Posted on 08/07/2005 12:12:38 PM PDT by Jomini
Crude oil prices have settled at a new high above $US62 a barrel, rallying on concerns about refinery snags and following the release of a positive US jobs report.
The rally strengthened late in the session, as fresh news headlines and market rumours about trouble at several US refineries added to worries about refiners' ability to meet summer fuel demand.
Light, sweet crude for September delivery rose 93 cents to close at $US62.31 a barrel on the New York Mercantile Exchange.
"We continue to see a bunch of headlines on outages and failed restarts at refineries," a trader in the New York Mercantile Exchange gasoline pit told Dow Jones Newswires.
"The refinery outages are spooking the gasoline market, and that's spilling over into the rest of the complex."
In earlier trading, the September crude contract jumped $US1.07 to an intraday high of $US62.45 a barrel, just five cents shy of the record hit on Wednesday.
A breach of the record high of $US62.50 is a matter of time, said Chris McCormack, a technical analyst and broker at brokerage ABN Amro.
It could come "by Monday or Tuesday at the latest", he said.
The number of refinery outages that have lifted gasoline futures more than 10 per cent in past two weeks continues to grow. Among the latest, a mechanical failure on Thursday reportedly forced Motiva to shut a catalytic cracker at its 115,000-barrels-a-day refinery in Norco, Louisiana.
The exact extent of the refinery troubles isn't known. But Barclays Capital estimates that the outages have cut about three per cent of US refining capacity at a time when refiners should be running flat out to meet peak summer driving demand.
Phil Flynn, an analyst at Alaron Trading Corp, added that strong US payrolls data released on Friday is also bullish for prices because they "seem to suggest that consumers will be able to continue to use energy at a record pace".
The Labour Department reported that US non-farm payrolls grew by 207,000 in July, the biggest increase in three months.
Roll Tide -- War Damn Eagle
While American armies romp to victory after victory in Iraq and Afghanistan, the opposition chooses instead to engage the West with concentration at her weakest point: an economic infrastructure increasingly requiring ever larger tranches of cheap (and inexpensive) money to keep the "boom" going.
BOOM!
J
The United States needs to embark on fast-track legislation towards the construction of new petroleum refineries and nuclear powerplants at strategic locations on the grid. This may even trump performance enhancing drug use by professional athletes in importance.
We will look back on the good old days of $70 per barrel oil soon.
Oh gee...reality destroys another Leftist lie. What a shock.
There goes the new van I was going to buy for work. Think I'll just hang on to my Nissan truck and buy a new motorcycle instead.
"The refinery outages are spooking the gasoline market, and that's spilling over into the rest of the complex."
What is this "complex"? It's not that complex. If refineries can't refine crude, then the price of crude should drop. This rally is speculative and unsustainable and the longer it lasts, the more oil prices will drop when it's over.
"What is this "complex"? It's not that complex. If refineries can't refine crude, then the price of crude should drop. This rally is speculative and unsustainable and the longer it lasts, the more oil prices will drop when it's over."
Care to hold your breath until it drops LOL..
lot going on in world to effect energy prices ..refineries are a small part of that.
General Sherman taught the definitive case study in how to collapse strong armies in the field by destroying the infrastructure that supports them. The American offensive platform kills hundreds of opposition fighters a week in Iraq and Afghanistan, adding to an impressive body count but doing little to staunch the pipeline structures that feed the jihadists into the fight.
Meanwhile Qaeda aims strikes at London and Riyadh while exponentially increasing the effects of these highly concentrated strikes on the electronic platform of the NYMEX -- an economic shaped charge so to speak. The opposition believes it can generate trained and motivated suicide bombers at a superior pace than the West can electronically create "dollars."
The market is neutral in moral terms of right or wrong -- the price is the price. The US military will never be defeated in the field, however whether the dollar can sustain this 21st century nonlinear assault remains to be seen.
The whole world is watching...
J
So refinery outages are causing crude prices to jump how? We need to remove speculation from the equation.
the administration could open the SPR, sell oil at $42/bbl, and sign a contract with the new iraqi government to replace it at $40/bbl - the $2 being seen as some modest form of "war repayment". that alone would break the speculative bubble in oil, taking about $12-15 out of the price.
so long as the speculators are in charge of the market, and so long as they can bring new money in and hype the price - the same formula they used to push tech stocks - the price of oil will continue to rise.
So refinery outages are causing crude prices to jump how? We need to remove speculation from the equation.
How do you propose to remove speculation?
see post #12.
provide a source of physical oil below market price, and consumers of crude will cancel their market contracts (some of them) as they are displaced by SPR crude. as the market price falls, the stop positions that all the speculators have under their positions will be taken out, and that flurry of selling can bring the market price down very quickly.
Fully concur.
mc
"Are there any botanists here?"
No, but I play one on TV. Is that close enough? ;) Actually, I saw a working plant as you described on Scientific America a week or so ago. Looked do-able to me.
yes, it will take years. and as soon as its economically feasible to have coal usage at a $30/bbl oil equivalent price, oil will magically fall to $28/bbl. no one is going to invest in alternate sources, because they know the price of oil is manipulated - you can't expect them to invest billions when they can't accurately determine what their competitive price point will be in the future.
And for all the supposedly legitimate reasons there are for high oil prices, I find it curious these never get spoken of in the MSM. I guess we're not supposed to know about them. Instead we get the same tired old platitudes about fears about refined product shortages causing oil prices to rise. Right. And I'm sure YHOO really was worth buying at $400/share. No one dares to speak the S word (speculation) in these articles either -- the same way it was with the dotcom bust. Oil boom forever, man!
They already have something similar to what you describe, namely oil palms. They are high yielding in quality oil that is easily harvested and processed into fuel with the added benefit that it's edible. While people are once again seriously discussing steaming tar from rocks, the malaysians and indonesians have been growing on trees for centuries something that with only minor enhancement can fill the gas tank of an SUV.
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