Jul 04

Oil Price Hits Record High at almost $146/Barrel

Oil prices hit $145.85 per barrel earlier in the day following expected drops in US oil stockpiles and comments from Saudi Arabia’s minister suggested that its country will not boost production.  These all came on a day when reports showed unemployment continued to climb.

The Energy Department reported Wednesday that the US oil supplies fell by 2 million barrels last week which was 800,000 barrels more than forecasts by analysts and Platts.  This was further compounded by rumors of possible attacks on Iran.  Traders were worried that Tehran might halt oil shipments going through the Strait of Hormuz in the event of an attack by Israel or the US.  Approximately 40% of the world’s oil tanker traffic passes through this choke-point.  The Iran Foreign Minister confirmed this possibility by indicating that they would defend their security by seizing control of the strait in the event of an attack.  Meanwhile, US military allegedly vowed that they would ensure that the strait remains open.

With the world’s most precious commodity now running short in supply, the world may indeed start going crazy.  For the sake of world peace, I certainly hope we all stay sane and remember that mankind survived even before gas was ever discovered as a source of energy.

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