U.S. Oil Prices Rise to over $62 a barrel and U.S.dollar plunges to near 15-year low

Commentary by Benjamin Train
November 29, 2006

Today's oil energy prices rose on a slight decline on U.S. inventories. Gold and Silver pulled back further, and the U.S. dollar fell to near a 15 year low. Right now the Euro is at resistance point. Euro/US Dollar at 131. The upper limit to this current move up in the Euro is around the 135 area. In a report by National Australia Bank economist, Gerard Burg, on Wednesday, which forecast an average gold price of $675/oz in 2007, up from his 2006 forecast of $606/oz. Tonights U.S. market close spot gold prices were at $636 as they entered the Sidney/Hong Kong market.

London stock trader and economist; Jerome R. Corsi, In an interview with CNBC, a vice president for a prominent London investment firm yesterday urged a move away from the dollar to the "amero," a coming North American currency, he said, that "will have a big impact on everybody's life, in Canada, the U.S. and Mexico."

Steve Previs, a vice president at Jefferies International Ltd., explained the Amero "is the proposed new currency for the North American Community which is being developed right now between Canada, the U.S. and Mexico."

Previs told the television audience many Canadians are "upset" about the amero. Most Americans outside of Texas largely are unaware of the amero or the plans to integrate North America, Previs observed, claiming many are just "putting their head in the sand" over the plans.

For a comprehensive look at the U.S. government's plan to integrate the U.S., Mexico and Canada into a North American super-state – guided by the powerful but secretive Council on Foreign Relations – read "ALIEN NATION: SECRETS OF THE INVASION," a special edition of WND's acclaimed monthly Whistleblower magazine.

Many analysts worldwide attributed the dramatic fall in the value of the U.S. dollar at least partially to China's announcement last week that it would seek to diversify its foreign exchange currency holdings away from the U.S. dollar. China recently has crossed the threshold of holding $1 trillion in U.S. dollar foreign-exchange reserves, surpassing Japan as the largest holder in the world.

Does this tell you that the U.S economy is over-extended? Here are a couple of articles that I feel you may find useful. Jan. Oil futures closed at $62.24, Jan. Unleaded closed at $1.6680 per gallon.

Where is the price of oil headed? Texas oilman T. Boone Pickens told central Arkansas business leaders Monday that the world has reached peak oil production and the United States, in particular, needs to find alternative sources of fuel.

"About 85 million barrels of oil are produced a day throughout the world, Pickens said. But because there are probably not any large, undiscovered oil fields left, the increasing demand for oil is rapidly diminishing the remaining supply," he said.

"Eighty-five million barrels is peak," Pickens said. "Will we find more oil? I think so, but we're going to have to go to alternative sources of fuel."



Oil Prices Rise on U.S. Supply Declines
Wednesday November 29, 4:06 pm ET

Oil Prices Climb More Than $1 to Surpass $62 a Barrel After U.S. Data Show Supply Drop

WASHINGTON (AP) -- Oil prices climbed above $62 a barrel Wednesday as colder weather drifted eastward across the U.S. and after fresh government data showed shrinking supplies of crude, gasoline and heating oil.

Other factors contributing to the market's upward momentum include a decline in the dollar, the currency in which crude oil is traded, and the possibility of further production cuts by the Organization of Petroleum Exporting Countries, which meets next month in Nigeria.

Citigroup energy analyst Tim Evans said the recent upswing in oil prices -- front-month crude futures have climbed by roughly $6 a barrel since settling below $56 on Nov. 17 -- may reflect traders' reassessment of OPEC's October decision to reduce its output by 1.2 million barrels a day.

Once extremely skeptical of the cartel's ability to carry out the cuts, the market now seems to recognize the significance of the cartel's action, Evans said.

"Maybe it was foolhardy on the part of some skeptics to take the opposite side of the trade from a cartel that has a 35 percent market share," he said.

"OPEC made a very clear statement that they intend to put a floor underneath this market," he added.

A strike by half the workers at a Valero Energy Corp. refinery in Aruba may also have influenced the buying, though a company spokeswoman said the 275,000 barrels-a-day plant is operating normally.

Light sweet crude for January delivery rose $1.47 to settle at $62.46 a barrel on the New York Mercantile Exchange. January Brent crude at London's ICE Futures exchange rose $1.86 to settle at $63.07 a barrel.

In other Nymex trading, natural gas futures climbed 31.2 cents to settle at $8.871 per 1,000 cubic feet, heating oil futures gained 6.7 cents to settle at $1.7953 per gallon on the Nymex and unleaded gasoline futures climbed 4.4 cents to settle at $1.6706 a gallon.

At year's end, the unleaded gasoline futures contract will be replaced by another as a result of changing environmental regulations. The new contract, known as the reformulated gasoline blendstock for oxygen blending, or RBOB, climbed Wednesday by 7.13 cents to $1.7084 a gallon.

The latest report from the U.S. Energy Department showed crude-oil inventories shrinking by 300,000 barrels last week to 340.8 million barrels, or 6 percent more than a year ago. Gasoline inventories declined by 600,000 barrels to 201.1 million barrels, or almost 2 percent below year ago levels. The supply of distillate, which includes heating oil and diesel, fell by 1 million barrels to 132.8 million barrels, or 1 percent above year ago levels.

Oil prices are down more than 20 percent since hitting a high above $78 a barrel in mid-July. They haven't settled above $62 a barrel since Oct. 1, 2006.



US setbacks see dollar plunge to near 15-year low
By Ambrose Evans-Pritchard
Last Updated: 12:16am GMT 30/11/2006

The dollar tumbled to a near 15-year low against sterling yesterday on fresh signs of economic trouble in the United States.

An 8.3pc crash in US industrial orders and an admission by the Federal Reserve chairman that Washington does not know how bad housing really is set off another day of wild gyrations on the currency markets.

US house prices fell 3.5pc to an average $221,000, the third month of declines. Stocks of unsold homes rose to 7.4 months' supply, the highest since 1993. The US consumer confidence index fell sharply to 102.9.

The "truckers index" of tonnage shipped by US haulage companies was down 1.8pc in October, a leading indicator of contraction. Merrill Lynch called the fall "borderline recessionary".

The dollar continued its slide against the euro, dropping to $1.3194 after the Federal Reserve chairman, Ben Bernanke, said the housing slump "would be a drag on economic growth into next year". Mr Bernanke said official figures did not pick up the "sharp increase" in cancellations on house deals and might understate the inventory glut.

"Any significant effect on consumer spending arising from further weakness in housing would have important implications for the economy," he said.

The pound briefly touched $1.95 and surged to eight-year highs against the yen.

The Japanese currency has been in freefall for months on repeated weak data. It suffered a fresh blow yesterday after retail sales fell for a second month, increasing fears that Japan's export-dependent economy may slow in lock step with America.

The OECD club of rich nations gave warning yesterday in its bi-annual economic outlook that the world's second-biggest economy was still too fragile after years of debt deflation to risk a rapid rise in rates from 0.25pc.

"The return to price stability is proving longer and less assured than expected. Further monetary tightening should wait until a fully-fledged exit from deflation finally materialises," it said.

The OECD downgraded its global growth forecast for the 30 leading economies from 2.9pc to 2.5pc in 2007, and said the US might need to start cutting interest rates next year.

Chief economist Jean-Philippe Cotis said there was no cause for alarm, arguing that the US would achieve the "soft-landing" it eluded after the dotcom bubble in 2000. "What the world may be facing is a rebalancing of growth," he said. "In the euro area, recent hard data suggest that a solid upswing may be under way. Growth should remain buoyant in China, India, Russia and other emerging economies."

In a rare piece of good news that helped calm Wall Street after the equity rout on Monday, Mr Bernanke said inflation had been "somewhat better behaved of late".

David Lereah, chief economist for the US National Association of Realtors, said there might be light at the end of tunnel for the housing market, citing a slight rise in transactions.