Posted on 04/19/2006 2:23:52 AM PDT by familyop
LONDON (Reuters) - A blistering four-year rally in crude oil shows no sign yet of running out of steam and crude could top $80 a barrel this year, boosting fuel costs for consumers and businesses, analysts said on Tuesday.
London's Brent crude hit an all-time high of $72.20 a barrel on Tuesday and U.S. crude oil hit a record $70.88, on concern that Iran's nuclear standoff with the West could cut oil exports from the world's fourth largest exporter.
"Under the wrong circumstances, you could easily see $80 being broken or even higher than that," said Kevin Norrish, an analyst at Barclays Capital. "Any major loss of production is going to give us another major push up."
Oil has almost doubled in two years as increasing demand stretches producers and refiners, and worries mount about threats to supply. A wave of fund buying has helped power this year's rally as investors seek to beat returns available in equities or bonds.
Prices are nearing the inflation-adjusted peaks of over $80 hit in 1980, the year after the Iranian revolution, which some analysts say may prove to be the next peak for prices.
"The question is where to set our sights next," said Deborah White, an analyst at SG CIB Commodities in Paris. "The only cap I see coming up is on the order of $85 a barrel -- something equivalent in real terms to the highest we saw."
CHARTS PATTERNS
Analysts who use chart patterns to predict oil price moves said Brent has shown little sign of peaking with fresh buying into profit-taking price dips, despite being heavily overbought.
The gains, with last week's advance confirming an upside break out of a neutral triangle pattern, have left analysts looking at equality projections which flag $72.30, $75 and $76.90 as near-term targets.
U.S. crude from June through the end of the year has soared faster and further than the prompt May contract this month as dealers fear the risks to supplies will grow bigger in the latter half of the year.
"There's a sense that Iran has heated up and if it's going to come to a head, it will be further out than May," said Tobin Gorey, analyst at the Commonwealth Bank of Australia.
Oil for September settlement rose as high as $74.06 on Tuesday and contracts only dip back below $70 from August 2009, suggesting traders expect oil to stay high for years.
'PANIC'
Increasingly sharp words between Iran and the West over the Islamic Republic's nuclear programme have increased worries that the dispute could cut Iranian oil exports, adding to actual losses in fellow OPEC members Nigeria and Iraq.
"There's panic over Iran," said Julian Lee, oil analyst at the Centre for Global Energy Studies. "Neither Iran or the U.S. seems to have any interest in toning down the rhetoric and taking the heat from under the crisis."
The dispute comes as Iraq, holder of the world's third largest proven oil reserves, is struggling to boost production and exports, and supply from Nigeria has been slashed by almost a quarter by rebel attacks.
There is no sign yet that the lost Nigerian output will resume soon. Royal Dutch Shell has not carried out an assessment of its EA oilfield, a step needed before it can restart output shut since February, a company spokeswoman said on Tuesday.
The disruption to Nigerian supply will become more important as the U.S. driving season begins next month because Nigerian crude is easier than some grades to process into gasoline.
Lee of the CGES, a forecaster founded by former Saudi oil minister Sheikh Zaki Yamani, said that while fundamentals such as supply and demand made it difficult to justify an oil price of more than $70, supply worries may push prices up further.
"Could we see $80 a barrel? Yes we could as we move towards the summer and fears of supply disruption worsen," he said.
Analysts reckon gasoline stocks in the world's top oil user fell again last week.
OPEC POWERLESS
Officials from the Organization of the Petroleum Exporting Countries, source of more than a third of world oil output, say there is nothing more the group can do to bring down prices.
Most members of the 11-country group are pumping oil at the limit, leaving only Saudi Arabia with significant unused capacity to make up for disruptions.
The kingdom holds reserve capacity of 1.3 million barrels a day, less than the 3.82 million bpd that Iran pumped in March, according to the International Energy Agency, an adviser to industrialised countries.
"It is obvious that OPEC does not have a magic wand," the oil minister for Qatar, Abdullah al-Attiyah said on Tuesday, the state news agency reported.
Women and minorities hardest hit.
My vest-pocket take:
http://www.freerepublic.com/focus/f-news/1616636/posts?page=54#54
Be sure to "click the pic" for thousands of links...
That was great commentary on your part. ...good job!
This is a smart tactic. It worked in the 70s oil embargo when they set us back a dozen years. Until the late 80s we were a basket case.
Fool me twice...shame on me.
BUMP
interesting that Shell seems in no hurry to bring their Nigerian field back on line. I wonder why that is /sarc
It probably wouldn't take more than a few weeks for enough combat (heavy) engineer units to build high-speed highways around the Strait of Hormuz. ...fastest builders on the planet.
Let's Roll
Actually, the market is predicting that we WILL hit Iran.
The market is usually right, absent some idiot in the government suing Microsoft.
The market is the compilation of hundreds of millions of minds guessing what is going to happen.
Funny thing about that: If you poll a bunch of people about how many jelly beans are in a jug, the average surprisingly turns out very close to what the number is. Statistical proofs exist for this, learned in Engineering school.
Even if some guy says a million, and there are only 1000, the average converges on the true number with more poeple added.
The market is a surprisingly good indicator of what is about to come.
Oils will climb even mor rapidly, so will gold, congress is already on board, so are the french, germans, russians (surprise!), Australians, GB, and KB! Regime change in one week.
Two months later oil tanks, gold tanks, Soros loses even more money, Syria tanks, Lebanon revolts, Kennedy falls out of his chair.
Isolated, we tell syria to give up the WMD's smuggled out of Iraq. Syria complies.
August checkmate.
All it would take is three days bombing, and 500,000 guns (and tons and tons of ammo) air dropped into Iran's universities. The Persian students will wipe out the mullahs in days.
Remember, Iran is Persian, not arab, and the mullahs were largely imported, and completely hated. They just have the guns. Warsaw uprising on a countrywide scale. Over in days.
No imbedded reporters this time. No ground assault needed. CIA and SF are already there.
Quite the scenario. For now, I'll wait for it in paperback.
Thank you!
I'll be here all week!
I think you should make your short play right away then... by fall you could retire to squillionaire acres...
We in America are being held hostage by two events.
The oil cartel and the eastern nations that hold all the large oil deposits are chocking our economy with the large price they have put on their oil.
American oil refineries are charging higher prices to increase
the profits of their investors at the peril of the average
working person.
Greed takes no prisoners, and be damn the little man. Greed and wealth are a bad combination, it causes a disconnect between the classes.
There could have been changes over the past 30 years to prevent the clash we are now experiencing with energy.
Congress could have enacted more research and development into energy research. Seems for those of us who remember the long gas lines and shortages, this would have prompted a sudden change in energy resource and energy research.
As time after time the leaders of the United States Government have failed its people, sold out to big oil and lobbying groups with wheelbarrows loaded with money to buy
the political process.
I assume you have proof for your statement. I'd like to see it.
>>crude could top $80 a barrel this year
This year? How about by Friday of next week.
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