Crude Oil Jumps $25.00 a Barrel Over Bailout Fears

[Guest guest]

Hurricane Ike probably had an effect too, which should also tell the politicians that we need to spread our oil production out around the country so it is less vulnerable to events like these or even terrorism.

You are right also that this is related to the bailout. The morons didn't learn earlier that every time they did a bailout by printing more money, that the value of the dollar fell, which in turn made oil more expensive. Things stabilized and then the did it again, big time.

I really wish that our government had votes of no confidence like so many others. We could force the Congress down over and over again until they learn. We really need term limits and a forced course for all politicians in economics. They don't pass, they lose their office.

In a message dated 9/22/2008 4:26:19 P.M. Eastern Daylight Time, no_reply writes:

See, this is what the idiots in Washington don't see. the potential problems ensuing from their bailout plan. Did they really think the rest of the world would not take notice and react?Looking for simple solutions to your real-life financial challenges? Check out WalletPop for the latest news and information, tips and calculators.

[Guest guest]

See, this is what the idiots in Washington don't see. the potential

problems ensuing from their bailout plan. Did they really think the

rest of the world would not take notice and react?

Of course those of us who are invested in energy continue to rake in

the dough while the whole market sinks like a lead weight.

Thing is, based on the devaluation of the dollar, EVERYTHING is going

to get more expensive really fast. How nice it is going to be for

those of us hard workers to have to pay loads of money for groceries

and everything else because a bunch of idiots borrowed more money

than they could ever pay back and they elected a bunch of idiots to

bail them out.

Administrator

http://www.bloomberg.com/apps/news?

pid=20601082 & sid=aPhXLrPjePjQ & refer=canada

Oil Posts Biggest Gain as Traders Caught in End-Month Squeeze

By Mark Shenk

Sept. 22 (Bloomberg) -- Crude oil climbed more than $25 a barrel, the

biggest gain ever, as traders scrambled to unwind positions on the

October contract's last day of trading. The more-active November

contract rose $6.62.

``This looks like a squeeze play,'' said Phil Flynn, senior trader at

Alaron Trading Corp. in Chicago. ``All of the contracts are up, but

nothing like October. This is the last day of trading and someone is

scrambling to guarantee supply.''

Crude oil for October delivery rose $16.37, or 17 percent, to settle

at $120.92 a barrel at 2:46 p.m. on the New York Mercantile Exchange.

It was the highest settlement price since Aug. 21. Futures for

November delivery rose 6.4 percent to settle at $109.37 a barrel.

Prices climbed today as traders who sold the October contract last

week, when oil dipped close to $90, had to buy the futures back. In a

squeeze a trader has gone short by selling contracts hoping the price

will decline. In the last days before the contract expires the trader

must buy back the same number of futures or be forced to deliver the

underlying oil.

``I don't think there's any doubt that's the indication of a huge

squeeze,'' said Craig Pirrong, director of energy markets for the

University of Houston's Global Energy Management Institute. ``It's

just stunning this could happen'' given the recent scrutiny in

Congress and among U.S. regulators concerning the crude oil markets,

he said.

`Yawning Gap'

``It's a very small pool playing in this market right now, and that's

why you're seeing those massive differentials'' between the October

and November contracts, said Kirsch, an energy markets analyst

at PFC Energy in Washington. ``Somebody did place a wrong bet and is

trying to cover that position.''

``The overarching factor is that the October futures contract expires

today,'' said Oatman, an analyst at SunTrust Humphrey

in Houston. ``This is a classic short squeeze. What lead up to it was

a strong euro, up on concerns U.S. government actions will ultimately

result in a greater budget deficit, higher inflation and a weaker

dollar.''

Investors looking to hedge against the dollar's decline earlier this

year have helped lead oil, gold, corn and gasoline to records. Oil

rose as high as $130 a barrel, up from $104.55 on Sept. 19, as the

dollar dropped on concern that a U.S. proposal to buy $700 billion of

troubled assets from financial firms will deepen the budget deficit.

The dollar declined 2.4 percent to $1.4817 per euro, from $1.4466 on

Sept. 19. It touched $1.4818, the weakest level since Aug. 22.

Hard Assets

``Gold, silver, oil, copper, just about any hard asset, is looking

good at this point,'' said Fitzpatrick, vice president for

energy risk management at MF Global Ltd. in New York. ``With the

dollar down and stocks getting hit, commodities look like a safe

play.''

Oil has risen 33 percent since Sept. 16 as lawmakers pledged fast

consideration of the Treasury's plan to buy devalued mortgage-related

securities.

``There's a flight to quality and the energy markets are

benefiting,'' said Lynch, president of Strategic Energy &

Economic Research in Winchester, Massachusetts. ``The dollar is down

again and investors are fleeing to commodities. We are back to the

cycle that pushed prices to records earlier this year.''

Hedge-fund managers and other large speculators increased their net-

long position in New York crude-oil futures in the week ended Sept.

16, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered

short positions by 19,379 contracts on the New York Mercantile

Exchange, the Washington-based commission said in its Commitments of

Traders report.

Gasoline

Gasoline for October delivery increased 10.41 cents, or 4 percent, to

settle at $2.7038 a gallon in New York. Heating oil rose 14.52 cents,

or 5 percent, to settle at $3.043, the biggest single-session gain

since June 6.

Regular gasoline, averaged nationwide, declined 1.8 cents to $3.739 a

gallon, AAA, the nation's largest motorist organization, said today

on its Web site. Pump prices reached a record $4.114 a gallon on July

17.

Crude oil prices are ``too high'' because the global economic

slowdown may spread and cut consumption, the International Energy

Agency's deputy executive director said.

``The economic slowdown in the U.S., Europe hasn't gotten into China,

India much, but at some point you have to presume it will,''

Ramsay said in an interview in Bangkok today.

The Paris-based IEA, which advises 27 developed nations on energy

policy, was set up in 1974 in response to the Arab oil embargo.

Brent crude oil for November settlement rose $6.43, or 6.5 percent,

to settle at $106.04 a barrel on London's ICE Futures Europe

exchange.

To contact the reporter on this story: Mark Shenk in New York at

mshenk1@....

Last Updated: September 22, 2008 15:53 EDT