Posted on 05/16/2008 6:40:32 AM PDT by Red Badger
LONDON (AFP) — The price of oil rocketed to a record high point of 127.43 dollars per barrel on Friday, as US President George W. Bush prepared to urge Saudi Arabia to pump more crude, analysts said.
New York's main oil futures contract, light sweet crude for June delivery, beat the previous all-time peak of 126.98 set on Tuesday owing to worries about tight supplies despite a downgrade to global oil demand growth for 2008.
The contract later stood at 126.90 dollars, up 2.78 dollars from Thursday's close.
London's Brent crude contract for June spiked as high as 125.85 dollars, which was not far off the record 125.90 hit on May 9. It later stood at 125.44, up 2.81 dollars.
US President George W. Bush arrived in Saudi Arabia from Israel on Friday for talks with the world's biggest crude exporter on record oil prices that have hit Western consumers hard.
Bush's Air Force One touched down shortly before 2:00 pm (1100 GMT) at Riyadh's King Khaled international airport, where King Abdullah led a red-carpet welcome for the US president and his wife Laura.
Bush aides have said that, at more than 125 dollars a barrel, oil prices were set to top the agenda of his talks with Abdullah and other Saudi officials.
"The global oil market remains indeed structurally tight," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
"Even though demand growth is showing some weakness, supply growth is also not there. OPEC continues to restrain supply and production in non-OPEC states are not expected to be strong."
Saudi Arabia is the main player in the 13-nation Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's oil.
On Thursday, OPEC trimmed its 2008 estimate of world oil demand growth, citing higher prices and slower economic momentum in major industrialized countries including the United States.
Global oil demand was projected to grow by 1.35 percent in 2008, compared with a previous estimate of 1.4 percent, OPEC said in a monthly survey.
The oil market was also supported by strong demand from China and a weak US currency.
Crude futures were also "gaining support from persistent supply concern," said Sucden analyst Andrey Kryuchenkov on Friday.
Distillate imports by Petrochina are expected to rise by a third to 400,000 tonnes in June, as the Chinese oil giant moves to ensure energy supplies after Monday's deadly 7.9-magnitude earthquake in Sichuan province cut its natural gas-generated power capacity.
Global distillate stocks -- which include heating oil and diesel -- are also being stretched by heightened buying in Europe, with a spate of refinery outages hampering supplies.
"Demand for distillates remains strong as Europe battles with the east for additional supplies," said MF Global trader Robert Laughlin.
A softer tone in the dollar has also fuelled buying, as commodities priced in the greenback become cheaper for holders of alternative currencies.
On Tuesday, the International Energy Agency suggested growth in global oil demand would slow this year.
The IEA, an energy policy adviser to major industrialised countries, predicted that crude demand in 2008 would stand at 86.8 million barrels per day (bpd) -- about 390,000 bpd less than its previous estimate given in April.
boy the democratic plan on stopping the SOR of 70,000 barrells really shocked the oil markets.
Why can’t Nancy and Harry save us? Amid other questions the DBM will never ask.
Too bad there’s no oil in the United States. We could get rich selling that stuff.
Hold on to your wallet, FRiend, ya’ll ain’t seen nuthin’ yet!....
Is he going to beg him to save the Polar Bears, too?
“Oil will never hit $25”
“Oil will never hit $50”
“Oil will never hit $100”
“Oil will never hit $150”
Thank God I work from home and only have to gas up once a month at the most. Sometimes every 2 months.
Why doesn’t Bush sign an executive order to allow immediate oil production IN OUR OWN COUNTRY? It sure would help matters.
Short of us attacking, there is nothing to motivate Saudi Arabia to do this unless we threaten to drill our own and sink the market ourselves. Thank the ones stopping off-shore and Alaska drilling for the Saudis’ behavior.
It is pretty hypocritical of us to ask the Saudis to produce more when we’re doing everything we can to prevent tapping our own reserves.
i work 45 miles from and drive a saturn vue...4 cylinder....costs me 330.00 a month to work....going to look for a part time job soon to pay for my gas to get back and forth to my real job......
I feel your pain. When I was a commuter I was easily blowing through $60-70/week in gas.
America’s living patterns are based on cheap fuel and utilities.
If this continues, it will definitely be disruptive for a lot of folks.
We spent over $2000 on propane this winter for heating.
america is a large country where you don’t have alot of choice but to commute...in most smaller countries such as england the towns were built in such a way that people are born, live, work and die in the same towns...they can ride a bike, walk, bus etc to thier jobs so when people say look at what they pay for a gal of gas over there it really isn’t comparing apples to apples....in my situation i live 45 miles from where i work because i can afford housing there, but the jobs where i live pay far less than what i make 45 miles away...on the otherside of the coin i can’t afford the housing in the surrounding area of where i work...its a catch 22....
Thanks Congress!
That's right. City planning puts where you live, where you work and where you shop miles apart. Great plan.
Remove the 10% ethanol from petrol and the price for gas at the pump will decline. SARC
Don't forget the subheading...$58 per barrel when the Democrats took power, less than 18 months ago.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.