Sports and my thoughts

Wednesday, September 06, 2006

Thoughts: Crude oil at lowest level since May

I hope this trend continues. Gas is between $2.58 and $2.65 around me now and I'd love to see it closer to 2 bucks a gallon. If this trend continues my wish just might come true.
Oil fell a dollar on Wednesday to the lowest level in more than three months as robust U.S. inventories at the end of the summer driving season further dulled bullish sentiment.

U.S. crude futures dropped $1.15 to $67.45, the lowest since May 22 and more than $10 below the record hit in late July on geopolitical worries and expectations for an active hurricane season. Brent crude dropped $1.14 to $66.95, also well below its August 8 peak of $78.65.

"We're not hyperventilating over Nigeria, Israel or Iran. We've run out of adrenaline and what we're left with are inventories that are higher than a year ago and a hurricane season that has been more fizzle than sizzle." said Tim Evans of Citigroup Global Markets.

U.S. crude inventories are around 6 percent higher than a year ago and the surplus is likely to widen dramatically due to the absence of a damaging hurricane in the Gulf of Mexico.

Last year's Hurricane Katrina slashed more than 6 million barrels from commercial crude inventories leading into early September after the powerful storm toppled offshore rigs and destroyed undersea pipelines.

Analysts polled by Reuters estimated that crude supplies eased last week by 1.3 million barrels, while stockpiles of distillates like heating oil, jet fuel and diesel built by 1.3 million barrels.

Of course one bad storm or one Islamofacist acting up in the Mid East and we will see the price soar.

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