lousy traders (which have now been fired, lol) In the long run, we're all dead. John Maynard Keynes
Sounds like someone had a bet working and got off a one lot trade before anyone else could respond. Bit tacky to trade through the other offers. Surprised the NYMEX didn't kick the trade out.
No biggy. We're basically there ($100)
For 2008, I'm betting lower though with GWB in the White House screwing up all over the world, any sort of political mess could keep things on a boil. But if his recession comes, we go lower.
If there is a recession, how low is "lower"? We have met the enemy, and he is us — Pogo
I could see the Saudis tolerating $60-75 if they see evidence higher prices are leading to real acceleration of shifting to alternatives. They're smart enough to know that once people shift, they won't come back.
If we have a serious worldwide recession such that demand drops back to say 70 MMBD from current 80-84 range, we could go even lower as at that level Saudi and Kuwait could turn off their entire production and there would still be a surplus. OPEC had that size drop in the pull of their production in the 80's which led to oil going from $40 to $10 (say $100---$25 now).
http://www.wtrg.com/oil_graphs/PAPRPOP.gif
Odds of that happening??? got me.
The fact that $100 oil when it came, was as a result of an apparently manipulative "high tick" trade by locals just about sums up the current system, which is run by intermediaries, for intermediaries...
I'll believe NYMEX (which has always been run by locals for locals) takes compliance seriously the moment they start videotaping the trading floor, which was the first thing I introduced when I started as Head of Compliance at IPE 17 years ago. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
