>>>>>>
http://www.newsmax.com/headlines/oil_price_record/2008/06/06/102451.html
>>>>>>
>>>>>>Oil's Biggest Day Ever Drags Down Stocks
>>>>>>
>>>>>>Friday, June 6, 2008
>>>>>>
>>>>>>NEW YORK -- Oil prices made their biggest single-day leap
>>>>>>ever Friday
>>>>>>- clearing $139, dragging the Dow Jones industrials down
>>>>>>nearly 400
>>>>>>points and raising the once-unthinkable prospect of $150
>>>>>>oil and even
>>>>>>higher gas prices by the Fourth of July.
>>>>>>
>>>>>>The meteoric rise of nearly $11 for the day piled atop an
>>>>>>increase of
>>>>>>almost $5.50 the day before, taking oil futures more than
>>>>>>13 percent
>>>>>>higher in just two days, easily a record on the New York
>>>>>>Mercantile
>>>>>>Exchange.
>>>>>>
>>>>>>And those weren't the only stunning numbers of the day:
>>>>>>The government
>>>>>>also reported the nation's unemployment rate zoomed to 5.5
>>>>>>percent in
>>>>>>May, a monthly rise of half a percentage point, the
>>>>>>biggest in 22
>>>>>>years.
>>>>>>
>>>>>>Oil surged higher after Morgan Stanley analyst Ole Slorer
>>>>>>predicted
>>>>>>strong demand in Asia and tight supplies in the Western
>>>>>>Hemisphere
>>>>>>could drive prices to $150 by Independence Day, when
>>>>>>millions of
>>>>>>Americans take to the roads.
>>>>>>
>>>>>>That means no end in sight for spiraling gas prices,
>>>>>>already above $4
>>>>>>per gallon in much of the country.
>>>>>>
>>>>>>Even longtime market observers were shocked by the
>>>>>>magnitude and speed
>>>>>>of oil's rally.
>>>>>>
>>>>>>"We're into unchartered territory, and somewhat off the
>>>>>>map as far as
>>>>>>historical precedents are concerned," said Jim
>>>>>>Ritterbusch, president
>>>>>>of energy consultancy Ritterbusch and Associates in
>>>>>>Galena, Ill.
>>>>>>
>>>>>>Besides the jump in the unemployment rate, the Labor
>>>>>>Department said
>>>>>>employers had cut 49,000 jobs in May, the fifth straight
>>>>>>month of
>>>>>>nationwide losses. Job losses for the year reached
>>>>>>324,000.
>>>>>>
>>>>>>The White House said President Bush was considering
>>>>>>further plans to
>>>>>>help energize the economy, already teetering on the edge
>>>>>>of recession
>>>>>>and crippled by a tumbling housing market and other
>>>>>>factors.
>>>>>>
>>>>>>On Wall Street, the Dow plunged 394.64 points, more than 3
>>>>>>percent, to
>>>>>>close at 12,209.81, the biggest drop in more than 15
>>>>>>months in both
>>>>>>percentage and points terms.
>>>>>>
>>>>>>Wall Street had managed to shrug off oil's advance on
>>>>>>Thursday but
>>>>>>succumbed to extreme anxiety Friday.
>>>>>>
>>>>>>The stock market's great concern of late has been whether
>>>>>>consumers
>>>>>>would curb their spending on non-essentials as they were
>>>>>>forced to pay
>>>>>>more for gas and other staples.
>>>>>>
>>>>>>The previously unthinkable idea of $150 oil, and gasoline
>>>>>>that will
>>>>>>keep climbing above $4, made it clear to investors that
>>>>>>consumers
>>>>>>would be forced to be even more conservative than they
>>>>>>have been in
>>>>>>recent months.
>>>>>>
>>>>>>Before Thursday, oil had receded nearly $13 a barrel from
>>>>>>its highs, a
>>>>>>respite from its nearly record-every-day march. But the
>>>>>>end of the
>>>>>>week sent it right back up again.
>>>>>>
>>>>>>The burst in oil prices also raised the prospect of
>>>>>>accelerating
>>>>>>inflation by adding to already strained transportation
>>>>>>costs _ which
>>>>>>will send prices higher throughout the economy.
>>>>>>
>>>>>>Light, sweet crude for July delivery officially finished
>>>>>>the day at
>>>>>>$138.54, up $10.75 on the Nymex. But after the settlement,
>>>>>>the
>>>>>>contract jumped as high as $139.12. Prices hit a previous
>>>>>>record of
>>>>>>$135.09 a barrel on May 22, and settled Thursday at
>>>>>>$127.79.
>>>>>>
>>>>>>Traders also zeroed in on remarks by an Israeli Cabinet
>>>>>>minister who
>>>>>>was quoted as saying his country will attack Iran if it
>>>>>>doesn't
>>>>>>abandon its nuclear program. Transportation Minister Shaul
>>>>>>Mofaz added
>>>>>>that Iranian President Mahmoud Ahmadinejad "will disappear
>>>>>>before
>>>>>>Israel does," the Yediot Ahronot daily reported.
>>>>>>
>>>>>>Iran is the second-biggest oil producer in the
>>>>>>Organization of
>>>>>>Petroleum Exporting Countries, and traders worry that any
>>>>>>conflict
>>>>>>with Israel could disrupt global supplies.
>>>>>>
>>>>>>A further weakening of the dollar also helped send oil
>>>>>>prices higher
>>>>>>by enticing overseas buyers armed with stronger currencies
>>>>>>and others
>>>>>>looking for a hedge against the greenback. But it also
>>>>>>represented a
>>>>>>stampede by bullish traders and optimistic computer models
>>>>>>betting
>>>>>>that prices still have further to rise.
>>>>>>
>>>>>>"The bulls ... refuse to go away," said Stephen Schork, an
>>>>>>analyst and
>>>>>>trader in Villanova, Pa.
>>>>>>
>>>>>>Meanwhile, U.S. gas prices at the pump continued to hover
>>>>>>just shy of
>>>>>>an average $4 a gallon, easing only 0.3 cent from
>>>>>>Thursday's record.
>>>>>>
>>>>>>Drivers are now paying an average of $3.99 for a gallon of
>>>>>>regular gas
>>>>>>nationwide, according to AAA and the Oil Price Information
>>>>>>Service; in
>>>>>>many parts of the country, consumers are already paying
>>>>>>well over $4.
>>>>>>Retail diesel slipped a penny overnight to $4.76.
>>>>>>
>>>>>>Pump prices are bound to rise even further if oil sustains
>>>>>>its
>>>>>>advance. James Cordier, president of Tampa, Fla.-based
>>>>>>trading firm
>>>>>>Liberty Trading Group, predicted prices could rise to
>>>>>>$4.25 as early
>>>>>>as the end of the month.
>>>>>>
>>>>>>"Unfortunately, drivers cutting back isn't going to lower
>>>>>>the price of
>>>>>>gasoline anytime soon," he said.
>>>>>>
>>>>>>The dramatic reversal in what had been a weakening oil
>>>>>>market began
>>>>>>Thursday after ECB President Jean-Claude Trichet suggested
>>>>>>the bank
>>>>>>could raise interest rates and the euro climbed against
>>>>>>the dollar.
>>>>>>When interest rates rise in Europe, or fall in the U.S.,
>>>>>>the dollar
>>>>>>tends to weaken against the euro.
>>>>>>
>>>>>>Many traders buy commodities such as oil as a hedge
>>>>>>against inflation
>>>>>>when the dollar is falling, and a weaker dollar makes oil
>>>>>>cheaper for
>>>>>>investors dealing in other currencies. Analysts believe
>>>>>>the dollar's
>>>>>>protracted decline has been a major reason why oil prices
>>>>>>have nearly
>>>>>>doubled in the past year.
>>>>>>
>>>>>>The euro strengthened further against the greenback
>>>>>>Friday. A Labor
>>>>>>Department report showing the U.S. unemployment rate
>>>>>>jumped half a
>>>>>>percentage point to 5.5 percent last month _ its biggest
>>>>>>monthly
>>>>>>increase since 1986 _ could drag the dollar even lower in
>>>>>>the days
>>>>>>ahead.
>>>>>>
>>>>>>"Unemployment jumping as it did today will be in the
>>>>>>market for a long
>>>>>>time and will continue to pressure the U.S. dollar,"
>>>>>>Cordier said.
>>>>>>
>>>>>>The influx of so much fresh money into the energy markets
>>>>>>has caught
>>>>>>the attention of federal watchdogs. The U.S. Commodity
>>>>>>Futures Trading
>>>>>>Commission recently said it was six months into a probe of
>>>>>>U.S. oil
>>>>>>markets focused on possible price manipulation.
>>>>>>
>>>>>>Asked about Friday's surge, CFTC spokesman R. David Gary
>>>>>>said: "People
>>>>>>are aware of what's happening and are monitoring the
>>>>>>markets closely,
>>>>>>but beyond that there is no comment."
>>>>>>
>>>>>>In other Nymex trading, heating oil futures jumped 29.32
>>>>>>cents to
>>>>>>settle at $3.974 a gallon, while gasoline prices rose
>>>>>>21.35 cents to
>>>>>>settle at $3.548 a gallon. Natural gas futures rose 17.4
>>>>>>cents to
>>>>>>settle at $12.693 per 1,000 cubic feet.
>>>>>>
>>>>>>In London, July Brent crude shot up $10.15 to settle at
>>>>>>$137.69 a
>>>>>>barrel on the ICE Futures exchange.
>>>>>>
> Nice try but no sale. The country went into an almost immediate tailspin when the
> democrats took over congress. Let's hope it's taken away from them again in
> November....AAC
