Oil jumps above $100 on refinery outage

[HungLikeJesus]

This AP article is a little contradictory, but it says that oil prices have closed above $100 per barrel for the first time.

Increasing gas prices haven't had much apparent effect on driving habits in the US. Or maybe I'm just not seeing it. Have you made any changes to your lifestyle due to higher energy costs?

I think we might see gas at $4/gallon this year.

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NEW YORK (AP) - Oil futures shot higher Tuesday, closing above $100 for the first time as investors bet that crude prices will keep climbing despite evidence of plentiful supplies and falling demand. At the pump, gas prices rose further above $3 a gallon.

There was no single driver behind oil's sharp price jump; investors seized on an explosion at a 67,000 barrel per day refinery in Texas, the falling dollar, the possibility that OPEC may cut production next month, the threat of new violence in Nigeria and continuing tensions between the U.S. and Venezuela.

The fact that there was no overriding reason for such a price spike could be a bad omen for consumers already bearing the burdens of high heating costs and falling real estate values. Many recent forecasts have said oil demand growth this year will be less than initially expected, yet prices continue to rise. That suggests they may continue rising as the weakening dollar attracts new investors to the futures market.

Rising oil prices mean higher gas prices.

"As the economy weakens, it's going to be met with $3.50 and $3.60 gasoline," said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm. "And that really spells trouble for the consumer."

Light, sweet crude for March delivery rose $4.51 to settle at a record $100.01 a barrel on the New York Mercantile Exchange after earlier rising to $100.10, a new trading record. It was the first time since Jan. 3 that oil had been above $100.

Oil prices are still within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

"I really think ... crude oil's going to soar through $100," Cordier said.

At the pump, meanwhile, gas prices jumped 1.8 cents to a national average price of $3.032 a gallon Tuesday, according to AAA and the Oil Price Information Service. Retail prices, which typically lag the futures market, are following oil prices higher. The Energy Department and many analysts expect gas prices to peak this spring well above last May's record of $3.227 a gallon.

Gasoline and heating oil prices appeared to lead Tuesday's wide advance in energy prices due to the explosion Monday at Alon USA's Big Spring, Texas, refinery, which could be shuttered for two months.

"The refinery fire in Texas is making people a little concerned," said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Amherst, Mass.

March gasoline jumped 10.93 cents to settle at a record $2.6031 a gallon, and March heating oil rose 11.45 cents to settle at $2.7614 a gallon, also a record.

A threat by a rebel group in Nigeria to escalate attacks on the nation's crude oil infrastructure helped boost oil prices. The rebels were acting in response to rumors that the government had killed a captured leader, whom authorities later said was safe and well. Militant attacks have cut about 20 percent of Nigeria's crude output in recent years.

For the moment, investors appear to have put aside concerns about the economy that have sent oil prices down into the mid-$80 range twice in the last month. Traders are instead focused on the Organization of Petroleum Exporting Countries, which will meet early next month to map out production plans, and Venezuela, where President Hugo Chavez made conflicting statements this weekend about the country's legal dispute with Exxon Mobil Corp.

OPEC could move to cut production in the second quarter, typically a period of low demand, though many analysts feel that's unlikely. In Venezuela, Chavez said he was not serious about an earlier threat to cut oil sales to the U.S., but also threatened to sue Exxon Mobil. The world's largest oil company is fighting Venezuela's nationalization of an oil project, and recently convinced several courts to freeze $12 billion in Venezuelan oil assets.

Other energy futures also rose Tuesday. March natural gas jumped 31.7 cents to settle at $8.977 per 1,000 cubic feet. Analysts said prices were supported by forecasts for cooler weather, but that futures were also following oil prices higher.

In London, Brent crude for April delivery rose $3.65 to settle at $98.56 a barrel on the ICE Futures exchange.


(Copyright The Associated Press. All rights reserved.)

[smoothmoniker]

I love my diesel jetta. It's gonna save me a billion dollars if gas keeps going up.

[Aliantha]

you know, if you pay $4/gallon, you're still paying less than we do in Australia. Consider yourselves lucky.

[HungLikeJesus]

smoothmoniker, what's your fuel mileage on the Jetta?

[smoothmoniker]

I've gotten as high as 45mpg on a tank, usually closer to 40. My old truck was getting 20.

I'll let you know more precisely in a few months, since I've started using this:

www.mymilemarker.com

[TheMercenary]

It is probably time for some higher gas prices, it will go well with the coming inflation, recession, and foreclosure crisis. It may give those idiots in Congress the stimulus to go after the issues and get something done.

[elSicomoro]

Gas went up this afternoon from $2.799 to $2.989. If it stays up, I'll go through my gas budget before the end of next week.

The Aveo is still calling me...but I'll only take a yellow one.

I heard a story yesterday about why diesel fuel is so expensive and how it will not go down any time soon. But apparently, the US is starting to warm up to it and it will become more popular by the end of the decade.

[TheMercenary]

Yea, I hear they are going to put the Land Rover diesel in the F-150 in 09. It is going to raise the cost by about 8 or 10 grand but the gas mileage is expected to go to the 30's. That would be a good start. Things are going to get much more painful for the next few years.

[tw]

Originally Posted by TheMercenary

It may give those idiots in Congress the stimulus to go after the issues and get something done.

Solution does not resided in Congress. Problems such as corporate welfare have only made the problem worse. Technology developed in GM in the 1970s, found standard in foreign models in the 1990s; and GM still could not install it in the 2000s? Engines in SUVs using 1960 technology.

Solutions are found only in one fundamental principle - do more work with less energy. Nothing in Congress can fix the problem. Although some Federal regulations did liberate car guys, how many more innovations must be stifled for 10 and 20 years by bean counters? Those are lessons from history.

Those who learn from history would than complain about ethanol - corporate welfare that solves nothing.

Let's see. The US government gave these automakers $100million to develop a hybrid. 12 years later - still no hybrid? Patriotic Americans (with Japanese citizenship) had to do it? I don't see the problem identified and blamed.

An F-150 pickup that could weight less than a Camry has lower gas mileage? Yes. They are not selling to people who meet the definition of patriotic Americans. American patriot wants, works for, and contributes to innovation. We need more work from less energy. We don't need cars that burn 10 gallons of gas while using less than 2 gallons in productive work. Vehicles are that inefficient. What will Congressman do? Pass more laws to protect GM - an anti-American auto company?

From history, gasoline had to rise to $5 per gallon before automakers conceded - started using pre-WWII technologies such as fuel injection - in cars. Costs had to increases that high before bean counters would finally concede that a decades obsolete technology - a carburetor - could finally be replaced.

[TheMercenary]

Originally Posted by tw

GM - an anti-American auto company

Now that right there is some funny shit.

[smoothmoniker]

This will be the year of the consumer diesel cars.

[TheMercenary]

I would love to see gas got to $4 a gallon overnight and my truck gets 16 mpg.

[tw]

Originally Posted by TheMercenary

Now that right there is some funny shit.

One who may be so anti-American and so anti-free market as to promote "Buy American"? GM cars were so pathetic as to cost more to build than Mercedes. Required more labor. Required two extra pistons and all those other expensive parts to do same as good American cars (ie Toyota). Those are facts with numbers. TheMercenary's proof - an intelligent response? Nothing. He uses mockery to prove his point. Clearly he is not an immigrant.

[TheMercenary]

Originally Posted by tw

One who may be so anti-American and so anti-free market as to promote "Buy American"? GM cars were so pathetic as to cost more to build than Mercedes. Required more labor. Required two extra pistons and all those other expensive parts to do same as good American cars (ie Toyota). Those are facts with numbers.

And why is that Idiot? because the US workers unions made it so. The industry was fucked by the unions, hence they outsourced. Pensions, insurance, required union work conditions have all contributed.

[tw]

Originally Posted by smoothmoniker

This will be the year of the consumer diesel cars.

Mercedes did substantial research in the 1990s onwards to refine a superior diesel. Other manufacturers were pioneering other technologies. In every case, it was about doing more work with less energy. Adapting better to changing loads. A 1960 technology V-8 so common in low performance American products should have and could have been cremated decades ago. That V-8 gasoline engine is a tribute to bean counters doing cost controls. Why do so many pickups and SUVs have these crappy technologies?

Mid 1970 America V-8 engines did maybe 170 Hp. That is what four cylinder engines and smallest V-6s do today where innovation existed. Why does anyone need 200 or 300 Hp engines? Ego? Confidence? Self-esteem? Who are these people? A problem.