US crude oil prices surged to a new record high of above 70 US dollars a barrel in opening trade on Monday amid concerns about supply shortages caused by coming Hurricane Katrina. Posted on 08/28/2005 7:07:57 PM PDT by M. Espinola
US crude oil prices surged to a new record high of above 70 US dollars a barrel in opening trade on Monday amid concerns about supply shortages caused by coming Hurricane Katrina.
Oil futures on the New York Mercantile Exchange soared to 70.8 dollars a barrel, beating the previous record of 68 dollars set last week, after producers and refiners shut down operations ahead of the Category 5 hurricane.
Katrina, measured as one of the four strongest storms on record, was expected to hit land at sunrise on Monday.
Seven southeast Louisiana refineries with a combined daily capacity of 1.45 million barrels per day (bpd) were shut alongside the Louisiana Offshore Oil Port, a major crude importing facility.
The Organization of Petroleum Exporting Countries (OPEC), which has been pumping at its full capacity for nearly a year, expresseddeep concerns over the buoyant prices.
"We are becoming increasingly concerned about the continuing high level of oil prices, which does not properly reflect the underlying fundamentals of the market," Kuwaiti Minister of Energy and OPEC President Sheikh Ahmad al-Fahad al-Sabah said in a statement.
He noted that current supply exceeds demand, leading to a buildup in stocks and stocks of crude and distillates are above their seven-year average.
"Oil resources and supplies are plentiful and OPEC has been producing 1.5 million more bpd than its quotas in the third quarter of 2005," Sheikh Ahmad said.
"Furthermore, demand is starting to slow down as a result of high prices," he said. "In view of these fundamentals, one expects to witness some price moderation."
OPEC meets on Sept. 19th to chart its future output policy.
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We still have the demand for heating oil which should take it near 85 by years end...and to 90 by spring...
I wonder if we hook up both my hubby's and my bike to our Pop-up, if the kids can ride safely on the top of it.
It's already fallen to $69.79, about -$1.00 .
It is pathetic when some sheik from Kuwait gets it right while all of Manhattan is hell bent on driving crude prices?????????????
The 600,000 barrels of oil produced is not nearly as important as the Louisiana Offshore Oil Port, which handles 1 million barrels a day.
I don't see how that is going to brought back online easily, as Port Fourchon will probably get clobbered (though it is on the West side of the mouth of the Mississippi).
And there is no way to replace 1.45 million barrels a day of oil refinery production. You have to have tankers (ships) bringing in refined gasoline, jet fuel, and diesel.
Wall Street had better learn to pray!
OPEC worried about high oil prices? NOT!
It's the way of the American market. Everybody wants to outspeculate each otehr and no one will ever sell below what they bought at. I personally think it's the same psychology behind the housing bubble. More buying drives up the price which leads more people to want to buy before the porice plateaus so there is more buying at higher prices.
This is going to really hurt a lot of people this winter. Recession 2006 is almost a certainty.
I've been saying the same thing as the Kuwaiti, and there are people here on FR who insist that restricted supply vs. demand is driving the prices up, rather than the fact that a large amount of money has been introduced to the oil market by non-industry investors/speculators.
The high powered commodity traders have a chart which shows the eye going through about a two hundred yards east of Port Fourchun which is the key to gasoline prices--reason unleaded droped a minute ago.
These guys look for every excuse they can to jack with our energy supply. We are going to be in very serious trouble if somthing doesnt break soon.
They used the hurricane excuse last year to send gas over $50.00. It never came back down.
A little 'irrational exuberance?'
I totally agree with you, in fact other then the demand for heating oil in the Northeast primarily, if the winter is a rough one, coupled with the Iranian nuclear weapon's threats being 'addressed' Persian Gulf crude & natural gas supplies could very well be disrupted rocketing oil well over a $100 a barrel in trader pandemonium.
If for any reason Saudi oil fields are 'disrupted' we don't even want to think about the adverse economic effects. Did somebody say a global-petrol-fueled-inflationary-spiral is on the horizon? By the middle of winter we shall know.
The prices above maybe begin to look 'cheap' as we enter 2006.
""I stated numerous times on FR over the last month, crude oil would indeed hit $70 by Labor Day and it has!""
1, this has been posted already with over 200 replys
2. so you knew a cat 5 would hit louisana one month ago?
I wonder if the liberals will now thank GW for not draining the strategic oil reserve so they could have a cheap vacation this summer. That reserve just may give us the breathing room to get the refineries back in service and the off-shore wells repaired.
We're DOOMED!
Yo...night trading goes on all night, and so will the effects of Miss Katrina.
Good for you...don't sound so happy about it
We should leave the spr alone...
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