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Oil at a record again in New York

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Oil market analysts think Opec is likely to cut production in March

Oil prices have closed at a record in New York, for the second day in a row.
The main contract for light sweet crude closed at $100.74 a barrel, up 73 cents. At one stage during the session it rose as high as $101.32 per barrel.
Traders again blamed worries that the Opec oil producing nations might announce production cuts at their meeting on 5 March.
Opec, which supplies 40% of the world's oil, is concerned that the slowing US economy is reducing the demand for oil.
Hedge funds
"Supply worries and comments by some Opec members that the group might not raise output at their March meeting provided the catalyst for the sharp rally," said Kevin Norrish, an analyst at Barclays Capital.
Traders said that hedge funds were buying up oil.
Their interest has been prompted by rising inflation.
"Traders are going into the oil market because it's what is causing the inflation and those assets are most likely to appreciate," said Rob Kurzatkowski, futures analyst with optionsXpress.
There is concern that higher oil prices will boost inflation. To counter that investors have been putting their money into gold, which hit a record on Wednesday. The main gold contract at the New York Mercantile Exchange closed $8 higher at $937.80 an ounce.
http://news.bbc.co.uk/2/hi/business/7254196.stm
 
Passed two of the local Gas Stations on the way to work this morning. Both were over $3 a gallon this morning, $3.12 and $3.15 thats about $.20 sense Friday! I'm sure that they both just filled up their tanks and can justify the rise in price to match the what they paid for the stuff. NOT!
 
Oil prices heat up a little

Crude futures off their lows after government report shows inventories of distillates, used for heating oil and diesel fuel, were weaker than expected.

February 21 2008: 11:08 AM EST

NEW YORK (CNNMoney.com) -- Oil prices fell Thursday, but were off their lows after a government report said supplies of fuel used to make heating oil declined much more than expected.
U.S. light crude for April delivery were down 34 cents to $99.36 a barrel. Oil traded down $1.22 at $98.48 a barrel just prior to the report's release.
In its weekly inventory report, the Energy Information Administration said crude stocks rose by 4.2 million barrels last week. Analysts were looking for a rise of 2.9 million barrels, according to a Dow Jones poll. [more]
http://money.cnn.com/2008/02/21/markets/oil_eia/index.htm?postversion=2008022111
 
Oil rebounds after big slide:nuts:

Crude prices rise above $98 a barrel despite inventory report showing build in crude supplies.

February 22 2008: 6:56 AM EST

SINGAPORE (AP) -- Oil prices stayed above $98 a barrel Friday despite a U.S. government report which showed that domestic crude inventories rose last week.
Light, sweet crude for April delivery gained 43 cents to $98.66 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract fell $1.47 overnight to settle at $98.23 a barrel.
In London, Brent crude futures rose $1.08 to $97.32 a barrel on the ICE Futures exchange.
Earlier Friday, the April contract fell as low as $97.16, the decline marking a temporary reversal of a trend that saw crude futures climb to a new trading record above $101 a barrel.
They climbed back above $98 as traders were seen buying into the market again in expectation of further gains in the coming weeks.
Prices have spiked in recent days on buying fueled in part by investors attracted to the oil market as a safeguard against inflation and a falling dollar.
The Energy Department's Energy Information Administration reported Thursday that U.S. crude oil inventories rose 4.2 million barrels in the week ended Feb. 15, more than the 2.9 million barrel increase analysts surveyed by Dow Jones Newswires had expected.
Stocks of distillates, which include heating oil, fell 4.5 million barrels, three times the 1.5 million barrel drop forecast. Gasoline supplies rose 1 million barrels, in line with expectations, bringing gasoline inventories to a 14-year high and possibly limiting spring price increases.
Traders initially chose to focus on the crude number. Many analysts believe rising supplies and the falling demand noted in a number of recent reports means oil prices will eventually fall.
"We are only at the halfway point of the first quarter and crude oil builds are already greater than what we typically see for the entire quarter," said the Schork Report, edited by U.S. energy analyst Stephen Schork.
March Nymex oil rose to a new settlement record of $100.74 and a new trading record of $101.32 before expiring Wednesday.
"The surge was really all attributed to investors getting into commodities in general as a safe haven from equities and credit markets," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Heating oil prices gained 2.08 cents to $2.7589 a gallon while gasoline futures were practically unchanged at $2.52 a gallon.
Natural gas futures fell 3.3 cents to $8.858 per 1,000 cubic feet.
http://money.cnn.com/2008/02/22/markets/oil.ap/index.htm?postversion=2008022206
 
Who knows why oil prices are so high?

By Anthony Reuben
Business reporter, BBC News
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On Wednesday, oil prices in New York set a new record trading high of $101.32 a barrel, ending the day at a record close of $100.74.

Various reports have attributed this rise to different reasons, but who is correct?
Some say it is because the Opec cartel may be about to cut its production.
Others say it is because of fears that Venezuela may stop working with Western oil companies.
It may have been sparked off by Monday's explosion at Alon USA's Big Spring refinery in Texas.
But the truth is, it could be something completely different.
The fundamentals
"Why did it happen on Tuesday? Nobody really knows for a fact what's happening or where it's going," says John Hall from the energy consultancy John Hall Associates.
So what is it that moves oil prices up and down?
"It's the fundamentals, stupid," says Mark Lewis from Energy Market Consultants.
The fundamentals are factors that influence the supply of, and demand for, oil.

Things such as the increasing demand from China and India, as well as fears that a stand-off between the US and Iran could interrupt supplies, have been raising oil prices.
Alternatively, financial factors may be at work, such as a hedge fund having to sell a particular oil contract so it does not end up receiving a tanker-load of oil - or a trader deciding it would be fun to be the first to trade oil above $100 a barrel.
The problem is, much fundamental information is not freely available.
No sense
"We really don't know what the fundamentals are doing at any point in time," Mr Lewis says.
"The markets are looking for signals from the fundamentals. Some of them are irrelevant, some of them are wrong, some of them are meaningless, but they affect prices nevertheless."
When the New York oil price broke through $100 a barrel for the first time at the start of 2008, one of the factors cited as being behind it was the assassination of Benazir Bhutto in Pakistan on 27 December 2007.
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It's like the dotcom boom in the 1990s
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Mark Lewis, Energy Market Consultants

"That didn't strike us as making any sense at the time," says Sean Cronin, editor of Argus Global Markets.
He says that people are too keen to attribute market moves to geopolitical factors.
He attributes rising prices to over-optimistic expectations of oil production by non-Opec countries - and also to signs that Opec members appear to have a greater tendency to stick to their output limits.
'Can't sit around'
These long-term trends are all very well, but oil traders have to make quick decisions.
"You can't sit around a day or two and see what happens," says Mr Hall.
"So the rocket testing in North Korea [previously cited as a reason for rising prices] or the assassination of Benazir Bhutto turned out to have no real effect, but they might have done."
Some of the factors that are more likely to influence oil supply and demand, such as figures of oil demand from China, are not available.
That means that minor news of fundamentals, such as the output of a single refinery, may be given too much weight.
"Little changes in insignificant parts of the fundamental picture, if they're visible, can have a substantial impact on the oil price - substantial in the sense of several dollars," Mr Lewis says.
Dotcom boom
So there appears to be a distinction between the factors that raise the oil price because they affect sentiment and the ones that genuinely affect supply and demand for oil.
And it may be that rises due to the former are vulnerable. "It's like the dotcom boom in the 1990s," says Mr Lewis. "It was overinflated, but as long as everyone kept believing in it, the price went up." "When they stopped believing in it, the price went down. And that's a warning."
http://news.bbc.co.uk/2/hi/business/7255447.stm
 
Brazil dances with OPEC

The country, likely to become a major exporter of crude, is serious about joining the cartel which - in the long term - could push up prices.:mad:

By Steve Hargreaves, CNNMoney.com staff writer
February 22 2008: 6:23 PM EST


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Brazil's massive new Tupi field, located off the country's mid-coast, could turn the nation into a big oil exporter and an OPEC member.

-- OPEC, the 13-nation cartel that has a huge influence over oil prices, may be expanding farther into South America.

News that the largest economy in Latin America (see correction below) was considering joining OPEC began to swirl late last year shortly after Brazil announced the discovery of huge offshore oil and gas deposits that could turn the country into a major oil exporter.
Politicians, including President Luiz Inacio Lula de Silva, said the country would consider membership in the Organization of Petroleum Exporting Countries as soon as the export potential from the new fields is evaluated.
Analysts say Brazil is serious about joining, and its membership could push crude prices higher as more oil would be under OPEC control, but that membership and significant crude exports from the country won't happen anytime soon.
Brazil's interest in joining OPEC is the political clout that membership brings.
Governments - especially democracies like Brazil - like to do things that make them popular with their constituents.
"To the extent they are able to present themselves as an international powerhouse, that plays favorably at home," said Christopher Garman, head of the Latin American division at Eurasia Group, a political risk consultancy.
OPEC membership would also give Brazil a tremendous boost in clout on the world scene, with a seat at the table of an organization that controls some 40% of global oil production. If oil prices fall, Brazil could help prop them up by voting to cut production in all OPEC countries, a far more powerful lever than simply cutting production on their own.
"It gives them [Brazil] a united voice," said Fadel Gheit, a senior energy analyst at Oppenheimer. "The more clout they get, the more they are able to influence oil prices." [more]
http://money.cnn.com/2008/02/22/news/international/brazil_opec/index.htm?postversion=2008022216
 
But the Market doesn't care!:D:confused:

Oil settles at record high above $100

Concern about global supply overrides indications that the U.S. economy remains weak.

February 26 2008: 3:41 PM EST

NEW YORK (AP) -- Oil futures surged back above $100 a barrel Tuesday, settling at a record high, as traders focused on supply concerns and stock market bulls rather than signs that the U.S. economy remains shaky.
Light, sweet crude for April delivery jumped $1.65 to settle at $100.88 a barrel on the New York Mercantile Exchange. Monday prices closed at $99.23.
Last week, March oil rallied to a settlement record of $100.74 and a trading record of $101.32 before the contract expired.
Crossing the psychologically significant hurdle once again - oil prices last topped $100 last week - in itself may have helped fuel the rally by triggering computer programs set to buy at certain levels and enticing new speculators into the market, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.
"You see additional buying among people who think they're missing something," he said. "Any time you move above [$100 a barrel], you're going to ignite some fresh buying."
Investors who recently were selling on weak economic data seemed to take in stride news from the Conference Board, a business-backed research group, that its Consumer Confidence Index fell to 75 this month from a revised 87.3 in January.
The reading was the lowest since February 2003, and was far below what analysts had been expecting. It indicated that consumers might continue to curb their spending in the coming months.[more]
http://money.cnn.com/2008/02/26/markets/bc.apfn.eu.fin.mkt.oilp.ap/index.htm?postversion=2008022615
 
Oil surges to highest mark ever:mad:Crude futures rise to trading record past $102 a barrel; weak dollar prompts investment in energy.

February 27 2008: 7:14 AM EST

SINGAPORE (AP) -- Oil prices broke through a new intraday high of $102 a barrel Wednesday as a slide in the U.S. dollar prompted investors to pump more money into energy futures as a hedge against inflation.
The dollar sank to a record low against the euro after the release of three disheartening U.S. economic reports Tuesday that show that the economy is slowing as prices for consumer goods rise. The dollar's decline prompted investors to seek a safe haven from turmoil in the financial markets and the threat of inflation.
"Crude has cracked through the $100-level again and that's driven by financial investors moving money into commodities markets," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
"The U.S. dollar weakened against the euro and the economic data also indicated that inflation in the U.S. rose in January, and commodities are generally considered a hedge against inflation," Shum said. "We are therefore seeing these strong prices that have really little to do with oil market fundamentals."
Light, sweet crude for April delivery spiked as high as $102.08 a barrel in electronic trading on the New York Mercantile Exchange before slipping back to $101.23, up 35 cents.[more]
http://money.cnn.com/2008/02/27/markets/oil.ap/index.htm?postversion=2008022704
 
Inventories pull oil further down from $102

Crude retreats from record high as supplies rise for 7th straight week.

By Steve Hargreaves, CNNMoney.com staff writer
February 27 2008: 10:53 AM EST


NEW YORK (CNNMoney.com) -- After setting a new high above $102 a barrel, oil prices gave up gains Wednesday following a government report showing inventories rising for the seventh straight week.


U.S. light crude for April delivery fell 65 cents to $100.23 a barrel on the New York Mercantile Exchange. Oil had traded down 14 cents just prior to the report's release.
Crude set a new intraday high of $102.08 a barrel earlier in electronic trading. Analysts blamed the spike on investors pouring money into commodities as an inflation hedge against the weak dollar.
In its weekly inventory report, the Energy Information Administration said crude stocks rose by 3.2 million barrels last week. Analysts were looking for a 2.4 million barrel increase, according to a Dow Jones poll.
Distillates, used to make heating oil and diesel fuel, fell by 2.5 million barrels while gasoline supplies rose by 2.3 million barrels. Analysts were looking for a 1.8 million barrel drop in distillates supplies and a 400,000 barrel increase in gasoline stockpiles.
http://money.cnn.com/2008/02/27/markets/oil_eia/index.htm?postversion=2008022710
 
Oil hits new record:mad:

Crude prices surge nearly $3 a barrel as dollar weakness and signs of further Fed accommodation bring in buyers.

February 28 2008: 3:45 PM EST



The CEO pledges to increase oil production and improve results at refining.

NEW YORK (AP) -- Crude prices rebounded Thursday, shooting up nearly $3 a barrel to another new record as a falling dollar and the prospect of lower interest rates attracted fresh money to the oil market. Retail gas prices, meanwhile, rose closer to records above $3 a gallon.
A pair of dismal economic reports Thursday drew more money into the oil market, as did Federal Reserve Chairman Ben Bernanke's comments that the economy is not immediately threatened with stagflation, a combination of economic weakness and rising inflation. The Commerce Department said gross domestic product grew at only a 0.6% rate in the fourth quarter, below estimates and at only a fraction of the previous quarter's growth rate, while the Labor Department said applications for unemployment benefits rose by 19,000 last week, more than expected.
Rather than viewing such news as bad for oil demand, investors chose to see it as confirmation of their beliefs that the Fed will continue cutting interest rates to try to shore up the economy. Interest rate cuts tend to weaken the dollar, and crude futures offer a hedge against a falling dollar. Also, oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.
"I really think that this is oil being viewed as ... a financial instrument," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Light, sweet crude for April delivery rose $2.95 to settle at a record $102.59 a barrel on the New York Mercantile Exchange. Prices continued rising after the Nymex closed, setting a new trading record of $102.97.
Crude prices are within the range of inflation-adjusted highs set in early 1980. A $38 barrel of oil then would be worth $97 to $104 or more today, depending on the how the adjustment is calculated. A direct comparison with daily Nymex prices is difficult because historical data, gathered before the crude futures contract was created in 1983, are based on average monthly prices posted by oil producers.
Stagflation not a problem - Bernanke [more]
http://money.cnn.com/2008/02/28/markets/oil_prices.ap/index.htm?postversion=2008022815
 
Oil touches $103 a barrel:eek:

Crude briefly hits trading record as the falling dollar and talk of lower interest rates draw investors.

February 29 2008: 6:18 AM EST

SINGAPORE (AP) -- Oil prices surpassed $103 a barrel for the first time Friday as persistent weakness in the U.S. dollar and the prospect of lower interest rates attracted fresh money to the oil market.
Prices were supported by comments Thursday from Federal Reserve Chairman Ben Bernanke, who said the American economy is not immediately threatened with stagflation, a combination of economic weakness and rising inflation.
Investors chose to see the comments as confirmation of their beliefs that the Fed will continue cutting interest rates to try to shore up the economy.
Lower U.S. interest rates tends to weaken the dollar, and crude futures offer a hedge against a falling dollar.
"Due to the weakening dollar and the rising fear of inflation, investors have put money into commodities, oil included," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
"Commodities, as tangible assets, do not face as much inflationary threat as opposed to holding a currency," Shum said. "Even though the value of money is changing, the asset continues to have an intrinsic value."
Light, sweet crude for April delivery jumped to a new trading record of $103.05 a barrel in Asian electronic trading on the New York Mercantile Exchange before slipping back to $102.79 a barrel, up 20 cents, midafternoon in Singapore.
On Thursday, the contract jumped $2.95 to settle at a record $102.59 a barrel.
Bush finds out about $4 gas forecasts [more]
http://money.cnn.com/2008/02/29/markets/oil_prices.ap/index.htm?cnn=yes
 
AP
Profit-Taking Pulls Oil Back From $103
Friday February 29, 10:49 am ET
By John Wilen, AP Business Writer Oil Retreats After Topping $103 As Investors Sell to Lock in Profits; Diesel Hits New Record.

NEW YORK (AP) -- Oil futures retreated from a new overnight record above $103 as the dollar gained strength and Turkish forces withdrew from northern Iraq, removing two of the reasons underpinning crude's dramatic 19 percent rise from earlier this month.
But many analysts believe the declines may be temporary, and that oil is poised to rise above $103.76 a barrel. That's the price many believe to be oil's all-time high on an inflation-adjusted basis, set in early 1980 during the Iranian hostage crisis. Gasoline and diesel prices, meanwhile, continued to soar. Gas prices rose 0.3 cent overnight to a national average of $3.164 a gallon, creeping closer to last May's record of $3.227 a gallon, according to AAA and the Oil Price Information Service. Diesel prices jumped 1.5 cents to a new record national average of $3.642 a gallon.[more]
http://biz.yahoo.com/ap/080229/oil_prices.html
 
Reuters
Gasoline could hit $4 as crude breaks records
Friday February 29, 11:00 am ET
By Rebekah Kebede
NEW YORK (Reuters) - Motorists may face gasoline prices as high as $4 a gallon this summer as crude oil costs smash records, painting a bleak picture for consumers already feeling the pinch of an economic slowdown.
Crude oil, the main feedstock refiners use to make fuel, hit an all-time peak over $102 a barrel Thursday, nearly doubling prices from a year ago amid a surge in speculative investment. "American consumers know these oil prices are an unpleasant omen of events likely to occur at the nation's gas pumps over the next few months," said Geoff Sundstrom, spokesman for travel and auto group AAA.[more]
http://biz.yahoo.com/rb/080229/usa_gasoline_4.html
 
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