Posted on 08/01/2005 10:34:42 AM PDT by Jomini
Oil prices climbed above $61 a barrel to a three-week high on Monday as the death of Saudi Arabia's King Fahd, a spate of U.S. refinery outages and tensions over Iran's nuclear ambitions rattled the market.
U.S. light, sweet crude rose $1.03 to $61.60 a barrel. The price has climbed 40 percent this year and is approaching the record high of $62.10 hit on July 7.
"It's this combination that serves as a reminder of the market's vulnerability," said a senior energy analyst.
King Fahd died on Monday and will be succeeded by Crown Prince Abdullah, his half-brother who has been the de-facto ruler of Saudi Arabia since Fahd suffered a stroke in 1995.
Abdullah will adhere to Saudi Arabia's long-standing oil policy aimed at ensuring global markets are well supplied, the kingdom's next U.S. ambassador Prince Turki al-Faisal said.
But analysts said markets were jittery over longer term Saudi policy, noting that the new king and Crown Prince were both octogenarians.
"It's this succession struggle and the possible related instability that's the actual concern," one trader said.
REFINERIES UNDER STRAIN
A spate of refinery problems in the United States resurrected concerns about meeting strong fuel demand.
Exxon Mobil added to the anxiety at the weekend as it shut down its 235,000 barrels per day Joliet refinery in Illinois, according to trade sources.
BP also shut down a gasoline-producing unit at the weekend at its giant Texas City refinery -- the third-largest in the U.S. and source of 3 percent of its gasoline -- for maintenance, a regulatory filing showed "Steadily declining inventory levels ahead of the gasoline peak demand season mean that this market has been looking increasingly tight," said Barclays Capital in a report.
Although stockpiles of most fuels are relatively healthy for this time of year, traders fear refiners may be hard-pressed to satisfy rising summer motor fuel consumption while also stocking up enough distillate supplies to meet peak winter consumption.
IRAN TENSIONS
Adding to market nerves, OPEC's second biggest oil producer Iran said it would break U.N. seals on a nuclear plant and resume work that the West suspects could help it build an atom bomb.
The move was in defiance of EU warnings and could see Iran's case sent to the United Nations Security Council for possible sanctions.
What crackpot newspaper do you subscribe to? That's absurd.
nonsense
the price of oil is determined by world markets, exporting to central america or anywhere else doesnt effet oil prices.
in the longer term, beyond 18 months to 2 years, high oil prices are good for the US economy.
even the worse oil shock which was 1973 didnt hurt the economy for more than 2 years. By early 1976 the economy was growing at 4% and unemployment was on the way down from 9% to 7%. Too late for Ford.
In 1973 the US consumed nearly 20 million barrels of oil per day, the same roughly as today.
FACT: 90% of lower 48 production is found by independents like myself. You wanna put about 500,000 people out of work.
You REALLY want to make a difference? Start attcking the Sierra Club, Natural Resources Defense council, et al. They are far more responsible for lack of supply (the MAIN reason prices jump) than any other factor.
You don't like speculators, then write your Senator and PLEAD with them to nationalize the business. Nothing like a gov't run program to show success.
George Soros is to blame!
What's next? This?
http://www.iaus.com/
Well said. Its tough to explain that gasoline (based on the dollar's value) is still cheaper today than 1976/77.
I like BOBTHENAILER's take on this the best, followed immediately by Dog Gone's!!! Them boys knows whut they's tawlkin 'bout!!!
You have to be completely out of your gourd to compare this 2nd phase of the 2nd Bush Presidency with the horrendusly failed Carter maladministration!!! Get a grip, will ya???
Why yes, let's let the mighty government decide how much gasoline I need. What a splendid idea straight out of the far left handbook.
Heck, you don't need to go see Grandma this weekend. Or if you do, please submit Form 19838-QP stating why and wait six months for your rejection letter.
"Just kiddin !"
Boy, I feel like a ditzy blonde. ;)
you nailed it.
$62 for a barrel of oil? This is madness.
A few years ago it was $18/bbl.
When I say it is tough for me, and a free-marketfanatic tells me to take a bus, I get upset.
Gas should be available at a reasonable cost. I also don't like giving these mutts my American dollars. America needs to start kicking ass with new technology, and leave these maniacs in our rearview mirror.
Wull... Even dumb ol Jimmah Carter was smart enough to have once said: "Life is not fair!" As I said "Get a Grip!"
I'll give you the benefit of the doubt and assume that you're not just interested in whining and complaining (please correct me if I err). Let say you believe something's wrong and you're interested in doing something.
It sounds like you believe that oil is over priced. OK, market prices vary and in a market economy people who think something's over priced can join in meeting demand. If they're right they get rewarded.
You interested, are you just whining, or what?
I think $2.39 for gas is truly hurting this nation.
Is this problem really unsolvable?
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