Metropol

http://news.bbc.co.uk/1/hi/business/4399537.stm

Crude oil prices hit record levels on Friday, with leading investment bank Goldman Sachs warning the cost of a barrel could eventually top $100.
Goldman Sachs said that the oil market may be in the early stages of a "super spike", which could push prices as high as $105 a barrel.

It said strong global demand, allied to potential instability in oil producing countries, could inflate prices.

US light crude rose as much as $2.40 to $57.70 a barrel in New York.

The previous high was $57.60, set on 17 March.

In late, trading it had slipped back to $57.40 a barrel.

In London, the benchmark contract of Brent crude climbed $2.22, or 4.1%, to $56.51 a barrel.

"There are real concerns about product availability, that's what is underpinning the strength of the market at the moment," said Kevin Norrish, an analyst at Barclays Capital.

Consumption effect

The last time prices were at these levels, economists highlighted the potential dangers to global economic growth and inflation.

Oil production cartel Opec was prompted to lift production quotas by 500,000 barrels a day.

In its report, Goldman Sachs said the possibility of political turmoil in major oil producers such as Saudi Arabia could lead to a significant rise in prices over the long-term.

The firm has raised its average US price forecasts for 2005 and 2006 to $50 and $55 a barrel from $41 and $40 respectively.

"Oil markets may have entered the early stages of what we have referred to as a 'super spike' period," said Goldman Sachs analyst Arjun Murti.

This would result in "a multi-year trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion only after which will lower prices return".

Tight supply

Prices have remained above $55 a barrel in recent days after data showed that US gasoline stocks fell last week while demand was 2% higher than this time last year.

Markets are also nervous about disruptions to supply after the recent fatal explosion at BP's largest refinery in the United States and a power failure which caused the closure of a Venezuelan refinery on Thursday.

However, other analysts said it would require a major disruption in supply to cause a spike in prices of such magnitude.

"The market is still of the mind that supply/demand is still very tight but the fundamental situation is not nearly as bad as what current oil prices would suggest," said David de Garis, an economist at ANZ Investment Bank.

Nothing like replying to your own (old) post.

Oil today reached $67 a barrel.

Home heating oil is now (in the middle of summer) over £300 for 900 litres, which is no doubt going to shock a few people when the weather turns.

This is rather worrying.

If terrorists mounted a significant attack on oil supplies at this point I think $100 dollars a barrel or more is rather likely.

Hmm. Commodities are a funny thing. They are very much a self fulfilling prophecy. They are allegedly linked to the geo-political state of the world, but the reality is, they remain as high as those who feel motivated to buy it at those high prices. A massive drop in oil prices would have an even more detrimental consequence when you consider the amount of inventories those such as the US government have built up based on today’s supply prices. The kind of deficit we are talking Is enormous.

Also, when you consider that US oil inventories have increased considerably in the past quarter (usually a bellwether of falling oil prices), oil has remained very high.

Totally off topic, but motorists over here are getting really pissed of with the price per litre of petrol. Its rose 4 cents yesterday bringing the cost of unleaded to $1.44c (0.56gbp) per litre and just 5 years ago it was 89c(0.36gbp) or not even that. What are the petrol prices like in the uk per litre?

We also have a new petrol called BP Ultimate, its about $1.66c a litre and its new, well to BP anyway I think and it makes your car run much smoother and faster.

Unleaded petrol is currently around £0.91 per litre in the UK.

bbcworld2003 wrote:Totally off topic, but motorists over here are getting really pissed of with the price per litre of petrol. Its rose 4 cents yesterday bringing the cost of unleaded to $1.44c (0.56gbp) per litre and just 5 years ago it was 89c(0.36gbp) or not even that. What are the petrol prices like in the uk per litre?

We also have a new petrol called BP Ultimate, its about $1.66c a litre and its new, well to BP anyway I think and it makes your car run much smoother and faster.

In the UK, the price of unleaded is now, in most cases, at least 90p per litre (that's roughly NZ$2.30). Diesel is rapidly reaching the £1 per litre mark (approx NZ$2.50).

We also have BP Ultimate, Shell Optimax, etc. It is also more expensive than regular unleaded/diesel.

The whole oil situation is confusing and fascinating at the same time.

Many experts believe we are headed for a time of "peak oil" - the theoretical year when demand for oil outstrips supply. It's been predicted for around the last 30 years, with many believing it will happen before 2010.

Demand for oil from China and India, containing more than 1/3 of the world's population, continues to sky-rocket, bringing the time of "peak oil" closer.

For a scary but compelling summary of peak oil, click here. Read it - it's fascinating.

It has been predicted for the last year that oil will hit to $100 mark. If it does, combined with other problems with the world economy, we could be in for a very bumpy ride.

The only major oil producing country which doesn't believe in "peak oil" is Russia. Since the 1940s, its scientists and geologists have believed that oil production is a natural "secretion", if you will, of the Earth.

They say that the theory of biological basis of oil is unsound. After all, in the world's greatest oil fields, how many dinosaurs would have to die in the same place and the same time to produce these massive fields? Oil fields in Siberia and other places around the world seem to have mysteriously topped themselves up. Click here to read more.

Totally off topic, but motorists over here are getting really pissed of with the price per litre of petrol. Its rose 4 cents yesterday bringing the cost of unleaded to $1.44c (0.56gbp) per litre and just 5 years ago it was 89c(0.36gbp) or not even that. What are the petrol prices like in the uk per litre?

To the British motorist, being able to buy petrol at 56 ppl is a dream of a buygone age (actually only about 6 years ago, but there we are). Regardless of the rising cost of oil, we are still ridiculously overtaxed on fuel over here, I think it entirely on the cards that another fuel strike could well happen this winter - we were warned in January (when average unleaded had dropped right back to 78.9) that '£1/litre petrol would come sooner than we think'. Well the public didn't stand for 83.9 petrol in 2000, and they won't stand for 100.9 petrol in 2005. The last fuel strike, despite the government's bleating about OPEC, did ultimately result in fuel dropping my 20p / litre when supplies resumed, and it could happen again.

We also have a new petrol called BP Ultimate, its about $1.66c a litre and its new, well to BP anyway I think and it makes your car run much smoother and faster.

Yeah we've had it for a while. As fuel has soared over the last few years, the major oil companies have sought to create an air of added value to their products. Hence just calling higher octane fuel 'super unleaded' won't do anymore - it's now got to be 'BP Ultimate', 'Shell Optimax', and 'Esso Energy Fuel System'.

BUMP!

It is $107 a barrel today.

Home heating oil is £459 for 900 litres.

When I first bought my own place 10 years ago, I got 900 litres for £85.

I'm going to buy some shares in knitwear.

Two years... heck of a zombie thread there.

Nini wrote:Two years... heck of a zombie thread there.

I do apologise, would it in your opinion have been better to open a new one that had no context?

Metropol

The rapidly rising price of oil.

The rapidly rising price of oil.

Re: Oil price - new high - could it hit $100 a barrel?

Re: The rapidly rising price of oil.

Re: The rapidly rising price of oil.