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Posted at 12:37 PM ET, 02/23/2011

Oil prices surge as violence in Libya escalates

By Ariana Eunjung Cha

Oil prices surged for the fifth day on Wednesday as anti-government protests in North Africa spread to the oil-exporting nation of Libya.

Crude oil prices were approaching $100 a barrel in New York, a 28-month high. Traders were shorting the dollar and going long in gold as a safe haven.

Shares of airline companies, some of which announced they were raising fares since the rise in fuel prices, were falling. American Airlines was off 5 percent and Delta 2.5 percent. Southwest and JetBlue were also in negative territory.

Many airlines followed American's lead on Monday when it announced it had raised fares $20 to $60 round trip on some premium fares mostly used by corporate travelers. That came after a $10 bump in prices over the weekend for a broader group of tickets.

While Libya contributes only about 2 percent of global oil output, many analysts were concerned that the unrest will continue to spread and affect larger oil exporters. Fears were exacerbated this week by the news that Libya's ports were closed and that much of its oil production and natural gas shipments had been suspended.

Deutsche Bank said in a research note Wednesday that the amount of spare oil may not be enough to offset a widespread supply disruptions in the region.

"The market is rightly nervously watching the Gulf of Arabia situation," the analysts wrote. "It now comprises the entirety of global oil production spare capacity."

As energy analysts predicted that oil prices may surge to $220 a barrel if the turmoil engulfs Libya's oil-exporting neighbors, world leaders sought to avert panic with statements that the situation is under control.

U.S. Treasury Secretary Timothy F. Geithner said Wednesday that the world is better prepared to withstand the jump in prices after surviving the global economic crisis: "The economy is in a much stronger position to handle [the surge]. Central banks have a lot of experience in managing these things."

The International Energy Agency announced it has strategic stockpiles of 1.6 billion barrels of crude. Saudi Arabian Oil Minister Ali al-Naimi said the Organization of the Petroleum Exporting Countries was prepared to boost output in the event of a shortage.

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By Ariana Eunjung Cha  | February 23, 2011; 12:37 PM ET
Categories:  Oil  
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Next: Unrest in Libya prompts flurry of forecasting about gas and oil prices

Comments

HEY OBAMA VOTERS: HOW IS YOUR COMMANDER IN CHIEF DOING IN KEEPING YOUR ENERGY COSTS DOWN? IS THAT COMMUTE GETTING ANY CHEAPER FOR YOU? OH, I FORGOT, YOU DON'T HAVE A JOB ANYMORE BECAUSE OF OBAMA'S POLICES. FOOLS.

As oil prices race toward $100 a barrel, the expectations that gasoline prices will make a leap are running high.

Some traders say $4 a gallon will be a reality in the not-too-distant future, and prices could shoot even higher. But that might be the exception rather than the average in the United States this year unless the Middle East unrest spreads to Saudi Arabia or another major oil producer, according to Thomas Kloza, chief analyst at OPIS.

WOW! IF I VOTED FOR OBAMA I SURE WOULD BE A PROUD TURKEY ABOUT NOW.

Posted by: charlietuna6661 | February 23, 2011 2:33 PM | Report abuse

Hey Charlietuna6661
You sure are stupid aren't you?
I guess you don't remember that it was George W. Bush who took Libya off of the List of Terrorist nations.
Wow I know you voted for Bush. TWICE. You are a very proud Turkey.
Actually you're more like an A-hole.

Posted by: Anonymous | February 23, 2011 2:44 PM | Report abuse

Hey Charlietuna6661
You sure are stupid aren't you?
I guess you don't remember that it was George W. Bush who took Libya off of the List of Terrorist nations.
Wow I know you voted for Bush. TWICE. You are a very proud Turkey.
Actually you're more like an A-hole.

Posted by: Anonymous | February 23, 2011 2:45 PM | Report abuse

charlie tuna- notthat I beleive obama has porvided "change for the better" as he has continued the errant wars started by war criminlas bush/cheney/tenet/rumsfeld/wolfowitz/rove
based on their lies......but-

To all you bellyachers blaming obama for the rise on oil prices....remind yourself that the criminals and crooks were bush/cheney (both oil family men) and they started two senseless wars costing us over $1.5+ TRILLION last year (dod and security and veterans and military retirement)....and with their buddy phil gramm senate finance committee chairman in 2001 that slipped in an addendum deregulating derivatives onto an ongoing funding bill sure to pass- written by the wall streeters and banksters and oil crooks (special mention here of exxon/mobil that built the largest oil futures trading desk in the history of mankind and helped drive oil prices to $147. a barrel and posted the largest profits of any corporation in history....all because of lax regs by you know who bush/cheney criminals and crooks et al.....

Now the same crooks- goldman sucs, exxon/mobil and others are using the STILL UNREGULATED DERIVATIVES to drive oil prices back up even though we get VERY LILLTE OF OUR OIL FROM Libya as stated in this editorial "Although the United States imports little oil directly from Libya, the prolonged loss of nearly 2 percent of the world's output would drive up global prices"...

The time has come to either regulate the oil companies...or nationalize them....

It is a NATURAL RESOURCE and NOT ROCKET SCIENCE....quit letting these crooks have any control over the USA economic destiny.....

Posted by: ticked | February 23, 2011 2:46 PM | Report abuse

charlietuna - how is the internal strife in Libya the fault of President Obama? I would rather you just say that you hate everything about Obama and be done with it. I seem to recall gas going up to $4 during GW Bush's administration - what was your reaction then.

Posted by: Anonymous | February 23, 2011 2:50 PM | Report abuse

Once again we see those fingers pointing. Like one political view has done this, not the unrest in these oil producing nations. How about for once using some intelligence and plan now for what might happen if it goes higher, which I think it will. It is like blaming your wife getting pregnant because she ate peanuts.

Posted by: Anonymous | February 23, 2011 2:58 PM | Report abuse

food riots now in India.

http://nakedempire.wordpress.com/

Posted by: nakedempire | February 23, 2011 3:11 PM | Report abuse

CharlieTuna, I guess you're suffering from short term memory loss. Under Bush, gas at over $4 a gallon and spending over a trillion to start two wars. Brilliant.

Posted by: Anonymous | February 23, 2011 3:11 PM | Report abuse

A lot of folks here are passionate about reviling Mr. Bush, or Mr. Obama.

OK, so what?

Posted by: Anonymous | February 23, 2011 3:27 PM | Report abuse

Hey Charlietuna6661
You sure are stupid aren't you?
I guess you don't remember that it was George W. Bush who took Libya off of the List of Terrorist nations.
Wow I know you voted for Bush. TWICE. You are a very proud Turkey.
Actually you're more like an A-hole.

Posted by: Anonymous | February 23, 2011 2:44 PM | Report abuse

Hey Charlietuna6661
You sure are stupid aren't you?
I guess you don't remember that it was George W. Bush who took Libya off of the List of Terrorist nations.
Wow I know you voted for Bush. TWICE. You are a very proud Turkey.
Actually you're more like an A-hole.

Posted by: Anonymous | February 23, 2011 2:45 PM | Report abuse

===========================================

hey Anonymous, calling me stupid when you don't know how to work this website is hilarious. Why did you post twice? BTW, calling people names and personal attacks are against the abuse policies here. You have been reported.

Posted by: charlietuna6661 | February 23, 2011 3:42 PM | Report abuse

Libya's crude oil is of higher quality than Saudi oil and some refineries are unable to process Saudi crude. I predict that if not from Libya than from some other regional problem Europe is going to get hammered and oil prices there are going to skyrocket. Let's see what happens to private travel and protests about gasoline prices and the associated taxes.

Posted by: Anonymous | February 23, 2011 4:22 PM | Report abuse

To CharlieTuna and everyone else concerned about energy prices, wake up. We have reached peak oil. If you don't know what that is, google it. Production of oil has peaked (its a bell curve), and energy demand is increasing rapidly(China and India). The unfortunate news is that there currently isn't any technolgy that can replace oil. Bio-diesel is energy neutral at best (growing all that corn and processing it costs a lot of energy), there isn't enough uranium to supply enough reactors to fill the oil void for longer than a decade or so, and wind and solar simply don't produce enough energy to replace the demand. Our current energy lifestyles are unsustainable (a common theme in today's reality). We need aggresive conservation efforts and immediate investment in alternative fuels, just to be able to hope to mitigate the coming storm. Obama has tried to introduce these changes incrementally, but has been meant with a political conversation(created by Tuna and his ilk) that doesn't allow for a true examination of reality. We should be aggresively taxing gasoline in order to reduce demand and to fund alternative energy. But our country is too short sighted to pay more now to avoid disaster later. This is largely in part due to people like charlietuna who love to post opinionated vitriol without actually researching an issue adequately. Believe me Tuna, Obama knows a LOT more about energy reality than you do. To anyone who thinks they know anything about energy policy; if you aren't familiar with the term peak oil you don't know squat.

Posted by: gbeyna | February 23, 2011 4:41 PM | Report abuse

hey charly tuna,,you might not have a job paying anything because you globalists love communist third world wages,,too bad idiot plutocrats like yourself cant be outsourced with dopey posts.Then again you probably own stock in exxon.what a maroon

Posted by: schmidt1 | February 23, 2011 5:02 PM | Report abuse

not to worry our POC potus will give everyone a solar powered vehicle to drive while the sunshines and a hybred the gang thugs can use to deliver their product. his bro Q can apply for political asylum and join the millions of illegals in this great country.

Posted by: pofinpa | February 23, 2011 5:15 PM | Report abuse

Hear hear gbeyna - you sure have it right. Peak oil, lack of alternative fuels R&D, need for gas taxes, more public transportation, smart electric grids - but golly gee - we may have to raise REVENUE and the American taliban only know how to make mindless mean spirited budget cuts. About the only thing some of the taliban get is the bloated military - which is of course - a subsidy for oil companies and our plutocratic wars.

Posted by: Anonymous | February 23, 2011 5:24 PM | Report abuse

F*** George Bush(both of them), F*** the Republicans, F*** the oil companies, and most of all F*** this economic system that protects these corparations and screws the PEOPLE!

Posted by: KingZarcon612 | February 23, 2011 6:20 PM | Report abuse

Nothing that we Americans don't deserve given our inability to reduce our dependence on oil.

Posted by: LittleRed1 | February 23, 2011 6:50 PM | Report abuse

Make no mistake about it -- what's happening in Libya & Egypt will affect everyone who pumps gas! I dont know, all I know is I HAVE the ANTIDOTE & YOU NEED IT! www.shopsyntek.goxft.com and for all your diesel fuel go to www.dieseltreatment.com your NUMBER 1 RESOURCE FOR FUEL SAVING !!!!

Posted by: mikie the fuel saver | February 23, 2011 7:00 PM | Report abuse

littlered1-

DOE founded with one goal in 1976- to end America's dependence on foreign oil- has been a complete failure- building 10 national labs that do mostly dod research, passed enough regs to make uneconomical to build a nuclear plant and has done NOTHING TO REDUCE OUR DEPENDENCE ON FOREIGN OIL....shut the agency down and fire all contractors and employees.....

Belwo crude oil imports direct from energy information administration (the two things doe does- reproting and regulations)-

October 2009 Import Highlights: December 30, 2009
Monthly data on the origins of crude oil imports in October 2009 has been released and it shows that two countries exported more than 1.00 million barrels per day to the United States (see table below). The top five exporting countries accounted for 65 percent of United States crude oil imports in October while the top ten sources accounted for approximately 85 percent of all U.S. crude oil imports. The top five sources of US crude oil imports for October were Canada (1.858 million barrels per day), Mexico (1.015 million barrels per day), Saudi Arabia (0.938 million barrels per day), Venezuela (0.879 million barrels per day), and Nigeria (0.853 million barrels per day). The rest of the top ten sources, in order, were Iraq (0.499 million barrels per day), Angola (0.437) million barrels per day), Algeria (0.327 million barrels per day), Colombia (0.282 million barrels per day), and Ecuador (0.174 million barrels per day). Total crude oil imports averaged 8.566 million barrels per day in October, which is a decrease of (0.657) million barrels per day from September 2009.

Canada remained the largest exporter of total petroleum in October, exporting 2.360 million barrels per day to the United States, which is an increase from last month (2.356 thousand barrels per day). The second largest exporter of total petroleum was Mexico with 1.136 million barrels per day

_______________________________________

Instead of regualtions why doesn't DOE approve 2-3 types of nuclear plants and let industry do its thing?

Beats me - likely the oil crooks have the politicians in their pockets.....

Posted by: ticked | February 23, 2011 9:01 PM | Report abuse

Why didn't we just keep Kuwait after we put out all (70) of the oil rig fires there? Or better yet we could have done that AND used our supplies of oil and natural gas. Why was the Alaskan Pipeline built? We could have been driving electric cars since 1929. Hmmm wonder why we didn't do that. Does the word OIL MONGOLS ring a bell?

Posted by: Anonymous | February 23, 2011 9:21 PM | Report abuse

Must be Obumbler's doing. Just as it was Bush's doing when oil prices went up during his presidency.

Posted by: illogicbuster | February 23, 2011 9:59 PM | Report abuse

SPECULATION of supply issues with a country that provides less than 2% of the world's oil supply can cost prices to increase by 10% or more?

Folks this Bullcrap does not add up. Where's the shortage to justify the cost increase? there's no shortage in supply. Libiya has not announced it was cutting shipping. Venezuela did not say a thing. Nigeria is not cutting supply. america gets most of its oil from Canada!!! is there a revolution in Canada too?

this stuff is yet another scam. the oil companies win every time. they try to capitalize off a storm in the gulf, a tanker spill or even the deepwater situation. it's a fraud and we get cheated every time. look at the graph above. Bush Obama or the next president. imagine the fraud is pallin is elected.

Posted by: oknow1 | February 23, 2011 10:22 PM | Report abuse

Gas may hit $5.00 per gallon? What about fuel costs for airplanes?

Thomas Chi
Author
PresidentSarah.Net

Posted by: ThomasChi | February 24, 2011 2:02 AM | Report abuse

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