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[Zutronius]

Oil price at record $100 a barrel
New York Mercantile Exchange and oil traders
Oil prices have doubled from $50 a barrel in January 2007
Oil has traded at $100 a barrel for the first time.

Violence in Nigeria, Algeria and Pakistan, the weak US dollar and the threat of cold weather have all raised prices after the new year break.

Light sweet crude rose $4.02 to $100 a barrel in New York, prompting a drop in shares and a surge in gold prices.

There are concerns that the high price of oil will stoke inflation at a time when many central banks are trying to cut interest rates to stimulate growth.

US shares had already been hit on Wednesday by figures showing that the manufacturing sector was contracting.


The entire focus on $100 oil is frivolous
Tim Evans, Citigroup Futures Research

Oil industry in figures
Key events in oil's climb

After oil broke the $100 barrel they fell further, with the Dow Jones trading 215.1 points, or 1.6%, lower at 13,049.73.

"All of the factors that pushed us above $80 are now moving us higher," said Peter Beutel at Cameron Hanover in Connecticut.

"Until we get more supply or demand starts to take a hit, there is no reason we can't see any number."

'Frivolous'

But some analysts played down the relevance of passing the $100 mark.

"The entire focus on $100 oil is frivolous," said Tim Evans at Citigroup Futures Research in New York.

"It is not a magic number. It doesn't suddenly make this a fundamentally strong market."

Trading volumes were about half of their usual levels as traders returned from their new year breaks, which may have exaggerated the effect of speculative transactions, analysts said.

"I would imagine the speculators are the biggest drivers today," said Phil Flynn from Alaron Trading in Chicago.


Oil pump in Bahrain
$100 is just the beginning
Zachary Oxman, Wisdom Financial

The oil-producers' cartel Opec has also blamed speculators for the high price of crude and said that there is plenty of the fuel in the market to meet demand.

President Bush has said he will not be drawing on the US Strategic Petroleum Reserve (SPR) to try to bring down prices.

"This president will not use the SPR to manipulate (oil prices)," White House spokeswoman Dana Perino said.

"Doing a temporary release of the SPR is not going to change prices very much."

Moving on up?

There are those who believe that oil prices can rise significantly higher.

While daily price rises have been blamed on unrest in oil-supplying countries such as Nigeria, a underlying and significant factor has been an increase in demand from China and India.

"$100 is just the beginning," said Zachary Oxman, senior trader at Wisdom Financial in California.

"This is kicking off what you are going to see this year. There will be huge moves up in gold and huge moves up in crude."

Central banks such as the Bank of England and the Federal Reserve are worried that rising oil prices will prevent them cutting interest rates.

Expensive oil increases inflation, which makes it more difficult to make the rate cuts that the central banks are considering to boost growth.

[wannago]

Rather than whinge about the inevitable, I choose to hope and pray these high oil prices will spur the U.S. into seriously exploring alternative energy sources. The economy is built on cheap transportation of everything, and this is starting to hit where it hurts.

A related story: I recently went on holiday to the U.S. and rented a car. The first time I filled the tank and the pump showed $50 I nearly crapped myself. My family has a long history of being farmers and my brothers are constantly worried about the effects of this new level of oil prices will have in the spring when the field work begins. They were living on a thin margin as it was. Diesel fuel is totally out of control price-wise. This could certainly drive whatever family famers there are remaining out of business. And to think...some of that farm ground has been in our family for over 100 years and was homesteaded by my great grandfather.

I am normally very conservative in all things, but this (and national health care) is where I part ways with my conservative brethren. We absolutely MUST kick our addiction to oil. Not just foreign oil, ALL oil. A long-term solution is the only way.

[Ya-ta Boy]

[ontheway]

Oil and gold have both doubled in price.

This is NOT because oil is fundamentally more scarce than it was a few months ago.

This is a recognition that the dollar is fundamentally weaker. The dollar has been hyperinflated. It is the fall of the dollar that we are seeing. Not a rise in oil. Other prices wil follow, but since the government has already spent the dollars that were printed without backing, someone has to lose out. The economy has to adjust. The government has already stolen your money people, prices will rise but your pay levels will not. Your standard of living must be adjusted downward.

This is the result of a socialist govenment debasing the currency. If you want the government to subsidize alternative energy, socialist medicine, or any other additional government programs, on top of Bush's socialist, imperialist war, you will get more of the same.

[Joo Rip Gwa Rhhee]

build coal to oil plants and raise the gas tax , and set up a hydrodogen infrastructure spend whatever it takes.

Remember Ron Paul has opposed every alternative energy program .

Shame on Ron Paul

[Pluto]

[supernick]