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Crude Oil Prices Dip Again

Crude oil traders are focused on the weather in recent days. As last week ended, prices moved higher. The memory of Hurricane Katrina, almost exactly one year ago, is still fresh in the minds of energy traders. No one wanted to be caught in a short position if weather worsened over the weekend.

As the path of Ernesto became clear, traders realized that it would miss the major energy installations. Some believe that the market is over-reacting to the weather, with little attention to fundamentals, and that might be true. Crude was back below $70/barrel.

There has been a corresponding dip in the one-year prices for gasoline and diesel. The astute fleet manager looks for dips in market prices, perhaps instituting a partial hedge.

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