Yesterday, the U.S. Energy Department's weekly inventory release showed a less-than-expected build in crude stockpiles. However, the headline news was centered on a sharp drop in gasoline stocks and refinery utilization that pushed oil prices to a fresh 2009 peak and lifted energy stocks. The federal government’s Energy Information Administration (EIA) reported a 400,000 barrels rise in crude inventories for the week ending October 9, much less than analyst expectations. The modest increase can be attributed to scaled back operations by the refiners (prompted by weak profit margins) even as imports fell. This follows last week’s report, which showed an unexpected rise in oil supply figures, against consensus forecast of a buildup. Current crude oil stocks, at 337.8 million barrels, are 9.6% above the year-earlier level and remain above the upper limit of the average for this time of the year (depicted in the first EIA chart ...

Crude oil has tumbled to prices not seen for five years. But Byron King says the energy industry can’t function with prices this low. Investment in the future is drying up, and so is the existing oil supply. And that’s why the long-term price trend of crude is still way up.

This from Rude Awakening:

As crude oil languishes near a 5-year low of $35 a barrel, forward-looking investors have good reason to suspect that a new bull market is about to begin. Sure, oil prices might continue slumping over the near term. But don’t kid yourselves; the long-term price trend is up…maybe way up.

Back when oil was selling at $147, I said that the world does not run very well at such lofty energy prices.  A lot of things just stop working at $147 for a barrel of oil, particularly things with a large energy component.  The airlines

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Last week’s crude and gasoline inventories dropped more than expected as the effects of Hurricane Gustav resulted in some production disruptions. Gustav, which struck last month, was the fourth-most-destructive storm to hit the United States, causing $20 billion in damages. And then came Hurricane Ike. Ike made landfall in the Galveston area of the U.S. Gulf Coast on in the pre-dawn hours Saturday (the day I was penning this column) as a Category 2 storm with winds hitting 110 miles per hour.  Ike’s path toward Houston makes it the first storm to hit a major U.S. metropolitan area since Hurricane Katrina eviscerated New Orleans in 2005, Bloomberg News reported. We won’t know how much direct damage those high winds from Hurricane Ike will cause for several days at least. From the initial reports, the results appear to be devastating. But the indirect costs are ...

It was an up and down day for stocks as the major indices fluctuated on a mixed bag of economic news. The Dow managed to finish in the green, up 69 points to close at 11,417.

There was more news on the Fannie Mae (FNM) and Freddie Mac (FMC) front, sending the companies' shares to an 18-year low on fear of an imminent government bailout. Freddie Mac representatives are scheduled to meet with Treasury officials on Wednesday, and while the exact intentions of the conversations is not clear, it is an obvious signal that the company continues to remain under considerable stress.

Freddie Mac was able to raise $3 billion in a debt offering yesterday, but the company paid out record yields on the notes in order to attract buyers and compensate for higher risk.

Oil prices traded higher in today's session in spite of a positive reading on crude inventories. The U.S. Energy Department reported

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