Investments

Bank Of America Investment Oil prices fell sharply Monday in what traders described as a wave of profit-taking after futures hit a new high above $55 a barrel and after gasoline futures fell sharply on indications of declining demand.

Oil prices surged almost 3% on Monday, up $2.86 a barrel to US$109.09 amid supply concerns following a large refinery fire in Finland over the weekend.

Investment Opportunity November crude futures plunged $1.26, or 2 percent, to settle at $53.67 per barrel on the New York Mercantile Exchange. November gasoline futures sank 5.9 cents, or 4 percent, to $1.3504 per gallon.

Higher oil revenue, strong liquidity, 06 led to a surge in asset prices (shares and real estate) and consumer inflation.

Banc Of America Investment The slide in prices might not last, analysts said, explaining that it could provide the basis for fresh buying in a market that is still ill at ease about the world's limited supply cushion.

The uncertain course of the war and the accompanying gyrations in oil prices are making U.S. priced crude. The companies also are worried that a sudden favorable turn in the war could caused oil prices to plummet.

Banking Investment "I think the mantra 'buy the dips' is still firmly in place," said Aaron Kildow, a broker with Prudential Financial Inc. in New York.

Traders cannot ignore the fact that Oil prices are on their way to $90 a barrel. The USD slipped broadly on Wednesday not only due to a sharp fall in U.S. Housing Starts for September, but also because of the surge in Crude Oil prices. Oil prices hitting new highs will continue to influence negatively on the US economy.

Investment Solution Strategic Ed Silliere, vice president of risk management at Energy Merchant in New York, attributed Monday's downward momentum to profit taking, which began after oil prices briefly surpassed $55 a barrel, as well as to signs of lower demand for gasoline.

According to the special energy report recently published by the Standard and Poor, Hill Companies which is one of the world providers of financial and investment report, research and evaluation, the burden of higher oil prices can be bearable but not pleasant especially on the part of the consumers who belong to the industries that calls for greater energy supply. On the other hand, higher prices can prompt the people to use less energy and spark up the drive of energy suppliers to look for a variety of oil substitutes hence, the expansion of energy sources and supply.

Investment Banking Services "It's more than the normal seasonal drop-off in demand," Silliere said, "and we think it's price related."

Bank Investment The Energy Department reported last week that the average daily demand for gasoline for the four weeks that ended Oct. 8 was 8.94 million barrels, down 0.4 percent from the same period a year earlier.

Alternative Investment Meantime, the average retail price of gasoline nationwide is slightly above $2 a gallon, just a nickel below the May peak, according to the Oil Price Information Service, a Lakewood provider of industry data.

Online Investment Services Crude oil prices are up about 75 percent from a year ago. However, even at current levels, crude oil prices are still about $27 below the all-time highs - in inflation-adjusted terms - of February 1981.

Accompany Essential Investment Prices have skyrocketed about $10 in the past month, primarily over production delays in the Gulf of Mexico, where Hurricane Ivan hit in mid-September.

Investment Company Declines in U.S. inventories of heating oil, diesel and jet fuel just before the Northern Hemisphere winter are the latest in a line of supply factors to rattle the market.

Investment Management Solution The U.S. Energy Department said in its weekly petroleum supply report last week that commercially available supplies of heating oil declined by 1.2 million barrels for the week that ended Oct. 8, falling to 50 million barrels, or 10 percent below year-ago levels.

Investment Management Services But given today's soaring price of heating oil, Silliere said he expects the industry to begin cranking out large amounts of fuel. Once refiners perform seasonal maintenance "they're going to make nothing but heating oil."

Guide Investment Stock Heating oil prices fell 3.94 cents, to $1.5097 a gallon, Monday afternoon on Nymex.

Investment Manual Solution Others remain concerned about winter fuels. "We are heading for winter, and stocks in the U.S., Europe and Japan are significantly lower than they were a year ago," said Axel Busch, the chief correspondent for Energy Intelligence Group in London. "If we get a cold snap, or a cold winter, we will see prices go higher."

Investment Stock In the Gulf of Mexico, more than 20 million barrels of crude remain shut in as recovery efforts continue to get production levels back to normal, the federal Minerals Management Service said on its Web site.

Essential Investment Solution But with the amount of excess capacity - immediate surplus supply - at about 1 percent of daily demand, now estimated to be above 82 million barrels, any supply outage is expected to factor into prices.

Citicorp Investment Services "Anything that's slightly bullish could scare the market right back up," said Prudential's Kildow.

Fool Guide Investment Motley Market players have been fixated on potential disruptions in production, such as the just-concluded oil workers' strike and threats of rebel attacks in Nigeria, Africa's largest producer, and sporadic attacks by militants on Iraqi pipelines.

Fidelity Investment Services By Bead Foss
Associated Press - 10/19/2004

Topic: Petroleum Industry

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