Oil Prices Flirt With $100 A Barrel

Government Reports Oil Supply Increase At Key Terminal In Midwest

(CBS/AP)  Energy futures balked on a drive to $100 a barrel Wednesday after the government reported that supplies at a key oil terminal in the Midwest rose for the first time in weeks.

Overall crude inventories fell, and distillates including heating oil dropped more than expected last week, the Energy Department's Energy Information Administration reported.

That could mean more bad news for heating oil customers already expecting costs to rise 22 percent this winter. Heating oil futures fell 0.32 cent to $2.6869 a gallon on the New York Mercantile Exchange after earlier hitting $2.7154, a new record.

George Vukasin watches the price of oil, minute to minute, bracing himself when it rises, reports CBS News correspondent John Blackstone.

Vukasin isn't in the oil business -- he's in the coffee business. But a tour of his roastery shows how energy prices percolate through the whole economy.

The cost of shipping sacks of coffee around the world depends on the price of oil. Energy costs hit everything from firing the roaster, to running forklifts and delivery trucks, adds Blackstone.

"The price of natural gas, the price of propane, the price of oil, the price of electricity -- all is going up," said Vukasin of Peerless Coffee and Tea.

At the pump, meanwhile, gas prices fell 0.1 cent overnight to a national average of $3.089 a gallon, according to AAA and the Oil Price Information Service. Prices have fallen 2.3 cents since last week, and are almost 14 cents below the record price of $3.227 a gallon set in May, a bit of good news for Thanksgiving holiday drivers.

Gas prices will likely remain flat or fall unless oil reaches $100 a barrel or higher, analysts say.

The price of oil has now increased 45 percent since August, reports CBS News correspondent Larry Miller.

Crude prices retreated Wednesday, however, after a mixed inventory report that didn't do much to change a prevailing view that oil supplies will tighten amid rising demand.

"It's two steps forward, then one back in terms of this week's inventory cushion," said Tim Evans, an analyst at Citigroup Inc. in New York.

Light, sweet crude for January delivery fell 90 cents to $97.13 a barrel on the New York Mercantile Exchange.

Before the inventory report, prices had risen as high as $99.29 a barrel in electronic trading to break the previous intraday record of $98.62 set earlier this month.

"Not exciting enough to get us over the hump just yet," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, referring to the inventory data.

Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

Other energy futures were mixed. December gasoline fell 1.31 cents to $2.4384 a gallon on the Nymex. December natural gas rose 13.1 cents to $7.608 per 1,000 cubic feet. In a separate report, the EIA said natural gas inventories grew by 4 billion cubic feet last week, more than expected.

In London, December Brent crude fell 63 cents to $95.86 a barrel on the ICE Futures exchange.

Oil inventories fell by 1.1 million barrels last week, versus a 700,000 barrel increase analysts surveyed by Dow Jones Newswires, on average, had expected. Inventories at the closely watched Nymex delivery terminal in Cushing, Okla., rose by 1.2 million barrels, however. It was the first substantial increase in Cushing stocks in weeks, and the largest since the end of August.

The Cushing terminal is the physical delivery point for Nymex crude. Falling supplies there are seen as a symptom of a tight market. Those concerns ease when Cushing inventories rise.

The EIA also said refinery activity fell last week, countering expectations for a slight increase. Gasoline inventories grew less than expected, but distillate supplies fell by 2.4 million barrels, far more than expected.

The decline in overall crude supplies can be explained in part by imports, which fell by an average of 667,000 barrels a day, or about 6 percent, last week. Gasoline imports rose 11 percent.

Demand for gasoline remains tepid, a function of higher prices, analysts say. Demand for gasoline rose by 35,000 barrels last week, and by 0.3 percent over the last four weeks compared to the same period last year, the EIA said.

Analysts cautioned that trading in energy futures could be volatile Wednesday due to light volumes before Thanksgiving. The Nymex will be closed Thursday and will close early Friday.

"This is holiday trade, and some pension fund comes in with a sizable order ... and you're down half a buck," said Jim Ritterbusch, president of Ritterbusch & Associates, in Galena, Ill.

[name_verify]

Actually $100 per barrell oil is bad for the oil companies. At that price it starts to become cost effective to consider alternative energy. If the price doesnt drop, oil companies could start to lose market share to other kinds of energy. The oil companies would be much smarter to get the price down to about $50 per barrell in order to prolong dependence on oil. Even people in the oil business think about this consideration. In other words, at a certain price point, it will be anything but oil.

[huanaco]

GENTLEMEN ALL : THE PRICE OF OIL IS THE PRICE OF WAR. YOU DON,T HAVE TO BE SMART TO FIGURE IT OUT WHY WE ARE IN WAR. WE ARE BECAUSE IS A HUGE BENEFIT FOR THE SAUDIS, AFTER ALL, BUSH FATHER STILL IS IN THE PAYROLL, AND I GUESS THE SON IS TOO. THIS WAR HAS THIS GOAL, NOTHING ELSE. IMPEACH THE SUCKER.

[stevex47]

Sorry to pile on, but it''s just more proof of the hypocrisy of the right. They claim to put more money in your pockets, when they are actually stealing it out of your wallet.

Everything they claim or stand for...all lies from all of them. They really should change their name, maybe people won''t notice.

[michellem99-2009]

That hurts.

[feelfree1]

Those who supported the failed and disgraceful empirial drive of the Bush League should only have gasoline available to them at $100 or so per gallon.

The excess receipts could be used to offset some of the costs that have resulted from their foolishness. We could call it a "stupidity" tax.

[feelfree1]

jowand,

I disagree. You don''t seem to be able to understand the concept of externalized costs.

[jowand]

"Iraq war hikes true cost of oil to US$300"

"What is the real cost of things? Freakonomics author Stephen Dubner cited a study this week that estimates a pack of cigarettes actually costs US$222. The amount includes the economic cost of a reduced lifespan."

"So what is the real cost of the Iraq war in terms of oil import prices? My rough estimate is that the real cost of oil from the Middle East for Americans may total US$300 a barrel or more."

www.canada.com/nationalpost/fi
nancialpost/story.html?id=d09989e3-1c24-
4b7b-ba38-9a7b69a2bd94

Posted by FeelFree1 at 02:06 PM : Nov 22, 2007

No true at all, 100 percent fiction. Oil is priced where it is by more demand than supply, OPEC controls 40 percent of the worlds oil production and limits pumping. Chinas oil demand is going up 10 percent per year, India a similar amount. One US political party refuses to support drilling for more oil in places where there are abundant supplies of oil; they would rather be boot licking lackies to the whacked-out left.

You just hate Bush and want to blame him for everything where you can gain political advantage.

[jowand]

Why would anyone say Bush or Cheney wants oil to go up to $200? Chavez is the one who said that, and last I heard he''''s also called Bush the devil. And while criticizing a person is one thing, calling them names synonymous to that of "Satan" is quite another! (Besides, Chavez is ruining his credibility the more he opens his mouth...)

Posted by hypnotoad72 at 02:08 PM : Nov 22, 2007

Chavez is an Archair Marxist, just like Castro and all other hold outs from the last century. Demonizing people is all they have.

[hypnotoad72]

Why would anyone say Bush or Cheney wants oil to go up to $200? Chavez is the one who said that, and last I heard he''s also called Bush the devil. And while criticizing a person is one thing, calling them names synonymous to that of "Satan" is quite another! (Besides, Chavez is ruining his credibility the more he opens his mouth...)

[feelfree1]

Hi ''formrusmcsgt'',

Re: "I often agree with you feelfree1, but this time I feel that you have not taken into account the economic impact of your proposal."

Just a quick comment. I am a strong believer that the true costs of any product should be included in the final sales price of that product.

Here is an article that touches on this topic:

"Iraq war hikes true cost of oil to US$300"

"What is the real cost of things? Freakonomics author Stephen Dubner cited a study this week that estimates a pack of cigarettes actually costs US$222. The amount includes the economic cost of a reduced lifespan."

"So what is the real cost of the Iraq war in terms of oil import prices? My rough estimate is that the real cost of oil from the Middle East for Americans may total US$300 a barrel or more."

www.canada.com/nationalpost/financialpost/story.html?id=d09989e3-1c24-4b7b-ba38-9a7b69a2bd94

[thgdriver]

Happy Thanksgiving every one!!

[jetranger7]

OIL PRICES "FLIRTING" NOPE NO FLIRTING, THEIR QUITE "COZY" ACTUALLY !

[beehive21-2009]

Time for the EUROs to pay the USA,they owe Billions, we need some relieve this time,Kuwait you owe also, pay up.the price of oil is being manipulated by the OIL Companies, Bush and Cheny,who have vast riches,why are they so Greedy ?

[jowand]

The "SECRET AGENDA" is to push and get OIL up to around "$200.00" a Barrell, meaning-you''''ll be paying upwards of $12.00 to $15.00 a Gallon for Gas & more for Diesel ! Its Coming, it was "SECRETLY" Discussed at the last "BUILDERBERGER" Meeting in Switzerland about a year and a half ago, Cheney was present, along with several other Highly Important Figure heads from around the GLOBE, from all different sections of the Political Sphere and Corporate Sections as well ! Theres NEVER any Public or Press ever Allowed in to these "SECRETIVE" Meetings, and SECURITY is Extremely High ! Don''''t believe me-just take a look around you at the cost of fuel and everything associated with it-MILK is NOW $4.00+ a Gallon and rising ! Their putting their Plan in place, unknown to many of the worlds population, it''''ll be "too late" when we wake up and realize whats happened !
Posted by JetRanger7 at 05:53 AM : Nov 22, 2007

The more oil you have on the market the lower the price of oil will be. OPEC control 40 percent of the world production of oil. We have enough oil to be independent for 400 years in the US, between liquid oil and shale oil. Why are we not drilling for oil and exploiting oil shale, who is against it? Why are we not building more oil refineries to produce gasoline and fuel oil; who is against this?

[jowand]

This "BUILDERBERGER GROUP" is something everyone needs to be concerened "Deeply" about ! They''''re a very Powerful bunch of "ELITEST", that have other "SECRETIVE-AGENDAS" unknown to most all Americans of Either Party, and they''''re really not intersteaded in either party and could careless, they''''ve got their own so called party,and their own Agendas their going to try to Implement thru out the WORLD, rather anybody likes it or not, despite what the outcome is, or what anybody thinks ! Google that word and research it !
Posted by JetRanger7 at 11:42 PM : Nov 21, 2007

Every group has a secret agenda an under the table deal(s) with all kinds of people. Why do you think nothing is ever done by goverment, either party, for the good of the average person. They go for the money to get relected year after year. You have the Bilderbergers, Illuminati, Tri Lateral Commission, CFo ....etc, they are not the problem.
It''s the Super (Merchant) Banks who wield the real power, they can make and break a nationions finances. The Federal Reserve in the USA is a primary cause of recessions in the US. Inflation used to be when you printed more paper money than you had something to back it up. Now, it is all kinds of rubbish which is thrown into th equation just to confuse things.
The Federal Reserve is controlling inflation (wages) by pushing interest rates up until it causes unemployment to go up, driving wages down.

[jowand]

BUSH - DESTROYING AMERICA ONE GALLON AT A TIME!!!


Posted by jw218389 at 01:28 AM : Nov 22, 2007

You have deranged Bush syndrome, seek help immediatly

[speakinup]

brianbwb - I won''t disagree with yo about the corruption in the oil industry.

However, you reasons for doing so in the last post were somewhat tainted.

Oil is not bought like gasoline, and there is a time lag between the time it is purchased and when it gets refined. Now, I know you were talking about average prices, but did you ever wonder why in one location it can be 20-30 cents higher than another city or state ?

Different locations have different requirements for additives.

Anyway - check out my previous post on the Shale oil thing. We have means to produce $30 barrel oil here in the US, from a supply that is 3 times as abundant as all of Saudi Arabia''s liquid oil, AND do it ecologically!

Have a great Turkey day Man.

[speakinup]

"I often agree with you feelfree1, but this time I feel that you have not taken into account the economic impact of your proposal. Posted by formrusmcsgt

formrusmcsgt - I know you don''t agree with me, but did you know that feelfree supports hugo chavez, and has called Hillary a fascist ? Ask him if you don''t believe me.

[speakinup]

So, how many of you have actually contacted your representative from the house to ask why insitu mining of shale oil hasn''t started until we can get the renewable energy sources up to speed ???

Shale oil can be mined insitu: (A) Put a frozen ring around the area you want to mine using drilling rigs. (B) Heat the Shale to 750 degrees - extract gas and oil until it no longer flows -unlike with liquid oil this means you have the VAST majority if it. (C) let rock cool - as it does it traps the remaining oil and gas. (D) stop freezing around target shale.

This yields a three and 1/2 to one energy output. We have approximately three times the amount of oil in shale oil that Saudi Arabia has in liquid. It can be produced at $30 a barrel. With over 1,500 barrels for a plot of land 20 X 35 feet!!!

http://www.rockymountainnews.com/drmn/news_columnists/article/0,1299,DRMN_86_4051709,00.html

And Shale oil is in the middle of NO WHERE in NE UTAH and SW Wyoming.

http://ostseis.anl.gov/guide/maps/index.cfm

Ask your Representative WHY we haven''t been doing it!
http://www.house.gov/writerep/

Otherwise, whine on...

[jowand]

suspect you would agree with this very profound quote:
"Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful."

- Seneca, (Roman philosopher, writer, politician)

Posted by USAyesterday at 06:25 PM : Nov 21, 2007

What do you expect from an eletist Roman politician like Senaca, they had a god for everything. I may be the dumbest quote of the day too.