Friday, May 16, 2008

Countdown to $200 Crude (4)

Another Friday and another new crude record. It settled at $126.29. That is $0.33 higher than the record set on last Friday. This is not a big jump but a new record nevertheless.

CNBC says
Oil Prices Finish at Record Above $126 a Barrel

Oil prices shot to new highs again Friday as traders, unimpressed by U.S. and Saudi efforts to boost supply, kept buying on the belief that prices had more room to rise. Light, sweet crude for June delivery jumped $2.17 to settle at record close of $126.29 on the New York Mercantile Exchange. Earlier in the session, prices surged to $127.82 a barrel, also a new high. It was the eighth time in the past 10 sessions traders rewrote the record books, and the first time prices topped $127 a barrel.

Investors shrugged off news from Saudi Arabia's oil minister, Ali Naimi, that the country increased its production by 300,000 barrels a day last week in response to requests from customers. The market also had little reaction to the Energy Department's announcement said it would cancel shipments into the Strategic Petroleum Reserve for six months beginning July 1.

Oil industry observers questioned whether either move would have a significant effect on soaring energy prices.

"It's ridiculous because I don't think this is going to bring the price down," said Phil Flynn, an analyst at Alaron Trading, of the Energy Department's move.

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