Oil Jumps $4 on Fed, Supplies

Discussion in '2007 Archive' started by KenH, Oct 31, 2007.

  1. KenH

    KenH
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    Oil jumps $4 on Fed, supplies

    Hits new record of over $94 dollars a barrel as crude stocks fall and interest rates decline.

    By Steve Hargreaves, CNNMoney.com staff writer
    October 31 2007: 4:47 PM EDT

    NEW YORK (CNNMoney.com) -- Oil prices set a new record high Wednesday, jumping over $4 on an expected interest rate cut from the Federal Reserve and dwindling supplies in the United States.

    U.S. light crude for December delivery jumped $4.15 to settle at a new record of $94.53 a barrel on the New York Mercantile Exchange, topping Monday's record close of $93.80 a barrel. Prices rose as high as $94.74 in intraday trade, surpassing crude's all-time record trading high of $93.80 a barrel, also set Monday.

    The Fed cut its key funds rate by a quarter percentage point Wednesday. The move, which will affect the amount both consumers and business have to pay to borrow money, was expected and traders said most of the quarter point cut was already priced into oil.

    Oil prices initially retreated to trade below $94 a barrel just after the late-day interest rate news.

    "The market had been rallying in anticipation of this, and the actual news didn't have much of an effect," said Andy Lebow, an energy broker at MF Global in New York.

    An interest rate cut boosts oil prices because it is meant to spur economic activity, which would drive up demand for oil.

    A rate cut also pushes down the dollar, in which oil is priced. A falling dollar makes oil cheaper for foreign consumers and means oil producing countries have less incentive to raise production, both of which are bullish for oil prices.

    - rest at http://money.cnn.com/2007/10/31/markets/oil_eia/index.htm
     
    #1 KenH, Oct 31, 2007
    Last edited: Oct 31, 2007
  2. TomVols

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    I thought the rates should've been left steady, but the verbige should've been to leave open the possibility for future cuts. Just my opinion. I believe the stock market has stabilized and the media obsessions with the overhyped subprime issue and foreclosure issue have died down a bit
     
  3. billwald

    billwald
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    Canadian$ just went over $1.05, highest since 1955? Why? because Canada is now considered an "oil" currency. Some say Bush invaded Iraq because Saddam intended to start selling oil in euros. Some say that Bush will invade Iran because Iran wants to do the same thing. Will Bush invade anyone if they start selling oil in $Canadian?

    Unless Bush can invade the world into continuing to sell oil in dollars the dollar will lose its place as the world's reserve currency. Canada has just reduced taxes because of its great financial position. If you were China would you put your money in the
     
  4. billwald

    billwald
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    con't

    (sorry bout that) in Canada or the USofA?

    So what happens to the working class if we lose our position as the world's reserve currency?
     
  5. NaasPreacher (C4K)

    NaasPreacher (C4K)
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    Gonna be interesting - oil over $100 a barrel and a euro that costs $1.50
     

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