Oil Sets New $53 High on Winter Worries, Nigeria

[RedEarth]

LONDON (Reuters) - Oil prices set a new record at $53 a barrel on Thursday on concerns over tight winter heating fuel supplies and news that a strike in Nigeria had put some crude exports on hold.

U.S. light crude futures rose 98 cents to a record $53 a barrel, marking a surge of $20 a barrel -- more than 60 percent -- so far this year. London's Brent crude also struck a record peak, rising $1.21 a barrel to $49.20.

Prices have rocketed as China's economic expansion drives the fastest demand growth in a generation, stretching world fuel supplies to the limit and leaving no cushion to cope with supply problems.

........

Some officials are beginning to admit concern. David Robinson, deputy research director at the International Monetary Fund warned on Thursday that tight oil supplies could leave the global economy worryingly vulnerable for years to come.

"I do worry about the medium-term outlook, about the sustained vulnerability to oil prices looking forward," said Robinson.




http://www.reuters.com/newsArticle.jhtml;jsessionid=CJIS51SWUKKM4CRBAELCFEY?type=businessNews&storyID=6441517

[lovuian]

1. This will be a Big Drag on the World Wide Economy

More expensive to transport ....Inflation

[Mr E McSquare]

2. Make fun....

of us red-neck country folk all you want! I love my wood burning stove.

[spinbaby]

5. But you drive more

We country folk use a lot of gas in the ol' pickup getting to town. Actually, we have the worst of both worlds--we drive a long ways to get anywhere AND we have an oil-fired furnace. We used to have a wood burning stove for the coldest days but our homeowner's insurance told us we couldn't have it.

[Cobalt Violet]

12. Do they really call rural Vermonters "rednecks"? n/t

[Skittles]

13. I hate wood burning stoves

give me central heat any day

[OKNancy]

3. As far as you know have you seen

the Oklahoma pumper wells going? I would figure that the price is high enough now that some of those closed wells would be pumping again.

( Trying to think of SOMETHING good out of this mess )

[hatrack]

4. But aren't a lot of those stripper wells?

I know Kansas has lots of strippers, many of which only come on when prices spike. Some of them only produce three or four barrels per day.

[RedEarth]

8. Not sure about that, however, I did see in this morning paper

the the share prices of public oil & gas stocks have risen recently.....that really shouldn't be any news, should it? I just paid $1.77/gallon and felt lucky to have found gas that "cheap".

[Fovea]

6. I wrote a paper back in the late 80's

mentioning that the emerging global economy would eventually run into limits based on increased transit costs.

It will be good for the actual world, but bad for producers of heavy indutries. At least until a new transportation paradigm comes along.

One hint-- don't invest in trucking companies.

[htuttle]

9. If fuel gets expensive enough, manufacturing might start to return

I don't know what oil would have to cost to make it feasible, but at some point, the money it costs to transport the goods back to the United States might end up being be more than is saved on outsourcing manufacturing.

Of course, we'll also be paying $25-$30 for a gallon of milk at that point...

[fedsron2us]

14. High oil prices are a hidden tariff on trade.

In order for all those Chinese consumer goods to reach the shelves of WalMart many of the raw materials have first to be transported across the seas to Asia. Once they have been converted into the finished product they then have to be shipped to the USA. Although movement of goods by sea is relatively efficient, bulk carriers and container ships still burn 60-90 tons of fuel oil per day. Add onto that the cost of moving goods by road from the ports to destinations within the American continent and you can see that the rise in oil prices are bound to make this type of import more expensive. It will be interesting to see at what point this factor outweighs the lower labor costs in Asia. While high oil prices are probably not going to have much effect on the off-shoring of service jobs, the impact on the production and movement of manufactured goods is likely to be much more profound. Blue collar workers might even do better than their white collar neighbors.

[venus]

7. This is what you get when you refuse

to have speaks with other nations. A lot of this could have been averted. I know the Pres does not have total control over oil prices, but we blamed Jimmy Carter back in the 70's!

[WillyT]

10. Nuff Said !!!

:shrug:

[David__77]

11. This will most certainly have a serious effect.

The economists are living in la-la land. They refuse to believe that anything could rock the neo-liberal boat. But such a great increase in the price of oil--the grease of the capitalist machine--will much things up in the mid-term.