We're gonna need it...cuz we're getting screwed.
Posted on 06/17/2005 12:16:52 PM PDT by RWR8189
WASHINGTON - Crude oil prices hit a new high above $58 a barrel on Friday, sustaining a rally built on strong demand for gasoline and diesel and on concerns about refiners' ability to keep up.
"This is a pivotal point we're at now," said oil analyst John Kilduff of Fimat USA in New York. "We're one hiccup away from $60."
Light sweet crude for July delivery darted $2.02 higher to $58.60 a barrel in late afternoon trade on the New York Mercantile Exchange. That topped the previous intraday high of $58.28 set on April 4 and the market was all but assured to close at a new high, at least in nominal terms.
While Nymex oil futures are more than 50 percent higher than a year ago, they are still well below the inflation-adjusted high above $90 a barrel set in 1980.
"The problem is not crude right now, there's plenty of crude on the market," said oil analyst Jamal Qureshi of Washington-based energy consultant PFC Energy, which estimates global oil demand is now slightly above 82 million barrels a day.
Still, the relatively small amount of surplus oil-production capacity is an important factor underlying the jitters on energy markets, keeping traders on edge about the possibility of output disruptions. failed to soothe the market earlier this week when it agreed to raise its daily output quota to 28 million barrels a day because its members had already been unofficially exceeding that level. Including Iraq, which is not bound by the 11-member cartel's quota system, the Organization of Petroleum Exporting Countries is pumping close to 30 million barrels a day, or about 35 percent of global demand.
OPEC said it would consider another 500,000-barrel-per-day increase if prices don't fall.
On London's International Petroleum Exchange, Brent crude for August delivery rose 86 cents to $57.08 a barrel.
Gasoline futures climbed 4.47 cents to $1.6425 per gallon on Nymex, where heating oil futures rose 1.95 cents to $1.645 per gallon.
Oil prices had dropped below $47 a barrel in May as traders locked in profits from the prior runup and as data pointed to slower economic growth and rising crude oil inventories around the globe. But the cooling off period didn't last long and prices returned to their perch above $50 a barrel before the month was over.
The Energy Department's weekly petroleum report has helped push prices higher in recent days because it showed that gasoline demand in the United States has averaged nearly 9.5 million barrels a day over the last four weeks. That's 3 percent above the same period last year — a pace that, if sustained, could push up gasoline prices, which now average $2.13 a gallon nationwide.
The Energy Department report said crude oil inventories stood at 329 million barrels, or 9 percent above last year, while gasoline inventories were at 215.7 million barrels, or 5 percent higher than a year ago.
But PFC's Qureshi said he expected supplies to tighten as summer wears on. "I think we're at a turning point," he said.
Fears of potential refinery glitches during the hurricane season in the United States have also added to market insecurity in recent days.
We're gonna need it...cuz we're getting screwed.
ANYBODY WANNA BUY A GOOD USED SUV? HARDLY DRIVEN. CAN'T AFFORD TO.........
Stock market up nearly 50 points...
oil is being used as the new "tech stocks" by the market and hedge funds. I now hear radio ads for people who want to day trade commodities on their home PCs. the administration has done nothing to try and break the speculative bubble in oil - its good for $10-15 in the price. We'll have $3 gasoline everywhere soon.
I've asked before, but I've never heard a real answer. I for the life of me cannot figure out why if refiners can't keep up with demand that prices for crude should go up.
I understand gasoline prices will go up. But if refiners stop buying oil because they have no more capacity to refine it, then there will be a leveling off of demand for crude oil. This will therefore cause the price of crude oil to fall. The price differential between crude and refined product will get larger, simply because the refining process is where the bottleneck is. Suppose for example that twice as much crude were suddenly available. Until new refineries could be built, the end price of gasoline wouldn't come down that much because no one would be able to refine the oil into gas.
good point. and when GM dumps their pension on the government, we'll be bailing out the insurance fund with our tax dollars too.
the dirty little secret is that the major oil companies, all the talk aside, don't really want to build new refining capacity - they like the situation just the way it is.
What do you want to do comrade? Nationalize the oil industry? Freeze prices? Do you support building new refineries? Pipelines? Synthetic fuels?
I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . -- Thomas Jefferson -- The Debate Over The Re Charter Of The Bank Bill, (1809)
No its being used as the new dollar. Its the only way to preserve purchasing power in the face of massive currency debasement. Copper, Natural Gas, etc. have all doubled as well. We are reverting to commodity currency.
your rants aside, why don't they add refining capacity in Mexico where they don't have the ennvironmental restrictions? why don't they do it? there are no shortages of refined products, you can buy as much gasoline as you want, no lines, no waiting.
take a look at the balance sheets and stock prices of the oil companies over the past two years - they are quite happy with the situation just the way it is.
why isn't gold zooming then?
You are using rationality. This is not permitted.
Anyway, refining capacity is not a bottleneck as yet. It could be very easily become so since the excess capacity is very small, but at this time it is not the true bottleneck.
Knowing that China and India have increased consumption at an ever faster pace, this comes as no surprise to me. Furthermore, the utter stupidity of letting environmentalists and liberals dictate energy policy is suicide for the most energy-dependent country in the world--this was a train-wreck waiting to happen. The U.S. has not the capacity now, thanks to liberals, to refine enough crude to keep pace with demand.
Several of us figured this out sometime ago after reading the industry literature, this was going to be the outcome--shortages in oil and natural gas-- and many have subsequently moved to capitalize on the ever tightening energy price noose by buying up associated stocks.
The stinking liberals whose policies are responsible for a good bit of the energy inflation spiral will begin screeching shortly that Pres Bush is single-handedly responsible for the high cost--such stupidity won't make you money.
that's a good quote by TJ - it almost like a prediction of the new no-money down, interest only mortgages americans are loading up on.
GM, FORD, Union buffons, et al are doomed. The emergence of China and Korea as major auto manufacturers will kill them. They cannot continue making cars with labor and bennies at sky high costs..............
I thought I saw a statistic a while back - US gasoline consumption is actually UP 3% in the last year? even in the face of higher prices, consumption is rising it would seem.
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