Oil Prices Hold Near $90 a Barrel on Speculative Buying
VIENNA, Austria (AP) — Oil prices held near $90 a barrel Friday, a barrier crossed for the first time in after-hours trading in New York on speculative buying.Investors are being drawn to energy futures as a hedge against the weakening U.S. dollar. That, plus worries over tensions between Turkey and Kurdish rebels in northern Iraq, has lifted crude oil prices to new records for five straight days.Light, sweet crude for November delivery rose to $90.02 a barrel in Thursday evening electronic trading on the New York Mercantile Exchange. By midday Friday in Europe, the contract was trading at $89.92 a barrel, up 45 cents from Thursday’s close.In London, December Brent crude rose $1.47 to settle at $84.60 a barrel on the ICE Futures exchange. By midday Friday, it had fallen back 25 cents to $84.34 a barrel.
While oil prices have risen sharply in recent days, the weak U.S. dollar is seen as somewhat moderating the impact of high oil prices in other currencies. The dollar had regularly been setting new lows against the euro and has also sagged against the yen.
Analysts said investors were also buying more oil to hedge further losses in the currency.
“The main way the weak U.S. dollar is actually relevant to oil and possibly other commodities such as gold, is that you may have seen some investment in those commodities as a hedge against U.S. dollar weakness and that has pushed up their price,” said David Moore, commodity strategist at the Commonwealth Bank of Australia in Sydney.
Vienna’s PVM Oil Associates said the surge “cannot be fully explained by market fundamentals, as the related factors are generally more bearish than bullish.”
Data released in recent weeks shows speculative buying of oil futures is on the rise.
“While oil markets are tight, there is a question as to whether the current price is sustainable,” Moore said.
In Thursday’s Nymex floor session, the November contract rose $2.07 to a record close of $89.47 a barrel.
On Wednesday, the U.S. Energy Department reported that oil and gasoline supplies rose more than expected last week, countering suggestions that supplies are tight. However, crude supplies at the closely watched Nymex delivery point of Cushing, Oklahoma, fell last week. And several reports in recent days have predicted oil supplies will tighten in the fourth quarter.
Thursday was the fifth day in a row crude prices have set new records. The new record has taken the price of oil nearer, but 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.
Nymex gasoline futures dropped 0.21 cent to $2.183 a gallon (3.8 liters) while heating oil prices added 0.35 cent to $2.3528 a gallon.
November natural gas futures fell 3.2 cents to $7.341 per 1,000 cubic feet as investors shrugged off an Energy Department report that inventories rose by 39 billion cubic feet last week, less than analysts had expected. Supplies are high by historical standards.
Custom Trucks With Hidden Trapdoors Used To Steal Gas From Fla. Stations
ORLANDO, Fla. — Several arrests involving custom-built trucks with hidden trapdoors used to siphon hundreds of gallons of gasoline may be linked to an organized crime ring targeting stations.
“My concern is with Homeland Security,” Police County sheriff Grady Judd said.
“When someone can pull up to a store during business hours and steal hundreds of gallons of gas and simply move on to the next station.” Investigators said Jose Guerra, 22, and Octavio Garcia, 27, were charged with siphoning off hundreds of gallons of gasoline from the Mobil station located on Curry Ford Road and Goldenrod in east Orange County. Wednesday, police said Hobert Gibson, 70, siphoned and stole more than 900 gallons of gas from underground fuel tanks at stations in Polk County.
In both crimes, police said, the men used similar custom-built trucks to steal the gasoline. Deputies said they witnessed Gibson steal gasoline from two stations Tuesday. He would pull over near the underground storage tank at a gas station, pop the trailer’s hood and pretend to fix a problem, as the trap door obscured the view of gas being pumped into the tanks, according to police.
“It was broad daylight, nobody knew that’s what he was doing,” sheriff’s representative Carrie Rodgers said. “He was that good at it.” Sheriff officials believe Gibson stole gas on a daily basis since at least January. They said he may have taken 10,000 gallons of fuel a week to sell at his towing company.
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