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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: c.hinton who wrote (11415)	5/18/2004 12:41:57 AM
From: c.hinton	Respond to of 108592

Oil prices soar amid deepening crisis in Iraq By Kevin Morrison and Neil Dennis Published: May 17 2004 9:53 \| Last Updated: May 17 2004 20:35 Crude oil prices hit fresh record highs on Monday, fuelled by persistent worries over global supplies, and concerns about the future of Iraq amid deepening domestic crises for both George W Bush and Tony Blair. Nymex light sweet crude for June delivery hit another record high of $41.85 a barrel shortly after the fatal bomb attack outside the coalition headquarters in central Baghdad yesterday morning, and by late trading in New York, the benchmark crude contract was trading 17 cents higher at $41.55 a barrel. In London, July Brent crude futures ended 5 cents lower at $37.91 a barrel after peaking at $38.50 on the International Petroleum Exchange. With no formal exit strategy from Iraq, oil market participants have been left wondering what is in store for oil supplies from the region when the US-led coalition withdraws. The recent attack on the Basra oil terminal in southern Iraq has cut daily output to 1m barrels, from 1.5m b/d, while shipping agents said oil output from Kirkuk in northern Iraq has halved from last week's levels to less than 200,000 b/d. Underpinning these fears has been the persistent threat of short supply of gasoline to the US market ahead of the summer driving season. Calls by Saudi Arabia for immediate output increases, aimed at soothing the market, have been virtually ignored. US gasoline futures hit another peak when they touched $1.4250 a gallon, and were trading at $1.4160, a rise of 0.60 cents, in early afternoon New York trade. Speculative investors continued their long attraction to US energy futures based on the latest weekly data from the Commodity Futures Trading Commission, the industry regulator. The CFTC showed speculators increased their net long position in Nymex WTI crude futures contracts by almost 1,000 contracts to 66,434 in the week to May 11, an indication that investors expect prices to rise further. "So while energy markets are vulnerable to a withdrawal of speculative length, the scale of short positions suggests there is almost as much risk of short-covering driving energy prices even higher over the next few weeks," Barclays Capital said in a research note. Elsewhere in the CFTC report, speculative investors cut their exposure to commodities as investors became increasingly nervous about the outlook for metal prices following China's attempts to cool its surging economy. Gold prices slipped from their intra-day peaks that were reached after the Baghdad bombing. Bullion peaked at $383.30 a troy ounce, before slipping to $379.45/$380.15 in late London trade, a rise of $1.50 from the late quote in New York on Friday.

To: c.hinton who wrote (11415)	5/18/2004 6:42:07 AM
From: jimsioi	Read Replies (2) \| Respond to of 108592

The Privateer's comments.... The Privateer has been around the PM tracks many a time...His work is well worth respecting.. Unfortunately, unless you are a subscriber, his thoughts are much less available that they were previously when in fact I used to quote his site often... Clinton, his comments you picked up are about in line now with how most participants see what has happened, better expressed then most...My question is if the flight of capital is getting more to cash when does that translate to a bull market again in commodities a la the late 1970s...? For the record I am beginning to believe all the parallel drawing between the 70's and now is way over done....These times are different. …markets have matured, there will be the unexpected differences..... --------- "With the growing apprehension, which has now become certainty, that the Fed is on the verge of raising official US rates, and with the resultant LEAP in rates on Treasury debt (especially Treasury debt of one year plus maturity), a huge hole has appeared in the value of US bond and stock portfolios. This has led to capital repatriation. But a far more potent aspect of the anticipation of higher US rates has been...this movement, this unwinding of the "carry trade", which is pushing the US Dollar up on the forex markets. The present Dollar advance is the VERY last echo of the US bubble markets, fuelled as it is by the accelerating unraveling of all the other ones. The flight of capital is getting closer and closer to "cash"... PRECISELY what happened to the dollar in the late 1970s."