Oil Prices Surge, Shatter Previous Record

(AP)  Oil prices surged more than $3 Friday, shattering a previous record in a spike near $128 a barrel as robust global demand for distillates continued to pull energy futures higher.

Light, sweet crude for June delivery rose as high as $127.82 a barrel on the New York Mercantile Exchange, before easing somewhat to trade up $2.64 to $126.76. The contract settled at $124.12 Thursday.

Oil prices could rise even higher as U.S. demand picks up during the summer months, when gasoline consumption is typically the heaviest.

Still, Saudi Arabia, the world's largest oil producer, does not see enough demand from customers to increase oil production, the White House said Friday morning. President Bush was in the oil-rich Gulf kingdom in part to lobby for an increase in crude output.

Also pushing oil prices up were speculation that China's demand for diesel needed to fuel its power plants would rise due to reconstruction efforts after this week's earthquakes and an upward revision of an oil price forecast by investment bank Goldman Sachs from $107 to $141 a barrel for the second half of the year.

"Everything the market looks at is bullish," said a report by U.S. energy risk management firm Cameron Hanover.

In other Nymex trading, heating oil futures rose 7.16 cents to $3.694 a gallon while gasoline futures added 6.12 cents to $3.227 a gallon. Natural gas futures fell 14.4 cents to $11.225 per 1,000 cubic feet.

Heating oil futures are up about 16 percent in May, far exceeding gains in oil and gasoline. Demand for distillates, a category that includes heating oil, diesel and jet fuel, has outstripped supply recently in Europe and Asia, causing futures to skyrocket long after the usual winter peak.

Technical trading, which takes into account prices patterns and other technical data instead of relying more on fundamentals such as supply and demand, also was seen as a reason for the high prices.

"Unless there is a confluence of substantive bearish news, when there is a pullback of something like $5, it's unlikely to stay down because enough participants will see that as a buying opportunity," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Thursday's expiration of options contracts and a temporary shutdown of ICE Futures trading in crude oil and other futures products due to a power outage also contributed to the previous session's volatility.

"So there was a lot of confusion yesterday, and not surprisingly, there was this wild, seesaw session," Shum said.

Options let investors bet oil prices will rise or fall in the future, and prices can fluctuate widely on days when options expire.

Shum said oil is still seen as a better bet than investors' other options.

"Oil as a class has performed better this year than equities and bonds, and continues to encourage investors to pile money into oil and stay in oil," Shum said.

On Thursday, the U.S. Energy Department reported that natural gas inventories rose 93 billion cubic feet last week, more than analysts had expected, and that pulled the whole petroleum energy complex lower.

Fluctuations in the dollar have contributed as well to oil's volatility. The dollar has generally been stronger than earlier in the year, but it is waffling between 104 and 105 against the yen, while the euro seems to be range-bound between $1.54 and $1.55.

Investors have been viewing oil and other commodities as a hedge against inflation and a weaker dollar since the middle of last year, and that link has meant that oil has been tending to rise and fall inversely with the dollar.

[sjc_1]

I think a fair deal would be we consider more drilling if you consider a REAL renewable energy program. Bush has cut the National Renewable Energy Lab''s budget for years. It is time to get serious about this. It may only give us 20% of our energy in the next 10 years, but that may keep us from being extorted by hostile nations for energy.

[ubrew12]

andylance1 said: "We do not need ethanol - we need oil exploration and drilling to increase our domestic oil supply ASAP. "

You''re probably right. As a pro-alternative guy, I also feel, however, that conservatives responded to the ''lib-environmentalist'' regulations denying them access to American oil-resources (as well as anti-nuke activities) by pulling the funding-plug on alternative energy research. So now other countries are in the forefront of wave, wind, solar, etc industries.

We should double our nuclear industry, increase oil-exploration off America''s coasts and ANWR, (BOTH sources have been made MUCH-safer than in 1969 by pro-environmentalist regulations), and MASSIVELY INCREASE our alternative energy spending as well.

Oil is all good, but it has the problem nowadays of contributing to Global Warming.

[andylance1]

In 1969 we had our first oil spill off Santa Barbara in California. This is the year plans were made to have an annual "Earth Day" and numerous laws were passed to protect the environment along with a huge bureaucracy to administer the laws.

Before anything dealing with energy could be built there were lengthy environmental impact studies established that could take many years to complete along with years of lawsuits to challenge the plans. Ever since then we have become almost completely dependent on foreign oil, and it has gotten worse each year since then.

Conservation and wind and solar energy were talked about endlessly, but there was little or no consensus about what to do, and Detroit derailed any plans to improve gas mileage for car and trucks.

For the last 35 years, the population has grown and so has the world demand for oil.
For the last couple years after many years of neglecting our domestic oil supply and refinery capacity the chickens have come home to roost. We are in a state of crisis and our entire economy is suffering.

Instead of stifling domestic oil supply by restrictive environmental laws we need a massive government stimulus plan to increase domestic oil supply. Call it what you want to, but this also impacts on national security and the health of our entire economy and our way of life.

We do not need ethanol - we need oil exploration and drilling to increase our domestic oil supply ASAP.

[lochlan-2009]

The system is fixed. Corporations pay lobbyists to tell politicians what bills they need passed, changed, or removed. Politicians use government agencies and the military to use our tax dollars to achieve these goals. The media are told what they are allowed to report and what not to report and when, so to make the markets move in the direction they need (a prime example of this was in March, when the Fed wanted the dollar to gain strength but they didn''t want all the comodities to lose value (dollar and commodities value usually go in opposite directions), so they put out fear reports about attacks on oil ships and pipelines and a strike). The banks and corporations manipulate and hold or release information through the media to move the markets at their whim, and the circle is complete at the expense of everyone else.

[esyrdr413]

I,say, what go''s around comes around!
To all oil producing countries,any and
all products,including food stuffs,military
hardware,grains,medicines,ect ect,effective
immediately,their costs for any and all of
these items will quadruple,every five days.
They are putting the screws to americans,its
time to retaliate,and make them pay.

[lochlan-2009]

"In late July, Nasseri was questioned for passing Iran%u2019s nuclear secrets to Halliburton and receiving $1 million in bribes from the company, Iranian government officials said.

According to Iran Press News, a huge network of oil mafia was uncovered during investigations.

Halliburton sources revealed that the company sold Iran centrifuges and detonators to be used specifically for a nuclear reactor as well oil and natural gas drilling parts for well projects to Oriental Oil Kish.

Halliburton%u2019s business with Oriental Oil Kish first surfaced in January, when the Iranian company said that it gave some contracts of the South Pars natural gas drilling project to Halliburton Products and Services, a subsidiary of Dallas-based Halliburton.

Later on, Halliburton said the South Pars gas field project in Iran will be the its last project in the country, %u201Cdue to a poor business environment,%u201D according to BBC."

[lochlan-2009]

and this one:

"It was Halliburton''s secret sale of centrifuges to Iran that helped get the uranium enrichment program off the ground, according to a three-year investigation that includes interviews conducted with more than a dozen current and former Halliburton employees."
"In an attempt to curtail Halliburton and other U.S. companies from engaging in business dealings with rogue nations such as Libya, Iran, and Syria, an amendment was approved in the Senate on July 26, 2005. The amendment, sponsored by Senator Susan Collins R-Maine, would penalize companies that continue to skirt U.S. law by setting up offshore subsidiaries as a way to legally conduct and avoid U.S. sanctions under the International Emergency Economic Powers Act (IEEPA)."

Didn''t hear about this? I''m shocked.

[lochlan-2009]

The thing is the media don''t play 98% of the corruption and corporate and political crimes. A media black out missed this report:

Vice President *** Cheney''s stock options in Halliburton rose from $241,498 in 2004 to over $8 million in 2005, an increase of more than 3,000 percent, as Halliburton continues to rake in billions of dollars from no-bid/no-audit government contracts.

An analysis released by Senator Frank Lautenberg (D-NJ) reveals that as HalliburtonUs fortunes rise, so do the Vice PresidentUs. Halliburton has already taken more than $10 billion from the Bush-Cheney administration for work in Iraq. They were also awarded many of the unaccountable post-Katrina government contracts, as off-shore subsidiaries of Halliburton quietly worked around U.S. sanctions to conduct very questionable business with Iran. "It is unseemly," notes Lautenberg, "for the Vice President to continue to benefit from this company at the same time his administration funnels billions of dollars to it." - http://www.mondovista.com/halliburton.html

Go down the street and see how many people know this.

[realhdvideo]

CORRECTION I meant 2001. I am still in shock knowing it is $128 a barel.

Jan-2001 remember the good old days?

Thats when it was $26.39 a barel.

[realhdvideo]

Jan-2008 remember the good old days?

Thats when it was $26.39 a barel.