Oil Down 13 Bits

With crude oil futures significantly lower today, it seems like a good time to round up the recent upward and downward market pressures and take a look at where things are headed.

(Note: if you count yourself among the fist-shaking oil company haters, convinced that high energy prices are simply due to ExxonMobil fatcats and George Bush's crude cronies greedily gouging you into the poorhouse, you needn't read further.)

Today's move (as of 3:30 pm):  Down $1.68/barrel (2.32%)

Recent upward pressures:

• Alan Greenspan comments that high prices are due in part to reduced spare production capacity and refinery shortages.
• Gunmen abduct oil workers in Nigeria (now freed).

Recent downward pressures:

• Energy Department announces crude inventories rose by 1.1 million barrels last week, putting them well above the average seasonal range (expectations were for a half million barrel decline).
• Iran dials down the crazy just a hair.

Neither meat nor fish:

• Venezuela and Cuba agree to share exploration technologies.

Where to from here?  Well, if this hurricane season is less brutal than last, it appears that seasonal inventory levels (particularly natural gas inventories) could continue to build, even as we enter the peak summer months.  Further, if Ahmadinejad keeps his lunacy in check and OPEC doesn't overly worry itself over price volatility (a recently vocalized concern they'd presumably most happily assuage by keeping prices steadily high), there seems to be reason for optimism that prices will continue to normalize.

With Greenspan's suggestion that high oil prices are finally starting to drag on domestic economic growth, and with Bernanke having made clear that he's worried about energy costs bleeding into core inflation, this would be a delightful time for oil prices to back off.  And with futures down about 4% from their Monday highs, we may just be off to a promising start.