Meltdown

[BachQ]

Price of oil .........


1 year live DOW chart


















11 July 2008

Oil sets new record= 147.27

http://www.iht.com/articles/ap/2008/07/11/business/EU-Oil-Prices.php



26 June 2008


Oil Surges to $140/bbl for the 1st Time




Return of the Credit Market Collapse



Don't look now, but its back. Swept back upon the rocky shores and thrown harshly against the rocks by a vicious tide, the banks' shares are once again moving to new multi-year lows. Of course, the news is horrible, but the price action of financial shares suggests there is far worse yet to come.  ... [T]he monumental credit crunch sweeping the globe ... is the proverbial elephant in the middle of the room that few like to talk about, and which once again in the last few days has passed another major round of gas. To begin with, we note that for the first quarter 2008, Banks' earnings fell by 46% to $19.30 billion with the number of officially reported 'problem' banks jumping from 76 to 90. In the first quarter, US Banks set aside a record $37.1 billion to cover losses, however, even government regulators don't believe that will be enough to stave off further problems. According to Sheila Bair, Chairwoman of the FDIC, Federal Deposit Insurance Corporation, loan-loss provisions and bank failures will likely continue to rise in coming quarters. "While we may be past the worst of the turmoil in the financial markets (ed. Don't count on it) we're still in the early stages of the traditional credit crisis you typically see during an economic downturn" stated Ms. Bair.  (continued....)







Dear Reader,   

"Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, bankers, and investors in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global Peak Oil."








Oil hits record high above $125 a barrel
Published: Friday, May 09, 2008
LONDON (Reuters) - Oil hit a record high above $125 a barrel on Friday, boosted by strong demand for diesel, concern about supplies and a renewed bout of buying by investment funds.  U.S. crude oil hit a record high of $125.10 a barrel, but by 6:24 a.m. EDT (1024 GMT), it handed back some gains and was trading $1.28 higher at $124.97.






Oil Rockets $4 to Record Over $120
Mon May 5, 2008 3:34pm EDT
By Matthew Robinson


NEW YORK (Reuters) - Oil jumped more than $4 to a record high over $120 a barrel on Monday on the weaker U.S. dollar and supply concerns from OPEC members Nigeria and Iran.





Oil prices, gasoline costs to double: CIBC report
SHAWN MCCARTHY
Globe and Mail Update
April 24, 2008 at 11:17 AM EDT


OTTAWA — Crude oil prices will soar to more than $200 (U.S.) per barrel over the next five year – driving Canadian pump prices to $2.25 a litre and forcing a fundamental transformation in the North American economy, says Jeff Rubin, chief economist with CIBC World Markets Inc. ... "Whether we are already at the peak of world oil production remains to be seen, but it increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity," the economist said.  World oil production has essentially stagnated at about 85-million barrels per day over the last two years, with growing demand met by increases in natural gas liquids, a fuel source that is used by the petrochemical industry but is of little use for transportation.  Mr. Rubin said he expects crude oil production to grow by about 1-million barrels per day over the next several years. Meanwhile, growing demand in China, India, Russia and the Middle East will more than offset declines in the industrialized world.

"Millions of new households will suddenly have straws to start sucking at the world's rapidly shrinking oil reserves," he wrote.  He said the sharply higher oil prices will prove devastating for the North America's industrial base, particularly the auto industry. But Canadians will benefit from the spinoffs, in terms of jobs, tax revenues and procurement, from the country's oil-rich provinces.




Oil surge continues, price hits $117 US

Last Updated: Friday, April 18, 2008 | 2:07 PM MT CommentsRecommendCBC News
Oil prices reached another new high on Friday as crude hit $117 US a barrel.

The price of oil for May touched its new peak in electronic after-hours trading on the New York Mercantile Exchange. During the regular trading, oil closed at $116.69 US, which was up $1.83 from Thursday's close.







Oil hits record high, weak dollar supports
April 15

By Randy Fabi

LONDON (Reuters) - Oil advanced to a lifetime peak above $112 a barrel on Tuesday as investors sought to hedge against a battered dollar.  U.S. crude rose 39 cents to $112.15 a barrel at 6:00 a.m. EDT, after touching a record high of $112.48 earlier in the session.  Oil is up 17 percent from the start of the year and is averaging near $100.




Oil roars to record over $112 on U.S. inventory drop



Wed Apr 9, 2008 6:24pm EDT
By Matthew Robinson

NEW YORK (Reuters) - Oil surged to a record high over $112 a barrel on Wednesday after a government report showed a sharp drop in U.S. inventories ahead of the summer driving season.







Oil heading for $US135: Barclays



Nigel Wilson, Energy writer | April 03, 2008

THE price of crude oil could easily reach $US135 a barrel, international analysts say.






Oil hits record of $111 on dollar slump
Thu Mar 13, 2008 11:53am EDT
By Ikuko Kao

LONDON (Reuters) - Oil rose to a fresh record high on Thursday, hitting new peaks for the seventh trading day, as a weak dollar overshadowed an increase in U.S. crude inventories. U.S. crude for April delivery struck a new high of $111.00 a barrel.







Dollar falls below 100 yen, hits record low vs euro
Thu Mar 13, 2008










Oil Rises Above $110 to Record as the Dollar Falls Against Euro
By Mark Shenk

March 12 (Bloomberg) -- Crude oil rose above $110 a barrel to a record in New York after the dollar weakened to an all-time low against the euro, prompting investors to buy commodities.  The dollar fell to $1.556 per euro, the lowest since the currency's 1999 debut. The declining U.S. currency has spurred investors to move funds into commodities such as oil and gold. Prices fell earlier after a government report showed that U.S. oil and gasoline supplies rose.




Gas Prices Jump, Oil Hits $110
By JOHN WILEN – 2 hours ago

NEW YORK (AP) — Gasoline and oil prices keep setting new records. The price of regular gas at the pump is now at a national average of nearly $3.25 a gallon. And on the futures markets, oil prices have reached a record over $110, rising in response to the dollar's continuing slide.  Pump prices are following crude's recent surge, and could rise as high as $3.75 a gallon this spring, analysts say. Meanwhile light, sweet crude for April delivery has reached a new trading record of $110.20. Traders shrugged off a government report showing another increase in crude oil inventories, a report that in the past would have sent prices falling.









Oil sets record high for fifth day
Tue Mar 11, 2008 7:52am EDT
By Jane Merriman

LONDON (Reuters) - Oil rose to a record high for the fifth day in a row on Tuesday, boosted by investor flows into oil and other commodities partly to hedge against inflation and the weak dollar.

U.S. light crude for April delivery was up 85 cents at $108.75 a barrel by 6:48 EST, after touching a record $109.20 a barrel.











Oil soars to record above $107
Mon Mar 10, 2008 5:01pm GMT
By Daniel Fineren



LONDON (Reuters) - Oil sped to a record high above $107 a barrel on Monday ... Fears of recession, following the biggest U.S. job losses in five years and strains in the credit market, have depressed equities and the dollar while prompting many investors to seek safety in commodities including oil. *** OPEC President Chakib Khelil was quoted on Monday as saying that speculation and political tension would keep prices at triple digits through the year.






Oil hits record near $106 on dollar, OPEC, supply
Thu Mar 6, 2008 6:49am EST
By Ikuko Kao



LONDON (Reuters) - Oil hit a record high near $106 on Thursday




NEW YORK TIMES

March 3, 2008
Oil Prices Pass Inflation-Adjusted Record
By JAD MOUAWAD
Setting an all-time record, oil prices rose to nearly $104 a barrel on Monday morning, exceeding their inflation-adjusted high reached in the early 1980s during the second oil shock. ... Today's record oil prices are markedly different from the energy crises of the 1970s and 1980s, which were brought about by sudden interruptions in oil supplies.  Since the year 2000, oil prices have more than quadrupled as strong growth in demand from the United States and Asia outstripped the ability of oil producers to increase their output.







Oil breaks $100, hits new all-time high
Crude soars as investors weigh the possibility of OPEC production cuts; Texas refinery explosion may have also lifted prices.
February 19 2008: 3:28 PM EST
NEW YORK (AP) -- Oil prices hit new record highs Tuesday as a Texas refinery fire and fears of an OPEC production cut pushed crude to settle at over $100 a barrel for the first time ever.



Bloomberg.com Jan 07, 2008

Oil $200 Options Rise 10-Fold in Bet on Higher Crude (Update2)

By Grant Smith

Jan. 7 (Bloomberg) -- The fastest-growing bet in the oil market these days is that the price of crude will double to $200 a barrel by the end of the year. Options to buy oil for $200 on the New York Mercantile Exchange rose 10-fold in the past two months to 5,533 contracts, a record increase for any similar period. The contracts, the cheapest way to speculate in energy markets, appreciated 36 percent since early December as crude futures reached a record $100.09 on Jan. 3. ... ``One hundred dollars a barrel is actually 14.9 cents a cup, so we're still talking about oil being remarkably cheap,'' said Matthew R. Simmons, chairman of Simmons & Co. International, a Houston-based investment bank that focuses on energy. Inventories ``are tight as a drum and I don't see how we get out of this box,'' he said in a Bloomberg television interview last week. ``Demand clearly isn't starting to slow down.'' 

Reuters

Oil hits record $100 a barrel
Wed Jan 2, 2008 6:13pm EST
By Richard Valdmanis

NEW YORK (Reuters) - Oil prices vaulted to a record $100 a barrel on Wednesday as violence in Nigeria, tight energy stockpiles and a weaker dollar triggered a surge of speculative buying, dealers said.




Oil prices end at a record high
Declining inventories, potential trouble with Turkey and projections for a colder winter push crude to $83.69 a barrel
By Steve Hargreaves, CNNMoney.com staff writer
October 13 2007: 8:55 AM EDT


NEW YORK (CNNMoney.com) -- Oil prices settled at a record high Friday on news of dwindling stockpiles, potential trouble with Turkey and projections for a colder winter. U.S. crude for November delivery rose 61 cents to settle at $83.69 a barrel on the New York Mercantile Exchange, after hitting a fresh trading high of $84.05 a barrel earlier in the session. The previous settlement record was $83.32 set Sept. 20.





Oil Rises Above $83 as Sliding Dollar Spurs Commodities Demand

Sept. 28 (Bloomberg) -- Crude oil rose above $83 a barrel in New York, set for its biggest monthly gain in three years, as the sliding dollar drew investors to commodities.



Oil surpasses $83 per Barrel
Crude Futures Surpass $83 a Barrel, Driven Largely by Weakening DollarThe Associated Press By JOHN WILEN AP Business Writer
NEW YORK Sep 20, 2007 (AP)

Crude oil prices surged further into record terrain Thursday, breaching $83 a barrel as the weak dollar and some worrisome weather in the Gulf of Mexico spurred buying. Gasoline futures jumped as well.

[karlhenning]

Yes, we had to refill the heating oil tank this week.

[BachQ]

Euro breaks $1.40 barrier
Dollar could weaken further as lower interest rates give U.S. investors a lower return on investments.
September 20 2007: 1:54 PM EDT


FRANKFURT, Germany (AP) -- The dollar took another fall on currency markets Thursday, reaching one-to-one parity against the Canadian dollar for the first time in 30 years and plumbing a new low against the 13-nation European currency.

The dramatic half-point cut in U.S. interest rates announced this week, while aimed at shoring up U.S. credit markets, also had the effect of further weakening the dollar versus other currencies by reducing the cash yield on dollars. A lower dollar can make travel more costly for U.S. residents and can also pose the risk of making imported goods more expensive over time.

The euro breached the $1.40 barrier against the dollar on Thursday. That level had long been seen as a key benchmark in terms of solidifying the euro's position on currency markets and giving it momentum toward becoming a reserve currency of choice - a position long held by the now-weakening dollar.

The 13-nation euro bought as much as $1.4064 in morning trading in Europe before falling back slightly to $1.4040, above its previous high Wednesday night of $1.3987, and more than the $1.3964 it bought in late New York trading.

The dollar also fell against other currencies, reaching parity with the Canadian dollar for the first time since November 1976. One U.S. dollar now buys one Canadian dollar.

David Jones, chief market analyst at CMC Markets in London, said the euro's rise is not likely to abate in the coming days, given fears about another interest rate decrease in the United States.

Dollar sinks to lifetime low versus euro

[BachQ]

Yes, we had to refill the heating oil tank this week.

You should have done it last week! 

[karlhenning]

Should have, but it was not possible . . . .

[bwv 1080]

Time to break out the Drive 90 - Freeze a Yankee bumper stickers again.

[dtwilbanks]

Time to break out the Drive 90 - Freeze a Yankee bumper stickers again.

Hey!

[karlhenning]

In Red Sox Nation, freezing Yankees sounds just wicked!

[bwv 1080]

Freeze A Yankee,
drive 75 and freeze them alive
Freeze a Yankee,
Let your thermostat rise and give them a surprise.

Governor Briscoe promised us
that if any damn Yankee raised a fuss,
He'd turn off the gas, cut the oil,
and let them all freeze and boil.

They don't want an oil rig
around their seashores,
Lord, it's a terrible sight.
And don't you try to drill
in their dirty old water
if you do you're in for a fight.

Senator Kennedy told me himself
That he wouldn't let a drill
on the continental shelf.
So, when they tried to get
Texas to drill another well
We could tell them all to go to ......
Hyannis port.

Now, President Carter was a good ole boy,
A southerner thru and thru,
But when he asked
all American's to sacrifice,
He really meant ...you know who.

He want's all our oils
And our nuclear fuels
What does he take us for?
Silly fools?

Freeze A Yankee,
drive 75 and freeze them alive
Freeze a Yankee,
Let your thermostat rise and give them a surprise.

Governor Briscoe promised us
that if any damn Yankee raised a fuss,
He'd turn off the gas, cut the oil,
and let them all freeze and boil.

Cram them Yankee's in little bitty cars
While we drive around in limousines.
There ain't nothing in the world any more fun,
Then pumpin' gas in those big Mochines.

Us Texan's love our Cadillac's,
Big Continental's and Pontiac's.
We're gonna keep all the gas we can make
And let them Yankee's shiver and shake.

Well, them Yankee's say they need our oil
And they gotta have gasoline,
But don't you put no refineries way up north,
They wanna keep their air real clean.

They only got enough Ignite
To last until midnight.
Not enough fuel
to keep their mirrors cool.

Freeze A Yankee,
drive 75 and freeze them alive
Freeze a Yankee,
Let your thermostat rise and give them a surprise.

Governor Briscoe promised us
that if any damn Yankee raised a fuss,
He'd turn off the gas, cut the oil,
and let them all freeze and boil.

Save your confederate credit card,
The south wanna rise again

[BachQ]

Gold hits 28-yr high on dollar fall

By Frank Tang and Atul Prakash

NEW YORK/LONDON (Reuters) - Spot gold prices surged to a 28-year high in European trade on Thursday as the dollar sank to an all-time low against the euro and new highs in crude oil bolstered inflation concerns.

Gold rose more than 2 percent to $738.30 an ounce, its highest since January 1980, when it hit a record high of $850. By 3:09 p.m. EDT, bullion was quoted at $734.50/735.30, compared with $721.10/721.90 in New York late on Wednesday.

Most-active December gold on the COMEX division of the New York Mercantile Exchange settled up $10.40 or 1.4 percent at $739.90 an ounce, dealing between $728.90 and $746.50 which marked the loftiest level since 1980.

"The market was in two minds yesterday, jumping between $722 and $726, but the euro's push through $1.40 against the dollar gave the market fresh impetus to break up again," said Tom Kendall, metals strategist at Mitsubishi Corporation in London.

Bill O'Neill, a partner in commodity consultant LOGIC Advisors in Upper Saddle River, New Jersey, said that the Fed's latest rate cut reignited investor fears about inflation and extended support to gold.

U.S. crude broke above the record $84 a barrel in afternoon trading. Oil prices have been rising sharply this week on U.S. supply concerns and storm worries.

Gold is usually seen as a hedge against inflation.

[DavidW]

Let me ask a dumb question-- why has the dollar became so weak in the past few years?

[Lilas Pastia]

There are many reasons, but it mostly has to do with other currencies finally reflecting their stronger underlying economies. IOW other currencies were neglected. Instead of saying the US$ has gone down, you could say that the other currencies have gone up. Investors have decided not to put all their eggs in the same basket.

In the case of the canadian dollar, it hit parity with the USD today, for the first time since 1976. Five years ago, it stood at 0.62 USD. That's a 61% appreciation. Much of that is simply reflecting higher natural resources prices (oil, gas and metals). More and more traders see the CAD as a resource-backed currency. If ever the demand for resources goes down, the CAD will fall rapidly.

Gold is traditionally seen as a refuge in times of inflation or political instability (oil crisis, wars). However, it used to hold this spot in tandem with the USD. The greenback is not seen as a safe place anymore. So US$ holders are selling the greenback and buying more gold, sending it higher.

When you combine all these effects you realize that all major currencies are now fairly priced against each other.

[BachQ]

There are many reasons, but it mostly has to do with other currencies finally reflecting their stronger underlying economies.

Also:

--  Artificially low US interest rates (the lower borrowing costs imposed by the Federal Reserve yesterday will lessen the global appetite for dollar-denominated assets like stocks, bonds, real estate)

--  Huge US trade deficit (imports>exports) (i.e. USA spends US dollars to buy products from China, thereby flooding the world with an excess supply of dollars)

--  US is in debt to foreign countries (Japan, China especially)

-- weakening US economy & retreating consumers & a fucked-up president named GWB



However, I'm not sure what the relationship is between US inflation and US dollar value.  Anyone?  Anyone?

[bwv 1080]

However, I'm not sure what the relationship is between US inflation and US dollar value.  Anyone?  Anyone?

Inflation will weaken a currency - just look at the various hyperinflation examples such as Weimar Germany and 80's Brazil.

[BachQ]

Inflation will weaken a currency - just look at the various hyperinflation examples such as Weimar Germany and 80's Brazil.

Well, the US inflation rate is incredibly low, especially in light of high oil prices ....... so why isn't the value of the dollar increasing with such low inflation?

[Gurn Blanston]

Time to break out the Drive 90 - Freeze a Yankee bumper stickers again.

(Mine's already on.   )

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Now playing: K 423  Duo #1 in G for Violin & Viola - Grumiaux / Pellicia - K 423  Duo #1 in G for Violin & Viola 1st mvmt - Allegro - 07

[BachQ]

Gurn, what about inflation?

[bwv 1080]

Well, the US inflation rate is incredibly low, especially in light of high oil prices ....... so why isn't the value of the dollar increasing with such low inflation?

It is relative rates of inflation that drive currency prices, so while inflation is low in the US, it is as low or lower around the world.  Commodity prices have little to do with inflation.  Inflation is, as Friedman put it, always and everywhere a monetary phenomenon.  It is the result of an increase in the supply of money relative to the available goods and services.  With no expansion in the money supply, a rise in the price of a commodity like oil will have to be compensated for by a combination of reduced demand and reduced spending in other areas.  If the price of gas doubles and your paycheck remains the same you have to either drive less, cut spending somewhere else, or go into debt. 

[Gurn Blanston]

Gurn, what about inflation?

Steve's explanation works for me. In addition, I don't worry much about things I have little or no control over.



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Now playing: Clementi: Complete Symphonies (Disc 1) - Philharmonia Orchestra & Francesco D'avalos - Symphony No. 1 in C - 1st mvmt - Larghetto - Allegro - 09/16

[Dungeon Master]

Yes, we had to refill the heating oil tank this week.

Wow - full tank, prices up ...... Sell! Sell! Sell!