Traders locking up storage space for crude created a huge rift in prices Friday between oil that must be delivered in several weeks and oil that can be taken in February.
The January contract for crude expired Friday and with stockpiles rising at the key storage facility in Cushing, Okla., the price dropped close to a five-year low as brokers and traders attempted to unload supply for whatever price they could get.
"If you could find storage for it, it's a way to get rich real quickly," said Peter Beutel, an analyst with Cameron Hanover.
With space tight amid a glut in supply, light, sweet crude for January delivery fell $2.35 to settle at $33.87, a level last seen in early 2004.
Most traders focused on the February contract, however, which rose 69 cents to settle at $42.36 a barrel o... [Read More]
Oil prices stabilized Friday as the White House's $17.4 billion auto industry rescue package gave Wall Street a boost and the dollar strengthened against the euro.
Light, sweet crude for February delivery rose 92 cents to $42.59 a barrel on the New York Mercantile Exchange. The contract overnight fell $2.94 to settle at $41.67.
The January contract, which expires Friday, fell 82 cents to $35.40, but fell as low as $33.44, a price last seen more than four years ago.
Analysts are largely discounting the January price, with the volume of the next month contract trading at 13 times the volume. Yet analyst Jim Ritterbusch said pre-expiration lows do provide a downside target to the next contract.
Ritterbusch, president of energy consultancy Ritterbusch and Associates, said the market is sending ... [Read More]
Auto package to come with new wage limits sought by Republicans
By TODD SPANGLER and JUSTIN HYDE
FREE PRESS WASHINGTON STAFF
WASHINGTON -- Saying he has to “shield the American people from a harsh economic blow at a vulnerable time,” President George W. Bush this morning announced plans to immediately extend $13.4 billion to struggling Detroit automakers, adding that in normal times it is a step he would be unlikely to take.
It signals the end of an anxious week for Detroit’s auto industry, with worries that the Bush administration might not move fast enough to keep General Motors and Chrysler LLC from collapsing, which both said could occur if they didn’t receive a quick infusion of capital.
The terms of the loans authorize $4 billion each for GM and Chrysler on Dec. 29 and another $5.4 billion for GM on Jan. 16.
Bankruptcy prospect looms for automakers; Bush raises stakes
Automakers begin studying options; White House warns of 'tough decisions'
BY JUSTIN HYDE, BRENT SNAVELY and KATIE MERX
FREE PRESS STAFF WRITERS
WASHINGTON -- The prospect of one or more Detroit automakers filing for bankruptcy rose Thursday as General Motors Corp. and Chrysler LLC weighed their options, and the Bush administration signaled that court-ordered cuts for creditors, suppliers and unions could be linked to a rescue.
Although federal officials emphasized that no decisions had been made, the possibility of government assistance for an automaker bankruptcy sent waves through Wall Street. GM shares were down 16% Thursday. Chrysler is not publicly traded.
People close to the companies say GM has continued to study bankruptcy as a possibility, and given the weakening economy, may need up to $15 billion to survi... [Read More]
And a Merry Christmas and Happy New Year to you, too.
President’s George W. Bush’s 9 a.m. holiday gift basket for Detroit automakers was $17.4 billion in short-term bridge loans to help General Motors Corp. and Chrysler LLC survive to see 2009.
The gift basket comes with lots of stern words about concessions, viability plans and possible bankruptcy in the future. But there’s little in the way of enforcement mechanisms. It will be up to the incoming Obama administration to set the strict terms and timetable for the profound changes to come for Detroit’s automakers, workers, suppliers, dealers and debtors.
This is not cause for wild celebration of the party-like-it’s-1999 variety.
Rather, it’s an occasion for thanks and relief that GM and Chrysler will sti... [Read More]
