Oil Prices Ease After Hitting $100 The Economists Say Edwards, Why Would Anyone Else Think Otherwise

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Oil Prices Ease After Hitting $100 Can You Really Trust Anyone Other Than John Edwards On ANY Issue, especially the Economy? I cannot! How High Do GAs Prices Have to Go Before Americans WAKE UP! Think and Vote John Edwards Iowans! :think:


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GILLIAN WONG | January 2, 2008 11:02 PM EST | AP
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SINGAPORE — Oil prices eased Thursday after soaring briefly to a record $100 a barrel overnight on escalating violence in Africa's leading oil producer, a weaker U.S. dollar and a view that global demand for oil will outstrip supplies.

Traders were awaiting the release of a weekly U.S. petroleum supply snapshot later Thursday, and some expected crude futures to breach the $100 a barrel level if the government reported crude inventories fell by more than expected, analysts said.

"We're so close to $100 right now," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

"If the U.S. inventory report indeed shows stockdraws, and particularly bigger than expected draws, plus a heightening of geopolitical risks and a falling U.S. dollar, all these factors could push pricing beyond $100."

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Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil producing nations like Nigeria and Iran have increasingly made investors nervous and invited speculators to drive prices even higher.

Violence in Nigeria helped give crude the final push to $100. Bands of armed men invaded Port Harcourt, the center of Nigeria's oil industry Tuesday, attacking two police stations and raiding the lobby of a major hotel.

Light, sweet crude for February delivery fell 38 cents to $99.24 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore.

The contract rose $4.02 to $100 a barrel Wednesday before slipping back to settle at a record close of $99.62, up $3.64.

The Organization of Petroleum Exporting Countries saying its member nations may not be able to meet demand as early as 2024, though the cartel also said that deadline could slide for decades if members increase production more quickly. Word that several Mexican oil export ports were closed due to rough weather also added to the gains.

Oil prices are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

The United States on Wednesday said it would not release oil from the nation's strategic reserves to drive prices lower.

"This president would not use the (Strategic Petroleum Reserve) to manipulate (prices) unless there was a true emergency," said White House press secretary Dana Perino.

Crude prices, which have flirted with $100 for months, have risen in recent days on supply concerns exacerbated by Turkish attacks on Kurdish rebels in northern Iraq and falling domestic inventories. However, post-holiday trading volumes were about 50 percent of normal Wednesday, meaning the price move was likely exaggerated by speculative buying.

Just one trade was recorded at $100 a barrel, and it was a relatively small one _ for one contract, or 1,000 barrels _ on the Nymex floor, where traders shout buy and sell orders, Dow Jones Newswires reported.

"There's been quite a bit of volatility, the amount of trading (on Wednesday) was thin and so you could have one or two trades that skew the market," Shum said.

"My view is that the market will breach $100 a barrel. But later on in the first quarter, pricing is bound to ease back below $100 because closer to spring, demand for oil in the world typically cools down," he said.

Investors are anticipating that U.S. crude inventories fell by 1.7 million barrels last week, which would be the seventh straight weekly drop.

The U.S. Energy Information Administration's inventory report, delayed until Thursday this week due to the New Year's holiday, is also expected to show gains in gasoline supplies and refinery activity, and a decline in supplies of distillates, which include heating oil and diesel.

In London, Brent crude futures lost 64 cents to $97.20 a barrel on the ICE Futures exchange.

In other Nymex trading, heating oil futures dropped 0.49 cent to $2.7355 a gallon while gasoline prices fell 0.39 cent to $2.565 a gallon. Natural gas futures added 3.4 cents to $7.884 per 1,000 cubic feet.