Oil falls below $59 on supplies expectations

Crude oil was trading below $59 a barrel in New York, dropping the most in almost 14 months on expectations that a U.S. government report will show a jump in fuel stockpiles. Supplies of distillate fuel, which includes heating oil and diesel, and of gasoline probably rose last week, according to a Bloomberg News survey. Gasoline stockpiles the previous week jumped by the most in five years. Crude oil output cutbacks announced by Venezuela and Nigeria won't crimp supplies, analysts said.

Crude oil for November delivery was at $58.58 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 9:27 a.m. Sydney time. Futures have dropped 25% from a record $78.40 a barrel on July 14 as tensions in the Middle East eased and U.S. fuel stockpiles increased.

Dow soars to new closing high of 11,727

chron.com :

The Dow Jones industrial average finally reached new heights Tuesday, extending Wall Street's seven-year recovery with a record closing level after climbing into uncharted territory in trading earlier in the day. The index of 30 blue chip stocks ended the session at 11,727.34, wiping out the previous record of 11,722.98. Earlier, the Dow crossed its old trading high of 11,750.28, rising up to 11,758.95. Both of the previous records were set Jan. 14, 2000.

The Dow has recovered ahead of the broader Standard & Poor's 500 and the Nasdaq composite index, which also peaked in early 2000. Those indexes were inflated - overinflated in the case of the Nasdaq - by the dot-com bubble. The S&P 500's high close was 1,527.46, and the index remains more than 12% away from that milestone. The Nasdaq is even further off its highs and no one expects it to eclipse its record of 5,048.62 any time soon.

The market's recovery was helped by more than four years of solid corporate profit growth, and more recently, the Federal Reserve's decision to halt its more than two-year string of interest rate hikes. The decline in oil prices was the catalyst of the day. A barrel of light crude settled at $58.68, down $2.35, on the New York Mercantile Exchange. Oil prices have had a stunning fall from their intraday high for the year of $78.40 a barrel, reached in July. "When oil and gold start to back off, that's a sign that the economy is slowing and inflation is not a fear," said Joseph Sunderman, vice president of research and development, Schaeffer's Investment Research in Cincinnati.

- The Dow reaching record highs amidst a slowing economy? Hmm. Look at the long-term chart above. It looks like a classic double top forming. Another 2-3 years, and it could go below 5000, easy. What do I think? Sell!! LOL. Anyway that's my personal interpretation, not intended to be investment advice, bla bla ... :)

(2006-10-04 12:33:43 SGT) [Biz] Permalink

TSX index tumbles 261 points on falling resource stocks

940news.com :

A slide of almost 4% in the price of crude oil on rising supply and diminishing demand helped send Canada's main stock index tumbling more than 250 points. Toronto's resource-heavy S&P/TSX composite index fell 261.26 points to 11,526.13, also pressured by drops in mining stocks as the price of gold fell more than US$20 an ounce.

The November crude-oil contract on the New York Mercantile Exchange fell $2.35 to US$58.68 a barrel - the lowest level since July 2005 - amid easing supply concerns. Analysts said the next major technical support level for oil is around US$55. Analysts see little immediate prospect of a revival in oil prices, which are down dramatically from a record-high US$78.40 in mid-July. Since then, worries about Iran have receded, the Gulf of Mexico hurricane season has been a non-event and demand has slackened for oil and other commodities.

(2006-10-04 09:24:59 SGT) [Biz] Permalink

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