Posted on 04/28/2008 7:25:50 AM PDT by Red Badger
LONDON (Reuters) - Oil hit a new record near $120 a barrel on Monday, boosted by a string of bullish factors that include big disruptions to Nigeria's output and a UK refinery strike, highlighting anxieties over threats to supply.
Prices retreated from early peaks as the dollar rallied versus the euro and yen, reflecting some expectations that the U.S. Federal Reserve may not cut interest rates this week.
U.S. light crude for June delivery was up 30 cents at $118.82 a barrel by 1321 GMT (9:21 a.m. EDT), after a record high of $119.93. Prices are up almost 25 percent since the start of the year.
London Brent crude was up 35 cents at $116.69.
"The Federal Reserve will have a chance to bolster the dollar if it decides to hold the line on further rate increases," Edward Meir, analyst with broker MF Global, said in a research note. "Both these developments could possibly induce a correction in energy prices later in the week."
Crude prices have surged more than fivefold since 2002 as global supplies struggle to keep pace with rising demand in emerging economies, such as China.
Years of underinvestment in new oil production means the market could struggle to keep pace with demand from China. The finely-balanced supply-demand outlook has made prices sensitive to any supply disruptions.
Exxon Mobil, for example, has had to shut nearly all of its Nigerian oil production, totaling around 770,000 barrel per day, due to a strike.
On Sunday, unidentified gunmen killed five policemen and seized several weapons in a raid on a police station in the oil-rich southern Nigerian state of Rivers.
Royal Dutch Shell has had to shut around 169,000 barrels per day of Nigerian output due to pipeline attacks by rebels.
The 700,000-barrel-per-day (bpd) Forties North Sea crude oil pipeline remained closed on Monday due to a strike at the 210,000 bpd Grangemouth refinery over pensions
Ineos, the owner of the Grangemouth refinery, expects striking employees to return to work on Tuesday. BP has said the Forties pipeline could then be back in operation within 24 hours but might take a few more days to get back to full flow.
The Organization of the Petroleum Exporting Countries (OPEC), that produces more than a third of the world's oil, has refused to pump more, saying the market is adequately supplied.
OPEC President Chakib Khelil blamed the fall in the dollar for high prices and did not rule out prices rising to $200 a barrel.
"Without geopolitical problems and the fall in the dollar, the prices of oil would not be at this level," he was quoted saying in Algerian government newspaper El Moudhajid.
(Additional reporting by Fayen Wong in Perth; editing by William Hardy)
While the clowns in D.C. continue to sit on their hands...
11/4 won’t come soon enough for me!
Not to worry, America. Our caring government is protecting us with our comprehensive, amazing ENERGY POLICY. Since we now generate most of our electric power from our new nuclear plants, and drill and pump most of our own crude, we have no worries -— THANK YOU WASHINGTON, DC for your great attention to, and support, of OUR COUNTRY and it ENERGY NEEDS.
....it’s all price gouging. We should raise taxes on gas - that’ll bring prices down. :D
for later
just remember that we the people are the idiots that keep electing them into office over and over again making them carreer politicians......we have no one to blame but ourselves.....
I wonder how many people remember this at election time?.
bump
not enough.....they will reelect the status quo....
So who do we elect, the dumbazz or the dumbazz?
Let it go up. And when it falls a lot people will have lost a lot of money.
Looks like you woke up in the alternative universe again.
and washington will bail them out.....
Maybe if we start a buzz about the “gasoline bubble” right now, it’ll burst by July.
I’ll start.
“There’s no way the market can support these prices. Gasoline is way overvalued.”
Nah, oil is like housing...... it will go up and up forever. /s
Good for .......uh, nevermind......
and to top it off we received a letter from state farm friday telling us they are dropping us in august due to the fact we live on the coast and may get hit by a hurricane.....we live in a 60+ yr old house that hasn’t been blown away yet by a hurricane...now we will go into the citizens insurance pool and pay triple....i for one have no more blood to give....
Allstate did that to us two years ago. We had never had a claim for anything. Just Goodbye, so long, thanks for all that money you gave us........
I wonder now if China may become interested in contributing to security of the world oil supply? Do we want them to is another question.
It’s hurting them with less $$ to buy Chinese products and more of their internal budget going to buy oil.
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