Oil is down another $4 per barrel.
And may we all say: Amen.
Fluffy kitty posts to come later today.
The news just reeks, otherwise.
The Catmage Chronicles
Andy thought he was going crazy when a talking cat showed up at his front door. He couldn’t have been more wrong.Goldeneyes is a Catmage – a cat with human intelligence and magical abilities. Andy is an eighth grader who is smart, impulsive, and trying to avoid the school bully at all costs. A prophecy threw them together. There’s just one problem: Goldeneyes can’t stand humans.The Catmage world is heading toward war. Goldeneyes and Andy must try to stop the enemy from getting stronger. And they must save a powerful Catmage who’s been kidnapped. For Goldeneyes, it’s personal. That Catmage is her grandmother.Andy and Goldeneyes must try to put aside their differences. If they can’t, the enemy will soon be too powerful to defeat…
So we announce that we’re going to drill here, something that will eventually give us more oil independence, and the Sauds drop the price per barrel. Funny how that works.
Well, I don’t know about that. But U.S. inventories are up unexpectedly, and so, the price dropped. Oil ended at $135 today, gaining a few cents, but I’ve been watching it. It was staying pretty steadily in the $138-$140 range for the past couple of weeks. Dropping five bucks is a good thing.
I think that the announcement on drilling dampened speculation.
Kate: The Saudis don’t set the price. Exchange-traded commodities aren’t bought and sold using the same rules you use when buying merchandise for yourself. They are instead sold via a continuous global auction, much like how stocks and bonds are traded. No individual buyer or seller determines the price – it is instead set by the exchange, based on the publicly-posted minimum prices sellers are willing to accept and the publicly-posted maximum prices buyers are willing to pay.
Recent news (the President revoking the executive ban on offshore drilling, and his calling on Congress to repeal their part of the ban) has convinced some of the market that new supplies will be forthcoming (at various time-scales.) The result is that some (but not all) buyers are no longer willing to pay as much as before for oil (or for future contracts to buy oil). It also convinced some (but not all) producers to be willing to accept a lower price for oil (or to sell future contracts.) This is what actually brought down the market price.
Cartels like OPEC can collaborate to post a uniform “willing to sell” price, but it’s still market forces (via the exchange) that combines this with other sellers’ prices and buyer’s prices to determine the actual amount of money handed over for a barrel of oil.