Posted on 08/08/2005 9:51:17 AM PDT by M. Espinola
Crude oil futures hit more record highs Monday, nearing US$64 a barrel, reflecting market fears over the U.S. embassy closure in Saudi Arabia and concerns that shutdowns of U.S. oil refineries would reduce supply.
Light, sweet crude for September delivery rose to a high of US$63.95 on the New York Mercantile Exchange before falling back a bit to US$63.75, up US$1.44 at midday.
Prices had settled at US$62.31 a barrel on Friday, a record close for crude since Nymex trading began in 1983.
"The market clearly has the jitters," said Deborah White, energy analyst at SG Securities in Paris.
The Nymex rally received a big boost from blistering gains in gasoline futures, which rose to a new front-month record high of US$1.8690 a gallon, up 3.68 cents, in September. The high, which tops gasoline's last record of US$1.8600 a gallon July 8, reflects the worsening refinery-outage situation in the U.S. that has tightened product supply amid scorching demand for fuel.
Nymex heating oil futures for September traded as high as US$1.7900 a gallon, up 5.88 cents, but remained more than 2 cents off their July 7 record high of US$1.8125 a gallon.
"We had a much lower-than-expected build in natural gas supplies in the U.S. last week and this is also adding to general nervousness," White said.
In London, Brent blend crude futures for September rose as much as US$1.63 to a record high of US$62.70 a barrel on the International Petroleum Exchange.
The market was on edge following Sunday's announcement of a security threat against U.S. government buildings in Saudi Arabia, the world's biggest petroleum producing country.
The planned closure Monday and Tuesday of the U.S. Embassy in Riyadh and consulates in Jiddah and Dhahran was "in response to a threat against U.S. government buildings" in the kingdom, the embassy said, adding it would also limit nonofficial travel of its mission personnel.
It urged Americans residing in Saudi Arabia to keep "a high level of vigilance," but did not elaborate on the nature of the threat.
Meanwhile, analysts said U.S. economic figures on Friday showing payrolls expanded by 207,000 in July, the highest reading in five months, continued to boost bullish sentiment in the market.
"The U.S. economy looks healthy and it's safe to infer that the demand for oil and diesel will remain pretty firm and that the price of oil should be helped along as well," said commodities strategist David Thurtell of Commonwealth Bank of Australia in Sydney.
Oil prices rose even though the Organization of Petroleum Exporting Countries said late Friday that it increased oil production by 300,000 barrels a day in the past two weeks, to around 30.4 million barrels daily.
The market appeared to have largely disregarded the move, as concerns over refinery outages continued to weigh on traders' minds in a time when most refiners are running at full tilt.
ConocoPhillips was the latest to suffer a refinery outage. The company reported planned work and unexpected operational upsets at its 145,800-barrel-a-day refinery in Borger, Texas. The plant's sulfur recovery unit was shut Friday, with a restart planned for Wednesday.
Meantime, a fire broke out at a unit of Sunoco Inc.'s 330,000 barrels-a-day Philadelphia refinery over the weekend, the Philadelphia Inquirer reported Sunday, citing a company spokesman.
The outages have affected approximately 3 percent of the refining capacity in the United States, according to Barclays Capital.
At least seven other U.S. refineries have reported problems of one kind or another in the last two weeks.
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And when the capital was moved to DC, all of the governments archives were put in a single box. Today, enough forms to fill a box need to be filled out to move a box.
That's the way I remember it too. I understand that things change, but how did it become that we are paying for all of it?
Good point.
The debate on ratification of the Constitution nearly went the way of not ratifying. The main objection was that the FedGov was being created to take over and manage the entire country and the importance of the states would eventually be eaten away to nothing, while the chance of eventual tyranny in such a concentration of power was more than possible. The alternative seemed to be the breakup of the country with the northern states going back to England and the southern states going to Spain. Did they choose the lesser of two evils? Tough choice, but they decided and that is how it happened.
I agree the bottom will fall out. It's the crude oil speculation bubble that will burst not the housing market. Funny how all the rampant speculators on the commodity markets like to explain their irrational bidding war on current events, any current event. The fundamentals are not there to support such a high price per barrel over the long term. Look at industrial output, demand for crude, worldwide inflation and the facts don't support the price. All of the REAL petroleum experts expect the price go through an ice bubble like correction and soon. A warm winter, a US recession a stable(or more stable) Mideast could facilitate this.
As I understand it, the ANWR drilling bill will be a part of the budget resolution. Budget resolutions can't be filibustered so the ANWR drilling authorization passes later this year.
I still ain't gonna hold my breath.
Let's hope not!
The date you listed is beyond very interesting, since for almost an hour, prior to reading your post I was watching a dvd detailing the tragic events of September 11th, 2001. It came with a book entitled "What We Saw" (9-11) by CBC News, which I purchased earlier in the evening.
Is the reason for the 9th of September due to the fact it would be the last trading day (Friday) and two days prior to September 11th?
Maybe I am reliving that day again through this dvd documentary, and also last week's al-Qa'ida terrorist threat(s) video issued by that miserable, wretched excuse for a human being 'Dr Death', Ayman al-Zawahri. Since the London Tube terror bombings followed up by Dr Death's verbal barbarism, the question is when & where will the jihadist enemy inflict more death on innocents, unless the enemy's plots are uncovered & stopped cold.
"The price of my favorite gasoline has risen 20 cents since the last time I gassed up."
Just today, I noticed gas prices had a 22 cents difference within a 45 minute area. Some gas station owners are making a bad situation far worse buy milking the public for every additional penny per gallon, they think they can get away with.
Let us really hope & pray this coming September 11th comes and goes without any further problems from the jihad death cult
YEAH HI PRICES! THIS CAN ONLY BE GOOD!
"These aren't record prices, just look at the rate of inflation"
(pay no attention to that man behind the curtain)
If we say there is no problem long enough, then there is no problem.
I wonder...who was president last time gas prices rose like this? And how was he remembered?
ANWR will not help this problem.
Update 22: Oil Prices Top $64 a Barrel in New High
It's not the fact of an embassy up shop for security reasons, it's the entire nation where the American embassy is located, which happens to be OPEC's #1 producer & exporter of Persian Gulf based crude oil.
There are scores of other factors, very real concerns over global Islamic terrorism, and whom shall be it's next victims. Nuclear Iran, OPEC's #2 crude oil exporter is on my mind for a future showdown with US, Israel & maybe some of our other allies (if they not to interlinked to Iranian oil supplies), resulting from the fanatical Muslim mullah's insistence on gaining an arsenal of offensive nuclear weapons. Think of a pack of rabid Jr Khomeini's, with their finger on the nuclear button(s).
Some energy traders just might have some of these & other concerns on the back or front burner when buying long within the entire energy complex.
Probable disruptive, global energy supply threats, tend to make that commodity very volatile, triggering upward jolts in price.
Recall, the oil markets are always thinking about the next season and one coming up requires heat via heating oil & natural gas. Will we have sufficient supplies? That's one of the pressing questions.
Here's a few more interconnected issues, besides the funds speculating picking up purchases of large blocks of open interest.
The lack of sufficient refining capabilities for reformulated unleaded gasoline products on an interstate basis. Will inflation really begin to hurt the overall economy resulting from the present bullish energy trending? How long will the housing boom continue at the current pace? How about interest rates climbing further. The U.S. Dollar verse other major currencies & on & on & on.
Bullish crude trading is not just about the securing of a US government building in oil rich Arabia.
As I post this NYMEX September crude is quoting @$64.17
It was the 'liberal' Carter crowd who really began the mess we continue being adversely effected by. Carter & company allowed ruthless, 7th century 'thinking' Islamic madmen to seize control of Iran, OPEC's second largest producer of oil, in-effect handing over to one insane Muslim sect (Shia), a very profitable cash cow for their world-wide terrorism goals.
Carter & his comrades also endeavoured to stuff us into dinky matchbox cars plus wanted all kinds of add on gas taxes and what was even worse, he treated the American public as though they were the cause of the so-called 'energy crisis', which he created, in more ways then one. President Reagan ousted Carter through the voter's mandate & then did his best to undo the Carter nightmare.
Each time a liberal cry baby pulls into gas station I hope they are really crying now.
I for one feel there is creeping inflation which could escalate rather quickly into a petrol-based-inflationary-spiral, if the fear factor expands amongst energy traders, contingent on added 'energy supply shortfalls' produced by various factors. Stock markets world-wide will also be adversely hit, if oil keeps climbing & climbing & ...
"I wonder...who was president last time gas prices rose like this? And how was he remembered?
I take it you mean Jimmy Carter? Old Jimmy's legacy: $850 gold, $50 silver, gas prices way up coupled with double digit interest rates, all= Jimmy's inflation one term!
* Iran faces UN sanctions over resumption of N-programme
* Warnings of terrorist strike in Saudi Arabia
* Capacity problems at US refineries
'British officials talked of "credible reports" that terrorists were in the "final stages of planning attacks" in the kingdom, a warning that was echoed by the Australian government and came as the US closed its missions in Saudi Arabia, also citing a terrorist threat.'
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Heating Oil Chart. Up, Up & Away - Hope it's not a rough winter.
There is another crucial & very obvious factor I should specifically listed before, the ever expanding national energy consumption of both Red China & India.
# Most of Québecs crude oil is imported.
# The new Galt Field in the Gaspé Peninsula has been producing natural gas since January 2002.
Jimmy certinly didn't help but the inflation train built up it's momentum from the Johnson and Nixon years.
Sept 8 or Sept 9 is the date that BRAC gives its list of base closures to Pres Bush. The Pres has said he will accept the list as is. Some communities are going to take a hit.
Thanks for the clarification, I was heading in another direction concerning the dates.
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