Oil Soars; $2.00 per gallon

“Oil Soars as US Prepares Iraq Resolution

Mon February 24, 2003 03:11 PM ET
NEW YORK (Reuters) - Oil prices sizzled near two-year highs on Monday and looked set to stay there well into March as a new U.S.-British draft resolution set the stage for war against Iraq.
Forecasts of more cold weather at a time when U.S. fuel supplies are running low sent heating oil futures prices to all time highs and natural gas prices to their 2-year peaks.

U.S. light crude rose 90 cents, or 2.5 percent, to $36.48 a barrel, within sight of 29-month highs above $37 struck last week, and nearing an all-time high of $41.15 hit in the build-up to the 1990-91 Gulf War. Brent crude in London jumped 91 cents to $33.18.

Prices rose as the United States and Britain prepared to introduce a draft resolution to the U.N Security Council declaring that Baghdad has failed to take advantage of the final opportunity to disarm peacefully.

The United States has said it will disarm Iraq by force if necessary, despite widespread international opposition to war and concern that rising energy costs could smother a weak world economy.

Oil markets fear an attack in Iraq, the world's eighth biggest exporter, may hit supplies from the Middle East, which supplies about 40 percent of globally traded crude.

UK Foreign Secretary Jack Straw said the U.S. and Britain want a U.N. decision on Iraq within about two weeks of submitting the new resolution to the Security Council.

On March 7 chief U.N. weapons inspector Hans Blix will report to the United Nations. Secretary of State Colin Powell on Sunday said he expected the Security Council to make a judgment soon after the report.

Blix has set a March 1 deadline for Iraq to begin destroying banned al-Samoud missiles and show it is cooperating with demands to rid itself of any biological, chemical and nuclear weapons.

SCRAPING THE BARREL

An 11-week oil strike in Venezuela has already run down U.S. stocks of crude oil to their lowest level since 1975, strengthening concern over the impact of any supply disruption in the Middle East.

"We're running on empty," said Gary Ross of New York consultancy PIRA Energy.

Sustained cold weather in the United States has also run down fuel stocks and heating oil futures surged four percent on Monday to hit $1.15 a gallon -- the highest level since NYMEX launched futures trading in 1978.

Temperatures in the U.S. northeast, the world's largest heating oil market are forecast to be below seasonal norms this week. High prices for rival fuel natural gas has further fired up demand for oil.

Traders said tankers were lining up to load vital barrels from Russia, the world's second oil exporter and an emerging supplier to the U.S at Baltic Sea ports.

"The Russians are coming but it won't be here until the end of March," said PIRA's Ross.

U.S. gasoline prices have surged 20 cents in a month to an average of $1.66 a gallon, within a nickel of all-time highs, as prices in some major cities breach the $2 mark.

Pump prices are expected to rise further as supplies tighten ahead of the summer vacation driving season.”

“I remember in 1991, oil prices shot up prior to the war, but dropped once things got underway. I can't remember if this was because the government told the oil companies to knock it off, or what have you.

I wonder if the same thing will happen again.”

“The Bush (I) Administration told the worldwide oil futures market to 'knock it off'?

<G>”

“why doesn't the US stopping selling the oil & natural gas from the Alaskan Pipeline and use it ourselves.

naw, that is to easy”

“I spent over $80 last week on gasoline.”

“Hey, you crazy Venezuelans! Knock it off, willya?

<GRIN>”

“Venezuela for the Venezuelians!”

“United Arab Emirites for the United Arab Emeritians, er whatever..”

“And you wacky Colombians! Leave that pipeline alone!”

“bad sign when your pipeline is nicknamed "the Flute"!”

“has anybody heard anything about that big explosion in new york? they covered it the day it happened and i haven't heard a peep about it since......kinda weird....it was last thur i think, cuz it was the same day as the club fire tragidy in RI. i am thinking they night have found out something about the explosion.....like, it wasn't an accident afterall but terrorism.”

“I'm sure they're investigating that angle, but odds are that it's yet another industrial accident.

Hey you nitpicking OSHA inspectors, let us get back to work here!”

“yeah but you'd think they'd say that at least. i scan the news constantly and haven't heard a word....”

“Gas is still really cheap here - I don't know what there is to complain about?”

“Natural gas is the real problem - it's just hit its highest-ever price and there's a fear that big industrials may have to shut down due to a lack of supply at the end of the heating season”

“Strat, that's local news here. According to what I hear, doesn't appear to have anything to do with terrorism.”

“how much is gas in England, ynami?”

“not sure how much it is now, but it was about $6 a gallon when I left, maybe a little under that”

“20 bucks, Father, same as downtown...




oops. wrong joke.”

“wow! i don't think gas here is that expensive, either.”

“hey ynami, have you ever read that Bill Bryson book about his travels in England? there's this one part where he's in a pub, talking to some random guys there about taking a trip to another town. they're like, "Oh, you want to go THERE? TODAY? No, no...you should have left a week ago Tuesday." (or something like that). And it ends up taking him like an hour and a half to get there...LMAO!!

maybe the $6 / gallon gas explains the distance perception...”

“yeah, notes from a small island I think it's called. There are some strange places once you get out the cities”

“yes, that's it! funny book.”

“our cars are much smaller Lyra, I think it has something to do with not needing our cars to make up for size issues in other areas”

“I want my fuel-cell powered car NOW!!! :-)”

“HA!! :-)”

“It might take about ten years to rebuild their oil fields, but I read one report that predicted that once the Iraqi oil industry is back up to speed, prices will be down to about $13 a barrel. I guess that’s assuming we don’t invade Iran and Saudi Arabia right away…


That explosion on Staten Island was pretty spectacular strat. I was in the dentist’s chair when the news broke. I live only a few miles from there and could see the flames from my house (the smoke was visible for about 50 miles). I hung around a bit before going to the office in case I had to go get my kids from school.”

“I heard on the news the other night that gasoline may go to around $3 per gallon this summer when demand picks up for the summer season. Depends also what happens to supplies in the mid east during the war. Whatever happens, it's likely to cost more to drive to the trailhead this year. Not good.”

“I wouldn't be so much worried about gasoline prices as I would be natural gas prices.

Natural gas closed at $12.20/mcf at Henry Hub yesterday, which is almost double what it closed on Friday ($6.50/mcf).

As long as the east stays cold, natural gas prices will rise. there has been a big draw on the gas storage fields the last two months. Expect natural gas prices to stay strong through 2003 into 2004.”

“2/24/2003 - OGI: Washington) The New York Mercantile Exchange (NYMEX) saw the price of natural gas spike to its highest level in more than two years today as fears concerning adequate supplies to meet demand and the continuing arctic weather blast over much of North America had traders buying up rapidly and at ever higher prices until the Henry Hub price of natural gas per million BTUs reached US$13.00 before settling at $12.20.

Analysts said the sudden surge in the price of natural gas - almost double its Friday closing price - is due to recognition that gas inventories are dropping due to the ubiquitous cold and not being replaced. The March contracts, which are the ones spiking today, expire on Wednesday. In contrast, the April contracts closed today at $7.62 per 1000 cf.

The US Energy Department's Energy Information Administration (EIA) said last week that gas stocks had fallen 15% or about 203 bcf to 1.17 Tcf in the week that ended 14 February. In 2002, that figure was 2.04 Tcf.”

“What $2.00/gallon? It's only $1.44 here with my Kroger card.



Go Venezualan(sp?) organized labor!”

“AH... the ubiquitous Kroger card.

We don't need no national ID card!
We've got Kroger keeping tabs on us!! LOLOL”

“it went down a couple cents here. I think regular is 1.47 right now at walmart (without the card). it was over 1.50 a couple days ago.”