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May 9: Crude rallies on to record high above $126 a barrel

Source: Marketwatch

New York -- Crude-oil futures blitzed past the $126 a barrel mark Friday, rallying to a record high of $126.20, pushed higher by weakness in the U.S. dollar and concerns over supply disruptions. Crude oil for June delivery was last up $2.18 at $125.87 a barrel on the New York Mercantile Exchange. The contract earlier rallied to a record high of $126.20 a barrel.

"Another rocking day," said Phil Flynn, a vice president at Alaron Trading. "There's a lot of bullish momentum right now and people are piling into oil, because it seems to be the best place to put your money.... Right now, the momentum for oil is very strong," Flynn said. See full story.

May 8: Crude futures slip, but remain in record territory

Source: MarketWatch

San Francisco -- Crude-oil futures edged lower Thursday, but remained firmly in record territory as traders' insatiable appetite for energy futures continued on the heels of ongoing global supply concerns. Crude oil for June delivery edged 8 cents lower to $123.45 a barrel on the New York Mercantile Exchange, after touching a high of $123.90. The contract traded 53 cents lower at $123 in electronic trading. Earlier this morning, crude soared to a record high of $123.93 in electronic trade, exceeding the intraday high of $123.75 hit on Wednesday.

"The surge in energy is being fueled by both technical and speculative interest, as both groups continue to pile into the markets on the back of continued concern about supply cutbacks," said Edward Meir, an analyst at MF Global, in a research note. "The buying interest is also evidenced by rising open interest readings, with yesterday's increase in WTI [West Texas Intermediate crude] up by 17,000 lots, bringing the two-day total to over 41,000 lots," Meir said. See full story.

May 7: Fed's Hoenig says inflation troublesome and too high

Source: Marketwatch

Denver -- A veteran U.S. central bank official said Tuesday he's worried about a deteriorating inflationary environment, and suggested that when the Federal Reserve begins to raise rates, it could do so swiftly. Federal Reserve Bank of Kansas City President Thomas Hoenig said rising inflationary pressures are "troublesome" and a "serious" matter, and now stand at "unacceptably high levels." He added, "the bigger concern is that these increases are beginning to generate an inflation psychology to an extent that I have not seen since the 1970s and early 1980s."

Hoenig fretted further that "there is a significant risk that higher inflation will become embedded in the economy and require significant monetary policy tightening to reduce it." He tied rising prices primarily to overseas factors, including a "sizable decline" in the U.S. dollar's value, and noted that given the long running rises in food and energy prices, he is increasingly focused on movements in overall inflation. Fed officials have long looked more closely at so-called "core" measures, which strip out food and energy moves, believing they predict future overall inflation rates more reliably. See full story.

May 6: Crude futures touch $122 as dollar weakens

Source: Marketwatch

San Francisco -- Crude futures reached a fresh record of $122 a barrel Tuesday as weakness in the U.S. dollar and global supply concerns fueled gains in oil prices for a third trading session. Crude oil for June delivery traded as high as $122 a barrel on the New York Mercantile Exchange. It was last up $1.68, or 1.7%, at $121.65. Crude's new record followed the previous session's record closing of $119.97 a barrel. The causes of the relentless climb in oil prices "have been chronicled repeatedly here -- demand from China and India, the falling dollar making oil an inflation hedge, speculation, OPEC supply restraints, supply threats in Iran, Iraq and Nigeria, and refinery bottlenecks in the U.S.," said John Kilduff, an analyst at MF Global, in a note to clients.

On the currency markets Tuesday, the U.S. dollar traded lower against most of its major rivals. The dollar index fell 0.4% to 72.77. A weak dollar makes oil more attractive as an investment alternative. "Adjusted for inflation, oil is now above the $101.70 peak hit in April 1980, the year after the Iranian revolution," said Kilduff. "Now we are in unexplored territory," he said "Add to it, the significant recent supply disruptions in Nigeria and additional inflationary pressures that surely must be the result of a loose monetary policy and the path of least resistance is higher still for energy markets." See full story.

May 5: Oil rallies on supply concerns, weak U.S. dollar

Source: Marketwatch

New York -- Crude-oil futures rallied more than 2% Monday, propelled higher by concerns about supply disruptions in Nigeria and weakness in the U.S. dollar. Crude oil for June delivery soared $2.43, or 2.1%, to $118.75 a barrel on the New York Mercantile Exchange in early morning trading.

"With last week's bullish headlines from the U.K. out of the way, Nigeria is the lingering hotspot the markets will be focusing on," said Edward Meir, an analyst at MF Global, in a research note. "The dollar is slightly weaker today against the euro, and is not pressuring energy, at least so far," Meir said. Nigeria's rebel group Movement for the Emancipation of the Niger Delta, MEND, said Sunday it was responsible for an attack on a Shell oil flow station in the south of the country, according to media reports. Shell confirmed the attack and said that some oil production had been closed down, according to reports. In recent months, MEND has claimed responsibility for a series of attacks on oil facilities in the Niger Delta. See full story.

May 2: Fed revs up lending in latest jolt to credit market

Source: Bloomberg

Washington -- The Federal Reserve, seeking to prevent a deeper economic slowdown, took another stab at coaxing banks into lending at lower rates.

The Fed boosted its biweekly Term Auction Facility sales of cash to banks by 50 percent to $75 billion and expanded the collateral it takes from bond dealers through loans of Treasury securities. It also raised the amount of dollars it makes available to the European Central Bank and Swiss National Bank through swap lines to a combined $62 billion from $36 billion.

Borrowing costs for banks have risen as much as 0.38 percentage point in the past six weeks, an increase that blunted the impact of the cash injections that began in December. The strains threatened to further impair mortgage markets, worsening an economy where growth has already stalled.

``The world is awash in liquidity, it just isn't reaching the right financial borrowers,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``Today's action from the central banks is another strong dose of medicine that will help cure what ails the credit markets.'' See full story.

May 1: U.S. initial jobless claims surge 35,000 to 380,000

Source: Marketwatch

Washington -- Erasing the drop reported in the prior week, first-time filings for state unemployment benefits surged 35,000 to 380,000 last week, the Labor Department said Thursday. That level is the highest seen since March. The prior week's claims were revised up by 3,000 to 345,000. The four-week moving average of initial claims fell 6,500 to stand at 363,750.

The level of average initial claims is consistent with a weak labor market, wrote John Ryding, chief U.S. economist for Bear Stearns. Economists say claims readings running consistently higher than 350,000 signal significant weakening in the labor market. Claims have been hovering near that level, albeit sometimes falling below it, for a few months now, exacerbating jitters about recession in the U.S. economy. See full story.

April 30: Dollar slightly lower after Fed decision

Source: Marketwatch

Washington -- The dollar was slightly lower against its major counterparts Wednesday, after the Federal Reserve cut interest rates 25 basis points as expected. The Fed cut short term interest rates on for the fourth time this year, lowering its benchmark federal funds rate by a quarter percentage point, to 2%. Rates stood at 4.25% at the start of the year. The Fed removed language that downside risks to growth remain, and added a suggestion that their other liquidity moves might help the economy. But the Fed statement showed that the central bank is still more worried about growth than it is concerned about inflation "This is a lot more dovish than I had expected," said Andrew Wilkinson, senior market analyst at Interactive Brokers.

The euro was lower but was holding its ground amid signs that inflationary pressures in the eurozone may be subsiding and businesses are growing gloomier about the economic outlook. The euro dipped slightly after Eurostat released its preliminary estimate of April consumer price inflation in the 15-nation eurozone. The agency estimated annualized CPI fell back to 3.3% in April after hitting a 3.6% rate in March. The consensus forecast was for an April rate of 3.4%. An easing of inflation pressures would be welcome at the European Central Bank, where officials have maintained a hawkish tone on interest rates in light of near-term price pressures and fears they could translate into entrenched inflationary expectations that would become difficult to root out. See full story.

April 29: Home prices plunge at faster pace in February

Source: Marketwatch

Washington -- The decline in U.S. home prices quickened in February, with prices down a record 12.7% in the past year for 20 key cities, according to the Case-Shiller home price index released Tuesday by Standard & Poor's. In February, prices were down 2.6% compared with January for 20 key cities, with prices in the smaller 10-city index off 2.8%. That's the fastest monthly price decline in the history of the index. The pace of decline has accelerated for nine consecutive months. The 10-city index has fallen a record 13.6% in the past year.

"There is no sign of a bottom in the numbers," said David M. Blitzer, chairman of the index committee at Standard & Poor's. Prices in 19 of the 20 cities have fallen over the past year, with prices in all 20 cities falling month-to-month for six straight months. "House prices in big cities are in a freefall," wrote Patrick Newport, an economist for Global Insight. "We think it very likely that the plunge in home prices is a key driver of the collapse in consumers' confidence," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics. In a separate report the Conference Board said its consumer confidence index fell to 62.3 in April, the lowest in five years. See full story.

April 28: Opec says oil could hit $200

Source: Financial Times

London -- Opec’s president on Monday warned that oil prices could hit $200 a barrel and there would be little the cartel could do to help. The comments made by Chakib Khelil, Algeria’s energy minister, came as oil prices continued to hover near $120 a barrel, putting pressure on the already struggling US economy. His comments suggest Algeria wants the Organisation of the Petroleum Exporting Countries to continue to resist calls by US and European leaders for the cartel to pump more oil.

But Mr Khelil blamed record oil prices on the weakness in the dollar and global political insecurity. He told El Moudjahid, Algeria’s government newspaper: “I don’t think that an increase in production would help lower prices, because there is a balance between supply and demand and the stocks of gasoline in the United States have recorded a surplus and are at their highest level for five years.” He added: ”The prices are high due to the fact of the recession in the United States and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the dollar, and therefore each time the dollar falls one percent, the price of the barrel rises by $4, and of course vice versa.” See full story.

April 25: Consumer sentiment plunges to 26-year low

Source: MarketWatch

New York -- High prices for food and fuel, weak income growth and falling home values pulled down consumer sentiment in April, according to a report released Friday. The U.S. consumer sentiment index declined to 62.6 in April -- the lowest level in 26 years -- from 69.5 in March, according to the latest gauge compiled by the University of Michigan/Reuters. Economists surveyed by MarketWatch were looking for a final April result of 63.0. An earlier estimate for April was 63.2.

"The recent acceleration in the loss in confidence indicates a longer and potentially deeper recession," according to Richard Curtin, survey director. "All households now anticipate smaller income gains and larger price increases, as just one-in-five now expect their overall finances to improve during the year ahead, the least favorable reading in more than a quarter century." The expectations index fell to 53.3 -- marking the lowest level since November 1990 -- from 60.1 in March. And the current conditions index in April declined to 77.0 -- the lowest level since November 1982 -- from 84.2 in March. See full story.

April 24: Platinum may hit $2,400 an ounce this year: GFMS

Source: MarketWatch

New York -- Platinum prices may soar to a new high of $2,400 an ounce this year, boosted by further supply disruptions from South Africa or a fresh break of gold prices over $1,000, London-based precious metals consultancy GFMS said Thursday. GFMS expects considerable volatility in the prices of platinum and palladium in 2008. It forecasts trading ranges between $1,700 and $2,400 for platinum, and between $400 and $550 for palladium.

"We would expect the higher end of these ranges to coincide either with further difficulties in South Africa or gold prices breaking strongly through the $1,000 level," GFMS said in its Platinum and Palladium Survey 2008, which was released on Thursday. "We remain positive for gold also and see this as a real possibility in 2008," GFMS said. See full story.

April 23: Foreign investors shun cheap US assets

Source: Financial Times

New York -- To the ire of many Americans, US assets are being sold to foreign investors at fire-sale prices courtesy of the beleaguered US dollar. That is the consensus, anyway, and one supported by the dollar’s 25 per cent decline on a broad trade-weighted basis since the start of 2002. True, the more the dollar slumps against the euro, yen and other currencies, the cheaper it is for foreign investors to snap up US assets. That’s the theory. But reality is far different.

Conveniently overlooked by the “America is being sold on the cheap” crowd is that foreign purchases of US assets have actually declined over the past six months. Rather than push deeper into the US, foreign investors are in retreat – a trend that should worry US legislators, not comfort them, since capital inflows are essential to the debt-laden, savings-deficient US economy. The weak dollar notwithstanding, US foreign direct investment (FDI) inflows declined 13.4 per cent in the fourth quarter of last year from the same period a year ago, and were only one-third the level of the prior period. On the M&A front, foreign purchase of US firms plunged roughly 25 per cent in the first quarter of from the same period last year. See full story.

April 22: Record-high crude nears $120 on supply concerns

Source: MarketWatch

San Francisco -- Crude-oil futures rose Tuesday to a new high of $119.90 a barrel as lingering worries over oil-supply disruptions and the dollar's new low against the euro provided support for prices. Crude for May delivery gained more than $2 to touch the new high in early afternoon trading on the New York Mercantile Exchange, surpassing $118.05 recorded overnight in electronic trading. The contract was last up $1.52, or 1.3%, to $119 a barrel. Crude's new intraday high followed on Monday's record closing price of $117.48 a barrel.

On the currency side, the dollar fell against the euro, with the euro-zone unit breaking the $1.60 level for the first time. Meanwhile, May reformulated gasoline rose 3.59 cents to $3.105 a gallon, and May heating oil gained 2.89 cents to $3.3403 a gallon. Natural gas for May delivery fell 5 cents to $10.68 per million British thermal units. See full story.

April 21: Crude hits $117.6 on weak dollar, Nigeria pipelines

Source: Marketwatch

San Francisco -- Crude-oil futures swung between gains and losses Monday, after soaring to a record high of $117.60 a barrel earlier in the session, as weakness in the U.S. dollar and concerns over supply disruptions underpinned prices. Crude oil for May delivery was down 42 cents to $116.26 a barrel on the New York Mercantile Exchange in early morning trading.

The Movement for the Emancipation of the Niger Delta, or MEND, said its members blew up two more oil pipelines in southern Nigeria, the Associated Press reported Monday. Crude hit the new record as "the dollar is down again and the Nigerian rebels MEND made good on their threats to have more attacks in Nigeria," said Phil Flynn, vice president of futures brokerage Alaron Trading. In the currency market, the dollar index, which tracks the greenback's performance against a basket of other major counterparts, dropped 0.5% to 71.59. The falling dollar increases the attraction of crude as an investment alternative and pushes up crude's dollar-denominated prices. See full story.

April 18: Crude closes at record, then touches $117

Source: Marketwatch

New York -- Crude-oil futures reversed earlier losses, rising nearly $2 a barrel on Friday to close at new record high of $116.69, as news about pipeline sabotage in Nigeria overtook the strengthening dollar to push up oil prices. The front-month contract hit $117 a barrel in electronic trading after markets closed. Crude oil for May delivery gained $1.83, or 1.6%, to settle at $116.69 a barrel on the New York Mercantile Exchange. It earlier fell to an intraday low of $112.72. The benchmark contract gained 6.2% in the week.

Traders said prices are rising after the main militant group in Nigeria's oil- rich region said it sabotaged a pipeline operated by a unit of Royal Dutch Shell PlC on Friday. "With this pipeline blowing up, traders have to think what else could happen over the weekend," said Phil Flynn, vice president of futures brokerage Alaron Trading. "The bears are already having kind of a weak hand now." Crude was mostly falling in morning trading as the dollar strengthened, weighing on dollar-denominated oil prices. See full story.

April 17: U.S. economy is rough shape, Fed reports

Source: Marketwatch

Washington -- The U.S. economy is in rough shape, a reading of the Federal Reserve's most up-to-date report on conditions indicates, with conditions weakening across much of the nation. Consumer spending has fizzled out, labor-market conditions are worsening and manufacturing activity is treading water, according to the Fed's Beige Book collection of anecdotal information from its 12 regional banks. Nine of the 12 districts said economic conditions were worse in mid-April than in the previous month. Three said that conditions had not changed much.

The report is prepared for Fed officials so that they can have a good sense of conditions "on the ground" when they meet on April 29 and 30 to set monetary policy. Most Fed watchers expect another rate cut of a quarter-percentage point or half a point. In addition to weak growth, inflation appears to be strengthening, the report said. Businesses are confronted with higher costs for inputs. Manufacturers have been better able than the service sector to pass these higher prices on to consumers. See full story.

April 16: Dollar falls to record low against euro

Source: Marketwatch

San Francisco -- The dollar remained under pressure against most major counterparts Wednesday, notching a fresh low against the euro after mixed U.S. economic data. The euro was changing hands at $1.5966, after rising as high as $1.5977, according to FactSet Research data. This marked loftiest level since the single European currency began trading in January 1999. It moved up from $1.5799 in late North American trading Tuesday.

The euro thus stands poised to test the technically and psychologically important target of $1.60, analysts said. The euro also hit a new all-time high against the British pound of at 80.88 pence. See full story.

April 15: Crude oil, motor gasoline set new records

Source: Marketwatch

San Francisco -- Crude-oil futures soared Tuesday to a new record of $113.93 a barrel, temporarily boosted by supply disruption in Mexico and Nigeria. A weaker dollar and lower inventories expectations also pushed prices up. Crude oil for May delivery rallied more than $2 to the new high earlier. It was last up $1.78 at $113.54 a barrel on the New York Mercantile Exchange.

At the pump, the average U.S. retail gasoline prices rose to a new record high of $3.386 a gallon, up 1.3 cent from the day before and well ahead of the month-ago price of $3.285 a gallon, according to the AAA Daily Fuel Gauge Report. Supply disruptions in Mexico and Nigeria were key in lifting crude to the record high. Bad weather forced the closure of export terminals in Mexico, according to analysts at Action Economics. Petroleos Mexicanos, the third-largest U.S. supplier of crude oil, shut its export terminal Monday and with another closing today, five terminals are now closed, they said. See full story.

April 14: An 'unfriendly' mix of inflation and weak growth

Source: Marketwatch

San Francisco -- There were a lot of grumpy shoppers last month, upcoming economic data are likely to show. Dragged down by a drop in auto purchases, retail sales are expected to have slipped 0.05% in March from the previous month, according to MarketWatch's survey of economists. Even taking out autos, whose annual sales rate is running 8% less than last year's, business was far from busy. Economists expect the government Monday to report a 0.1% drop in non-auto consumer sales, which include groceries, gasoline and other spending.

When they did take out their wallets, consumers likely paid more on both basic items and impulse purchases. The consumer price index, which comes out Wednesday, is estimated to have climbed 0.3% from February, or nearly 4% from the same month last year. "An unfriendly mix of mostly higher inflation numbers and weaker economic growth indicators," is how Lynn Reaser, an economist at Bank of America Corp., describes the roster of scheduled economic reports. See full story.

April 11: U.S. stocks hard hit by GE's disappointing results

Source: MarketWatch

New York -- U.S. stocks retreated to April lows on Friday after industrial bellwether General Electric Co.'s earnings miss jolted investors and cast a gloomy light on upcoming profit reports. The major indexes, down about 2%, were on track for weekly losses of 2% and more. "GE never surprises us, and they had the whole month of March to let us know, all they had to say is, for the love of God, business is actually slow!" said Art Hogan, chief market strategist at Jefferies & Co.

The Dow Jones Industrial Average shed 229.93 points to 12,354, readying it for a weekly loss of 2%. Of the Dow's 30 components, 28 traded in the red. General Electric fronted the blue chips' losses, its shares suffering their worst one-day percentage drop since October 1987. The shares were recently off 12.8%. The industry bellwether reported a 6% decline in first-quarter net profit, largely over trouble in its financial-services businesses. See full story.

April 10: Housing pain continues to spread

Source: Marketwatch

Boston -- Ongoing weakness in the market for previously owned U.S. homes is a signal the key spring sales season is off to a poor start and a reminder that softness in residential housing is still spreading, analysts said Thursday. "Overall, it illustrates just how much more national this housing downturn is than any other in recent memory," Deutsche Bank wrote in a research note.

"The mortgage crisis is clearly the common culprit, sapping demand through tighter standards and accelerating home-price declines through distressed inventory," said analysts Nishu Sood and Rob Hansen. "Most remaining housing imbalances are in the resale market, so we argue that resale trends are the most important in evaluating the housing market's trajectory." Earlier this week, the National Association of Realtors said sales contracts on existing homes dropped about 2% in February from the prior month. "The slip in pending home sales implies we're not out of the woods yet, though an era of successive deep sales declines appears to be over," said Lawrence Yun, NAR's chief economist, in a statement. See full story.

April 9: Oil rises to new high of $112.21 as inventories fall

Source: MarketWatch

San Francisco -- Crude-oil futures rallied more than $2 Wednesday to end at a new record closing price of $110.87 a barrel as government data showed a surprising drop in U.S. inventories. Similarly, gains were seen in petroleum-products futures trading on the New York Mercantile Exchange. The nation's stockpiles of crude fell to 316 million barrels in the week ended April 4, the Energy Information Administration reported. This was down 3.2 million barrels on the week. Analysts surveyed by energy information provider Platts had been looking for an increase of 2.7 million barrels. Crude oil for May delivery rose $2.37, or 2.2%, to close at $110.87 on New York Mercantile Exchange. Earlier it surged to a new intraday high of $112.21 a barrel.

"The hefty fall in crude oil stockpiles was a major shock for a market which was expecting the opposite," said Martin Slaney, an analyst at GFT Global Markets U.K. Ltd., in email comments. "As we head into driving season in the U.S. the tumbling inventories data is particularly significant." Chris Lafakis, an analyst at Moody's Economy.com, called last week's reduction in inventories "supportive of record oil prices." Crude's previous all-time high record was $111.80 hit on March 17. See full story.