Oil Prices Climb Above $75 a Barrel

[phantom power]

July 25,2006 | VIENNA, Austria -- Oil prices extended their rise above $75 a barrel Tuesday amid refinery snags in the United States, Mideast turmoil and anticipation of the weekly report on U.S. petroleum inventories.

A lack of progress in easing violence in Israel and Lebanon was compounded by further refinery woes, concerns about U.S. demand and hurricanes that could affect supply, analysts said.

Light, sweet crude for September delivery on the New York Mercantile Exchange rose 42 cents to $75.47 by midday in Europe. September Brent at London's ICE Futures exchange gained 45 cents to $75.06 per barrel.

(...)

Paul Harris, head of energy and emissions at the Bank of Ireland Global Markets in Dublin, said the market also was reacting to news that the Amuay refinery in Venezula will close for up to eight months due to fire damage.

"The refinery supplies significant gasoline to the U.S. and comes at a time when gasoline consumption in the States is on the rise," said Harris.

http://www.salon.com/wire/ap/archive.html?wire=D8J2VTDO5.html

[MessiahRp]

1. It's kind of like watching the Dow at this point...

Remember the whole, "Will the Dow pass the 10,000 mark"?

Now it's "Will Oil reach $100 a barrel"?

I think it will.

Rp

[phantom power]

2. It wouldn't surprise me to see $100/brl this year. But...

I thought the same thing last year, and it didn't happen. Regardless, I doubt we have more than a couple years to wait.

[Strelnikov_]

3. . . And Without Any Significant Supply Disruptions

Take your pick:

- Massive Gulf Hurricane
- Major MEND Offensive
- Venezuelan Oil Embargo
- Successful 'Al Queda' Strike On Major Saudi Facility
- Collapse Of Dollar (We are buying 65% of our fix from the other gangs, after all).

And, the mother of all:
- Open warfare in the Strait of Hormuz region with Iran.


Those are a lot of icebergs to steer through.

I'd say $100/bbl++, if not outright shortages, are a certainty in the very near future.