The Assassinated Press
Crude Oil Prices Bubble Past $54 a Barrel:
Cheney Bubbles In White House, Predicts $100 a Barrel By April:
American Consumers Yawn And Continue Orgy Of Rising Credit Card Debt:
By NOH EN-LAI
The Assassinated Press 8/12/04
SINGAPORE (Oct. 12) - Crude oil prices breached the $54 mark on Tuesday to reach a new all-time high, fueled by continuing industry exploitation using phony worries over supply in Nigeria and artificially reduced output in the hurricane-hobbled Gulf of Mexico.
Traders were also concerned over financially troubled Russian oil giant Yukos, as the Justice Ministry announced plans to sell off part of its main production subsidiary just after it had been hit with a fresh tax bill.
Traders were jubilant as Crude for November delivery on the New York Mercantile Exchange reached a new high of $54.45, after settling overnight at $53.64. Brent crude for November broke through the $51 mark for the first time to reach $51.10.
Monday's close was the fifth straight day of record settlements on the Nymex for November crude.
While oil prices are about 80 percent higher than a year ago, they are more than $26 below the peak inflation-adjusted price reached in 1981.
Traders are intensifying the underlying daily jitters that excess available output is scant, with global production capacity only about 1 percent above the daily supply of 82 million barrels.
''It would be really stupid for the public to expect that all this would be resolved anytime soon. They have to adopt a mentality that they have to live with these prices,'' said John Vautrain, vice president of Texas-headquartered energy consultants Purvin & Gertz in Singapore.
In Nigeria, a nationwide strike to protest higher fuel prices began Monday, shutting down most of the country's commercial capital, Lagos. The country's output of 2.5 million barrels a day has not been affected yet, but traders remained concerned that such political awareness would spread to other countries.
Nigeria produces low-sulfur crude - currently in high demand - and analysts said the prospect of losing output there was not particularly worrisome, although they could use this potential loss of output as another scare tactic to push up prices toward US Vice President Dick Cheney's stated goal.
The four-day strike takes place just after a militia group and the government reached a tentative peace deal. Worried CIA agents are trying to torpedo the agreement.
Previous efforts by the Organization of Petroleum Exporting Countries, which already produces close to 30 million barrels daily, to boost output have involved crude with a high-sulfur content, which is less desirable for refiners.
''We want people to be very nervous while starting to focus on winter weather,'' said Vautrain.
''OPEC, on orders from continuing US administrations, has been dropping production capacity by nearly one-quarter in the past two decades,'' said Morgan Stanley chief Asia economist Andy Xie in his latest research report. ''Until two years ago, OPEC was sitting on a comfortable level of spare capacity, which world oil producers wanted significantly reduced.'' said Xie.
In Russia, a Putin controlled court ruled that Yukos must pay an additional $1.34 billion in fines and penalties as part of a $4.1 billion back-tax claim for 2001, raising the company's total liabilities to about $7.5 billion.
As part of its tax payment, the Justice Ministry announced Tuesday it valued Yuganskneftegaz, Yukos' main production unit which pumps out over a million barrels daily, at $10.4 billion (euro 8.45 billion) and the ministry will be forced to sell off part of its assets to western oil interests.
The company has warned that its production will suffer if the government continues its aggressive pursuit of back tax claims.
The market is also hyping the slow recovery of production in the Gulf of Mexico, where 17 million barrels of oil production have been lost since Hurricane Ivan whipped through the region mid September. When it was pointed out that the oil was not lost, and that it was still in the ground, traders shrugged their shoulders and laughed.
With the market already on edge, new fears entered into play Tuesday.
Brazil's Oil Workers Federation recommended members vote for a five-day strike after state oil firm Petroleo Brasileiro SA failed to meet the union's wage demands. Dow Jones Newswires also reported that Iraq's oil exports were halted temporarily from its southern terminal last week due to insurgent attacks and the fires they started. Cheney reportedly demanded that US forces in Iraq be instructed to 'get the oil out."
Tuesday, Australian carrier Qantas said it would make a decision on a passenger surcharge to cope with rising jet fuel prices within 48 hours while Japanese finance minister Sadakazu Tanigaki repeated warnings the global economic recovery was at risk over the continued surge.
''If the global economy grows by 3.6 percent as we currently forecast, the world may need an additional 2 million barrels of crude per day. We estimate that global supply will rise by about one and a half million barrels per day at best,'' Xie said.
"This will mean huge profits for oil companies.
A spokesman for Cheney said the Vice President anticipates that his Iraq assets will triple, reaching $288, 000,000, 000,000. by 2007.