Oil Sets New Record: Over $132 A Barrel

Analysts Fear Little Can Be Done To Stem Runaway Prices

(AP)  Oil prices bolted to a new record above $132 a barrel Wednesday after the government reported that supplies of crude oil and gasoline fell unexpectedly last week. And crude's rise in the futures market again pressured consumers by pulling prices at the pump higher - a gallon of regular gas rose overnight to a new record above $3.80 a gallon.

With gas and oil prices setting new records on a daily basis, many analysts are beginning to wonder whether anything can stop runaway prices. There are technical signals in the futures market, including price differences between near-term and longer-term contracts, that crude may soon fall. But with demand for oil growing in the developing world, and little end in sight to supply problems in producing countries such as Nigeria, few analysts are willing to call an end to crude's rally.

In its weekly inventory report Wednesday, the Energy Department's Energy Information Administration said crude oil inventories fell by more than 5 million barrels last week. Analysts had expected a modest increase. Gasoline inventories also fell and took the market by surprise, while inventories of distillates, which include heating oil and diesel fuel, rose less than analysts surveyed by energy research firm Platts had expected.

Light, sweet crude for July delivery rose as high as $132.08 a barrel in late morning trading on the New York Mercantile Exchange before retreating slightly to trade up $2.67 at $131.65.

Investors seized on the inventory report to boost prices Wednesday, but traders interested in pushing prices higher are increasingly picking and choosing which news they wish to pay attention to, analysts say.

"Even if this report was bearish, with the momentum the way it is right now, it wouldn't matter," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

Crude prices first passed $130 overnight on concerns about demand and a weaker dollar. Analysts say crude has been boosted in recent days by especially strong demand for diesel in China, where power plants in some areas are running desperately short of coal and certain earthquake-hit regions are relying on diesel generators for power.

The dollar, meanwhile, weakened against the euro Wednesday. Investors see hard commodities such as oil as a hedge against inflation and a weak dollar and pour into the crude futures market when the greenback falls. A weak dollar also makes oil less expensive to buyers dealing in other currencies.

Many investors believe the dollar's protracted decline over the past year has been the most significant factor behind oil's rise from about $66 a barrel a year ago to today's highs.

At the pump, meanwhile, the average national price of a gallon of regular gas rose 0.7 cent overnight to a record $3.807 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Prices are 60 cents higher than a year ago, and many forecasters believe they'll hit $4 on a national basis at some point over the next month.

"That's a fait accompli at this point," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos.

Prices are already that high in many parts of the country, and the number of stations charging $4 or more rises each day. Prices are nearing $5 a gallon in parts of Alaska.

Diesel fuel rose 1.9 cents to its own record of $4.558 a gallon Wednesday. Rising prices of diesel, used to transport most consumer and industrial goods, are sending prices of food and many other goods higher.

There are signs high prices are cutting demand for gasoline, which fell slightly over the past four weeks and has been mostly lower since January, according to EIA data. Only serious "demand destruction," a jump in supplies from Nigeria or other oil producing nations or a jump in gasoline output by U.S. refiners could stop prices from continuing to rise, Rafield said. There is little sign that demand will fall anytime soon in fast-growing China, India and the Middle East, she said.

A move by the government to shore up the dollar, or an announcement that the Federal Reserve won't cut interest rates further, could also reverse the upward momentum, Flynn said; rate cuts tend to weaken the dollar.

Still, the price differences between the current, July crude oil contract and contracts for delivery of oil in later months signal a possible correction, or sharp price downturn, at some point, Rafield said. Many analysts have long argued that prices have risen well beyond levels that can be justified by supply and demand fundamentals.

"It's very difficult to call when this is going to happen, but when it happens, it's going to be quick and ugly," Flynn said.

In other Nymex trading, June gasoline futures rose 6.43 cents to $3.3687 a gallon, and June heating oil futures rose 7.11 cents to $3.8461 a gallon. June natural gas futures rose 19.8 cents to $11.563 per 1,000 cubic feet.

In London, July Brent crude rose $3.10 to $130.94 a barrel on the ICE Futures exchange.

[skyk-2009]

The Week Dollar seems to be the major problem here outside the destablizing of the Middle East. Who was it that said that Deficits don''t matter???

[Gary Kempf]

It''s simple, who wins at a $130.00 a barrel, and who loses. Our elected politicians are not concerned about the Average citizen. Example: Senator Feinstein of California is more concerned about passing amnesty for illegal immigrants tacked in to the new defense budget up for vote this week. She can''t be bothered worrying about $130.00 a barrel oil and how it may further erode a America''s working class incomes. She is a disgrace to Democrats.......

[irliberal]

$130 a barrel... heh. Wow, which part of HUGE REPUBLICAN FAILURE is confusing, considering the last seven years? I''m amazed Bush isn''t in chains yet.

[Renegade.Rivers]

So who do we blame for this debacle? Bush for all of his wars and rumors of war? Congress for going a long with Bush? The liberals who are keeping us from drilling in Alaska? The Fed for lowing interest rates over the last 20 years to lows that have devalued the dollar? The lack of big oil that has let them tramp all over the American people while making billions? OPEC for not drilling more wells and pumping more oil? ? China for using slave labor to make products that are then marked up hundreds of percent to be sold in the United States? The lack of controls that have allowed companies in America to become monopolies. The lack of controls that have allowed companies to move all of their operations overseas, and suffer no penalty when bringing the goods back to the USA? NAFTA and similar agreements? The peak oil theory. Global Warming? The leaders of this country who made this all possible? Or do we blame no one but ourselves, because we were so arrogant, and so uncaring that we didn''t even take the time to realize what was happening, and because of that we sold our country for a song?

[gopsoccermom]

skyk, be quiet or everyone else will know the real problem. I perfer them to run around shreaking about peak oil.

[gopsoccermom]

renrivers, the dollar has been devaluing for years. And its a good thing I tell you because when the dollar gets cheap enough the jobs will come back.

[msay3]

This whole thing reads like a sci-fi novel...Wonder how it will end?

"This whole thing reads like a sci-fi novel...Wonder how it will end?"

It ends when Congress stops the oil companies from gouging the life out of Americans. The republicans are to blame for putting the Bush idiot (oil man) in office. His agenda is OIL...not people.

Want cheaper gas? End the damned wars!
http://www.democrats.com/node/16606

http://www.whatreallyhappened.com/reich.html

[Renegade.Rivers]

when the dollar gets cheap enough the jobs will come back.

Posted by gopsoccermom
-------------------------------------------------------
Yea its good for who? All the people who will be working at slave labor like they do in China? Your just like all of the other Republicans who are trying to sell a broken record and a pig in the poke. Your so blind to the truth you got to have blinders on. I wonder how much longer all of you idiots are going to think of no one but yourselves, and never once consider the consequences of the greed you all have. I wonder how many of you have ever once considered the consequences of this that will be suffered by your grandchildren and great grandchildren. I wonder how much you have thought about the elderly and the poor who can''t afford to even buy food and heating fuel, and pay for medical cost too. Go ahead and drive your big SUVs and believe that this is good for our country, but when this country is broke, and your credit cards won''t buy a roll of toilet paper any more, I wonder how good you will think it was then.

You think that your 401k and your retirement planning will save you? Well if the dollar is worthless so shall be your 401ks and your other retirement plans. You better wake up and realize that your are being sold a worthless piece of goods, because what has happened isn''t good for anyone but the upper 1% of the world population, and I seriously doubt that you are a part of it.

"This whole thing reads like a sci-fi novel...Wonder how it will end?"

It ends when Congress stops the oil companies from gouging the life out of Americans. The republicans are to blame for putting the Bush idiot (oil man) in office. His agenda is OIL...not people.

Want cheaper gas? End the damned wars!
http://www.democrats.com/node/ 16606

http://www.whatreallyhappened.com/ reich.html

renrivers...I can''t agree more. I''ve been saying the same thing for years. It baffles me that so many people can be so greedy, ignorant, selfish and arrogant to believe they would not be held accountable for raping others and the world just so long as they have what they want. I''ve often wondered how anyone would consider Bush our leader. This is a man who has no vision or even a care about the world he leaves to his own daughters - let alone to his constituents and the world. But looking closer, I see that Bush has been the perfect leader for stupid Americans. They get what they deserve, and take those of us who know better with them to hell.

Republicans and sleeping Americans won''t wake up until gas is $10 a gallon and riots over food happen later this year. Yes, it is coming...to a street near you.

[dchu76]

Not to sound smug, i saw this coming, we all should have. On one hand i have majority of my investments in the Oil Sands companies, but on the other hand i put a lot of miles on the car for work.

[oscarez]

Remember the Cheney Energy Task Force in 2001 it was supposed to develop an energy policy for the Bush administration. Well this is it. A plan for their oil buddies to get stinking rich.

[bikerb54]

''Scuse me, but why the heck are we sending money to countries that already have millions from us in the first place? Saudi already is getting a nice flow because of Ernest P Worle aka GW Bush and the Evil Emperor aka Cheney, we keep rebuilding Iraq just to have the terrorists blow it up so we can rebuild again, so the terrorists can... well you get my drift. Then we send money and aid to China, Mynmar and where the heck are they when our people need help recovering from the natural disasters? USA who?? Looks like GW and Cheney moved faster to help those others than with Katrina aid and the aid needed for the midwest for recovery from the tornados!!!!
Shouldn''t our government take care of those who pay the taxes and their wages???
Don''t you think it''s about time we depend on ourselves and our natural resources we have here?? We can drill for oil and still preserve our natural heritage if we really wanted to. Come on, people, if we can figure out how to build computers, cars, cell phones and all the technology, use some of that knowledge to get our own oil and stop depending on the Saudi''s for that.

[Renegade.Rivers]

Republicans and sleeping Americans won''''t wake up until gas is $10 a gallon and riots over food happen later this year. Yes, it is coming...to a street near you.

Posted by mariony
------------------------------------------------------
You stole my thunder, yes it is coming, and it''s a lot closer than most people dare realize. Some of these rich technocrats should take a look at history and see what happens when things get desperate. They feel so safe and secure in their big homes on the hill, but they will be worthless after they burn to the ground, and the insurance companies walk away. There will no doubt be a lot of people die, and many of those that don''t die, will wish they were dead. The contingency plans are already in place for riots in the streets, and the aftermath of the burning of major US cities. These idiots just don''t believe that it will happen to them. When the poor have nothing to lose, and the rich think that they will be secure, their won''t be enough bullets to stop them. Many a rich fool will end up being the first to suffer the wrath. Some foolishly believe that the government will save them, but if the infrastructure is destroyed it will be nearly impossible for that to happen. There is a lot more vulnerability than can be imagined. Especially if the oil stops flowing, and trucks stop rolling. It won''t be pretty, and I won''t predict the outcome.

Gy the way that is a good site you offered up.

[mcornell42]

Hi,

Have you heard about this website suggests consumers can save time, money and frustration in lieu of high gas prices. I agree and I am glad the internet is getting on the "band wagon". Maybe if more people use the internet for shopping etc, instead of driving around for everything less gas would be purchased and the big wigs would get the message.

Check out this site -
http://www.fivestarexpressions.com
If you agree with me forward, comment and or website to everyone you know.
Power to the People!

[sjc_1]

Expect prices to continue to rise until we hit $5 per gallon gas and then shortages will set in. Not only will you be paying 3 times more for gas than 6 years ago, but it will be in short supply. You will go to gasoline stations and see "out of gas" signs on the pumps.

[lochlan-2009]

CRIMINAL!!!!!!!!!

[petro49l]

Why continue drilling dry Arab oil wells? All around the Americas there are vast reserves of off-shore petroleum. Those governments are offering cheap deals on leases. Congress should authorize the negotiations. American Oil Companies could make billions of dollars immediately. Motorists in the United States are simply asking for a reasonable charge for gasoline.

[gopsoccermom]

My stocks are up today! I own GG and AUY. We are nearing peak gold and silver. I think I should buy other commodities because we are near peak wheat and peak corn as well. I dont see any connection with one commodity to another, do you?

[bobnjersey]

[You can thank the democrats for not allowing any new drilling.They are on about the same level as the oil speculators.]
[Posted by b48151 at 10:40 AM : May 21, 2008]

what happened to the ''no new refinery'' talking point ... or is that just on alternate days?

so what were the republicans doing between 2000 - 2006 when then had complete control?

new places to drill for oil is not an energy plan. maybe cheney has some surprises in ''his'' super secret energy pow-wow from 2001 ... or was that the invasion of iraq?

[Renegade.Rivers]

Allow farmers to grow hemp again, and use the oil from it, stop all of this nonsense, and lets get on with being realistic. Because of the so-called, "war on drugs" we have spent billions of dollars, allowed countless numbers to die in the streets, and filled our prisons with people who suffer from the disease of addiction, and what has it gained? The drugs still flow freely, and the killing over turf continues. Until we take a common sense approach to the problems that we face nothing will change, be it our energy problems, or "war on drugs", or any other of the multitude of problems that we now face. As long as everything has a dollar value, the price is going to go up, and the value of life in America is going to continue to decline.

[bobnjersey]

[I dont see any connection with one commodity to another, do you?]
[Posted by gopsoccermom at 11:11 AM : May 21, 2008]

they all serve as a hedge against falling dollar and inflation ... says so just above in the story.

[realhdvideo]

Posted by b48151: You can thank the democrats for not allowing any new drilling.They are on about the same level as the oil speculators.

Yes they are the same f*cking babies that were crying about the Alaska pipeline. No drilling no oil. We will always be slaves to those Rag heads as long as we can not drill because of the left cry babies.

[gopsoccermom]

$132 now praise Jesus!

[oscarez]

You people just don''t get it. The United States is no longer the center of the Universe. The dollar is on it''s way to becoming of no value when compared to other world currencies. The EU and Japan are not having to deal with high oil prices, just the exchange rate. With Bush''s help the middle east is going to bring the USA to its knees.

[dchu76]

Posted by b48151: You can thank the democrats for not allowing any new drilling.They are on about the same level as the oil speculators.

Yes they are the same f*cking babies that were crying about the Alaska pipeline. No drilling no oil. We will always be slaves to those Rag heads as long as we can not drill because of the left cry babies.
--------------------------------------------------------------------------------
Posted by realhdvideo at 11:19 AM : May 21, 2008

Anwar oil reserves wont be anywhere close to what people are expecting. It might provide 5% of domestic use for about 10 years. Yes it should be tapped, but its not a solution, its a band aid on a stab wound.

[gopsoccermom]

bobnjersey, oh thats why. I knew there was a reason I bought all that Canadian gold mining stock back in 2002.

[dchu76]

You people just don''''t get it. The United States is no longer the center of the Universe. The dollar is on it''''s way to becoming of no value when compared to other world currencies. The EU and Japan are not having to deal with high oil prices, just the exchange rate. With Bush''''s help the middle east is going to bring the USA to its knees.
--------------------------------------------------------------------------------
Posted by Oscarez at 11:20 AM : May 21, 2008

Also the chinese have been dumping the dollar on the market to further devalue it.

[witchsince91]

REPENT

THE MAYAN CALENDAR ENDS ON DEC 21, 2012!!!!!!!!!!!!

[realhdvideo]

Posted by dchu76 Anwar oil reserves wont be anywhere close to what people are expecting. It might provide 5% of domestic use for about 10 years. Yes it should be tapped, but its not a solution, its a band aid on a stab wound.

The facts are such, we need to drill here and open new places to refine our oil. Plain and simple. Most people are too young to know we have not built 1 new plant to refine since 1977. Wake up. Thank those cry babies on the left for shooting down every plan to build more plants.

[arlt1627]

"week" dollar or "weak" dollar? this skyk is not the sharpest knife in the drawer folks

Posted by jamesm12341 at 10:37 AM : May 21, 2008

You''re still lame James! Still not an original thought posted! :)) Instead your the "Webster man!" Get a life!

[gopsoccermom]

dchu76, that oil will be sold to the highest bidder anyway.

[arlt1627]

Posted by dchu76 Anwar oil reserves wont be anywhere close to what people are expecting. It might provide 5% of domestic use for about 10 years. Yes it should be tapped, but its not a solution, its a band aid on a stab wound.

The facts are such, we need to drill here and open new places to refine our oil. Plain and simple. Most people are too young to know we have not built 1 new plant to refine since 1977. Wake up. Thank those cry babies on the left for shooting down every plan to build more plants.

Posted by realhdvideo at 11:25 AM : May 21, 2008

Do you honestly think that by opening up ANWR and pumping 500,000 barrels or so a day will make a dent? Or better yet, what guarantee is there from Oil Companies that it will be sold for less than the current market value??? Remember that OPEC does NOT abide by American anti-trust standards.....that is a cartel that we continue to bow-down to and that won''t change unless we develop other forms of energy to use....oh, and remember that the other driving force behind the increase in prices is the GROWING Chinese & Indian economies and need for oil....thanks to us buying their products rather than vise versa.

[antoniof123]

I see now why most people are begining to hate neo cons they are truly dumber than dirt.

We are having problmes for many reasons most of which can be blamed on the village idiots mamagement of the economy. This has been a long time in coming and you can beat your drums but we know who is responible.

Iraq is also in the equation.

If you like the price of oil; thank a Republican.

[arlt1627]

Lowering interest rates and borrowing money to fund our wars is also contributing to our current problem as well!

[bobnjersey]

[Yes they are the same f*cking babies that were crying about the Alaska pipeline. No drilling no oil. We will always be slaves to those Rag heads as long as we can not drill because of the left cry babies.][Posted by realhdvideo at 11:19 AM : May 21, 2008]

sounds like you''re the whining cry baby.

why didn''t your fearless leader use his ''rubber stamp'' between 2000 - 2006 to drill ... and refine ... and rachet up the national debt more than the nearly 30% (in only 6 years)?

why don''t one of you ignorant morons answer this?

oh ... that''s right ... your head would explode if you did ... w/ your delusional belief system that ''liberals are to blame for everything'' collapsing all around you.

[dchu76]

Democrats had the right intentions of avoiding driiling in ANWR. To protect the environment. The republican over the last 7 years could have done the same but they didnt so they could mint money off the high gas prices. And the oil companies know at some point they will get a chance to drill there so why do it now, just print money and wait for gas prices to increase more.

[arlt1627]

confused are you? it should be "weak" dollar...w e a k....you are welcome

Posted by jamesm12341 at 11:45 AM : May 21, 2008

James,

Apparently you are not capable of understanding sarcasm. I''m betting that ALL on this forum understood the usage of "week" in that context. I don''t think that you caught the "Webster Man" bit....too bad though!!

[talkingham]

Great job Bush.

[gopsoccermom]

This is all Clintons fault!

[arlt1627]

[Yes they are the same f*cking babies that were crying about the Alaska pipeline. No drilling no oil. We will always be slaves to those Rag heads as long as we can not drill because of the left cry babies.][Posted by realhdvideo at 11:19 AM : May 21, 2008]

Just remember, the intitial BOOM of OPEC crippling our economy began with a Republican president named Richard Nixon. In case you didn''t know, Nixon tried to impose price controls and OPEC did not like it so they jacked the US around.....from there, we have become dominated by them and have done little to nothing to change that problem. Drilling will not change it.

[gopsoccermom]

arlt1627, Nixon also took us away from the gold standard which BTW had nothing to do with inflation then. That was all Carters fault.

[arlt1627]

arlt1627, Nixon also took us away from the gold standard which BTW had nothing to do with inflation then. That was all Carters fault.

Posted by gopsoccermom at 11:53 AM : May 21, 2008

The gold standard bit is true.....however, do you deny that oil costs increased by 4 times the cost before the Yom Kippur War was fought and OPEC slammed us? Imagine that today......in August oil prices would be $10-12 dollars a gallon if we went by percentage.....yet you find the time to blame this solely on Carter.....it is EVERYONE''s fault and problem....we''re doing nothing socially, politically, or economically to stop it either!

[bobnjersey]

[Nixon also took us away from the gold standard which BTW had nothing to do with inflation then. That was all Carters fault.]
[Posted by gopsoccermom at 11:53 AM : May 21, 2008]

let me guess ... all the worlds problems were created by liberals ... and we''ve all been saved by republicans?

is the way it all looks in your world view?

[brianp55]

Not sure about the rest of you, but I''ve stopped paying attention. If gas becomes unaffordable, I will adapt. Screw em.

[acolton1]

Yeah: These IDIOTS keep predicting 150 dollars a Barrel and these predictions are driving up prices. The OIL BUBBLE is going to burst and come crashing down to $90 a Barrel but first these IDIDOTS have to drive it up for the Memorial Day Weekend and I am sure its going to be almost 4$ a gallon in Missouri by this Friday.

I also dont know why these News Anchors talk about high has prices. IF you work for CNN, CBS, ABC, NBC, FOX and you are a News Anchor you are making SOME FAT CASH and probably drive a Hummer H2 or JAG, or Lexus, Cadillac, Navigator, BMW M5, and really dont care about Gas Prices.

[dchu76]

The gold standard bit is true.....however, do you deny that oil costs increased by 4 times the cost before the Yom Kippur War was fought and OPEC slammed us? Imagine that today......in August oil prices would be $10-12 dollars a gallon if we went by percentage.....yet you find the time to blame this solely on Carter.....it is EVERYONE''''s fault and problem....we''''re doing nothing socially, politically, or economically to stop it either!
--------------------------------------------------------------------------------
Posted by arlt1627 at 11:56 AM : May 21, 2008

Touchy topic, but hasnt America done enough for Israel already? Think about all the issues facing us right now. Much of the arab animoisty towards US, is because of the favoritism america shows towards isreal. The oil embargo in the 70''s because of the support of the yom kappur war. The high tech weapons we sell to israel, the financial support we give to isreal, to support isreal slumpping economy America gave them a loan gurantee. 1/2 of all US foriegn aid goes to isreal.

[acolton1]

Posted by JLSV1618 at 12:00 PM : May 21, 2008


Please DONT CUT AND PASTE WE GET YOUR POINT.

THANKS YOU !

[oscarez]

I think it''s time for Bush to Nationalize the Oil Companies. Bush can then set the price for oil. One problem, all oil workers will be government employees. The problem with the government is that there will be five workers standing around telling the one worker who is working what to do. By the time the government adjust the cost of oil for employee cost oil will be $200.00 a barrel.