Posted on 01/13/2005 1:07:48 PM PST by Jomini
Oil prices jumped higher Thursday morning, briefly rising above $48 a barrel, as traders' nerves were tested by a combination of short-term production snags in the North Sea, expectations of colder U.S. weather and concerns about OPEC's next move and the upcoming election in Iraq.
After reaching as high as $48.25 per barrel, light, sweet crude for February delivery traded $1.56 above Wednesday's closing price at $47.93 per barrel in midday dealings on the New York Mercantile Exchange. Oil futures have climbed nearly 14 percent since the start of the month.
Referring to the recent uptrend, Andrew Lebow, a senior vice president at Man Financial Inc. in New York, said "I think it's more psychological than fundamental."
Lebow said the so-called fear premium now embedded in the price of oil is somewhere between $10 and $15 a barrel and that some of the uncertainty in the market should be removed by the end of the month, following the Iraqi election and the next meeting of the Organization of Petroleum Exporting Countries.
While the United States has had a relatively mild winter so far, analysts cautioned that there are still a couple of months left in the season. At the moment, they are focused on a forecast calling for colder weather later this month in the U.S. Northeast - the region that consumes the most heating oil.
"You have to think that heating oil stocks will drop," said Tom Bentz, a broker at BNP Paribas Commodity Futures in New York. "Most of the building of inventories is probably done at this point."
On Wednesday, the U.S. Department of Energy reported that the nation's supply of distillate fuel, which includes heating oil, diesel and jet fuel, rose by 1.9 million barrels, though inventories are 8 percent below a year ago at 123 million barrels. Crude oil supplies declined by 3 million barrels last week to 288.8 million barrels, leaving inventories 7 percent higher than a year ago.
Analysts are worried that OPEC, which already trimmed its output by 1 million barrels a day beginning this month, might decide on further production cuts at its next meeting in Vienna on Jan. 30. If prices stay at these levels, though, such action would seem unlikely.
Meantime, rough weather in the North Sea has resulted in production shortfalls of about 345,000 barrels a day from Norway, while fog caused shipping delays in Turkey. In Iraq, sabotage has halted exports from the Kirkuk oil fields to the Turkish port of Ceyhan.
Iraqi officials said Thursday a major pipeline linking Kirkuk's oil fields with the Beiji refinery had been repaired after a sabotage attack allowing renewed pumping of up to 400,000 barrels a day to that northern facility.
Still, Copus said tension ahead of the Jan. 30 Iraqi elections had at least a potential bullish effect on markets. Shum foresaw "strong support for a bullish price, around the mid-$40 levels."
Oil prices peaked in October at more than $55 a barrel, but remain around 33 percent higher than a year ago.
In other Nymex trading, heating oil for February delivery was up 3.06 cents to $1.331 per gallon, while gasoline futures 2.05 cents to $1.239 per gallon.
Natural gas futures rose 30.7 cents to $6.25 per 1,000 cubic feet after the Energy Department reported a larger-than-expected draw in underground storage last week.
With the election over, the Administration has no reason to muzzle this run north by adjusting margin requirements and such as last Fall. When a score of Iranian nuclear facilities are toasted and the US fleet catches multiple doses of Sunburn then $65 will look very cheap.
J
i hope oil goes to $100 a barrel. then maybe this country will start looking for ways to become energy self sufficient. its sad these third world fascist states got us by the b****.
The article indicates that the traders and the speculaters have us by the b****.
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In fact, the jump we're having now isn't even as bad as the one Clinton had in the late '90's, and if that didn't kill us this one won't.
Just because the MSM uses this spike for Bush-bashing and they didn't for Clinton only means the MSM are a bunch of democrats. Trust me, it doesn't mean your b**** are in any danger what so ever.
Oil prices now change regularly almost on a daily basis in one hour 5%. That's more than half of what main western oil stocks changed since oil was $20. Example BP over last year: Example NYMEX Crude, January 10 (same pattern for the last weeks) : Now the question that the media avoids is : why ? Hurry up to give an answer. There's only few days left before it's too obvious
http://www.freerepublic.com/focus/f-chat/1317990/posts
if oil went that high then i would hope our government could force them to start drilling in alaska. theres more oil there potentially then in all of the arab world. i just wish something big would happen so we would stop paying regimes our money for energy. they all are anti-american and fund terrorism. it just pissed me off.
Once the Iranian nuclear issue is confronted it is greatly expected crude oil & the entire energy complex shall rise considerably, since Iran is Opec's number two exporter.
Removing or seriously interrupting Iran's oil flow from the global market, although needed to hopefully topple the radical Islamic regimé, nevertheless will most likely trigger trader fear/panic, thus jacked up prices in short order.
"theres more oil there potentially then in all of the arab world."
There's potentially more oil under my back yard than in all of Arab world. I haven't seen proof of either though.
Soros is trying to manipulate the Election again.
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Inflation has been a much bigger factor than the Bush-bashers of the MSM want to let on. In real terms we have cheaper oil than we had during the entire Reagan Presidency.
Not only is this not the end of the world, we can't even see the end of the world from here.
The question is as I stated before, once Iranian nuclear problem is brought to the front burner, removing Iran's crude oil exports from the international market, even though the U.S. is not dependent on the mullahs petroleum, other major economies are.
I firmly believe we shall indeed be witnessing another round of some what severe price hikes in part resulting from the very unstable nature of the current Iranian 'leadership'. These guys will not go down with out attempting to cause some serious damage to the Western economy if not prevented. Recall Saudi Arabia's vast oil fields are a short missile shot across the Gulf.
We keep hearing about say, a health care 'crisis' (a doctor's visit cost 100 times what it cost in the days of Teddy Roosevelt) or an education 'crisis' where tuition fees are going to be out of the reach of young people unless their parents help. IMHO this oil shtick may be the 'crisis du jour' but it's just here to satisfy everyone's need to feel bad. You may have a lot of company when you say that those middle eastern heathens are bad because they're raising the price of oil. OTOH, when the price of oil (in real dollars now, not this inflated stuff) goes back down, I'm not expecting to hear anyone suggest that maybe those heathens aren't so bad after all.
The billions earned via overseas crude sales are misused to spread Islamic terrorism around the globe. If Iran's oil exports were cut off how could the mullah run regimé sustain it's campaign of exported jihadic terrorism in Iraq, taking the lives of our troops & those of other nations?
The enemy has and is using the commodity of crude oil, including Saudi Arabia, to finance some of the worst problems of our era. It's high time we place the enemy on gas lines.
"The billions earned via overseas crude sales are misused to spread Islamic terrorism around the globe. If Iran's oil exports were cut off how could the mullah run regimé sustain it's campaign of exported jihadic terrorism in Iraq, taking the lives of our troops & those of other nations"
Exactly, the Arabs have us bent over the barrel.
Time to start drilling in ANWAR, reconstruct the rigs off the California coast and put that wind farm in on Teddy's sailing lane. The country's National and Economic security is at stake here.
Radical leftist are always squawking about 'oil pollution'. Where was their outcry when Saddam henchmen caused the largest, deliberate act of oil pollution in the Gulf by blowing up all of the Kuwaiti wells in the first Gulf War? The answer is well known
Possibly by March a meaningful resolution to the 'Persian'(Iranian)terrorist problem will be underway.
If Iran's mad rush to gain offensive nuclear weapons is indeed being 'resolved',by late Winter - early Spring, then the present price of June-05 oil contract could look real cheap in retrospect.
Yes the NIMBY's feel it's more environmentally safe to tank the oil 11,000 miles through the terrorist infested waters of the gulf, then past the coastlines of umpteen different countries on the way here. They're very selfish.
They might even change their minds, what's 'left' of them, rather soon :)
The "fear premium", now embedded in the price of oil, seems to have been a good marketing ploy. What incentive is there for OPEC nations to reduce turmoil in the world? Want more money this month?, just up the fear premium.
I remember seeing a gas station in California had posted all the taxes levied on a gallon of gas and the corresponding agency doing the taxing. Kind of looked like the deductions on a persons paycheck. I can imagine adding a line showing the "fear premium" per gallon.
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