Oil Rises to Record $75.40/Bbl After North Korea Tests Missiles
July 5 -- Crude oil touched a record $75.40 a barrel in New York after North Korea fired missiles into the Sea of Japan, raising concern that supplies to Asia, the fastest- growing energy consumer, could be disrupted by conflict in the region.
North Korea launched at least six missiles, said Stephen Hadley, the U.S. national security adviser. The firings, along with concern over a confrontation over Iran's nuclear research, stoked concern about supply disruptions. U.S. gasoline stocks probably fell last week, leading to speculation high prices haven't tempered demand for oil-derived fuels.
``The current woes around the world all have the potential to threaten oil supplies,'' said Michael Fitzpatrick, vice president of energy risk management at Fimat USA in New York. ``The higher gasoline prices didn't slow driving over the weekend. Demand is a big problem.''
Crude oil for August delivery rose $1.37, or 1.9 percent, to $75.30 a barrel at 1:49 p.m. on the New York Mercantile Exchange. Earlier crude touched $75.40 the highest since oil futures began trading in New York in 1983.
Brent crude oil for August settlement gained on the ICE Futures exchange in London, halting two days of declines. It was up $1.33, or 1.8 percent at $73.81 a barrel.
``The most important news is the missile test overnight,'' which also has implications in Iran, said Rob Laughlin, a senior broker at Man Financial Ltd. in London. ``Some people in Iran had a big smile this morning. Now they will wait for how President George W. Bush is going to react.''
The Russian army said it tracked 10 North Korean missile launches, Interfax reported today, citing Russian Armed Forces Chief of Staff Yury Baluyevsky. Japan's Kyodo newswire reported North Korea may have launched seven missiles, according to government officials it didn't identify.
Iranian Confrontation
Oil has risen 24 percent this year in New York, partly on concern a confrontation over Iran's nuclear research will lead to an interruption of oil supplies from the Islamic republic, the world's fourth-largest producer. Bush on June 19 threatened action by the United Nations Security Council if Iran rejected a European Union plan to encourage Iran to end uranium enrichment.
Iran has until July 12 to stop enriching uranium or risk UN sanctions, the Associated Press said this week, citing unidentified diplomats. Iran this week rejected calls for a prompt reply to the EU proposal, saying it will stick to its own deadline of Aug. 22.
Iranian and European Union officials including, Javier Solana, the EU's foreign policy chief, will meet tomorrow in Brussels to discuss the Islamic republic's nuclear program. Iran's top nuclear negotiator, Ali Larijani, postponed the meeting by one day.
Solana will receive the Iranian envoy tomorrow and resume talks on July 11. The EU wants to ``proceed rapidly'' on the issue, Solana said in a statement on his EU Web site.
Holiday Demand
Oil-price gains were aided by speculation that gasoline demand over the U.S. holiday will eat into supplies when the U.S. Energy Department provides its next weekly inventory report tomorrow, at 10:30 a.m. Washington time. The report is delayed a day because of the U.S. Independence Day holiday.
``Demand was strong over the holiday weekend even though prices were high,'' said Phil Flynn, vice president of risk management at Alaron Trading Corp. in Chicago.
Inventories may have been affected by disruptions to barge deliveries and imports when the Calcasieu Ship Channel in Louisiana was closed for more than a week in late June because of an oil spill.
The Energy Department's previous inventory report, issued June 28, showed an unexpected 1.1 million-barrel decline in U.S. gasoline stockpiles for the week ended June 23, the first decline in nine weeks.
Factory Orders
Factory orders in the U.S. rose more than forecast in May and a private report showed unexpected strength in hiring, adding to concern that the Federal Reserve will keep raising interest rates after 17 consecutive increases. Higher factory output increases demand for oil-based fuels.
Orders placed with factories increased 0.7 percent during the month, led by demand for business equipment, following a 2 percent decline in April, the Commerce Department said today in Washington. A report from the largest paycheck processor, Automatic Data Processing Inc., showed U.S. employers added 368,000 jobs in June, the most since 2001.
Strong job growth and business investment may keep the economy expanding as the housing market and consumer spending slow down. The dollar and U.S. Treasury yields climbed as investors speculated Fed policy makers won't pause with rate increases, as they suggested they might after meeting June 29.
$80 Oil
Boone Pickens, the hedge-fund manager who has correctly predicted rising energy prices in the past two years, said crude oil will climb to $80 a barrel before the start of 2007.
``I think you're headed up on oil prices now,'' Pickens said today in a CNBC interview.
Pickens, who oversees more than $4 billion, predicted in April that oil was more likely to rise to $80 than fall to $60. Since then, U.S. oil futures have climbed to around $74 a barrel. Pickens predicted $50 oil in May 2004, when prices had just topped $40 and some analysts were predicting declines.
July 5 -- Crude oil touched a record $75.40 a barrel in New York after North Korea fired missiles into the Sea of Japan, raising concern that supplies to Asia, the fastest- growing energy consumer, could be disrupted by conflict in the region.
North Korea launched at least six missiles, said Stephen Hadley, the U.S. national security adviser. The firings, along with concern over a confrontation over Iran's nuclear research, stoked concern about supply disruptions. U.S. gasoline stocks probably fell last week, leading to speculation high prices haven't tempered demand for oil-derived fuels.
``The current woes around the world all have the potential to threaten oil supplies,'' said Michael Fitzpatrick, vice president of energy risk management at Fimat USA in New York. ``The higher gasoline prices didn't slow driving over the weekend. Demand is a big problem.''
Crude oil for August delivery rose $1.37, or 1.9 percent, to $75.30 a barrel at 1:49 p.m. on the New York Mercantile Exchange. Earlier crude touched $75.40 the highest since oil futures began trading in New York in 1983.
Brent crude oil for August settlement gained on the ICE Futures exchange in London, halting two days of declines. It was up $1.33, or 1.8 percent at $73.81 a barrel.
``The most important news is the missile test overnight,'' which also has implications in Iran, said Rob Laughlin, a senior broker at Man Financial Ltd. in London. ``Some people in Iran had a big smile this morning. Now they will wait for how President George W. Bush is going to react.''
The Russian army said it tracked 10 North Korean missile launches, Interfax reported today, citing Russian Armed Forces Chief of Staff Yury Baluyevsky. Japan's Kyodo newswire reported North Korea may have launched seven missiles, according to government officials it didn't identify.
Iranian Confrontation
Oil has risen 24 percent this year in New York, partly on concern a confrontation over Iran's nuclear research will lead to an interruption of oil supplies from the Islamic republic, the world's fourth-largest producer. Bush on June 19 threatened action by the United Nations Security Council if Iran rejected a European Union plan to encourage Iran to end uranium enrichment.
Iran has until July 12 to stop enriching uranium or risk UN sanctions, the Associated Press said this week, citing unidentified diplomats. Iran this week rejected calls for a prompt reply to the EU proposal, saying it will stick to its own deadline of Aug. 22.
Iranian and European Union officials including, Javier Solana, the EU's foreign policy chief, will meet tomorrow in Brussels to discuss the Islamic republic's nuclear program. Iran's top nuclear negotiator, Ali Larijani, postponed the meeting by one day.
Solana will receive the Iranian envoy tomorrow and resume talks on July 11. The EU wants to ``proceed rapidly'' on the issue, Solana said in a statement on his EU Web site.
Holiday Demand
Oil-price gains were aided by speculation that gasoline demand over the U.S. holiday will eat into supplies when the U.S. Energy Department provides its next weekly inventory report tomorrow, at 10:30 a.m. Washington time. The report is delayed a day because of the U.S. Independence Day holiday.
``Demand was strong over the holiday weekend even though prices were high,'' said Phil Flynn, vice president of risk management at Alaron Trading Corp. in Chicago.
Inventories may have been affected by disruptions to barge deliveries and imports when the Calcasieu Ship Channel in Louisiana was closed for more than a week in late June because of an oil spill.
The Energy Department's previous inventory report, issued June 28, showed an unexpected 1.1 million-barrel decline in U.S. gasoline stockpiles for the week ended June 23, the first decline in nine weeks.
Factory Orders
Factory orders in the U.S. rose more than forecast in May and a private report showed unexpected strength in hiring, adding to concern that the Federal Reserve will keep raising interest rates after 17 consecutive increases. Higher factory output increases demand for oil-based fuels.
Orders placed with factories increased 0.7 percent during the month, led by demand for business equipment, following a 2 percent decline in April, the Commerce Department said today in Washington. A report from the largest paycheck processor, Automatic Data Processing Inc., showed U.S. employers added 368,000 jobs in June, the most since 2001.
Strong job growth and business investment may keep the economy expanding as the housing market and consumer spending slow down. The dollar and U.S. Treasury yields climbed as investors speculated Fed policy makers won't pause with rate increases, as they suggested they might after meeting June 29.
$80 Oil
Boone Pickens, the hedge-fund manager who has correctly predicted rising energy prices in the past two years, said crude oil will climb to $80 a barrel before the start of 2007.
``I think you're headed up on oil prices now,'' Pickens said today in a CNBC interview.
Pickens, who oversees more than $4 billion, predicted in April that oil was more likely to rise to $80 than fall to $60. Since then, U.S. oil futures have climbed to around $74 a barrel. Pickens predicted $50 oil in May 2004, when prices had just topped $40 and some analysts were predicting declines.
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