Islamic terror attack in Saudi Arabia /Oil back over $43!

The Sydney Morning Herald. ^ | 12-29-04 | AP

[M. Espinola]

Oil prices surged nearly $US2 a barrel Wednesday following two bombings in the capital of Saudi Arabia and after the US government reported that winter fuel supplies shrank last week.

Light crude for February delivery was up $US1.87 at $US43.64 per barrel on the New York Mercantile Exchange.

In London, Brent crude fell 90 cents to $US39.17 per barrel on the International Petroleum Exchange.

While down considerably from the October peak above $US55 a barrel, crude futures are 33 per cent more expensive than a year ago, contributing to higher prices for gasoline, heating oil and other fuels.

Fears of supply interruptions in Saudi Arabia, Iraq, Russia and Nigeria have underpinned higher oil prices throughout 2004, with markets especially volatile due to surprisingly strong demand and a tight global supply cushion.

Oil prices were lower Wednesday morning as traders seemed comforted by forecasts calling for mild temperatures later in the week, allowing them to essentially shrug off a report about the nation's declining inventories of crude oil and distillate fuel, which includes heating oil.

But attacks launched by militants and a suicide driver in Saudi Arabia sparked an afternoon rally in oil prices.

[KwasiOwusu]

Temporary blip.
Price of oil is still down a massive 21% from its high of $55 just a few weeks ago.
Plus there is always bombings in Saudi Arabia. Hasn't affected their output much.
In fact Saudi Arabia is now producing oil at close to their highest ever.
Meanwhile, Winter temperatures in America continue to be quite warm. It was hardly that cold at all in New York today for example.
Expect the price of oil to continue their downward spiral over the past weeks as these basic facts sink in.

[Shermy]

Might Osama's recent threats to attack Saudi oil facilities be a little rent-paying to his Iranian pals??

[putupjob]

Binny just got done telling his armies of scum to attack all oil interests.

[SunkenCiv]

"Winter temperatures in America continue to be quite warm"

Oh, no. I'd hate to live here in Michigan when it isn't! Seriously, last winter was about as cold as this, but for weeks on end. "The high today was 6." Just awful.

Still, this is good news. I agree, nothing too serious. Some of that bidding will be position covering and hedging or whatever.

[KwasiOwusu]

"Oh, no. I'd hate to live here in Michigan when it isn't!."

We have had some pretty cold spells in New York too, but we continue to have days when its not that cold at all, like today.
In fact one of the reasons why oil prices have come down like they have, from $55 to today's $44 been because of the higher then expected Winter temperatures that we have had so far.
Its all relative isn't it?

[steve86]

I understand why local weather affects the price of heating oil for regional delivery but not why it should affect worldwide crude prices much if at all. I just don't think that stands up to any kind of analysis.

[SunkenCiv]

The oil market is international. When there is a seasonal increase in demand (and that would be once a year, due to northern hemisphere consumption -- most of the world's landmasses are north of the equator) the price will go up. That's just supply and demand.

[M. Espinola]

That is one way to view it and most likely correct.

Both the mullahs & Osama are more than cognizant the quickest and cheapest method for 'Terrorist Inc' to cause the West's economic alarms to go off is keep Saudi Arabia on the front page via terrorist attacks.

During the winter heating oil season the last thing Wall St. needs is Opec's #1 crude oil exporter going down the oil drain (no great loss as long as the Wahhabis are replaced.)

[M. Espinola]

The bears regained the oil market and for that matter the entire energy complex. Today's 4.74% jump for Feb-05 crude is not a good sign for the consumer, [if] the organized jihadist attacks continue inside Arabia.

If, or when, Islamic fanatics are able to stage actual, major sabotage of Saudi oil installations, I would not rule out a 10% to 15% price jolt in a single trading session, for not only the price of crude oil, but heating oil, propane & natural gas as well.

[M. Espinola]

I know what your saying about NY weather, but it is the market panic effect, plus sudden, renewed bullish speculation which could really jack up the price of energy.

[KwasiOwusu]

"but it is the market panic effect, plus sudden, renewed bullish speculation which could really jack up the price of energy."

Anything can happen of course.
But the trend for the price of oil is clearly down.
I really doubt if we are going to see $55 oil again in the next 12 months. $55 is simply not sustainable.
There is just too much oil sloshing about. Plus the Saudis are still producing that extra 2 million barrels a day, which they want to cut, but will still retain the capacity to quickly bring on stream should the market warrant it.

[M. Espinola]

I would like to believe your overview and so would my gas tank.:)

The Islamic terrorist enemy knows they will never, ever beat US on the battle field, thus they will continue looking for cheap shot, the low blow, underhanded cowardly ways to harm US via inflicting damage to the Western economy.

My overview is we will have to address the Iranian nuclear issue in the coming year. Iran is Opec's #2 producer. If the death cult mullahs feel their time is up the oil fields of Saudi Arabia is a short distance for Iranian missiles.

In addition all indications point to Osama's suicidal lunatics lurking throughout are beginning a new wave of terrorism inside Arabia in order to cripple the Wahhabi 'Kingdom'.

What you stated first I would go with, "Anything can happen of course".

Since nobody picked the exact day blood thirsty Muslim madmen would fly passenger jumbo jets in the World Trade Center, at least in the current situation we know the short term stated goals of the enemy and they have targeted those which produce & supply crude oil to the free world.

There is great concern about security of oil facilities in the world's biggest oil exporter.

[KwasiOwusu]

" If the death cult mullahs feel their time is up the oil fields of Saudi Arabia is a short distance for Iranian missiles."

We are waiting for those Iranians to do just that.
THat'd give us an excellent excuse to wipe 'em out.
Bottom line, I don't see the price of oil going anywhere near the highs we saw this year. At the time, I posted on this board that supply and demand simply did not justify those prices, and sure enough the prices came tumbling down.
This spike in prices today won't change the overall downward trend of prices.
Plus, I have a feeling that Republicans now have enough votes in the Senate, to vote through oil exploration in ANWR, something that will further have the psychological effect of eroding oil prices even more.

[M. Espinola]

If the despotic mullahs are dumb enough to start something, let them bring it on :)

Between Iran & Syria's 'assistance' our servicemen and free Iraq's are being murdered. Iran & Syria are on very thin ice (sand)

I concur, general price trending due to numerous factors is on the 'put' side, even with this attack in Arabia. I also agree ANWR must be developed and the result would be far lower prices. However the enemy sick minds dictating insane acts of suicidal car bombings shall intensify, since the enemy actually relishes the thought of blowing themselves to Hell if it kills the 'infidels'.

We can only hope enough of enemy self detonates in order to thin the ranks of the most fanatical jihadists, plus the sooner the two rouge states most responsible for terrorism in Iraq, Iran & Syria, the better.>