Oil Stays Near $79 Amid Rising U.S. Supply

Crude Stocks Increased by 1.2 Million Barrels; Traders Watch U.S. Economy and Ida

(AP)  Oil prices fell below $79 a barrel Wednesday in Asia as investors mulled rising U.S. oil inventories and a weaker dollar.

Benchmark crude for December delivery was down 14 cents to $78.91 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 38 cents to settle at $79.05 on Tuesday.

U.S. oil inventories rose last week, the American Petroleum Institute said late Tuesday. Crude stocks increased 1.2 million barrels while analysts had expected a rise of 1.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Information Administration is scheduled to release its supply data on Thursday.

Crude traders are also watching a volatile dollar closely. A weaker dollar makes oil cheaper for investors buying the commodity with non-dollar currencies.

The euro rose to $1.5002 in Asian trading Wednesday from $1.4985 the previous day while the dollar fell to 89.60 yen from 89.81.

"Crude prices continue to be driven by the dollar and sentiment," Societe Generale said in a report. "The dollar will be, on balance, moderately bullish for crude oil prices."

Crude has bounced near $80 a barrel for the last few weeks as traders eyed mixed U.S. economic data and the threat of Ida, a one-time hurricane in the Gulf of Mexico that weakened significantly before reaching oil installations near the Gulf Coast on Tuesday.

"The reaction to the data and events has been knee-jerk in nature, and not well thought out by market participants," Societe Generale said.

In other Nymex trading, heating oil was steady at $2.05 a gallon. Gasoline for December delivery held at $1.98 a gallon. Natural gas for December delivery rose 2.3 cents to $4.49 per 1,000 cubic feet.

In London, Brent crude for December delivery fell 27 cents to $77.50 on the ICE Futures exchange.

[gunnyh1]

Well said Mr. Gibbs

Our corrupt politicians could really care less if we are being ripped off by the big banks. They get paid off by with huge campaign fund and political charity donations and it seems like the American people could care less either. People should be harrassing their congressmen on a regular basis about this but they seem content to drink the kool-aid. All incumbents need to replaced at the next couple of general elections. If Congress will not do its job then they all have to go!!! We need a national movement for putting DISSOLVE CONGRESS on the next ballot. And lobbyist reform needs to happen immediately. Also if you want Social Security fixed then the outrageous retirement plan that Congress put in place for themselves needs to be eliminated...they pay themselves huge retirements right out of the fund that we pay SS into...and they never deposit a dime into it.

[JethroLGibbs]

When is this garbage going to stop?

This is a sure fired way to stop any momentum to the economy moving forward.

Here's what happens when the gas prices go up:

Manufacturers/Producers
1)Costs more for them to receive and ship, they pass costs along

Wholesalers/Distributors
1)Pass shipping costs along

Retailers
1)Raise prices to cover increase shipping costs

CONSUMERS

1)We see the price at the pump go up and we reduce the amount we drive to the stores
2)Once we get there, we reduce the amount we spend because of increased prices
3)Too much left on the shelves means waste and lower re-order points
means less to produce.

Get the idea......

In the past the reasons for increases were:
1) A war somewhere in the Middle East that would disrupt supply
2) A hurricane somewhere that would disrupt production
3) Maintenance or a mysterious fire at a refinery that would disrupt production
4) The yearly change over to produce heating oil

How, forget all of the above along with supply & demand. it is now the conversion rate of the dollar.

It still comes down to someone on Wall Street looking to shaft all of us to make themselves a bunch of money by speculating. Wasn't Washington going to put a STOP to that......

They can forget any hopes of recovery if they don't put a stop to the speculating on the one commodity that can make virtually make an economy stop because of greed.....

Will someone open their eyes and stop it before its' too late....