Monday, August 14, 2006

Oil and gasoline futures fall.

Bloomberg reports that futures prices of crude oil and gasoline are falling today as an improved picture for crude oil production in Alaska and Nigeria has emerged, along with a cease fire in the Middle East.

From Bloomberg: Crude oil fell and gasoline dropped to a two-month low after BP Plc said it will keep half of the output flowing at the largest U.S. oil field, and a cease-fire began in Lebanon.

BP plans to pump about 200,000 barrels a day from Prudhoe Bay in Alaska while it replaces corroded pipelines, rather than shutting the entire field as initially intended. Middle East supply concern also eased as the cease-fire began early today. Royal Dutch Shell Plc's Nigeria venture last week began pumping oil through a pipeline that was damaged in July.

``The cessation of hostilities in Lebanon, the improved outlook for Prudhoe Bay and the return of the Shell output in Nigeria have combined to move us lower,'' said Michael Fitzpatrick, vice president of energy risk management at Fimat USA in New York. ``You are seeing some of the speculators leave the market but this move could be short lived.''

Crude oil for September delivery fell $1.35, or 1.8 percent, to $73 a barrel at 10:04 a.m. on the New York Mercantile Exchange. Futures touched $72.90, the lowest since July 31. Prices are up 9.4 percent from a year ago.

Gasoline for September delivery declined 7.13 cents, or 3.5 percent, to $1.993 a gallon in New York. Futures touched $1.9674 during the session, the lowest since June 19. Prices are little changed from a year ago.

The Bloomberg report is accompanied by video of analysts weighing in on oil prices, but I found the video slow to load.

I've copied a shortcut link to the Donald Coxe interview and pasted it in Window's Media Player to play. By pressing play and allowing it to buffer it's way through the interview, the entire clip will play back smoothly if played again.

Incidentally, all three video interviews seem to put forth the notion that oil prices should fall or at least "pause" in the near term. Watch out for the consensus!