Oil Falls Below $75

WSJ(10/16) Commodities Report: Oil Falls Below $75 Wed

Wed Oct 15 18:45:45 2008
EDT

(From THE WALL STREET JOURNAL)
By Gregory Meyer

With oil trading at half of its record highs, price forecasts once seen as a
remote possibility are gaining mainstream acceptance.

Crude closed below $75 a barrel for the first time in more than 13 months
Wednesday, as the story of inexorable world demand growth starts to unravel.

Absent aggressive action from the Organization of Petroleum Exporting
Countries, oil now looks on track to fall below $70 -- possibly to $50 -- a low
last reached in January 2007, analysts say.

It's been a punishing few months for anyone who bought crude when it traded
above $147 a barrel in July. After a decadelong climb from $10 a barrel, oil
has fallen 50% in three months. Light, sweet crude settled at $74.54 a barrel
Wednesday, down $4.09, or 5.2%, on the New York Mercantile Exchange. In late
electronic trading, it sank as low as $73.55.

Copper on the Comex division of Nymex fell as weakness in stocks and worries
about the strength of the economy after a weak retail sales report pressured
the commodity. Nearby October copper lost 18.60 cents to settle at $2.2235 a
pound, while most-active December tumbled 18.40 cents to $2.2105.

The declines reflect fears that the credit crisis upending global financial
markets will snowball into a full-blown recession around the world.
Energy-demand growth has also slammed into reverse in large consuming nations,
and some forecasters now see global oil use shrinking next year, potentially
the first contraction since 1983.

Frozen credit has also altered the trading landscape. Investors have grown
leery of doing business with Wall Street firms that fashion complex products
pegged to commodities. Hedge funds with big positions in commodities are facing
redemptions from investors and demands for new collateral on bets made with
borrowed money. The number of open Nymex crude-futures contracts is at its
lowest since July 2006.

Stock markets have also been discouraging. In an industry short of good
supply-and-demand data, stocks indexes have become a "moment-by-moment
indication of future demand prospects," said Tim Evans, a New York-based energy
analyst at Citi Futures Perspective. Crude extended declines after a
late-afternoon plunge in the Dow Jones Industrial Average, which closed down
7.9% at 8577.91.

Having been overwhelmingly bullish amid oil's gains earlier this year, a host
of Wall Street energy analysts have chopped forecasts to account for the price
drop and the future demand scenarios. J.P. Morgan Chase & Co. on Wednesday said
it now sees oil averaging $74.75 a barrel next year; this is $25 lower than its
prior prediction. Prices could dip to as low as $60, the bank said.

Unlike most others, J.P. Morgan sees world demand shrinking next year, albeit
by a modest 320,000 barrels a day, to about 85.5 million barrels a day, as
drivers and businesses in heavily industrialized countries use less oil.

"The world economy is currently in recession," said Lawrence Eagles, J.P.
Morgan's head of commodities research and a former official at the
International Energy Agency. "This global recession, which has occurred very,
very suddenly, has reduced global demand."

Government analysts continue to see world demand growing next year, albeit
hesitantly. OPEC on Wednesday trimmed 100,000 barrels a day from its 2009
demand forecast and now sees consumption growing by 800,000 to 87.2 million
barrels a day.

Oil's slide suggests the cartel may agree to cut output at an emergency
meeting Nov. 18, or perhaps even earlier, if prices fall below $60. Iraq's oil
minister said Wednesday that OPEC should trim production at the meeting. Saudi
Arabia, OPEC's de facto leader and the only member with spare capacity, has yet
to tip its hand.

"Unless OPEC -- by that I mean the Saudis -- are willing to cut output, this
market will remain in free fall," said Nauman Barakat, senior vice president at
Macquarie Futures USA in New York.

Some commodity veterans argue for a rebound. Oil's decline could subside once
the rush by traders is over to unwind oil trades with counterparties they view
as risky, or once hedge funds stop unloading oil bets just to cut down on
leverage. But for now, oil's decline is also being exacerbated by a drying up
of physical oil deals amid the credit crisis: Some refiners and traders can't
get short-term trade financing to move tankers around the world or even to ship
fuel on pipelines.

In other commodity markets:


PLATINUM: Nymex prices tumbled as economic worries threaten demand for
platinum, which is mainly used in automobile catalytic converters and jewelry.
The demand worries at the moment are enough that investors may be reluctant to
hold the metal even if supply cuts should occur, traders said. October platinum
fell $68.40 to $966.70 an ounce.


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Asia Outlook

DJ UPDATE: Stks Slide; S&P 500 Loses Most Since Black Monday '87

Wed Oct 15 17:44:34 2008
EDT



(Updates with market data in the second paragraph and further company
information beginning in the fifth paragraph.)

By Rob Curran
Of DOW JONES NEWSWIRES


NEW YORK (Dow Jones)--The 2008 stock-market crash resumed on a Black
Wednesday with the Standard & Poor's 500 suffering its biggest percentage loss
since Black Monday, Oct. 19, 1987. This time, everything from retail-sales data
to a warning from mining giant Rio Tinto to a statement from Federal Reserve
Chairman Ben Bernanke indicated the bank rescue would not prevent a potentially
deep and widespread recession.

The broad S&P 500 index fell 90.17, or 9.03%, to 907.84, its biggest
percentage loss since the 20% decline on Oct. 19, 1987. The Dow Jones
Industrial Average fell 733.08 points, or 7.87%, to 8577.91 for its biggest
percentage loss since Oct. 26, 1987. The Dow trimmed its gains to 1.5% on a
week that started with a "Green Monday" - the biggest point gain ever for the
Dow. After its second biggest point loss ever, the Dow is off 39% from its peak
last October. The technology-oriented Nasdaq Composite fell 150.68, or 8.47%,
to 1628.33, and is now down 1.3% for the week for its lowest close since 2003.

Traders dumped stocks and commodities most tied to economic growth and
consumer spending after U.S. retail sales took the sharpest drop in three years
during S

Asia Outlook

DJ UPDATE: Stks Slide; S&P 500 Loses Most Since Black Monday '87

Wed Oct 15 17:44:34 2008
EDT



(Updates with market data in the second paragraph and further company
information beginning in the fifth paragraph.)

By Rob Curran
Of DOW JONES NEWSWIRES


NEW YORK (Dow Jones)--The 2008 stock-market crash resumed on a Black
Wednesday with the Standard & Poor's 500 suffering its biggest percentage loss
since Black Monday, Oct. 19, 1987. This time, everything from retail-sales data
to a warning from mining giant Rio Tinto to a statement from Federal Reserve
Chairman Ben Bernanke indicated the bank rescue would not prevent a potentially
deep and widespread recession.

The broad S&P 500 index fell 90.17, or 9.03%, to 907.84, its biggest
percentage loss since the 20% decline on Oct. 19, 1987. The Dow Jones
Industrial Average fell 733.08 points, or 7.87%, to 8577.91 for its biggest
percentage loss since Oct. 26, 1987. The Dow trimmed its gains to 1.5% on a
week that started with a "Green Monday" - the biggest point gain ever for the
Dow. After its second biggest point loss ever, the Dow is off 39% from its peak
last October. The technology-oriented Nasdaq Composite fell 150.68, or 8.47%,
to 1628.33, and is now down 1.3% for the week for its lowest close since 2003.

Traders dumped stocks and commodities most tied to economic growth and
consumer spending after U.S. retail sales took the sharpest drop in three years
during S

Asia Outlook

DJ UPDATE: Stks Slide; S&P 500 Loses Most Since Black Monday '87

Wed Oct 15 17:44:34 2008
EDT



(Updates with market data in the second paragraph and further company
information beginning in the fifth paragraph.)

By Rob Curran
Of DOW JONES NEWSWIRES


NEW YORK (Dow Jones)--The 2008 stock-market crash resumed on a Black
Wednesday with the Standard & Poor's 500 suffering its biggest percentage loss
since Black Monday, Oct. 19, 1987. This time, everything from retail-sales data
to a warning from mining giant Rio Tinto to a statement from Federal Reserve
Chairman Ben Bernanke indicated the bank rescue would not prevent a potentially
deep and widespread recession.

The broad S&P 500 index fell 90.17, or 9.03%, to 907.84, its biggest
percentage loss since the 20% decline on Oct. 19, 1987. The Dow Jones
Industrial Average fell 733.08 points, or 7.87%, to 8577.91 for its biggest
percentage loss since Oct. 26, 1987. The Dow trimmed its gains to 1.5% on a
week that started with a "Green Monday" - the biggest point gain ever for the
Dow. After its second biggest point loss ever, the Dow is off 39% from its peak
last October. The technology-oriented Nasdaq Composite fell 150.68, or 8.47%,
to 1628.33, and is now down 1.3% for the week for its lowest close since 2003.

Traders dumped stocks and commodities most tied to economic growth and
consumer spending after U.S. retail sales took the sharpest drop in three years
during S