Oil price over $147 for the first time-now above $80

[Derek Ortt]

there is an easier way to increase the value of the dollar than cutting spending (which is not going to happen)

RAISE INTEREST RATES. Instead, we have a fed chairman who is only concerned about the short term and is cutting rates. Cutting rates when the dollar is falling... HAHA. That is driving down the dollar even faster!

A little short term pain from a ocouple of 50 basis point rate kies will do us some good in the long run

[Cryomaniac]

But raising rates would make the stock market do a nose dive, and in a time of instability that's not really a good thing.

[HURAKAN]

In the long term only increasing the rates will increase the value of the dollar. If we continue lowering the rates, the dollar will continue to sink, and inflation will continue to increase. We're for very tough times in the near future.

[Nimbus]

The stock market was up 228 points friday on better economic news. The stock market may have factered in one more quarter point interest rate cut at the end of April. If the housing data is better in the second quarter of 2008 we could see an interest rate hike in July. Don't know if oil will peak before then or not?

[Derek Ortt]

:uarrow: But raising rates would make the stock market do a nose dive, and in a time of instability that's not really a good thing.

As I said, some sahort term painb may be necessary for the long-term benefit

if rates are cut any further, please tar and feather the fed chairman

[Ed Mahmoud]

Kind of a no win. The interest rate cuts are an attempt to keep the bad mortgage crisis (where some banks chose to give, and some homeowners chose to accept, mortgages that the homeowners would have a hard time paying back, especially ARM loans designed to make the initial payments affordable on an unaffordable house) from becoming a full fledged recession, with Jimmy Carter style 8 and 10% unemployment rates, and neither a Democrat Congress or Republican President are eager for that in an election year.


But cheap money means inflation, which isn't helped any by the silliness of ethanol subsidies, turning food to fuel that would never make economic sense on its own, which doesn't help gas prices at all, but drives all grain prices up, and makes things dependent on grain, like meat and milk, more expensive.


If ADM didn't have so much pull in Congress, among both political parties in the Corn Belt, ethanol subsidies wouldn't exist, and there wouldn't be tariffs on Brazilian ethanol, made in a way that makes sense, from sugar cane.

[HURAKAN]

Forecasted prices
Fatih Birol, chief economist of the International Energy Agency expressed his opinion in October, 2007 that oil prices will remain high for the foreseeable future due to rapid increases in demand from the huge developing economies of India and China. According to informed observers, OPEC, meeting in early December, 2007, seemed to desire a high but stable price that would deliver substantial needed income to the oil producing states, but avoid prices so high that they would negatively impact the economies of the oil consuming nations. A range of 70-80 dollars a barrel was suggested by some analysts to be OPEC's goal.

Some analysts point out that major oil exporting countries are rapidly developing; and because they are using more oil domestically, less oil may be available on the international market. This effect, outlined in the export land economic model, could significantly reduce the oil available for trade and cause prices to continue to rise. Particularly significant are Indonesia (which is now a net importer of oil), Mexico and Iran (where demand is projected to exceed production in about 5 years), and Russia (whose domestic petroleum demand is growing rapidly).

Others such as Matthew Simmons predict a rise to $300 a barrel or higher by 2013 as oil production continues to uncontrollably fall and demand continues to remain high, especially in China and India, which are not as affected by higher oil prices as the developed world.
________________________________

It seems we're still in good times and worse is yet to come.

[Matt-hurricanewatcher]

Kind of looks like the fake global warming charts, at least up intill 98. HEHE

[Cryomaniac]

if rates are cut any further, please tar and feather the fed chairman

*Prepares tar and feathers for the next fed meeting*

[feederband]

$3.56.......

[HURAKAN]

Oil prices spike to record above $117 a barrel
By THOMAS HOGUE – 6 hours ago

BANGKOK, Thailand (AP) — Oil prices spiked to a record above $117 a barrel Monday in Asia following an attack on a key pipeline in Nigeria at the end of last week.

Comments over the weekend by an OPEC official that the group isn't likely to increase production also supported prices.

Abdullah el al-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Sunday that oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply — something he doubted.

"Oil prices, there is a common understanding that has nothing to do with supply and demand," al-Badri said on the sidelines of an energy conference in Rome.

Light, sweet crude for May delivery rose as high as $117.05 a barrel in Asian electronic trading on the New York Mercantile Exchange early Monday. At midday in Singapore, the contract was trading at $116.73 a barrel, up 4 cents from the end of last week.

On Friday, May crude surged $1.83 to $116.69 a barrel following the attack on the Royal Dutch Shell PLC pipeline by the Movement for the Emancipation of the Niger Delta — the main militant group in Nigeria's restive south.

The group also promised further attacks on the petroleum industry in Africa's largest producer of crude oil.

Last Friday, Shell confirmed a pipeline leak that it said appeared to have been caused by explosives. It said it had isolated the line for repairs and that a small quantity of production had been shut.

Attacks since early 2006 on Nigerian oil infrastructure by the militant group have cut nearly one-quarter of the country's normal petroleum output, boosting oil prices. Nigeria is a major supplier of oil to the U.S.

A host of other supply and demand concerns in the U.S. and abroad, along with the dollar's weakness, have served to support prices, even as record retail gasoline prices in the United States appear to be dampening demand. Crude prices rose nearly 6 percent last week.

Analysts believe the weaker dollar is the primary reason oil has soared well past $100 a barrel this year. A sinking dollar draws investors to hard commodities such as oil and gold as hedges against inflation. Also, a weak dollar makes the commodities less expensive for buyers operating in other currencies.

OPEC Secretary-General al-Badri said Sunday that the group "will not hesitate" to increase production if it thought the higher prices were due to shortages. But he said more oil will not solve the high prices.

Also over the weekend, Iran's hard-line President Mahmoud Ahmadinejad was quoted Saturday as saying crude oil prices at $115 a barrel are too low, and that oil must "discover its real value."

"The oil price of $115 a barrel in today's global markets is a deceiving figure. Oil is a strategic commodity that needs to discover its real value," the Web site of Iran's state-run television quoted Ahmadinejad as saying.

The Iranian president made the remarks during a visit to an oil and gas exhibition in Tehran late Friday.

In other Nymex trading, heating oil futures were flat at $3.2923 a gallon while gasoline prices fell 0.18 cent to $2.9875 a gallon. Natural gas futures rose 1.3 cent to $10.60 per 1,000 cubic feet.

Brent crude futures for June rose 3 cents to $113.95 a barrel on the ICE Futures exchange in London.

[HURAKAN]

April 21, 2008, 12:13PM
Oil production cuts in Nigeria following attacks

By EDWARD HARRIS Associated Press Writer
© 2008 The Associated Press

LAGOS, Nigeria — Nigerian militants announced fresh attacks Monday against oil facilities and a leading producer said exports could be affected, helping send oil prices to record levels.

A Royal Dutch Shell PLC joint venture said it may not be able to cover some April-May supply contracts totaling 169,000 barrels per day of crude after the militants sabotaged a pipeline last week in southern Nigeria, where militancy and lawlessness has grown in recent years.

The Movement for the Emancipation of the Niger Delta, or MEND, took credit for that attack, and said Monday that its fighters hit two more pipelines that it believes are operated by Chevron Corp. and the Shell joint venture in southern Rivers state.

Shell officials had no immediate information on any attack and the Nigerian military battle group that patrols the oil region's waterways said it had no reports of overnight violence. Officials from Chevron could not immediately be reached for comment.

But word of the attacks, on top of a rocket strike Monday against a Japanese oil tanker off the east coast of Yemen, sent oil prices spiking to a record $117.40 a barrel. Retail gas prices reached another new U.S. milestone Monday, jumping to an average $3.50 a gallon.

Nigerian militants say they are stepping up their activities after the arrest of one of their leaders, Henry Okah, who is on trial for terrorism and treason.

On Monday, militants called on former President Jimmy Carter to mediate, after receiving no reply from President Bush and actor George Clooney to similar requests. Carter is in the Middle East for peace talks.

"The ripple effect of this attack will touch your economy and people one way or the other and hope we now have your attention," MEND said in a statement.

The militant group emerged in early 2006, launching bombing attacks on Nigeria's oil infrastructure that cut about one-quarter of the usual oil output in Africa's biggest crude producer. Nigeria is a top supplier of crude to the United States.

The militants say they want the nation's oil wealth distributed more evenly to help poor regions. But many of the various armed groups in the southern Niger Delta region have links to corrupt local politicians.

Both militants and government officials are suspected of heavy involvement in the theft and resale of crude oil, which oil industry officials say brings revenues that run into the millions of dollars per day.

The vast network of oil pipelines crisscross the swamps and creeks in the Niger Delta and are easily sabotaged.

The militants recently have failed to launch the same the sophisticated, military-style raids on staffed oil facilities that made them a potent force in southern Nigeria.

[cycloneye]

It's uncharted territory. People look at the prices and think they're being taken advantage of," said Tom Kloza of the Oil Price Information Service, Wall, N.J. "I don't think we're done, but I have to believe we're in the eighth or ninth inning" of price increases.

Gas prices at the pump jumped more than a nickel over the weekend nationwide, and are up 23% from a year earlier. Drivers are paying the lowest prices in New Jersey and the most in California, where a gallon of regular is now averaging $3.86 for a gallon.

Crude prices are rising along with a host of commodities, from corn and wheat to gold and platinum. Light, sweet crude for May delivery rose to a record $117.60.

http://money.cnn.com/2008/04/21/markets ... 2008042112

[HURAKAN]

Luis, ¿cómo está la gasolina en Puerto Rico?

Luis, what is the gas price in Puerto Rico?

[cycloneye]

Luis, ¿cómo está la gasolina en Puerto Rico?

Luis, what is the gas price in Puerto Rico?

Aqui es por litros.Esta a 87.7 el litro.That is $3.45 el galon.

Here is by liters.The price now is at 87.7 a liter.That is $3.45 a gallon.

[Matt-hurricanewatcher]

Most stations around Portland are around 3.50-3.60 for the cheap stuff. WOW.

[JonathanBelles]

average price here is 3.48, but ive seen it as low as 3.39.

[feederband]

average price here is 3.48, but ive seen it as low as 3.39.

Closer to the port.

[HURAKAN]

Today in my area the prices have been b/w $3.43 and $3.59. Not even talk about premium.

By the way, in Miami Beach there is a gas station that has the cheapest at $4.21.

[Ed Mahmoud]

Eventually high prices will surpress worldwide economic activity, which will reduce demand, and eventually prices will fall.



Hopefully not something like the mid 1980s, or late 1990s, when oil dropped to near $10 a gallon. Over the period, over half of all domestic US oilfield workers lose their jobs, many never to return. So when demand went back up, supply was slow to follow, part of the reason for high prices. Even now I hear stories of dangerously inexperienced workers on oil rigs. And the low margin US wells shut in when oil is very cheap, generally they stay shut in because it isn't economically feasible to return them to production.

Except that much of it is lower quality Venezuelan crude that only a limited number of refineries can take, the government could make a profit by selling high and buying low from the emergency crude stockpile, easing the extremes of high prices to consumers and extremely low prices to the smaller domestic oil companies. But next time oil prices drop below the inflation adjusted baseline, the government should buy up oil, so they can sell it when it gets too expensive and drive prices back down. Cushion the spikes.


Of course, always need to keep enough in reserve as its hard to predict when Iran will decide to attack its neighbors, or al Qaeda overthrows Saudi Arabia, or civil war breaks out in Venezuela or Nigeria.