Oil jumps 2.8 percent as new storm brews

[hadrons]

NEW YORK (Reuters) - Oil prices surged nearly $2 on Tuesday as relief that Hurricane Dennis had passed without major disruption to U.S. offshore oil infrastructure gave way to concern about a new Atlantic storm.

U.S. light sweet crude for August delivery settled up $1.70, or 2.8 percent, to $60.62 a barrel, after coming within a dollar of the record $62.10 posted last Thursday. London Brent crude gained $1.38 to $58.82.

The contracts had fallen on Monday after companies expressed confidence that Gulf of Mexico output would swiftly return to normal, following shut-ins because of the hurricane.

"There was no big damage after Hurricane Dennis but people are looking at the next one," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures. "People are quite nervous and doing some short-covering."

....

They predicted a 1.6 million-barrel build in distillate stocks, the eighth increase in as many weeks, and an 800,000-barrel fall in gasoline stockpiles.

....

http://news.yahoo.com/s/nm/20050712/bs_nm/markets_oil_dc_9

[Domitan]

1. I shit on those craven speculators

Why should we have to pay the extra $$$ because of the nervous nellies in the trading rooms???

[Inland]

2. Because the nervous nellies are correctly assessing risk.

Offshore platforms, middle east production facilities, American refineries....all susceptible to natural and man made disasters.

We are paying a risk premium for oil, thanks in part to the political upheavals brought to you by Bush.

[Boomer]

4. And after Emily....

Dennis, now Emily, and more tropical waves falling into line even now. Chances are very good that there will be a constant barrage of hurricanes and storms through the Gulf for the remainder of the hurricane season.

Eventually, one of those storms is going to turn really nasty and do real damage, and in the meantime repairs will become increasingly difficult to carry out due to constant weather interruptions.

Price of oil will escalate as the already tight pipeline of available oil effectively narrows.

[Domitan]

9. I understand that

however, it just seems that any perceived future risk against one of the oil plants anywhere in the world causes the prices to jack up significantly. Seriously, the oil industry and stocks remind me of a house of cards!!!

[existentialist]

3. Indeed, why should we pay more?

The rational economic, and political, and ecological solution is to buy less gasoline and other oil derived products.

[Dave Reynolds]

5. Did anyone watch "Oil Storm"?

A fictitious documentary that started off with a Gulf hurricane disrupting oil production, and then an accident at a processing facility.

Gas prices went to over $8 a gallon.

Sounds like traders were watching.

[NEOBuckeye]

7. $8.00 per gallon... I wonder how people would react? n/t

[Dave Reynolds]

8. It was interesting,

although not well-depicted. Basically, grocery shelves were going bare due to no trucks running, there was mention of anarchy in big cities, and empty roads.

[merwin]

6. Wasn't it like $50 a barrel like.... 6 months ago?