U.S. oil surges $4, to record above $70, on hurricane

reuters.com ^ | 28 August 2005

[lauriehelds]

SINGAPORE, Aug 29 (Reuters) - U.S. crude oil futures surged more than $4 in opening trade on Monday, hitting a new record high above $70 a barrel after Hurricane Katrina forced Gulf of Mexico producers to shut in more than a third of their output.

Katrina, which strengthened into a rare, maximum power Category 5 hurricane as it spun through key oil and gas fields toward New Orleans, shut in a total 633,000 barrels per day

(bpd), according to company figures on Sunday.

It also forced the closure of seven refineries and a major U.S. crude import terminal.

Crude oil futures on the New York Mercantile Exchange

(NYMEX) surged as high as $70.80 a barrel, up $4.67 a barrel, as traders feared lasting damage could further strain an industry that has struggled to keep up with demand for two years.

[Reeses]

reduce consumption

That won't have much effect unless the whole world decreases consumption. This demand surge could be blamed on the new China/Walmart economy.

[atlanta67]

""What's your ETA for $40/barrel?""


2008 or 2009...there need to be demand destruction and more supplies.


supplies are slow to come online becasue oil companies got so badly burned in 1986 and 1998 when prices crashed...the fact that capital spending in the oil patch is slow to ramp up is a sign that oil companies know that most of this is peculation

[TBall]

I would imagine the refiners enjoy the regulations. Just as the drug companies enjoy FDA regulations that make discovery of new drugs cost prohibitive. Despite what you may read in the news, the high price of oil is not refinery driven. Lack of refining capacity is actually a negative influence when it comes to the price of oil. I don't know the extent to witch drillers are held back by regulation, but I certainly don't think price caps would be an effective long term policy.

[newgeezer]

The nice thing about $90/bbl is that we'll no longer have people saying the record-high oil price isn't really a record.

At $90/bbl, it'll finally be equal to the inflation-adjusted 1980 price.

[Renegade]

Your arrow to the DU is pointing to thr RIGHT! It should point to the LEFT!

[Prophet in the wilderness]

"Americans buy oil on the very same open markets that everyone else does! They just aren't taxed like you europeans are! " .....

Correction:

"Americans buy oil on the very same open markets that everyone else does! They just aren't taxed like you europeans are, Yet ! " but, give them time.

[PilloryHillary]

This thread is filled with trolls....or the same troll posting under different names.

[RWR8189]

Backing off a little...

Light, Sweet Crude Oil

8/29/2005 Session Contract Detail for Oct 2005

	Last				69.85
	Open High				68.60
	Open Low				68.60
	High				70.80
	Low				68.60
	Settle				66.13
	Change				+3.72
	Open Interest				0.00
	Volume				0.00
	Last Updated				8/28/2005 19:33:46

 

 

[VOR78]

And who is going to buy your $400/barrel oil? No one. The majority of people in this country can barely afford $2.50/gallon gas as it is! Even on your low side of $150/barrel, if sustained, I think you would see a worldwide economic depression soon result that would push oil prices back down to $10-20/barrel.

Even at current prices, I think its unsustainable and will cause a global recession in 6-12 months, with oil prices falling to around a more realistic $40/barrel.

[atlanta67]

we should very soon begin to see recession in countries that are industrializing and are not very energy efficient..S Korea comes to mind

[atlanta67]

i think youre right

[Prophet in the wilderness]

But, the Liberals/Communist/Envirowackos won't let us drill that oil.

[PilloryHillary]

""Bush's friends will not let him release any oil from the reserve. Remember when J.F. Kennedy was starting to talk about eliminating the oil depletion allowance? Look what happened to him a short time later!""

Are you nuts??? Have another glass of kool aid, troll.

[RightWhale]

these supply disruptions

There are none and there have been none. When gasoline in Iraq and Venezuela is selling at 10 cents a gallon, and even China it is $2 a gallon, there is no supply problem.

[HuronMan]

The Chinese demand will start to fall rapidly. How can the Chinese general public afford to purchase gasoline at these ridiculously prices? Americans, even the the Wal-Mart shoppers, have deeper pockets that the Chinese motorists.

[atlanta67]

Gasoline is cheap in china becasue they have price controlls....they also recently have been having gasoline lines in Hong kong because of those price controlls

[kittymyrib]

My, my...why is it that some poor smuck gets fined big-time for "price gouging" if he sells ice, plywood, or gas at the pump for more than he should after a hurricane, yet the oil companies can run up the price like this with NO penalty? Just what makes the one "price gouging" and not the other...the oil companies have bought more politicians?

[RWR8189]

I'm talking about the imminent disruptions that will be caused by Katrina.

[atlanta67]

the price of gasoline MUST rise to keep demand and supply in balance...if prices didnt rise but supply fell, the nwe would quickly deplet our inventories and we'd all be spending hours inline for gasoline.

[RightWhale]

they also recently have been having gasoline lines in Hong kong because of those price controlls

That is due to distribution, something like rationing, which is also under central control. Somewhere, somehow, the price of gasoline in China is being supported.