Oil Price thread

Oil prices have once more risen to record highs amid ongoing concerns over supply and security.

In Wednesday trading in New York, a barrel of US light crude temporarily hit a fresh high of $65.00 before ending the day's trading at $64.90.

London Brent saw similar gains, jumping $2.08 to a new peak of $64.06 a barrel, before settling at $63.99.

http://news.bbc.co.uk/2/hi/business/4140026.stm

The US thirst for gasoline and fears of a hurricane have pushed the oil market further into uncharted territory, with prices breaking the $67 mark on Friday.

US light crude closed $1 up at $66.80 a barrel, after hitting $67.10 earlier, while in London Brent crude closed $1.12 higher at $66.50.

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How high will it go do you think?

Oil prices fell by more than 4% on Wednesday as US inventory data showing crude oil was sufficient to meet demand helped to ease supply fears.

US crude oil settled at $63.25 a barrel in New York, down $2.83, while in London Brent crude ended down $2.52 at $62.56 after the announcements.

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Oil prices have surged to fresh record highs again after a surprise drop in US petrol stocks added to worries about a gathering storm in the Caribbean.

Tropical Storm Katrina could threaten oil production in the Gulf of Mexico, analysts warned, while a 2% slump in US supplies signalled a thirsty market.

US light crude closed at a new high of $67.40 a barrel, up $1.69 on the day, topping the previous high of $67.10.

Meanwhile, in London, Brent crude closed up $1.36 to $66.01 on Wednesday.

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[Richard]

The recent fluctuations seem to have more to do with the stock market than an actual shortage though, don't they? And that's because of worries over production capacity, not an actual crude-oil shortage.

Hard to say. Hurricane Katrina has also had an impact on oil prices. Crude oil contracts jumped almost $5 to a high of $70.80, before falling back to trade at $69.93 in Singapore.

Oil prices remained high on Wednesday as initial reports showed Hurricane Katrina had caused extensive damage to facilities in the Gulf of Mexico.

As the US Coast Guard said seven rigs were adrift and eight refineries had closed down, US light crude hit $70.57 a barrel in early Far East trade.

On Tuesday US light crude touched a fresh record high of $70.85, before falling back to close at $69.81.

Full story

[imp]

It is interesting that long-term oil futures (5-7 years for delivery) are in the low $60s USD compared to about $70USD for 1year futures. Although this can't strictly be interpreted as an indication that there will be much more oil in the future, it does indicate that those with big money on the line do not see $100+ USD coming in the long-term. It also indicates that they do not see a real shortage of oil before 2011.

http://www.nymex.com/lsco_fut_csf.aspx?product=CL

[Richard]

Doesn't mean that they are right though.

Well, I aren't saying that they are wrong either, only that the future is uncertain.

[eclipse]

Tracy said......
Oil at record prices again today. Boring.

Does anybody really care anymore about the price of oil? Certainly Wall Street doesn't, as it rightly puts its faith in Say's Law: supply creates demand. Cut the price of oil, and more will be used; increase the price, less demand. A law as old as the hills.

Recommended reading for Peak Oil fanatics: "The Doomsday Myth: 10000 years of economic crisis" (Hoover Inst Press, Stanford).

Yawn.

Recommended reading for "market solutions" fanatics...
The HIRSCH REPORT to the USA Department of Energy recommends 20 years of a "Manhattan Project" geared economy to weaning off oil. You can get the 96 page report at my home page www.eclipsenow.org or read the following summary that he emailed me...

"No one knows with certainty when the world production of conventional oil will peak, but a number of experts think it will happen in the next 5-15 years. Our work illustrates that the oil peaking problem can be mitigated with available technologies, but the time required for implementation is measured on a 15-20 year time line, at best.

The character of the oil peaking problem is like none other; without timely mitigation, the impacts will be dire, worldwide, and long-lasting. Prudent risk management dictates serious attention and massive action soon, which is difficult for most people and many decision-makers, who tend to wait until a problem is obvious before taking action.

Use this as you see fit.

Bob"

Recommended listening for "market solutions" fanatics...
Andrew McNamara, head of the Oil Vulnerability Taskforce for the Queensland state government in Australia, says that NOTHING will replace aviation fuel and the airlines will go bankrupt.
http://media.globalpublicmedia.com/R...a.20050824.mp3

Recommended reading for "market solutions" fanatics...
the USA budget including obscene subsidies for building highways when they should be building fast rail. The government is already meddling with the supply and demand mechanism, I'm campaigning that they meddle in the other direction.

Sorry Tracy but your arrogant disdain for this crisis, and cliche faith in "market solutions" is actually so familiar that (yawn) I'm trying hard to stay awake myself. Yes the market normally responds to issues of supply and demand, but oil currently IS the market. To quote Kunstler (of www.endofsuburbia.com movie fame) after oil peaks, how are you American's going to get toilet seats from China anymore?

My response to cliche faith in the market? (Yawn.)