Friday, January 21, 2005

Gosh, it seems like just yesterday that people actually worried about $50/barrel oil. Now it just seems to roll right off the black kangaroo boots decorated with a white star and embroidery, together with a smart and sexy aqua-colored mink wrap, that all the fashionable Republicans are sporting this season.

Here is today's triple whammy:
Temperatures in the U.S. Northeast, the world's largest heating oil market, will stay much below normal through the weekend with cold locked in longer than previous expected by heavy snowfall, forecasters said. . . .

customs data released on Friday showed China's crude imports hit a record 12.1 million tonnes in December, sending total 2004 imports to 122.7 million tonnes, a rise of almost 35 percent from last year. . . .

OPEC oil to be shipped in the four weeks ending Feb. 5 sank by 650,000 bpd, marking the biggest drop since April, a shipping analyst said on Thursday.
WTI spot prices averaged $43.15/barrel in December, the lowest monthly level since July. Yet they've been rising precipitously all January and today settled at over $48 after rising as high as $48.95; they may be set to close above $50 next week for the first time since the election.

Stephen Roach's rule of thumb for an energy "shock" has long been an extended period of >$50/barrel. So far the US has only seen one month of such action, but prices have remained above $40/barrel consistently since mid-July. Maybe that doesn't rank up there with shoving a screwdriver into a wall socket, but six months of this has to at least qualify as grabbing hold of an electric fence.

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