Oil hits new record $68

[Bluebear]

SINGAPORE (Reuters) - Oil surged to a record $68 a barrel on Thursday, hounded by supply concerns due to a growing threat to oil facilities from an Atlantic storm and a large fall in U.S. gasoline stocks.

U.S. light crude was up 18 cents at $67.50 a barrel by 0747 GMT, pausing after hitting $68 in early trade, the highest since U.S. crude futures started trade in 1983. London Brent crude was up 34 cents to $66.35.

Dealers are concerned about a thin stock cushion after a rash of disruptions and tensions in oil-producing countries cut crude output and propelled prices to a series of record peaks.

http://today.reuters.com/news/newsArticle.aspx?type=topNews&storyID=2005-08-25T081525Z_01_DIT521129_RTRIDST_0_NEWS-MARKETS-OIL-DC.XML

[Oerdin]

1. Old news.

Over the next decade the projected long term price of oil is supposed to slowly but continously creep higher but much of our recent run up has been the work of market speculators. I sometimes wish the speculators would lose their shirts so they'd stop making things so volital though in the long run it may be better for energy prices to rise thus forcing us to finally start conserving and developing alternative power infastructure like nuclear power.

[rman]

4. "slowly creep higher" - at $20/year so far,

and "the work market speculators" is inspired by impending peak oil.

[smoogatz]

6. Market speculators?

It's simple supply and demand. Production in existing fields is near peak levels; the new pumping technologies we've all been hearing about for the past five years have not materialized; few new major fields are coming on line, despite intensive global exploration; global demand has increased rapidly in the past decade or so. There's an excellent piece on this subject in the most recent Sunday Times Magazine--you should read it. And how does nuclear power solve our oil dependency problem? Just curious.

[Shipwack]

2. Blame Clinton...

If he hadn't let it get above $45 a barrel, it wouldn't be above $67 now.
:sarcasm:

[Trillo]

3. hmm. housing rental prices increasing.

oil increasing.

Hyperinflation, anyone?

Oh, but in Bush world, the economy's doing "great". :sarcasm:

[whistle]

5. Isn't crude oil pumped from around most of the world, so.....

...what is the range of oil prices from the different sources? Why is anyone paying the highest level? Just curious.

[TX-RAT]

8. On a global market it goes to the highest bidder.

He who offers the most, gets the most.

another question.

Why is there a range of prices from the different sources?

[smoogatz]

9. Because oil from different sources is--different.

Oil is priced according to grade. The "lighter" and "sweeter" it is (lighter and sweeter in what way, I don't know), the less it costs to refine. Saudi oil is mostly "light sweet" crude; North Sea oil is "brent" crude; and so on. High grade oil costs more per barrel, but is less expensive to refine.

[TX-RAT]

10. Add lifting costs, and transportation costs to that , Good answer

(lighter and sweeter in what way, I don't know)

Low sulfur content
No H2s (Hydrogen Sulfide)

[Strelnikov_]

11. "Differences across grades of crude oil"

http://www.econbrowser.com/archives/2005/08/sweet_and_sour.html

The graph at the right shows the price differential (in dollars per barrel) for European Brent (a relatively light, sweet crude) over Mexican Maya (a heavier sour). The price premium for light sweets had typically been about $5 a barrel up until last summer, when it began rising quickly, now standing at triple its earlier value. To put the size of the current price spread in perspective, if the price of light, sweet crude had only risen as much (in dollars per barrel) as the heavy sour, the increase in the price of light, sweet crude during the last year would have been a third smaller than what we actually observed.

One factor contributing to the dramatic increase in the price spread is a decrease in the supply of light, sweet crude. The higher quality crude supplies of course get used up first, so the world is now increasingly reliant on a lower quality product. The graph at the left reveals that every year over the last five years, the average API gravity of non-OPEC oil production has decreased (produced crude is increasingly "heavy") and the sulfur content has increased (crude is increasingly "sour").Vital Trivia used data from OPEC's August Oil Market Report to calculate that global production of light, sweet crude actually declined between 2000 and 2004-- peak oil has already passed, at least as far as light, sweet crude is concerned.

[LostinVA]

7. Thank Goddess for my VW Golf TDI

It still hurts at the pump, but it helps knowing the tank refills are few and far between...

[lonestarnot]

12. $120 year's end.. those son-of-a-bitches have to rake it in why the rake'n

is good.

[Javaman]

13. As the heat slowly goes up, the US drivers put on their blinders...

The old frog in the pot story. Throw him in hot water, he jumps out, aka 1970's oil embargo. Consumption dropped 10 percent

Throw the frog in cool water and slowly turn up the heat, he boils to death. 2005. Consumption has either stayed the same or increased.

We humans, are a stupid race.

colossal failure*.