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Thread: Oil rises above $85 as US jobs market improves

  1. #1
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    Oil rises above $85 as US jobs market improves

    Oil rises above $85 as US jobs market improves
    Apr 5, 6:59 AM (ET)

    By PABLO GORONDI
    Oil prices rose above $85 a barrel Monday, extending gains from last week as investors bet an improving U.S. job market will herald growing crude demand.
    By early afternoon in Europe, benchmark crude for May delivery was up 56 cents to $85.43 a barrel in electronic trading on the New York Mercantile Exchange, but down from a peak of $85.89 earlier in the session. On Thursday, the contract climbed up $1.11 to settle at $84.87 following a gain of $1.39 on Wednesday.
    Global oil trading was closed for the Good Friday holiday.
    Crude has jumped from $69 a barrel in early February on expectations a growing U.S. economy will eventually spark higher oil consumption.

    On Friday, the U.S. Labor Department said employers added 162,000 jobs in March, the largest job gain in three years. The unemployment rate stayed at 9.7 percent for the third straight month.
    "The market was positive before but now it's been confirmed," said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. "If the job growth can be sustained for several months, we'll definitely see crude demand pick up."
    Analysts, however, warned that the rise in oil prices caused by speculative investments could harm the recuperation of the global economy.
    "The last time we had oil prices at current levels, what followed was the worse recession ever and we will worry about what the combination of what is still high unemployment and higher fuel expenditure does to the economic recovery," said Olivier Jakob of Petromatrix in Switzerland. "On a fundamental basis we still do not see the indicators that would justify crude oil to trade at $90 a barrel."
    "We still expect that this technical rally will start to work its way against the economic recovery," Jakob said.
    Edward Meir, senior commodity analyst at MF Global in New York, said higher oil prices were part of an overall surge in the value of commodities, with investors betting that commodity prices will benefit as the global recovery picks up steam.
    "The flip side to this argument is that the rally has already discounted a recovery, and that continued gains, particularly in energy, could potentially slow growth down, increase inflation and interest rates, and in a worst case, short-circuit the very recovery markets have been banking on," Meir said.
    In the near term, nonetheless, oil prices will likely go higher.
    "Technically, there is very little resistance showing on the charts given the upside breakout evident, which means that prices will likely have to define their own tops at this stage," Meir said.
    In other Nymex trading in May contracts, heating oil rose 1.43 cents to $2.2310 a gallon, and gasoline gained 1.83 cents to $2.3420 a gallon. Natural gas fell 4.2 cents to $4.044 per 1,000 cubic feet.
    In London, Brent crude was up 36 cents at $84.37 on the ICE futures exchange.

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    This looks like the beginning of hyperinflation. Price increases based on nothing. Job market improving? My effing eye.

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    Senior Member DonTom's Avatar
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    Quote Originally Posted by swamprat View Post
    This looks like the beginning of hyperinflation. Price increases based on nothing. Job market improving? My effing eye.
    That's what I was thinking too. A .001% increase (or whatever it was) in the employment rate sounds like a good reason to jack up the prices. Even though that increase might just be because a lot of people's unemployment insurance has now ran out.

    But this is nothing new. Our economy has always ran on BS.

    -Don-

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    Quote Originally Posted by DonTom View Post
    That's what I was thinking too. A .001% increase (or whatever it was) in the employment rate sounds like a good reason to jack up the prices. Even though that increase might just be because a lot of people's unemployment insurance has now ran out.

    But this is nothing new. Our economy has always ran on BS.

    -Don-
    You got that right. My unemployment insurance is in the verge of running out as well. Pisses me the hell off.

    85 dollar oil is madness. I want to take those pinhead speculators and make them swallow their damned oil.

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    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by swamprat View Post
    You got that right. My unemployment insurance is in the verge of running out as well. Pisses me the hell off.

    85 dollar oil is madness. I want to take those pinhead speculators and make them swallow their damned oil.
    Unleaded regular is almost $3 per gallon here again....

    So, the price of a gallon of fuel (which means, the cost of driving) has roughly doubled since circa 2000 - but people's incomes have not risen to compensate; indeed with unemployment pushing 20 percent and many people having lost 40 percent of their net worth (crashed home equity values, 401k losses, etc.) the impact of this doubling of fuel/transportation costs is especially acute.

    I have no idea how the automakers are selling cars...

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    Quote Originally Posted by Eric View Post
    Unleaded regular is almost $3 per gallon here again....

    So, the price of a gallon of fuel (which means, the cost of driving) has roughly doubled since circa 2000 - but people's incomes have not risen to compensate; indeed with unemployment pushing 20 percent and many people having lost 40 percent of their net worth (crashed home equity values, 401k losses, etc.) the impact of this doubling of fuel/transportation costs is especially acute.

    I have no idea how the automakers are selling cars...
    Yeah. It completely sucks. I know that that the value of the dollar has tanked, but not as much as gas has increased. Gas in 2000 was 1.50-1.65, true. In 1997-1999 time period, gas was between 0.70 and 1.19 a gallon.

    Two things happened in 2000 - 1. Reformulated gas came into being, putting stress on overall refinery capacity and the ability to match supply in specific gasoline markets with demand. 2. The price of crude started inching up. In 1996-1999, oil was selling below 20 per barrel. In 2000, the price went to the high 20's for a bit.

    Excess oil production capacity began to tighten in the early 2000's.

    Fast forward to today, the dollar has devalued by about 40 percent and I believe that world production has peaked and China is sucking the hell out of oil right now.

    We are really screwed. I think that 85 buck oil is a bit high given the state of the economy- the real price should be around 60-70, which is still double what it was as early 2004.

    Things just suck.

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    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by swamprat View Post
    Yeah. It completely sucks. I know that that the value of the dollar has tanked, but not as much as gas has increased. Gas in 2000 was 1.50-1.65, true. In 1997-1999 time period, gas was between 0.70 and 1.19 a gallon.

    Two things happened in 2000 - 1. Reformulated gas came into being, putting stress on overall refinery capacity and the ability to match supply in specific gasoline markets with demand. 2. The price of crude started inching up. In 1996-1999, oil was selling below 20 per barrel. In 2000, the price went to the high 20's for a bit.

    Excess oil production capacity began to tighten in the early 2000's.

    Fast forward to today, the dollar has devalued by about 40 percent and I believe that world production has peaked and China is sucking the hell out of oil right now.

    We are really screwed. I think that 85 buck oil is a bit high given the state of the economy- the real price should be around 60-70, which is still double what it was as early 2004.

    Things just suck.

    I think its entirely possible the global elites who control the works have decided it's time to shift operations; that China and East Asia will be the new profit centers for them now that they have sucked the lifeblood out of the West.

    Note, for example, that GM is concentrating on China as its main market for Buicks. Porsche revealed the Panamera not in Europe or America... but in China.

    These are clues.

    Global political evolution is not happenstance. The West (and the US in particular) has been systematically deconstructed over the past 40 years. It is too consistent to be coincidental or accidental.

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