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Tuesday, September 20, 2005 

Oil Prices Rise on Fear Mongering

Oil prices soared yesterday in the largest one-day gain ever as fears mounted that a developing tropical storm could damage oil operations in the Gulf of Mexico and Texas. [...]
U.S. benchmark crude for October delivery gained $4.39 a barrel on the New York Mercantile Exchange to close at $67.39. That was the largest one-day dollar gain since oil started trading on the exchange in 1983, according to the Energy Department. The oil price closed at a record $69.81 on Aug. 30.

I really hope that the SEC takes a good hard look this time at oil companies this time. OPEC producing 2 million more barrels of oil, the temporary lift on refining and transport restrictions, and the release of crude from the strategic oil reserve should mean that our prices are headed back down to pre-Katrina levels.

Now I am not an economics genius, and I understand futures started selling higher, but this is all based on "Fears" of what Rita will do. Prices didn't rise with Katrina until the damage was done, and we knew what we are getting into. Prices just started falling, and now, with a tropical storm, that only hints at turning into a hurricane in the Gulf, prices start jacking up?

To me, everyone seems to be doing what they can, except the oil companies themselves. Gas stations are taking a profit hit because of this stuff, but Exxon just posted record profits?

Update: Prices have continued to drop throuout the day, reaching at least below $65 per barrel. Wallstreet has gained in light of this information...

Hey Exxon... Ya think?