Tuesday, April 18, 2006

Wait......it's not over???

The following are snipped from CNN and Fox News:
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"OPEC does not have the capacity to increase production. Right now, it is not the time to discuss such issues," a senior Iranian Oil Ministry official told a newspaper.

Fear drives oil to all-time high

Light sweet crude for May delivery, which expires on Thursday, traded as high as $70.88 per barrel on the New York Mercantile Exchange (NYMEX), surpassing the previous record of $70.85 set last summer after hurricanes devastated the Gulf Coast.

LONDON — Oil prices reached a new high of $70.88 a barrel Tuesday as persistent concerns about Iran's nuclear program and supply disruptions in Nigeria overshadowed a new report from OPEC forecasting weakening global demand.

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Wait a minute.

Weakening global demand? WEAKENING GLOBAL DEMAND?

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In its latest monthly report, the Organization of Petroleum Exporting Countries on Tuesday revised its demand-growth forecast for 2006 to 1.42 million barrels a day, down from 1.46 million barrels per day in the previous report. The cartel estimates that global crude-oil demand will be slightly above 84.5 million barrels per day — about half a million barrels per day lower than the current Wall Street consensus

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Are they saying that oil prices are going up because it's not in demand as much? They want us to believe that economics work backwards for oil?

OPEC: "Will you buy oil at $40 per barrel?"

American consumer: "No thanks, I don't need it"

OPEC: "Okay then, $70.88 it is."

American consumer: "SOLD!"


I mean, WTF?

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Crude oil production is only barely keeping up with rising global demand, leaving a slim margin for error if there is a prolonged supply interruption, experts say.

Traders are anxious that U.S.-led efforts to stop Iran, OPEC's second-largest member, from pursuing a suspected nuclear weapons program would lead to a disruption in Persian Gulf supplies.

And in Nigeria, militant attacks have led to the shutdown of crude oil production. Platts estimates Nigeria's output fell by 220,000 barrels per day in March, compared with February.

Also underpinning high oil prices is booming demand in emerging economies such as China and India.

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Crude oil production is barely keeping up with rising oil demand. Wait, what? I thought it was falling. huh?

Booming demand in emerging economies such as China and India. Oh. Thank god. That's why the price is so high. Demand in CHINA and INDIA. Whew.

For a second there I thought we still needed oil here.


I was scared for a moment.

Glad that's over.


False alarm.




-lord GOTWA