Tulsa World: Oil hits new 2009 peak

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Oil hits new 2009 peak
One analyst said the trend defies the market fundamentals.

By Staff and Wire Reports
Published: 6/5/2009 2:23 AM
Last Modified: 6/5/2009 4:19 AM

Oil prices on Thursday set a new high for the year, buoyed by a weaker dollar and the first drop in unemployment since January.

Benchmark crude for July delivery was up $2.69 to settle at $68.81 a barrel on the New York Mercantile Exchange. Oil climbed as high as $69.60 earlier in the day.

Meanwhile, the common price of gasoline in Tulsa remained at $2.39 a gallon Thursday evening. The local wholesale price was $2.33, according to Bloomberg data.

John Olson, the managing partner of Houston Energy Partners, said in a telephone interview that the current price of oil is not supported by market fundamentals.

"We have a record amount of crude in storage and continuing depressed demand," Olson said.

Oil prices have rallied for three months, and they soared this week to their highest levels since November. Crude now fetches nearly twice its February price, mostly on the expectation that the dismal U.S. economy could be stabilizing.

The dollar also fell against the euro and the yen, a move that tends to push oil prices higher since the benchmark contract is traded in U.S. currency.

Also, Goldman Sachs boosted its forecast for benchmark crude to $85 a barrel by the end of the year, up from its previous estimate of $65 a barrel.

The Organization of Petroleum Exporting Countries may be reacting to the recent trend.

The cartel will raise shipments 1.1 percent in the four weeks to June 20, according to consultant Oil Movements, a further increase that runs counter to the group's resolution to stick to agreed-on cuts.

The next meeting is Sept. 9.

Tulsa World Business Editor John Stancavage and Bloomberg News contributed to this story by The Associated Press. By Staff and Wire Reports

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just passing through, (6/5/2009 4:23:23 PM)

Here come the speculators! You guys did not learn last time, did you? Defie market fundementals and you will always get burned.

Based on what I am reading here oil will likely hit $83 and then crash to about $45 and maybe even $30 because the market is ignoring one fact: It is the summer driving season, but no one has the money to go anywhere.

Stay tuned!

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