Oil Is Staying High

International Energy Agency's monthly report said that consumers should not expect relief from the present sky-high oil prices. Will oil price continue to soar?

That means the balance of growth has to come from OPEC, which has been unable and/or unwilling to increase capacity fast enough in recent years to keep up with increases in demand. In fact, OPEC's spare capacity—the extra crude it could produce if necessary—has dwindled back below 2 million barrels per day for the first time since the third quarter of 2006, the IEA says.

That will likely make the hair-trigger markets even more sensitive to potential outages that could be caused by hurricanes on the U.S. or Mexican Gulf Coast, or political tensions from Iran to Nigeria. "Higher prices are needed to choke off demand to balance the market," the IEA said. On cue, U.S. crude, which had declined on June 9 following the June 6 record of $139.12, rose by 2.26%, to $137.00 per barrel, Reuters reported.

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Oil Price Slides Sharply to $127

From above $135 a barrel last May 22, oil prices have sharply slid back to $127 a barrel as OPEC officials still claiming that there is no need to pump more oil in the world oil markets. Will the lowering oil price support OPEC's claim?






With global stock markets weak, some investors also see better potential for gains in the oil market. Speculative buying has been cited as a major reason behind oil's more than doubling its price in a year.

"As an asset class, oil has performed better than stocks and bonds. Money always looks for better returns," said Shum. "Until global equities turn better, oil demand collapses or supplies increase significantly we're not gong to see a substantial drop in oil prices."

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Oil Price Fall Pushes Stocks To Jump

After a shocking $135 per barrel oil price, oil price is now at less than $129 per barrel. A strong fall of oil price has pushed the ailing stock markets to recover, as it rallied today. The falling oil price and strong dollar boost the investors confidence to put shares on stocks as it recorded a strong gains Tuesday.

After a two-month rally off the March 17th lows and a nearly two-week selloff, stocks are basically pausing, he said.

"Investors are taking a cautious approach and are keeping an eye on any news about growth in the second quarter," King said. "We know growth was slow, but we don't know how slow. So stocks are going to react to any news on that, and on inflation, over the next few weeks."

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$200 A Barrel Is Possible, Oil Producers Say

Oil price is at above $135 per barrel in early trading today, which escalates tensions and fears over supplies. The price becomes double as last year's price. Meanwhile, oil producers predicted that oil price may end up $200 per barrel this year. how would OPEC react on this issue?

The US has repeatedly called for oil-producing countries to raise output to calm the market but producers blame speculators and the weakness of the dollar for high prices, rather than supply constraints.

Abdullah al-Badri, Opec secretary general, said the cartel saw no problems with the fundamentals of oil supply and demand. "Even if we increase output tomorrow, the prices will not come down."

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Oil Price Scaled At $130/Barrel

What could you expect from the trend in the global oil market? Everybody is expecting nothing aside from the continued increasing oil prices, despite effort to minimize its price. But those efforts seemed to be useless, as the oil price has surged to its peak.

The U.S. House of Representatives approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies, but the White House threatened to veto the measure because it could spur "retaliatory action against American interests in those countries".

Energy analysts say an OPEC decision to raise output could help ease the price rally, which they say has been fueled largely by resilient world energy demand even as the United States economy slows.

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Weak Dollar Equals High Oil Price?

Last week, oil price set another record at $125.96 a barrel on Friday following the consistent weak dollar. The question is: Does a weak dollar equal equal high price of oil?


“The problem is that the market for dollar-denominated assets is orders of magnitude bigger than the oil market,” Mr. Diwan says, so this hedging can have a disproportionate effect on oil prices. “It’s like a lake and a pond, and the lake is overflowing into the pond.”

While it’s hard to pinpoint the impact, it’s clear that money has been pouring into commodities over the last five years. In the first quarter of 2008 alone, commodity assets under management rose $30 billion, to $225 billion, according to estimates by Barclays Capital.

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Oil Market Brings No Good News At All

What do you expect from the oil market? Are you expecting oil price to at least go down a little bit? Last week yes, it fell down a bit lower. But now, oil price becomes more unaffordable as it already hits near $123 per barrel. What is happening to our oil management sector? the OPEC? Isn't it time to act?

Separately, the U.S. government again raised its short-term price forecasts for crude oil and gasoline. The Energy Department now expects average monthly gasoline prices should peak at $3.73 a gallon in June, while regular-grade gasoline is expected to average $3.52 a gallon this year.

At the pump, the national average price of a gallon of regular gas slipped 0.1 cent overnight to $3.61, according to AAA and the Oil Price Information Service.

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Oil Price Fall May Not Last?

After weeks or even months of shocking oil price increase, oil price has slowly stepped down. Yet, there is still a threat that the current oil price may not last for good. Find out.

Crude oil prices were up over $117 a barrel on Monday morning amid supply concerns fueled by an attack on a Nigerian oil installation. The rise was tempered by a slightly stronger dollar; the dollar's weakness has pushed crude prices higher this year as investors look to commodities as a hedge against inflation.

As the summer driving season approaches, refiners need to recover how much they make per gallon in order to restore some capacity that they have idled, Lundberg said. Also, refiners overseas could be attracted to a higher U.S. gas price "and send over those extra barrels," increasing supply to meet the U.S. demand, she said.

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No need to increase oil productions, OPEC Oil Minister says

Oil market is well supplied and there is no need to increase oil production. This was according to OPEC Oil Minister Abdullah Al-Attiyah in response to the call of US President Bush to improve output by increasing oil production. Bush's call was made in consonance with the tremendous problems on oil supply and price on the world market.




The Organization of the Petroleum Exporting Countries, source of more than a third of the world's oil, stood ready to boost supply when the market needed it, he added.
"If the market needs more oil we will be there," he said.
Last week, Attiyah said OPEC would need to be cautious ahead of the seasonal fall in consumption in the second quarter and because of the possible effect on oil demand of an economic slowdown in the world's largest energy consumer, the United States.
Attiyah said he would meet with Bodman later this week. The U.S. Energy Secretary is on a tour of Middle East countries after President Bush visited the region last week.

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