Thursday, February 18, 2010

Oil under $77 as US heating oil, diesel supply up

Unexpectedly, too!

From a perennially perplexed AP:

"Inventories of distillates, which include heating oil and diesel fuel, rose 1.3 million barrels last week, the American Petroleum Institute said late Wednesday. Analysts, eyeing a cold weather spell in much of the U.S. this month, had expected a drop of 1.6 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Gasoline inventories also grew while crude supplies fell slightly, the API said."

It's not until the end of the article, almost as an after thought, the AP mentions falling prices. But, even so, wowser. Demand dropped, supplies rose, and prices fell! That's inconceivable. It's almost like the natural outworking of free people buying and selling in a free market, free from gub'mint manipulation, to determine their own affairs.

But the AP is trying hard to warn the Obama administration:
"A recovering U.S. dollar also put pressure on oil prices, as a stronger dollar makes oil more expensive for investors holding other currencies.

The euro fell to $1.3563 on Thursday from $1.3618 late Wednesday in New York, while the British pound was lower at $1.5595 from $1.5686 and the dollar was down to 90.90 Japanese yen from 91.15 yen.

Some analysts expect demand to soon pick up, and conspire with limited supplies to boost prices."

I knew it. A conspiracy! Gee. I wonder if drilling more wells and building more refineries would aleviate those 'limited supplies'?