- Warren Buffett to Sell Stakes In Union Pacific & Norfolk Southern
- Nov. 9: Unusual Volume Leaders
- The Battered Businesses Behind Housing
- Modern Warfare 2's Record-Breaking Launch
- Merck’s Mega-Monday Morning
- Why are Traders Bullish on This Food Company?
- Profiting From Natural Gas: Strategists
- S&P Stocks Trading at New 52-Week Highs
- Shopping for Answers
- Can Apple Top Microsoft as Most Valuable Tech Firm?
- Buffett to Sell Stakes in Norfolk Southern, Union Pacific
- Do You Know Your Coca-Cola Myths?
- Electronic Arts Beats Street, Announces 1,500 Job Cuts
- Time Is Here to Look at Overseas Stocks: Bill Gross
- Home Prices Start to Stabilize In the US as Sales Pick Up
- Flaw in US Data Overstates Growth, Productivity
- Priceline Crushes Profit Forecasts; Shares Jump
- 'Modern Warfare 2' May Be Biggest Event This Year
MOST SHARED
- Future of Marketing
- Home Prices Start to Stabilize In the US as Sales Pick Up
- Dow Up Over 100 After G20 Stimulus Pledge
- Oil Tomorrow
- Israel: Leader of Business Innovation
- Priceline Crushes Profit Forecasts; Shares Jump
- Dow Industrials at New Highs—But Other Indices Lag
- Rock Band Weezer Uses Snuggie to Promote New Album
- 'Modern Warfare 2': Biggest Entertainment Event of 2009?

![]() |
There are reports Exxon [XOM
Loading...
()
] has lifted "force majeure" on its exports of Nigeria crude. The oil giant's inability to honor export contracts--which averages about 800,000 barrels a day--after a workers' strike in late April was a key factor in the run-up to over $120 a barrel. But now that situation has calmed.
Oil supplies--at least here in the U.S.--are increasing not falling. Today's Energy Department data showed oil and gasoline supplies rose much more than expected last week: a 5.7 million barrel increase in crude inventories was nearly quadruple consensus estimates and expectations were for adecline not an 800,000 barrel build in gasoline supplies.
American drivers haven't kept their cars in the garage just because they're paying $3.62 a gallon--the national average, says AAA--or $4/gallon in my neighborhood. The Energy Department said gasoline demand actually ticked slightly higher over the past four weeks. Let's see if that changes as average prices nationally close in on the $4-mark.
The argument that speculators have driven up the price of oil as a hedge against the falling dollar doesn't fly considering the greenback has been retesting it's five-week high against the euro today. Talking to trader Randy Rothenberg on the floor today, he said, he thinks the oil-dollar trade has decoupled in the last few weeks. Afterall, oil has rallied over 10% since the first week in April, while the dollar has risen about 2% vs. the euro.
Perhaps it's the fact that distillate fuel supplies fell in the weekly U.S. inventory report--when a 800,000 to 1.3 million barrel build was expected--that's taken oil prices up over $123/barrel today. After all, today's gains in heating oil, a proxy for distillates overall, are nearly double those of crude. Heating oil futures are up nearly 3% posting another intraday record over $3.45/gallon this afternoon.
I understand there are macro factors at play as well. Global supply disruptions and geopolitics, limited spare capacity and increasing extractions costs are the factors Cambridge Energy Research Associates chairman and CNBC contributor Dan Yergin thinks could take oil prices to $150 a barrel.
But we didn't see any startling headlines marking any immediate changes in those factors today. Nothing that would have really sparked this rally. Yet at $123/barrel a $1-move is what a few cents was a year ago. Those projections that seemed ridiculous several months ago are bearing fruit day after day. What's next? $125, $150, $200 oil? Look out!
Questions? Comments? energysource@cnbc.com
- Do free market libertarians really believe what they say about ethics and shareholder value? The Big Money takes a look.
- Cramer did the research and found eight stocks that lead the pack. Read on to get his top picks.
- On the anniversary of the fall of the Berlin Wall, many in the former Eastern Bloc recall communism fondly.
- Software, biotech firms, even banks are watching a particular Supreme Court argument today.
- From politicians to CEOs to companies, here's your chance to vote for the winners and losers of 2009.
- A new sinister Internet viruses can turn you into an unsuspecting collector of child pornography.











