Oil Closes Above $100 for First Time

[The Instructor]

Oil Closes Above $100 for First Time
By JOHN WILEN,AP
Posted: 2008-02-19 17:28:54

(Feb. 19) - Oil futures shot higher Tuesday, closing above $100 for the first time as investors bet that crude prices will keep climbing despite evidence of plentiful supplies and falling demand. At the pump, gas prices rose further above $3 a gallon.

There was no single driver behind oil's sharp price jump; investors seized on an explosion at a 67,000 barrel per day refinery in Texas, the falling dollar, the possibility that OPEC may cut production next month, and continuing tensions between the U.S. and Venezuela.

Gasoline and heating oil prices appeared to be leading the advance, rising faster in percentage terms than oil due to the explosion Monday at Alon USA's Big Spring, Texas, refinery, which could be shuttered for two months.

"The refinery fire in Texas is making people a little concerned," said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Amherst, Mass.

Light, sweet crude for March delivery rose $4.51 to settle at a record $100.01 a barrel on the New York Mercantile Exchange after earlier rising to $100.10, a new trading record. It was the first time since Jan. 3 that oil had been above $100.

March gasoline jumped 10.93 cents to settle at $2.6031 a gallon, and March heating oil rose 11.45 cents to settle at $2.7614 a gallon, also a record.

Oil prices are still 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.

The dollar fell Tuesday, giving investors another reason to buy oil. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

For the moment, investors appear to have put aside concerns about the economy that have sent oil prices down into the mid-$80 range twice since crude peaked above $100 last month. Traders are instead focused on the Organization of Petroleum Exporting Countries, which will meet early next month to map out production plans, and Venezuela, where President Hugo Chavez made conflicting statements this weekend about the country's legal dispute with Exxon Mobil Corp.

OPEC could move to cut production in the second quarter, typically a period of low demand, though many analysts feel that's unlikely. In Venezuela, Chavez said he was not serious about an earlier threat to cut oil sales to the U.S., but also threatened to sue Exxon Mobil. The world's largest oil company is fighting Venezuela's nationalization of an oil project, and recently convinced several courts to freeze $12 billion in Venezuelan oil assets.

None of the news is enough to justify a nearly $3 a barrel jump in the price of crude, said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm. Echoing other analysts, Cordier argued that the oil market is in the process of "decoupling" from oil's supply and demand fundamentals. He said investors drawn by the falling dollar and momentum are pushing oil prices sharply higher despite reports last week from the Energy Department, OPEC and the International Energy Agency which all cut oil demand growth predictions for this year.

"Everyone concurs that we've got smaller demand coming in the U.S.," Cordier said.

Retail gas prices, meanwhile, jumped 1.8 cents to a national average price of $3.032 a gallon Tuesday, according to AAA and the Oil Price Information Service. Retail prices, which typically lag the futures market, are following oil prices higher. The Energy Department expects gas prices to peak near $3.40 a gallon this spring.

AP Business Writers George Jahn in Vienna and Thomas Hogue in Bangkok contributed to this report.

http://money.aol.com/news/articles/_a/o ... 0000000001

[LICKING COUNTY FAN]

It's nothing more than they being allowed to rip us off and us doing what we do best and that is take it.

[orange-n-brown 365]

I have at least 2 to 3 different doctors appts. out of town every week this new price is going to kill me I'm gonna have to get a horse and buggy I guess! and maybe more appts coming up out of town argh!!!!!!!!!!!!!!

[Bassmaster]

There was no single driver behind oil's sharp price jump; investors seized on an explosion at a 67,000 barrel per day refinery in Texas, the falling dollar, the possibility that OPEC may cut production next month, and continuing tensions between the U.S. and Venezuela.

The little guy can be an investor also. I countered this by making some changes in my 401K stocks that now invest in oil. It paid off by doing this and only took asking a few questions to people in the know and getting online and making the changes. I also purchased a used small car and it is now saving me $15-$20 a week because I drive so far to work each day. I found that complaining about it did nothing to change my situation, and there are little changes that all of us can make to help our finances. If you can't beat-em join-em

[LICKING COUNTY FAN]

Just more crap they feed us.

http://news.yahoo.com/s/ap/20080221/ap_ ... oil_prices

[Bassmaster]

I'm gonna tell ya a little story about a man named Jed......

[LICKING COUNTY FAN]

I'm gonna tell ya a little story about a man named Jed......