Oil Prices Hit New High Over $141 A Barrel

Dollar's Relentless Freefall Sends Investors Flocking To Oil As A Hedge, Upping Its Value

(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.

[skyk-2009]

How far will the Dollar fall? The economic policies of the Bush Administration with their Borrow and Spend mentality along with the "Deficits don''t matter" attitude has created the perfect storm! Good luck America and lets all pray we can somehow make it until we can get a true leader in the White House who will act to restore this nation''s economy.

[brianbwb-2009]

"How far will the Dollar fall?" Posted by skyk

There will come a point where the Chinese, holding almost 2 trillion in dollar denominated debt, will cut their losses and dump it on the market, further driving it down.

Then will come the point where OPEC no longer wants to accept a currency that declines in value, so they will switch the transaction medium to Euros. At that point, with nothing to sustain the dollars value, it will collapse.

Under an Obama presidency, this could happen before his term is out, unless he takes the drastic steps necessary to stop it.

Of course, if McSame gets in, and escalates the current conflict to include Iran, the above scenario will happen in a very short time, perhaps one month after the first bombs fall on Iran.

[midland666]

rusty9j ..

the Dollar has lost almost 5% Against the peso,

since last night its gone down just a little bit more,

[faith_in_w]

This board is about oil prices going up, not about the dollar losing value. Go to that board to talk about that. On this one we are supposed to repeat the mantra "drill drill drill".

[faith_in_w]

dragonwagon5
dollar goes down = oil goes up
dollar goes up = well I''ll tell you when that happens.

[midland666]

Dump the Dollar for Ameros, Oil goes Up.
SHRUB, Chenney go on trial for war crimes, oil goes up.

[samthetvcat]

---"The tight market has empowered speculators to invest in oil and the oil market is subject to further spikes in the coming weeks."---

All they''re doing is what people would do if gas weren''t so volatile - haven''t there been stories of people trying to stock up on gas and store it in their homes like it was sale-priced toilet paper, and then it spontaneously combusted and burnt down their homes?

I agree more with what everybody else has said - that there''s no shortcuts here . . . that the best way to regain control of prices is to just buckle down and stick to basics when it comes to our national spending by paying off debts and focusing on trying to find ways to grow our economy.

PS I get the sense that Jeff Corzine was in the running for VP until he came up with that hokey gimmick of blaming the ''dark market speculators''. That didn''t get any more support than Hillary''s ''gas tax holiday'' . . . I think he blew it.

[faith_in_w]

All they''''re doing is what people would do if gas weren''''t so volatile - haven''''t there been stories of people trying to stock up on gas and store it in their homes like it was sale-priced toilet paper, and then it spontaneously combusted and burnt down their homes?
===============================
Gee that would be a terrible thing to happen if they were behind on the payments. Here they are trying to save money to make their morgage payment.

[samthetvcat]

---"nGee that would be a terrible thing to happen if they were behind on the payments. Here they are trying to save money to make their morgage payment."---
Posted by faith_in_w

It sounds like you''re being sarcastic, but if you don''t have insurance, you still have to pay off your mortgage even though your house has been destroyed. That''s what happened to all those people after hurricane Katrina hit.

And even if you did have insurance, would it even cover such a circumstance?

[faith_in_w]

THIS IS ALL CLINTONS FAULT!

[acolton1]

A few weeks ago I read on CNN or CBS that Some DOUSCHBAG predicted that OIL would hit 150 dollars a barrel by the 4th of July.

I guess this DOUSCHBAG has everybody pushing up the price so it will hit 150 by the 4th.

[acolton1]

faith_in_w

Its all George W Bushie''s fault and his Douschbag Administrations Fault and its Cheneys and Condies Fault and Iraq''s fault.

[acolton1]

faith_in_w

Its GODS FAULT THATS WHO TO BLAME. faith_in_w !

[antoniof123]

"another surge in oil prices"

At least one surge is working, stay the course we can win it.

The problem is what are we going to win.

neo cons are dumber than dirt.

[midland666]

This surge sure is working as planned.
2 thumba up, youre doing a fiiiiine job Dumbyah.

[acolton1]

WOW in the article some DOUSCHBAG SAID, A new energy report predicts $200-a-barrel oil in as short a time as two years.

Well POOP LETS JUST MOVE IT UP A YEAR AND HAVE 200$ A BARREL OIL FOR CHRISTMAS 2009. I think thats a fantastic frackin IDEA. Then these people who are pushing the price of oil up and up will choke on how much money they have made and all these NAZI Future Traders will Die.

[rudy654-2009]

Maybe we will all get another stimilus package.

[faith_in_w]

acolton1, how could you possibly come to this absurd conclusion?

[midland666]

the only stimulus package thatr would work to reverse this trend is, Impeachment proceedings.

[petro49l]

The Saudis will raise the price on a gallon of gasoline to $5, then $6, and then $7 before George W. Bush leaves office. They have bribed Bush with several billion dollars to remain silent on this issue. Saudi oil has little quality and the wells have not much left. Petroleum can be found anywhere in the world. There is no reason to buy it from swindlers like the Saudis. South American Governments offer petroleum leases at bargain prices. Why waste money on lying thieves?

[inventagod2]

DlCK CHENEY and his Secret Energy Taskforce are high-fiving each other...
Mission Accomplished!

[acolton1]

faith_in_w: You wrote

THIS IS ALL CLINTONS FAULT!

According to your posts that you have made in the past on CBS.com You have said that God Controls everything so these Gas Prices are Gods fault and he is responsible for the price increase. I am just going by the statements you have made in the past. Oh and by the way Clinton had nothing to do with it!

[sccabritt]

is this someones way of controlling our use of oil consumption due to global warming lets say? I really dont think this is all about money.

[von_marko]

GOP Rep. John Peterson%u2019s latest bid to lift domestic offshore drilling restrictions, was killed recently by the Democrat controlled House Appropriations Subcommittee on Interior and the Environment. It was a straight, party line vote.

Democrats voting against lowering gas prices:

Chair: Norman D. ***** (WA)
James P. Moran (VA)
Maurice D. Hinchey (NY)
John W. Olver (MA)
Alan B. Mollohan (WV)
Tom Udall (NM)
Ben Chandler (KY)
Ed Pastor (AZ)
Dave Obey (WI), Ex Officio

Republicans voting for lowering gas prices:

Ranking Member:
Todd Tiahrt (KS)
John E. Peterson (PA)
Jo Ann Emerson (MO)
Virgil H. Goode, Jr. (VA)
Ken Calvert (CA)
Jerry Lewis (CA), Ex Officio

[flagship-usa]

corey2444 at 07:30 AM : Tricycle''s are looking nice these days. Everything I do, I could do using a go-cart, or use public transportation. My car was stolen, and I''m getting around just fine without it.

[u-r-right]

I like the idea of raising grain prices to match thata of oil for those who buy it from us and can''t grow their own.

[von_marko]

I%u2019m voting Democrat because we have more oil underground in the USA then in all the Muslim countries combined. If McCain wins and begins drilling and building Nuke plants, the speculators will see that America is on a path to independence, the markets will dump oil futures and the price will drop.
Just Look at Brazil! 100%energy independent. Offshore drilling with ethanol production and Brazil imports ZERO muslim oil!!!!

We can%u2019t let that happen here. Vote Obama 2008 and do your part to keep us dependant on foreign oil!!
Obama Akbar!!

[von_marko]

Oil prices directly linked to who controlls US Congress:

2001 to 2006 - Republicans Controlled Congress; Oil $40 to $60 per barrell

2007 to present - Democrats Controll Congress; Oil $70 to $140 per barrell

[trishab4]

Had it now? Not yet? wait N see!

This is good news!

Man torches BMW to protest gas prices
http://www.cnn.com/2008/WORLD/europe/06/27/germany.gas.ap/index.html

[trishab4]

Had it now? Not yet? wait N see!

This is good news!

Man torches BMW to protest gas prices
http://www.cnn.com/2008/WORLD/europe/06/27/germany.gas.ap/index.html

[trishab4]

Had it now? Not yet? wait N see!

This is good news!

Man torches BMW to protest gas prices
http://www.cnn.com/2008/WORLD/europe/06/27/germany.gas.ap/index.html

[trishab4]

Had it now? Not yet? wait N see!

This is good news!

Man torches BMW to protest gas prices
http://www.cnn.com/2008/WORLD/europe/06/27/germany.gas.ap/index.html

[von_marko]

Oil prices directly linked to who controlls US Congress:

1992 to 2006 - Republicans Controlled Congress; Oil $25 to $60 per barrell

2007 to present - Democrats Controll Congress; Oil $70 to $140 per barrell

[bobnjersey]

[Oil prices directly linked to who controlls US Congress:
1992 to 2006 - Republicans Controlled Congress; Oil $25 to $60 per barrell

2007 to present - Democrats Controll Congress; Oil $70 to $140 per barrel]
[Posted by von_marko at 11:23 AM : Jun 27, 2008]

simple correlations for simple minds.

i think there''s a correlation to the production and consumption of potato chips during this period as well ... might this have something to do w/ the price of oil?

[acolton1]

Hey all you FRACKIN analysts that see $150 a barrel looming, of course its going to be $150 a barrel because your driving up the price by these speculations. WHY THE HELLL DONT YOU JUST MAKE IT $200 BY CHRISTMAS 2009 and I hope you choke on it. When this OIL BUBBLE BURSTS I will be glad to see all you Speculators in JAIL getting Raped by your cell mates and I hope they play shower Tag Team on all your A$$$es.

[bobnjersey]

["We can''''t drill our way out of this crisis."
Seriously, what does it mean? Finding more oil isn''''t going to increase the supply of oil?]
[Posted by ddhinnyc at 11:17 AM : Jun 27, 2008]

what level of increase in supply is going to reduce the price? do you know what this is ... does anyone?

how long will it take for any new drilling to have any impact on the current situation?

is supply (or the lack of it) the only factor contributing to the increase in prices?

[faith_in_w]

I''m voting republican because they will drill drill drill and no address the real problem of the price of oil which is our weak currency. Infact they will make it wealer with more tax cuts and war spending.

[actornaught]

...Also why aren''''t the oil companies drilling on all of the domestic sites they have permission?
Posted by getoffmine at 11:26 AM : Jun 27, 2008

They want to strike up favorable deals while (neocon) public opinion is full knee-jerk anti-logical synchronization with big oil business interests.

The Big Money Grab...

[briannorwood]

"Oil prices directly linked to who controlls US Congress:"--von marko


I''ve read some dumb comments on this site, but that one is among the tops!

[hoseobama]

von_marko at 11:04 AM

Excellent information. Had the Democrates not killed any of the prior attempts to drill, ANYWHERE, we wouldn''t be in this bind.

I''m not buying the argument it takes years to get it going. We''ve known about this problem since the 1970''s.

Once again, the Democratic Party is destroying this country.

[hoseobama]

"Oil prices directly linked to who controlls US Congress:"--von marko


"I''ve read some dumb comments on this site, but that one is among the tops! - Posted by briannorwood



Look.... We already know everyone is entitled to your opinion, but why don''t you try to follow it up with something stimulating, like a fact or two.


WHY is it so "dumb", other than you can''t think of a good reason for congress to be at fault and you are embarrassed your Democrates have stonewalled every attempt to NOT get us energy dependent ?

[vietnam21]

Good job Congress, this is a mayor issue of America and what the congress doing? try to protect Horses, legally Gun and legally Gay marriage ?????what the ..

[actornaught]

Posted by hoseobama at 11:45 AM : Jun 27, 2008

Is rush telling you what to think about why they''re only drilling in 20% of the offshore acreage they''re already allowed to drill in?

[prairiefox1]

THE PRICE OF OIL IS UP BECAUSE ALL THE ARAB COUNTRIES ARE INCREASING THE PRICE BECAUSE WE ARE OVER THERE AND THEY ARE PUNISHING US! WE SHOULD BOMB A FEW OF THEIR OIL FIELDS WITH A PROMISE OF DOING MORE! WE SHOULD START REDUCED SPEED LIMITS AND POSSIBLY RATIONING GAS AND IF OUR OIL COMPANIES ARE PRODUCING LITTLE OR NO OIL AND BUYING THE BULK FROM THEM THEN THEY SHOULD BE PUT OUT OF BUSINESS!

[vietnam21]

Congress keep block for Drilling , pretty soon we all gonna ride the bicycle that made in China..

[prairiefox1]

SUPPLY AND DEMAND! LET US REDUCE THE DEMAND AND SEE IF THIS STOPS! I BET IT WONT MAKE A DIFFERENCE!

[imarltool2u]

I love the smell of fear in the morning from republicans. It''s, it''s joyful! They know there going to lose the white house and congress. Ahh! Democracy at last.

[vietnam21]

What ever happen to Kuwait ? we leberate the country from Saddam and now they do nothing for US ?.
Saddam was stealling Gold, Rapes, killing etc..do you remember this Kuwaities

[imarltool2u]

sp: (they''re)

[actornaught]

...Also why aren''t the oil companies drilling on all of the domestic sites they have permission?
Posted by getoffmine at 11:26 AM : Jun 27, 2008

The oil companies are ignoring the vast majority of sites they already have permission to drill in.

Why?