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Here we go again....


Oil Futures Rise to $100 a Barrel
Wednesday January 2, 1:02 pm ET
Crude Futures Hit Record $100 a Barrel for 1st Time on Supply Concerns


NEW YORK (AP) -- Oil prices soared to $100 a barrel Wednesday for the first time ever, reaching that milestone amid an unshakeable view that global demand for oil and petroleum products will continue to outstrip supplies.
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Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil producing nations like Nigeria and Iran have increasingly made investors nervous and invited speculators to drive prices even higher.

Violence in Nigeria helped give crude the final push over $100. Bands of armed men invaded Port Harcourt, the center of Nigeria's oil industry Tuesday, attacking two police stations and raiding the lobby of a major hotel. Word that several Mexican oil export ports were closed due to rough weather added to the gains, as did a report that OPEC may not be able to meet its share of global oil demand by 2024.

Light, sweet crude for January delivery rose $4.02 to $100 a barrel on the New York Mercantile Exchange, according to Brenda Guzman, a Nymex spokeswoman, before slipping back to $99.48.

Crude prices, which have flirted with $100 for months, have risen in recent days on supply concerns exacerbated by Turkish attacks on Kurdish rebels in northern Iraq and falling domestic inventories. However, post-holiday trading volumes were about 50 percent of normal Wednesday, meaning the price move was likely exaggerated by speculative buying.

"I would imagine the speculators are the biggest drivers today," said Phil Flynn, an analyst at Alaron Trading Corp., in Chicago.

It's hard to say whether prices would have risen as quickly on a normal trading day, Flynn said. While crude prices have soared on mounting supply concerns in recent months, speculators have often been cited as a reason for the swiftness of oil's climb.

Moreover, many of the concerns about supply disruptions have yet to materialize, but that hasn't stopped buyers from driving prices higher.

"Although the (Nigerian) violence has not impacted oil flow out of the country, it has reignited supply concerns as militant attacks have reduced Nigeria's crude output by roughly 20 percent since 2006," said John Gerdes, an analyst at SunTrust Robinson Humphrey in a research note. Nigeria is Africa's largest oil producer.

Separately, the Organization of Petroleum Exporting Countries said its member nations may not be able to meet demand as early as 2024, though OPEC also said that deadline could slide for decades if members increase production more quickly. Word that several Mexican oil export ports were closed due to rough weather added to the gains.

On top of those concerns, investors are anticipating that crude inventories fell by 1.8 million barrels last week, which would be the 7th weekly decline in a row.

"(A decline) is not anything unusual for this time of year, but when it happens for 7 weeks in a row, it starts to add up," said Amanda Kurzendoerfer, an analyst at Summit Energy Services Inc. in Louisville, Ky.

Oil prices are 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.

At the pump, meanwhile, gas prices rose 0.6 cent Wednesday to a national average of $3.049 a gallon, according to AAA and the Oil Price Information Service. Gas prices, which typically lag the futures market, have edged higher in recent days, following oil's approach to $100.

Gas prices peaked at $3.227 a gallon in May as refiners faced unprecedented maintenance issues and struggled to produce enough gasoline to meet demand. A similar scenario is expected this spring, when gas prices could peak above $3.40 a gallon, according to the Energy Department's Energy Information Administration.

The EIA's inventory report, delayed until Thursday this week due to the New Year's holiday, is also expected to show gains in gasoline supplies and refinery activity, and a decline in supplies of distillates, which include heating oil and diesel.

In other Nymex trading Wednesday, February heating oil futures rose 9.06 cents to $2.74 a gallon while February gasoline futures climbed 7.92 cents to $2.57 a gallon. February natural gas futures advanced 26.7 cents to $7.75 per 1,000 cubic feet.

In London, February Brent crude rose $3.11 to $97.58 a barrel on the ICE Futures exchange.

Associated Press Writers George Jahn in Vienna and Gillian Wong in Singapore contributed to this report.
 

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Americans own more than 950 cars/vehicles per 1000 people.

Chinese own 9 (yes nine) vehicles per 1000 people and their economy is growing very fast.

It is easy to understand that growing demand and shrinking supplies will cause ever-rising gas/energy prices.

The US MUST develop a workable energy policy. Putting it on the auto industry to improve fuel mileage does not even come close to making progress toward a solution.
 

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Part of the reason that the price of oil is going up is because the value of the dollar is falling. Several years ago the Fed stopped reporting the M3 money supply, and this was followed immediately by the printing of more money. This is what happens when a gooberment and its people decide that it's okay to be in debt over their heads.

For now, just be glad that OPEC doesn't switch over to the euro, because if they do, the dollar will collapse.

Mike
 

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Hey, the World only has maybe 10 more years of oil anyway.
I`m buying a horse and a bicycle.
 

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PhotoRick said:
Americans own more than 950 cars/vehicles per 1000 people.
True. But most of ours (at least around here) are sitting on cinder blocks in the front yard. :lol:
 

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Hey dragon glad to see this one didnt get locked over here.. I myself dont care if the oil and gas prices go up I have been working in the oilfield since 1999 as a field supervisor, and its made me a good living.. Now I know most say they want cheaper gas/oil prices but as long as the prices go up or stay within reason alot of people keep there jobs... I love Driving around here in north texas and seeing drilling rigs poking holes... $$$$$$$$ I LOVE IT $$$$$$$$$ :tongue: :tongue: :wink:
 

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I dont think that the prices are going to keep me from buying the V8 powered cars that i want. If the day comes that i have to park them then so be it. Until then Rock On with V8 power. :bigguns:
 
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