Oil rises $5 overnight, Rand weakens

Brent Crude is trading at over $128 now, and the Rand is now 7.80 to the $. At these prices we can anticipate 3 or 4 more months of successive fuel price hikes,with petrol prices breaching R12 a litre by the end of this year.

Every time we have a downward shift, the market forgets what pushed the market up,and when it's up, the market calls it a bubble, blames speculators, or the $ - in short the market looks everywhere except at real fundamental forces.

FT.com:
India, which imports 70 percent of its oil needs to feed its fast-growing economy, on Wednesday raised petrol prices by 11 percent and diesel by 9.4 percent based on pump prices in New Delhi.

Malaysia raised petrol prices 41 percent in a bid to curb its massive subsidies bill, following a similar move in Indonesia where fuel prices jumped by almost 30 percent.

High fuel prices have also hit global airlines. US carrier Continental Airlines said Thursday it will cut 3,000 jobs and pull 67 ageing planes in a massive retrenchment because of rising fuel prices. Two other big US carriers, American and United Airlines, have made similar moves.

More: Improving Mileage: "Hypermiling"

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'

Crude price approaches $130 (WATCH FORBE'S VIDEO)

Collecting a mix of crude oil and water last week from an old well in East Java, Indonesia. The miner sells the oil at up to $28 a drum.

(Sigit Pamungkas/Reuters)

NVDL: Watch Forbe's Video Explanation of record oil prices here.

LONDON: The price of oil hovered near a new high of $130 a barrel Tuesday as investors continued to ignore the prospect of more supply this summer and instead focused on bullish forecasts from investment banks and the influential oilman T. Boone Pickens.

Traders were encouraged to add to their positions after Pickens said he expected crude prices to reach $150 a barrel this year.

The investment banks Credit Suisse and Société Générale also raised their forecasts for average oil price for 2008.

Light sweet crude for June delivery rose to an all-time high of $129.60 a barrel on the New York Mercantile Exchange. In London, the benchmark Brent crude futures contract was up $2.15 at $127.21.

Last week, the most active investment bank in the energy market, Goldman Sachs, helped to push the oil price above $127 a barrel when it predicted prices would average $141 in the second half of this year.

Olivier Jakob, of the trade advisory company Petromatrix, called it the fundamentals rule, "but the question is whether the futures market should reflect the fundamentals of the next few months or of the next few years."

NVDL: Fundamentally prices have to go up. Because the demand is growing faster than supply is growing, and supply growth is no longer a certainty. It's simple economics. And against a background of an ever increasing world human population, with each new individual an additional consumer of resources, an additional user, well, even more demand strain on a finite resource. Think about mould on a piece of bread. The mould can become seemingly infinite in number, mushrooming on the bread, but eventually the resource is consumed and all the mould can do is grow, feed on itself. Eventually very little is left.

Oil Soars Beyond $129 After OPEC Warns It Won't Increase Output
Credit Suisse raises 2008 oil price forecast to $120/bbl from $91/bbl
Oil close to $130 after buying surge

The cost of oil was today poised to break through the $130-a-barrel barrier for the first time after supply shortages and forecasts of high prices for years to come

NVDL: It would be interesting now to provide the encyclopedia of data where so many so-called experts predicted oil prices of what, $80 this year, or $65? They were so far wrong it's a joke. They've been dreaming. We all have. Unfortunately, we awaken on not a pleasant day, and with the news of terrible weather approaching. We are ill prepared.

Brent Crude now $95

These are the latest indicators:

All Share 28456.340 Down 2.01%
Gold 914.48 Up 0.78%
Platinum 2060.00 Up 2.56%
Brent Crude Oil 95.12 Down 0.04%
R153 9.260 Up 0.11%
Rand - $ 7.6655 Down 0.01%
Rand - Sterling 15.0366 Down 0.44%
Rand - Euro 11.2549 Up 0.00%

If oil is $95 now, it's likely to be $110-$120 by July, when the US driving season kicks off.

EINA! Rand at $6.99, Oil at $91

This combination is going to hurt South African consumers. It's not as big a setback if the oil price goes high and the Rand is at, say, R6.60 or R6.70, but the Rand has come all the way back, and now the full impact of those oil prices is going to sting.

The JSE is hovering around 28 400, licking its wounds after plenty of blood letting. The media are underplaying this of course, saying that the political background is not relevant (of course it is) and obvious there's also not a collective wince about oil (which effects food prices, and is the source of inflationary pressures).

Whether or not you go on holiday this December, the odds are next year this time your options will be even fewer. That's a pretty austere scenario, I know, but unfortunately, one I believe to be probable.

Oil rises above $91

LONDON (Reuters) - Oil rose to over $91 a barrel on Tuesday after Turkish troops crossed over into Kurdish territory in northern Iraq.

Three hundred Turkish troops crossed the border overnight to combat Kurdish militants sheltering in the semi-autonomous region and blamed for attacks on Turkish territory.

U.S. light crude for January delivery, which expires later on Tuesday, rose 81 cents to $91.44 a barrel by 10:21 a.m., recouping some of the losses after falling for three straight sessions.

London Brent crude was up 55 cents at $91.84.

Analysts said rising geopolitical concerns centred on the oil-producing Mideast had put fundamental factors such as tight fuel stocks during an intensifying winter season into sharper focus.
More.

Oil Surges Above $99 as Weaker Dollar Spurs Commodity Demand

Nov. 21 (Bloomberg) -- Crude oil rose above $99 a barrel for the first time in New York as a weakening U.S. dollar increased demand for commodities.

Oil, gold and silver gained as the dollar fell yesterday to a record low against the euro on speculation that the Federal Reserve will lower interest rates for a third time this year. Oil gained after Royal Dutch Shell Plc said a fire more than halved output from a 155,000 barrel-a-day oil-sands plant in Alberta, potentially cutting shipments to U.S. refineries.

``Oil has become a hedge for investors and the weaker U.S. dollar has contributed to the rise in gold and oil,'' said Victor Shum, senior principal at consultants Purvin & Gertz Inc. in Singapore. ``The price strength in oil is also supported by the tight fundamentals.''

For more, go here.

NVDL: OPEC are saying $100 oil is cheap, particularly when one factors into it the fact that a large proportion of the oil price is made up of taxes. It's a well made point, but unfortunately, not one that makes it all better.

Oil At $98 Now

Oil Passes $98 on Bombs, Demand Forecast

By John Wilen, AP Business Writer

NEW YORK (AP) -- Oil futures jumped to a new record above $98 a barrel late Tuesday after bombings in Afghanistan and an attack on a Yemeni oil pipeline compounded the supply concerns that have driven crude prices higher in recent weeks.

Those concerns were also fed by a government prediction Tuesday that domestic oil inventories will fall further this year while consumption rises.

At the pump, meanwhile, gas prices continued to rise, following oil's 39 percent price rally since August. The national average price of a gallon of gas jumped 2 cents overnight to $3.024 a gallon, according to AAA and the Oil Price Information Service.

Separately, the federal Energy Information Administration reported that diesel fuel prices reached a national average of $3.303 a gallon, a new record.

Light, sweet crude for December delivery rose $2.72 to settle at a record $96.70 a barrel on the New York Mercantile Exchange Tuesday after earlier rising as high as $97.10, a new trading record.

Later, the contract surpassed that mark, climbing as high as $98.03 in electronic trading.
Oil's seemingly relentless climb raises the question of how high energy prices will go. If crude does keep going up, it might be some time until consumers see relief at the pump. Some analysts predict prices could rise as high as $3.50 to $4 a gallon next summer.

NVDL: "I wonder whether we should be concerned about this? Do you think we should be? Oh what's that on TV about Britney Spears; turn up the volume..."

R/$ and Brent Crude Prices (LATEST)

Rand - US Dollar : 6.5300
Brent Crude Oil : US$ 88.41

Global climate points to interesting times for SA

NVDL: No doubt more interesting than we can conceive...

ALERT: Oil jumps over $90 a barrel

By Javier Blas 2 hours, 2 minutes ago
Crude oil prices on Friday rose to a fresh all-time high above $90 a barrel as the US dollar sunk to a new low against the euro.

Persistent worries about tight supplies ahead of the winter peak season and fresh geopolitical tensions also helped to push prices higher.

Nymex November West Texas Intermediate hit $90.02 a barrel in overnight trading. It later was 10 cents higher at $89.57 a barrel, extending Thursday's $2.07 price jump. It is the sixth straight trading day that oil set a record high.

Edward Morse, chief energy economist at Lehman Brothers in New York, said that financial flows betting on further US dollar weakness ahead of the Group of Seven meeting and the US Federal Reserve meeting were propping up the oil price.

The dollar traded on Friday to $1.4303 against the euro, after touching earlier a record low of $1.4311 per euro. Investors are betting on a further interest rate cut when the Federal Reserve meets on October 31.

A lower dollar cuts the purchasing power of the barrel, suggesting that producing countries, such as Saudi Arabia, would try to keep the oil price higher to compensate for it. The strength of the euro, the sterling pound and other currencies also mean that some countries, particularly in Europe, are partially insulated from the oil price rally.

From Yahoo News. For more go here.

NVDL: Brent Crude - which is the price SA pays for crude - is $83.88, down from $85 last night. That these prices aren't making front page headlines* demonstrates the extent of our chronic delusion and distraction. Also, yes there is a relationship between the high oil price and the low dollar. Read the implications for this here.

In the face of these headlines we still see stories in the paper gleefully shouting: Petrol Prices Likely to Fall. What this does is send out a mixed message, effectively transforming an attitude of rational panic to paralysis and even serenity. Not good.