Category: Crude Oil

The crude oil market bull has been relentless on it’s run for $100 a barrel crude oil.

With crude oil well over $90 a barrel, closing at $91.86 on Friday, oil market analysis agree that it is no longer if crude oil will top $100 a barrel, but when.

Experts also believe that there’s a good chance drivers will see $3 gasoline in the US before the end of the year. “Three dollar gasoline in this market is unavoidable,” said Stephen Schork, publisher of the industry newsletter the Schork Report. “At this rate, we’re going to see $4 a gallon.”

Europeans must be envious of what to them are cheap gasoline prices in the US, even at $4.00 a gallon. Gasoline is already over $6.00 a gallon in most European countries and can go as high as nearly $9.00 a gallon. Of course, as gasoline prices increase in America they will be increasing in Europe as well.

The oil bull market is driven not only by speculative fever but by a growing imbalance of supply and demand as peak oil supply conditions kick in while demand is soaring in a world full of geopolitical tensions. For example, the recent increase in sanctions imposed upon Iran by the US and the tough talk from the US that goes with it and the possibility of the Turks invading Northern Iraq to strike at PKK forces there has been supportive of higher crude oil prices.

Crude Oil for November delivery briefly traded up to a record high of $88.20 per barrel today as supply concerns once again fueled the market.

Fears that Turkey may invade northern Iraq to strike against Kurdish rebel PPK forces are focusing concern on an interruption of oil supplies from northern Iraq. With oil supplies deemed to be tight going into the fourth quarter any potential interruption of supplies is taken seriously by oil traders and prices are pushed ever higher.

“Whenever there is any escalation in political tensions in the Middle East, oil markets become concerned,” said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney. “There is production and there are pipelines that people worry may be affected if there are any issues in Iraq.”

$100 a barrel crude oil may not be that far away. There are hot spots in Iraq, Nigeria, Iran, and even Saudia Arabia that could erupt at any moment and cause a spike to $100 a barrel and perhaps far beyond.

Turkey tensions support crude oil prices and lift prices to record levels as oil traders fear that Turkish incursion into Kurdish northern Iraq could interfere with oil produced in the region.

Tensions between Turkey and the United States have recently escalated over a bill passed by a US congressional committee that would label the deaths of a reported 1,500,000 Armenians in Turkey during the WW 1 period as a genocide.

Turkey has warned the US that the passing of the bill in committee has already seriously damaged US - Turkey relations, and that should the full congress pass the bill Turkey may close to the US Turkish facilities being used to supply US forces in Iraq.

Turkey has also stated that with the passage of the bill that Turkey will feel less restrained by US concerns about it launching military operations inside of Iraq to strike against PKK forces using Iraq as a base from which to launch raids against Turkey.

Should the Armenian genocide bill be passed a new complication will very likely face the US and its forces in Iraq. With the demand for oil showing no signs of abating any interruption in supplies from Iraq or elsewhere will continue to push crude oil prices higher.