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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Why yell at me.. I agree with you..
Yeah, I know I realized it after I posted it and was hoping you wouldn't notice! =)
One of the President's first veto threats was actually over a Senate version of an Iraqi aid bill that would have required the Iraqis to pay back part of the cost with the proceeds from oil revenues. The House had made it a grant and that was the version actually passed.
Tax cuts equals pay more at the pump. The bill should have never included incentives for companies making record profits, it's corporate welfare.
Touchy subject, huh? =)
It makes me touchy when people here call for more Government regulation..
>>>Why yell at me.. I agree with you..
Sorry, didn't mean to direct it at you.
In a nutshell... world oil production is peaking while world oil demand continues to rise. North Sea oil production for Great Britain dropped 10% last year. Norway's oil exports are at an 11 year low. The majority of the world's oil production comes from a few large oil fields that are over 50 years old and nearing the end of peak production. There has not been enough oil found the past 25 years to replace these fields once they go into decline. The price of oil is more than likely going to continue to rise until it has an effect on our oil consumption habits.
Good points!
I'm not sure if they are talking about Gov't Regulation as much as they are suggesting that Bush & friends start twisting some arms or whatever to get these prices back in line.
Quiet alright.. I get touchy when some freepers call for more Government action..
Norway's high gas prices are caused by onerous taxes.
That alons should e worth something...
Fleets of commercial grade vehicles will be purchased and/or replaced, heavy equipment, tubular steel goods (drill pipe, casing, and pipeline), miles of wire rope, oceans of diesel fuel, and a lot of fairly good paying jobs created.
All so folks who live in the hinterlands on $80,000 a year can pay taxes and support the 'homeless' in Silicon Valley who only make $300K...
You could be paying $6.70 a gallon in Norway. Gas is still cheap by historic standards. Be glad you're living in America.
Does this oil/gas come from Norway or do they import it?Point being we don't have to be paying higher prices. If the tree huggers would stop their B.S. we wouldn't be importing as much oil or paying more for special summer blends of gas. you can't compare our situation to Norway's.
In America at least it has a long way to go then. Even at the higher prices that everyone is bitching about, gasoline consumption is up 8% from last year at this time.
You're thinking in constant dollar terms. It very well may be that when oil hits $100/bbl that $100 has the purchasing power of $70 today meaning these techniques will not be viable.
I think oil will hit $100.00/bbl within 18 months. I don't see any significant inflation out there in that time frame.
SO9
What do the libbies have to do with this? Trust me, though, I am NOT sticking up for them, I am just curious what you mean by this.
Er, ok. Do you work for the BLS?
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