Oil Exceeds $55 Per Barrel on Supply Fear

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Oil prices surged above $55-a-barrel on Friday as concerns about the global supply of winter fuels persist ahead of the Northern Hemisphere winter.

Crude for December delivery surged 93 cents to $55.40 per barrel in afternoon trading on the New York Mercantile Exchange, where heating oil futures climbed 1.85 cents to an unprecedented $1.598 per gallon.

The rally in heating oil has also spilled over into natural gas futures, which soared 50.3 cents Friday to $8.20 per 1,000 cubic feet. Natural gas futures are now about 67 percent higher than a year ago, even though analysts agree that supplies of this mostly-domestic fuel are ample.

"The primary concern now is the heating oil inventory level in the U.S," said Victor Shum, an analyst at Texas-based energy consultants Purvin & Gertz.

On Wednesday, the Energy Department reported that U.S. inventories of distillate fuel, which include heating oil and diesel, shrank for the fifth consecutive week, leaving supplies nearly 10 percent below year ago levels.

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Type: Discussion • Score: 1 • Views: 764 • Replies: 7

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The fix... as they say... is IN!

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Hello anybody!!!! Unlimited access to the oilfields of Saudi Arabia, Kuwait AND Iraq for the last year and now there's a SHORTAGE of crude oil, forcing the price to RISE!?!

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Yes - some of us noticed.

Actually - this looks GOOD for the US.

Thay said it wasn't to get oil...

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Yes - I've heard the pundits on the financial shows guestimate that $10 a barrel is there due to the political situation in the Middle East, and fears of terrorism. I'm not so sure.

A premium due to fear can only exist as long as there is still room in the crude oil and product (gasoline/diesel) storage tanks in the consuming counties. Once the tanks are full, people will either stop buying, or overflow $55 a barrel liquid on to the ground. And once people stop buying, the price has to go down.

I've read that world crude oil demand is up 3% this year, with the biggest increases coming from rapidly industrializing China and India. With demand up, and few new fields being brought on-line, I suspect most of the $55 a barrel is due to supply and demand.

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The USA maintains the Strategic Oil Reserve, which is at presently 670 million bbls. goto SOE

At present the Iraqi production has returned to it's pre-war level of 2.5million bbls a day, this is combined with no drop in the production of Saudi Arabia, Kuwait (below):

Quote:

Saudi Arabia is ready to increase oil production if necessary, announced Al Sauda Adel ad-Djubeir, Advisor of Saudi Prince Abdalla ibn Abdel Aziz. "Now we can additionally increase oil supplies by 1.5 million barrels per day." Meantime, according to him, Saudi Arabia has received no requests of extra oil supplies by now.

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Oct. 10 -- Kuwaiti Minister of Energy Sheikh Ahmad Al-Fahad Al-Ahmad Al-Sabah said Kuwait's oil production will reach 2.7 million barrels per day (bpd) in the next few days, the Kuwait News Agency reported on Sunday.

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World oil prices have reached 53 US dollars per barrel in the US market lately, while some expect the prices to increase to 60 dollars per barrel in winter.

Drawing from the SOE would have reduce the price of oil products IN THE USA, not across the entire world. The demand is great in the States, and will increase over winter, but there is no domestic shortage in fact the opposite - suppliers falling over themselves to increase supply.

I may not be a expert on such matters, but I would draw the conclusion that there is a situation artifically created and controlled to drive up the price of oil products in the USA. As I said, the fix is in.

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Besides India and China, it is my understanding that the US is still buying oil on the open market to add to the Strategic Oil Reserve. We are in effect contributing to the problem through our own policies.

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Quote:

Crude oil was little changed near a four-month high after a U.S. Energy Department report showed the country's crude oil stockpile gained half as much as forecast.

Supplies climbed 608,000 barrels last week, leaving them 8.5 percent higher than a year ago, according to the report. The median forecast of 13 analysts surveyed by Bloomberg was an increase of 1.2 million barrels. Imports plunged to the lowest since September as refiners cut operating rates.

Crude oil for April delivery traded at $51.21 a barrel, down 18 cents, or 0.4 percent in after-hours electronic trading on the New York Mercantile Exchange at 12:33 p.m. Singapore time.

source

And though the demand has dropped AND the supply has increased - has the price gone down? Right......

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Oil Exceeds $55 Per Barrel on Supply Fear

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