NEW YORK (Reuters) - Oil prices fell $2 on Monday in thin trading as the U.S. dollar recovered some of the ground it lost against major currencies. U.S. crude futures were $2.01 lower at $79.21 a barrel at 1711 GMT, extending losses from Friday. London Brent crude was $2.03 lower at $76.87. Oil prices have been closely linked to changes in the value of the dollar in recent weeks as investors have bought crude futures and other commodities as a hedge against the weakness in the dollar. Stronger-than-expected jobs data out of the U.S. last week eased fears of a recession in the world's biggest economy and reduced the likelihood of another cut in U.S. interest rates, helping the dollar bounce back from its recent lows. "The stronger dollar is hurting commodities across the board, and for oil there is also a sense that the worst of the hurricane season has passed, and so that is adding to the weakness," said Mike Zarembski, senior commodities analyst with optionsXpress in Chicago. The Atlantic hurricane season officially runs through November, although the peak period for storms falls in August and September. Thirteen named storms have been tracked in the Atlantic this year, but no significant damage has been done to oil and gas infrastructure. Oil prices hit a record high of $83.90 a barrel on September 20, after the U.S. Federal Reserve cut interest rates in a bid to calm credit markets, sending the dollar lower. Concern that the decision by the Organization of Petroleum Exporting Countries to increase oil production by 500,000 barrels per day starting November 1 would fall short of demand further fueled prices. The new executive director of the International Energy Agency, which represents 26 developed nations, warned on Monday that high prices would eventually hurt consuming nations' economies. "If the prices are going very high, certainly, it has a negative effect on the economy," said Nobuo Tanaka in an interview. However, Tanaka stopped short of calling on OPEC to further increase production and said the IEA was still evaluating the impact of the subprime credit crisis on oil demand growth. Investors say the outlook for oil prices remains bullish, given poor growth in non-OPEC supplies. "The most likely situation we are in is that we're going to see oil prices average $70 for the rest of the year," said Tim Guinness, chairman of Guinness Atkinson Asset Management. "We think there is a 30 percent chance that we will see some sort of decisive assault on $100." Investment bank Goldman Sachs last month forecast oil prices could surge to $95 by the end of 2008 and estimated the average price next year at $85 a barrel.
Sometimes... well... er.... make that Manytimes.... its hard to keep up with all the "experts" and their opinions or forecasts... Oil like so many other things... will price according to demand and supply... It will really go sky high when there is limited production or wells dry up.... Doesn't make much sense to me... other than the rich getting richer on the backs of the poor getting poorer.... Guess that's sort of a "duh" statement... oh well... guess I'm just another "Master of the Obvious" ....
I think I am going to change my name. This guy deals in black gold and has the last name that goes along with Black Beer.....MMMMMMMMMMMMMMMMm
