http://biz.yahoo.com/ap/071019/oil_prices.html?.v=25
Oil Futures Retreat From $90 Record Friday October 19, 6:38 pm ET By John Wilen, AP Business Writer Crude Prices Fall From Overnight Highs on Profit-Taking, but Renewed Push Higher Is Expected NEW YORK (AP) -- Oil futures fell Friday, retreating from an earlier foray to a new record above $90, as investors sold to lock in profits. Still, many analysts expect the declines to be temporary and believe oil futures will continue their assault on price records in the days ahead. They say high prices are driven by a factors including a weak dollar, speculative investing and low supplies at a key Midwest oil terminal. "This is just profit-taking today," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service. Crude prices have jumped 28 percent since late August. The advance appears to be trickling down to consumers in the form of higher gas prices, and may result in higher heating prices this winter. Prices at the pump have risen 5.3 cents over the past four days, averaging $2.81 a gallon on Friday, according to AAA and the Oil Price Information Service. Meanwhile, heating oil costs are expected to jump more than 20 percent this winter. Crude futures briefly passed $90 a barrel -- rising as high as $90.07 -- twice in electronic trading overnight, despite a growing consensus among analysts that the oil's underlying supply and demand fundamentals do not support such high prices. "This market has been hijacked by speculators," wrote Stephen Schork, a trader and analyst in Villanova, Pa., in a research note. Light, sweet crude for November delivery fell 87 cents to settle at $88.60 on the New York Mercantile Exchange. Oil futures rose $4.91 this week, or 6 percent. The price of oil is still below inflation-adjusted highs hit in early 1980. Depending on the adjustment, a $38 barrel of oil in 1980 would be worth $96 to $101 or more today. Other Nymex energy futures also fell. November gasoline lost 1.64 cents to settle at $2.1687 a gallon, and November heating oil slid 1.87 cents to settle at $2.3306 a gallon. Natural gas futures fell 33.3 cents to settle at $7.041 per 1,000 cubic feet on a new forecast from the National Oceanic and Atmospheric Administration that this winter will be 3.4 percent warmer than the 30-year average. In London, December Brent crude fell 81 cents to settle at $83.79 a barrel on the ICE Futures exchange. While organizations such as the International Energy Agency and the Organization of Petroleum Exporting Countries warn that demand for oil will increase in the fourth quarter, many observers think the demand forecasts are overstated. Demand for gasoline is actually falling, the Energy Department says. Domestic oil inventories are at high levels by historic standards, and grew last week. Speculators have been lured to the crude market by the falling dollar, which makes dollar-denominated oil futures a bargain to overseas investors, and profits that can be made arbitraging various oil contracts, experts said. Meanwhile, oil inventories at the Nymex delivery point of Cushing, Okla., fell last week even as overall supplies grew. And falling Cushing supplies feed a perception that, while overall oil supplies might be sound, it is harder to secure oil in the short term. For its part, the White House is worried about the cost of oil. "The president certainly would like to see the price of oil lower," said deputy White House press secretary Tony Fratto. But it will take more than hand-wringing to end the crude rally, analysts say. "The market seems to have a mind of its own at this stage, and only something 'seismic' could force prices down," wrote Edward Meir, an analyst at MF Global UK Ltd., in a research note.
