Posted on 10/29/2007 8:43:01 AM PDT by NormsRevenge
LONDON (AFP) - Oil prices jumped to fresh historic highs on Monday, breaching 93 dollars for the first time on mounting concerns about tight energy supplies worldwide, analysts said.
Investors pushed up crude futures to new peaks as more bad news in the shape of Mexican production cutbacks came on top of already serious tensions in the Middle East.
Also supporting oil prices Monday was a weak dollar and OPEC's reluctance to increase output ahead of the northern hemisphere winter when demand for heating fuel spikes.
"There are supply concerns around," CMC Markets trader Nas Nijjar said.
New York's main futures contract, light sweet crude for delivery in December, hit a record 93.20 dollars per barrel before settling back to 92.89 dollars, a rise of 1.03 dollars from Friday's close.
Brent North Sea crude for December delivery hit a record 90.00 dollars, before it too slipped back to 89.49 dollars for a gain of 80 cents.
Oil prices have rocketed by about 50 percent over the past year although adjusted for inflation, they remain below levels reached after the 1979 Iranian revolution.
Current prices would have to go just above 100 dollars to reach outright as well as nominal highs, according to economist calculations.
"What we see (in Monday's trade) is a continuation of the trend that was in place Friday," said David Moore, a commodity strategist with the Commonwealth Bank of Australia.
"Geopolitical tensions, issues regarding tensions between Turkey and Kurdish rebels (in Northern Iraq) ... those sort of factors have added to oil prices," he added.
Tension between Turkey and Kurdish militants in northern Iraq has fuelled concerns that energy supplies from the Middle East -- where Iran's nuclear programme has already triggered sanctions from western nations -- could be disrupted.
Given the current situation, prices are likely to rise further and 100 dollars for oil cannot be ruled out, Moore said.
"I wouldn't be surprised if in the very short term we see oil prices continue to move a little bit higher," he said.
"It is certainly possible they will move higher ... I personally don't believe we will see oil prices at 100 dollars but it is not impossible given the situation."
Also pushing up oil prices on Monday were reports that Mexico had cut some crude output because of a storm, said Dariusz Kowalczyk, a senior investment strategist with CFC Seymour.
Kowalczyk also predicted that prices were headed north given the prevailing conditions.
"I think pretty much at this point anything goes," he said.
The dollar's continued weakness was also bolstering oil prices.
Drill our own oil. Look at it this way......the automobile has been around for over 100 years now. Look at when they were first made and what they have evolved into today. People say we only have 200 years of oil left.....if that is true, what do you perceive the automobile will become in the next 100 years? We probably won’t need gas to run cars. So why not drill our own oil. This question is beyond belief..........who says we can’t drill our own oil? Doesn’t it belong to the people of this country?
Drilling wont help.
The falling dollar is the cause.
A weak dollar helps our manufacturing however.
This is a bread and butter issue that would drive people to the polls.
Yeah, the reality is we need refinery capacity (those such issues) but drilling for our own oil (with a clear determination to do such!!) would have an impact on OPEC and the world oil markets. The symbolism of such would cause prices to go down.
Thus showing the world WHY THE USA is the best country in the world.
We nicely buy and pay for their oil, instead of just taking it.
If it was not for the USA, the rest of the world would be marching on the middle east to take control of the oil?
When we first started buying oil from the middle east, it was because it was only about $6. Theory was, since it was so cheap, why drill our own? At $93, it’s time we drill our own and build more refinerys and........keep our oil here in this country.
Doing that requires the two B's... brains and balls.
That ship passed in 2006 and the democrats will not allow it
Most people think all these oil profits are lining Bush and Cheney’s pockets. Plus they figure Mr Exxon, Mr Sunoco and all those guys have safes in their offices just overflowing with cash.
You are right though. GWB could use this to support the idea of drilling at ANWR and other locations but I suppose his message would end up being “filtered” by the media to the point where he would come off looking like a polluter no matter what he said.
“Quote”
“Drill our own oil. Look at it this way......the automobile has been around for over 100 years now. Look at when they were first made and what they have evolved into today. People say we only have 200 years of oil left.....if that is true, what do you perceive the automobile will become in the next 100 years? We probably won’t need gas to run cars. So why not drill our own oil. This question is beyond belief..........who says we can’t drill our own oil? Doesn’t it belong to the people of this country?”
~~~~~~~~~~~~~~~
Sounds good to me, Gunny!!!!!
And, while we’re at it we should drop all this bs junk BigBroMoFo has required on our vehicles by federal law, e.g., smog controls, bells and whistles to control us closing/locking doors, fastening seatbelts, etc., etc.
Matter of fact, tailfins and big V-8s are ok too.
With all the improvements in vehicles in the last many years, just think how great they would be if designed with the drivers in mind, and to hell w/the tree huggers and their imaginary global warming, global this and/or that.
Old Marine saying...
“Ya can shock the sh!t troops...
But ya cannot sh!t the shock troops”
-Author Unknown
Semper Fidelis
Dick G
~~~~~
It is called Supply and Demand. Drilling most certainly will help. Even a big reserve find like the one they found under the Gulf of Mexico off Texas last year will help a lot.
Which the a certain sect of Freeper seem to lack. I suppose the fact that no one in the WH is on the ballot in 2008 is going right over the BDS crowds head.
That ship passed in 2006 and the democrats will not allow it
—
and folks need to keep in mind who on the GOP side also voted Nay when legislation to at least start the process. Some are up for re-election and likely will be re-elected, without a change in their tune on this and other moderate issues.
And the years before 2006? Can't blame the Dems for everything. The Pubbies have had plenty of time to make things right since the Clinton presidency. The Republican are no better then Democrats at this time in history.
####Drilling wont help.
The falling dollar is the cause.
A weak dollar helps our manufacturing however.####
Surprising more people (the media) do not make that cause and effect connection.
How many EURO’s or Pound Sterling does it take to buy a barrel of oil? It puts it in perspective real fast.
I am not sure the boost in manufacturing is more than a blip on the screen at this point. The price I am paying at the pump, food market, and home heating oil seems like a lot to pay for that blip. Not worth it IMHO
They still need to help those who are running...
This is peak oil. Actually a month ago.
Your context is a little off. Drilling by itself won't necessarily or drastically affect oil prices. The price of a barrel and the price at the pump are not directly and/or completely related.
But adding supply to offset demand will certainly drive prices down. Supply has to be supplemented with refinement capabilities and right now, America doesn't have the infrastructure to refine much more than we already do. We don't build refineries anymore.
Now, if there was a market to refine more oil, there would be a bigger push to build refineries. To do that, the cost of the assets would have to be offset by the potential profits. And what is the most expensive and restrictive part of "drilling for oil" or "refining" it? Land, legal and EPA standards, processes, procedures, red tape, etc.
We could bring a lot more oil into this country and drive prices way down in 5 years if we were as committed to it as we were to get a man on the moon.
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