Oil Hit $64 A Barrel Today
Oil, gas prices both jump to new records
Market gets the jitters; unleaded soars to average $2.37 a gallon
http://www.msnbc.msn.com/id/8533441/
Updated: 5:52 p.m. ET Aug. 8, 2005
Things got even hotter on the energy market Monday as oil and gas prices both rose to record highs, driven at least in part by jitters over political conditions in the Middle East.
Crude oil jumped nearly 3 percent on global markets, hitting a peak of almost $64 a barrel as investors worried about threats in Saudi Arabia and tension over Iran's nuclear ambitions. Oil for September delivery ended with a gain of $1.63 at $63.94 a barrel on the New York Mercantile Exchange, the highest close recorded since trading began on the exchange in 1983.
Meanwhile, retail gasoline prices have risen 7.7 cents over the past week to a record $2.37 a gallon, the government said in a weekly report.
The national price for regular unleaded gasoline is up 49 cents from a year ago, surpassing the old record of $2.33 set on July 11, according to a survey of service stations conducted by the U.S. Energy Information Administration.
When adjusted for inflation, both oil and gas prices are below the peaks recorded in the early 1980s, but they are getting closer. The adjusted record for gasoline is about $3.12 a gallon in March 1981, the EIA said.
Are higher gas prices affecting your summer driving plans?
Traders pinned the latest rally on security concerns in Saudi Arabia, refinery snags in the United States and the continued rise of gasoline consumption in spite of soaring pump prices.
Oil analyst Marshall Steeves at New York-based brokerage Refco Group Inc. said oil and gasoline prices were likely to keep rising until there were signs of a significant dropoff in demand, or a sharp slowdown in economic growth. “We’re clearly not there yet,” he said.
“The market clearly has the jitters,” said Deborah White, energy analyst at SG Securities in Paris.
Broadly speaking, those jitters are tied to worldwide consumption, which is expected to average more than 84 million barrels a day in 2005, leaving only about 1.5 million barrels a day of spare production capacity that could be called upon in an emergency to offset a prolonged supply disruption.
Given such a slim margin for error in the supply chain, a large premium has been priced into every barrel of oil sold on futures markets. This premium takes into account the possibility of production outages stemming from hurricanes, terrorism and labor strife around the globe.
Several factors put the market on edge Monday:
The U.S. Embassy and consulates in Saudi Arabia were closed after authorities announced Sunday a security threat against U.S. government buildings inside the world’s largest petroleum-producing country.
Iran, OPEC’s second biggest player behind Saudi Arabia, resumed uranium conversion activities at its Isfahan nuclear facility Monday, a step that Europeans and the United States have warned would prompt them to seek U.N. sanctions against the Tehran regime.
A fire broke out at a Sunoco Inc.’s refinery in Philadelphia over the weekend. This followed a string of refinery fires and other snags over the past two weeks that have not severely diminished supply, but have nonetheless made oil traders nervous.
“The fear factor is alive and well,” said oil analyst Jim Burkhard of Cambridge Energy Research Associates. Suspected rebels launched renewed attacks overnight on pipelines in eastern India, leaving oil operations in the remote region in critical shape, a top oil official said Monday.
The market has also kept a close eye on tropical storms in the Gulf of Mexico, fearing a repeat of last year’s Hurricane Ivan, which damaged oil facilities and caused output in the region to drop for several months.
Oil broker Tom Bentz of New York-based BNP Paribas Commodity Futures said there was no single event on which Monday’s rally could be attributed. “We’ve just got a continuation of the uptrend here,” he said. “And there’s no sign that it will be stopping anytime soon.”
Reuters and The Associated Press contributed to this story.
support our troops, buy a hummer!
Hummer has a new "h3" out, looks like they're getting smaller.
Pretty soon they'll have a hatchback smaller then a cooper.
"the new H1/2 - no really, we don't want you to invade Iran"
http://img193.exs.cx/img193/4822/bummer16yv.jpg
http://www.idontcareaboutair.com/bumpers/bummer.gif
