Oil prices and news roundup for week ending May 16th, 2008

Oil prices started the week at a new record high and they finished the week at yet another new record high.  Oil futures finished the week at $126.29 and saw prices go as high as $127.82

 

Gas prices at the pump followed suit and rose 6.9 cents during the week.  Gas futures also rose to new highs jumping  4.26 cents

 

Diesel prices also moved higher for the week 19.7 cents.  Heating oil futures rose 6.68 cents.

 

Natural gas bucked the trend close lower for the week down 22.7 cents for the week.

 

On Monday the Bush administration said they would resist the calls to sell crude from the Strategic Petroleum Reserve.  They also rejected calls from Congress to stop adding oil to the reserve.  This move was later changed at the end of the week on Friday when they said they would stop adding new oil to the reserve on July 1st.

 

It was reported on Monday that oil imports to China dropped 3.9 percent from last year to 14.24 metric tons, or about 3.5 million barrels a day.  This was the first decline in 18 months.

 

Starting Tuesday, May 13th, Canadian based Westjet Airlines was going to the most recent airline to add fuel surcharges.

 

On Tuesday news came out that Iran's government was considering cutting crude oil production.  In a later report Iranian officials denied that production cuts were imminent, but said a reduction has been discussed.

 

The IEA said high prices are cutting demand for oil and petroleum products in the U.S. and Europe.  They cut their global demand forecast for this year to 1.2 to 1.5 percent, down from 2.1 percent earlier in the year.  They said gasoline demand will drop by about 1 percent.

 

Qatar oil minister said, "The oil price is out of control.  Supply is sufficient and refineries don't ask for more."  OPEC ministers see no need to meet before their September meeting.

 

Two of the four Bonny Light crude oil facilities in Nigeria has been restored.  A force majeure on Bonny Light exports remains in place.

 

In a counter move to the rest of the airline industry, South African Airways plans to build its domestic, regional and international route network despite losing money fast due to rising oil prices.

 

On Wednesday the EIA, in its weekly report, said oil inventories rose by 200,00 barrels last week to 325.8 million barrels.  It was less than the 2.25 million barrel increase analysts had been forecasting.  Gasoline inventories fell by 1.7 million barrels to 210.2 million barrels.  Analysts were expect a decline of 800,000 barrels.  Distillates inventories grew by 1.4 million, more than analysts were expecting.  The current distillate supply sits at 107.1 million barrels.

 

Refinery utilization jumped 1.6 percent to 86.6%.

 

Thursday the EIA report said natural gas inventories rose by 93 billion cubic feet last week, more than analysts expected.

 

A pipeline explosion in Nigeria appeared to be accidentally caused by a road construction crew and the oil markets didn't react to the news.

 

OPEC said its esimate of world oil demand growth for 2008 has decreased.  They are now expecting global oil demand to grow by 1.35 percent compared to their previous estimate of 1.4 percent.

 

British Prime Minister Gordon Brown called again for OPEC to increase output to help bring down record high prices that are helping to fuel inflation around the globe.

 

Governor Bill Ritter told a U.S. Senate committee today that more research is needed into producing oil from oil shale before the government sells leases for commercial production on federal lands in Colorado.

 

Federal and industry officals said today that the oil and gas industry is better prepared for a rough hurricane season than they have been in years past.

 

BP Plc said Wednesday a small oil leak occured in a well being brought back online earlier this week at the nations's largest oil field in Prudhoe Bay.  The well had been shut down since January for routine maintenance.  Since the worker was right there when it happened, he was able to shut down the well within minutes.

 

Oil drilling in the Arctic may slow down now since the polar bear has been added to the U.S. Endangered Species Act. 

 

Venzuelan President Hugo Chaves said crude oil would rise to '$400 or $500' a barrel in the event of a U.S. attack on his country.

 

Angola has now surpassed Nigeria as the top Africa oil producer as unrest has sharply cut Nigerian output.

 

On Friday, Saudi Arabia announced that it had opened its taps and have been pumping an additional 300,000 barrels of crude a day since last Saturday.

 

Goldman Sach's raised its forecast for oil prices for the second half of the year to $141 a barrel, up from $107 previously.

 

The number of rigs actively exploring for oil and natural gas rose this week by 16 to 1,862.  1,471 rigs were exploring for natural gas, 381 for oil and 10 were listed as miscellaneous.  One year ago, the rig count stood at 1,744.

 

The Interior Department is moving forward with an oil and gas lease sale covering nearly 4 million acres in Alaska's National Petroleum Reserve.  The government says the lease area could hold up to 3 billion barrels of oil.  The decision includes a plan to set aside more than 600,000 acres of land considered environmentally sensitive.

 

To see all the oil news from the past week check back through the blog.  To see the current chart of oil prices go to the bottom of the page.