POST YOUR OIL NEWS, Clips here


"

A note of caution from Bloomberg:
"In the near term it looks like the move to the downside (Brent Crude) is exhausted,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. `Yesterday (6th feb) we had bearish statistics and were unable to break through the recent lows.''

Stockpiles rose 7.05 million barrels to 300 million barrels in the week ended Feb. 1, an Energy Department report showed yesterday.

"The market fundamentals are deteriorating daily,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. There are going to be bouts of short-covering but the move lower looks inevitable.''

Associated Press 02.08.08, 3:34 PM ET

http://www.forbes.com/feeds/ap/2008/02/08/ap4634197.html


Prices also rose on news that North Sea oil production was cut by 280,000 barrels a day because of technical problems at a Total SA oil field, and that Russian crude output could fall this year with the depletion of a large oil field.

Possible another spike up to $100 barrel then, it doesn't take much now to put the price up!

http://ap.google.com/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB-tAD8UOTT1O0

What would this do to the price?
http://www.resourceinvestor.com/pebble.asp?relid=40396
cyril

Tax hits North Sea competitivenessFiled from Aberdeen
2/26/2008 3:05:37 PM GMT

UK: The North Sea is becoming less competitive in global terms as the tax man eats away at increased investment, Oil & Gas UK said today. The representative body's 2007 Activity Survey showed investment continued strongly with US$24 billion spent on exploring, developing and extracting the oil and gas reserves.



In turn though, cost inflation of 15 to 20 percent a year reduced the efficiency of such sums to the leve that the North Sea now yields a return on investment which is just a third of what it was five years ago.



Investment in developing new oil and gas reserves dropped by around US$2 billion to US$9.8 billion in 2007.



Operating existing assets also continued to get more expensive in 2007. The new report shows operating expenditure rose by US$1 billion in 2007 to US$12.4 billion and is expected to rise further to around US$13 billion in 2008.



Oil & Gas UK's Economics Director Mike Tholen said, "The survey does, however, show that there are significant opportunities to sustain investment of 29 billion (US$58 billion) over the next ten years."



Fifteen more fields are expected to start up in 2008 and overall production is expected to decline at only four percent a year until the end of the decade.



While exploration and appraisal drilling activity rose in 2007 from 70 wells to 111 wells, the increase was largely accounted for by appraisal drilling instigated by the need to reduce technical and commercial risks in such a high cost environment.



Oil & Gas UK Chief Executive Malcolm Webb said, "Over the years, the valuable experience gained in a maturing oil and gas basin means that the UK now has access to world-class people and technology, extensive infrastructure for bringing oil and gas ashore and a range of well-established initiatives to improve the efficiency of working practices.



"However, the North Sea's maturity also makes it more sensitive to cost inflation which is clearly affecting its capital efficiency and hence competitiveness.



"It must be recognised that, even in the current price environment, the tax regime continues to have an impact on long-term investment confidence.



"The primary challenge facing industry, regulators and Government now is to ensure that the UK remains globally competitive, enabling it to attract the required investment in future and keep the supply chain engaged on the UKCS."

Speculation Adds to Oil Price Surge
By H. JOSEF HEBERT 15 hours ago

WASHINGTON (AP) Market speculation on energy prices may have added as much as 10 percent to crude oil costs and the peak may be yet to come, a top Energy Department official said Tuesday.

Guy Caruso, head of the department's Energy Information Administration, told a Senate hearing that supply and demand would suggest a price of about $90 a barrel.

Prices fluctuated around $102 a barrel Tuesday although futures prices later dropped below $100 a barrel on the New York Mercantile Exchange on word that the Organization of Petroleum Exporting Countries are likely to keep production as is when they meet on Wednesday. Oil prices had surged to $104 a barrel on Monday.

President Bush, meanwhile, chided OPEC for failing to pump more oil as energy prices soar and the U.S. economy slumps. "My advice to OPEC is understand the consequences of high energy prices," Bush said after an Oval Office meeting with Jordan's King Abdullah II.

"I think it's a mistake to have your biggest customers' economies slowing down as a result of higher energy prices," Bush said.

Caruso said that supply and demand cannot account for all of the recent price surge.

"Something is clearly going on," he told the Senate Energy and Natural Resources Committee.

Caruso said that in the long run oil prices are forecast to decline, but he acknowledged any short-term predictions are uncertain and prices could increase further.

"I think it's difficult to say whether this is a peak because there's so much uncertainty," said Caruso.

Sen. Byron Dorgan, D-N.D., asked Caruso to explain the recent surge in oil prices.

"I am fairly well convinced that in the short term what we have is an unbelievable orgy of speculation," Dorgan said.

"There's clearly been a surge in moneys coming in to commodities markets, including energy, which has had some upward effect on the price above the trendline," Caruso responded. He said it was difficult to say whether speculation contributed $5 or $10 to the most recent surge, but that his agency's estimate of where prices should be, based on supply and demand, was about $90 a barrel.

Caruso said higher oil prices also stem in part from strong global economic growth, shortages of experience workers, equipment and construction material in the oil industry, and political instability in regions of major oil production.

Energy analysts also have cited the shift of money from the stock market to the commodity markets, including energy, as well as the declining value of the dollar and political turmoil in the Middle East, Nigeria and Venezuela, and a buildup of military forces on the Venezuela-Colombia border in recent days.

Caruso said his agency's forecast shows oil prices declining over the next eight years, and then resuming an upward direction.

The Energy Information Administration's long-term energy forecast expects oil prices to average $57 a barrel by 2016, declining because of increased production of crude oil and availability of alternative fuels including ethanol. But then increased demand is projected to push crude prices higher again to an average of well over $100 a barrel by 2030.

That brought a skeptical response from some senators.

"We're looking at $100 barrel today. I'm not confident in these projections in any way shape or form," said Sen. Kenneth Salazar, D-Colo., adding that he would not rule out $100 oil through 2015.

Caruso acknowledged difficulty in predicting short and long-term prices given today's price volatility.

"In the long run we do think...that high prices do stimulate investment on the supply side," he said. "We do think that over time the (fundamental) economics should prevail."

"It's our view that the longer term impact of the current high oil prices will lead to more exploration and development and investment." But Caruso noted the EIA has hedged its numbers for 2030. It said crude oil prices could be $111 a barrel by 2030 under one economic scenario, but as much as $185 a barrel under another set of economic assumptions.

On the Net:
Energy Information Administration: http://www.eia.doe.gov

Bow Valley bites the dust in North SeaFiled from Aberdeen
3/5/2008 3:37:15 PM GMT





UK: The Bow Valley-operated 16/27a-8 exploration well has turned out to be a duster. The well was drilled by semisubmersible Transocean Prospect to a total measured depth of 11,838 feet (3,608 m).



Bow Valley says Block 16/27a contains prospectivity in multiple zones including the Eocene, Paleocene, Jurassic and Triassic formations. The 16/27a-8 well is a shallow well which only evaluated the Eocene formation.



Elsewhere in the North Sea, Bow Valley will shortly participate in the drilling of the Blackbird prospect close to the Ettrick field development. Bow Valley holds 12 percent interest in Blackbird.



Bow Valley has also committed to an undisclosed drilling rig to drill one exploration well on Block 22/11b in the second half of 2008. Block 22/11b is currently owned by Bow Valley at a 100 percent working interest but the company anticipates finding a partner to join in the drilling of this well.



Bow Valley President and CEO R. G. Moffat said, "Although lack of early success in our U. exploration program is disappointing, we see significant exploration potential remaining on Block 16/27a in addition to our continuing exploration elsewhere.



"We are committed to a multi-well, multi-year exploration program funded out of cash flow. We expect to participate in two more exploration wells in the North Sea over the next six months and are working on plans to participate in additional wells through the remainder of the year and into 2009."

Oil Prices Set New Highs Above $110
By PABLO GORONDI 2 hours ago

Oil prices on Thursday hit a record high above $110 a barrel as investors fled the tumbling dollar that fell to new lows against the euro and a 12-year low versus the yen.

Light, sweet crude for April delivery rose 78 cents to reach $110.70 in early afternoon European electronic trading on the New York Mercantile Exchange. On Wednesday, it had set a record trading high of $110.20 a barrel.

In London, Brent crude futures rose 23 cents to $106.50 a barrel on the ICE Futures exchange.

The greenback's decline has played a role in a surge in crude futures, which have hit record territory in 11 of the past 12 sessions, despite the fact that crude supplies have risen 10.2 percent since early January.

The euro rose as high as $1.5625 before falling back to $1.5592.

In Asia, the dollar briefly slumped to 99.75 yen before creeping back up to 100.27 yen.

"The dollar will remain the dominant factor until the Fed meeting next Tuesday but oil will also have to balance with equities under the pressure of more credit hedge funds going bellyup," said Olivier Jakob of Petromatrix in Switzerland, referring to the U.S. Federal Reserve.

Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak.

"Oil and other commodities have an intrinsic value so that to the extent that the U.S. dollar depreciates, (oil) becomes relatively cheaper in terms of other currencies, such as the euro," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney. "So you get an adjustment to compensate for that effect."

Oil prices initially fell Wednesday in New York trading after the U.S. Energy Department's Energy Information Administration, or EIA, said crude supplies rose 6.2 million barrels last week, more than three times the 1.6 million barrels forecast by analysts surveyed by Dow Jones Newswires. But buyers quickly returned to the market.

"I think the weakness of the U.S. dollar was a key part of that," Moore said.

The EIA also reported that gasoline supplies rose 1.7 million barrels last week, well above the expected 300,000 barrel increase, and distillate supplies dropped 1.2 million barrels, less than the expected 2 million barrel decline.

It was the eighth increase in crude supplies in nine weeks, putting oil inventories back on a growth track after a one-week decline. Meanwhile, forecasters including the Energy Department, the International Energy Agency and OPEC have consistently reduced their demand growth predictions for this year.

Wednesday's EIA report offered more evidence demand is falling: Gasoline consumption fell 0.7 percent last week compared to the same week last year. Normally, gasoline consumption grows about 1.5 percent year-over-year, just to keep pace with population growth.

Many analysts argue that current oil prices can't be justified by the market's underlying supply and demand fundamentals. Yet evidence of weak demand amid growing supplies has not stopped oil prices from rising in the past, particularly when the dollar is falling.

"Some investors are apparently viewing oil and other commodities as providing something of a hedge against U.S. dollar weakness and possibly inflation concerns as well," Moore said.

In other Nymex trading, heating oil futures gained 0.77 cent to $3.0321 a gallon (3.8 liters) while gasoline prices were down 1.06 cents to $2.7180 a gallon. Natural gas futures added 2.7 cents to $10.038 per 1,000 cubic feet.

Oil steady as producers warn on high prices
Tuesday, 22 April 2008 07:49
World oil prices eased only slightly in Asian trade this morning after once again crashing through record highs and as producers warned sky-high values are here to stay.

Analysts said reports of pipeline sabotage in Nigeria had helped boost prices, which broke records almost every day over the past week.

New York's main oil futures contract, light sweet crude for delivery in May, fell 22 cents to $117.26 a barrel. The benchmark contract had struck a new peak in intraday trading of $117.76 before closing at a record $117.48 yesterday on the New York Mercantile Exchange.

Brent North Sea crude for June delivery fell two cents to $114.41 a barrel, after finishing at an all-time high of $114.43 a barrel last night in London. It earlier struck an intraday record of $114.86.

Anglo-Dutch oil firm Shell said yesterday that it may not be able to honour contracts for April and May after a leading Nigerian militant group attacked two key pipelines of Africa's top petroleum producer.

Despite record-high prices, the president of the OPEC oil producers' cartel, Chakib Khelil, said over the weekend that there was no need for an immediate increase in production.

Oil prices are unlikely to fall back below $90, the energy minister of OPEC-member Venezuela, Rafael Ramirez, said yesterday at an international forum in Rome.

Analysts say turmoil in global financial markets has driven investors into oil and other commodities. Oil prices have also been boosted recently by a weak US dollar. The sliding value of the US currency makes dollar-priced goods cheaper for foreign buyers and tends to encourage oil demand.

UK refinery shuts for strike, fuel prices soar
04.21.08, 3:29 PM ET



LONDON, April 21 (Reuters) - Unions at a major British oil refinery were due to meet management for talks on a planned strike that drove oil prices to a new record on Monday as a farmers' union said fuel suppliers had imposed rationing.

The 200,000 barrels per day Grangemouth refinery in Scotland was cutting production on Monday ahead of a two-day strike due to start on Sunday over pensions cuts.

A shutdown at Grangemouth could cut flows of North Sea crude into Britain and hit British gas supplies if the Forties pipeline, which feeds the refinery, is forced to close.

"The union is meeting the company later this evening," a source with the refinery's union told Reuters by telephone.

"The plant is in the process of beginning to shut down."

Ineos was not immediately available for comment on talks. Earlier, refinery owner Ineos' Communications Manager Richard Longden said it would take a week to fully shut the plant.

Worries about a supply disruption at Grangemouth was one of the factors helping push U.S. oil futures to a new record high of $117.76 a barrel on Monday.

Oil traders said the effects could be felt first on the diesel market.

"It's more a diesel problem than anything else," said one London based oil trader.

A spokesman for British Prime Minister Gordon Brown said the dispute was a matter for the company and unions to resolve. "There is contingency planning under way," he said, without giving details.

The threat of shortages pushed the price of London ICE gas oil futures, the basis for diesel prices throughout Europe, within a few dollars of their all time record high of $1,079 per tonne. European gasoline hit a record of $1,002 per tonne.

In New York, gasoline futures surged to their record high of $3.0040 a gallon and heating oil, the basis for U.S. diesel and heating oil prices, hit its all time peak at $3.3309 a gallon.

This rise in oil is incredible !, for investors great and for non hedged oil producers...the profit reports next year will be double that of 2 years ago...really extraordinary !, though we must all hope we don't get a crash in all the other stocks with this going on...the airlines must be cursing !

RF;

Tonite $120 heading to $123 by Thursay..long oil shares short airlines.

In the next 36 months, oil prices will hit $187 a barrel and gasoline prices could reach as high as $6 a gallon, Money Morning Investment Director Keith Fitz-Gerald predicts.

How? Consider the four following concurrent events:

The Dollar Doldrums: Oil is priced in dollars. And the dollar is in the dumper. OPEC members will counter the greenback decline by marking up the price of crude, causing prices to increase still more in dollar-denominated terms.


Soaring Global Oil Demand: Newsflash: there hundreds of millions of new motorists in Asia. China's oil imports jumped 18% in one month. And India's Tata Motors Ltd has unveiled a $2,500 Nano. The fallout: oil will first get more expensive as supplies start to drying up.


Obfuscation by OPEC: Key players of the Organization of the Petroleum Exporting Countries have "reported" no new discoveries for decades.


Terrorism Threats: Threats are escalating beyond comfort levels, already driving up prices and creating a double-whammy effect. Damage to pipelines and refineries could crimp supplies just as global demand escalates.
That sounds pretty painful, but it also gives investors one of biggest profit opportunities in decades.

"Savvy investors [will realize that] we are still in the very early stages of a generational game with the potential to be played for great profits," Fitz-Gerald said.

Wed, Apr. 23, 2008


Record set for gas, oil
Gasoline reaches $3.51 a gallon, and crude nears $120 a barrel. They will likely continue to rise.
By John Wilen

Associated Press

NEW YORK - Gasoline and oil prices pushed further into record high territory yesterday, with retail gasoline reaching a national average of $3.51 for the first time and crude nearing $120, as the dollar fell to a new low against the euro.
At the pump, the national average price of a gallon of regular gasoline rose 0.8 cent yesterday, according to a survey of stations by AAA and the Oil Price Information Service. Prices for diesel - used to transport most food, industrial and commercial goods - also rose overnight to a record yesterday of $4.204 a gallon.

Gasoline prices are nearly 66 cents higher than last year, and they have prompted many analysts to raise their estimates of where gas is going to go.

"I wouldn't rule out the possibility that we could get to $4," said Antoine Halff, an analyst at Newedge USA L.L.C.

Other analysts are less certain. Fred Rozell, retail-pricing director at the Oil Price Information Service, said he thought gasoline prices would rise only 10 cents to 20 cents more nationally. That would mean they would peak near $4.15 a gallon in California, where prices are typically highest, and about $3.50 in New Jersey, where they are typically lowest.

Gasoline prices are rising for many reasons, including oil's record run. Light, sweet crude for May delivery rose to a record of $119.90 before retreating to settle up $1.89 at a record $119.37 a barrel on the New York Mercantile Exchange.

Many investors see commodities such as oil as a hedge against inflation and a falling dollar. Also, a weaker greenback makes oil cheaper for investors overseas.

The dollar fell yesterday after the National Association of Realtors said sales of existing homes dropped in March while the median home price declined, raising prospects that the Federal Reserve will cut interest rates further this year. Fed cuts in interest rates tend to weaken the dollar.

Oil also rose on overseas concerns. A Royal Dutch Shell P.L.C. joint venture declared force majeure on April and May oil-delivery contracts from a 400,000-barrel-a-day Nigerian oil field because of a pipeline attack last week. The move protects the company from litigation if it fails to deliver on contractual obligations to buyers.

In Mexico, oil production slipped 7.8 percent in the first quarter to 2.91 million barrels a day as output at the country's oil fields waned, state oil company Petroleos Mexicanos said. In Scotland, workers at Ineos P.L.C.'s 196,000-barrel-a-day Grangemouth refinery and petrochemical plant threatened to strike over changes to a pension plan.




Time to get out me old push bike !! :)

Oil prices edge higher towards 114 dollars
4 hours ago

LONDON (AFP) Oil prices rose slightly on Thursday after falling sharply the day before in response to a bigger-than-expected rise in US crude reserves.

New York's main oil futures contract, light sweet crude for June delivery, rose 13 cents to 113.59 dollars per barrel. New York crude had struck a record high 119.93 dollars on Monday.

London's Brent North Sea crude for June gained eight cents to 111.44 dollars. The contract had hit an all-time peak of 117.56 last Friday.

Oil prices fell nearly two dollars on Wednesday after slumping by more than three dollars on Tuesday.

"Oil prices were almost unchanged (from Wednesday's close), with market participants still digesting the latest US inventories report and with the dollar continuing to strengthen against a basket of major currencies," said Sucden analyst Andrey Kryuchenkov.

The US currency fell to a record low of 1.6019 to the euro on April 22 but has since recovered, changing hands at around 1.55 dollars in European trade on Thursday.

A stronger US currency makes dollar-priced crude more expensive for foreign buyers and tends to dampen demand.

On the supply side, US government data released Wednesday showed that US crude inventories rose 3.8 million barrels in the week ending April 25, far stronger than market expectations for a gain of 1.5 million barrels.

"The weekly data is generally bearish, with a larger than expected crude build and an unexpected build in distillate inventories," said Eric Wittenauer, analyst at Wachovia Securities.

After striking record highs on Monday, oil prices began sliding Tuesday amid an end to a two-day strike at the Grangemouth refinery in Scotland.

The stoppage had closed a pipeline which supplies 40 percent of Britain's oil and gas.

Over the past two weeks, oil prices have smashed through a series of record highs, sparking widespread international concern among consumer nations.

Kuwaiti Oil Minister Mohammad al-Olaim said Wednesday that OPEC may hold an extraordinary meeting on oil prices before a scheduled conference in September and did not appear to rule out higher production.

However, Libya's acting oil minister Chukri Ghanem indicated that the Organization of Petroleum Exporting Countries cannot pump more crude oil.

Oil rises towards $125 after earlier dip
Janet McGurty, Reuters
Published: Tuesday, May 13, 2008
LONDON (Reuters) - Oil rose towards $125 a barrel on Tuesday, shrugging off a forecast for slower growth in world demand from the International Energy Agency that earlier sparked profit taking.

A decline in China's oil imports in April, the first year-on-year drop in 18 months, also raised questions over demand. China is the world's second-largest oil consumer after the United States.

U.S. crude was up 47 cents to $124.70 a barrel by 1211 GMT (8:11 a.m. EDT), after falling as low as $123.10. On Monday, it hit a record of $126.40. London Brent crude rose 25 cents to $123.16. Record-high oil prices will slow global oil demand growth this year to 1.03 million barrels per day (bpd), said the IEA, 230,000 bpd less than its previous forecast.

But the adviser to 27 industrialized countries also said demand growth from emerging countries led by China and the Middle East remained strong.

Investors wondered how long demand could hold up given the sharp rise in oil prices, which first hit $100 in January.

"It's not the absolute level, it's the rate," said Evan Smith of Texas-based fund manager U.S. Global Investors.

A too-rapid rise in prices is "what's going to cause oil prices to hold back. It's going to be demand destructive."

China's April crude oil imports fell by 3.9 percent from a year ago to 3.47 million bpd, and were also down from the record of 4.07 million bpd in March, official Chinese data showed.

The market has kept a close watch on oil demand in China and India, whose economic booms have helped send prices up sixfold since 2002.

Weekly U.S. inventory data on Wednesday will provide further direction to the market after an unexpected fall in distillates stocks, which include heating oil and diesel fuel, pushed prices higher last week.

U.S. crude inventories are expected to have risen for a fourth straight week, while products stocks would also rise, helped by an increase in refinery utilization, a Reuters poll of analysts found.

(Additional reporting by Maryelle Demongeot in Singapore and Alex Lawler and Barbara Lewis in London)

Crude sets new mark above $135
Concerns about supply and weakening dollar help oil prices maintain upward surge.
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May 22, 2008: 6:49 AM EDT

Fuel costs hurt air travelersWhat is to blame for high oil prices?
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BANGKOK, Thailand (AP) -- Oil prices hit a record above $135 a barrel before falling back slightly in Asia on Thursday, with supply worries, rising global demand and a slumping dollar keeping crude futures on an upward track.

With gas and oil prices setting new records nearly every day, many analysts are beginning to wonder what might stop prices from rising. There are technical signals in the futures market, including price differences between near-term and longer-term contracts, that crude may soon fall. But with demand for oil growing in the developing world, and little end in sight to supply problems in producing countries such as Nigeria, few analysts are willing to call an end to crude's rally.

"The sentiment in the market is very bullish at the moment," said David Moore, commodity strategist with the Commonwealth Bank of Australia in Sydney. "The U.S. dollar was weaker last night, and also the U.S. EIA report showed an unexpected decline in U.S. commercial crude oil inventories, so there's a combination of factors pushing the oil prices higher."

Crude prices blew past $130 on Wednesday amid concerns about demand, supplies and a weaker dollar, and then they just kept going. The rise accelerated when the U.S. Energy Department's Energy Information Administration said U.S. crude inventories fell by more than 5 million barrels last week. Analysts had expected a modest increase.

Late afternoon in Singapore, light, sweet crude for July delivery was up $1.71 at $134.88 a barrel in electronic trade on the New York Mercantile Exchange.

The contract had earlier hit a trading record of $135.09 a barrel after rising $4.19 in the floor session Wednesday to settle at $133.17. The settlement price marked crude's largest one-day price advance since March 26.

Some analysts say crude has been boosted in recent days by especially strong demand for diesel in China, where power plants in some areas are running desperately short of coal and certain earthquake-hit regions are relying on diesel generators for power.

Also, the Wall Street Journal reported Thursday that the Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world's top 400 oil fields.

For several years, the IEA has predicted that supplies of crude and other liquid fuels will arc gently upward to keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently.

Now, the agency is worried that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day in production over the next two decades, the paper reported.

That view has been echoed by many analysts watching the seeming unending string of oil price records.

"The market is really structurally tight ... oil demand is not growing that fast but supply is constrained," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

In its weekly report, the U.S. Energy Information Administration said gasoline inventories also fell, which took the market by surprise as well. Inventories of distillates, which include heating oil and diesel fuel, rose less than analysts surveyed by Platts had expected.

In Asia, the dollar gained slightly from overnight levels, but was still showing a downward bias that wasn't there last week.

Investors see hard commodities such as oil as a hedge against inflation and a weak dollar and pour into the crude futures market when the greenback falls. A weak dollar also makes oil less expensive to buyers dealing in other currencies.

Many investors believe the dollar's protracted decline over the past year has been the most significant factor behind oil's rise from about $66 a barrel a year ago.

And while Moore said his bank's "expectation is that oil prices will ultimately fall back from current levels over the course of this year ... the likelihood is that we'll have oil prices remaining at what would be considered a high level by the standards of a couple of years ago for some time yet."

In other Nymex trading, heating oil futures rose 8.2 cents to $3.9904 a gallon while gasoline prices added 3.92 cents to $3.4357 a gallon. Natural gas futures rose 9.3 cents to $11.733 per 1,000 cubic feet.

First Published: May 22, 2008: 3:51 AM EDT

May 23 (Bloomberg) -- Crude oil rose, headed for a third weekly gain, after a report forecast that the 2008 hurricane season may be more active than usual, threatening oil platforms and refineries in the Gulf of Mexico.

The 2008 season, which begins on June 1, may have as many as nine hurricanes forming in the Atlantic Ocean, more than average, the National Oceanic and Atmospheric Administration said in a report yesterday. Crude prices rose to a record yesterday spurred by concerns about long-term supply.

``The prospect of a more active hurricane season is at the back of people's minds, keeping the market up,' said Robert Laughlin, a senior broker at MF Global Ltd. in London.

Crude oil for July delivery rose as much as $2.33, or 1.8 percent, to $133.14 a barrel on the New York Mercantile Exchange. It was at $132.92 a barrel at 12:18 p.m. in London.

Yesterday, oil fell $2.36, or 1.8 percent, to settle at $130.81 after reaching $135.09 a barrel, the highest since futures started trading in 1983.

At the lower end of the NOAA's forecast, as few as six Atlantic hurricanes may form, including two major ones, which would make 2008 an average storm year. In the past two years, NOAA predictions have overestimated the number of hurricanes.

``It's the first look at what might happen,'' said Barbara Lambrecht, an analyst at Commerzbank AG in Frankfurt. ``The hurricane outlook is a bit better than last year but a bit stronger than average.''

Oil trades above $132 a barrel
1 hour ago

SINGAPORE (AFP) Oil traded higher at more than 132 dollars a barrel Monday as the US summer driving season kicked off, underscoring concerns that output was inadequate amid rising demand.

Tightness in the oil market has made prices sensitive to a confluence of factors, including a weak US dollar, speculative funds, an unwillingness by oil-producers to raise production and geopolitical tensions, analysts said.

In afternoon Asian trade, New York's main oil futures contract, light sweet crude for July delivery, was up 56 cents to 132.75 dollars a barrel, after closing at 132.19 dollars a barrel in New York on Friday.

Electronic trading on the New York Mercantile Exchange was unaffected by the US Memorial Day holiday on Monday.

The US summer driving season, which kicked off at the weekend, is a time when Americans take to the roads on their holidays, boosting fuel demand in the world's biggest economy and affecting global prices.

London's Brent North Sea crude for July delivery was trading at 131.90 dollars a barrel, up 33 cents.

On Thursday, Brent struck an all-time high of 135.14 dollars and New York crude reached a record 135.09 dollars, before both contracts plunged as investors banked profits.

Mark Pervan, senior commodities strategist at ANZ Bank, said buying ahead of the reopening for floor trading in New York on Tuesday pushed prices higher Monday.

Expectations the dollar will continue to struggle has also made the market more attractive because a weak US currency makes dollar-commodities such as oil cheaper for foreign buyers.

"A lot will depend on the performance of the US dollar. I think trading will be dictated by the currency markets this week," Pervan said.

Investors were positioning on expectations the US market will reopen strong on Tuesday, he said.

The dollar was steady in Asian trade on Monday as traders awaited upcoming data amid worries that soaring oil prices could hinder a recovery in the US economy, dealers said.

The dollar was stable at 103.28 yen in Tokyo afternoon trade from 103.31 in New York late Friday.

The euro was steady at 1.5763 dollars from 1.5761 but slipped to 162.80 yen from 162.91.

Investors were waiting for a batch of economic data due this week as well as speeches by Federal Reserve officials for fresh clues on the outlook for US interest rates.

"Oil prices don't seem to be stopping their upwards march and are pressuring the (US) economy," said Kazuhiko Shibata, Tokyo branch manager at Dresdner Bank.

"Recent market optimism that the economy might be nearing the end of its slump has waned," he added.

Stock markets across Asia also fell on concerns of rising inflation stoked by surging oil prices.

"With crude oil still trading above 132 dollars a barrel and no positive news to lift sentiment, many investors are staying on the fence," said Rommel Macapagal of Westlink Global Equities in Manila.

"High oil prices will certainly hurt consumers and the overall domestic economy."

Crude futures have risen by more than a third since the beginning of 2008 when they struck 100 dollars for the first time, lifted by unrest in some of the oil-producing countries, falling energy inventories, high Asian demand for fuel and a weak dollar.

Reluctance by the Organisation of Petroleum Exporting Countries (OPEC) to hike their output has also helped keep prices high.

OPEC, which produces 40 percent of the world's oil, insists that the market is well supplied and that record prices reflect speculative investment activity rather than actual supply and demand conditions.