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Oil hits record high near $128
By Richard Valdmanis Reuters
Friday, May 16, 2008

Oil shot to a record high near $128 a barrel on Friday after Goldman Sachs, the most active investment bank in energy markets, forecast a continued spike in prices through the end of the year due to thin supplies.


The rally came as OPEC kingpin Saudi Arabia rebuffed an appeal from U.S. President George W. Bush for more oil supplies to ease pressure on the U.S. economy, already hard hit by a housing slump and credit crunch.


U.S. crude gained $2.50 to $126.62 a barrel by 5 p.m. British time after touching a peak of $127.82 earlier in the day. London Brent rose $2.48 to $125.11.


Oil prices have risen sixfold since 2002 and doubled since last year as rising demand from China and other developing nations outpaced new supply.


Goldman Sachs raised its forecast for average oil prices for the second half of 2008 to $141 a barrel from $107 because of tight inventories -- a prediction that would require a rapid run up in current prices to come true.


"I would say the bigger story today is that Goldman upped their target on average oil prices for the back half of the year... That's causing oil to run up about $3 today," said David Katz of Matrix Asset Advisors.


Goldman earlier this month predicted that oil prices could scale $200 within the next two years.


DIESEL CRUNCH


Diesel has taken centre stage in the world energy crunch as tight power supplies in China, South Africa, Chile, Argentina, and parts of the Middle East triggered a boom in demand for middle distillates for electric generators.


Chinese demand for imported diesel is expected to rise even further in June after this week's deadly earthquake disrupted gas supplies to major cities and as companies built stockpiles ahead of the summer Olympics.


"People are looking at diesel. The situation is worse since the earthquake on Monday in China," said Robert Laughlin at MF Global.


The boom in diesel consumption added to already robust demand from the European vehicle fleet, thinning inventories on both sides of the Atlantic.


Adding support to oil's rally, the Organisation of the Petroleum Exporting Countries (OPEC) has repeatedly said there is no need to add supply to the market.


Bush arrived on Friday in Saudi Arabia, the world's biggest oil exporter, where he renewed his appeal for more oil. In response, Saudi Arabia repeated its pledge that it would pump as much oil as needed to meet demand but saw no need for a hike at the moment.


OPEC's smallest producer, Ecuador, offered the first dissenting view from the group, saying members should consider raising output because record prices are hurting the poor.


"I think OPEC has to deal with this issue, because this is hitting all the poorest countries that are oil importers," Ecuador's President Rafael Correa told Reuters in the Peruvian capital, Lima.


The dollar extended losses against the euro on Friday, hurt by a report showing U.S. consumer confidence tumbled in May to its lowest level in 28 years.


The sliding dollar has devalued U.S. financial assets, prompting investors to move cash to commodities which helped fuel oil's rally this year.


(Additional reporting by Santosh Menon and Alex Lawler in London, Felicia Loo in Singapore; Editing by David Gregorio)





http://www.iht.com/articles/reuters/2008/05/16/business/OUKBS-UK-MARKETS-OIL.php






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Just another idiotic thing that Bush does!!!
I wonder what drugs he was on when he asked them to increase production. I need to get me some - cause living in a fantasy world like him, must be great!!!!

Now why in Sam Hill would you want to Frog-Up-My-Friday with such disparaging news. That's it- to the whip room with you my friend!

Opec isn't going to increase production, they are making to much money. I wouldn't if I were them.

To bad we aren't on good terms with Venezuela or Russia, then we can tell OPEC hadios muchacho and be done with it, it would nice to see what happens to OPEC's prices then.

Idiotic????? President and Vice-President both from the oil industry and as the end of their term approaches, oil prices are at a record high. Is that a failure or a success?

If he asks them, you are unhappy. If he doesn't try something at least, you are unhappy. What else do you want him to do? Sure he had to try and hope that they would say "yes, but you must do this for us.".

Sure. Another conspiracy theory in the making.

Hey. If he’s trying something that might stand even a snowballs chance of helping the price come down, I’m happy. No matter what drug he is or isn’t on, or what party he's in.

Yesterday, I bought 7500 gallons of AvGas, and there was nothing “happy” about it.

Gotta try something.

Well, now that I've finally got my 560SEC, I can quit looking for a set of pimped out wheels I guess. Anybody know where I can pick up a cheap set of cinder blocks. I'll just put it up on blocks in the driveway, sit in it, and make car noises . . .

I have yet to see any station run out of gas. Has anyone on this forum seen a shortage or lack of supply?

What is the definition of shortage? Seems to be plenty to go around, the only shortage I see is on the consumer wallet. It's all a conspiracy to enrich big oil.

I believe the Saudis, there is no shortage. Just massive greed.

:D
I'll go with that.

Nothing conspiratorial about it at all. Do you think those who live in the world of corporate oil are happy or unhappy over the price of oil?

So there is proof that Bush and Cheney manipulated the oil prices for his buddies to get a kickback?

I have no idea what the deliberate plans were since the energy policy meetings with industry leaders were held in secret. But I never suggested there was a deliberate plan to manipulate oil prices. What I think is that Cheney and Bush are deeply socialized within the oil industry. When they took public office, the slate was not wiped clean. The values according to which they had judged the world for decades were still in their minds. High oil profits are good, low oil prices are bad.