Oil prices spike again on low US Inventories

[swag]

cut and paster's note - recall that the war on Iraq was predicted to drop prices to $25 - $28 barrel and to help US corporate profits and Bush. Isn't quite working out that way.

Crude Oil Soars the Most in Two Months as U.S. Inventories Drop
April 7 (Bloomberg) -- Crude oil futures rose the most in two months after inventories in the world's largest energy consumer unexpectedly fell from a 19-week high last week.

Supplies declined 2.1 million barrels to 292.2 million in the week ended April 2, the U.S. Energy Department reported. Analysts surveyed by Bloomberg expected an increase of 2 million barrels. Inventories of gasoline and distillate, which includes diesel and heating oil, also fell. Refineries operated at 89.9 percent of capacity, the highest in eight weeks.

``The good draws in both crude oil and gasoline came as a shock,'' said Justin Fohsz, a broker with Starsupply Petroleum Inc. in Englewood, New Jersey.

Crude oil for May delivery was up $1.36, or 3.9 percent, at $36.33 a barrel at 12:11 p.m. on the New York Mercantile Exchange. Futures are set for the biggest single-session rise since Feb. 2. Oil rose 1.7 percent yesterday on concern that violence in Iraq may limit exports from the country.

Prices were up 30 percent from a year earlier when U.S. forces were attacking targets in Baghdad.

. . .

[kalian]

1. Where's the link to the article.....

and, what the hell happened to the oil reserves? I thought
that shrub had signed an EO requiring a vast INCREASE in the oil
reserves. Given that he hasn't allowed any of this oil to get pumped
into the US economy...where did it go?

[54anickel]

2. Shrub has managed to tick off the world. High oil costs are just one

of the many prices this nation pays for having an idiot at the helm.

http://www.atimes.com/atimes/Global_Economy/FD08Dj02.ht...

snip>
Despite strong pressure from the administration of US President George W Bush on OPEC to delay its planned production cut, the position of Saudi Arabia - to reduce supplies - prevailed. More important than the immediate impact on oil prices, OPEC's action signals the depth to which US foreign relations with Persian Gulf countries have plunged in the year since the US invasion of Iraq. US foreign relations with other key oil-producing countries, including Russia and Venezuela, have also weakened considerably over the past year. Increasing antagonism between the world's largest oil producers and the Bush administration will keep world oil supply lean through at least the end of 2004. With supply diminished, oil demand, particularly in Asia, will remain strong, pushing international oil prices above US$40 per barrel.

Saudi Arabia holds the world's largest petroleum reserves and accounts for more than one-third and one-half of total OPEC oil production and spare production capacity, respectively. Its dominant position in OPEC and importance to world oil supply has made strong relations with Saudi Arabia a priority for the US government over many administrations. In the past, strong relations with Saudi Arabia gave the United States considerable influence over OPEC, helping to ensure that international oil prices remained at levels acceptable to consuming countries. But over the past three years, relations between the Bush administration and Saudi Arabia have deteriorated substantially. The role of Saudi nationals in the terrorist attacks against the US in September 2001 instigated this deterioration. The deterioration in relations advanced with the US invasion of Iraq, which Saudi Arabia, along with many other Gulf countries, opposed. These countries opposed the war in Iraq specifically because they feared it would strongly destabilize the entire region - a fear that has been realized.

In addition to the chaotic conditions accompanying the US occupation of Iraq and growing instability there, terrorist attacks have occurred in Saudi Arabia, Morocco and Turkey. The conflict in the Palestinian Territories has escalated to heights unimaginable two years ago and the Bush administration continues to threaten Syria and Iran. Washington has succeeded in alienating almost every country in the Middle East. Against this background, it's no great leap to infer that many of the region's governments would be happy to see Bush defeated in this year's presidential elections, potentially heralding a change in US foreign policy and the return of stability in the Middle East. While the Gulf countries have no influence over US foreign policy, they do have modest leverage over the US economy via their ability to control oil supply and therefore international oil prices. High oil prices will undermine the US economy, threatening Bush's re-election.

Russia is the world's largest crude-oil producer and its second-largest oil exporter. Like Saudi Arabia, Russia has strong influence over world oil supply and international oil prices. Relations between the United States and Russia, though seemingly strong after the terrorist attacks in the US, have deteriorated sharply over the past year. Russia also strongly opposed the US invasion of Iraq. While Moscow was loath to see the Middle East destabilize, it was even more concerned with the potential of increased instability in Central Asia and in Russia as a result of the war in Iraq. As in the Middle East, an upsurge of terrorism has swept through Central Asia and Russia over the past year. In addition to increasing instability, the government of President Vladimir Putin is also very concerned about US plans for permanent military bases in Uzbekistan and Kyrgyzstan, and Washington's influence over Georgia, a key transit point in the Caspian oil pipeline.

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