The price per barrel went over $120 - a new high - and closed at $119.97. Last week's sell off was short lived and buyers jumped on whatever news they could find, which is pretty much the same as any other day. It's going to test the $120 mark a few times but unless the demand eases and suddenly the world has great news in the oil regions, get used to more increases. Add to that Bernanke's Wall Street loving rate cuts (which never quite reach beyond Wall Street, in a good way) and you have this.
Those Republicans sure were right on this. Ha ha, look at those ridiculous people who talk about conservation. They're tree hugging goofballs who want to drive silly little cars. Errrr, nevermind. Mission Accomplished.
Who knows how long the trend will continue but for now, the euro is king on the street.
The US dollar bill’s standing as the world’s favourite form of cash is being usurped by the five-year-old euro.
The value of euro notes in circulation is this month likely to exceed the value of circulating dollar notes, according to calculations by the Financial Times. Converted at Wednesday’s exchange rates, the euro took the lead in October.
Don't think the dollar's decline affects you since you don't go to Europe? Think Again. Chris posted earlier today about OPEC and the price of oil, and buried in his post was a fascinating quote from the head of OPEC:
"[E]ach time the dollar falls one percent, the price of the barrel rises by $4, and of course vice versa"
The dollar has fallen 30% versus the Euroe since April 2003. That would mean a $120 rise in the per barrel price of oil. Now, oil is at $120/barrel, and oil was around $30/barrel in 2003, so the formula isn't perfect. But that means the real increase was $90 versus the predicted $120. That's pretty darn close. The overall point is that the head of OPEC just said that George Bush and the Republicans' economic policy vis-a-vis destroying the dollar (they don't care if the value plummets because "it's the market's doing") has led to the majority of the oil price increase. I.e., you're paying more at the pump because of George Bush and the Republicans.
It's not very comforting that $200 per barrel is even being discussed but unfortunately, the OPEC president isn't the only person kicking this idea around.
He added: "The prices are high due to the fact of the recession in the United States and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the dollar, and therefore each time the dollar falls one percent, the price of the barrel rises by $4, and of course vice versa," he was quoted as saying in brief remarks to journalists on Sunday.
He added that: "If this (the dollar) strengthens by 10 percent, it is probable that (oil) prices will fall by 40 percent."
If the U.S. economic situation improved from now to the end of the year "that would help the market to stabilize."
More problems in Nigeria, Russia producing less oil, the weak dollar and China's demand shot up 8% from March 2007. In other words, same old, same old. And the dollar has hit an all time record low, trading at $1.60 to the Euro. Absolutely shameful.
It gets worse by the day and we're in yet another weird range. There were a few new incidents today but let's be clear, there will always be another incident. Whether another problem in Nigeria, a hurricane, a whatever, it's always going to be there. The US will keep buying more oil just as China will keep buying more and more oil.
All of this was predictable but the Republicans all made a big joke out of it, dismissing the seriousness of energy independence until we arrived at this period where too many other issues have spiraled out of control such as the fall of the US dollar. It's a good thing voters fell for the Republican propaganda of mocking Democrats on this issue. How's everyone feeling about that now?
It's a good thing the GOP made 'conservation' a dirty word. Oil tested the $117 support level and went up to $117.05 though it has since backed down.
"No," said Chakib Khelil, who is also Algeria's Energy and Mines Minister, when asked by reporters whether OPEC would raise production. "I don't think that any increase in production will have an impact on prices.
There is a balance between supply and demand," he said, speaking during a visit to Kuwait. "Even if we raised the production we may not find a buyer," Khelil said.
He added a previous output increase had failed to bring prices down.
"We raised output last year and there was an increase in prices not decrease." A falling dollar was a main factor behind the surge in oil prices, he said.
Oil hits a new high today and closes at $113.79 after testing $114. We're now in a no mans land and it's not going to take much to test $115. Gordon Brown and Bush can groan all they like but they should have thought about the consequences of invading Iraq and promoting conservation long ago. Since the US and UK invaded Iraq the cost of oil has gone through the roof and it's not going to ease up just because two leaders of two countries that the oil producing countries detest have a public temper tantrum.
Not to worry though because we will probably never again see any more disruptions from hurricanes or whatever, nor hostage situations in Nigeria, new military invasion of an oil country or anything like that and the emerging economies of China and India will likely be reducing their demand. Oh, I almost forgot the other CNBC classic, that one trader wanted to be the first person to touch $100/barrel, but it was all just a gag or a bet between traders. Nothing more than that. Sounds fair enough and why shouldn't we believe them?
What's that? Oil hit $112.48 and we're now looking for the next support level at $115? Won't the strong dollar help? Nevermind.
U.S. import prices rose by a more-than-expected 2.8 percent in March as petroleum prices jumped 9.1 percent, a Labor Department report showed Friday.
Frank Franklin Ii / AP U.S. export prices rose 1.5 percent during the month, also more than expected and the largest monthly gain on record, as prices for farm and food products continued to rise.
I'd seen this article while I was Greece two weeks ago, and forgot to post it then. It's still relevant. The Republicans are destroying our international reputation. This is the dollar we're talking, not the peso. This kind of thing happens with developing country currencies experiencing hyperinflation, it doesn't happen with the US dollar. Until now. I really think this is an issue that Hillary, Obama and the Dems overall have dropped the ball on. It's frightfully embarrassing. And it so encapsulates what the Republicans have done to our country over the past 8 years. The almighty dollar is now no better than a third world currency you've never even heard of. From Reuters:
The U.S. dollar's value is dropping so fast against the euro that small currency outlets in Amsterdam are turning away tourists seeking to sell their dollars for local money while on vacation in the Netherlands....
That's because the smaller currency exchanges -- despite buy/sell spreads that make it easier for them to make money by exchanging small amounts of currency -- don't want to be caught holding dollars that could be worth less by the time they can sell them.
Imagine if Bill Clinton had done this. Imagine the Republican talking points. Come on, Democrats - think strategically. This is the kind of insult that regular Americans can appreciate.
Shoppers not shopping because the credit binge is over. Families struggling to afford food and gas in the car to make it to work. Oil hits a new high every day thanks to a weak dollar. People worried about whether their job will still there by the end of the year. Isn't self-regulation worth it though? Business has been able to realize the decades long dream of letting us know if there's a problem and guess what? They say "no problem" so who are we to argue? Team McCain has already brought together the leading Bush economic adviser along with good ol' Phil Gramm, who helped build this new and exciting banking system that we all watch in awe (or is it shock?). McCain will eagerly bring us more of the same.
Oil hit a record high, the dollar sank again, and consumers stopped buying pretty much everything.
Stocks kept gyrating, too, on Thursday, swinging between gloomy recession evidence and rising hopes that all the bad news would bring another aggressive cut in interest rates when the Federal Reserve meets next week.
The Bush administration, conceding the economy was facing ''difficult'' times now, rushed out new proposals aimed at next time -- plans to fix various problems that have led to a severe crisis in credit markets.
From bad to worse in the GOP economy. The dollar has fallen through a very important support level $1.50 - €1 so if the greenback fails to bounce back quickly this could hit the free fall that many have been predicting. So what does this mean in America? Exactly what happened yesterday, which was a nasty inflation (stagflation) report courtesy of high energy costs.
Oil hit yet another new high, breaking through the $101 figure. Looking at the trends in oil, while it could drop back into the $80s though realistically, there is little preventing another climb. Just about anything can make the prices go back up (Turkey invading Iraq, hurricane, rumors, you name it) and now that the $100 support level has been tested and kicked aside it will be much easier for it to go up again. The Democrats really need call out the GOP and McCain in particular on this. These results are directly linked to years of bad policy by the Republicans. If we fail to drive this point home early and often, shame on us.
The Bush "strong dollar" policy has made shopping trips to America all the rage across Europe. With the dollar hitting lows not seen since the Nixon years, Europeans are flying to the US for weekend shopping trips in "cheap" places such as New York City. Travelers who normally could not afford to visit the US are now arriving in droves, much like Americans who would fly to Mexico on a cheap holiday.
During my own recent trip to the US, this was the talk on the flight. While shopping, store clerks confirmed the high number of Europeans stocking up on just about everything. (I was however shocked at the emptiness of stores and malls. I expected long lines, but never waited myself, though a few clerks told me that lines were terrible last Saturday.) In the near term, shopping binges by Europeans might help fill in the gaps though long term, the pitifully weak dollar is going to be disruptive both for Americans as well as Europeans and the world. Balance may not be in fashion with this administration, but we need to move back in that direction soon.
When Wall Street CEOs can't give a straight answer about the extent of credit losses, why should anyone be surprised when the dollar free falls? Who can honestly have any near term faith in this mess that Bush, Greenspan and the GOP created? The bill for America's easy credit years has arrived and it's not pretty.
In European trade, the euro beat its previous historic peak of 1.4752 dollars reached on November 9. It later stood at 1.4785 dollars, which compared with 1.4665 dollars in New York late on Monday.
The greenback also fell heavily against other major rivals, including sterling and the Swiss franc, as a slew of negative reports in the banking sector on Monday shook investor optimism.
The Eurozone isn't exactly a model of good fundamentals so it gives you some idea just how bad off the world views the state of the US economy. Will the US recover? Definitely. The problem is timing and the dominance once maintained in the market will not be coming back any time soon, if ever.
This brings us back to the issue of our next president. Will that person be able to bring the world together and successfully work with other friends or will they stick with the current "go it alone" model that brought us here in the first place?
