Bloomberg has latest story about falling crude oil prices and stronger dollar: Crude Oil Falls on Minimal U.S. Storm Damage, Stronger Dollar
Crude oil fell for a fourth day as Hurricane Gustav caused minimal damage to refineries and rigs in the Gulf of Mexico and a strengthening dollar curbed the appeal of commodities as an inflation hedge.
The dollar’s gain is also prompting funds to lower their exposure to commodities, and another concern is demand as U.S. refiners are due to shut for maintenance soon.
Crude oil for October delivery fell as much as $1.20 to $108.51 a barrel. Prices are up 48 percent from a year ago. Yesterday, futures lost $5.75, or 5 percent, to settle at $109.71 a barrel, the lowest close since April 8. Oil, down more than $37 from its July record, dropped because Gustav inflicted less damage to states along the Gulf than occurred in 2005 when Hurricanes Katrina and Rita struck.
Royal Dutch Shell Plc, Total SA, ConocoPhillips and Valero Energy Corp. are among oil and gas producers, and refiners that have started initial inspections of facilities.
Oil’s 26 percent slide from its July 11 record of $147.27 a barrel is a symptom of an economic slowdown in the U.S. and Europe and may continue over the next six months, investor Marc Faber said yesterday in a Bloomberg Television interview.
New York crude oil yesterday breached the 200-day average as slowing economic growth and unprecedented fuel costs slash U.S. demand for oil products.
Oil prices are unlikely to drop below $100 a barrel because OPEC will cut production to support the price, billionaire hedge-fund manager Boone Pickens told CNBC yesterday.
Lower oil prices means up days for the stock market. Transport and retail sectors are benefiting from the drop in oil prices. Airline stocks have been bouncing higher for this reason. JBLU, LCC, NWA have such a surge in their stock prices. How long will the that last ? Its a guessing game.