Oil Prices Rocket Over $10 To a Record Above $138
http://www.cnbc.com/id/24993747
Topics:Israel | Iran | Economy (U.S.) | Economy (Global) | Energy | Commodities
Sectors:Oil and GasBy Reuters | 06 Jun 2008 | 01:07 PM ET Font size: Oil jumped more than $10 to a record over $138 a barrel Friday, extending a two-day rally to more than $15 on the slumping U.S. dollar and rising tensions between Israel and Iran.
Morgan Stanley forecast falling U.S. inventories could send U.S. crude to $150 a barrel by July 4 amid signs record high prices at the pump are already cutting into demand at the start summer vacation driving season in the world's top consumer.
U.S. light, sweet crude NYMEX CRUDE OIL FUTURES Front MonthUS%40CL.1
138.08 10.29 +8.05% BIS
Quote | Chart | News | Profile
[US@CL.1 138.08 10.29 (+8.05%)] swept past its previous record, as did London Brent crude IPE BRENT CRUDE Future Front Month CGB%40IB.1
137.4 9.86 +7.73% KRF - US
Quote | Chart | News | Profile
[GB@IB.1 137.4 9.86 (+7.73%)].
Oil has surged this year in part due to an influx of cash from investors seeking a hedge against the weaker dollar and inflation.
The greenback weakened against other currencies on data showing the U.S. economy lost jobs for the a fifth straight month and the unemployment rate shot up to its highest in more than three years.
The drop added to losses from Thursday when European Central Bank President Jean-Claude Trichet said a number of policymakers wanted higher interest rates -- possibly as soon as next month.
Further support came from remarks by Israel's transport minister that an attack on Iran's nuclear sites looked "unavoidable," the most explicit threat yet against Tehran from Prime Minister Ehud Olmert's government.
Worries of a potential disruption of the OPEC member's crude supply have helped support prices over the past year.
"We've had a huge historic rally on little fundamental input, other than the weakness of the dollar and the news this morning out of Israel that seems to have pushed some geopolitical risk premium back in the market," Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.
Morgan Stanley forecast the diversion of Middle East oil shipments away from the United States to Asian markets could push U.S. crude to a $150 a barrel by the U.S. July 4th holiday.
From 'Fast Money':
Airlines: Fuel Addicts in Recovery
"Middle East oil exports are stable, but Asia is taking an unprecedented share," Morgan Stanley said in a report, adding U.S. inventories have dropped by 35 million barrels since March.
"Robust Asian non-OECD demand growth, coupled with a stagnant global oil supply backdrop appears to be pricing out Atlantic basin consumerers while at the same time driving Atlantic inventories to critically low levels." The report added to a string of upward price forecast revisions by analysts, with Goldman Sachs in May predicting prices could tip $200 a barrel within the next two years.
RELATED LINKS
Blame Speculators, ECB's Trichet
Poll: Regulate Oil Trading?
Biggest Jumps in Oil Prices
Dollar Falls on Jobs Report
Check the Latest Energy Prices
Kilduff: Oil Prices Dampen Demand
India, Malaysia Raise Fuel Prices
A six-year rally in oil has sent prices up six-fold as demand from emerging economies such as China and India strain supplies.
High prices have started to eat away at global growth however, with some consumers such as the United States and the United Kingdom showing signs of lowering consumption.
Some Asian governments -- including India -- have decided to cut fuel subsidies, stirring concern rising prices could cut further into demand.
The International Energy Agency (IEA), an adviser to 27 industrialised countries, said it may cut issues its latest its 2008 demand growth projection further after having already more than halved it to 1.03 million barrels per day (bpd).
http://money.cnn.com/2008/06/06/markets/markets_newyork/index.htm?postversion=2008060613
Stocks tank on recession fears
Wall Street slumps, with the Dow down over 250 points on spiking crude prices, a weaker dollar and a rise in the unemployment rate.
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See all CNNMoney.com RSS FEEDS (close) By Alexandra Twin, CNNMoney.com senior writer
Last Updated: June 6, 2008: 1:46 PM EDT
Quick Vote
My job gives me…
HappinessSatisfactionA headacheA paycheck or View resultsWaiting for oil to peak
More VideosUnemployment hits minorities
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Jobless spike deepens economic pain
Oil's 2-day surge tops record
Bond-rating agencies agree to reforms
Household wealth drops by $1.7 trillion
Homes in foreclosure top 1 million
Issue #1 on CNN — This week, 12pm ET
NEW YORK (CNNMoney.com) -- A surprisingly weak May jobs report and a big spike in oil prices were among the factors pummeling stocks Friday afternoon, reviving worries about slow growth paired with higher inflation.
With about 2-1/2 hours left in the session, the Dow Jones industrial average (INDU) lost 270 points, a decline of 2.1%. The broader Standard & Poor's 500 (SPX) index lost 1.8%, as did the Nasdaq composite (COMP).
The unemployment rate shot up to 5.5% in May from 5% in April, the government said, in the biggest jump since 1986. Economists surveyed by Briefing.com thought unemployment would rise marginally to 5.1%.
"The jump in the unemployment rate really caught people by surprise," said Stuart Hoffman, chief economist at PNC Financial Services Group. He said the report makes it clear that at least for so-called Main Street and the labor market, "we are in a recession, regardless of how we economists define it."
He was referring to the fact that with GDP still limping higher, the economy is technically not in a recession as defined by at least two consecutive quarters of negative growth.
However, with non-farm payrolls dropping for a fifth consecutive month, it feels to many people like its a recession, he said. Employers cut 49,000 from their payrolls, the report showed, versus forecasts for a decline of 60,000.
As rattling as the unemployment number was, the stock market was perhaps even more spooked by the spike in oil prices, said Bill Stone, chief investment strategist at PNC Wealth Management. Crude has jumped over $14 in two sessions, with prices flirting with $138 a barrel Friday afternoon.
"I think more than anything, it's the shock of oil prices being up this substantially two days in a row," Stone said.
"You're definitely seeing a bit of the fear trade today, with the dollar down, commodity prices up and bonds rallying," he said.
Dollar falls, oil spikes: The dollar continued its slide versus the euro on the weak jobs report and comments Thursday that the European Central Bank could potentially raise interest rates.
The dollar's decline contributed to a rally in dollar-traded commodity prices, with U.S. light crude oil for July delivery rising as high as $137.70 a barrel in electronic trading before scaling back to trade at just over $137 a barrel, a jump of more than $9.
Should the spike hold up through the close, it would be the biggest single-day price gain since record-keeping began in 1983 - taking out the previous session's record.
Gold and other commodities jumped too. COMEX gold for August delivery rose $23.50 to $899 an ounce.
Gas backs off record: The national average price for a gallon of regular unleaded gas fell to $3.986 from the previous day's record of $3.989, AAA reported. Gas prices had set new records for 28 of the previous 29 days.
Other markets: Treasury prices rallied, lowering the yield on the 10-year note to 3.92% from 4.05% late Thursday. Bond prices and yields move in opposite directions.
On the move: Stock declines were broad based, with 29 out of 30 Dow issues falling. The lone gainer was Chevron (CVX, Fortune 500), which rose on the oil spike. The Dow's other oil stock, Exxon Mobil (XOM, Fortune 500), was barely changed.
The Dow's financial components were the biggest decliners, including AIG (AIG, Fortune 500), American Express (AXP, Fortune 500), Citigroup (C, Fortune 500) and JP Morgan Chase (JPM, Fortune 500).
AIG was under pressure on reports that the Securities and Exchange Commission is looking into whether the insurer overstated the value of contracts connected to subprime markets, something AIG denies. Additionally, it was reported that federal prosecutors have asked the SEC for material related to the investigation.
Stocks spiked Thursday on a surprise dip in weekly jobless claims, stronger-than-expected May retail sales and a merger in the telecom sector. But the advance was short lived as Friday's barrage of discouraging economic news and spiking oil prices brought out the sellers.
First Published: June 6, 2008: 9:48 AM EDT
http://www.cnbc.com/id/24993747
Topics:Israel | Iran | Economy (U.S.) | Economy (Global) | Energy | Commodities
Sectors:Oil and GasBy Reuters | 06 Jun 2008 | 01:07 PM ET Font size: Oil jumped more than $10 to a record over $138 a barrel Friday, extending a two-day rally to more than $15 on the slumping U.S. dollar and rising tensions between Israel and Iran.
Morgan Stanley forecast falling U.S. inventories could send U.S. crude to $150 a barrel by July 4 amid signs record high prices at the pump are already cutting into demand at the start summer vacation driving season in the world's top consumer.
U.S. light, sweet crude NYMEX CRUDE OIL FUTURES Front MonthUS%40CL.1
138.08 10.29 +8.05% BIS
Quote | Chart | News | Profile
[US@CL.1 138.08 10.29 (+8.05%)] swept past its previous record, as did London Brent crude IPE BRENT CRUDE Future Front Month CGB%40IB.1
137.4 9.86 +7.73% KRF - US
Quote | Chart | News | Profile
[GB@IB.1 137.4 9.86 (+7.73%)].
Oil has surged this year in part due to an influx of cash from investors seeking a hedge against the weaker dollar and inflation.
The greenback weakened against other currencies on data showing the U.S. economy lost jobs for the a fifth straight month and the unemployment rate shot up to its highest in more than three years.
The drop added to losses from Thursday when European Central Bank President Jean-Claude Trichet said a number of policymakers wanted higher interest rates -- possibly as soon as next month.
Further support came from remarks by Israel's transport minister that an attack on Iran's nuclear sites looked "unavoidable," the most explicit threat yet against Tehran from Prime Minister Ehud Olmert's government.
Worries of a potential disruption of the OPEC member's crude supply have helped support prices over the past year.
"We've had a huge historic rally on little fundamental input, other than the weakness of the dollar and the news this morning out of Israel that seems to have pushed some geopolitical risk premium back in the market," Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.
Morgan Stanley forecast the diversion of Middle East oil shipments away from the United States to Asian markets could push U.S. crude to a $150 a barrel by the U.S. July 4th holiday.
From 'Fast Money':
Airlines: Fuel Addicts in Recovery
"Middle East oil exports are stable, but Asia is taking an unprecedented share," Morgan Stanley said in a report, adding U.S. inventories have dropped by 35 million barrels since March.
"Robust Asian non-OECD demand growth, coupled with a stagnant global oil supply backdrop appears to be pricing out Atlantic basin consumerers while at the same time driving Atlantic inventories to critically low levels." The report added to a string of upward price forecast revisions by analysts, with Goldman Sachs in May predicting prices could tip $200 a barrel within the next two years.
RELATED LINKS
Blame Speculators, ECB's Trichet
Poll: Regulate Oil Trading?
Biggest Jumps in Oil Prices
Dollar Falls on Jobs Report
Check the Latest Energy Prices
Kilduff: Oil Prices Dampen Demand
India, Malaysia Raise Fuel Prices
A six-year rally in oil has sent prices up six-fold as demand from emerging economies such as China and India strain supplies.
High prices have started to eat away at global growth however, with some consumers such as the United States and the United Kingdom showing signs of lowering consumption.
Some Asian governments -- including India -- have decided to cut fuel subsidies, stirring concern rising prices could cut further into demand.
The International Energy Agency (IEA), an adviser to 27 industrialised countries, said it may cut issues its latest its 2008 demand growth projection further after having already more than halved it to 1.03 million barrels per day (bpd).
http://money.cnn.com/2008/06/06/markets/markets_newyork/index.htm?postversion=2008060613
Stocks tank on recession fears
Wall Street slumps, with the Dow down over 250 points on spiking crude prices, a weaker dollar and a rise in the unemployment rate.
EMAIL | PRINT | DIGG | RSS Subscribe to Markets
feed://rss.cnn.com/rss/money_markets.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) By Alexandra Twin, CNNMoney.com senior writer
Last Updated: June 6, 2008: 1:46 PM EDT
Quick Vote
My job gives me…
HappinessSatisfactionA headacheA paycheck or View resultsWaiting for oil to peak
More VideosUnemployment hits minorities
More Videos
Jobless spike deepens economic pain
Oil's 2-day surge tops record
Bond-rating agencies agree to reforms
Household wealth drops by $1.7 trillion
Homes in foreclosure top 1 million
Issue #1 on CNN — This week, 12pm ET
NEW YORK (CNNMoney.com) -- A surprisingly weak May jobs report and a big spike in oil prices were among the factors pummeling stocks Friday afternoon, reviving worries about slow growth paired with higher inflation.
With about 2-1/2 hours left in the session, the Dow Jones industrial average (INDU) lost 270 points, a decline of 2.1%. The broader Standard & Poor's 500 (SPX) index lost 1.8%, as did the Nasdaq composite (COMP).
The unemployment rate shot up to 5.5% in May from 5% in April, the government said, in the biggest jump since 1986. Economists surveyed by Briefing.com thought unemployment would rise marginally to 5.1%.
"The jump in the unemployment rate really caught people by surprise," said Stuart Hoffman, chief economist at PNC Financial Services Group. He said the report makes it clear that at least for so-called Main Street and the labor market, "we are in a recession, regardless of how we economists define it."
He was referring to the fact that with GDP still limping higher, the economy is technically not in a recession as defined by at least two consecutive quarters of negative growth.
However, with non-farm payrolls dropping for a fifth consecutive month, it feels to many people like its a recession, he said. Employers cut 49,000 from their payrolls, the report showed, versus forecasts for a decline of 60,000.
As rattling as the unemployment number was, the stock market was perhaps even more spooked by the spike in oil prices, said Bill Stone, chief investment strategist at PNC Wealth Management. Crude has jumped over $14 in two sessions, with prices flirting with $138 a barrel Friday afternoon.
"I think more than anything, it's the shock of oil prices being up this substantially two days in a row," Stone said.
"You're definitely seeing a bit of the fear trade today, with the dollar down, commodity prices up and bonds rallying," he said.
Dollar falls, oil spikes: The dollar continued its slide versus the euro on the weak jobs report and comments Thursday that the European Central Bank could potentially raise interest rates.
The dollar's decline contributed to a rally in dollar-traded commodity prices, with U.S. light crude oil for July delivery rising as high as $137.70 a barrel in electronic trading before scaling back to trade at just over $137 a barrel, a jump of more than $9.
Should the spike hold up through the close, it would be the biggest single-day price gain since record-keeping began in 1983 - taking out the previous session's record.
Gold and other commodities jumped too. COMEX gold for August delivery rose $23.50 to $899 an ounce.
Gas backs off record: The national average price for a gallon of regular unleaded gas fell to $3.986 from the previous day's record of $3.989, AAA reported. Gas prices had set new records for 28 of the previous 29 days.
Other markets: Treasury prices rallied, lowering the yield on the 10-year note to 3.92% from 4.05% late Thursday. Bond prices and yields move in opposite directions.
On the move: Stock declines were broad based, with 29 out of 30 Dow issues falling. The lone gainer was Chevron (CVX, Fortune 500), which rose on the oil spike. The Dow's other oil stock, Exxon Mobil (XOM, Fortune 500), was barely changed.
The Dow's financial components were the biggest decliners, including AIG (AIG, Fortune 500), American Express (AXP, Fortune 500), Citigroup (C, Fortune 500) and JP Morgan Chase (JPM, Fortune 500).
AIG was under pressure on reports that the Securities and Exchange Commission is looking into whether the insurer overstated the value of contracts connected to subprime markets, something AIG denies. Additionally, it was reported that federal prosecutors have asked the SEC for material related to the investigation.
Stocks spiked Thursday on a surprise dip in weekly jobless claims, stronger-than-expected May retail sales and a merger in the telecom sector. But the advance was short lived as Friday's barrage of discouraging economic news and spiking oil prices brought out the sellers.
First Published: June 6, 2008: 9:48 AM EDT
Last edited:
