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Log inOil hits $135 a barrel on new supply concerns
Oil hits $135 a barrel on new supply concerns
by Outspoken on Thu May 22, 2008 6:46 am
Oil hits $135 a barrel on new supply concerns
By PABLO GORONDI
Associated Press Writer
Oil prices rose above $135 a barrel for the first time Thursday, with supply worries, global demand and an ever weakening U.S dollar driving crude futures up.
The world's top energy watchdog is preparing a sharp downward revision of its oil-supply forecast, according to a report in The Wall Street Journal.
Light, sweet crude for July delivery rose as high as $135.09 before falling back slightly. By midday in Europe, the contract stood at $134.37 a barrel in electronic trade on the New York Mercantile Exchange, up $1.20 on Wednesday's close of $133.17.
That settlement price, up $4.19 on Tuesday's close, marked NYMEX crude's largest one-day price advance since March 26.
Meanwhile, July Brent crude on the ICE Futures exchange in London also reached a new record of $135.13 a barrel Thursday. By midday in Europe, it had retreated to $134.35, a gain of $1.65 on its Wednesday close.
"Simply put, this is a market you cannot afford to be short in," said U.S. analyst and trader Stephen Schork about Brent futures in his Schork Report.
With gas and oil prices setting new records nearly every day, analysts have begun to wonder what might stop prices from rising. There are technical signals in the futures market, including price differences between near-term and longer-term contracts, that crude may soon fall. But with demand for oil growing in the developing world, and little end in sight to supply problems in producing countries such as Nigeria, few analysts are willing to call an end to crude's rally.
"The sentiment in the market is very bullish at the moment," said David Moore, commodity strategist with the Commonwealth Bank of Australia in Sydney. "The U.S. dollar was weaker last night, and also the U.S. EIA report showed an unexpected decline in U.S. commercial crude oil inventories, so there's a combination of factors pushing the oil prices higher."
Crude prices breezed past $130 early Wednesday, then accelerated when the U.S. Energy Department's Energy Information Administration said U.S. crude inventories fell by more than 5 million barrels last week. Analysts had expected a modest increase.
Investment bank Goldman Sachs last week revised its oil price forecast for the second half of 2008 from $107 to $141 a barrel. But some analysts saw the new target becoming a reality much sooner.
"Futures are moving so fast that under the current volatility that goal could already be reached within the end of the week," said a report by Olivier Jakob of Petromatrix in Switzerland.
Some analysts say crude has been boosted in recent days by especially strong demand for diesel in China, where power plants in some areas are running desperately short of coal.
http://news.yahoo.com/s/ap/20080522/ap_on_bi_ge/oil_prices;_ylt=Ai.4Wn5AJj.dCktuI7r4Nvys0NUE
By PABLO GORONDI
Associated Press Writer
Oil prices rose above $135 a barrel for the first time Thursday, with supply worries, global demand and an ever weakening U.S dollar driving crude futures up.
The world's top energy watchdog is preparing a sharp downward revision of its oil-supply forecast, according to a report in The Wall Street Journal.
Light, sweet crude for July delivery rose as high as $135.09 before falling back slightly. By midday in Europe, the contract stood at $134.37 a barrel in electronic trade on the New York Mercantile Exchange, up $1.20 on Wednesday's close of $133.17.
That settlement price, up $4.19 on Tuesday's close, marked NYMEX crude's largest one-day price advance since March 26.
Meanwhile, July Brent crude on the ICE Futures exchange in London also reached a new record of $135.13 a barrel Thursday. By midday in Europe, it had retreated to $134.35, a gain of $1.65 on its Wednesday close.
"Simply put, this is a market you cannot afford to be short in," said U.S. analyst and trader Stephen Schork about Brent futures in his Schork Report.
With gas and oil prices setting new records nearly every day, analysts have begun to wonder what might stop prices from rising. There are technical signals in the futures market, including price differences between near-term and longer-term contracts, that crude may soon fall. But with demand for oil growing in the developing world, and little end in sight to supply problems in producing countries such as Nigeria, few analysts are willing to call an end to crude's rally.
"The sentiment in the market is very bullish at the moment," said David Moore, commodity strategist with the Commonwealth Bank of Australia in Sydney. "The U.S. dollar was weaker last night, and also the U.S. EIA report showed an unexpected decline in U.S. commercial crude oil inventories, so there's a combination of factors pushing the oil prices higher."
Crude prices breezed past $130 early Wednesday, then accelerated when the U.S. Energy Department's Energy Information Administration said U.S. crude inventories fell by more than 5 million barrels last week. Analysts had expected a modest increase.
Investment bank Goldman Sachs last week revised its oil price forecast for the second half of 2008 from $107 to $141 a barrel. But some analysts saw the new target becoming a reality much sooner.
"Futures are moving so fast that under the current volatility that goal could already be reached within the end of the week," said a report by Olivier Jakob of Petromatrix in Switzerland.
Some analysts say crude has been boosted in recent days by especially strong demand for diesel in China, where power plants in some areas are running desperately short of coal.
http://news.yahoo.com/s/ap/20080522/ap_on_bi_ge/oil_prices;_ylt=Ai.4Wn5AJj.dCktuI7r4Nvys0NUE
"When I stand before God at the end of my life, I would hope that I would not have a single bit of talent left, and could say, 'I used everything you gave me'."
Erma Bombeck (1927-1996)
Erma Bombeck (1927-1996)
