Oil tops 70 buck aronies per barrel...

http://online.wsj.com/article/BT-CO-...09-713262.html

By Gregory Meyer and Madalina Iacob
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Crude oil cleared $70 a barrel by a whisker on Tuesday, getting an immediate boost from a weaker dollar as traders continue to bet a stronger economy will lift soft demand.

Light, sweet crude for July delivery settled at $70.01 a barrel, climbing $1.92, or 2.8%, on the New York Mercantile Exchange and notching a seven-month high. Brent crude on the ICE Futures exchange settled at $68.62 a barrel, up $1.74 or 2.6%.

Crude took support as the dollar weakened against the euro, making commodities more attractive to investors seeking a currency hedge. The euro was recently $1.41, from $1.39 late Monday.

Oil pushed above $70 late in the period during which floor trading was still open as U.S. stock markets shed early losses. The positive sentiment bled into the oil market.

"The dollar is again showing some weakness, and you've had the stock market tick up and become positive," said Raymond Carbone, president of Paramount Options on the Nymex floor. "That's what's driving the crude oil market again,"

Crude's insistent rise - up more than 50% since mid-April - has defied the bleak state of oil demand. The U.S. Energy Information Administration on Tuesday reiterated its view that the world will consume less oil this year, with demand falling 2% to 83.7 million barrels a day.

The EIA, the Energy Department's analytical and statistics wing, also hiked its oil price forecast and now sees crude averaging $67 a barrel in the last six months of the year. Oil's surprising strength over the past three months was largely due to the weaker dollar, more active financial markets and the belief that an economic recovery could end the demand nosedive, the EIA said. Other high-profile oil analysts have also raised their price forecasts in recent weeks.

Some observers, however, are baffled by crude oil's persistent rise despite the notable lack of increase to global demand now. It was the falloff in demand, which was sparked by the intensification of the economic crisis last year, that took oil down from the record highs above $145 a barrel hit last summer.

"We are ignoring fundamentals," said Tim Evans, energy analyst at Citi Futures Perspective. "The unemployment rate continues to rise, which is not good for gasoline consumption. To pretend that there is nothing but blue skies going forward, it's a naive economic assumption."

All eyes are set now on weekly U.S. oil inventories data due Wednesday from the EIA. Analysts surveyed by Dow Jones Newswires say that in the week ended June 5, crude oil inventories likely fell by 700,000 barrels, while gasoline inventories rose 800,000 barrels and distillates rose 1.5 million barrels. Analysts see U.S. refineries operating at 86.8% of capacity, up 0.5 percentage point.

U.S. oil data compiled by the American Petroleum Institute is scheduled to be released 4:30 p.m. EDT Tuesday.

Front-month July reformulated gasoline blendstock, or RBOB, rose 3.07 cents, or 1.6%, to $1.9667 a gallon. July heating oil rose 3.97 cents, or 2.3%, to $1.8076 a gallon.

 

Oil is rising because the dollar is losing value, thanks in part to the TRILLIONS in debt our country has added to its balance sheet over the last couple years (and few months especially).

 

and congress's retraction of off shore drilling...

 

a certain 'green plan' works out nicely with oil around $75...

 

Drilling doesn't solve the problem overnight or even in the immediate future. It takes time to build the infrastructure to collect and store oil from new drill sites. The answer is to remove speculators from the oil commodities market. These guys are making money while the rising oil price drives the economy into the toilet.

 

Trogdor:

If Congress would recant our off-shore ban, announce a new drill for US oil campaign, coupled together with legislation that requires speculators to actually take posession of the product (oil) and new energy efficiency requirements of automobiles, the price of oil would fall overnight.

However, our government is doing everything but that. They're in bed with the Green Machine and there's no stopping that money train.

Simply put, this oil problem is human made and until we get real energy legislation in this country, we're doomed.

 

GE is our new corporate overlord, All hail GE.

 

Good my stock should keep going up!!!haha

 

No offense, but you boys need to go back to your university geology courses. When it comes to drilling wells for oil to alleviate prices, no amount of drilling in the Gulf (which is completely safe, and makes great artificial habitat) in the next twenty years will do anything. It takes a very long time to explore, drill, and extract petroleum from the earth. These nonsensical campaign slogans only show how easily we can be swayed as Americans.

 

Americans love simple solutions to complex problems.