OPEC output rise would have lowered oil price-IEA

Posted by Skycypher on Wednesday, March 5th 2008

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5
Mar

By Muriel Boselli

PARIS (Reuters) - The International Energy Agency (IEA), which advises industrialized countries on energy policy, said on Wednesday record crude oil prices would have eased had OPEC decided to raise production at its meeting.

OPEC ministers agreed earlier at a meeting in Vienna to hold output steady and said oil prices, which hit all-time highs on Wednesday, were being driven by factors beyond their control.

“I think it’s basic economics, if you increase the amount of supply that is available, prices fall … It would have had an impact, ” said Lawrence Eagles, head of the IEA’s Oil Industry and Markets division.

“We are seeing the market signaling a desire for more flexibility,” he added.

U.S crude futures struck an all-time high of $104.56 earlier on Wednesday.

OPEC ministers argued the oil market was pushed higher by a weak dollar, speculation and political strife, and not by a lack of crude.But Eagles warned that a tight crude market could lead to possible market distortion.

“If people are not confident they will have oil supplies when they are needed, then they’ll have a tendency to hoard, so regardless of your stock level, those stocks might not be available to the market,” he said.

“A few weeks ago people were talking about a need for an output cut so from that perspective a rollover is a much better option and we are encouraged by the fact that they said they would closely watch the market in the coming months,” he said.

(Reporting by Muriel Boselli; editing by James Jukwey)

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6 Comments Already

Skycypher Said,

March 5th, 2008 @8:44 pm

Bush urges OPEC to weigh pain of high oil prices
Tue Mar 4, 2008

http://tinyurl.com/ysdwdw

Even with Bush pretending to be concerned about energy costs OPEC continues to do the bidding of the oil cartels by keeping the prices soaring with no glass ceiling in sight!

Skycypher Said,

March 6th, 2008 @8:53 pm

03/06/08

LONDON (Thomson Financial) - Oil hit a record 105.10 usd per barrel quickly after an explosion was reported at a military recruiting station in Times Square, New York, before retreating.

Skycypher Said,

March 9th, 2008 @6:27 pm

Cost of gas rises to record, and could go higher

$3.20 a gallon on average; analyst sees jump of 20 to 30 cents next month

Reuters
updated 7:36 p.m. CT, Sun., March. 9, 2008

NEW YORK - U.S. average retail gasoline prices have reached a new high of almost $3.20 per gallon and will likely jump another 20 to 30 cents in the next month, worsening the pain of consumers struggling to make ends meet in an economic downturn.

Gasoline prices are rising sharply as refiners, who have kept prices down in order to compete for sales, become more willing to pass on their higher costs of crude oil, according to an industry analyst on Sunday.

The national average for self-serve regular unleaded gas was nearly $3.20 a gallon on March 7, up about 9.44 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of about 7,000 gas stations. The price has risen 64 cents per gallon in the past 12 months.

“The price increase was entirely due to the higher costs of crude oil,” said survey editor Trilby Lundberg.

Although the latest price represents a nominal all-time high, when adjusted for inflation it is a smidgen below the record of $3.18 per gallon reached on May 18, 2007, Lundberg said.

Lundberg said things will likely get worse, with prices at the pump rising 20 to 30 cents per gallon in the next month as refiners begin passing on to customers more of their higher costs for crude oil.

“Should prices indeed rise 20 to 30 cents, they would vastly exceed previous prices on an inflation-adjusted basis,” Lundberg said.

Refiners since last spring have deliberately refrained from passing on their higher costs for crude oil, in order to compete for sales, she said.

“But refiner profit margins have become so slim that they will now raise prices to recover their lost margins,” said Lundberg. Likewise, she said retailers will also be less willing to hold back from passing on their higher costs to drivers.

Moreover, prices will also rise because of the return to daylight savings time and the approach of warmer weather, Lundberg said.

“Spring demand growth will soak up the current surplus of U.S. gasoline and put more pressure on prices,” Lundberg said.

At $3.58 a gallon, the San Francisco Bay Area had the highest latest average price for self-serve regular unleaded gas on March 7, while the lowest price was $2.95 in Cheyenne, Wyoming.

The average U.S. diesel price was $3.80 a gallon in the latest survey, up 22 cents a gallon from two weeks ago, and $1.02 higher than this time last year.

URL: http://www.msnbc.msn.com/id/23550921/

Skycypher Said,

March 12th, 2008 @5:50 pm

Oil rallies to record $110 as dollar plumbs new low
http://www.guardian.co.uk/feedarticle?id=7379309

Reuters
Wednesday March 12 2008

By Matthew Robinson

NEW YORK, March 12 (Reuters) - Oil pierced $110 a barrel on Wednesday, marking the sixth straight day of record highs, as the dollar sank to new lows and outweighed large increases in U.S. crude inventories.

Investors have raced into commodities over the past month to hedge against inflation and the slumping dollar, sending oil to fresh peaks despite concerns about the economic health of top oil consumer the United States and rising fuel stocks.

U.S. crude traded up $1.25 to $110.00 a barrel at 2:37 p.m. EDT (1837 GMT) after racing to a record $110.20 earlier. London Brent gained $1.05 to $106.30 a barrel, down from an all-time high of $106.40.

“There has been a huge detachment between price and fundamentals in the energy markets,” said Rob Kurzatkowski, futures analyst at optionsXpress. “It has been more of a dollar play of late.”

Oil fell earlier on Wednesday after U.S. government inventory data showed a sharp 6.2 million build in crude stocks last week and another gain in gasoline levels, now at 15 year highs.

Analysts said crude’s rise despite swelling inventories highlights the disconnect between supply and demand fundamentals and the current, speculator-driven price.

“It is a ridiculously bearish report,” said Stephen Schork, editor of The Schork Report.
“We have major concerns regarding the economy in the United States, rising supply, falling demand. Why is crude oil trading at over $100 per barrel? It makes no fundamental sense.”

U.S. consumers already face record gasoline prices at the pump due to soaring crude costs for refiners, prompting forecasts for gasoline over $4 a gallon in some regions as the summer driving season approaches.

The dollar tumbled to a record low against the euro as doubts grew about the long-term impact of recent Federal Reserve efforts to pump money into credit markets.

A day earlier, the greenback rallied after the Fed said it would lend primary dealers $200 billion in Treasury securities and accept a wider array of mortgage debt as collateral to ease tight credit conditions. (Reporting by Matthew Robinson in New York; Alex Lawler in London; Chua Baizhen in Singapore; Editing by Marguerita Choy)

Skycypher Said,

March 13th, 2008 @5:06 pm

Economy

Weak Dollar Helps Push Gold, Oil Prices Higher
by Melissa Block and Adam Davidson
http://www.npr.org/templates/story/story.php?storyId=18942303

All Things Considered, March 13, 2008 · The U.S. dollar plunged against other major currencies Thursday, dipping below 100 yen for the first time in 12 years. The weakness of the dollar is helping to push gold and oil prices higher.

Skycypher Said,

March 20th, 2008 @6:06 pm

WHEN PEAK OIL MEETS GODZILLA

By William Thomas http://www.willthomasonline.net/willthomasonline/When_Peak_Oil_Meets_Godzilla.html

What do you suppose will happen when faltering oil supplies and skyrocketing demand run head-on into the roaring Godzilla of Climate Change?

If you answered, “Bad juju,” go to the head of the class.

If you shouted, “I’m not listening to any more hysterical green commie pinko doom drivel!”, better make sure there’s still water coming out of your kitchen taps before checking the fuel gauge of your own personal carbon burner. That’s right, Bubba. There’s a tiger in all our tanks. And he’s ravenous enough to devour every life we’ve known.