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Home Front Economy
Oil prices down again, Lehman out of that market
2008-09-17
Crude oil prices plunged again today, falling below $91 a barrel at one point this morning as traders and investors worried about lower oil demand from a weakened economy and the prospect that troubled financial firms would curtail oil trading or liquidate positions. The dip in prices follows a 5.4 percent drop yesterday that brought the cost of oil below $100 a barrel for first time since Feb. 15.

Early this morning, oil prices fell to $90.83 on the New York Mercantile Exchange, although they crept back up as the morning advanced. It settled today at $91.15 a barrel. Crude oil prices on the New York Mercantile Exchange fell $5.47, to $95.71 a barrel yesterday, continuing a two-month retreat. The prices of other commodities also fell but much more modestly.

The price drop is tied to the tumult on Wall Street. "The fear is that the sharp deterioration of the banking crisis in the U.S. will spread to the real economy and demand for oil," Carsten Fritsch, a Commerzbank AG analyst in Frankfurt, told Bloomberg News.
Posted by:Steve White

#8  I can't wait for Congress to investigate what they created and treated with no oversight. Bring it on Barney and Chris - you weasels. What we need is a special prosecutor to look into Frank and Dodd and their relationships with Fannie Mae, Freddie Mac, Countrywide and the thing called Community Development Act.
Posted by: Jack is Back!   2008-09-17 12:22  

#7  The problem with the hedge funds is that they weren't hedging. Hedge Fund became a code word for very risky (but potentially profitable) transactions.

Posted by: Frozen Al   2008-09-17 11:44  

#6   lower oil demand from a weakened economy

Also lower demand because tankers could not get to/refineries could not take crude on the Gulf Coast. Tankers could sometimes divert loads elsewhere, but would have to undercut previous supplies to make the sales. But it beats driving around in circles burning money.
Posted by: Glenmore   2008-09-17 10:40  

#5  There were people running around writing articles about why we shouldn't blame the traders and hedge funds for the price of oil a few months ago.
Liars, every one of them. The price is sinking fast in the same world of hurricanes and political turmoil. It was them all along, and I think they are finally getting what they have coming to them.
Posted by: bigjim-ky   2008-09-17 10:31  

#4  
I wonder how many of these investment firms are having troubles because of the drop in commodities, especially oil?

I'm wondering how much of the drop in oil prices is due to the fact that these guys have financial problems.
Posted by: Fred   2008-09-17 09:46  

#3  I suspect most of these firms bought commodities while they where still very low and kept purchasing on the way up in some cases. However, they've been selling on the way down, so I suspect even at these prices they're still in the black.
Posted by: Mike N.   2008-09-17 01:11  

#2  I wonder how many of these investment firms are having troubles because of the drop in commodities, especially oil?

I've wondered for a while but this is the first mention I have seen. Someone had to lose when they dropped and perhaps now we know who.
Posted by: tipover   2008-09-17 01:04  

#1  The bottom of the bear approaches! The more bad news the better!

And we're not finished hearing about Legman, unfortunately. They have some tax troubles and will have a starring roll in a Senate investigation.
Posted by: Mike N.   2008-09-17 00:44  

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