Oil Climbs to Record in London on Concern About Iran Conflict

[sabra]

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a8AFA4mnjO8Y&refer=home

Oil Climbs to Record in London on Concern About Iran Conflict

April 10 (Bloomberg) -- Crude oil touched a record in London and a two-month high in New York after reports that the U.S. is planning for military strikes against Iran, the world's fourth- biggest producer.

The U.S. may be using the threat of attacks to put pressure on Iran to comply with United Nations' demands that it end nuclear enrichment, the Washington Post said yesterday. The Strait of Hormuz, which lies between Iran and Oman, is the only waterway in and out of the Persian Gulf, and about a fifth of the world's oil passes through it.

``The geopolitical rally is back in full swing,'' said John Kilduff, vice president of risk management at Fimat USA in New York. ``These headlines have upped the ante,'' he said. ``The Iranians could shut the Strait of Hormuz if attacked and are considerable oil producers.''

Crude oil for May delivery jumped $1.31, or 1.9 percent, to $68.70 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures were just $2.15 shy of the record $70.85 reached on Aug. 30, the day after Hurricane Katrina, which shut most Gulf of Mexico oil production.

[ECH1969]

1. Bullshit

Oil is up because these assholes are jerking us off again.

[sabra]

2. there are many assholes, which ones are you referring to?

[MadHound]

3. No friend, oil is up because we are running out.

Or at least out of the cheap, easy to get to oil. We reached the domestic oil peak thirty odd years ago, and the is one of the major factors the precipitated the oil shocks of the seventies. Now we're staring down the barrel of global Peak Oil, and there is absolutely no plan or program for how we're going to deal with it. We're on our own.

Sure, there's probably some gouging going on. But I think the real culprit is the fact that we're plain and simple running out. There haven't been any significant oil deposits discovered in over forty years. The world's largest oil pool, Ghawar, has peaked and is in decline. The Saudis have to pump twice the volume of seawater into Ghawar than what they get out. Other oil fields are simply drying up all together.

This is why we're in Iraq, for they have a lot of reserves in the ground. They haven't pumped any real quantity for twenty odd years, so they've probably got the largest oil supply left.

Meanwhile, America and the rest of the industrialized world just keep burning the shit like there's no tommorrow, and pretty soon that mentality will take the entire world over the energy cliff. Devestation will be enormous, especially in the US where cheap gas is tied to virtually everything, from plastics to food to suburbia, etc.

So if I were you, I would start preparing now. Start growing a garden, put solar panels on your house, and switch to much more fuel efficient vehicles, or go out and buy a diesel vehicle and make your own biodiesel. But apparently it's all going to be up to the individual, because Bushco and our other oil coated politicians aren't going to do a damn thing except take us all over that energy cliff.

[cliss]

5. That is a

frameable post.

[AndyTiedye]

6. That Isn't Why Oil is Up TODAY

Oil is up TODAY because of all the sabre-rattling in the Middle East.
Oil has about doubled in 6 years because of all the instability
that the WarpedResident** has been causing there.

Some of this is intentional. His friends are robber barons.
They profit enormously when oil prices rise.

[MadHound]

7. What you say is true,

However it is the pre existing condition of ever more scarce oil that magnifies these oil spikes. For instance, if we had plentiful oil coming out of Saudi Arabia, Mexico, etc., no matter what we said, or what went on in the world at large, oil prices would remain stable.

But now we are precariously balanced on the knife edge of Peak Oil, and that magnifies each and every little hiccup. The reason these current surges in prices started was the continued violence and disruption of oil supplies in Nigeria. Nigeria for heaven's sake, a one time bit player in the oil market can now send prices rising with any disruption in supply flow.

And yes, saber rattling in the Middle East also sends those prices climbing. Thirty five years ago we could rattle all the sabers we wanted and the only thing that would rise is everybodys' anxiety over nuke war. Today, we say boo in the ME and prices go up a dime overnight.

And oil companies do make a bundle off of this. Oil future markets are rife with corruption and cronyism, and each rise in a barrel squeeze out that much more profits for the oil barons.

But the scenario of Peak Oil is real, and not to be discounted. It is the underlying reason that oil continues to rise, and if we don't take action soon, it will be the downfall of this country.

[n2doc]

8. However, the stocks of oil here in the US are still high

This has been noted by the financial markets. Each week the inventory of crude goes up, yet the proces don't fall as market theory would predict. IT is the fear of an attack on Iran, together with the civil war going on in Nigeria that is disrupting supply there, that is keeping oil prices up.

See:
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B04DAEDEF%2D97C7%2D42C0%2DAFC9%2D151E2E3D2981%7D&siteid=mktw&dist=&print=true&dist=printTop

FUTURES MOVERS
Oil ends at 10-week high on Iran-attack report
Analysts say $80 to $100 crude is a possibility
By Myra P. Saefong, MarketWatch
Last Update: 3:48 PM ET Apr 10, 2006

SAN FRANCISCO (MarketWatch) -- Crude-oil futures climbed near $69 a barrel Monday to close their highest level in ten weeks, as a report that the U.S. might attack Iran's nuclear-research facilities ignited concern that oil output at the world's fourth-largest producer might be interrupted.
"Nothing like a little psychological warfare to get the blood moving," said Phil Flynn, a senior analyst at Alaron Trading.
If the market loses Iranian oil, crude futures could spike to near $80 to $85 a barrel, said Flynn. Iran produces around 3.8 million barrels of oil per day, according to the Organization of the Petroleum Exporting Countries. It's OPEC's second-largest oil producer.
If the spigots were shut off for an extended period, prices could go even higher, Flynn said, likely spurring a release from the world's strategic petroleum reserves. Meanwhile, Iran is not the only supply threat for the U.S. at present. Venezuelan President Hugo Chavez is threatening to expel the U.S. ambassador to his country in a worsening diplomatic row between the two countries.
"If Chavez decides to shut off the spigot this summer, we could see gasoline spike not to $3.50 , but more like $4.50 and $5.50," said Kerr.


my comment:
To top all of this off, in spite of ample crude supplies gasoline prices continue to go up and there are concerns about shortages due to the changeover to summer formulations. At least that is the reason being given. Stocks of gasoline continue to drop, so one could think of some other reasons for this.... So looking at it all, prepapre to spend a lot on gas this summer, no matter what. Probably $3/gallon will be the average by July.

[Zynx]

9. There is actually a weird circumstance at work there where short term

inventories are being influenced by some odd factors having to do with various refinaries shutting down and the markets are looking at a long term situation in which supplies are becoming scarcer relative to this big rise in demand.

[AndyTiedye]

10. I Am Not Discounting Peak Oil

But we must not mistakenly attribute short-term market fluctuations to peak oil.
If we do, then we are discredited when prices drop again.

That is what happened in the early 80s.
We did a lot of conserving, and prices plunged.

Then everybody assumed that peak oil was a farce, and started consuming more than ever.

To mistakenly attribute price fluctuations such as today's to peak oil
also gives the robber barons a pass.

There is a long-term upward trend in oil prices due to increasing demand that supply cannot keep up with,
and short-term fluctuations due to market manipulation and political instability.

The public must learn to distinguish between them.

[MadHound]

11. I'm not making that mistake friend,

I think that you would see that if you would reread my post. Peak Oil is the backdrop, the factor in the background that is keeping supplies stretched thin. And other fluxuation in supplies, unrest in Nigeria, saber rattling in Iran, etc. and the price is going to soar. Without the background presence of an oil supply at its peak, and these relatively minor events wouldn't even amount to a cent on the gallon of gas.

[StrafingMoose]

4. Too true

That's where you see that geopolitical tensions, wars, conflicts profit so much to the robber barons. They don't even need to get involved in these, they can just use the pretext to squeeze, again, a little more from us.