tony mitra
10-29-2007, 06:16 AM
REUTERS (http://www.reuters.com/article/hotStocksNews/idUSSP21758220071029)
Oil hits record on Mexico outage
Mon Oct 29, 2007 1:01am EDT
By Fayen Wong
SYDNEY (Reuters) - Oil leapt to its third record high in a row on Monday as a brief halt to one-fifth of Mexico's production added fuel to a rally driven by a stand-off between Turkey and Kurdish rebels, a weak dollar and winter supply fears.
U.S. light crude for December delivery jumped as much as 1 percent to touch a record high of $92.79 a barrel, and was trading up 80 cents at $92.66 by 0238 GMT. Oil prices have soared about a third since mid-August, when they stood below $70.
London Brent crude also hit a record high at $89.62, up 93 cents.
Prices rose after Mexico's state-owned oil company Pemex said it was shutting about 600,000 barrels per day (bpd) of oil output due to bad weather in the Gulf of Mexico and high terminal stocks, fanning concerns of a U.S. supply shortfall this winter.
A spokesman said Pemex should be able to resume output "immediately" once the cold weather passed in two days. The country's three main export terminals were shut on Sunday.
The precautionary closure came days after a storm killed at least 21 oil workers, provoking a flurry of criticism against Pemex for its safety standards.
After easing early last week, oil prices resumed their march toward the $100 mark after data showed a sharp drop in U.S. crude stocks, the U.S. dollar plumbed new lows and tension mounted between Turkey and Kurds in northern Iraq.
"There remain concerns that oil market conditions are tightening and geopolitical tensions are also continuing to add a premium to oil prices," said David Moore, a commodities analyst at the Commonwealth Bank of Australia.
The dollar hit yet another record low against a basket of currencies on Monday on expectations that the Federal Reserve will trim interest rates this week and possibly again this year.
Turkey's foreign minister Ali Babacan, speaking on Sunday after talks aimed at averting a Turkish incursion into Iraq, said diplomatic and military operations could both be used in the country's fight against Kurdish guerrillas.
Turkish troops killed 20 Kurdish guerrillas on Sunday in a major operation against separatist rebels in eastern Turkey, army sources said.
The attacks have sparked worries of supply disruptions from northern Iraq and heightened fears of wider regional fallout if Turkey follows through with threats to launch attacks inside northern Iraq if necessary.
The abduction of foreign oil workers in Nigeria on Friday that forced ENI unit Saipem and SBM Offshore to cut production by 50,000 barrels per day (bpd) also reignited fears of tighter winter supplies.
Attacks by militant group Movement for the Emancipation of the Niger Delta (MEND) had already cut Nigerian output by a fifth since early last year and forced thousands of foreigners to flee the vast wetlands region in southern Nigeria.
Despite the surge in oil prices, OPEC has shrugged off calls from importer nations to raise output.
Iran's oil minister said on Saturday that world oil markets were well supplied, with petroleum inventories above average, reiterating suggestions earlier this week that the Organisation of Petroleum Exporting Countries (OPEC) is not likely to hike output to calm markets.
U.S. Vice President Dick Cheney also ruled out tapping the nation's oil reserve to rein in prices.
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Well, this is only a taste of things to come. The world output, irrespective of comments from Iranian oil minister or Dick Cheney, is going more or less flat out, and neither OPEC nor the US strategic reserve is in a position to alter the general trend. The production is so flat out that any little wriggle anywhere is causing the oil price to shoot up. And even if there is absolutely no wriggle anywhere, and everyone continues to produce flat out at 100 percent efficiency, there is this inexorably rising demand from the world, lead first by the US, and then followed by rising giant economies such as China and India.
Cheers and enjoy what is left of the weekend.
:)
Oil hits record on Mexico outage
Mon Oct 29, 2007 1:01am EDT
By Fayen Wong
SYDNEY (Reuters) - Oil leapt to its third record high in a row on Monday as a brief halt to one-fifth of Mexico's production added fuel to a rally driven by a stand-off between Turkey and Kurdish rebels, a weak dollar and winter supply fears.
U.S. light crude for December delivery jumped as much as 1 percent to touch a record high of $92.79 a barrel, and was trading up 80 cents at $92.66 by 0238 GMT. Oil prices have soared about a third since mid-August, when they stood below $70.
London Brent crude also hit a record high at $89.62, up 93 cents.
Prices rose after Mexico's state-owned oil company Pemex said it was shutting about 600,000 barrels per day (bpd) of oil output due to bad weather in the Gulf of Mexico and high terminal stocks, fanning concerns of a U.S. supply shortfall this winter.
A spokesman said Pemex should be able to resume output "immediately" once the cold weather passed in two days. The country's three main export terminals were shut on Sunday.
The precautionary closure came days after a storm killed at least 21 oil workers, provoking a flurry of criticism against Pemex for its safety standards.
After easing early last week, oil prices resumed their march toward the $100 mark after data showed a sharp drop in U.S. crude stocks, the U.S. dollar plumbed new lows and tension mounted between Turkey and Kurds in northern Iraq.
"There remain concerns that oil market conditions are tightening and geopolitical tensions are also continuing to add a premium to oil prices," said David Moore, a commodities analyst at the Commonwealth Bank of Australia.
The dollar hit yet another record low against a basket of currencies on Monday on expectations that the Federal Reserve will trim interest rates this week and possibly again this year.
Turkey's foreign minister Ali Babacan, speaking on Sunday after talks aimed at averting a Turkish incursion into Iraq, said diplomatic and military operations could both be used in the country's fight against Kurdish guerrillas.
Turkish troops killed 20 Kurdish guerrillas on Sunday in a major operation against separatist rebels in eastern Turkey, army sources said.
The attacks have sparked worries of supply disruptions from northern Iraq and heightened fears of wider regional fallout if Turkey follows through with threats to launch attacks inside northern Iraq if necessary.
The abduction of foreign oil workers in Nigeria on Friday that forced ENI unit Saipem and SBM Offshore to cut production by 50,000 barrels per day (bpd) also reignited fears of tighter winter supplies.
Attacks by militant group Movement for the Emancipation of the Niger Delta (MEND) had already cut Nigerian output by a fifth since early last year and forced thousands of foreigners to flee the vast wetlands region in southern Nigeria.
Despite the surge in oil prices, OPEC has shrugged off calls from importer nations to raise output.
Iran's oil minister said on Saturday that world oil markets were well supplied, with petroleum inventories above average, reiterating suggestions earlier this week that the Organisation of Petroleum Exporting Countries (OPEC) is not likely to hike output to calm markets.
U.S. Vice President Dick Cheney also ruled out tapping the nation's oil reserve to rein in prices.
----------------------
Well, this is only a taste of things to come. The world output, irrespective of comments from Iranian oil minister or Dick Cheney, is going more or less flat out, and neither OPEC nor the US strategic reserve is in a position to alter the general trend. The production is so flat out that any little wriggle anywhere is causing the oil price to shoot up. And even if there is absolutely no wriggle anywhere, and everyone continues to produce flat out at 100 percent efficiency, there is this inexorably rising demand from the world, lead first by the US, and then followed by rising giant economies such as China and India.
Cheers and enjoy what is left of the weekend.
:)