Oil prices hit new highs on supply fears ($43.80 a barrel)

[RamboLiberal]

http://www.msnbc.msn.com/id/5556536/

Oil prices vaulted to new highs on Friday on worries that financial turmoil at Russia's largest oil company could cut into exports from the No. 2 supplier nation, with oil cartel OPEC already struggling vainly to cool the red hot market.

Oil futures in New York settled up $1.05 cents to $43.80 a barrel, after hitting $43.85 at midday, the highest level since the futures contract began trading in 1983. In London, Brent crude oil rose 78 cents to $40.03 a barrel.

The gains come amid heightened concern over production from Russian oil giant YUKOS, embattled by a huge tax bill. Oil prices were already on the rise due to fears of terror attacks on Middle East oil infrastructure, sparking worries over inflation in energy consumer nations.

“There's a sense with YUKOS of postponing the inevitable. YUKOS' financial problems will get worse in the coming weeks and the market is very nervous that we will see some of its 1.7 million barrels a day shut in for some period,” said Steve Turner, an oil analyst at Commerzbank Securities.

YUKOS has said the company could collapse by mid-August because of a freeze on its bank accounts and assets, adding that its rail shipments of oil, which make up a quarter of its total sales, could be affected soon.

[2Design]

1. and did everyone READ that exxon and shell had record

profits

so the rising of the prices isn't oil shortage. It is corporate greed.

[Gin]

2. every time our costs go up...their profits go up...no need to be a rocket

scientist to figure out whos getting rich-er.

[lanparty]

3. Those Saudis better start pumping ...

... if they want to keep Bush in office. It takes a few months for that crude oil to show up as gas. And expensive crude during August could GUARANTEE high gas prices come November.

[htuttle]

4. They ARE pumping, but it's not working. They are pumping flat out

From the Economics forum, an article from Petroleum Review posted by GoreN4:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x10247
'Global oil production now flat out' - Petroleum Review

By the time this is being read, currently available oil production capacity all around the world will be producing flat out. How sustainable this proves to be remains to be seen.

For many years now non-Opec production has been operated at capacity, leaving Opec to fine tune production in order to achieve its price objectives. In economic terms, because no company or country had the capacity to challenge Opec, they had no choice but to be price takers, maximising earnings by maximising production.

Opec's record production of 31.7mn b/d in 1977 wasn't exceeded until November 2003, since then it has never been under that level. It reached 32.2mn b/d in March, dropped back a little in April and May, and then in June reached 32.65mn b/d.

On p26 Dr Salameh tackles the thorny question of how accurate are Middle East reserve estimates. His conclusion that these may be overstated by up to 300bn barrels, or roughly five North Seas, will certainly give pause for thought. If his assessments are right, the world faces very major challenges in developing and securing the oil supplies it will require.

(more at link)

[lapfog_1]

6. Saudi oil reserves and pumping capacity

consistently overstated. Peak oil (at least peak cheap oil)
is here (or we passed it a short time ago). Oil IS going to
$60 or $70 per barrel, and not in the distant future, but maybe
within 2 years or less. World's consumption increasing as developing
nations with huge populations (India, China) are striving to become
developed nations with affluent (relatively) populations.

This is going to be a very strange time.

The US could end up a third world country, and very soon
(two classes, the wealth class and the struggling poor), we
will be in debt to creditor nations up to our eyeballs, we
simply won't be able to afford a "cold war" spending level
military. Think Russia after the collapse of the Soviet Empire.

The new imperialists (neocons) believe they can forestall this
through military actions overseas (much like Germany made war
and a war economy to get out of the depression). They are wrong.

I hope President Kerry can become another FDR, Bush is clearly
an evil version of Herbert Hoover.

[74dodgedart]

5. But Dubya said he would tell OPEC to "open those spigots"

Gore took a hit on energy policy in 2000, Bush's lack of an energy policy should be an issue.

[ecoalex]

7. Time for a new source

In the West, solar is neglected, as well as more wind, and other alternative sources.In the midwest wind is a second crop for farmers. In the East,hydro, small hydro, and biomass, other sources.We went to the moon , we can solve this problem too, if the stranglehold of big energy, is broken.Community power plans work.

[Massacure]

9. Oil usually doesn't go toward electricity.

Transportation is the biggest use of it. If America would just stop using their damn SUVs.

[ecoalex]

12. Other sources

Hydrogen, ethanol hybrids, extreme efficiency, an Appolo program for ALL energy consumption. Specific fuels for specific applications. Cars on hydrogen. Heavy equipment on bio diesel, super clean diesel. Some fuels would be more available off the beaten track, like etanhol in corn country.Investment in our own country returns the most for dollars spent, as they ripple through out our whole economy. Stop financing wars, keep an adequate defence, and invest the rest in our own energy independence.

[ck4829]

8. The oil prices will lower...

In October, strangely just before the election.

[Massacure]

10. If they lower in October, then Gas won't fall until January.

[wishlist]

11. Thanks, Bush for promoting oil consumption and encouraging SUV's

through your irresponsible tax policies and public statements.
I would like to know the details of which of your oil industry pals are making obscene profits and funneling these profits back into your campaign.

[puerco-bellies]

13. That is the trend but today spike is primarily because

no one wants to be caught "shorting" (speculating that prices will drop) the market going into a weekend where any type of disruption or attacks could occur upon production facility's in any oil producing area of the world.

With production flat out the markets are extremely vulnerable.

On a weekday if an "occurrence" happened during trading hours, or overnight you could react to a single incident and not take to bad of a beating. During a weekend there is time enough for many things to go wrong without any ability to mitigate your short positions. If that occurs you are flat out Cheney'd.

[goforit]

14. Looks like the Bush/Cheney cabal is making billions!!!!!

[Tippy]

15. Something has been bothering me all afternoon

A few days ago I read articles about the Saudi's wanting to go into Iraq...to help...help my foot...They want bush in the WH and if Bush is able to bring some of our troops home...well I hate to even put it in writing...but chances are it will be enough to give him 4 more years in the WH...but what would the Saudi's get in return....They sure don't want Kerry in the WH I am sure we would eventually become much less dependent on their OIL...what better way for bush to pay the Saudi's back...than high oil prices...This is really bugging me...

Am I crazy to think this way?