Oil rises above $130 for first time
 

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By THOMAS HOGUE

Oil prices rose above $130 a barrel for the first time Wednesday in Asia as supply concerns mounted and the dollar weakened.

Light, sweet crude for July delivery swept to a trading record of $130.47 a barrel in electronic trade on the New York Mercantile Exchange after closing at $128.98 in the floor session. It later retreated to $130.36 a barrel, up $1.38.

The June contract, which expired Tuesday, settled overnight at $129.07 a barrel.

The dollar had become less of a factor as attention turned to supply and demand concerns, but that seems to have changed this week.

"We've seen an about-face turn on the dollar in the last couple of days," said Mark Pervan, senior commodity strategist at Australia & New Zealand Bank in Melbourne. "It looked like it was starting to recover, but I think there's a less certain outlook at the minute and ... enough reason to be buying commodities as a currency hedge again."

In Tokyo's currency market, the dollar was trading at 103.25 yen, down from the 104-105 range last week. And the euro has started to climb again against the dollar, rising above $1.5750 in Asian trading.

Investors see hard commodities such as oil as a hedge against inflation and a weak dollar and pour into the crude futures market when the greenback falls. A weak dollar also makes oil less expensive to buyers dealing in other currencies.

It was the 11th time in the last 13 sessions that crude prices have hit trading or closing records, if not both.

Oil futures are now selling for about twice what they were just a year ago. Prices have been propelled by a number of factors, including worries about insufficient supply, soaring global demand and a sliding dollar that has made oil cheaper for some buyers overseas. Speculative buying has also helped push prices higher, analysts say.

Industry observers in recent days have also pointed to especially strong demand for diesel in China, where power plants in some areas are running desperately short of coal and certain earthquake-hit regions are relying on diesel generators for power. The country is also ramping up diesel imports ahead of the Olympics, analysts say, driving up prices.

Besides that, "major Chinese petrochemical companies are really struggling to keep up with demand. The trend is that we're going to continue to see pretty strong crude imports (from China) going forward," Pervan said. "That's what the market is really getting on board."

Crude's latest surge also comes after Algerian Energy Minister Chakib Khelil, OPEC's current president, was quoted by a government newspaper as saying the cartel won't boost output before its next meeting on Sept. 9, adding to concerns about global supply.

That added to worries about gasoline and diesel supplies at the start of the summer driving season in the U.S., where retail prices for the motor fuels are already at record levels. Many analysts expect prices for both fuels will continue to rise.

In other Nymex trading, heating oil futures rose 3.95 cents to $3.8145 a gallon while gasoline prices rose 2.13 cents to $3.3257 a gallon. Natural gas futures, meanwhile, rose 15.3 cents to $11.518 per 1,000 cubic feet.

In London, July Brent crude rose $1.88 to $129.72 a barrel on the ICE Futures exchange in London.

and the oil companies keep turning record profits.... hmmmmmm

I'm getting an electric car, fuck it

Can someone please explain to me why we here in Europe paying more than double for gasoline than our friends accross the pond in USA?

....Taxes

And shareholders :thumbsup

don't kid yourself.. the shareholders are doing alright but the Oil Execs are swimming in cash

$130 and going high...

how does FEDEX and UPS DHL... deal with this, i havent heard shit from them...

$140 here we come!

Sure. I'm up 84.72%. Couldn't be happier.

wow really the government prints up billions of dollars to give as a "stimulus" and oil rises? Who would have thought printing billions of dollars would have caused inflation! :error

Nice photoshop......

First Taxes in Europe are between 40-60%, second in the UK they earn way more that the USA in salaries

This is only the tip of the iceberg, you think gas prices are bad ? The next big rise is food. Because all these wankers are farming crops to turn into eco fuels we ( USA ) have a serious food shortage, transport costs have gone through the roof and the cost is being added to our food prices.

I own a number of restaurants and coffee shops so I see this before most people. Here's a few examples: Strawberries which normally cost $7.00 wholesale for a tray now costs $28.00 ( in season prices ). Milk has doubled in the last 6 months and looks like it's going up again this week. Rice is being rationed. Canola cooking oils ( no Trans Fats ) was $24.00 for 5 gallons, 6 months ago, its now $38.00 and climbing fast.

Most restaurants are holding back passing this on to customers so it's not too apparent yet. But soon you will see huge food cost rises passed on to you in restaurants and supermarkets like Vons, Ralfs, Albersons ???? Oh and delivery prices for most products including food has also hit all time highs so surcharges are being added to my food delivery costs which also get added to the menu prices eventually !!!!!

Fuck you very much Bush :thumbsup:thumbsup

Their rates have gone up and their fuel surcharges that are added to each shipment are definitely a bigger chunk than before. They just aren't being as vocal about their price changes.

meat prices are going through the roof next year as well.

You buying hog and cattle futures?

"predicting rain doesn?t count, building arks does."

I have a lot in commodities

Straight contracts or indexes? Ive never messed with futures. Time element.

congrats, make sure you sell on the way up... electric / natural gas cars are coming soon :helpme

meat, ag prices are skyrocketing because of Bush's Ethanol program... let's give farmers incentive to give the govt all their corn, guess the other crops might be a bit scarce now, and we'll use 30% of corn crop to make 3% of this Ethanol additive that will make us less dependent on foreign oil....

what an insane fucking world we are living in :helpme:error:helpme:upsidedow:disgust:(

Considering selling a portion soon but a lot of energy companies still seem to be selling at considerably lower multiples of their reserve value than is usual. I mean significantly below current prices.

Lets all do a class action to get our 1/10th's back!!!!!!!!!!1

It's doubled in 1 years time.

Topped $132

150 by the end of summer?

lol, probably 150 by the end of lunch :P

Man, I don't even try to guess at that stuff.

we will think 130 was cheap when it hits 150 soon

$133 now. Every dollar per barrel seems like so much when it is a new record. My brain is still anchored on $70.

You in the USA moan about petrol costs (gasoline), we have been paying around the equivalent of $10 a gallon for ages here. So shut up whining! :)

Do they tease you in the UK with 9/10th's also?

Nah haha, I was wondering about that when I saw the pic actually. Why do it?

There are some that believe that Opec is at capacity and that, even though they say otherwise, they don't have any more to pump (which would explain why the Saudis have rebuffed Bush twice now even though their families are friends).. Those same people say that oil is going to hit $200.

gasoline is euro 1,50 per litre now (=2,25$) so if a gallon is x4.5=10$ per gallon appox. The Dutch newspaper said that the prices will rise to 2 euros per litre by the end of the year (=like 14$ a gallon)

Psychology I guess as per this article I just searched up on it.
http://www.rough-equivalents.com/200...ths-of-a-cent/

Pretty annoying.

Many investors believe the dollar's protracted decline over the past year has been the most significant factor behind oil's rise from about $66 a barrel a year ago to today's highs.

At the pump, meanwhile, the average national price of a gallon of regular gas rose 0.7 cent overnight to a record $3.807 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Prices are 60 cents higher than a year ago, and many forecasters believe they'll hit $4 on a national basis at some point over the next month.

"That's a fait accompli at this point," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos.

Prices are already that high in many parts of the country, and the number of stations charging $4 or more rises each day. Prices are nearing $5 a gallon in parts of Alaska.

Diesel fuel rose 1.9 cents to its own record of $4.558 a gallon Wednesday. Rising prices of diesel, used to transport most consumer and industrial goods, are sending prices of food and many other goods higher.

There are signs that high prices are cutting demand for gasoline, which fell slightly over the past four weeks and has been mostly lower since January, according to EIA data. Only serious "demand destruction," a jump in supplies from Nigeria or other oil producing nations or a jump in gasoline output by U.S. refiners could stop prices from continuing to rise, Rafield said. There is little sign that demand will fall anytime soon in fast-growing China, India and the Middle East, she said.

A move by the government to shore up the dollar, or an announcement that the Federal Reserve won't cut interest rates further, could also reverse the upward momentum, Flynn said; rate cuts tend to weaken the dollar. On Wednesday, the Fed released minutes of its most recent meeting that left the impression it's not inclined to cut interest rates further.

Still, the price differences between the current, July crude oil contract and contracts for delivery of oil in later months signal a possible correction, or sharp price downturn, at some point, Rafield said. Many analysts have long argued that prices have risen well beyond levels that can be justified by supply and demand fundamentals.

"It's very difficult to call when this is going to happen, but when it happens, it's going to be quick and ugly," Flynn said.

In other Nymex trading, June gasoline futures rose 7.28 cents to $3.3772 a gallon, and June heating oil futures rose 11.9 cents to $3.894 a gallon. Both contracts set new trading records. June natural gas futures rose 26.3 cents to $11.628 per 1,000 cubic feet.

In London, July Brent crude rose $4.54 to $132.38 a barrel on the ICE Futures exchange.

By JOHN WILEN