Oil went to a record high today. Expect gas stations to respond as quick as they can.
Oil went to a record high today. Expect gas stations to respond as quick as they can.
I bought it on Saturday for $1.99.
NEW YORK — Crude oil prices marched to new heights of close to $60 a barrel Monday as worries about a possible winter fuel crunch stoked buying and forced OPEC to consider releasing extra crude.
Light sweet crude (search) for July delivery hit a record $59.23 per barrel on the New York Mercantile Exchange (search), before paring gains to stand up 33 cents at $58.80 in midday trading. Brent futures for August traded in London climbed 24 cents to $58 a barrel, having hit a fresh peak of $58.58..
NYMEX contracts for delivery in the last four months of the year, when oil demand seasonally picks up in the northern hemisphere, all traded above $60.
"The main reasons for the continued momentum remain the same as they have been throughout the strong push up over the past month --- the perception of a tight balance for the back end of this year in a market with limited slack," said Kevin Norrish of Barclays Capital.
OPEC (search) President Sheik Ahmed Fahd Al Ahmed Al Sabah said Monday that "if the prices continue to the end of this week at the same level, I will start consulting my colleagues to release the 500,000." Asked by reporters in Kuwait what he meant by the end of this week, the minister said Friday.
Last week the oil cartel agreed to raise its official production ceiling to 28 million barrels, but that failed to soothe traders because OPEC's output had already exceeded that level as producers seek to cash in on high prices. Including Iraq, which is not bound by the quota system, OPEC is pumping close to 30 million barrels a day, or about 35 percent of global demand.
"We have been expecting prices to come down for a while but this is clearly not the case. The rally is definitely sustained by gasoline demand in the United States, posting a 3 percent yearly growth, which is seen as extremely strong," said Deborah White, energy analyst with SG Securities in Paris.
"People are trying to push prices through $60," she added.
While Nymex oil futures are more than 50 percent higher than a year ago, they are still below the inflation-adjusted high above $90 a barrel set in 1980.
Analysts said unlike the record prices last year, which were driven largely by concern over geopolitical events in oil-producing countries such as Nigeria, Saudi Arabia, Iraq and Venezuela, this year's trend has more to do with speculative buying, continued supply fears and limited excess production capacity.
ANZ Bank energy analyst Daniel Hynes said the rise in oil prices last week was partly a reaction to the kidnapping of two German and four Nigerian Shell subcontractors who had been seized by gunmen on Wednesday. They were released Saturday. Nigeria exports some 2.5 million barrels of oil daily, making it the world's seventh-leading exporter and the fifth-biggest source of U.S. oil imports.
High Oil Prices Causing No Panic -- Yet
Monday, June 20, 2005
NEW YORK — U.S. consumers and corporations can cope with higher oil prices as long as crude prices stay clear of volatility, market strategists say.
In inflation-adjusted terms, oil prices remain well-below the roughly $90-a-barrel peak hit in the 1980s, according to calculations by the International Energy Agency (search).
"Oil prices on a real basis are not as expensive. The economy is more energy efficient. Volatile is more problematic than just high oil prices," said Chip Dickson, chief U.S. strategist at Lehman Brothers (LEH), speaking at the Reuters Investment Outlook Summit.
Oil prices have risen more than 27 percent this year, hitting a record high of $58.28 a barrel on April 4. U.S. crude futures on the New York Mercantile Exchange (search) on Friday hit a new record of $58.60 per barrel -- over the former record of $58.28 set on April.
"When energy prices rise, it is during that period (of rise) that we see a slowdown," said Abby Joseph Cohen, chief U.S. portfolio strategist at Goldman Sachs and Co (GS). "If energy prices stabilize at a certain level, the impact seems to abate a little bit as households and others adjust to that new level."
But Cohen said if prices jump dramatically above Goldman's near-term target range of $45 to $50, it could hurt consumers, particularly lower-income households, and that could hit the margins of discount retailers.
In March, Goldman Sachs said in a research report that oil markets have entered a "super-spike" period that could see 1970s-style price surges as high as $105 a barrel. Cohen said that is the level at which Goldman's analysts expect oil to be "totally disruptive."
Investors worry about the negative impact of oil prices on stocks but at least one market strategist said there's reason to relax.
"I don't think I would draw any kind of connection between equities in general and the oil market," said Rick Bensignor, executive director and chief technical strategist at Morgan Stanley.
While oil prices have risen about 70 percent over in the last year and a half, the S&P 500 index has also risen, although by a far lower 8.6 percent.
"Now you are talking longer term and clearly there is no correlation there. Crude, if anything, is stopping the stock market from being much higher," Bensignor said.
One of the main reasons high oil prices don't seem to send shockwaves through the U.S. stocks markets in recent years is the high services component in the U.S. economy and relatively efficient manufacturing processes, the strategists said. The services sector comprises about 80 percent of the U.S. economy.
"From a global standpoint we know that there are other countries more afflicted by higher energy prices than we are," Cohen of Goldman Sachs added. "I'd like to say that this is because the growth in our economy has come not from heavy duty, metal-bending manufacturing but from more sophisticated manufacturing that is not as energy intensive and also because a good deal of our growth has come from services."
Greenspan: Economy Will Weather Oil Prices
Friday, May 20, 2005
WASHINGTON — The economy, which had hit a temporary soft patch from surging energy prices, probably will weather the situation well, Federal Reserve (search) Chairman Alan Greenspan (search) suggested Friday.
"The effect of the current surge in oil prices, though noticeable, is likely to prove less consequential to economic growth and inflation than in the 1970s," the Fed chief said in a speech to the Economic Club of New York (search).
A copy of his speech was distributed in Washington.
Greenspan, in a largely upbeat assessment, noted that oil and gas prices have calmed down a bit recently.
As he did in April, the Fed chief expressed hope that high energy prices would spur conservation by businesses and consumers and greater energy exploration by energy companies. That should also help moderate prices.
Oil prices skyrocketed into record territory in March and closed at a new peak of $57.27 a barrel at the beginning of April. Prices have since retreated and now are above $47 a barrel.
President Bush has called on Congress to produce a comprehensive energy bill by August. The House passed a bill last month, but its prospects in the Senate — where energy legislation died two years ago — remain uncertain.
Greenspan also repeated his interest in letting market forces help to stabilize prices. He said any response by policy-makers should not "distort or stifle the meaningful functioning of our markets," he said.
$2.31 on Saturday (93 octane)
Buy gas? theres plenty of cars on my street with gas in them.
They already raised it here, up to $2.25/gallon for regular, up from $1.99 yesterday.
Filled up when it was 2.04. Drove by 'bout an hour later, 2.25. Score.
Only problem is you have to fill up at 3am ;)Quote:
Originally Posted by CTA513
Just don't try to use an electric vacuum while the car is running to get to it.Quote:
Originally Posted by KronoRed
Driving down the AA thru Wilder, it's 2.05 at Ameristop and up to 2.25 at the UDF. Guess which place had a line?
Isn't it amazing when we are actually happy that we got gas for $1.99 or $2.04?Quote:
Originally Posted by TC81190
Saw gas for $2.01 across from Tri-County Mall today (Kemper and 747). Anyone from Cincinnati that finds cheap gas sites should post the locations on here :thumbup:
As I was lamenting the fact that it took $26 to fill up my Civic this afternoon, the manager of a local UDF said he has been instructed to raise the price to $2.60 on Tuesday.