But overnight the price of oil rose 85¢ to $43.48 on the Lebanese attack on Israel

The Feb NYMEX oil contract closed at $42.63, down substantially from $48.58 the day before and under the 10-day and 20-day moving averages. The WSJ says the 12% drop is the biggest single-day drop in percentage terms since September 2001. One factor was the US dEpt of Energy report showing crude inventories rose 6.7 million barrels last week, many multiples of the forecast. The amount of oil stored at the Cushing,

OK delivery terminal rose to a record high, too, showing weak demand.

But overnight the price of oil rose 85¢ to $43.48 on the Lebanese attack on Israel, the fear starting to grow that a pan-Arab alliance could grow against Israel and ultimately get reflected in a 1983-style embargo for Israeli allies. We say the probability of such an outcome is low. The miscreants are fringe groups, even if they hold power or high influence in Gaza and Lebanon, neither of which is an oil producer and both of which are failed states The question is whether real states want to make trouble and join up with these losers.

Bye For Now

Barbara Rockefeller
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