Oil Prices Surge Ahead Of Driving Season

Prices Surpass Record $126; Tensions Between U.S. And Venezuela Could Cut Exports

(CBS/AP)  Oil rose above $126 a barrel for the first time Friday, bringing its advance this week to nearly $10, as investors questioned whether a possible confrontation between the U.S. and Venezuela could cut exports from the OPEC member. Meanwhile, on the eve of the U.S. driving season, gas prices rose above an average $3.67 a gallon at the pump, following oil's recent path higher.

On Friday, The Wall Street Journal published a report that suggested closer ties between Venezuelan President Hugo Chavez and rebels attempting to overthrow Colombia's government. Chavez has been linked to Colombian rebels previously, but the paper reported it had reviewed computer files indicating concrete offers by Venezuela's leader to arm guerillas. That appears to heighten the chances that the U.S. could impose sanctions on one of its biggest oil suppliers.

"If we put on sanctions, I'm sure Chavez would threaten to cut off our oil supply," said Phil Flynn, an analyst at Alaron Trading Corp. "Obviously that would have a major impact on oil prices."

Light, sweet crude for June delivery vaulted to a new record of $126.20 in morning trading on the New York Mercantile Exchange before retreating to trade up $1.09 at $124.78 a barrel.

Even if Chavez cut oil shipments to the U.S., Venezuelan oil would still make its way to the U.S. via middle men, who would buy it from Venezuela and resell it to the U.S., Flynn said. But that new layer in the supply chain would bump up costs.

Oil prices also were boosted Friday by the dollar, which declined against the euro. The European Central Bank said it was unlikely to consider interest rate cuts to cool the strong euro against the slumping dollar. Investors often buy commodities such as oil as a hedge against inflation when the greenback falls. A weaker dollar also makes oil less expensive to overseas investors.

Many analysts believe the doubling in oil prices since this time last year has much to do with the dollar's protracted decline. Another school of thought thinks tight global supplies of oil, driven by growing demand in countries such as China, Brazil and India, is the primary factor driving oil higher.

A prediction by analysts at Goldman Sachs seeing oil rising as high as $150 to $200 a barrel within two years also has boosted prices.

Oil's surge is pushing retail gas prices higher. The national average price of a gallon of regular gas jumped 2.6 cents overnight to a record $3.671 a gallon according to a survey of stations by AAA and the Oil Price Information Service. The Energy Department expects prices to peak at a monthly average of $3.73 in June, though many analysts say national average prices could rise as high as $4. Consumers in many regions, including parts of California and Hawaii, are already paying that much.

Meanwhile, big oil has launched a nationwide campaign to show it isn't "the bad guy" when it comes to high gas prices (listen), reports CBS Radio News correspondent Steve Kathan.

Demand for diesel fuel is also growing worldwide, but supplies of distillates, which include diesel and heating oil, fell unexpectedly last week, the Energy Department said Wednesday. That's pushing U.S. diesel prices to record highs and inflating heating oil prices in the futures market; heating oil futures are often viewed as a proxy for diesel.

Heating oil for June delivery rose 7 cents to $3.5798 on the Nymex after earlier setting a trading record of $3.6125. At truck stops, retail diesel prices rose 1.8 cents overnight to a record national average of $4.269 a gallon,

Diesel is used to move most of the world's food, consumer and industrial goods via truck, ship and rail. Skyrocketing diesel prices are part of the reason food and consumer goods prices are so high.

In other Nymex trading Friday, June gasoline futures rose 3.72 cents to $3.175 a gallon, and June natural gas futures rose 13.2 cents to $11.395 per 1,000 cubic feet.

In London, June Brent crude futures rose $1.79 to $124.63 a barrel on the ICE Futures Exchange.

[sjc_1]

I leave it to you and others to do your own research on the matter. I think you will find that I am accurate. USGS and others have made some high estimates on what can be recovered from these areas. It has been shown that their estimates are on the high side over the years. Even if you accept the USGS figures, those estimate still stand. We use 20 million barrels of oil each day and 14 million of those are imported. That makes for more than 7 billion barrels used each year with less than 1/3 produced domestically.

[sjc_1]

ANWR might provide 2% of our oil consumption for 20 years starting 10 years from now. It is the same for drilling off the Pacific, Atlantic and Gulf coasts combined. To get 5% more oil in 10 years or cellulose ethanol in 5 years or stop driving that big SUV in less than 1 week. All of those will get you to the 5% figure, which would you rather do?

[andylance1]

Want to know why gas is so expensive?

In 1969, oil began leaking from an offshore drilling site off the California coast near Santa Barbara. The incident caused an environmental backlash in Congress that is responsible for today''s high gas prices.

Congress has not permitted any new oil refineries to be built since then. They have blocked all oil drilling off shore Florida and California.

So the next time you are filling up your vehicle at a gas station.... don''t blame OPEC or the oil companies for the high price of gas, blame the idiots in Congress that have blocked all drilling off Florida and California and no new refineries. Under the Gulf of Mexico there is more than enough oil for both us and our children and probably their children as well.

[crater7]

OBAMA BOAST; HE IS "THE ONLY CANDIDATE THAT ISN''T TAKING A DIME FROM WASH. LOBBYIST," YET HIS FUNDRAISING TEAM INCLUDES 38 MEMBERS OF LAW FIRMS THAT WERE PAID $138 MILLION LAST YEAR TO LOBBY THE FEDERAL GOVERNMENT.

THOSE LAWYERS INCLUDING 10 FORMER FEDERAL LOBBYIST HAVE PLEDGED TO RAISE AT LEAST 3.5 MILLION FOR THE OBAMA PRESIENTIAL RACE.

OBAMA, CLAIMS HE DOSEN''T ACCEPT MONEY FROM BIG OIL COMPANY''S. BUT EMPLOYEE''S AND LAW FIRMS WORKING FOR OR TIES WITH BIG OIL FIRMS, HAVE MADE "MAXIUM" CONTRIBUTIONS TO HIS CAMPAIGN.

IMAGINE THAT !!!

GOD "BLESS" AMERICA. NOT "G D" AMERICA.

[panhandlpete]

Can you imagine NATIONALIZING anything with this docile, incompetent leadership currently in power?

The idea of staying home this summer will be a necessity, not a choice, as many just cannot afford a vacation or even a visit to distant family. Just think how much more rural people have to spend on travel cost to and from their job when they live 40 miles away.

Driving less or reducing speed limits is like pi@@ing in the ocean for the impact it will have on prices. We, the populus, grumble, then sheepishly accept whatever is pushed our way. We have been privy to the raping and destruction of our Constitution through deceptive actions to get OIL. How high will the price for it be......loss of our country?

[bluestardad]

AMERICA NATIONALIZE ENERGY!

STOP BLEEDING THE AMERICAN PEOPLE!

JAIL THESE OIL CRIMINALS!

THEY ARE HURTING AMERICAN SECURITY!

START WAR CRIMES TRIALS NOW FOR THE IRAQ WAR...

AMERICA STAND UP OR SHUT UP!

[jjp735i]

Stay home this summer. It will send a huge message. As long as people are willing to pay high prices for gas and drive all over, the price will continue to rise. Stay home, drive much less and spend much less. You will save more for other things you can not buy right now. Carrying on about high gas prices, yet still driving ever were is like crying wolf. No one listens.

[sharncedar]

The only way to seriously save fuel is to change the pattenr of houses in the US to concentrate people into populatino cneters with work, shopping, and modest living quarters all bunched together. The entire country is now designed around a pattern that assumes long drives, this is the extended suburb, with houses far from services on former farmland (that was smart not) and goods supplied in the least efficient way possibl which is mega-sized big box stores many miles apart. Better fuel economy standards are like spitting in the ocean. We have an entire structure, the single-family home in the suburbs, which is of, by, and for the waste of inexpensive gasoline.

[nownthen-2009]

are we serious about fuel saving? of course not if we want to really save fuel the easiest and quickest way is to lower speed limits 50mph it would also save thousands of lives and injuries. the next step would be limit engine size,2.5L max,vehicle weight,3000lbs max.,this would save much fuel,but that isn''t what most want. we want speed and large vehicles and $1 gas. so we''ll just keep crying about oil price s and keep paying till the economy finally implodes. oh well I''m old and will not have to live through it all.
vote for no incumbents!

[apprxam]

And, please,don''t bring up shareholder''s rights. Without the numerous bail-outs over the last twenty years, most oil shareholders would''ve been broke a long time ago. The cost of Marines in money and lives, national policy corruption and the collateral damge to imagine and industry vaugely related to oil, has been great, and maybe it''s time to reduce their influence by removing them altogether out of the picture. The shareholders can claim it on their taxes next year.