Oil prices rise as Fed meets on interest rates

[Americanhero1]

Oil rises as Federal Reserve begins two-day meeting on interest rates


Oil prices rose Tuesday as the Federal Reserve began a two-day policy meeting on interest rates.
The U.S. government stepped in to bail out faltering banks and other giant businesses over the past year, which has helped send the dollar tumbling and the price of oil sharply higher.

Since oil is largely bought and sold in dollars, investors holding stronger currencies can buy more crude for less and have done so in recent months, sending the price of benchmark crude above $80 near the end of October.

The central bank isn't expected to take any action on interest rates, yet statements issued after such meetings can hint at the Fed's take on the state of the economy.

"Oil is still being controlled by larger macroeconomic forces and not just demand and demand expectations," said PFGBest analyst Phil Flynn. "The main concern is still all about what the Federal Reserve might do."

Crude has been plentiful because the global economic slowdown has crimped demand, particularly in the United States.

Most analysts believe crude supplies in the U.S. grew again last week, and the Energy Department on Wednesday will release its weekly supply and demand figures for oil and gasoline.

Benchmark crude for December delivery gained $1.47 to settle at $79.60 a barrel Tuesday on the New York Mercantile Exchange.

The steady rise in crude prices has pulled the retail price for gasoline higher.

Pump prices rose for more than two week straight before leveling off over the weekend.

The average price for a gallon of regular gasoline fell a half penny overnight to $2.686, according to auto club AAA, Wright Express and Oil Price Information Service. That's 22.5 cents more than a month ago, and 27.1 cents more than gas cost at this time last year.

Gasoline consumption dropped last week but continues to edge higher from a year ago, when the financial crisis helped drive the economy further into a recession.

Consumption for the week ended Friday declined 0.4 percent from the previous week, but it is up 3.3 percent from a year ago, according to the weekly MasterCard SpendingPulse report.

MasterCard's report is based on aggregate sales activity in the MasterCard payments network, coupled with estimates for all other payment forms, including cash and check.

In other Nymex trading, heating oil rose 2.73 cents to settle at $2.0733 a gallon. Gasoline for December delivery gained 1.32 cents to $2.0035 a gallon. Natural gas for December delivery gained 9.8 cents to settle at $4.922 per 1,000 cubic feet.

In London, Brent crude for December delivery added $1.56 to settle at $78.11 on the ICE Futures exchange.
http://finance.yahoo.com/news/Oil-prices-rise-as-Fed-meets-apf-3278495901.html?x=0

[Lewinsky Stinks, Dr. Brennan Rocks]

The falling dollar is so much BS. Even if the dollar were at full value, the robber-baron cartel investors would find some other excuse to pour money into oil, like nonexistent hurricanes, demand in China, etc.

[briann]

The falling dollar is so much BS. Even if the dollar were at full value, the robber-baron cartel investors would find some other excuse to pour money into oil, like nonexistent hurricanes, demand in China, etc.

Its not BS, its fact.  The dollar is at extraordinary lows right now, against many of the major currencies.  Its almost at parity with the Canadian Dollar. Everyone is flocking to Gold and oil for this reason.

Its not a coincidence that Gold is now at an all time high.... its ludicrously expensive.  Speculators everywhere are investing/speculating in these 2 commodities like never before.  Ask them why, and they all say the same thing... they hate the dollar and they hate the imminent inflation and our nations horrific debt.  Im not saying its the right thing to do, Im just telling you what they are thinking, and why they are buying it.

Yes, there is no question that the oil cartel is fixing prices and limiting supply like they always do.... but that doesnt cause the huge swings weve seen.  For it to go from 70 up to 143 down to 35 and up to 85 is maybe 10% from changes in supply and 90% from changes in demand (mostly from speculators).

[Lewinsky Stinks, Dr. Brennan Rocks]

You said it in the end with your statement about changes in demand from speculators. Even with a very stable dollar the investment cartel would still do their thing--maybe not quite as much as fast, but they could still set it to any price they want. Oil tycoon and Arab sheik speculators aren't exactly lacking in funds.