Crude oil's brief jump past $147 a barrel yesterday arrived not only as the United States and Israel view Iran as a growing threat, but also as the U.S. dollar fell and worries erupted over possible supply disruptions in two other major oil-producing nations: Nigeria and Brazil.
Those factors contributed to new all-time trading highs in crude, gasoline and heating oil. It looks like $4-a-gallon gasoline might be here to stay, and that heating oil costs might cause further problems for consumers as the weather gets colder. Futures prices for natural gas turned lower Friday, but are still about twice as high as a year ago.
Heating oil is used mostly in the Northeast United States; homes in most other parts of the country use natural gas. It's possible for people to cut back on heating as they do on driving, but it's not easy to slash the bill significantly. Political unrest in oil-producing regions along with production cutbacks by refineries and fairly resilient demand for diesel fuel have been keeping energy costs high.
Iran, which has long been under U.N. scrutiny for its uranium enrichment program, has been testing missiles this week, including a new missile capable of reaching Israel. On Thursday, Secretary of State Condoleezza Rice warned the oil-producing nation that the United States will defend its allies, and Iran responded with another missile launch. Neither the United States nor Israel has ruled out a military strike on Iran.
Then yesterday, there were rumors of Israeli military exercises taking place in Iraqi air space. The rumors were reportedly denied by Israeli officials. About 40 percent of the world's tanker traffic passes through the Strait of Hormuz. Meanwhile, Brazilian oil workers were threatening to go on a five-day strike next week unless the state-run oil firm Petrobras gives them an extra day off at the end of their 14-day shift. Those supply worries added to those sparked Thursday when Nigeria's main militant group said it would resume attacks in the oil-rich region.
Light, sweet crude for August delivery soared to an all-time high of $147.27 a barrel before settling at $145.08, up $3.43. That's slightly below last Thursday's settlement record of $145.29 a barrel. Meanwhile, the dollar weakened against other major currencies Friday. Because oil is bought and sold in dollars, oil's rise has not been as severe for countries with stronger currencies; meanwhile, traders have been using commodities as a hedge against the tumbling dollar.
In Nymex trading, heating oil futures rose to a trading record of $4.1586 before settling at $4.0766 a gallon, up 3.92 cents. Gasoline futures also rose to a new trading record of $3.631 a gallon before finishing at $3.5632, up 5.23 cents.
Those factors contributed to new all-time trading highs in crude, gasoline and heating oil. It looks like $4-a-gallon gasoline might be here to stay, and that heating oil costs might cause further problems for consumers as the weather gets colder. Futures prices for natural gas turned lower Friday, but are still about twice as high as a year ago.
Heating oil is used mostly in the Northeast United States; homes in most other parts of the country use natural gas. It's possible for people to cut back on heating as they do on driving, but it's not easy to slash the bill significantly. Political unrest in oil-producing regions along with production cutbacks by refineries and fairly resilient demand for diesel fuel have been keeping energy costs high.
Iran, which has long been under U.N. scrutiny for its uranium enrichment program, has been testing missiles this week, including a new missile capable of reaching Israel. On Thursday, Secretary of State Condoleezza Rice warned the oil-producing nation that the United States will defend its allies, and Iran responded with another missile launch. Neither the United States nor Israel has ruled out a military strike on Iran.
Then yesterday, there were rumors of Israeli military exercises taking place in Iraqi air space. The rumors were reportedly denied by Israeli officials. About 40 percent of the world's tanker traffic passes through the Strait of Hormuz. Meanwhile, Brazilian oil workers were threatening to go on a five-day strike next week unless the state-run oil firm Petrobras gives them an extra day off at the end of their 14-day shift. Those supply worries added to those sparked Thursday when Nigeria's main militant group said it would resume attacks in the oil-rich region.
Light, sweet crude for August delivery soared to an all-time high of $147.27 a barrel before settling at $145.08, up $3.43. That's slightly below last Thursday's settlement record of $145.29 a barrel. Meanwhile, the dollar weakened against other major currencies Friday. Because oil is bought and sold in dollars, oil's rise has not been as severe for countries with stronger currencies; meanwhile, traders have been using commodities as a hedge against the tumbling dollar.
In Nymex trading, heating oil futures rose to a trading record of $4.1586 before settling at $4.0766 a gallon, up 3.92 cents. Gasoline futures also rose to a new trading record of $3.631 a gallon before finishing at $3.5632, up 5.23 cents.
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