Wednesday, November 07, 2007

Oil Blows Through $100 Barrier!!

Tapis crude breaks $US100 a barrel
[From Reuters]

SINGAPORE -- Asia-Pacific light sweet crude benchmark Tapis hit three-digit levels for the first time, ahead of Western bellwethers, on fears of a winter squeeze in the Northern hemisphere, Reuters data show.

Malaysia's flagship Tapis crude for December loading rose to $US100.54 a barrel, up $US2.32 from its settlement on Tuesday, according to Reuters calculations.

"Phew," said a Singapore-based trader when told about the price.

The high-quality Malaysian grade is one of the most expensive crudes worldwide, and used as a marker for most Asia-Pacific light, low-sulphur crude.

Malaysia is a net oil exporter with an output of just above 500,000 barrels per day (bpd) of oil and condensate and state oil firm Petronas, which operates most fields in the Southeast Asian country, is reaping the profits of high oil prices.

Petronas posted net earnings of $US12.9 billion for the year ended March 31 from a revised $US11.4 billion in 2005/2006. The company makes nearly as much money as number-three US oil firm ConocoPhillips and contributes almost a third of Malaysia's revenues.

But surging prices are also forcing Malaysia to reconsider its fuel subsidies, which give it some of Asia's lowest petrol and diesel prices.

Prime Minister Abdullah Ahmad Badawi told members of his ruling party this week that a rise in fuel prices could not be avoided while crude oil traded at record highs.

Oil has jumped nearly $US30 higher since mid-August, as investors braced for more fallout from the U.S. subprime crisis and sought shelter from the falling US dollar, while thinning oil stocks in the US ahead of winter added to the boil.

US light, sweet crude for December rose $US1.33 on Wednesday to a record-high of $98.03 a barrel on North Sea supply fears, as ConocoPhillips said on Tuesday it may be forced to shut five of its 16 oil platforms at the Ekofisk field due to a looming storm.

London Brent crude also hit new peaks of $US94.48 a barrel.


[Some people count sheep when they're unable to sleep--I track the surging price of oil. Not sure if it will bring peaceful sleep; probably more likely to cause nightmares.

It's interesting to Google "$100 oil" and see posts and other news clips predicting this, previously. This news release from Reuters was talking $100/barrel oil back in April of 2005.

I'm curious to see which presidential candidate (if any) reacts to this and what exactly they have to say. I doubt it will vary much from their typical, canned talking points that had grown stale six months ago. In fact, see if you can find any of the candidates, Democrat, or Republican, who have even uttered the phrase, "peak oil."

For anyone that's interested in pulling their heads up from the sand, stay tuned to The Oil Drum for news and commentary on the continued trend upward for oil prices. I don't even dare to spend much time writing (just yet) about water shortages.--JB]

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