infowars: Forecast: $70 per barrel

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Forecast: $70 per barrel

Oil prices surge to new record

Los Angeles Times | August 9, 2005

Oil prices climbed to a new record on Monday amid strong demand, worries about the nation's fuel supplies and security threats in Saudi Arabia.

After hitting $64 during trading Monday, the price of U.S. benchmark crude for September delivery closed at $63.94 a barrel, up $1.63 on the New York Mercantile Exchange. That eclipsed Friday's record high close of $62.31 a barrel.

Crude futures today briefly rallied even higher, to $64.27 a barrel, then edged back. Light, sweet crude on the New York Mercantile Exchange was down 6 cents this morning to $63.88.

"Setting a new record in oil is like a broken record - it keeps happening over and over again," said Phil Flynn, senior market analyst for Alaron Trading Corp. in Chicago. "I think we're on a path to hit $70 a barrel."

Flynn and others said Monday's price surge was triggered in part by plans to close temporarily the U.S. embassy in Saudi Arabia in response to what it said was a "threat against U.S. government buildings in the kingdom."

With worldwide oil production near capacity and global demand headed upward, traders have become hypersensitive to any news or event that could endanger production. That includes - in addition to potential problems in Saudi Arabia - hurricanes, labor disputes or a showdown with Iran over its nuclear activities.

Still, some industry experts note that those production risks and the oil market fundamentals are not appreciably worse than at the end of last year, when oil was trading at around $43 a barrel. The situation was no better on the gasoline front, as retail pump prices nationwide climbed to new highs. The average price of regular gasoline jumped to $2.368 a gallon Monday, up 7.7 cents in the last seven days, the federal Energy Information Administration said in a survey. The previous U.S. record was $2.328 a gallon, set in mid-July.

Last modified August 14, 2005