Oil Prices Rise Above $63 a Barrel (may go to $65/bbl soon)

[jpak]

http://www.breitbart.com/news/2006/11/30/D8LNGCNG0.html

Oil prices briefly shot above $63 a barrel Thursday in a rally that brokers attributed to technical trading, coupled with buying prompted by the approach of the Northern Hemisphere winter.

Natural gas futures also climbed following the release of government data that showed a net withdrawal of natural gas from domestic underground storage facilities.

Analysts are split over whether the recent surge in energy futures represents a correction for a market that had been trending lower since late summer, or if it is the beginning of a new upswing.

Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo, argued prices are headed higher.

"There are bullish factors in the market finally. I expect prices will rise to $64-65 in December," Emori said.

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[toadaway]

1. We should ask President Bush to call some kind of election ASAP. EOM

nt

[newyawker99]

4. Hi toadaway!!

Welcome to DU!! :toast:

[Joe for Clark]

2. Sure looks like those traders know something is up

doesn't it??

Joe

[NOLADEM]

5. Yeah, look at your calendar and the huge arctic front on the weather map today

Some trends are kinda easy to spot, no?

[Joe for Clark]

7. I don't think it is that simple at all.

Could be something else - right??

You know Kirkorian dumped a third of his stock in GM today. Why now??? You know, GM - price leader in the last dow runnup.

Hey - I could sure be wrong, wouldn't be the first time. But it sure appears like a top in the djia chart to me. And I believe everything happens for a reason.

Joe

[DemReadingDU]

11. Coud be something

I can't quite put my finger on it, but there are definitely lots of odd things going on. I feel something is about to boil over.

[MADem]

3. Are the Saudis trying to profit take before they pull the rug out from Iran by dropping prices?

http://www.alertnet.org/thenews/newsdesk/N29311689.htm

WASHINGTON, Nov 29 (Reuters) - Using money, weapons or its oil power, Saudi Arabia will intervene to prevent Iranian-backed Shi'ite militias from massacring Iraqi Sunni Muslims once the United States begins pulling out of Iraq, a security adviser to the Saudi government said on Wednesday.

Nawaf Obaid, writing in The Washington Post, said the Saudi leadership was preparing to revise its Iraq policy to deal with the aftermath of a possible U.S. pullout, and is considering options including flooding the oil market to crash prices and thus limit Iran's ability to finance Shi'ite militias in Iraq....

[Strelnikov_]

6. IMHO The Saudi's Have Nothing To Flood The Market With

They are more than likely already producing at peak output.

[MADem]

10. They can kick it up several notches if they need to.

They've been very smart in their oil management, and have taken on the "swing producer" role for some time now. They're complaining right now that inventories are too high across the board.

In fact, they're right now griping at the rest of the OPEC crowd that they aren't cutting production sufficiently to kick the price up, and they're ticked that they are always the ones that are first to do it: http://money.cnn.com/2006/11/29/markets/oil_eia/?postversion=2006112918

They're interested in seeing inventories decline...and I'm sure they'll keep a close eye on Iran's while they're at it....

[Strelnikov_]

12. I Don't Agree. Past Actions Do Not Match Their Claim Of Excess Capacity

A couple of years ago they claimed a target ceiling of $40/bbl. After Katrina, they said they would increase production, but did not.

A year now of plus $60/bbl oil, no significant increase in production.

Sure, they may be able to squeeze out another 1 M bbl/dy, a far cry from 'several notches', and not nearly enough with a global demand of 85 M bbl/dy to cause the price to crash thus hurting Iranian interests.


OPEC is not cutting production, production is cutting OPEC.


Saudi Arabia's Oil a Huge Question
21 Jul 2006

http://www.energybulletin.net/18474.html


. . .

Control, it seems, has slipped away. So when the Saudis a few weeks ago suddenly reversed field and announced a production cut, some analysts scratched their heads and wondered if, at long last, Saudi Arabian oil production has peaked. If it has, the effect is potentially huge on oil markets and the price of gasoline at the pump. "When the price is high, that's when you want to take out your oil and sell it," said economist Ujjayant Chakravorty of the University of Central Florida. "I am wondering if they have some production issues."

In the past, the Saudis have repeatedly passed up the chance to maximize short-term profits. Instead, they have seen high prices as a threat to global economies and an incentive for development of alternative energies that would threaten their cash cow. When prices have been high, they have pumped more. "If your concern were energy market stability and not your income level, you'd put more oil out in the market," said Amy M. Jaffe, energy fellow at Rice University's Baker Institute. "Why do they see something different now? It doesn't make sense to me."

. . .

If Saudi production languishes for a month or two, that won't prove the peak has arrived, Hamilton said. On the other hand, if world demand for oil keeps growing while the pace of Saudi pumps does not, that would show they either won't or can't keep up. "Right now, I am not really sure how to read things beyond concluding that the Saudi statements do not make sense, do not fit the market situation and don't fit what they are doing," Hamilton said. "The evidence is going to dribble in."

[MADem]

13. The inventories across the board are large, they want to decrease them

Your bulletin is a half year old. My report was from, what, yesterday? And this article which discusses the 'screw the consumer' strategy was linked from that site you cited: http://finance.myway.com/jsp/nw/nwdt_rt_top.jsp?news_id=ap-d8lkf8a80&

The oil producing nations aren't running a charity, they want to maximize profits. They're in it for every cent they can squeeze out of us. They of course don't want to price themselves OUT of the market, they just want every dime they can get without motivating us to develop alternatives. It's a delightful little dance they engage in, two steps forward, one back.

I'm not terribly interested in getting into a "peak oil" discussion; suffice it to say that the Sauds have MORE than enough oil to jack the market around in the near term, and the crisis in the Middle East IS a near-term crisis, make no mistake. And by jacking the market around, I mean a SERIOUS PRICE CUT, a CUT, not an increase. That will force the Persians to pump like mad just to pay their everyday bills, like government salaries, pensions for the war veterans and widows, and so forth, and will leave them with less disposable income to fund militias to raise hell in Iraq. And that is what the Saudis discussed with Cheney. The purpose of jacking the market? To box in the Persians and prevent them from achieving hegemony over Arab Iraq--that's the ONLY purpose. They don't want those shi'a militias slaughtering their sunni/ba'athist brothers in their beds. And neither do the Jordanians, the Egyptians, and even the Syrians, who, as we know, are mainly Sunni and also Ba'athists.

The only way they can make the Persians "get it" is to hit them hard in their wallets, and back it up with a little muscle from the Arab world, if need be. And that is what they intend to do. And they'll keep doing it until the Ayatullahs get over this snotty desire to spread their Persian thinking over the unwelcoming Arab world. The Arabs deeply RESENT this Iranian sabre-rattling, and they aren't gonna put up with it. They think the Ayatullahs and that crackpot puppet/former mayor of Teheran have their heads up their asses, along with a helluva lotta nerve. Many Arabs quietly cheered when Israel handed Hizb'allah their heads and their asses; not because they developed any affection for Israel, but Israel is an enemy they know, and Hizb'allah is a coiled snake that spells serious trouble down the line if left unchecked. It quietly pleased them to see that crowd decimated, though they'll never admit it publicly.

[Strelnikov_]

14. Again, I Disagree. But Since You Don't Want To Get Into A 'Peak Oil'

discussion, and 'peak oil' is the reason they cannot increase production, further discussion is pointless.

IMHO the Saudi's have no excess capacity of a scale to reduce the price of petroleum through 'oversupply'. They claimed after Katrina all they had excess was sour crude in which no one was interested due to refining difficulties.

My position is not based on one article. It is based on closely following the petroleum market since I became 'peak oil' aware . . . oh, that term again . . . three years ago.


By the way, OPEC has dropped their shipments by 700 k bbl/dy to 1,200 k bbl/dy, all in the face of $63/bbl oil. Guess they are not worried about development of alternatives any more. Wonder why that is?

http://www.peakoil.com/fortopic25406.html

[MADem]

16. From your cite, again: Saudis may use oil market to crush Iran's funding of militias

http://peakoil.com/article21173.html

You're giving me these websites and insisting I am wrong, and I'm showing you, on those same websites you are tossing at me to prove your point, my very same argument repeated:

Saudis may use oil market to crush Iran's funding of militias
ETHAN MCNERN

USING money, weapons or its oil power, Saudi Arabia will intervene to prevent Iranian-backed Shiite militias from massacring Iraqi Sunni Muslims once the United States begins pulling out of Iraq, a senior security adviser to the Saudi government said yesterday.

Diplomats and analysts say Iraq's Sunni Arab neighbours, led by Saudi Arabia, fear that the sectarian violence could spill into large-scale civil war between Shiites and Sunnis and set off a political earthquake far beyond Iraq. ....."To turn a blind eye to the massacre of Iraqi Sunnis would undermine Saudi Arabia's credibility in the Sunni world and be a capitulation to Iran's militarist actions in the region," he said.

An official Arab source said: "Saudi Arabia is worried about Iran imposing its political agenda on the region. We don't want Iran and its allies to have a free hand. Iran knows that it is vulnerable and that Saudi Arabia has the upper hand and maintains real weight and power."

A Western diplomat based in the Saudi capital, Riyadh, said Saudi Arabia was already funding Sunni tribes in Iraq. ..... "If Saudi Arabia boosted production and cut the price of oil in half ... it would be devastating to Iran. The result would be to limit Tehran's ability to continue funnelling hundreds of millions to Shiite militias in Iraq and elsewhere," said Mr Obaid.

http://news.scotsman.com/index.cfm?id=1773812006

[Strelnikov_]

17. Feel Free To Think The Saudi's Have Spare Capacity, Time Will Tell

Again, my position is based on closely following the oil market for the last three years, a period which has been rife with claims of the Saudi ability to increase production, never delivered, or a lack of buyers in a record high market.

OPEC, after not being able to keep it's act together in the 90's in the face of relatively low prices, suddenly becomes one of the worlds most disciplined cartels, even in the face of record prices over the last few years, as world wide production has remained flat. A case of geologically enforced discipline?

[IDemo]

8. Part of this may also be due to the continuing slide of the dollar

A buck just won't buy the amount of oil or bread it did back in the good ol' days (one month ago).

http://www.usatoday.com/money/world/2006-11-30-dollar-daily_x.htm

[Uncle Joe]

9. Wow, and with the election not even a month old!

Who could have seen that one coming!?:shrug:

[libnnc]

15. NC--price jumped from 2.19 to 2.23 a gallon today

was 2.19 this morning :mad:

[MazeRat7]

18. I'm going to disagree... I'm betting around $50+/bbl for most of 2007. -nt