Oil just went to $130 a barrel...

[Manedwolf]

Networks just have the "developing story" tag up, but the media heads on the financial channels are all "WHAT WHAT".

Lovely.

SAN FRANCISCO (MarketWatch) -- Crude futures leaped as much as $25 per barrel, or 24.3%, shortly before the New York close Monday, to tap a high of $130 per barrel. They're poised to score their biggest daily gain since 1984 -- when crude began trading on the New York Mercantile Exchange. October crude was last up $19, or 18.2%, at $123.55 per barrel on Globex.

[brimic]

 

[HankB]

Sounds like they need to kick the price of crude up to justify the (still) high price of gasoline . . .

[AZRedhawk44]

Anyone know if this is a result of inflation/devaluation of the US Dollar due to the $700 Billion mortgage buyout, or if this is actually caused by a decrease in supply due to world unrest?

[Nick1911]

Oil spikes $25 a barrel on anxiety over US bailout     
Sep 22 02:29 PM US/Eastern
   
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NEW YORK (AP) - Oil prices spiked more than $25 a barrel Mondaythe biggest one-day price jump everas anxiety over the government's $700 billion bailout plan battered the dollar and touched off frenzied buying of safe-haven investments including crude.

Light, sweet crude for October delivery jumped as much as $25.45 to $130 a barrel on the New York Mercantile Exchange before falling back somewhat to trade at $123.77,up $19.22. The contract was set to expire at the end of the day, adding to the volatility; the October price began accelerating sharply in the last hour of regular trading.

Crude has gained about $40 in a dramatic four-day rally that has at least temporarily halted oil's steep two-month slide below $100. At this rate, crude is within striking distance of its all-time record of $147.27, reached in July.

The Nymex temporarily halted electronic crude oil trading after prices breached the $10 daily trading limit. Trading resumed seconds later after the daily limit was increased.

The huge rally was poised to shatter crude's previous one-day price jump of $10.75, set June 6.

Oil's sharp gains came as energy traders grappled with the implications of the government's proposed $700 billion initiative to stem the U.S. financial crisis by absorbing billions of dollars of banks' bad mortgage-related securities. Anxiety over the plan also sent stocks sharply lower Monday; the credit markets were calmer than they were last week, but still showing the effects of investors' nervousness.

"They're going to have to continue auctioning off a whole lot of Treasurys to finance these projects, so the dollar is going to suffer," said Matt Zeman, head trader at LaSalle Futures in Chicago. "Right now it's fear and anxiety driving people who want tangible assets.

http://www.breitbart.com/article.php?id=D93BU9KO0&show_article=1

[Jamisjockey]

Here's what I heard:
During the Olympics and Para-Olympics, China basically stopped buying crude.  Something to do with thier smog initiatives.  Now that those are over they are back on the market.  Heard it on one of the major networks about a week ago.

[richyoung]

Here's what I heard:
During the Olympics and Para-Olympics, China basically stopped buying crude.  Something to do with thier smog initiatives.  Now that those are over they are back on the market.  Heard it on one of the major networks about a week ago.

Shina's smog is almost completely from burining coal.

[Jamisjockey]

Here's what I heard:
During the Olympics and Para-Olympics, China basically stopped buying crude.  Something to do with thier smog initiatives.  Now that those are over they are back on the market.  Heard it on one of the major networks about a week ago.

Shina's smog is almost completely from burining coal.

The talking heads say that they pretty much shut down vehicular traffic in Beijing for the olympics.

[AZRedhawk44]

I don't buy the china story.

There's a lot more to China than just Beijing.  Only maybe 50 million people in town and the vast surrounding areas, at most.

China is ~1.5 Billion (with a B) people.  Lots of agriculture, mining, logging and other work to get done for all those people.  Power generation, transportation, et cetera.

Also, China would have been back into the speculative market DURING the Olympics to get oil back into the supply line.  Not now, 2-3 weeks later.

This is speculation on the value of the dollar in the face of a gubmint bailout of wall street.

[Headless Thompson Gunner]

Oil now serves much the same purpose gold has always served.  It's a fear thing.  People now buy oil when anxieties rung high, just like with gold.  It makes a lot of sense.  Oil is a finite commodity just like gold.  Oil is even more liquid than gold (liquid in the easy-to-trade sense, not just the physical sense).  And unlike gold, oil actually has utility value.  People need oil.

People are freaked out by what's happening in the markets, and even more freaked out by what the government is doing.  All of the old standby safe-havens are getting bought up left and right.  Gold is up some $150 an ounce in the past week.  Oil is up $30 a barrel.  Yields on 1 and 3 month treasury bills are way down. 

[French G.]

Here's what I heard:
During the Olympics and Para-Olympics, China basically stopped buying crude.  Something to do with thier smog initiatives.  Now that those are over they are back on the market.  Heard it on one of the major networks about a week ago.

I think that had something to do with the unwinding of commodities for sure. Nobody buys raw materials for awhile and the price falls. The scrap metal prices, oil, gold, were all off. My gold mining stock has packed on 30% over the last week as everyone realizes what a craptastic mess the investment banks are. I'm sure fear and the devalued dollar are the main drivers of this latest oil spike.

[Nitrogen]

I read that it was all October futures that people had to suddenly buy to cover short positions.
November futures only went up a few bucks.

Typical media fear mongering and ratings grabbing.

[charby]

I read that it was all October futures that people had to suddenly buy to cover short positions.
November futures only went up a few bucks.

Typical media fear mongering and ratings grabbing.

pretty much how I understood it

[Sindawe]

Typical media fear mongering and ratings grabbing.

Of course.  THAT is what draws the veiwing eyes and sells the air time for advertising dollars.

[Manedwolf]

Though it quickly becomes a self-fulfilling prophecy.

What do you think all the amateur speculators will do in response to that?

[Racehorse]

Are amateur speculators that big a force in the market? I thought prices were mainly driven by big, institutional investors.

[Headless Thompson Gunner]

Are amateur speculators that big a force in the market? I thought prices were mainly driven by big, institutional investors.

I don't think that amateur investors can move the oil market like the big guys can, but I do believe that they can exaggerate or amplify the trends set by the big guys.