Oil within $1 of record-peak on refinery snags

[tocqueville]

By Maryelle Demongeot
2 hours, 36 minutes ago

SINGAPORE (Reuters) - Oil climbed on Friday to within $1 of its all-time high as more U.S. refiners suffered unexpected outages that would stymie efforts to meet strong demand growth in the world's biggest consumer.

U.S. light sweet crude was up 27 cents to $61.65 a barrel in Asian trade, having closed 52 cents higher on Thursday, its fifth gain in the past six sessions. Prices were 85 cents below the all-time peak of $62.50.

London Brent crude gained 23 cents to $60.35 a barrel, 91 cents off the record-high of $61.26 struck this week.

"It's no secret that refineries are the problem. There wouldn't be a problem if there was any slack in the system," said Tony Nunan, a manager at Mitsubishi Corp.'s international energy business in Tokyo.

A half-dozen refineries in the United States have been forced into unplanned shutdowns since late July and some have had to delay planned restarts, leaving the market on edge after U.S. gasoline stocks fell a sharp 4 million barrels last week.

http://news.yahoo.com/s/nm/20050805/bs_nm/markets_oil_dc

[still_one]

1. there is a different reason every day

including that gasoline is actually cheaper today than it was in 1980 with inflation factored in

If you believe that crap I have some swamp land to sell you in Arizonia

[jody]

2. How can low refinery capacity cause the price of oil to go up? I can see

how it would cause gas prices to go up but low refinery capacity should reduce the demand for oil and reduce oil prices.

[Delphinus]

3. I wondered

what was going on. Yesterday, gas prices jumped from $2.29 average to $2.49. I was lucky enough to get it for $2.24 - I had put off, hoping prices would fall, and I needed a lot of gas. $30 for my little Cavalier.

[ThomWV]

4. How About NonExistant Demand?

Go back and look at the reason for record setting oil prices in the first quarter of this year. You will find that the reason given was increased demand from China. However about 3 weeks ago actual consumption figures were provided by DOE and others and it turns out that the increased demand from China was never a reality - they did not buy as much as predicted by the futures market. In other words the demand that drove up prices was quite litterly a figure in someone's immagination - and we all paid for it. That was the basis for the prices we pay now. Oh, did anyone mention that Exxon made 7 Billion dollars profit in the first quarter of this year?

[tocqueville]

5. how come you Americans relatively pay more ?

the price of gasoline in Europe is 80% taxes. At the same time it hasn't really increased here except for diesel (and only a couple of cents). The taxes here haven't sunk. Since the US are now paying a price which starts to remind of European prices and since a very little part in the US is going to taxes, doesn't that mean that the major US oil companises are using the situation to make a huge profit ?

[wli]

6. sounds like some huge fraud is going on

Par for the course for the BFEE.

[MercutioATC]

7. It's still WAY below inflation-adjusted 1980 prices ($80-$90/bbl).

I'd imagine it would have to get close to that again before anything drastic like a real recession was a danger.