OPEC Speaks, Oil Costs Continue Climb

Prices Hit Record $105 A Barrel; U.S. Crude Supplies Suffer Surprise Drop

(CBS/AP)  Oil prices hit a record $105.10 a barrel Thursday, a day after a surprise drop in U.S. crude supplies and a decision by OPEC not to boost production.

Prices gave up some ground by midday trading in Europe. Light, sweet crude for April delivery was still up 11 cents to $104.63 a barrel in electronic trading on the New York Mercantile Exchange.

On Wednesday, the April contract had jumped $5 to settle at a record $104.52 a barrel and later rose to $104.95 in post-settlement electronic trading.

Earlier this week, oil prices broke the previous inflation-adjusted price record of $103.76, set in 1980 during the Iran hostage crisis.

In London, Brent crude fell 21 cents to $101.43 a barrel on the ICE Futures exchange.

"The primary factor causing the surge in oil prices is the surprising drawdown in crude inventories, which caused traders to really react quite dramatically," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Most analysts had expected the U.S. Energy Department's Energy Information Administration to report oil stocks rose last week for the eighth straight time. Instead, the stocks fell 3.1 million barrels.

In Vienna, the Organization of Petroleum Exporting Countries said Wednesday it would hold production levels steady, at least for now. OPEC ministers cited falling demand in announcing their decision to hold production steady.

Tom Kloza, an oil analyst with Oil Price Information Service, told CBS' The Early Show that OPEC isn’t all to blame for the spike in gasoline prices.

"I think OPEC's right in saying that prices are up not just because of supply and demand but because of a lot of speculation in some of the big capital markets. But I don't think you can just sort of ask or expect to see OPEC raise production simply because the United States wants it to," he said.

The EIA report and OPEC announcement fed a new frenzy of investing in oil futures, which have risen to new inflation-adjusted records this week as the falling dollar drew investors to the market.

"Five dollars is an incredible gain," Shum said. "The overall oil market fundamentals are supportive of strong oil prices but not at this level, above $100. I would expect some profit taking to put a temporary halt to this rather large surge in pricing."

The dollar, meanwhile, fell to a new low against the euro, with the EU's shared currency climbing to $1.5329 before dropping back slightly. The euro set its previous high mark of $1.5302 on Wednesday.

Analysts noted that U.S. oil inventories are at historical highs despite last week's decline in crude supplies. Meanwhile, demand for gasoline is falling, and several forecasters have cut their oil demand growth predictions for this year.

Traders also worried about the escalating of tensions between oil producing countries in Latin America. Colombia's weekend attack on leftist rebels hiding in Ecuadorean territory has sparked a growing crisis as Venezuela moved tanks and soldiers to the Colombian border Wednesday. Ecuador said Monday it had sent 3,200 soldiers to its border with Colombia.

Kloza said consumers may be resigned to higher gas prices, but that there are steps that could be taken to mitigate sticker shock.

"You know, we're going to have to pay the prices, and we're going to have to pay more," he told The Early Show. "The one thing you probably won't hear from political candidates makes a lot of sense: We need to have some sort of energy discipline here.

"We talk about energy independence, but energy discipline really needs to presage energy independence. If everyone cut back by about a half a mile or so driving per day - and I know a lot of people say they can't - we really would swing the balance of products slightly toward the oversupply category as opposed to tight supply.

"We're in for a rough ride here, but hopefully we'll see some leadership from some of the candidates running for president, and they'll really level with the American public and say, look, we can't drill our way out of this. We can't negotiate our way out of this. We just, somewhere down the line, have to use a little bit less and be a little bit more disciplined - and there's no downside to that."

In other Nymex trading, heating oil futures fell 1.04 cents to $2.9327 a gallon while gasoline prices lost 0.63 cent to $2.6358 a gallon. Natural gas futures added 3.9 cents to $9.78 per 1,000 cubic feet.

[mcv57]

what is the matter . . . your micro neobrain does not know stort from short. Is that too hard for you to figure out???

[mcv57]

Posted by neobrian

A TYPO Morre of aa moran than I.

[neobrian-2009]

Num-nut ?
What is a '' STORTAGE ??
That is not a STORTAGE num-nuts. That is a nuke site that went down, stupid. Anyway, I talking about Gasoline, brain dead. Energy power plants don''''t have gasoline generators. Ignorance is so sinful.

Posted by mcv57 at 08:46 PM : Mar 06, 2008
-----------
Ironic-Moronic,...

[mcv57]

Posted by omega39

That is not a STORTAGE num-nuts. That is a nuke site that went down, stupid. Anyway, I talking about Gasoline, brain dead. Energy power plants don''t have gasoline generators. Ignorance is so sinful.

[neobrian-2009]

THE WHOLE TRUTH
Ha!Ha! Your postings are growing more bitter because you know you backed a LOSER not once but twice and you are upset that most everyone in America polled say he has been a complete and utter diaster. What?...26 or 27% still support that turkey. AND JUST THINK...YOU ARE ONE OF THEM. You must feel mighty lonely about now. But you made your bed, now lie in it. Only 320 days left! Enjoy!

Posted by leftyintexas-----------
------------
YES,...well written,...The Idiots who fail miserably trying to uphold Shrub are just as Moronic as he is!
A third grader making W`s is smarter than Their King ! Shrub has taken out country into the depths of
Futility,..Whoever inherits His problems has mountains to move,..It`s Truly Amazing how much damage has been perpetrated against our people and the world.

[downsteamjim]

Why aren''t you people celebrating? We didn''t drill offshore, we didn''t drill in Anwar, we didn''t put up windmills new his highness Ted Kennedy? If you reduce supplies you get high prices.

[brianp55]

"George Bush has started an ill-timed and disastrous war under false pretenses by lying to the American people and to the Congress; he has run a budget surplus and an economic boom into a severe deficit and a recession; his moronic policies have sent inflation through the roof while the dollar sinks in value; he has consistently and unconscionably favored the wealthy and corporations over the rights and needs of the population"

Yeah.....and we''re letting him do it.

[jwind11]

Ha!Ha! Your postings are growing more bitter because you know you backed a LOSER not once but twice and you are upset that most everyone in America polled say he has been a complete and utter diaster. What?...26 or 27% still support that turkey. AND JUST THINK...YOU ARE ONE OF THEM. You must feel mighty lonely about now. But you made your bed, now lie in it. Only 320 days left! Enjoy!

Posted by leftyintexas at 05:18 PM : Mar 06, 2008

find a post where i back bush, bet you can''t. I am and will do well no matter who the president is. You? 320 days from now no matter who president is will still be an angry person and will have to have someone new to misdirect your anger at

[omega39-2009]

The telephone/communications deregulation has been helpful, but at the cost of reliability however. Though clearly, getting a dropped call is far less of a burden than being denied a life saving medical procedure!

Posted by USAyesterday

But even in telecommunication as well as airlines the supposed benefits are being eaten away by the very mergers that deregulation permits.

[enriquecaliente]

"George Bush has started an ill-timed and disastrous war under false pretenses by lying to the American people and to the Congress; he has run a budget surplus and an economic boom into a severe deficit and a recession; his moronic policies have sent inflation through the roof while the dollar sinks in value; he has consistently and unconscionably favored the wealthy and corporations over the rights and needs of the population"

Trickel down econamics, works everytime.

Let''s see, 8 years of Regan,+ 4 years of Bush I.=
"severe deficits and a recession"

8 years of Bubba and we have a surplus, Wall.st is off the hook.

8 years of Bush II = (go back to the top of this thread)

[joyous88]

jimmy carter solved the energy problem, the fix was in place until the republiCons came along and created this mess.

[omega39-2009]

THERE IS NO STORTAGE STUPID ANALSIST, JUST CORRUPTION AND NO GOVERNMENT TO PROTECT THE PEOPLE. THIS IS PROFITEERING . . . JUST GREED! This is such a stupid articles.

Posted by mcv57

Just look at what happened to CA during their "energy shortage", multiple reactors being shut down for maintenance at the same time while energy was being routed out of CA to be sold back to them on the spot markets. Deregulation has proven to be a repeated failure because the people gaming the system are basically dishonest.

[bm6005]

I drive smaller vehicles mostly, tho I do have a truck for hauling only. My main transport is a motorcycle. I''m waiting on spring so I can go back to my 50mpg Harley. Everyone needs to pull their MC''s out this spring and start driving gas consumption down.

[liberalme]

Nah, the LIBS would rather bit*h about how much it costs to fill up the Yukon, Tahoe and Merecedes.
Posted by mbcsmith

Cowboy cadillac''''s and Mercedes. Sounds like rich conservatives to me.
Posted by bm6005 at 04:26 PM : Mar 06, 2008

I don''t know a con in Florida that doesn''t drive a huge man lovin SUV or--mercedes?? naw they''re for the con trendies---the real cons drive BMW''s. HAHAHA they have noooo problem pulling up to the pump for their high test gas.

[leftyintexas]

all your whiny posts prove otherwise

Posted by jwind11 at 05:04 PM : Mar 06, 2008

Ha!Ha! Your postings are growing more bitter because you know you backed a LOSER not once but twice and you are upset that most everyone in America polled say he has been a complete and utter diaster. What?...26 or 27% still support that turkey. AND JUST THINK...YOU ARE ONE OF THEM. You must feel mighty lonely about now. But you made your bed, now lie in it. Only 320 days left! Enjoy!

[bm6005]

luckily there are tollbooths to work in huh?
Posted by jwind11

For you perhaps but I''m retired. My only pastime is engraving names on bullets for "compassionate conservative MF''s"!

[jwind11]

Now, would someone please give him a blowwjob so we can impeach him?



jwind11 and mBSmith would do it but they are already being paid to take Bush up the @ss and they are not allowed to double dip.





lol!







Posted by singingrick at 05:06 PM : Mar 06, 2008

just backing up my posts on how you libs have the emotional level of 12 year old

[singingrick]

A SUGGESTION



George Bush has started an ill-timed and disastrous war under false pretenses by lying to the American people and to the Congress; he has run a budget surplus and an economic boom into a severe deficit and a recession; his moronic policies have sent inflation through the roof while the dollar sinks in value; he has consistently and unconscionably favored the wealthy and corporations over the rights and needs of the population; he has destroyed trust and confidence in, and good will toward, the United States around the globe; he has ignored global warming, to the world''''s detriment; he has wantonly broken our treaty obligations; he has condoned torture of prisoners; he has attempted to create a theocracy in the United States; he has appointed incompetent cronies to positions of vital national importance.


Now, would someone please give him a blowwjob so we can impeach him?



jwind11 and mBSmith would do it but they are already being paid to take Bush up the @ss and they are not allowed to double dip.





lol!

[jwind11]

We ''''LIBERALS'''' can take care of ourselves just fine. YOU are an idiot for assuming that we can''''t. COMPRENDO?

Posted by leftyintexas at 04:56 PM : Mar 06, 2008

all your whiny posts prove otherwise

[leftyintexas]

Thanks, I will enjoy the next 320 days and many days after that, you see, unlike you, i dont need the president to make me happy....so it doesnt matter to me who gets elected...i will enjoy each day to the fullest....must be hard to be so miserable in life that you have to come on here and blame all your choices in life on one man.

Posted by jwind11 at 04:53 PM : Mar 06, 2008

If only any of what you say was true....