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Just before war: Price of Oil Hits 26-Month High After Bush's Comments on Iraq
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The Iraq war was part of the cause of high oil and gasoline prices. The markets anticipated a disruption of oil supplies, as proved by the impact of Bush's speech. In fact the disruption was severe during the first year, and production has not fully recovered. This may have cost the US another $50 or $100 billion.
February 8, 2003, Bloomberg News.
Crude oil rose to a 26-month high yesterday after President Bush said that the United Nations Security Council must enforce its resolution on disarming Iraq.
Mr. Bush said the council would be weakened if it allowed Iraq's president, Saddam Hussein, ''to deny and deceive'' the United Nations, whose inspectors are searching Iraq for chemical and biological weapons. Prices also rose as lowUnited States inventories of heating oil and gasoline sent prices of those products soaring. "War looks imminent," said Andrew Lebow, an energy broker with Man Financial in New York. "We'll be going to war while supplies are low and demand for products is high."
Crude oil for March delivery rose 96 cents, or 2.8 percent, to $35.12 a barrel on the New York Mercantile Exchange, the highest closing price since Nov. 27, 2000. Crude oil gained 4.8 percent this week. In London, the Brent crude oil contract for March rose 90 cents, or 2.9 percent, to $32.34 a barrel on the International Petroleum Exchange, the highest closing price for a contract closest to expiration since Nov. 29, 2000. Brent is up 4 percent this week.
Prices were propped up by rallies in heating oil and gasoline. Fuel distributors in the Northeast said they would ask the Bush administration to release some of the two million barrels of heating oil held in reserve for emergencies.
Heating oil for March delivery rose 6.86 cents, or 6.7 percent, to $1.0957 a gallon on the New York exchange. Inventories of gasoline fell 1.6 percent, or 3.4 million barrels, to 209.6 million barrels last week. The decline left supplies 3.1 percent below year-ago levels.
Gasoline for March delivery rose 3.87 cents, or 3.8 percent, to $1.067 cents a gallon on the New York exchange, the highest closing price since May 29, 2001.
Even if international oil supplies improve, the Energy Information Administration said the average retail price for gasoline in the United States should peak at $1.66 a gallon in early spring, just 5 cents below the record high pump price reached in mid-May 2001.
On Monday, the agency reported that weekly pump prices jumped by an average 5.4 cents a gallon -- the biggest increase in 10 months. The price for regular unleaded gasoline averaged $1.53 a gallon, according to the agency's nationwide survey of gasoline stations.
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http://zfacts.com/p/377.html | 01/18/12 07:17 GMT
Modified: Fri, 19 Jan 2007 18:23:03 GMT
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