Date registered: Aug 2005
Location: Lawrence, KS (USA)
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Gas could fall to $2 if Congress acts, analysts sayThis is a bit more esoteric, but still relevant.
Limiting speculation would push prices to fundamental level, lawmakers told
By Rex Nutting & Michael Kitchen, MarketWatch
Last update: 4:24 p.m. EDT June 23, 2008
WASHINGTON (MarketWatch) -- The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday.
Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.
Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters' assessment at a hearing on proposed legislation to limit speculation in futures markets.
Krapels said that it wouldn't even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets.
"Record oil prices are inflated by speculation and not justified by market fundamentals," according to Gheit. "Based on supply and demand fundamentals, crude-oil prices should not be above $60 per barrel."
Futures trading in London has not been a major factor in rising oil prices, testified Sir Bob Reid, chairman of the Chairman of London-based ICE Futures Europe. Rising prices are largely a function of fundamental supply and demand, not manipulation or speculation, he said.
"Energy speculation has become a growth industry and it is time for the government to intervene," said Rep. John Dingell, D-Mich., chairman of the full committee. "We need to consider a full range of options to counter this rapacious speculation." It was Dingell's strongest statement yet on the role of speculators.
Perceptions of supply shortfall keep oil prices highSupply....demand....hmmmmmmmmm...........
Market is discounting new supplies and slowing demand, CERA says
By Laura Mandaro, MarketWatch
Last update: 6:31 p.m. EDT June 25, 2008
SAN FRANCISCO (MarketWatch) -- A "shortage psychology" in oil markets is overshadowing news of fresh discoveries and falling demand to drive oil prices to record levels, the head of influential energy consultancy Cambridge Energy Research Associates said Wednesday.
"A lot of what's going on in financial markets is not just looking at Nigeria but looking at the shortfall in supply three, five years down the road," said Daniel Yergin at a Senate Joint Economic Committee hearing in Washington, which was Webcast.
Investors are viewing future oil supplies through the prism of expected high-demand growth in China and India, which "tends to be the end of all discussions," he added.
These concerns -- that global oil supplies won't be able to keep up with the rapid industrialization and consumer-spending growth of emerging markets -- are overshadowing other fundamental factors that would typically dampen oil prices.
These include discoveries of potentially large oil fields in Brazil and a drop in some developed countries' demand for oil, which tend to be "discounted" by the market, according to Yergin.
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|What you have to say now? Jay||elau||Off-Topic||51||03-07-2008 01:50 PM|
|Uh-Oh......Jay is not going to be happy about this..........||Jakarta Expat||Off-Topic||7||02-01-2008 07:58 PM|
|Jay, got that sheet yet? :-)||Max||R170 SLK-Class||1||10-10-2002 03:47 AM|
|As much as I wish I were Jay Huang, alas I am only Jay Y (my latest photos - kinda large pic)||Jason Y||R170 SLK-Class||17||06-08-2001 12:11 PM|
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