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Oil prices up after news that U.S. ship fired on Iranian boats

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  • Oil prices up after news that U.S. ship fired on Iranian boats

    NEW YORK --

    Oil prices rose sharply Friday on news that a ship under contract to the U.S. Defense Department fired warning shots at two Iranian boats. Retail gas prices as expected rose further into record territory, nearing $3.60 a gallon.


    Word that a U.S. ship had fired on the boats in the Persian Gulf raised concerns that a conflict between U.S. and Iranian forces could cut oil supplies from the region. Light, sweet crude for June delivery jumped as high as $119.50 on the news before retreating to trade up $2.70 at $118.76 a barrel on the New York Mercantile Exchange.

    Prices were already up before the report on news of a pipeline attack in Nigeria and a looming refinery strike in Scotland.

    In Nigeria, the Movement for the Emancipation of the Niger Delta, or MEND, said its fighters hit an oil pipeline late Thursday, the fourth conduit the group has attacked in the past week. MEND said the pipeline belongs to a Royal Dutch Shell PLC joint venture. A Shell spokesman confirmed one of its pipelines had been hit, but provided no additional details.

    MEND is the main militant group behind a series of recent attacks in Nigeria's southern oil region. Earlier this week, Shell said an earlier attack cut its Nigerian oil production by about 170,000 barrels a day.

    Separately, workers at an ExxonMobil Corp. joint venture in Nigeria said they were cutting production by an unspecified amount to demand more pay. Officials said the facility, which typically produces about 2 million barrels a day in crude, was operating at "partial production."

    Adding to the supply concerns, BP PLC said it is considering shutting down a 700,000 barrel-a-day pipeline system that carries oil from the North Sea to refineries in the U.K. if workers at Scotland's Grangemouth refinery carry out a threat to strike beginning Sunday.

    The refinery supplies power and steam to the pipeline; if it shuts down, the pipeline can't operate, said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.

    Oil's rise came as the dollar strengthened. A stronger dollar typically encourages selling by making commodities such as oil less effective hedges against inflation, and by making oil more expensive to overseas investors. Analysts say the dollar's steady decline over the past year is the chief culprit behind this year's rapid rise in oil prices.

    But, Ritterbusch notes, "that connection between oil and the dollar can be broken easily by supply issues," which drove trading on Friday.

    At the pump, meanwhile, gas prices rose another 2.1 cents Friday to a record national average of $3.577 a gallon, according to AAA and the Oil Price Information Service. Gas prices have been following oil futures higher, but are also rising due to concerns about whether gasoline supplies are adequate to meet peak summer driving demand.

    Analysts expect gas prices to continue rising for at least another month; predictions of how high prices will rise range from $3.70 to $4 a gallon. To a large extent, how high gas prices peak depends on what oil does.

    Lately, analysts have recently raised their oil price predictions to $125 to $130 a barrel. Earlier this week, the expiring May crude contract rose as high as $119.90 as investors scrambled to square positions.

    However, the Federal Reserve is expected to cut interest rates less sharply next week than originally thought. Because rate cuts tend to weaken the dollar, a smaller than expected cut could push the dollar higher, and send oil prices down.

    "The current thinking is that the U.S. dollar may be bottoming out," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

    In other Nymex trading Friday, May gasoline futures rose 4.04 cents to $3.059 a gallon after earlier rising to a new trading record of $3.0815, and May heating oil futures rose 5.37 cents to $3.3121 a gallon.

    May natural gas futures rose 13.5 cents to $10.925 per 1,000 cubic feet.
    In London, Brent crude futures rose $2.80 to $117.14 a barrel on the ICE Futures exchange.

    http://www.bnd.com/breaking_news/story/321080.html

  • #2
    Gas will be back in the $2s by the end of the year!


    Official Lounge sponsor of Chris Pronger & Alex Pietrangelo

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    • #3
      They'd raise the prices if two dead cows were found in the Houston shipping channel.
      Make America Great For Once.

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      • #4
        Originally posted by Prngr44 View Post
        Gas will be back in the $2s by the end of the year!

        Once it crosses $4.00, and it will, we'll be lucky to see $3.00 gas again.

        They're all greedy bastards.

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        • #5
          effin bullshit
          Official sponsor of Mike Shannon's Retirement Party

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          • #6
            [airshark]

            You are too simpleton to understand how the market works when it comes to oil.

            [/airshark]

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            • #7
              but...but...but...I thought middle east conflict didn't cause the price to go up???
              . . . and to tell you this: I work with gays, have friends who are gay, go to church with gays. Most of them are aware that I believe that homosexual behavior is sin. Some of them actually agree. Most don't. It's OK . . . because they also know or at least have been made aware of my multitude of sins: adulterous heart, lustful and covetous behavior, wicked pride, angry spirit . . . do I need to go on?
              -mike
              mike smith, post-dispatch online sports editor

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              • #8
                Originally posted by OldSchoolStroker View Post
                but...but...but...I thought middle east conflict didn't cause the price to go up???
                The price of Oil is so complex - it can only be understood by Airshark's gigantic head.

                Now go back to the huck and play with Bobbo's little balls.

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                • #9
                  Originally posted by hansolo View Post
                  The price of Oil is so complex - it can only be understood by Airshark's gigantic head.

                  Now go back to the huck and play with Bobbo's little balls.
                  *snivel*

                  everything I learned in my "Joy of Swallowing Capitalist Bullshit" class was a lie!!!
                  . . . and to tell you this: I work with gays, have friends who are gay, go to church with gays. Most of them are aware that I believe that homosexual behavior is sin. Some of them actually agree. Most don't. It's OK . . . because they also know or at least have been made aware of my multitude of sins: adulterous heart, lustful and covetous behavior, wicked pride, angry spirit . . . do I need to go on?
                  -mike
                  mike smith, post-dispatch online sports editor

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                  • #10
                    Fungible?
                    Make America Great For Once.

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                    • #11
                      I remember $.75 gas in 1999 (although that was just a place down the street from the project I was on at the time, the rest was like $1.09 or something). What the fuck happened?

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                      • #12
                        Originally posted by Hepatitis Dispenser View Post
                        I remember $.75 gas in 1999 (although that was just a place down the street from the project I was on at the time, the rest was like $1.09 or something). What the fuck happened?
                        GWB happened
                        Official sponsor of Mike Shannon's Retirement Party

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                        • #13
                          No one has asked yet what the FUCK "a ship under contract to the U.S. Defense Department" means?

                          Do these store bought mercenaries now have a fucking Navy? And are they getting us into a war? Or just raising the price of oil for the benefit of all the people in office who coincidentally gave them the fat contract to go sail around and shoot at people?
                          Be passionate about what you believe in, or why bother.

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                          • #14
                            Originally posted by madyaks View Post
                            No one has asked yet what the FUCK "a ship under contract to the U.S. Defense Department" means?

                            Do these store bought mercenaries now have a fucking Navy? And are they getting us into a war? Or just raising the price of oil for the benefit of all the people in office who coincidentally gave them the fat contract to go sail around and shoot at people?
                            It's probably an Exxon owned boat
                            Official sponsor of Mike Shannon's Retirement Party

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                            • #15
                              Originally posted by madyaks View Post
                              No one has asked yet what the FUCK "a ship under contract to the U.S. Defense Department" means?

                              Do these store bought mercenaries now have a fucking Navy? And are they getting us into a war? Or just raising the price of oil for the benefit of all the people in office who coincidentally gave them the fat contract to go sail around and shoot at people?
                              You know, if you leave out the last sentence, which is just plain silly, this is the most valuable post in this thread. Who is it, exactly, that fired these shots? It makes sense that if they were mercenaries, they might have their own patrol boats, but I think the real question that has to come up is whether we should continue employing "contractors" for these patrol and security duties.

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