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Posted on 10/07/2004 12:20:37 AM PDT by RWR8189
SINGAPORE (Reuters) - Oil prices broke into record territory above $52 Thursday on heightened concerns that supplies of heating fuels will prove inadequate during the northern hemisphere winter.
U.S. light crude futures set an all-time high at $52.38 a barrel, marking a 60 percent surge in prices so far this year on the strongest demand growth in a generation and a thinning cushion of spare capacity to cope with supply outages.
London's Brent crude also struck a record peak, at $48.15 a barrel.
"We're in uncharted territory. There aren't many reasons to sell and there's lots of reasons to buy oil," said David Thurtell at Commonwealth Bank of Australia in Sydney.
Most Asian stock markets fell as sky-high oil reignited worries that high energy costs would dent household incomes, raise companies' expenses and hurt global economic growth.
The yen (JPY=: Quote, Profile, Research) slid against the dollar due to Japan's heavy reliance on oil imports.
A senior International Monetary Fund official warned on Thursday that tight oil supplies could leave the global economy worryingly vulnerable for years to come.
David Robinson, deputy director of the IMF's research department, said the continuing rise in oil prices meant the fund's forecast of 4.3 percent global growth in 2005, published on Sept. 29, was already out of date and would probably be scaled back to around 4 percent if recalculated now.
"I do worry about the medium-term outlook, about the sustained vulnerability to oil prices looking forward," he said. U.S. government data Wednesday showed heating oil stocks fell 1.2 million barrels to 51.2 million barrels in the week to Oct. 1, leaving commercial tanks 6 percent lower than a year ago.
Other major oil consumers in Europe and Asia also hold thin heating oil supplies. Inventories of heating fuels should normally rise at this time of year to cater for a surge in consumption in winter months.
"We don't have enough inventories before winter when oil demand typically peaks," said Tony Nunan at Mitsubishi Corp. in Tokyo.
Worries about a thin supply cushion have intensified after mid-September's Hurricane Ivan, which drove U.S. crude production to the lowest level since 1950 and disrupted operations at refineries along the Gulf Coast.
About 478,000 barrels per day of crude output in the Gulf of Mexico, 28 percent of total gulf production, remains shut due to storm damage and industry executives estimate it could take 45-90 days to restore supplies from offshore platforms.
The hurricane also disrupted operations at Gulf Coast refineries, where plants were still working at only 89 percent of capacity last week, cutting into heating fuel supplies.
Nigeria also remains a concern.
Nigerian oil union NUPENG is threatening to disrupt production Sunday ahead of a general strike Monday, unless the government starts talks on retail fuel prices.
Nigeria's oil unions have called strikes four times this year over rising fuel prices in the world's seventh largest exporter. So far none have affected output
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If the scrawny Florida squirrels are an indication---we should be seeing snow by Thanksgiving. They have placed pecans (from what is left of the tree) on top of gasoline cans, propane tanks, garden rakes, shovels, tarps...then they have buried pecans too...these are witnesses squirrel placements, as opposed to hurricane tossings.
please hum a few bars...what song are you singing?
Oh why, oh why, didn't I buy stock in this?!
Not a peep from Bush. This is really starting to make me angry.
If you're not going to fix it, then at least blame the Democrats for blocking it.
He won't even do that much.
If you're not going to fix it, then at least blame the Democrats for blocking it.
He won't even do that much
Uh how can he fix it, when the demos in the Senate(i.e kerry) block his energy bill.
Funny how you don't blame kerry, who has votes on record blocking exploration.
I think it's gonna be an early and cold winter but not because of global warming.
I don't think warming = cooling. Something's wrong when we get to arguing that the opposite of what's happening is a sign that we're right. I'd say you better change your basic theory....something's wrong with it.
America has the world's largest coal reserves. Time to invest in and switch to clean coal technologies. We could replace all of the foreign oil we import with just 1 billion tons of coal a year. That would increase us to 2 billion used each year....and we'd have an 800 year supply.
Let the camel jockeys eat sand.
The best mid-east solution....take away their oil money and power....coal.
The best American energy solution...self sufficiency...coal.
Bought a wood pellet stove 4 years ago. I heat my 1,800 sq ft home on 3 tons for an entire year.
179.00 x 3 = 537.00 not bad eh?
Could it be the towel heads are raising price on purpose, to put a damper on our economy right before the election?
What's to stop Kerry from blocking it in the future as President or Senator? Not a peep about energy;its not even on the table.
BTW: Kerry is a whacko on this issue, and has a awful record-yet we hear nothing. Who is prepping W? They should be fired.
This will smother our economy eventually if something isn't done. Bush better make it an issue soon.
Clearly there is speculating going on. Soros?
$52.50 now.
Question: When gasoline spiked above $2 last year, oil was around $30 a barrel. We're nearly DOUBLE that now, and gasoline is still hovering at or around $2. Now, the laws of supply and demand cannot be circumvented. So, one of these scenarios must be true:
1) Oil companies have been grossly overcharging the public vis-a-vis oil prices and the pump, or
2) Gasoline will be at $3 in sudden fashion, or
3) Demand is slowing.
We know #3 is false. So, either we will see a spike in gaosline prices very shortly, or the #1 scenario has to be true. I'm personally guessing the #2 scenario is the true scenario. I'm guessing the oil companies are doing their best to keep prices in check with the election coming up.
Any comments?
I want GW to hammer this point home at the debate. Because I have to believe that fuel prices will be an issue.
Kerry will do nothing, other than perhaps raise the gasoline tax, to cope with this problem. he is too beholden to eco-nazis to do much else.
But I thought Bush had a secret deal with the Saudis to drop oil prices before the election!
Both coasts saw lower average temps this summer and therefore used less energy.
We have no idea whether the winter will be severe or mild.
I vote for speculation and something sinister too.
Talking heads now saying this means the economy will be in a free fall next year.
Politics? Of course.
Dittos-our home is 3500 square feet (three stories) and because heat rises, our pellet stove heats the whole house with very little help from our heat pumps. Also, we are in a rural area where field corn is cheap-most pellet stoves will burn a 50/50 mixture of corn/pellets. This leads to even more savings.
What oil shock? Read it here:
http://www.bloomberg.com/news/commentary/cbaum.html
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