Oil hits 2007 high

[Donger]

http://money.cnn.com/2007/02/23/markets/oil.reut/index.htm?cnn=yes

LONDON (Reuters) -- Oil climbed above $61 to its highest level all year Friday after the United States reported an unexpected drop in gasoline stocks and Iran said it would show 'no weakness' over its nuclear program.

Strength in energy is also part of a broader commodity rally, Petromatrix analyst Olivier Jakob noted, with corn, wheat, metals and sugar all on the march in recent days.

U.S. crude for April delivery rose 37 cents to $61.32 a barrel in electronic trading. It earlier hit $61.70, a 2007 trading high, taking gains for the week to about 6 percent.

Some analysts had said a close above $60.80 Thursday could presage further gains.

"The range on crude oil has now been broken and ... the positive momentum is back into oil and should attract further momentum investment," Jakob said.
Iran: Unstable, troubled oil giant

London Brent crude rose 68 cents to $61.30.

Weekly U.S. data Thursday showed a surprise 3.1 million barrels fall in gasoline stocks, unnerving investors ahead of the peak summer demand season. Nine cargoes of European gasoline are already headed to the United States and more are likely to follow to take advantage of higher U.S. prices.

"Gasoline stocks drew for a second week, falling more than expected... U.S. gasoline demand continued to show surprising strength," said BNP Paribas in a research note.

More defiant words Friday from Iran's President Mahmoud Ahmadinejad also unsettled the market.

"If we show weakness in front of the enemy the expectations will increase but if we stand against them, because of this resistance, they will retreat," he said.

Tehran ignored a February 21 United Nations deadline to stop enriching uranium.

The five permanent members of the U.N. Security Council plus Germany will meet next week to discuss possible further steps against the world's fourth biggest oil exporter. Already the United Nations has imposed sanctions barring the transfer of nuclear technology and know-how.

"The risk is to the upside if the Iranian situation deteriorates a little bit, so just in case you buy," said Dariusz Kowalczyk, chief strategist at CFC Seymour Ltd.

Problems at some U.S. refineries and the temporary closure of part of a fuel pipeline supplying the densely populated Northeast risk straining supplies in the United States.

A fire over the weekend at Valero Energy Corp.'s (Charts) 170,000 barrel-per-day (bpd) refinery on the Texas panhandle was expected to keep the plant shut for several weeks. Several other refineries were shut for repairs and regular seasonal maintenance.

TEPPCO (Charts) told customers Thursday it could restart the downed portion of its 240,000 bpd refined oil products pipeline by Friday morning, pending regulatory approval, a day sooner than initially expected.

[InChiefsHeaven]

Shit. Here we go again.

...too bad we didn't see this coming after the first Gulf War...

[Bowser]

I see supply and demand is dictating the market once again.

[Donger]

I see supply and demand is dictating the market once again.

Yep. A surprise 3.1 million barrel decline will do that.

[Bowser]

Yep. A surprise 3.1 million barrel decline will do that.

And here I thought our trouble with oil was over when we occupied Iraq. What happens when we occupy Iran, and oil is still through the roof? Occupy China and Indonesia?

:Poke:

[Mr. Laz]

i bet their profits hit a high too

[Donger]

i bet their profits hit a high too

You'd be wrong:

http://www.iht.com/articles/ap/2007/01/17/business/NA-FIN-US-Oil-Companies-Outlook.php

* EDIT - I just realized that I read that incorrectly. My bad.

[Saulbadguy]

Texas tea.

[chief2000]

We don't need oil.

Just put miles of solar cells in the desert.

[Calcountry]

If we show weakness in front of the enemy the expectations will increase but if we stand against them, because of this resistance, they will retreat," Gee, I wonder what gave him that Idea?

[gblowfish]

1) Remove Wallet
2) Grab Ankles
3) Say Howdy!

Welcome to $3 a gallon summer once again.

[Donger]

We don't need oil.

Just put miles of solar cells in the desert.

That already exists. The SEGS plant in the Mojave. Generates 350+ MW.

[Donger]

1) Remove Wallet
2) Grab Ankles
3) Say Howdy!

Welcome to $3 a gallon summer once again.

It's possible. $2.75 is most likely.

[Kerberos]

It's possible. $2.75 is most likely.

Not like we haven't paid it before. :cuss:

Then again Recxjake said the new GM hybrid would get like a billion MPG and he wouldn't lie would he?

;)


.

[BucEyedPea]

I'm reading if we attack Iran, it could go to $3 a barrel.This will put the entire economy into a tailspin.

[InChiefsHeaven]

I'm reading if we attack Iran, it could go to $3 a barrel.This will put the entire economy into a tailspin.

3$ a barrel would be FANTASTIC!!

...Oh, you meant 3$ a gallon...sorry...


:p

[tiptap]

So Donger, why the 3.1 drop in gasoline. Is this the infamous refinery short fall? Did the sudden generator glut in ice torn Missouri lead to larger demand on petroleum both gas and kerosene?

You are always quick to say the market is in control but then in this case have failed to follow through and give us an understading of the gasoline shortfall because the source for the shortfall isn't addressed. That would be the pertinent information for an informed understanding.



And this still doesn't appease me on why the oil companies get to raise gasoline prices, for supply already secured, in sync with crude oil price rise but get to use 'step down averaging' as crude oil prices move down.

[Donger]

So Donger, why the 3.1 drop in gasoline. Is this the infamous refinery short fall? Did the sudden generator glut in ice torn Missouri lead to larger demand on petroleum both gas and kerosene?

You are always quick to say the market is in control but then in this case have failed to follow through and give us an understading of the gasoline shortfall because the source for the shortfall isn't addressed. That would be the pertinent information for an informed understanding.



And this still doesn't appease me on why the oil companies get to raise gasoline prices, for supply already secured, in sync with crude oil price rise but get to use 'step down averaging' as crude oil prices move down.

Pretty simple.

Last week, after EIA released the latest weekly petroleum inventory data, crude oil and product prices fell on the NYMEX futures exchange. This happened despite a slight drop in crude oil inventories and fairly significant declines in gasoline, distillate fuel, jet fuel, residual fuel and propane inventories. Total petroleum inventories plummeted by over 11 million barrels, a very large weekly decline. Typically, a drop in inventories would signal a tightening market, one where demand needs to be met by pulling from storage, and would usually signal upward pressure on prices. So why did prices fall initially after last week’s release of the data? A theory proffered by many analysts was that the decline in heating oil stocks (a subset of distillate fuel) was not as large as had been expected, given the cold weather seen recently in the Northeast, the region where most of the heating oil in the country is consumed. Traders and market participants apparently focused only on the 2.7-million-barrel drop in heating oil inventories in last week’s data (less than the 4-million-barrel decline they had expected), rather than the overall inventory picture.

As the chart below illustrates, movements in crude oil stocks and the stocks of major refined petroleum products (total gasoline, total distillate fuel, jet fuel, residual fuel, and propane/propylene) often vary significantly. During October and early November, as crude oil refinery inputs decline as some refineries cut back to perform maintenance, product stocks were drawn down, even as crude oil inventories remained relatively flat or increased. With less crude oil going into refineries, crude oil inventories tended to build, but product stocks declined as they were needed to meet demand, since lower refinery inputs meant less refinery production. But during December and early January, refinery inputs increased and crude oil inventories were drawn down. With refinery inputs and, thus, refinery production on the rise, refined product inventories were built during this period. But over the last few weeks, some refineries have been undergoing maintenance programs prior to the peak gasoline season, and refinery inputs have begun to decline once again, pressuring product inventories downward, while relatively low crude oil imports limited crude oil stock builds.

[Fairplay]

As the chart below illustrates,



I can't see a chart.

[Donger]

I can't see a chart.

Sorry: http://tonto.eia.doe.gov/oog/info/twip/twip.asp

These data are released every week on Wednesday.

[Fairplay]

Heres how im fighting back at the oil industry.

<object width="425" height="350"><param name="movie" value="http://www.youtube.com/v/WWDmaxDmIhU"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/WWDmaxDmIhU" type="application/x-shockwave-flash" wmode="transparent" width="425" height="350"></embed></object>

[InChiefsHeaven]

Bottom line then...what would have to happen for oil prices and ultimately gas prices to stabalize at under $2.00 a gallon?

[HonestChieffan]

And people will bitch driving a V-8 4X4 SUV to the grocery store

[Donger]

Bottom line then...what would have to happen for oil prices and ultimately gas prices to stabalize at under $2.00 a gallon?

About $35 to $45 a barrel.

[InChiefsHeaven]

About $35 to $45 a barrel.

Right, but what does it take for that to happen? Increase domestic production? Blow up Iran? Make nice with Mexico to get some of their oil? All of the above?

...just looking for opinions basically. I'm sure there are no solid anwers.

[Donger]

Right, but what does it take for that to happen? Increase domestic production? Blow up Iran? Make nice with Mexico to get some of their oil? All of the above?

...just looking for opinions basically. I'm sure there are no solid anwers.

Decreased demand and/or new supply.

[InChiefsHeaven]

Well, than since China and India are increasing their demand for oil, I guess more fuel efficient vehicles and tapping into more domestic supply is in order...

[tiptap]

Well, than since China and India are increasing their demand for oil, I guess more fuel efficient vehicles and tapping into more domestic supply is in order...

There is oil to be found in the Gulf. And supplies in Alaska. But these are not inexpensive finds. And the peak production of oil for the world is about to peak. That is there is not reneweable souces of oil being created in any time scale to be meeting our energy needs over even 50 years. The best process would be to move off fossil fuel sources as best we can. Geothermal, tidal, wind, solar and uhmmmm . . uh uh uh Nuclear.

The present electrical grid has off hour capacity to charge up a huge, in the millions, of cars during the night. If you insist upon oil you are missing good options for energy needs.

[InChiefsHeaven]

There is oil to be found in the Gulf. And supplies in Alaska. But these are not inexpensive finds. And the peak production of oil for the world is about to peak. That is there is not reneweable souces of oil being created in any time scale to be meeting our energy needs over even 50 years. The best process would be to move off fossil fuel sources as best we can. Geothermal, tidal, wind, solar and uhmmmm . . uh uh uh Nuclear.

The present electrical grid has off hour capacity to charge up a huge, in the millions, of cars during the night. If you insist upon oil you are missing good options for energy needs.

Well, I'm not necessarily insisting on oil, but realistically, charging up millions of cars during the night would require some massive changes, and they are not going to happen quickly. In the interim, we should be drilling more of our own oil, and should have been for the past 25 years. Once Electric cars are developed to be affordable and efficient, I'd drive one...

[Eleazar]

I'm sure glad those oil companies were so nice to us this winter.

[007]

Funny, Spring Break is coming up and gas is getting higher. When Spring Break is over prices will magically decrease and then start climbing again at the beginning of May. Prices will then start to go down in September.

Doesn't have anything to do with the peak driving seasons though.

[InChiefsHeaven]

Funny, Spring Break is coming up and gas is getting higher. When Spring Break is over prices will magically decrease and then start climbing again at the beginning of May. Prices will then start to go down in September.

Doesn't have anything to do with the peak driving seasons though.

:shrug: I think it has a lot to do with peak driving. More gas used + less gas available = higher prices.