Crude Oil Price Skyrockets to New High!

[eXpat]

They high yesterday: $109.98 http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
Next week we may be firmly in $110 terrain...

Oil prices rising to near 2011 highs

NEW YORK — Oil prices are approaching last year's highs as tensions increase over Iran's nuclear program. The rise pushed gasoline prices on Friday to a national average of $3.65 per gallon, the highest ever for this time of year.

Western nations fear Iran is building a nuclear weapon and have been trying to force it to open its facilities to inspection. Iran has refused, turning away international inspectors this week for the second time this month. The United Nations said Friday that Iran has responded to the recent scrutiny by speeding up production of higher-grade enriched uranium, feeding concerns that it is developing a bomb.

As both sides dig in for a protracted standoff, investors are snapping up oil contracts in case fighting breaks out in the heart of the one of the world's biggest oil-producing regions. "Everyone's pricing in the potential for war now," independent analyst Stephen Schork said. "Without a concrete resolution, nobody knows how high this can go."

Israel hasn't ruled out an attack on Iran, and Iran has said it is ready to strike pre-emptively, possibly targeting the Strait of Hormuz, if it is threatened. The Persian Gulf passageway is a potential choke point for oil supplies. One-fifth of the world's oil tankers pass through it every day.

On Friday benchmark West Texas Intermediate crude rose by $1.94 to end the week at $109.77 per barrel in New York. Brent crude rose by $1.85 to finish at $125.47 per barrel in London.

WTI peaked near $114 a barrel last May, while Brent rose above $126 per barrel.

The price of gasoline, which is made from crude oil, has soared with oil prices. The national average jumped by nearly 12 cents per gallon in a week, with state averages above $4 per gallon in California, Alaska and Hawaii.

It looks like they'll keep climbing.

Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said pump prices will add at least another 10 to 15 cents per gallon in coming days to reflect a recent jump in wholesale markets.

At $3.65 per gallon, gasoline is still below last year's high of $3.98 and the record $4.11 set in 2008. Kloza says pump prices are on pace to top both of those in coming months. He thinks gasoline will climb as high as $4.25 per gallon by late April.

http://www.springfieldnewssun.com/news/springfield-business-news/oil-prices-rising-to-near-2011-highs-1333643.html

[Cog]

There goes the pretend recovery.

[eXpat]

There goes the pretend recovery.

True
"Oil Won't Stop Until The Economy Breaks"

As gold strengthens on the back of the extreme experimentation of the world's (now-sheep-like) central bankers' easing and printing protocols, it does no real harm to the world, but as John Burbank (of Passport Capital) notes, the painful unintended consequence of all this liquidity is energy costs skyrocketing - and it won't stop until the economy breaks. The negative feedback loop, that we pointed to yesterday as potentially the only thing to stall a magnanimously academic response to the insolvency we see around the world (and the need for deleveraging at this end of the debt super-cycle), of oil prices into the real economy will be devastating not just for US but for EM economies, though as the bearded-Burbank reminds us - Saudi benefits greatly (and suggests ways to trade this perspective). Flat consumer incomes while costs are rising is never a good thing and while we make new highs in oil in terms of EURs and GBPs, he warns we may soon in USDs also. Summing up, his perspective is rising tensions in the Middle East combined with central bank liquidity provision are a huge concern: "We're actually quite bearish. The only reason all this liquidity is coming into the market is because things are really bad. It's not because things are good. It's hard to know where things are going to go. The point is, just because they're putting liquidity in the market doesn't mean the economy is improving."

http://www.zerohedge.com/news/oil-wont-stop-until-economy-breaks

[Daniel_Plainview]

Reuters -- Brent rockets to $128, while WTI passes $110, reaching 10-month highs

[Daniel_Plainview]

EUR Brent takes out all-time highs

[lper100km]

From the Globe and Mail Business Section March 2nd., 2012, Eric Reguly

This is a remarkably concise and sanguine commentary on the failure of oil prices to decline in the face of recessionary trends.

Evidently, the producers are having difficulty coping with even the reduced supply demands. Peak oil is mentioned as though every one knows about it (and without the word ‘theory’ being appended).

http://tinyurl.com/83v9xsj

[pstarr]

From the article;

If you want a recipe for falling global oil prices, you would think this would do the trick.

The 17-country euro zone, which includes three Group of Seven countries, is back in recession. The shale deposits in the United States are gushing oil. Libyan supplies are coming back with a vengeance. Iran has not been bombed and, if the blathering Beltway pundits are right, will not be bombed before the U.S. election. The Strait of Hormuz is wide open. The latest generation of cars makes the fuel economy of your dad’s old banger look like the Exxon Valdez’s. European austerity-related taxes on gasoline and diesel are pushing down demand.

Why, then, are oil prices so high, to the point they threaten the tentative economic recoveries in debt-bombed Europe and elsewhere?

The author covers his bases, hems and haws some, equivocates a bit, but finally shows us his money shot. And it is not pretty. Looks and smells just like peak.

[SeaGypsy]

As I have noted in other threads, this stealth entry of peak oil into MSM language and story context over just the last few weeks, is notable.

A cursory google shows over 1.5 million peak oil related updates in the last month, with such as:

http://www.onlineopinion.com.au/view.asp?article=13234

and current redactions from the likes of the pathetic Citigroup published in the WSJ couple of weeks back just look stupid:

http://blogs.wsj.com/source/2012/02/17/ ... l-is-dead/

[Repent]

I didn't like either of those links. In particular the first one that claims peak oil has made in into the MSM 'from the extremist conspiracy fringes of society'.

What is extreme about the simple idea that oil fields deplete over time? Why would someone be on the fringe of society for understanding that oil wells, individually or in aggregate have maximum production rates? Where is there a 'conspiracy' of the likes of 'UFO tinfoil hat coverup involved'?

It fact this isn't news at all, this site was lauched at the beginning of 2004 and 8 years later the mainstream media hasn't fully 'gotten it'? This is both sad and tragic.

[Cog]

I didn't like either of those links. In particular the first one that claims peak oil has made in into the MSM 'from the extremist conspiracy fringes of society'.

What is extreme about the simple idea that oil fields deplete over time? Why would someone be on the fringe of society for understanding that oil wells, individually or in aggregate have maximum production rates? Where is there a 'conspiracy' of the likes of 'UFO tinfoil hat coverup involved'?

It fact this isn't news at all, this site was lauched at the beginning of 2004 and 8 years later the mainstream media hasn't fully 'gotten it'? This is both sad and tragic.

To truly understand peak oil you have to do the research on it as most of us have done. We understand the difference between shale oil and oil shale. But you will not see the cornies or the MSM make that distinction. For the cornies its a matter of dishonesty. With the MSM its a matter of intellectual laziness.

For the political class, peak oil means an end to growth. That is anathema to getting re-elected. So you will find few polticians that will talk about it even if they understand the implications.

Peak oiler's will always be a fringe element since we aren't telling people what they truly want to hear.

[dolanbaker]

http://www.bloomberg.com/news/2012-02-2 ... ys-1-.html

Excluding Iran from the global oil market would increase the shortfall between worldwide supply and demand sixfold, based on February production and consumption estimates, the U.S. Energy Department said.

Global fuel use averaged 3 million barrels a day more than output when Iran is excluded from the calculations and 500,000 more when Iran is included, the department’s Energy Information Administration said in a report yesterday.

We're using it up quicker than we're getting it out of the ground!

[SeaGypsy]

The ABC news in Australia has incorporated peak oil and Brent/ WTI/ Tapis spread into their nightly finance news broadcasts. Without any mention of tinfoil or aliens or extremism. This has just happened in the last few weeks. I think it has now gotten to the point where so many indicators are now in place, denial looks like the fringe to any sensible person who has done a few hours research.

[pstarr]

I didn't like either of those links. In particular the first one that claims peak oil has made in into the MSM 'from the extremist conspiracy fringes of society'.

What is extreme about the simple idea that oil fields deplete over time? Why would someone be on the fringe of society for understanding that oil wells, individually or in aggregate have maximum production rates? Where is there a 'conspiracy' of the likes of 'UFO tinfoil hat coverup involved'?

It fact this isn't news at all, this site was lauched at the beginning of 2004 and 8 years later the mainstream media hasn't fully 'gotten it'? This is both sad and tragic.

To truly understand peak oil you have to do the research on it as most of us have done. We understand the difference between shale oil and oil shale. But you will not see the cornies or the MSM make that distinction. For the cornies its a matter of dishonesty. With the MSM its a matter of intellectual laziness.

For the political class, peak oil means an end to growth. That is anathema to getting re-elected. So you will find few polticians that will talk about it even if they understand the implications.

Peak oiler's will always be a fringe element since we aren't telling people what they truly want to hear.

ahem to that. It's not just the political class--MSM is beholden to advertisers, in particular car companies and the FIRE group (Finance, Insurance and Real Estate). None want to admit that good debt depends on forever growth

[pstarr]

The ABC news in Australia has incorporated peak oil and Brent/ WTI/ Tapis spread into their nightly finance news broadcasts. Without any mention of tinfoil or aliens or extremism. This has just happened in the last few weeks. I think it has now gotten to the point where so many indicators are now in place, denial looks like the fringe to any sensible person who has done a few hours research.

interesting. (didn't mean to upstage you) do you have references? regarding peak oil/brent/tapis spread?

[SeaGypsy]

http://www.abc.net.au/pm/content/2012/s3417345.htm

An example. The ABC has been talking about peak oil for a long time, but building the language into the mainframe of what is causal in the economy seems to be what has changed more recently.

Then we have Alan Kohler, who seems to know a fair bit about oil, the ABC's head of Business Analysis; taking a cornucopian view based mostly on the USA's shale development. The last line in this article is a dead givaway.

http://www.businessspectator.com.au/bs. ... nt&src=rss

[pstarr]

both articles depend on the shale phenomena to offer hope; one for a bright shiny oil future (the later) and the other kind of a nice decline--no mention of population dieoff/zombies. Problem with shale; it declines precipitously and wells need to be drilled and re-drilled at a fantastic rate. It's a scam and bubble.

[SeaGypsy]

It's clearly at the stage of transition from denial to bargaining.

[Daniel_Plainview]

One of the most comprehensive reports of this year predicts record-breaking oil prices, including the spectre of $200 oil.

Erste Group Research: "Nothing to spare" - Oil Outlook 2012

We see the risks for the oil price heavily skewed to the upside. At the moment, the market is well supplied, but the smouldering crisis in the Persian Gulf could easily push oil prices to new all-time-highs should it escalate. We believe that new all-time-highs can be reached in H1, at which point we could see demand destruction setting in. We forecast an average oil price(Brent) of USD 123 per barrel between now and March 2013.

The latently smouldering Iran crisis seems to be close to escalation. The most recent manoeuvres, ostentatious threats, sanctions, embargoe sand the shadow war currently ongoing, have heated up the situation further.It seems we may soon see the last straw that breaks the camels back. Even though Iran could probably only maintain a blockade of the Straits of Hormuz only for a very limited period of time, the consequences would still be dramatic. The oil price would definitely set new all-time-highs and could reach levels of up to USD 200.

The still low reserve capacity makes the oil price vulnerable to geopolitical tensions. With the exception of Saudi Arabia, no country holds any significant reserve capacities. But since Saudi Arabia has never exceeded the barrier of 10 mbd on a sustainable basis, we harbor doubts as to whether the country can actually produce 12.5 mbd. Risks are that it will take a supply side crunch to find out whether the alleged reserve capacity actually exists to the extent proclaimed. At any rate, the decision of IEA to tap the strategic reserves during the Libya crisis is a clear indicator of the strained supply situation.

The belief in a quick substitution of fossil energy carriers by alternative forms of energy seems illusory and naïve, given the current investment volumes and lip service. But we still believe that much like Julian Simon forecasted high oil prices cause shifts in efficiency and technology. Or as Mark Twain said, "The reports of my death are greatly exaggerated"
.
Further topics:

- High liquidity, low interest rates, and QE should create a positive environment for oil
- Does the skyscraper index signal a weaker oil price?
- Excursus: Oil price development from the perspective of the Austrian School of Economics
- Petrodollar exiting through the back door?
- Break-even oil price (BEOP) suggests rising floor
- Sharply rising oil consumption in the exporting countries could trigger shortages in the long run
- US natural gas has a attractive risk/reward profile
- "Clean fracking" will make shale gas production more efficient,cleaner and cheaper

[pstarr]

Erste Group Bank AG is one of the largest financial services providers in Central and Eastern Europe and focuses on retail and SME banking. More than 50,000 employees are serving clients in over 3,000 branches in 8 countries (Austria, Czech Republic, Slovakia, Romania, Hungary, Croatia, Serbia, and Ukraine).[1]

What do you expect from the Socialists? They are jealous of our can-do approach to energy production. Our roustabouts Git 'Er DONE!

[Pops]

A couple more sorta-MSM articles:
On Forbes blog they talk about the Total exploration chief saying peak is nigh - while at the CERA festivities in Houston :^D

Forbes from yesterday, We’re all entirely out of $80 oil... but high prices are... a good thing... yeah, that's it!


Neither are 'head for the bunker Madge!' but neither are they 'Poo-Poo PO' which I also think is becoming more common, even here in the US. Kind of hard to ignore it really.