Crude Oil Falls as Equities Decline, Oil Workers Seem To Be Kept On The Job, OPEC Unlikely To Announce New Cuts

"Crude Oil Falls as Equities Decline, Signaling Lower Demand"
Crude oil fell as declining equity markets signaled that the recession in major energy consuming countries will prevent demand from rebounding. Prices retreated from the highest level this year as a drop in telephone and technology companies snuffed out an early stock rally. The Energy Department said yesterday that U.S. crude oil supplies climbed to the highest level since 1990 as fuel consumption tumbled.

“We’re just tracking equities,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “The recent demand data are so weak that we could have a remarkable increase in demand.....Complete Story

"Oil Workers Stay Put In a Downturn"
The recent oil boom spurred the largest expansion in offshore drilling since the 1970s. Diamond Offshore Drilling (DO) particularly cashed in on the huge demand for its 45 deepwater oil rigs that it contracts to oil companies such as ExxonMobil (XOM), Chevron (CVX) and Conoco-Phillips (COP). During the past three years, Diamond's average annual growth rate was 41%, and in 2008 it increased profits by 55%,to $1.3 billion. But when the economy took a nosedive and oil prices plummeted last year, drilling activity saw a precipitous drop, too. While Diamond is still growing, the pace has slowed: On Apr. 23 the Houston company announced a 13% revenue increase in the first quarter of 2009. In 2008, revenue had grown by nearly 30% compared to the same period the year before.....Complete Story

Today’s Stock Market Club Trading Triangles

"OPEC Unlikely to Announce New Output Cut in May, Barclays Says"
The Organization of Petroleum Exporting Countries, supplier of about 40 percent of the world’s oil, is unlikely to announce a further output cut at its next meeting as prices “stabilize,” according to Barclays Capital. OPEC will probably keep production targets unchanged as long as crude prices remain around current levels and inventory growth continues to slow, according to Barclays’s head of commodities research, Paul Horsnell. The group meets on May 28 in Vienna.

“If they held the meeting today, there’s no reason to change” quotas, Horsnell said in a telephone interview from London. “Prices are stabilizing and starting to nudge up in the direction they want.....Complete Story



Do you think OPEC cuts have an influence on the price of oil anymore? Let's us know what you think, please feel free to leave a comment!


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