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Producers say $200 oil is possible as prices hit record three days running
Mark Milner and Larry Elliott, Guardian
The oil price soared to a record for the third day in a row yesterday, reaching $135 a barrel, more than double the price a year ago.
The surging cost of crude is increasing the pressure on petrol and diesel prices and led yesterday to renewed calls for the government to scrap planned rises in fuel duty.
The latest surge came as the CBI, the employers’ body, warned that an increasing number of manufacturers were planning to raise prices despite falling order books, adding to inflationary pressures and making further cuts in interest rates less likely.
The US has repeatedly called for oil-producing countries to raise output to calm the market but producers blame speculators and the weakness of the dollar for high prices, rather than supply constraints.
Abdullah al-Badri, Opec secretary general, said the cartel saw no problems with the fundamentals of oil supply and demand. “Even if we increase output tomorrow, the prices will not come down.”
Libya’s leading oil official, Shokri Ghanem, told Bloomberg TV: “It is out of our hands. $200 a barrel is not logical but even $135 is not logical, so yes oil could reach $200 a barrel. Why not?”
(22 May 2008)
Oil Is Little Changed After Falling on Signs Gains Unjustified
Christian Schmollinger, Bloomberg
Crude oil was little changed after the biggest one-day drop in three weeks on concern that a surge to record prices this month isn’t justified by demand.
Oil reached a record $135.09 a barrel yesterday, an increase of 20 percent since the start of the month, leading traders to sell contracts in order to lock in profits. Prices plunged $4.28 by the close.
(22 May 2008)
Soros, Ghanem, Tanaka, Chalabi’s Own Words on $135 Oil
Bloomberg
Crude oil rose to a record $135.09 a barrel, an increase of 19 percent in the month of May, on supply concerns. This report compiles comments on the outlook for oil prices and factors affecting demand from International Energy Agency head Nobuo Tanaka, Chairman of Libya’s National Oil Corp. Shokri Ghanem, billionaire investor George Soros, Fadhil Chalabi of the Centre for Global Energy Studies in London, Ashley Heppenstall, chief executive officer of Lundin Petroleum AB, Manoj Ladwa, a derivatives broker at TradIndex, Rachel Ziemba, an analyst at RGE Monitor, and Kevin Daly, a portfolio manager at Aberdeen Asset Management.
(22 May 2008)
Bloomberg AV page. Contributor steve writes:
The previous clip had Soros in a very long interview at the London School of Economics. At the end he gives four reasons for the price of oil. One reason, he says, is peak oil which, whichis a misnaming of the simply higher cost of exploration and production of wells. That clip was replaced with the present one.
Skyrocketing Oil Prices Stump Experts
Steven Mufson, Washington Post
Confused about oil prices? So are the experts.
Executives from the giant oil companies say it’s partly the fault of “speculators” or financial players. Key financial players say it’s really a question of limited supply and expanding global demand. Some members of Congress accuse the Organization of the Petroleum Exporting Countries for bottling up some of its production capacity. And OPEC blames speculators, wasteful U.S. consumers and feckless U.S. policy.
Almost everyone points at China’s growing appetite for fuel.
Whatever the causes, one of the most dizzying runs in the history of oil prices picked up pace yesterday — again — as crude oil prices jumped to settle at more than $133 a barrel, up $4.19 in one day, 18 percent so far this month and more than one-third so far this year.
… “The basic story that has brought oil from $20 to $130 dollars is that world demand is growing robustly when world supply is not,” argued Jeffrey Rubin, chief economist of CIBC World Markets. “As a result, we need ever-higher world oil prices to kill demand in the [industrialized countries], which is exactly what’s happening.”
(22 May 2008)
Oil coverage by the Washington Post and New York Times continues to lag behind business publications like the Wall Street Journal and Financial Times. This article does not even mention “peak oil” and ignores the recent IEA pessimism. -BA
Another Day, Another Record: Oil Tops $135 a Barrel
Voice of America
The price of crude oil hit another record high Thursday of more than $135 a barrel, fueled by worries about supplies and growing demand.
This is the second day in a row crude oil prices soared to new highs in trading in New York.
The price of crude oil came close to $134 (133.82) on Wednesday.
Oil prices have been buoyed by fears about production shortages around the world. And there are indications those shortages could becomes more severe.
A U.S. newspaper, The Wall Street Journal, reports the Paris-based International Energy Agency will predict oil companies may struggle to produce 100 million barrels a day by 2030. The agency had previously predicted oil production would reach 116 million barrels by that time.
The high fuel prices are prompting protests in nations as diverse as France and Indonesia. French fishermen clashed with police and blockaded ports, while Indonesians staged marches.
(22 May 2008)
Experts Say High Prices of Oil Are Here to Stay
Greg Flakus, Voice of America
The continuing rise of oil prices on the world market is affecting everything from transportation to agriculture and manufacturing. In the United States, some politicians are blaming big oil companies for the problem, but, as VOA’s Greg Flakus reports from Houston, energy experts say national leaders need to confront the realities of growing demand and limited supply.
… a study released this week by Rice University’s Baker Institute for Public Policy in Houston shows that demand is also increasing in the United States, which already accounts for a third of the transportation fuel used worldwide and imports more than half of the petroleum it consumes.
One of the authors of the study, Kenneth Medlock, speaking to VOA, says talk of US energy independence is unrealistic, given the current level of demand.
“We have to rely on imports because the oil that is available at lower cost is not domestic. Trying to move to a world in which we import absolutely no oil in a very short amount of time is going to cause the price of fuel to rise dramatically and that is certainly not the outcome that people want,” he said.
The study on US Energy Policy and Transportation co-authored by Medlock and his colleague Amy Myers Jaffe calls for efforts to curb demand as well as increases in energy production, not just from oil, but from other sources, including wind, solar and biofuels. Medlock disputes the idea that the world is running out of oil, but he says the increasing cost of producing oil will make alternative energy more attractive in the years to come.
(22 May 2008)
