Wednesday, July 27, 2011

Look At The Bright Side

Signs of the recession; Falling oil prices 

Oil futures fell as the impasse over the U.S. debt ceiling hardened, while a surprise drop in U.S. durable-goods orders also weighed.

Later today, market participants should shift their attention to the U.S. Department of Energy's weekly report on U.S. oil and fuel inventories.

Light, sweet crude for September delivery was down 97 cents, or 1%, to $98.63 a barrel in early trade on the New York Mercantile Exchange. Brent crude on the ICE Futures Europe exchange fell seven cents, or 0.1%, to $118.21 a barrel.

U.S. Congress and Senate are still far from an agreement to raise the U.S. debt ceiling before Aug. 2, a date when the U.S. Treasury Department has said the government will run out of cash to pay its bills. Republican leaders have put forth a plan in the House of Representatives to raise the country's borrowing limit, but they delayed a vote on the bill until Thursday. 
AAA Credit Rating

If the government fails to reach an agreement, the three major ratings agencies have said they will downgrade the U.S.'s triple-A credit rating. That could raise the cost of borrowing and possibly slow the economic recovery in the world's biggest crude consumer. An actual default on U.S. obligations could be even more disastrous, some analysts warn.

"Ratings agencies can already easily make the case for a downgrade of the U.S. credit rating from AAA to AA," analysts at JBC Energy, a consultancy based in Vienna, said in a research report. "We think this is going to happen, reflecting not only the relatively dire state of the U.S. economy, but also the inability of the political system to cope with the current situation in a responsible manner."

Crude futures extended their losses following a surprise drop in U.S. durable-goods orders last month. The decline signals the sluggish economy is weighing on the country's manufacturing sector, a major user of energy.

Manufacturer's orders for goods like transportation, computers and machinery fell 2.1% to a seasonally adjusted $191.8 billion, the Commerce Department said. Economists surveyed by Dow Jones Newswires had expected orders would rise 0.4%.

Attention is likely to shift to the Energy Department's weekly report at 10:30 a.m. EDT. A similar report from the American Petroleum Institute late Tuesday showed a surprise increase in inventories, sending crude futures lower in after-hours trading.

The industry group said oil stockpiles rose four million barrels last week. A rise in stockpiles can signal weaker demand from refiners and can weigh on oil futures. 
I'm not playing fair but more people are using public transportation

Analysts are expecting the DOE to report a 1.4 million-barrel drop in U.S. oil inventories, according to a survey by Dow Jones Newswires. Gasoline stocks are seen rising 400,000 barrels, while inventories of distillates, including heating oil and diesel, are seen rising 1.7 million barrels.

1 comment:

  1. What if...? So what...! It's time to face the music; the monkey that been on America's back for years. We adapt. Stop borrowing; bring the bacon back to the US.

    Throw out the WTO.

    Start making products here, again.

    Like other countries keep your natural resources for your own well being.

    We make sure that if the product in made here;the money stays here! We must not allow foreign companies to send a large percentage of our labored profits to their homeland!

    Oil can and should be drilled for, by Americans for Americans within our territorial limits. Once people realize our income doesn't have to be just for labor. We will much better off.

    Window Man