Wednesday May 21, 2008

Crude oil reaches record $129.60 on supply concern

This article belongs to the NYMEX crude oil price records story arc.

bloomberg.com :

Crude oil was little changed in New York trading after rising to a record $129.60 yesterday [20 May 2008] as billionaire hedge-fund manager Boone Pickens said prices will reach $150 a barrel this year. Producers are "running out of oil," Pickens said on CNBC. Prices have risen 94% from a year ago. A strengthening of the euro against the dollar added to the gains. The weakening dollar prompted the purchase of commodities as a hedge against the currency's decline. Oil advanced above $127 for the first time on May 16 when Goldman Sachs boosted its estimate for the second-half of the year to $141 a barrel, citing supply constraints. The Organization of Petroleum Exporting Countries' oil-export revenue will exceed $1 trillion this year, the U.S. Energy Information Administration said on May 6.

- Whoa, did you see that last part about OPEC bringing in $1 trillion this year? Incredible. Even with the falling US dollar and everything, that's a big chunk of change. As oil prices continue to head toward the stratosphere, this figure is only going to get larger. While the peakoiler community sits back and enjoys telling everyone "we told you so", the news media has been going nuts trying to explain the crude oil price lately. The previous item I didn't even bother to cover, because they were saying something about oil rising to the (then) record of $127.82 last Friday due to Goldman Sachs coming out with a report that said oil is going to $150. I know Goldman is a big financial institute and all, but imagine them having the power to move the trillion-dollar oil markets with a little report like that. Ha! I really don't think so.

The technical side of things looks interesting. Doesn't it always. We're rapidly approaching the $130 milestone, yet another nice and round number. I did wonder aloud earlier, whether $130 looked more like a possible resistance level than $120. If and when $130 is breached, we could probably "look forward" to resistance levels of $150, $200, $300 and over $400 later on. Support levels are at $120 (*cringe*), $110, $100 and $90. Now since when did $120 become support? Since the price broke through it as a resistance level, dudes! If there is to be a correction we might be testing $120 on the downside. We'll see.

See also :

1. Crude oil hits $126.98, extending record run to 7 days in a row
2. Crude oil pulls back after hitting $126.40, breaking records 6 days in a row
3. Crude oil caps record-breaking week by reaching $126.27 on NYMEX
4. Crude oil continues 5-day record-breaking run to reach $125.98

(2008-05-21 11:51:18 SGT) [Energy] Permalink

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