Thursday, May 22, 2008

Peak Demand Pushes Oil to record $132.08

Oil hits record $132.08 as U.S. inventories plunge ahead of peak demand period

Why are prices spiking?
Companies – such as airlines and logistics firms – that are particularly reliant on oil are buying long-term oil futures to hedge against future price rises. That's driving prices up, which is leading to more and more hedging.

Goldman analyst Arjun N. Murti wrote in a report earlier this month that ``the possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months.''

LONDON (Thomson Financial) - Oil hit a record $132.08 as U.S. crude and gasoline stocks fell ahead of the peak demand driving season, which officially kicks off next week.

In a weekly report issued by the Energy Information Administration, crude oil stocks plunged 5.4 million barrels last week against market calls for a modest rise. Gasoline stocks also fell sharply, by 800,000 barrels against predictions for a 200,000 barrel decline, ahead of the driving season.

In London, Brent crude for July delivery was up $3.36 at $131.20 per barrel having earlier hit a record $131.57.

NVDL: $200 oil by Christmas is now looking scarily obvious. The US market underestimated oil stocks by 400%. We are in deep crap. SABC TV news about 1 hour ago had oil prices at $126. Koo koo. Time for everyone every where to say good morning, open your eyes and welcome a brand new day in the Land of Finally Awake Now.

Oil exec: Prices driven by 'fundamentals'

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