Oil, Gas Hit New Highs

Oil Tops $143 A Barrel For First Time; Average Gas Price At $4.086

(CBS/AP)  The price of crude oil hit yet another record on the last day of a tumultuous first half, spurting past $143 a barrel before ending lower on demand fears and a resilient dollar. Crude has shot up nearly 50 percent since the start of the year, in large part on the dollar's troubles, and analysts expect that trend to remain intact as the second half of 2008 begins.

A government report lowering oil and gasoline demand estimates and a dollar hanging tough nullified investor concerns over supply, a fragile global economy and continued tensions in the Middle East.

"What this shows is that demand destruction in the U.S. is a lot larger than previously thought," said Phil Flynn, an energy analyst at Alaron Trading Corp. in Chicago. "There are more signs that demand is deteriorating."

Light, sweet crude for August delivery lost 21 cents to settle at $140.00 a barrel on the New York Mercantile Exchange. In early electronic trading, the contract hit a record $143.67.

The Energy Information Administration reported that oil usage in April was lower than previously estimated, falling to 4.2 percent to 19.768 million barrels per day from 20.631 million. That was 3.9 percent lower than in April 2007 and the lowest level for the month in six years.

The price of oil, which began 2008 at $96 a barrel, has risen in part on expectations of higher demand in China and other developing nations. But its almost relentless advance has also forced consumers and businesses to cut back the amount of gas and oil they use; it is also posing a threat to U.S. economic growth that could further slice into demand.

A hardier dollar also sent oil prices lower on Monday. Often, oil futures are used as a hedge against a weaker dollar.

"A lot of the momentum from late last week was the expectation we would continue to see a weaker U.S. dollar. When that didn't materialize, we had some profit-taking," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.

The dollar rose against the 15-nation euro after the Chicago Purchasing Managers' index came in better than expected. The index for June rose to 49.6 from 49.1 in May, topping estimates of 49.1. The report is seen as a precursor for the national Institute for Supply Management report, to be released Tuesday.

But there was little expectation in the market that Monday's trading was the start of a turnaround in the dollar that would send oil falling much further. The dollar has weakened on expectations the Federal Reserve Board won't soon raise interest rates as the U.S. economy struggles with low growth. The Fed left its benchmark rate unchanged last week.

European Central Bank "President Jean-Claude Trichet's hawkish stance (on) inflation" could mean the dollar may be headed for further weakness against the euro "and that's not bearish for oil," said The Schork Report edited by U.S. analyst and trader Stephen Schork. When other countries raise their interest rates, they are more competitive with U.S. rates, and that weakens the dollar.

"If the Federal Reserve is powerless to raise interest rates because the economy continues to be soft, then we'll see low interest rates push oil higher," Flynn said.

Meanwhile, retail gasoline, which has been tracking oil higher, reached a new national average of $4.086 a gallon, according to a survey of stations by AAA, the Oil Price Information Service and Wright Express. The previous record of $4.08 was reached June 16; since then, oil has moved past $140 and been setting new records of its own.

As The Early Show reports, police and automotive experts say over-the-top attempts by some drivers to boost their gas mileage could be endangering them and other motorists.

The AAA and Connecticut State Police are warning against extreme measures in "hypermiling," a practice in which unusual techniques are used to boost vehicles' mileage.

Gasoline's surge higher has clearly affected consumer spending in the U.S. The concern is that the inflationary effects of higher oil and gas will force consumers to cut back their spending on non-essentials further in the months ahead.

Geopolitical tensions, particularly surrounding Iran, also continue to boost oil prices. Traders were digesting reported comments from the commander of Iran's Revolutionary Guards, who warned that if his country is attacked, Tehran would strike back by barraging Israel with missiles. In a report published Saturday in the conservative Jam-e-Jam newspaper, Gen. Mohammad Ali Jafari said that if Iran were provoked, it would also move to control a key oil passageway in the Gulf.

Iran is the world's fourth-largest oil exporter and about 60 percent of the world's oil passes through the strategic Strait of Hormuz.

Global supply also remains a concern. The Iraqi government opened six oil fields to international bidding Monday as the nation attempts to boost daily production by 60 percent.

The potential participation of big Western companies like BP PLC, Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell PLC and Total SA in Iraq's oil industry has been criticized in recent weeks following published reports that several were close to signing no-bid contracts with the Iraqi government.

Those contracts were expected to be announced Monday, but Iraqi Oil Minister Hussain al-Shahristani instead named 35 companies that would be qualified to bid on service contracts for the oil fields of Rumeila, Zubair, Qurna West, Maysan, Kirkuk and Bay Hassan.

In other Nymex trading, heating oil futures slipped less than a cent to settle at $3.9029 a gallon while gasoline prices rose less than a penny to $3.5015 a gallon. Natural gas futures increased 15.5 cents to end at $13.353 per 1,000 cubic feet.

In London, Brent crude futures lost 48 cents to settle at $139.83 a barrel on the ICE Futures exchange in London. Earlier Monday, the price for Brent had peaked at $143.91.

[captanahab]

I can''t help recalling the lines in the 1975 movie "Three days of the Condor" when Redfords''CIA character figures out all covert ops and assinations is all about oil and the conversation goes on...." and the American people aren''t going to want any questions or excuses about the lack of oil, they will do anything to get it." Seems like We The People are just about to that point. So much for what is best for our country and the majority of its people.For now it seems to be Big Oil, The select few and then there is everyone else. But still no talk about the nuclear power solution .

[samsel3]

Reuters UK December 30, 2007 Reports: "Bin Laden says U.S. seeks to exploit Iraqi Oil". OBL states: "America seeks, alongside it''''s agents in the region, to create an allied government...that would accept in advance the presence of major U.S. bases in Iraq and give the Americans all they wish of Iraqi Oil. The true intent for the Iraq invasion was to gain control of world oil markets for BIG OIL. US oil interests and British petroleum were tired of Saddam flooding the market with cheaper priced oil and then charging US oil companies more for oil then Russia, France, Germany, China and Korea. The administration is not interested in what you have to pay at the pump. The bottom line is profit for BIG OIL, which is the reason BIG OIL put up 150 million dollars for the election campaign of G.W. Bush.

[samsel3]

Iraq''s oil infrastructure was rebuilt when Cheney controlled Haliburton. Halliburton/Iraq deal was done through the French because it was illegal for US companies to deal with Iraq, except for the oil for food program which US oil companies participated in. Saddam was charging US interests more for oil then other countries and cutting off supplies at times so they took him out.

Taking out Saddam helped BIG OIL drive the prices up. A few months before the invasion, gasoline was under a dollar the lowest since the seventies oil embargo era.
Saddam actually lowered the world price of oil by selling it cheaper to Russia, China, France, Germany and South Korea before the invasion. He created an advantage against US & British oil by charging them more for oil than these countries increasing competition. US oil companies then got subsidies from Congress.

The Times of India August 2007 reported : " Iran, Iraq signed an agreement to build pipelines for the transfer of Iraqi crude oil and oil products." Under the deal crude will be refined and sent back to Iraq. Bush opposes this agreement and wants the Iraqi Parliment to accept and sign a U.S. designed oil law that would result in huge profits for BIG OIL. Iraqi oil workers and 63% of Iraqis polled are opposed to the Bush law and prefer a hands off Iraq oil policy.

[noloyalisti]

Mission Accomplished! Actually the people who are so frightened over taxes don''t seem to mind paying higher gas prices, higher fees and higher prices for everything plus interest forever. Borrow and spend republicans, yeah.

[triplet-man]

I''ll grab my soup bowl if I need to BUT... these greedy spoiled Americans - need to STOP whining about such small things When there are people in this world who are worried about their next meal Not how many gallons of gas they may or may not get to afford. They don''t have running water in their homes.
Stop WHINING... it''s rediculous!

[triplet-man]

underdogus10 -

Actually the fall of ROME was attributed to "overtaxation" There has NEVER been a country TAXED into prosperity.

The United States had already out lasted The Roman Empire (Short lived at about 200 yrs)

But... it''s definitely headed in the wrong direction.

[underdogus10]

DEPRESSION a'' COMING GRAB YOUR SOUP BOWL!! he,he

[captanahab]

gimme summa dat tater soup

[underdogus10]

captanahab.. Kingdom rise,Kingdom fall have fun at the soup lines-------------------------------NEXT!!

[underdogus10]

YEN UP,PESO UP,EURO UP,-THE DOLLAR DOWN THE PLUG HOLE..the end of an empire always comes when their currency is destroyed.......

[captanahab]

Listen to the people and hear their justified anger. That is exactly what happened in Louisiana over the past few weeks. The La Legisature voted themselves a 100% pay raise against the voters wishes and Gov Jindel didn''t want to rock the boat , in fear of the leg. retaliating against his future adgenda. But the la citizens roared their dissapprovial in the media & over the internet forcing the Govnr to veto because of the "peoples''" backlash. We The People must organize and come together on a national scale as never before, and get this energy /economey delema under control. What is it gonna take people, 40% to 60% of your net take home pay going to the gas and energy companies, before you finally decide to react

[edgardebbins]

If we wanted to do so, the American people could make arrangements for every member of Congress to be brand new in 2009. Its possible. An all new Congress might have a different attitude about the public being frustrated with way things are.

[triplet-man]

I know ONE THING. With the cost of living - you will see some headlines next year about March or April :-0

Unions don''t agree with BIG OIL pay cuts

Or

Big Oil FIGHTS Union on wages/benefits

You can bet we will be fighting for OURS (and in essence every wage earning AMERICANS right to good wages).

Somehow they will make the Unions out to be the BAD GUY tho, and it WILL affect the price of oil/gasoline AGAIN.

[triplet-man]

captanahab - I work for one of those "demonic" oil companys. I am a UNION hand that sees, demand has dropped so much that we can''t even sell all that we are making and have slowed prodution in the units. Using this opportunity to fix some things.
It is not in the "big oils" buisness plan to open up the refining market with MORE refinerys. They like having the system so "fragile" that any little bobble or Fright NIGHT headline sends their profits through the roof.
It doesn''t make "buisness sense" to flood the market with cheap easy gasoline. So they will never do it.
They are all about RETURN on CAPITOL EMPLOYED (usually 5 years or less).

[captanahab]

triplet-man,I work for one of those ship builders, and I know what you mean. It is just the point, where is the plan to get started, just how much do we the people have to bleed in dollars and sence before the nuclear solution is implemented

[triplet-man]

captanahab - I don''t really have a straight answer/statistics, but I do know They haven''t built any NEW reactors in 30 yrs. At least not for power supply/generation.
HOWEVER - as for the "safety" environmental concerns - there are HUNDREDS of nuclear reactors all over the oceans of the world on our FINE United States naval ships. In the case of our aircraft carriers - FOUR (count that) FOUR reactors on board supplying electrical energy as well as propulsion for the floating city. AND there HAVE BEEN new ones of those built in the last 30 years.
SURE - nuclear energy has to be handled properly - but when we DO - it does TONS of useful things for us. Just like electricity (I''m and electrician) as long as we handle it properly it will do AMAZING things for us. We learned how to use it and handle it over the years and it has been a good friend.

[captanahab]

Has anyone ever gotten a straight answer as to how many Nuke power plants it woud take to displace 25% of our nations oil consumption. It should be real intresting this fall/winter if oil is in the 150 to 200 dollar range and the average Northeast American starts getting energy (fuel oil) bills exceeding 50 % of their gross take home pay.

[captanahab]

Meanwhile, with everyone is so fixiated on oil and gas prices, we as a united people have yet to demand, and protest to our representatives and our government on a major scale so that we should be on an acceralerated building program of several nuclear reactor power generation facilities, as if we were in a World War type of manufacturing mode, balls to the wall, without any hesitation to be completed in 2 to 3 years. For those that say it can''t be done, read about Americas history of WW2 industrial output and the massive projects and amounts of products produced in a 2 to 3 year window.It''s up to us folks, to make this happen for the well being of WE THE PEOPLE and our Nations security. Do nothing and suffer the conquences of what ever corporate America, Big Oil and Wall Street gives you. Enough is enough,it''s time to make a stand NOW.

[triplet-man]

Hey Terror SALAMI, get a job, get a life.

[underdogus10]

breaking news: "Saudi Arabia Ruled out further increases in crude production" there you have it folks we are in serious trouble,and it will only get worse.........