Oil Prices Hit New High Over $141 A Barrel

(CBS/AP)  Oil prices climbed to a record above $141 a barrel in Asian trading Friday as the dollar's protracted slump prompted investors to flock to oil as a hedge against inflation.

Prices were also lifted Thursday after OPEC's president said crude prices could rise well above $150 a barrel this year and Libya said it may cut oil production.

Light, sweet crude for August delivery rose as high as $141.71 a barrel before pulling back to $141.10, up $1.46 in Asian electronic trading on the New York Mercantile Exchange, midafternoon in Singapore. The contract Thursday rose $5.09 to settle at a record $139.64.

The previous trading record for a front-month contract was $139.89, set on June 16.

A new energy report predicts $200-a-barrel oil in as short a time as two years. If that happens, reports CBS News correspondent Priya David, one economist says gas would likely go up to $7 a gallon - and that would have an enormous impact on the way Americans live.

On Thursday, the dollar slipped against key currencies as U.S. data showed sluggish economic growth and pointed to a struggling labor market. Oil is priced in dollars, and some investors buy oil contracts to protect the value of their assets against accelerating inflation when the dollar falls.

"The dollar movements caused the surge in oil pricing and the bullish trend remains intact," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "The oil market is subject to further spikes in the coming weeks."

On Friday, the dollar slipped to 106.42 yen from 106.91 yen Thursday; the euro was trading at $1.5738, down from $1.5751.

Crude futures were also driven higher after Chakib Khelil, president of the Organization of the Petroleum Exporting Countries, said he believes oil prices could rise to between $150 and $170 a barrel this summer. Khelil also said prices will decline later in the year, and aren't likely to reach $200 a barrel.

Khelil joined a long list of forecasters who have made bold oil price predictions this year. Each new forecast - such as Goldman Sachs' recent prediction that prices could rise as high as $200 - causes a jump in prices as speculative buyers are drawn into the market.

Meanwhile, the head of Libya's national oil company said the country may cut crude production because the oil market is well supplied, according to news reports.

Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut, said in a research note that Shokri Ghanem, the nation's top oil official, has declined to say when a decision would be made on whether to lower production, or give any indication of the size of the cut under consideration.

But analysts expressed skepticism over the comments out of Libya, saying the current level of oil prices provides an incentive for producers not to cut output.

"I doubt that any real effort in cutting output would be forthcoming, considering that pricing continues to hit new records," Shum said. "There's no economic reason to cut output at this time so it's just talk."

Oil prices have more than doubled over the past year on concerns about rising demand in fast-growing economies such as China and India, and supply disruptions in the Middle East and Nigeria.

Analysts have also attributed oil's rapid climb to speculative buying, with traders jumping into the market purely on the expectation that futures will continue to rise.

"Even though we have continued to see weakening demand in the U.S., other markets in the developing world still show growth," Shum said. "The tight market has empowered speculators to invest in oil and the oil market is subject to further spikes in the coming weeks."

In other Nymex trading, heating oil futures rose 0.71 cent to $3.8905 a gallon while gasoline prices lost 0.68 cent to $3.5045 a gallon. Natural gas futures declined 1.7 cents to $13.231 per 1,000 cubic feet.

Brent crude futures rose 17 cents to $140 a barrel on the ICE Futures exchange in London.

[terrorislami]

FASCIST NAZI TERRORISLAM IS THE PROBLEM,,,

DEMONIC-RAT HUSSEIN IS NOT THE SOLUTION,,,

[edintex]

Hey tree huggers, liberals and democrats...You just keep on ignoring what the oil companies have to say about whats is causing these high prices. They warned the government back in the 1980''s that this was coming. But you northerners enjoyed the $10/barrel. The automakers REALLY enjoyed good times then too. At the same time, the south had lost hundreds of thousands of jobs. Businesses closed. No congressional inquiries. No help at all. YOU ALL WERE WARNED. You all chose to ignore. Enjoy the $141/barrel oil now. You deserve it. Just don''t move down here. The refineries already stink it up enough as it is.

[terrorislami]

YOU DO NOT LIKE THE USA IN THE MIDDLE EAST,,,

BLAME THE DEMONIC-RATS,,,

THE DEMONIC-RAT DOCTRINE,,,

On February 16, 1943, President Franklin D. Roosevelt said the "the defense of Saudi Arabia is vital to the defense of the United States." On February 14, 1945, while returning from the Yalta Conference, Roosevelt met with King Ibn Saud of Saudi Arabia on the Great Bitter Lake in the Suez Canal, the first time a U.S. president had visited the Persian Gulf region.

The Carter Doctrine was a policy proclaimed by President of the United States Jimmy Carter in his State of the Union Address on 23 January 1980, which stated that the United States would use military force if necessary to defend its national interests in the Persian Gulf region. The doctrine was a response to the 1979 invasion of Afghanistan by the Soviet Union, and was intended to deter the Soviet Union%u2014the Cold War adversary of the United States%u2014from seeking hegemony in the Persian Gulf. After stating that Soviet troops in Afghanistan posed "a grave threat to the free movement of Middle East oil," Carter proclaimed:

Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force. (full speech)
http://en.wikipedia.org/wiki/Carter_Doctrine

[b48151]

You can blame the "no new drilling" democraps.

[bradster999]

It''''s time we did something about high gas prices. Copy and paste the web addres below into your browser address bar and tell your government representative that you want the loopholes in oil commodities trading plugged up.

ie: the SWAPS LOOPHOLE and the ENRON LOOPHOLE

This problem is serious and needs to be addressed immediately. The link to the government site is

http://answers.usa.gov

Then click the "Email Your Question" link at the top of the page. It''s an online form . Real easy.

[randynason]

I heard on NPR the other day that it was Exxon-Mobile who created sub-organizations whose sole purpose was to rebuff global warming claims. They did that so that their "good" name would not be associated with such action. That, and the recent Exxon Valdez court ruling, I find to be tremendously offensive and downright immoral.

[patriotic9]

FASCIST NAZI TERRORISLAM IS THE PROBLEM,,,
Posted by terrorislami at 07:11 PM : Jun 27, 2008

Then why their PSYCHOTIC CHRISTIAN BROTHERS support them?

OSAMA BEEN FORGOTTEN is against homosexual''s right of marriage.

Do you support OSAMA BEEN FORGOTTEN and his ISLAMIC RADICAL BROTHER "JESUS" or oppose them?

[patriotic9]

Why shouldn''t we help Arabs in the destruction of Israel to enjoy oil in cheaper prices?
Why should we protect NON-AMERICAN HOLY LAND and GOD-CHOSEN NON-AMERICANS to buy HATRED, TERRORISM and 9/11 for UNHOLY LAND "UNITED STATES" and GOD-NEGLECTED AMERICANS?

Because CHRISTIANITY is PSYCHOSIS and CHRISTIANS are PSYCHOTICS!

[terrorislami]

THE REASON WE ARE IN IRAQ,,,,

THE DEMONIC-RAT DOCTRINE,,,

On February 16, 1943, President Franklin D. Roosevelt said the "the defense of Saudi Arabia is vital to the defense of the United States." On February 14, 1945, while returning from the Yalta Conference, Roosevelt met with King Ibn Saud of Saudi Arabia on the Great Bitter Lake in the Suez Canal, the first time a U.S. president had visited the Persian Gulf region.

The Carter Doctrine was a policy proclaimed by President of the United States Jimmy Carter in his State of the Union Address on 23 January 1980, which stated that the United States would use military force if necessary to defend its national interests in the Persian Gulf region. The doctrine was a response to the 1979 invasion of Afghanistan by the Soviet Union, and was intended to deter the Soviet Union%u2014the Cold War adversary of the United States%u2014from seeking hegemony in the Persian Gulf. After stating that Soviet troops in Afghanistan posed "a grave threat to the free movement of Middle East oil," Carter proclaimed:

Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force. (full speech)
http://en.wikipedia.org/wiki/Carter_Doctrine

[terrorislami]

FASCIST NAZI TERRORISLAM IS THE PROBLEM,,,

HUSSEIN IS NOT THE SOLUTION,,,