A crude oil at $200 response

I find it very hard to believe that in the course of a single year, the world's demand has increased so much that oil prices have doubled. Just look at the chart posted a few posts up: oil prices began to soar in mid-2007. I know correlation does not equal causation, but that's around the time the US economy began to tank. The USD began to really plummet in value suggesting that it was a least one of the major factors in oil's skyrocketing prices.

And to those suggesting the demand in the US for oil derivatives has not begun to decrease, I'd like to point out that report issued sometime after Memorial Day that said auto gas consumption was down 0.4% from a year ago. Lots of people have begun to curb their usage of gas and other oil products because the prices are getting too high.

http://www.ibtimes.com/articles/2008...il-markets.htm

One of the issues for increased Oil demand is the USA is stock piling it, likely refilling there old oil wells or something as a backup incase there supply gets cut off so they have the means to fight to recapture is.

Why do you think they are in Iraq and the like.

200? maybe in 5 yrs but definitely not withing 2 years.

June 17 (Bloomberg) -- Reliance Industries Ltd., building the world's biggest refinery, is increasing crude oil imports from Saudi Arabia as it seeks to secure supplies because of rising demand for fuels in India and the rest of Asia. Mumbai-based Reliance, India's biggest company, is boosting purchases by at least 90,000 barrels a day, accounting for 30 percent of Saudi Arabia's output increase of 300,000 barrels a day this month, P.M.S. Prasad, president of the company's oil and gas business, said in a telephone interview.
The refiner stepped up imports after Saudi Arabia's Oil Minister Ali al-Naimi said last month the kingdom is raising output to meet demand from customers. Demand for fuels in the Middle East and Asia is forecast to rise 25 percent to 39 million barrels a day in 2015 from 2008, consultant FACTS Global Energy said today in a report.
``We have been assured of the additional barrels,'' Prasad said yesterday. Reliance exports gasoline, diesel and jet fuel to Asia, the Middle East, the U.S., Europe and Africa.
Reliance operates a 660,000 barrel-a-day refinery at Jamnagar in Gujarat, and would start operations at a 580,000 barrel-a-day plant under unit Reliance Petroleum Ltd. later this year. The combined facility will be the world's biggest refinery, according to Reliance.
Refiners in Japan and South Korea are poised to increase crude oil imports in the coming months after annual plant maintenance peaked this month.
``There's an abundant supply of heavy crude but the Saudis are more savvy than others in marketing their crude,'' said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA. ``There's also a seasonal element to this as refiners return from maintenance.''
Heavy Crudes
Saudi Arabia, the world's biggest oil producer, and the most influential member of the Organization of Petroleum Exporting Countries, pumps a variety of light and heavy crudes. OPEC, which supplies about 40 percent of the world's oil, hasn't been able to rein in prices, which doubled in the past year to reach a record $139.89 a barrel in New York yesterday.
Reliance Chairman Mukesh Ambani earns more compared with overseas rivals by processing cheaper, dirtier crude with high- sulfur content. His plant is located two days away by ship from the Middle East.
Reliance earned $15.50 from processing a barrel of oil into fuels in the quarter ended March 31, compared with $7 for a plant in Singapore, the company said April 21.
China, the world's biggest energy user after the U.S., has increased crude oil imports from Saudi Arabia 17 percent this year to almost 10 million tons as new refineries start operations, according to customs data.
To contact the reporter on this story: Nesa Subrahmaniyan in Singapore at [email protected]
Last Updated: June 17, 2008 04:01 EDT

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