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. 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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Goldman Sachs and the hedge funds, along with the major oil companies, are laughing all the way to the bank.
None of us fits your scenario. Thank the libs. Call Pelossi, Boxer, Kennedy, Schumer... for your answer.
Not so loud, you'll stir up the DU crowd into chanting anti_Bush slogans again.
"You could be paying $6.70 a gallon in Norway. Gas is still cheap by historical standards. Beglad you live in America"
A)I am proud to live in America and love my country very much.
B)I givew not one SH-T about historical gas prices.
C) I DONT live in Norway, thus I don't give a SH-T what their gas prices are.
indeed it is, that's the point, the traders and hedge funds don't want some boring market driven by supply and demand. they want it to be like tech stocks were in the 90s.
I'm game. February 3, 2006
Refinery shutdowns? We need to be building MORE refineries, not shutting down the ones we have now.
I do that every day, no matter what the price of gas is. {{starts humming "America the Beautiful"}}
Tell the EPA that.
Something I've been curious about.......if Iraq's production is in the range of 1-2 million barrels per day and Saddam is no longer in power who's controlling those revenues and is any of it being used to offset the cost of our occupation?
Filled up this morning 15 miles north of Denver $2.11.
Take a chill pill. You have no qualms about $50,000 SUVs, but the best cars of 1973 topped out at about seven grand, and a really nice house went for less than $80,000.
Of course, in those old days, we ancient people actually saved money until we could afford stuff and didn't run out and get ourselves nostril deep in hock.
I have watched my paycheck disappear (I'm a wellsite geologist, just in from another well) while Americans were practically cartwheeling around the gas pumps over cheap prices while drilling rigs sat rusting in the weeds.
Sooner or later, you pay for it, if the prices then had supported continued exploration we would not be in a crunch now.
A large part of this goes squarely on the heads of all the enviros who ever stopped a refinery from being built, or helped have one close down, too.
Well, have you discovered why gas prices are so much higher in CA than in other states?
And theres more to come. I believe The elite want president hillary.
Good point, never thought of it before. Where is the money going?
hhhmmmmm ... you might be on to something.
Can someone here educate me to as to why it is this high? I keep hearing about how we don't have refineries, blah blah blah. That has nothing to do with the price of crude oil. I do think that the government needs to step in at some point and attempt to do SOMETHING. It's going to cripple our country if it doesn't stop.
They and India are developing and the global supply/demand equation has changed.
While OPEC can get prices to increase by shutting production down, they can no longer exert enough influence on the global market to significantly lower prices.
Domestic exploration in the lower 48 is utilizing drilling rigs at a rate unparalled since the boom of the late '70's. The only catch is that about half of the drilling rigs in the world were scrapped when the crunch of '82-'86 hit, and few new ones are being built.
Settle down man, or your blood pressure will be rising to ridiculous levels.
We don't need the Government to do something period.. I think it was the Government meddling (EPA regs) that got us into this mess in the first place.
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