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.

[forthepeopl1]

WE GET 3/4 OF OUR OIL FROM CANADA, AND MEXICO!!!!

NOT VENESWALA,IRAQ,SAUDI...

SO WHY DONT WE SANTION CANADA, AND MEXICO?????????

[forthepeopl1]

AND WHY DO WE SELL OUR OWN OIL TO CHINA THAT WE GET FROM ALASKA PIPE LINE?????

WE DONT EVEN USE 1 BARROW FROM IT????????WHY

[acolton1]

Just another gas story how about this story:

DES MOINES, Iowa -- A blind Iowa man scored a perfect 300 game at the Century Lanes bowling alley on Saturday, The Storm Lake Times reported.

The Times said Dale Davis, 78, of Alta, called the game "quite a thrill." He rolled 12 back-to-back strikes, the first-ever perfect game at the Century Lanes, The Times reported.

[acolton1]

I did not know we sold oil from Alaska o China. I try to get my gas from HESS or Diamons Shamrock that comes from the Gulf of Mexico or the Amarillo Texas Area. I saw alot of wells in the Amarillo area that said Diamond Shamrock on them a few years ago when I was driving thru the area.

[acolton1]

Do we really sell old from Alaska to China from the Pipe line. I though that all came to the USA.

[oscarez]

"the U.S. could impose sanctions on Venezuela one of its biggest oil suppliers as a state sponsor of terror."

Does anyone, besides me, see Bush''s plan here. Is he going to invade Venezuela? What do you think mbcsmith?

[notblue]

Why doesn''t the majority in control of both houses of congress allow drilling in Anwar and other off coast locations that are presently banned? Americans will never stop driving and the Auto companies will not transition to alternates in a timely or massive manner for the forseeable future. The Ethenol biodiesel thing are nothhing more than political pascifiers, not reality. If we want to be independent we must be allowed to use our own resources, it''s that simple.

[analogtwin]

forthepeopl1,

Thanks for your comments here - they''ve been quite enlightening - however two quick reminders are in ourder. First, leaving your caps in the on position means you''re shouting. And secondly, simple words like barrel and sanction don''t usually require a spell check however it would be better a blogging experience for everyone if you''d check your spelling before posting since the all of the words you can''t spell are in the article that presumably you just READ!

[duffyn]

I do know one thing. Everytime bush oil man threatens Iran, Venzula, etc the price of oil goes up! And it''s also these huge investment entities like pension funds that will buy up massive oil futures driving prices up. Obama or Clinton has a lot of work to do making up for the 8 year oil man bush team.

[analogtwin]

"Order" how did that word get by me. Just the irony of the situation.

[nolalou]

SO WHY DONT WE SANTION CANADA, AND MEXICO?????????
Posted by forthepeopl1

My guess? Probably because there is no such word as ''SANTION'' !

[l8c6]

forthepeopl1

If Bush has done anything good at all, he has exposed the big lie that it''s somehow "We, the people of the United States". It''s not "We the people of the United States". We the people are like peasants forced by a privatized legal and monetary system to fund private exploitation of earth''s resources for the profit of a succinct minority of arrogant, elitist, self-righteous anti-socials who rule through dividing and conquering the masses through fear and misinformation. The desired outcomes of the elite are further accomplished through disproportionate taxation and the implementation of peasant youth in the form of cannon fodder.

Bush talks of the danger of isolationism. Take note of the opposite of what Bush says and there closer to the truth is revealed. The elite are extremely isolationistic. Privatization is code for kingdom/ dictator.

[oscarez]

notblue because no one knows if there is any recoverable oil in these remote fields. At best it will only delay, by a few months, what will happen when the worlds oil is gone.

[l8c6]

SO WHY DONT WE SANTION CANADA, AND MEXICO?????????
Posted by forthepeopl1

My guess? Probably because there is no such word as ''''SANTION'''' !

Posted by nolalou

Cheap shots, a waste of time. Much time has been wasted by the right wing neo con republicon conservative with everyone but themselves.

[singingrick]

Thanks Bushies!

Hey let''s attack Iran and see what happens to gas prices!

[nolalou]

Posted by notblue "Why doesn''''t the majority in control of both houses of congress allow drilling in Anwar "

Due to environmental reasons , drilling in Anwar (Alaska) is controversial. In addition, according to the United States Geological Survey, if we used the estimated supply of recoverable crude oil from Anwar to supply 5 percent of our annual need, it would last about 12 years. If we used it to supply 100% of our need, it would last a bit more than a year and a half!

Additional drilling in US territory is at best a stop-gap measure. We need to start working on alternative fuels now.

[edward1975-2009]

For months now they have said that the reason for the jump in oil prices is being driven by the amount of investors trying to get into the oil market. If they wish for it to drop pull oil off the trading boards and allow it to sink to a reasonable rate and then freeze it here in the U.S. We have the ability to fix this problem.

[notblue]

oscarez, your lack of understanding is staggering. THe oil companies estimate that Anwar alone holds enough oil and natural gas to fuel 60 million vehicles and homes for the next 160 years, that sir is a non-political truth.

[l8c6]

A few anal retentive english teachers/ librarians are here today to check our spelling and grammar. Priorities, we all have different ones for certain. Now ya''ll fall in the soup line before it gets too long.

[notblue]

noalou, while it is controversial, modern drilling techniques are no longer environmentally damaging, it''s time to use these vast resources.

[oscarez]

notblue where did you get this information?

[trillion1]

It''s amazing that the average working American is the economic blood of this country and the goverment is letting big business wipe us out. I don''t see the logic. American''s have a set amount they can spend. If they have to spend more on one thing they have to cut back on something else. It isn''t rocket science.

[l8c6]

The term "conservative" that the right wing has managed to attach to their ideology is quite deceptive. Ironically many labeled liberal are far more conservative than elitist self-righteous right wingers who accuse public government of waste yet through their private government profiting waste vast amounts of the earth''s resources.

[edward1975-2009]

notblue: We have the entire west coast that is nothing but capped wells. We have a reserve that hasn''t been tapped yet in southern Utah that would make us oil independent for 100''s of years to come. If we pulled out of the global market for oil, many economies would collapse or dive to an unreversable level, this is why we don''t explore our options.

[mediapreachr]

What a bunch of drivel.I bet this article was outsourced.Big media has no respect for us anymore.
Also it is obvious now they''re expecting us to accept the new rates-like 150-200.WOW

[underdogus]

renewed expectations that the dollar will continue to weaken against foreign currencies such as the euro and the yen are likely to keep pushing oil to new records......

[mudrose-2009]

notblue: We have the entire west coast that is nothing but capped wells. We have a reserve that hasn''''t been tapped yet in southern Utah that would make us oil independent for 100''''s of years to come. If we pulled out of the global market for oil, many economies would collapse or dive to an unreversable level, this is why we don''''t explore our options.
Posted by Edward1975

Hmm. On some level that hit a chord. Interesting.

[underdogus]

OPEC chief warns of 200$ a barrel oil price...

[l8c6]

It''''s amazing that the average working American is the economic blood of this country and the goverment is letting big business wipe us out. I don''''t see the logic. American''''s have a set amount they can spend. If they have to spend more on one thing they have to cut back on something else. It isn''''t rocket science.

Posted by trillion1


It actually is quite simple. Right wingers spin everything. They don''t disdain government as they say. Right wingers disdain public government. Right wingers desire a private government i.e. kingdom ruled by an elite hierarchy unburdened by democratic vote and accountability to the "little people".

Wall street determines things by offering one vote for every share owned. In other words, the elite determine leadership. Privatization of the earth''s resources places power in the hands of large global corporations such as the oil industry. The United States is not as free as the illusion the private elite in power have created for the people of this nation. People are so often like sheep, led to be fleeced.

[l8c6]

notblue: We have the entire west coast that is nothing but capped wells. We have a reserve that hasn''''t been tapped yet in southern Utah that would make us oil independent for 100''''s of years to come. If we pulled out of the global market for oil, many economies would collapse or dive to an unreversable level, this is why we don''''t explore our options.

Posted by Edward1975

I think the entire republicon state of Idaho should be thoroughly excavated in search of more oil or would NIMBY raise its hypocritical head?

[oscarez]

Tues., March. 16, 2004 from the AP:

"WASHINGTON - Opening an Alaska wildlife refuge to oil development would only slightly reduce America%u2019s dependence on imports and would lower oil prices by less than 50 cents a barrel, according to an analysis released Tuesday by the Energy Department.

Full report here:
http://www.msnbc.msn.com/id/4542853/

[lkedanis]

Let%u2019s see; $50 per week to fill up the gas tank in the car just to get to work and back plus 1 trip to the grocery store where I spend at least $100 per week just for food; there went my stimulus check. And I made it last 1 month to just support those greedy capitalists! Based upon all the comments I%u2019ve read about suspending fuel taxes, these stimulus checks will also contribute to the rising prices in food and fuel. It seems the only logical way to stop all this speculation-induced inflation is to quit buying. However, our government will not allow those speculative investors to be left holding the bag should this market bubble ever pop by bailing them out with our taxes.

[mudrose-2009]

Tues., March. 16, 2004 from the AP:

"WASHINGTON - Opening an Alaska wildlife refuge to oil development would only slightly reduce America%u2019s dependence on imports and would lower oil prices by less than 50 cents a barrel, according to an analysis released Tuesday by the Energy Department.

Full report here:
http://www.msnbc.msn.com/id/45428
53/

Posted by Oscarez

Yeah Chuck Schummer is about as astute on economies as you are. don''t borrow his talking points, he''s an idiot.

[l8c6]

Shouldn''t conservation of the earth''s resources fall in line with a "conservative" ideology? Does anyone find it troubling that the United States consumes a quarter of the earth''s energy reserves? Is it that hedonistic sociopaths are not troubled by this? Interesting that those who raise such questions are labeled "liberals" "bleeding hearts" "do gooders"

Right wing neo con republicons, conservative with everyone but themselves.

[notblue]

notmudrose, if you can refute with fact that the results in regards to the billions of dollars oil companies spend to find these resources please supply the info or a link we can all research. If these stated facts are not true I would like to see the research showing these vast untapped supplies do not actually exist.

[mudrose-2009]

What''''s the flip side? It will take over 12 years from today just to get the ANWR reserves to market. Hardly enough time to do anything today about $120 oil.
Posted by notmudrose

Well if we start now maybe with our technology it''ll only take 5.

[rf35]

The president knew full well that the majority of the stimulus checks would be spent at the gas station. All this was was an extra shot of profit to his oil buddies taken from the government coffers (our tax dollars).

[mudrose-2009]

The president knew full well that the majority of the stimulus checks would be spent at the gas station. All this was was an extra shot of profit to his oil buddies taken from the government coffers (our tax dollars).
Posted by rf35

Gee since the Congress went along with it I guess they knew too. After all the Congress gets free gas and government vehicles which WE THE PEOPLE pay for.

[notblue]

notmudrose, I just came back from the USGS site and it does not support your claim as a matter of fact it supports the estimates previously stated. If you include prudo bay the numbers become even larger.

[vietvet1973]

The president knew full well that the majority of the stimulus checks would be spent at the gas station. All this was was an extra shot of profit to his oil buddies taken from the government coffers (our tax dollars).
Posted by rf35

Gee since the Congress went along with it I guess they knew too. After all the Congress gets free gas and government vehicles which WE THE PEOPLE pay for.

Posted by mudrose at 11:59 AM : May 09, 2008

Yeah, and it''s about the only bill to come from Congress that Bushie didn''t veto. Hmmmmm...and it involves oil profits. Amazing.

[oscarez]

"Well if we start now maybe with our technology it''''ll only take 5."

What technology? To get oil from the ground you drill a hole. To get the oil to the refinery you use a pipeline. Lots of pipeline across Alaska or Canada. Do you see the problem?

[vietvet1973]

"Well if we start now maybe with our technology it''''''''ll only take 5."

What technology? To get oil from the ground you drill a hole. To get the oil to the refinery you use a pipeline. Lots of pipeline across Alaska or Canada. Do you see the problem?

Posted by Oscarez at 12:04 PM : May 09, 2008


It''s not technology that really slows things down....it''s the regulations.

[bogusbones]

does this really surprise anyone? the small clique of traders and speculators are making BILLIONS at the expense of consumers world wide. this is a prime example of capitalism totally out of control and in the end, hurting many while benefitting a few.

[hungry1968]

What''''''''s the flip side? It will take over 12 years from today just to get the ANWR reserves to market. Hardly enough time to do anything today about $120 oil.
Posted by notmudrose

Well if we start now maybe with our technology it''''ll only take 5.

Posted by mudrose at 11:52 AM : May 09, 2008





They could just as easily drill OUTSIDE of Anwar on state land AND off shore to recover that oil.

It''s not about the oil itself that''s an issue, it''s about setting a precedent about drilling for oil in nature preserves - nothing more.

[vietvet1973]

They could just as easily drill OUTSIDE of Anwar on state land AND off shore to recover that oil.

It''''s not about the oil itself that''''s an issue, it''''s about setting a precedent about drilling for oil in nature preserves - nothing more.

Posted by hungry1968 at 12:07 PM : May 09, 2008

Careful hungry1968, I see a few of the pubbies'' heads exploding on that one. Too much thinking involved.

[mudrose-2009]

They could just as easily drill OUTSIDE of Anwar on state land AND off shore to recover that oil.

It''''s not about the oil itself that''''s an issue, it''''s about setting a precedent about drilling for oil in nature preserves - nothing more.

Posted by hungry1968

There are techniques that will not harm these preserves. I agree partially with your premise but there are alternatives to drilling as well. What''s the excuse there?

[wdrussell1]

People can at least get a glimpse of the world their grandchildren will live in.
As long as we continue to worship polluters.
As long as we refuse to work for alternative energy.
As long as we add trillions to the national debt just to invade other countries and get away money to the already wealthy.

[pollroller1]

Oh well, We were planning a trip this summer, but we may just hang around here at the house. I can afford the gas. Just don''t like getting ripped off.

[bgwinnett]

There''s the Alberta Tar Sands too, but I can''t see where the will and the money to build the extra refinery capacity is going to come from.

[dorlockt]

Top ten reasons to drill in ANWR (Part I)

1. Only 8% of ANWR Would Be Considered for Exploration Only the 1.5 million acre or 8% on the northern coast of ANWR is being considered for development. The remaining 17.5 million acres or 92% of ANWR will remain permanently closed to any kind of development. If oil is discovered, less than 2000 acres of the over 1.5 million acres of the Coastal Plain would be affected. That9s less than half of one percent of ANWR that would be affected by production activity.

2. Revenues to the State and Federal Treasury Federal revenues would be enhanced by billions of dollars from bonus bids, lease rentals, royalties and taxes. Estimates on bonus bids for ANWR by the Office of Management and Budget and the Department of Interior for the first 5 years after Congressional approval are $4.2 billion. Royalty and tax estimates for the life of the 10-02 fields were estimated by the Office of Management and Budget from $152-237 billion.

3. Jobs To Be Created Between 250,000 and 735,000 ANWR jobs are estimated to be created by development of the Coastal Plain.