[Dio]

Oil hits record $120.93 on fear of tight supply By GEORGE JAHN, Associated Press Writer
2 hours, 51 minutes ago



VIENNA, Austria - Oil futures rose to an all-time high near $121 a barrel Tuesday with new concerns about a threat to supply and a weaker dolla

The surge in oil prices was also fueled by hopes that the U.S. economy will be spared a sharp downturn after the release of data Monday showing an unexpected expansion in the U.S. service sector in April, analysts said.

Light, sweet crude for June delivery rose to a record $120.93 a barrel in electronic trading on the New York Mercantile Exchange on Tuesday. The contract later retreated to $119.88 a barrel, down 9 cents from Monday's close.

Crude futures settled on Monday at $119.97 a barrel, up $3.65 from Friday's close.

"The bulls are in control of the market," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "The economic report out of the U.S. yesterday on the service sector seems to suggest the economic slowdown may not be as deep as initially thought."

"The sentiment is that the oil pricing is likely going to stay quite strong, with a lot of volatility," Shum said.

The dollar weakened against the euro on Monday, attracting investors to oil and other commodities viewed as hedges against inflation. Also, a falling dollar makes oil less expensive to investors overseas. A series of U.S. Federal Reserve rate cuts starting last year weakened the dollar considerably against foreign currencies, and analysts blame the dollar's protracted decline for oil's sharp rise this spring.

Supply outages or potential threats to supply emerged in Iran and Nigeria over the weekend and from Iraq on Monday; events in all three nations have caused prices to spike many times in recent months.

In Iraq, Kurdish rebels warned they could launch suicide attacks against American interests to punish the U.S. for sharing intelligence with Turkey after Turkey bombed rebel bases in Iraq on Friday. In Nigeria, a Royal Dutch Shell PLC spokesman said attackers hit an oil facility belonging to Shell's joint venture in southern Nigeria and that some oil production has been shut down. And Iran's Supreme Leader Ayatollah Ali Khamenei said his country will not bend to international pressure and give up its nuclear program.

Energy investors grow concerned any time conflict breaks out or is threatened in the oil-rich Middle East. Years of unrest in Nigeria have cut off nearly a quarter of the major U.S. supplier's oil output.

Amid the occasional threats to crude supplies, global demand for oil continues to grow. The Chinese and Indian economies are growing by double digits, boosting global demand for oil.

In the U.S., where demand has been dampened over economic concerns, the prince for "gasoline at the pump is averaging 29.4 percent above last year's pace," noted Stephen Schork of the Schork Report. "Meanwhile, average diesel prices are up by 41.1 percent or $1.079 a gallon (3.8 liters)."

In other Nymex trading, heating oil futures were both down slightly at $3.3005 and $3.0455 a gallon. Natural gas futures slipped more than 3 pennies to $11.145 per 1,000 cubic feet.

Brent crude futures rose 52 cents to $118.53 a barrel on the ICE Futures exchange in London.


And now Goldman sach came out and said it could hit 150 to 200 barrel. Thats bs. The true price should be around 80 dollars. And now i guess its going to hit 150 or 200.

[Jay Pan ROKK]

It will reach $200 soon.

[Crimsonsabbath]

Prepare for recession.

Eventually oil prices combined with the weak dollar will create significant inflation, which will result in a drop in consumer spending, which will result in economic recession.

[logos]

Originally Posted by Crimsonsabbath

Prepare for recession.

Eventually oil prices combined with the weak dollar will create significant inflation, which will result in a drop in consumer spending, which will result in economic recession.

I think recession may already be here. I own a small retail business, and it seems that I am raising prices every time I get a new shipment, to cover the skyrocketing shipping and handling costs. Suprisingly, my sales are actually up, but I am not optimistic about the coming months.

[Turban Capote]

Originally Posted by Crimsonsabbath

Prepare for recession.

Eventually oil prices combined with the weak dollar will create significant inflation, which will result in a drop in consumer spending, which will result in economic recession.

QFT. Economics 101. This is gonna be the case in a lot of other countries too.

[Crimsonsabbath]

Originally Posted by logos

I think recession may already be here. I own a small retail business, and it seems that I am raising prices every time I get a new shipment, to cover the skyrocketing shipping and handling costs. Suprisingly, my sales are actually up, but I am not optimistic about the coming months.

The good news is that in Texas we are positioned the best in the USA for a recession. Due to the major energy companies based in Dallas and Houston we have a cash-infusion for our economy. People pay more for energy, energy companies proffit, energy companies (and their employees) spend their proffits in Texas.

So in Texas, and D/FW in particular, we will be the least hardest hit in the recession.

We're all going to take it on the chin, but while places like New York, the midwest, and California have James Thompson chins, Texas has a Fedor chin.

[canadian mongoo]

yak yak yak american bitch about gas prices while they drive SUVs to their air conditioned desert homes......

blame china they are using more gas and oil than ever so if you think there is a shortage now just wait............

with the ecological disaster in the tar sand in northern alberta the prices are just going to rise...

[Darwinist]

It's crazy that just a year and a half ago I was arguing with posters on this very forum, some that trade on the market, trying to convince them that oil would never go back down to $20 a barrel from a then-high of $40, and almost nobody believed me. It was only temporary you see...

And it's doubly strange that there are still people around who say Peak Oil isn't real, when the events of the last 2-5 years have unfolded pretty much exactly according to the peak oil model. Lots of volatility in the market with large up and down swings, no supply expansion from OPEC, and a price that in the long term only keeps on rising.

We will hit $200 soon, perhaps within a year and a half, and its not going to stop anytime soon.

[Fanu]

all barriers have been broken (60$, 80$, 100$)

oil prices will only keep rising from now on

200$, 300$, 400$, .. where is the limit...

[Depth]

Someone has to pay for all those construction projects in the Middle East.