Crude Awakening 2

Oil prices continue to spike, and there is no solid economic reason to justify the rise. Oil prices surpassed $90 a barrel for the first time in after-hours trading in New York before slipping back Friday in Asia.

What does this mean for consumers? Not only will you see prices at the pump rise, but expect heating oil and natural gas to rise as well - purely on speculation. The general public should not get upset with OPEC, the usual suspect has nothing to do with this rise.

Investors are being drawn to energy futures as a hedge against the weakening U.S. dollar. That, plus worries over tensions between Turkey and Kurdish rebels in northern Iraq, has lifted crude oil prices to new records for five straight days.

Data released in recent weeks shows speculative buying of oil futures is on the rise. Many analysts believe the underlying fundamentals of supply and demand do not support oil prices of $90 a barrel.

On Wednesday, the U.S. Energy Department reported that oil and gasoline supplies rose more than expected last week, countering suggestions that supplies are tight. However, crude supplies at the closely watched Nymex delivery point of Cushing, Okla., fell last week, and several reports in recent days have predicted oil supplies will tighten in the fourth quarter.

Thursday was the fifth day in a row crude prices have set new records. The new record has taken the price of oil nearer, but still below, inflation-adjusted highs hit in early 1980. Depending on the adjustment, a $38 barrel of oil in 1980 would be worth $96 to more than $101 today.

November natural gas futures fell 1.4 cents to settle at $7.360 per 1,000 cubic feet as investors shrugged off an Energy Department report that inventories rose by 39 billion cubic feet last week, less than analysts had expected. Supplies are high by historical standards.

For the savvy futures investor, now is a good time to look at oil; the price will climb to just above $100 per barrel, before this unctious bubble burst. Another gppd place to look on the commodities side is OJ, and not in Las Vegas.

The U.S. Department of Agriculture on Friday estimated Florida would produce 168 million orange boxes for the 2007-08 season, and growers are happy about it.
However, in Australia's Valencia orange crop for 2007 is tipped to be the smallest in over three decades. Those attending the National Orange Forum in Mildura (Victoria) on 9 October 2007 were told the crop would total just 194,000 tonnes by Australian Citrus Growers, down 19,000 tonnes on its initial forecast of 213,000 tonnes. The small crop, attributed to factors such as the drought and low water allocation, may mean that fruit juice processors will run out of supplies, while exports of ValenciaA's will be severely restricted.

The Aussie's along with teh risk of disease in FLA will greatly affect the supply curve, and this will lead to increased prices. It is still unclear if this will affect customers at the local grocery store, but it will affect the "market".