Oil climbs towards $75, hurricanes ahead

http://www.reuters.com/article/hotStocksNews/idUSSP5715420070904

By Peg Mackey

LONDON (Reuters) - Oil rose towards $75, within sight of its all-time high, after predictions of more hurricanes in the Atlantic Ocean raised concern over potential oil and gas outages.

Lending further support, OPEC was sticking to oil production curbs ahead of its meeting next week -- building expectations the group would not raise supplies before winter.

U.S. crude was up 70 cents at $74.74 by 10:25 a.m. EDT, while London Brent crude was up 45 cents at $73.86.

Even as top-ranked Category 5 Hurricane Felix was expected to steer clear of oil and gas rigs in the Gulf of Mexico, a noted hurricane forecasting team at Colorado State University said on Tuesday it saw a busy storm season ahead. "While the threat posed by Felix has receded with the Hurricane set to pass south of oil production facilities in the Gulf of Mexico, concerns over OPEC's behavior persist and are likely to intensify ahead of OPEC's gathering next Tuesday," said a Barclays Capital report.

Consumer nations have been urging the Organization of the Petroleum Exporting Countries to pump more crude as U.S. oil climbs back towards its record high of $78.77.

But the betting is the group that pumps more than a third of the world's oil will retain output curbs. A Reuters survey showed OPEC kept supply restricted last month.

Analysts said OPEC must boost supplies to keep pace with growing demand this winter. Their worry is the 12 exporters may leave things too late.

An OPEC source told Reuters on Tuesday the producer group may have to raise supplies by up to 1 million barrels per day (bpd) later this year.

OPEC officials have said repeatedly that -- for now -- the world has more than enough crude. The only member suggesting the possibility of an imminent supply boost was Indonesia, OPEC's second smallest producer.  Continued...

"If current high prices are due to inadequate supply, then we will propose current production level increase," Indonesia's OPEC governor Maizar Rahman told Reuters on Tuesday.

OPEC agreed last year to lower production by 1.2 million barrels per day (bpd) from November 1 and by a further 500,000 bpd from February 1.

(Additional reporting by Alex Lawler in London and Neil Chatterjee in Singapore)

We are in the middle of Oil rationing by the Oil producing world.

The prices will only go UP now.  It's a question of how fast and by how much.

Oil at $ 76.50!

Oil surges to $78 after Mexican pipeline attack
Tue Sep 11, 2007 12:27AM EDT
By Annika Breidthardt

SINGAPORE (Reuters) - Oil prices surged to near a record high on Tuesday after attacks on oil and natural gas pipelines rocked the world's fifth-largest crude producer Mexico, ahead of an OPEC meeting to determine production policy.

U.S. light crude rose 37 cents to $77.86 a barrel by 0424 GMT, after gaining 79 cents on Monday to near August 1's record of $78.77. London Brent crude gained 28 cents to $75.76.

A series of attacks that caused explosions on Mexico's oil and gas pipelines on Monday will not hit the country's oil output or exports but cut off a quarter of its natural gas flow, said chief executive Jesus Reyes Heroles of state firm Pemex.

"At this point, it doesn't seem to be a serious problem but it could potentially pose a longer-term problem, which is why futures reacted so strongly," said Jim Ritterbusch, president of Ritterbusch & Associates, adding there had been an influx of hedge fund money.

Oil futures had traded weaker for much of Monday's session on expectations that OPEC, which meets in Vienna later on Tuesday, would either maintain current supply curbs or raise output slightly.

A number of consuming nations, including top consumer the United States, have called on OPEC to increase oil supplies as they see stocks declining rapidly in the coming peak winter season.

But several OPEC members have said they see no need to raise output as current stock levels are comfortable.

Saudi Arabia and other Gulf Arab states back a token rise in oil output in a gesture to consumer nations worried by the impact of high oil prices and rapidly diminishing inventories, an OPEC source said on Monday.

But such a plan may struggle to win support from members including Iran and Venezuela that take a more hawkish price view, and Libya was quick to voice its opposition.


© Reuters 2006.

http://www.reuters.com/article/hotStocksNews/idUSSP5715420070911

Oil price hovers near new record

The cost of crude oil has fallen back from record levels reached despite an increase in Opec output quotas.
But at $79.67 a barrel for US light, sweet crude, it remains close to the $80.18 price it touched on Wednesday. Brent crude fell to $77.32 a barrel.

Falling oil stocks in the US remain a concern, but a hurricane in the Gulf of Mexico that threatened facilities there is now expected to ease.

Oil prices have risen 30% this year and are four times their 2002 level.

When inflation is taken into account, current prices are still some way below the all-time high of about $90-$100 a barrel reached in 1979.

That year, ouput from Iran - a key Opec member - collapsed following an Islamic revolution. The next year, war broke out between Iran and Iraq, another Opec member.

Breakneck growth

Still, analysts warn that the present situation is driven more by changes in the world economy, and less by shock events.

Hasan Qabazard, director of Opec's research division, said a spread of factors had caused the spike in oil prices.

"We have a storm working its way to American facilities. We have an economic crisis, so many things are affecting... prices." Mr Qabazard said.

Demand has soared in recent years, as China and India, in particular, have ramped up the fast-growing economies of their massive countries.

Production and refining capacity have struggled to keep pace, while heavy speculation in contracts for future oil deliveries has also helped keep prices high.

The most recent move by Opec - an increase of 500,000 barrels a day in the 12-nation group's quota - was little more than an "underwhelming gesture", said National Australia Bank analyst Gerard Burg.

Opec members are already pumping about a million barrels a day more than quota.


Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/6992597.stm

Published: 2007/09/13 14:20:44 GMT

© BBC MMVII

I'm getting together some spare "junk" to pawn off for the cash to buy a decent used Mountain bike (still have yet to get one, but I'm really feeling I'll be needing one soon).

In 3 years I see $4-$6 a gallon for unleaded regular (mogas) at the pump for consumers.

...the death-blow to the world economy

Dont forget to buy some spare parts too.

OIL OVER $81!!!!!!

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQjpCy24nWjY&refer=home

Oil Rises to Record $81.18 on Expected Supply Drop, Rate Cut

By Gavin Evans

Sept. 18 (Bloomberg) -- Crude oil rose above $81 a barrel for the first time in New York on speculation rising global demand may hamper efforts to store fuel for the fourth quarter.

A U.S. Energy Department report tomorrow will probably show oil stockpiles in the world's biggest consumer fell for the 10th time in 11 weeks, according to a survey of analysts. The U.S. Federal Reserve will cut lending rates later today to help prevent the nation's housing slump from slowing the economy, interest rate futures show.

``The market just thinks that there is not a whole lot of crude to go around and they're not willing to give up crude at cheap prices,'' said Tom Hartmann, commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California. ``From a technical standpoint, this market probably has the legs to get up to $83-$84.''

Crude oil for October delivery rose as much 61 cents, or 0.8 percent, to $81.18 a barrel, and was trading at $81.09 in after- hours electronic trading on the New York Mercantile Exchange at 7:45 a.m. in Singapore.

The contract rose $1.47, or 1.9 percent, to $80.57 yesterday, the highest closing price since trading began in 1983.

U.S. oil stockpiles probably fell 2 million barrels last week, based on the median estimate from a Bloomberg News survey of 12 analysts. Inventories held 322.6 million barrels on Sept. 7, 2.7 percent less than a year earlier, and 8.3 percent more than the five-year average for the period, the Energy Department said Sept. 12.

Fed Meeting

``If we do have another big draw in the stocks, then that will probably have a more substantial impact'' on prices than the Fed decision, Altavest's Hartmann said. ``There could be some fears, if the Fed does not lower rates, that that will cause some economic slowdown.''

Interest-rate futures show 46 percent of traders' bets are on a half-percentage point cut in the Fed's 5.25 percent target rate today. The U.S. dollar fell to its record low of $1.3927 per euro on Sept. 13 on speculation of a rate cut.

A rate cut `` is going to reassure folks about the economy and ease fears about a pullback in demand,'' Rick Mueller, an analyst with Energy Security Analysis Inc. in Wakefield, Massachusetts, said yesterday. ``This comes on top of the realization that OPEC's production increase isn't that large and the barrels won't be hitting the U.S. for months anyway.''

Brent crude oil for November settlement rose 76 cents, or 1 percent, to $76.98 a barrel on the London-based ICE Futures Europe exchange yesterday.

Fourth Quarter

The Organization of Petroleum Exporting Countries last week said it will release an additional 500,000 barrels of oil a day into the market beginning Nov. 1 to help meet fourth-quarter demand. OPEC produces about 40 percent of the world's oil.

OPEC's announcement of the production increase was ``too little too late,'' to prevent prices from rising above $90 this year, Goldman Sachs Group Inc. analysts, led by Jeffrey Currie, said in a research note yesterday. The investment bank raised its year-end oil-price forecast to $85 a barrel from the $72 it predicted previously.

Global oil demand peaks in the fourth quarter when refiners make heating fuel for the northern hemisphere winter.

Tomorrow's Energy Department report will probably show U.S. distillate stockpiles, including heating oil and diesel, gained 1.4 million barrels last week, the ninth straight increase, according to the analyst survey.

U.S. oil stockpiles have fallen 8.9 percent after reaching a nine-year high of 354 million barrels on June 29. The decline accelerated late July after near-month prices rose above those for later contracts, penalizing companies from storing oil.

Oil prices have doubled the past three years, setting records above $50, $60 and then $70 dollars without any apparent impact on global demand, Altavest's Hartmann said.

Supplies aren't that tight and oil's latest price surge may be more to do with establishing a long-term fair value for the commodity, he said.

``It may be that there are still some big players in the market trying to see where that price is.''

To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net

Last Updated: September 17, 2007 20:14 EDT