POST YOUR OIL NEWS, Clips here


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smiler

Believe it or not this is called a smiler ride. Battery-Powered

Found another one also called a smiler ride, that's not you is it smiler.

If that pic is 39 years old could be ! :))

OIL: Oil jumped following a Morgan Stanley analyst's forecast of $150 oil by July 4, and in response to a drop in the dollar and fresh tensions in the Middle East.

Interesting angle on Oil News today in the Middle East.

'Kuwait MP's seek to cut oil output and limit production to one percent of proven reserves'. - Kuwait Arab Times 16.06.08.

The 'officially' stated reserves has been around 100 Billion barrels for several years. There are noises, probably with some truth, that the 'proven' reserves are materially less. There is some belief it could be as low as 25 Billion.

The current production is around 2.5 million barrels per day. The 'master plan' was/is to increase to 4 million barrels per day.

Clearly there are some political agendas being 'spun' by the new Kuwaiti MP's. Whatever the agenda, it all adds to the uncertainty of future oil supply.

This story will probably run a while as events unfold. I'll keep posting the news as it comes out.

Thanks Darradev (gcm still going well !)

Aye, the story has a fair bit to go.

I sold gcm a few weeks back but it is definitely on my watchlist.

Page last updated at 15:22 GMT, Monday, 16 June 2008 16:22 UK


Oil at record near $140 a barrel

There have been calls for increased global oil output
The price of crude oil has hit a new high of close to $140 a barrel in New York trade, despite Saudi Arabia agreeing to increase output in July.

US light crude rose to a record high of $139.89 a barrel, surpassing the previous high of $139.12 set on 6 June. The price later fell back slightly to trade up $4 at $138.86 a barrel.

On Sunday, Saudi Arabia had said it would increase its oil production by 200,000 barrels a day next month in a move to meet growing world demand.

That would make a total rise of 550,000 barrels a day, or over 6%, since May and would take Saudi output to its highest monthly rate since August 1981.

The news was announced after UN Secretary General Ban Ki-Moon met Saudi Oil Minister Ali al-Naimi in Jeddah for talks on the high oil price.

The market has got it in its head that we are about to run out of oil, and is looking for negative news

John Hall, oil analyst


Q&A: Record oil prices

Last month, Saudi Arabia increased its production by 300,000 barrels a day.

The country is thought to be the only oil producer with the ability to pump substantially more crude.

It argues that the current high prices are caused by speculators rather than any shortage of crude oil.

Oil prices had fallen by almost $2 on Friday after reports that Saudi Arabia might boost oil production but many believe that this pledge is too little too late to bring down oil prices.

Extremely volatile

"If they'd have said this six months ago, it might have had some effect," said oil industry expert John Hall.

"But the market has got it in its head that we are about to run out of oil, and is looking for negative news."

"The market is extremely volatile at the moment," he added. "Any disruption to supply is immediately jumped on."

Speculation about the future of oil prices has been rife recently, with some analysts predicting oil could jump to as much as $200 a barrel during the next 18 months.

Israeli threats to strike Iran over its nuclear programme have also helped fan the flames.

Movements in the currency markets on Monday also triggered the latest price spike, with the dollar weakening against the euro and subsequently making oil cheaper for investors dealing in other currencies.

Meanwhile, Norwegian oil firm StatoilHydro saw oil and gas production temporarily abandoned when a fire broke out on the 90,000 barrel a day North Sea platform.

Oil companies return to IraqBy Henk Sjoerd Oosterhoff*

20-06-2008

International oil companies are negotiating their return to Iraq 36 years after their expulsion from the country by former dictator Saddam Hussein. On 30 June, Royal Dutch Shell, Total, BP and ExxonMobil will sign agreements with Baghdad about providing maintenance work and technical support for Iraqi oil facilities over the next two years.

The oil companies have offered all sorts of enticements to secure the favour of the Iraqi government. They are offering the use of the most modern technologies, they have made countless analyses of the country's oil supplies, and during the past two years their experts have been touring Iraq offering free advice and training. Of course, they did this in the hope of securing contracts and huge profits at a later date.
According to Lucia van Geuns, an energy expert at the Clingendael Institute's International Energy Programme:

"It's a win-win situation. As a result of the events of the past years the Iraqi companies have not been able to maintain the same level as international companies. These companies can look forward to a bright future."


New exploitation law
For the time being only short-term contracts for maintenance and repair work will be agreed. The international firms will be paid as contractors who are delivering services ("service agreements"). Nothing has been agreed concerning the exploration and exploitation of new fields. The Iraqi parliament has been unable to agree to a new law regulating mining and exploitation.
The director of the Cambridge Energy Research Associates' Middle East and Africa Department, Leila Benali, says the move is an important first step. The provision of service agreements is the only creative way of circumventing the deadlocked talks in parliament. By negotiating agreements with a limited number of companies for at most one or two years, it will be possible to increase production from the current level of 2.5 million barrels a day to up to 3 million barrels. The Iraqis are hoping to produce 6 million barrels five years from now.

Big prize
The Saddam era and the US-led invasion of Iraq have left their marks on the country's oil fields. Ms Benali dos not think it will be easy to renew production at fields which are no longer operating. And, because of the security situation, insurance fees are enormous. However, the companies are willing to take the risk since, as Leila Benali puts it:

"Everybody is waiting for the big prize - the giant fields in the south. There have been a lot of talks between the authorities and the companies about whether they will receive contracts once their service agreements have ended, or if they will still have to compete with other companies. So of course it's an attempt to gain a foothold in an effort to win the big prize everybody is hoping for."

Effect on oil prices
Would increased Iraqi production lower oil prices? Ms Benali says it would take another few years to answer this question. The price of oil wouldn't be affected by a mere half a million barrels from Iraq. The Clingendael Institute's energy expert Van Geuns also does not expect an immediate reduction in oil prices:

"Maybe in five years when Iraq is producing more and heading towards six million barrels a day, which is what they are hoping to produce within five years. Surely those extra 3.5 million barrels would have an effect. But I doubt that oil prices will drop dramatically."


http://www.radionetherlands.nl/currentaffairs/region/middleeast/080620-oil-iraq

Oil 'would create budget surplus' Friday, 20 June 2008 15:21 UK


The SNP believes the figures back the economic case for independence
Scotland would be in budget surplus to the tune of more than 800m with a "geographical share" of North Sea revenues, government figures suggest.

However, if the country was to receive its per capita share of North Sea revenues in line with the rest of the UK, it would have a deficit of 6bn.

Excluding North Sea revenues entirely would leave deficit of 6.7bn.

The figures are contained in the Government Expenditure and Revenue in Scotland (Gers) report.

The report compares government spending with the amount of money raised.

Experts from Aberdeen University said a geographical share of North Sea oil revenues would give Scotland 83% of the revenues.

That would give the country a budget surplus of 837m (0.7% of GDP) in 2006/07 - compared with a UK deficit of 4.3bn. Finance Secretary John Swinney said the report showed Scotland was in surplus.

"The flow of resources from Scotland to the rest of the UK is some 1.2bn," he said.

"This year's Gers publication has been informed by an updated and detailed analysis of North Sea revenues by Aberdeen University, enabling a geographical share to be allocated to Scotland's accounts.

"Indeed, as North Sea oil revenues soar, city accountancy firm Grant Thornton estimates that Scotland's surplus would now stand at some 4.4bn."

Total non-North Sea public sector revenue in Scotland was estimated at 42.4bn in 2006/07, compared with expenditure of 49.9bn.

The figures were produced by government officials, but ministers were not involved in the process.

Officials said the figures were the most accurate picture yet of Scotland's fiscal position, with more than 3,000 budget lines having been queried with the Treasury since the last figures were produced.


http://news.bbc.co.uk/2/hi/uk_news/scotland/7465840.stm

Treasury is one of the few UK winners from the surge in oil prices
By Roger Bootle
Last Updated: 12:43am BST 23/06/2008

The rise in international commodity and oil prices is evidently having a serious impact on our economy. But unlike corn or rice, we are substantial producers of oil. Given this, why aren't we made better off by higher oil prices? And if the country as a whole is made better off, then given that most of us are clearly worse off, who are the gainers?

Over the past three-and-a-half decades, the UK's oil position has gone through a transformation. When the first oil shock occurred in 1973, the UK produced virtually no oil. But by the time of the second oil shock, which roughly coincided with Mrs Thatcher's election in 1979 (although, so far as I can tell, there was no causal connection) production had soared. At the peak, oil production was worth about 20bn per annum, or roughly 6pc of GDP. Moreover, the UK became a substantial net exporter of oil, with the oil surplus worth 8bn, or more than 2pc of GDP.

And oil had a major impact on the public finances. At the peak, the tax revenues from the North Sea amounted to 12bn, or 3.5pc of GDP and 8pc of overall tax revenues.

But the steady decline in North Sea production, set against the continued rise in UK demand for oil, has caused the position to change dramatically. Oil production is still worth about 20bn a year but this amounts to only about 1.5pc of our current GDP. And, as our chart shows, we are no longer net exporters of oil. Last year we were net importers to the tune of about 3bn, or 0.2pc of GDP. The Treasury still gains from tax on North Sea oil and again the nominal revenues are not far off what they were at the peak, but as a share of GDP they are only 0.6pc, and as a share of total tax revenues they are less than 2pc.

The net export position is critical. If a country is a net exporter of oil then, at least in a narrow, direct sense, it will be a net gainer from higher oil prices. This was the UK's position until 2005. Even in the days of high oil surpluses, however, there were adverse indirect effects. For a start, higher oil prices, at least for a time, increase the inflation rate, and if this threatens to become ingrained it could require higher interest rates to restrain it. This would have the effect of reducing output in the non-oil economy.

Second, the fact that a country is a net beneficiary from higher oil prices may tend to strengthen its currency, thereby worsening the country's non-oil trade performance. Moreover, this could be of much greater long-run significance, as the oil will some day run out.

Third, if you trade with other countries which will be made worse off by higher oil prices, then your exports to those countries may suffer.

Fourth, higher oil prices will make some production uneconomic. Offsetting this by shifting resources into other areas takes time and involves heavy costs.

Accordingly, it was never clear, even in the halcyon days of North Sea oil, that the UK was a net gainer from higher oil prices. And some have even argued that we would have been better off without the stuff.

More on oil
Whether that is true is not easy to establish because it demands an analysis of the counter-factual. The advent of North Sea oil was one of the factors which propelled the pound to ludicrous heights in 1979-81. This, in turn, was a major factor in the collapse of British manufacturing. On the other hand, though, much of manufacturing had to go anyway, and the economy derived some benefit from the shock treatment. This also helped inflation to come down quickly.

But where did the oil money go? Some countries have established reserve funds where the oil money is effectively stored. This is what Norway, Russia and some of the oil sheikhdoms have done. But not us. Since 1978, just totting the money up without allowance for inflation or interest, total Treasury revenues from the North Sea have amounted to 130bn. Where is it? It got lost in the general pot.

Yet given that we are still a substantial producer of oil and our trade is roughly in balance, isn't there a case for us pricing our oil more cheaply and thereby avoiding the adverse effects of higher international oil prices? No. While we are on the subject of liquids, because the French produce Chateauneuf-du-Pape, does that mean that they should sell it more cheaply internally than they charge for export? Of course not. It is more beneficial to France to sell much of its fine wine abroad and then use the proceeds to buy the output of other countries - even the liquid bits, for example Guinness. Mind you, we go to the opposite extreme and charge our motorists much more through the imposition of high petrol taxes. But this is a subject for another day.

Suppose, for a moment, that if the effect of higher oil prices on the economy overall were just about neutral, given that most of us lose from higher oil prices, who are the gainers? The answer is partly the UK Treasury, which means all of us at one remove - assuming that it does not just squander the money (pigs might fly).

The result of higher oil revenues is lower taxes, higher spending or lower borrowing than there would otherwise be. The problem is that it is impossible to perceive this benefit because the money gets lost in the general fund.

And, in any case, the amounts are now not huge. This year, North Sea taxes are officially forecast to bring in 10bn, some 2.2bn more than last year. That does not even quite pay for the bail-out of the losers from the abolition of the 10p tax band.

Other gainers are the international oil companies, some of which are UK-owned and hence pay dividends to UK owners, including pension funds. And then there are all those people employed directly and indirectly in the UK oil industry. They will tend to be better off as the demand for their services rises. It is no accident that Aberdeen is the boom town of the UK.

The end result is that, although higher oil prices undoubtedly do make the economy overall worse off, they are not quite the unalloyed disaster for the UK that they are for some countries. The biggest threat from them comes from the danger that what could be a temporary burst of higher inflation gets embedded because of the passage of inflationary pay claims.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/23/ccom123.xml

June 2008
UK Energy News
The Russians undermined Opecs attempts to talk down the oil market yesterday by warning that crude prices could almost double to $250 a barrel within 18 months.

The prediction from Alexey Miller, chairman of Gazprom, came as the price of oil leaped $2.75 to $137.10 a barrel even though Opec insisted everyone was already panicking unnecessarily and stressed there were no shortages.

The soaring value of crude yesterday pushed British wholesale gas prices to new record highs of 100.75p per therm for next winter deliveries. This will put pressure on domestic heating bills, while the current price of motor diesel has already reached 1.30 a litre.

Gazprom said the higher crude prices it expected would drag gas values up too. We think it [oil] will reach $250 a barrel in the foreseeable future, said Miller, insisting that high demand rather than financial speculation was the primary factor, an argument that runs counter to that put forward by Opec.

The comments came 24 hours after Tony Hayward, the BP chief executive, said supply constraints were partly responsible for the very high crude prices so far.

A spokesman for Gazprom, which is also one of Russias largest crude producers, expected the price to hit $250 some time in 2009. The company exports gas to Europe at prices linked to oil products for historic reasons and Miller said the current gas price was $410 per 1,000 cubic metres.

Analysts said the latest Russian energy estimates were hard to support and noted they were not backed up with specified research data. Its crazy maybe they know something we dont, said one. Abdullah al-Badri, the secretary general of Opec, had earlier appealed for calm. Really we need some calm. We are panicking too much, Badri told a global energy summit. The situation is unbearable as far as we are concerned. I want to say, there is no shortage now and in the future.

Saudi Arabia said on Monday it would soon call for a meeting to discuss what it called unjustified rises in prices.

Badri supported holding such a meeting, which he said might happen before the next scheduled Opec gathering on September 9. He hoped that measures could be taken to curb speculation in the oil market, a factor Opec believes is inflating prices to levels not justified by supply and demand.

We are not happy with the current level of price for one reason. It has nothing to do with the fundamentals, he said.

Speculators are playing a big role in high oil prices. Also there are other considerations, the value of the dollar and the geopolitical situation.

Original Source: The Guardian

Low reserves in Saudi!

Opec 'to earn US$1.251 trillion from oil exports'
Reuters | Wednesday, 09 July 2008

AdvertisementOpec's earnings from oil exports are expected to reach a record US$1.251 trillion ($NZ1.68 trillion) this year, about US$73 billion more than previously estimated, the US government's top energy forecasting agency said on Tuesday.


Net oil export earnings from the Organisation of the Petroleum Exporting Countries are projected to jump 86 per cent this year from US$671 billion in 2007 and then rise 6 per cent to US$1.322 trillion in 2009, the Energy Information Administration said in its new monthly forecast.

Opec members have been raking in the cash from soaring crude prices, which hit a record US$145 a barrel last week.

During the first half of 2008, Opec members raised US$645 billion from oil exports.

Saudi Arabia accounted for almost one-third of that total, bringing in US$192 billion, just US$2 billion less than the kingdom's total oil export revenues in 2007, according to the EIA.

Iraq's oil earnings reached US$39 billion through June of this year, already US$1 billion more than the country's total oil earnings last year.

750bn oil reserves remain untapped under North Sea


The North Sea could provide a major boost to the economy, but only if there is more investment :

Date: 09 July 2008
By Frank Urquhart
A POTENTIAL prize of 750 billion in unrecovered oil and gas reserves is in the North Sea and the Atlantic frontier west of Shetland, industry leaders said yesterday.
But they warned that without new technology and investment incentives from the government, the reserves will never be recovered to boost the ailing British economy.

Under the current fiscal regime and investment plans, only around ten billion barrels of oil and gas stand to be recovered over the next two or three decades.

However, the latest economic report by Oil and Gas UK, the pan industry trade body, claims a further 15 billion barrels or more could be pumped from the UK Continental Shelf. That equates to almost half that extracted from the North Sea so far.

Malcolm Webb, the chief executive of Oil and Gas UK, said: "Barrels left in the ground do not pay taxes, do not sustain jobs, do not help secure the nation's energy supply and provide no support to the country's balance of payments. While we may have produced nearly 38 billion barrels of oil and gas over the last 40 years, the UK still has substantial oil and gas potential.

"It is estimated that somewhere between 16 and 25 billion barrels of oil and gas remain to be recovered."

A spokesman for the Department of Business, Enterprise and Regulatory Reform said: "Our estimate is also between 16 and 25 billion barrels in normal circumstances.

"It is the most probable extent of the reserves but there is a potential high of 39 billion barrels based on various figures we have, to do with undiscovered resources, potential resources and current reserves."

Mr Webb added: "Plans currently in place should reach about 10 billion of those barrels so the challenge in the hands of the government and industry is how to achieve the remaining 15 billion barrels.

"While realising this goal will require massive further investment from the industry, at $100 per barrel it is worth $1.5 trillion to the British economy and this is a prize which the country should not contemplate losing.

"There need to be targeted incentives for companies wishing or willing to invest the very, very considerable sums that are going to be needed to get up to that 25 billion target but, my word, that is a target worth going for."

The latest economic report, however, reveals the cost of producing a barrel of oil or gas in the UK Continental Shelf has continued to soar to record levels.

Oil and gas prices have trebled in the past seven years but the cost of "developing" a barrel of hydrocarbons has risen fivefold while the operating cost per barrel has doubled. The report also reveals money spent bringing new reserves into production fell from 5.5 billion in 2006 to 4.9 billion in 2007.

The industry is expected to submit its detailed proposals to the Treasury for changes in the fiscal regime within the next few days. Mr Webb said: "What we are looking to government to do is to give further encouragement and incentives to those companies willing to invest.

"So we are suggesting that they need to have further targeted incentives in the form of uplifted capital and balances."

According to industry leaders it is also vital to "find the right economic way" to unlock the potential of the reserves west of Shetland, where there are believed to be between four and six billion barrels.

But new technology will have to be developed to explore and develop the Atlantic frontier fields and there is no gas infrastructure in the area.

FACT BOX

OIL was discovered in the North Sea in 1966, with the first year of full production taking place in 1976.

The city of Aberdeen became the centre of the North Sea oil industry and today it promotes itself as the "Oil Capital of Europe."

The oil and gas supply chain in the north-east of Scotland is estimated to be worth about 15 billion a year to the nation, with some 4 billion of that related to export activity.

Latest figures suggest that the north-east currently supplies around three-quarters of the UK's primary energy demand.

The UK is the world's 12th largest overall producer of oil and gas.

The oil industry in the North Sea is estimated to support some 40,000 jobs.

The oil boom is the main reason why the average weekly earnings in Aberdeen, at 606.30, are roughly 20 per cent higher than the Scottish average.

The full article contains 768 words and appears in The Scotsman newspaper.

Summary of Weekly Petroleum Data for the Week Ending July 4, 2008

U.S. crude oil refinery inputs averaged nearly 15.5 million barrels per day
during the week ending July 4, up 75 thousand barrels per day from the previous
week's average. Refineries operated at 89.2 percent of their operable capacity
last week. Gasoline production fell last week, averaging 8.9 million barrels per
day. Distillate fuel production increased last week, averaging 4.6 million
barrels per day.

U.S. crude oil imports averaged 9.5 million barrels per day last week, down 621
thousand barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged nearly 10.1 million barrels per day, 82 thousand
barrels per day above the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components) last
week averaged nearly 1.2 million barrels per day. Distillate fuel imports
averaged 142 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 5.9 million barrels from the previous week. At
293.9 million barrels, U.S. crude oil inventories are below the lower boundary
of the average range for this time of year. Total motor gasoline inventories
increased by 0.9 million barrels last week, and are in the middle of the average
range. Finished gasoline inventories were unchanged last week while gasoline
blending components inventories increased during this same time. Distillate fuel
inventories increased by 1.8 million barrels, and are in the middle of the
average range for this time of year. Propane/propylene inventories increased by
2.6 million barrels last week but remain below the lower limit of the average
range. Total commercial petroleum inventories decreased by 3.3 million barrels
last week, and are near the bottom of the average range for this time of year.

Total products supplied over the last four-week period has averaged nearly 20.4
million barrels per day, down by 1.8 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged 9.3 million
barrels per day, down by 2.1 percent from the same period last year. Distillate
fuel demand has averaged about 4.2 million barrels per day over the last four
weeks, up by 1.3 percent from the same period last year. Jet fuel demand is 2.2
percent lower over the last four weeks compared to the same four-week period
last year.

Third oil shock warning
09 Jul 2008, 21:59 GMTThe world could suffer from a 'third oil shock' if oil price rises lead to increasing energy expenditures.

The warning came from the International Energy Agency (IEA) in a presentation to the World Petroleum Congress in Madrid on July 1.

The IEA has forecast that oil expenditures as a percentage of GDP have increased, in a similar pattern to the first and second oil shocks of the mid-1970s and early 1980s.

But despite the record high prices, demand has still been increasing for oil supplies, the IEA said.

The agency also weighed in on the debate over the impact of speculators in commodities markets such as oil.

http://www.bunkerworld.com/news/2008/07/72422

Oil sets new record near $147 a barrel
By PABLO GORONDI 56 minutes ago
July 11 2008

Oil prices spiked Friday as continued tensions in the Middle East and concerns of renewed violence in Nigeria pushed the price for a barrel of oil to a record near $147.

By midday in Europe, light, sweet crude for August delivery jumped $5.25 to $146.90 on the New York Mercantile Exchange.

Oil prices had fallen $10 over two days to start the week and as oil rebounded Friday, Dow Jones industrial average futures fell more than 120 points.

In London, August Brent crude soared $4.92 to $146.95 a barrel on the ICE Futures exchange after hitting a record $147.25.

"There's always a fear premium in pricing. The tensions in Iran and the threat of supply disruption will help support oil prices," said Jeff Brown, managing director of FACTS Global Energy in Singapore.

JBC Energy in Vienna, Austria, said the news about Iran, Nigeria, as well as a reported threat of a strike by oil workers in Brazil were "enough to wake the market from its two-day slumber."

A day after Iran tested a missile capable of reaching Israel, Secretary of State Condoleezza Rice warned the oil-producing nation that the United States will defend its allies. Iran then responded with another missile launch, drawing buyers back to jittery energy markets.

Both the U.S. and Israel have not ruled out a military strike on Iran.

Domestically, there was another disappointing report on U.S. stocks.

Heating oil futures on Friday rose to a record $4.15 In other Nymex trading, adding more than 11 cents a gallon.

The Organization of Petroleum Exporting Countries has warned that it cannot replace the shortfall if Iran is attacked and takes its crude supplies off the market. The fear is that Iran, OPEC's second-largest producer, could block the Strait of Hormuz, a passageway that handles about 40 percent of the world's tanker traffic.

Meanwhile, attacks on Nigerian oil facilities could again disrupt supplies in the oil-rich region.

Nigeria's main militant group vowed Thursday to resume attacks because of Britain's recent pledge to back the government in the conflict there. Unrest over the past two years have already slashed the country's normal daily oil output by a quarter.

Still, while supply worries abound and the U.S. dollar remains weak compared with levels a year ago, many investors are seeing reasons to believe that oil might be peaking because of resistance to the record-level prices.

"Here in the United States, airplanes are being grounded. Travel has definitely changed. People are looking at hybrids," said James Cordier, president of Tampa, Florida-based trading firms Liberty Trading Group and OptionSellers.com.

"It's been about a three- or four-year bull market, and anyone who has called a peak in this market has ended up with a red face," he said. However, "it appears that demand destruction is at a level where we might have seen the high in oil prices."

The U.S. Energy Department reported Wednesday that American demand for gasoline over the four weeks that ended July 4 was 2.1 percent lower than a year earlier, at about 9.3 million barrels a day.

"I don't think we're going to imminently fall out of bed here," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos., referring to crude-oil prices. "But I'm finding it difficult to justify prices at much higher levels."

Natural gas futures rose 28 cents to $12.59 per 1,000 cubic feet.

Crude Oil Rises to Record on Speculation Israel May Attack Iran

By Alexander Kwiatkowski

July 11 (Bloomberg) -- Crude oil rose more than $5 to a record on concerns that Israel may be preparing to attack Iran, while a strike in Brazil and renewed militant activity in Nigeria threaten to cut supplies.

Oil rallied to a record high of $146.90 a barrel in New York after the Jerusalem Post said Israeli war planes practiced over Iraq, adding to speculation the country is preparing to attack Iran. A Brazilian union said it plans a five-day strike on platforms that pump 80 percent of the country's crude and Nigerian militants pledged to renew attacks on oil facilities.

``We are now in uncharted territory here with the Iranian situation,'' Tom James, head of commodities trading at Liquid Capital Markets Ltd., said in a phone interview ``People are just too scared to sell.''

Crude oil for August delivery rose as much as $5.25, or 3.7 percent, to an all-time high of $146.90 a barrel on the New York Mercantile Exchange and was trading at $146.59 at 1:46 p.m. in London.

Israeli war planes are conducting maneuvers in Iraqi airspace and using U.S. airbases in the country, possibly practicing for a strike against Iran, the newspaper reported, citing comments by Iraqi officials in local media. Israeli government spokesman Mark Regev denied the report.

Iran, OPEC's second biggest producer, this week tested missiles capable of reaching Israel.

Brent crude oil for August settlement rose as much as $5.22 a barrel, or 3.7 percent, to $147.25 a barrel and was trading at $146.94 at 1:46 p.m. local time on London's ICE Futures Europe exchange.

Falling Stockpiles

Yesterday, the contract gained $5.45, or 4 percent, to $142.03 a barrel. Prices climbed to a record $146.69 on July 3.

Oil may rise next week because of threats to supply from Iran and Nigeria and falling stockpiles in the U.S., the biggest energy-consuming country, according to a Bloomberg News survey.

Gasoline prices in the U.S. rose to a record. Futures for August delivery rose as much as 10.46 cents, or 3 percent, to $3.6155 a gallon on Nymex.

The average price of a gallon of gasoline at the pump in the U.S was $4.11 on July 8, according to AAA, 38 percent higher than a year earlier.

About 4,500 employees of state-controlled Petroleo Brasileiro SA will take part in a protest on platforms in the offshore Campos basin to get full pay for the day they return to the mainland after a 14-day shift at sea, a union official said yesterday.

Iran's Exports

The standoff has led to concern that Iran may come under attack from the U.S. or Israel, disrupting exports from OPEC's second-biggest producer.

``You could survive with one of these factors, but if they come all at the same time it will drive prices up,'' said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. ``As soon as violent attacks increase in Nigeria it is a threat to production.''

The Movement for the Emancipation of the Niger Delta said attacks will resume on oil facilities. The Nigerian militant group said it will call off its unilateral cease-fire beginning midnight on July 12.

MEND's attacks on pipelines and other installations have cut more than 20 percent of Nigeria's oil exports since 2006. MEND says it is fighting for a greater share of oil wealth for the impoverished inhabitants of the Niger Delta.

The group declared a cease-fire after a June 19 attack on Royal Dutch Shell Plc's Bonga deep-water oilfield, located 120 kilometers (75 miles) offshore that cut 190,000 barrels a day of oil output.

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.netNesa Subrahmaniyan in Singapore at nesas@bloomberg.net.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aZkEmveQew70&refer=latin_america

What a ever next !! : (