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Article History NEW YORK (Map, News) - Oil rose above $126 a barrel for the first time Friday, bringing its advance this week to nearly $10, as investors questioned whether a possible confrontation between the U.S. and Venezuela could cut exports from the OPEC member. Gas prices, meanwhile, rose above an average $3.67 a gallon at the pump, following oil's recent path higher.
On Friday, The Wall Street Journal published a report that suggested closer ties between Venezuelan President Hugo Chavez and rebels attempting to overthrow Colombia's government. Chavez has been linked to Colombian rebels previously, but the paper reported it had reviewed computer files indicating concrete offers by Venezuela's leader to arm guerillas. That appears to heighten the chances that the U.S. could impose sanctions on one of its biggest oil suppliers.
"If we put on sanctions, I'm sure Chavez would threaten to cut off our oil supply," said Phil Flynn, an analyst at Alaron Trading Corp. "Obviously that would have a major impact on oil prices."
Light, sweet crude for June delivery vaulted to a new record of $126.20 on the New York Mercantile Exchange before retreating to settle up $2.27 at a record $125.96.
Even if Chavez cut oil shipments to the U.S., Venezuelan oil would still make its way to the U.S. via middle men, who would buy it from Venezuela and resell it to the U.S., Flynn said. But that new layer in the supply chain would bump up costs.
Oil prices also were boosted Friday by the dollar, which declined against the euro. The European Central Bank said it was unlikely to consider interest rate cuts to cool the strong euro against the slumping dollar. Investors often buy commodities such as oil as a hedge against inflation when the greenback falls. A weaker dollar also makes oil less expensive to overseas investors.
Many analysts believe the dollar's protracted decline has much to do with the doubling in oil prices since this time last year. Another school of thought thinks tight global supplies of oil, driven by growing demand in countries such as China, Brazil and India, is the primary factor driving oil higher.
Oil's surge is pushing retail gas prices higher. The national average price of a gallon of regular gas jumped 2.6 cents overnight to a record $3.671 a gallon according to a survey of stations by AAA and the Oil Price Information Service. The Energy Department expects prices to peak at a monthly average of $3.73 in June, though many analysts say national average prices could rise as high as $4. Consumers in many regions, including parts of California and Hawaii, are already paying that much.
Demand for diesel fuel is also growing worldwide, but supplies of distillates, which include diesel and heating oil, fell unexpectedly last week, the Energy Department said Wednesday. That's pushing U.S. diesel prices to record highs and inflating heating oil prices in the futures market; heating oil futures are often viewed as a proxy for diesel.
Heating oil for June delivery rose 12.62 cents to settle at $3.636 on the Nymex after earlier setting a trading record of $3.6524. At truck stops, retail diesel prices rose 1.8 cents overnight to a record national average of $4.269 a gallon,
Diesel is used to move most of the world's food, consumer and industrial goods via truck, ship and rail. Skyrocketing diesel prices are part of the reason food and consumer goods prices are so high.
In other Nymex trading Friday, June gasoline futures rose 6.34 cents to settle at a record $3.2012 a gallon after rising to its own record of $3.2038.
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Associated Press Writer Pablo Gorondi in Budapest and AP Business Writer Thomas Hogue in Bangkok, Thailand, contributed to this report.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Examiner Reader said:
The Tax thing is a gimmick. The Government in our system does not have the authority to regulate anything but taxes at this moment. However if the Government could take ownership of all of the off shore areas then they could decide just how much they would charge for it as well as even the salaries of those who are working it. The government may even be able to regulate any profits that are associated to it. The Government is also in charge of all the shipping and receiving to this country. Mostly in permits. They may be able to regulate a price for the crude oil coming in as a condition to the permits. More off shore drilling in our country must, take place, and the Dems. must OK more refineries. I would Ok for citizenship many of the illegal families here already if a family member agrees to go to Iraq to guard the pipe line, so as to get the flow going and to maintain it. I know I would welcome them then, as they would have earned my respect.
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Examiner Reader said:
this country sure has a worthless govt!
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Examiner Reader said:
im waiting for the oil bubble to burst.be plenty of laughs to watch wall street and the saudis go into the crapper along with the bush and dickyboy families.
2 agree | 4 disagree
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Examiner Reader said:
what i cant underestand is ,WHY do we have a government sucking up paychecks. and who the hell is in charge of anything? sure isnt anyone we elected or was appointed. move over terrorist cuz we have big oil and wall street right here,and they are doing their best to put america into a third world status this country already owes more than its worth!
4 agree | 2 disagree
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Examiner Reader said:
oh now fuel prices are up because one of our ships fired a few warning shots at some boats in the gulf,gets better and better any old excuse they can think of to raise the price,sure hope none of our troops in iraq throws a gravel across the line into iran,that would bankrupt us all,thats about how stupid there statement was our ship shot two warning shots at boats in the gulf so we will raise gas prices just in case iran might cutt oil flow,heres a thought for the big giant brains wait and see and if it happens then raise the prices and use it as a excuse then,if they are going to tell a lie about why they raise it think up a good one that the people will believe instead of off the wall b.s.................
3 agree | 3 disagree
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Examiner Reader said:
p t barnum was right,as the bush administration proves. but to be suckered since carter was pres., is the ultimate victory. three balls for a dollar,step right up!
4 agree | 4 disagree
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Examiner Reader said:
lets regulate gas company it has become monopoly since every big corporation are merging and government official that we voted are letting it happen. as big as our country are, we need more independent refiners for gas and gas stations for major oil company to have compition. this makes them compete so price will be right not over the roof. when there is monopoly there is no supplie and demand they fix the price how ever they want even there if plenty gas supplies and they spend money on ad to confuse public with lies which they don't get sue. they probably own the new media's stock too.
4 agree | 5 disagree
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Examiner Reader said:
i hope is goes so high truck drivers park there trucks and quit,if they quit hauling goods across the whole country it will bring the country to its knees,then mabe the goverment and greedy ass oil companys will get the message.
2 agree | 6 disagree
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Examiner Reader said:
can remember when oil went to $5.00 a barrel and the oil people asked congress to help out. People I know had to shut all their wells down couldn't make ends meet. Congress said people liked the low price of gas now it has come back to bite all of us now.
5 agree | 5 disagree
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Examiner Reader said:
fuel prices are so high now this country thinks its in a recission now not seen a thing yet wait till the truck drivers all across the country park there trucks and stop moveing goods because the cost of fuel is eating up what they earn,when they park there trucks and quit,it will bring the country to its knees,its comeing watch for it they will drop the price on fuel then, the goverment is keeping the price high they have to replace some of the moneys they are pouring in the sand some were.
4 agree | 2 disagree
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Examiner Reader said:
this country has only one way to go,and thats worse.been heading that way since the 80's . at least with our technology we vare going a hell of alot faster than the roman empire.
4 agree | 3 disagree
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Examiner Reader said:
all democracy means is that you will be charged as much as you can tolorate or are willing to pay. over one hundred years of de-education and greed in america has finally come to fruition. mr bush should have been given a pile of dirt and some green army men to play with ,instead of of the real thing. we allowed this mess, and for several generations will pay the price thru the obfuscation of facts no matter who is in the whitehouse. i wonder if george is suprised about the price of gas now. when it hits 4 bucks a gallon for reg. maybe one of the chicken hawks will have the balls to tell him.not!
4 agree | 4 disagree
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Examiner Reader said:
oil company greed, cant wait till the truck drivers country wide shut down there trucks and stop hauling goods because of the fuel prices,when that happens and they bring this country to its knees then mabe the rip off oil companys will finally get the message,exxon made record high earnings last year humm wonder how,could it be they are ripping us off,they said they wasent,how can they set in front of congress and the people of this country and tell that lie with a straight face and exspect everyone to believe that crapp,truckers will fix high fuel prices when they shut down there trucks and quit hauling goods across this country.
5 agree | 5 disagree
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Examiner Reader said:
Why do I feel this is a Monopoly business? You either have to buy from them at whatever price they choice fit or Not get the gas at all ( knowing we need gas to get to work everyday). You know it was in the news about the President given his Vp a 200 million dollar retirement bonus. This country sucks ( we are no better then any other country out there , the other countries tell their people what they can and cant do and we have already started doing the same thing . HOME OF THE FREE, WHAT A JOKES!
5 agree | 5 disagree
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Examiner Reader said:
why doesn't oil go up to 200 hun a barrel. then those that bought at 118 can sit on their yachts and the rest of us can sit in our caves.at least we wont have to worry about april 15 again. ass sittin dont pay too good. except when you are a politician.
2 agree | 4 disagree
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chuck in st paul said:
4:16PM said "The person who suggested refining oil in colorado is an idiot." Give it a rest Francis. They just made a slip. We don't "drill" in Colorado we dig the Green River shale deposits and process them. All together the Green River area has more oil than Saudi Arabia. Add that to the Athabasca tar sands, offshore oil, and Alaska, and you have more oil than the Middle East. Except the neo Luddites and neo Malthusian misanthropic dirt worshippers won't let us.
6 agree | 5 disagree
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Examiner Reader said:
just think of a pipeline going to ALL cities and towns in the u s from wash d c ,carrying hot air to power our new american made hot air cars.hot air is a commodity we will never run out of. and if that fails we can use the same pipeline to carry bulls**t for the next wallstreet moneymaker. thats a real "SURE THING".
4 agree | 4 disagree
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Examiner Reader said:
dont worry this news blurb will change tomorrow. some reporter is working on the story right now. and you can bet even odds that it will be contrary to this report.
7 agree | 5 disagree
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chuck in st paul said:
Why are some of you so angry? This is exactly what your presidential candidate Al Gore said was necessary to save the planet - $5 a gallon gasoline. You voted for him and the Green Peace thugs he and the liberals in Congress support. Now you're upset and blaming it on President Bush? It must be hard to be bipolar. If we were turned loose to drill our own oil and process the shale and tar sands we in North America have more oil than the entire Middle East. Fact. You won't let us at it. Fact. Scare goods and panic drive up market prices. Fact. QED. [Where did you leave that lithium?]
16 agree | 15 disagree
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Examiner Reader said:
I love reading these comments. I now realize that a nation of morons actually can read. We are too stupid to realize that until we can solve our own problems as a nation we need to stop sending money around the world to buy "friends" that hate our cuts and cut and run on us when things get tough or require some action. Under these circumstances isolationism is not a bad idea at all.
11 agree | 11 disagree
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Examiner Reader said:
9:48am, care to elaborate? Or would that require too much thought? Want to enlighten the rest of us "vile" Republicans, (as if we're all Republicans) on what your solution is for producing our own fuel supply? This could be an opportunity for you to practice critical thinking while you're sitting around fuming over "vile" Republicans.
12 agree | 10 disagree
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Examiner Reader said:
You republicans who comment here are nothign short of vile.
13 agree | 12 disagree
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Examiner Reader said:
I think we are all well aware of this. Why do we have to be constantly reminded?
12 agree | 11 disagree
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Examiner Reader said:
george bush is great, nothing is his fault. its our own greed that got us into war and unemployment.
13 agree | 14 disagree
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Examiner Reader said:
The democrats are the ones that keep trying to raise the gas tax another $.50 per gallon. The democrats will not let us drill in Alaska or further explore the gulf. The democrats that will not allow new nuclear energy or new refineries. Liberals want high gas prices, just look at California and Europe prices. We are on are way.
17 agree | 14 disagree
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insider said:
The democrates don't want us to drill for more oil because its going to hurt your inviroment.Don't blame Bush!He wants to drill drill drill.But ,again The Democated congress will not allow it.And don't blame the oil Companies.You are going to get your green tree ,so stop complaining.
11 agree | 12 disagree
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Examiner Reader said:
geez , who was in charge of congress since 1994. couldnt they forsee the coming crisis. i guess not,especially with bush and cheney controling the govt.and writing the energy policy. look out ,your are going to miss fox news, for you instructions.
11 agree | 13 disagree
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Demsaredumb said:
"Cheney whitehouse"? Funny. With the radical/terrorist environmental kook movement, The Sierra Club, Al Gore and his "global warming" zombies, etc., thwarting any attempt at our own energy independence by forcing anti- oil exploration legislation and denying nuclear power investment, is it any wonder we're held hostage to OPEC and other countries that are free to produce their own oil and nuke power? Blaming Cheney or Bush is just intellectually lazy and ignorant. As long as we are forced to sit on our energy producing hands by the afore mentioned Socialists, $107.00 oil is just the beginning. The Democrap solution to high gas/oil prices? Raise taxes. Better start shopping for that new bicycle before Pelosi, Reid and their Socialist buddies force you to.
11 agree | 8 disagree
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Examiner Reader said:
with the cheney whitehouse, maybe gas will drop down to what it was before he took over.then we can afford to drive around and watch the country turn into a third world nation in person.
10 agree | 10 disagree
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Examiner Reader said:
examiner reader 4:38 pm feb 19; i agree with most of your assertations,especially the part about the worthless scum. which i take as your meaning the whitehouse and the oil companies. those sir, are the middlemen of the product. HAPPY TRAVELING!
34 agree | 41 disagree
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Examiner Reader said:
one reader doesn't like name calling,another one says there's enough oil in colorado to buy the mideast, and another, says that oil wells replenish themselves. i think your are all uneducated idiots. the reasons for iraq war are manufactured by the administration to keep the oil in the ground, thus causing high prices at the pump. this alledged govt. of ours can only deal with crisis management when they create the crisis. you can see that in their response to katrina. with crisis management it doesn't matter about the outcome,as its about making as much money as possible for years after the crisis. yessir ,this is a great country,its just the govt that sucks. according to them,everything is peachy. and before all you right wing hayseeds get upset, im not a democrat. politicians actually make me puke!
55 agree | 48 disagree
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Examiner Reader said:
Why? that person stated something as a fact, you called names... very immature. What is wrong with harvesting our resources? Why are we allowing ourselves to be held hostage by a bunch of worthless scum who just want to suck our money, and our lives, from us? Build refineries, start drilling for our own oil, and when they start begging, give them the finger! Cuz this is America, baby, and after that, there ain't much else!
61 agree | 59 disagree
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Examiner Reader said:
The person who suggested refining oil in colorado is an idiot.
48 agree | 60 disagree
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Examiner Reader said:
we have enough oil in colorado to bye the middle east if we would drill it.
118 agree | 96 disagree
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Examiner Reader said:
Anyone could have predicted this,it stayed below this level in order to fufillretail spending, hotels, airlines, and restaurants for the holiday numbers . Welcome to 2008 and the bad news. More to come, as we all know this was the magic number everyone was anticipating. The economy is not what they say it is. Start doing less driving and spending and watch how fastthe oil prices will come down.
112 agree | 113 disagree
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Robin Ficker, Broker Robin Realty said:
The solution of the Washington Post and County Executive Leggett to combat record high crude futures? Raise the gas tax to make it hurt even more. They would waterboard us if they got the chance.
125 agree | 92 disagree
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Examiner Reader said:
the way i look at it,do to the the brain manipulation of the masses by politicians,oil companys,and phoney wars for so called democracy,a gallon of gas costs us approx $1257.98.9 per gallon.good to know ,when your house is worth less than you owe on it!
121 agree | 117 disagree
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Examiner Reader said:
to 12:19,its just manipulation of the masses no matter what party.
113 agree | 107 disagree
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Examiner Reader said:
THe Dems were screaming last time gas prices were so high, saying it was because the Pres and Congress were doing such a bad job. Now that they are in control of Congress they are so quiet. Wonder why.
181 agree | 161 disagree
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Examiner Reader said:
sure hope whoever we think we elect in 08 is smarter than the 8 balls rattleing around the whitehouse now.
193 agree | 147 disagree
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Examiner Reader said:
Thanks just in time for the Holiday's. The democrats talk about pro choice whats our choice for energy. They only know about pro death, as in abortion and in our pocketbooks.We are heading down a very very dangerous path. We speak of democracy and our communist trade partners will have the Iraq Oil Contracts, and trade with dictatorships we sanction This is political suicide American Buffalos wake up
188 agree | 147 disagree
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Examiner Reader said:
Thanks just in time for the Holiday's. The democrats talk about pro choice whats our choice for energy. They only know about pro death, as in abortion and in our pocketbooks.We are heading down a very very dangerous path. We speak of democracy and our communist trade partners will have the Iraq Oil Contracts, and trade with dictatorships we sanction This is political suicide American Buffalos wake up
196 agree | 163 disagree
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R.J. said:
Seven years ago when Shrub stole the White House, oil was $27.00 a barrel, gas was $1.52, gold was $271.00 an ounce, and the national debt was $5.5 trillion. Now the national debt is over $9 trillion, oil is $100.00 a barrel, gas is $3.50 a gallon and gold is $850.00 an ounce. Don't you just love the way Shrub and the republicans are being fiscally responsible? Inflation, what inflation?
191 agree | 179 disagree
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Examiner Reader said:
Ya'll are going to think that $100.00 a barrel oil is cheap after Bush invades Iran. Then it will be $500.00 a barrel, and gas will be rationed. Most will go to his war effort. Boom! That's all folks! Remember America, you asked for it.
185 agree | 176 disagree
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Examiner Reader said:
Another great depresion during and after a battle. I am moving to Canada.
192 agree | 177 disagree
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Ind. Presidential Candidate - MiddleClass2008.com said:
And it's going to keep on going UP UP UP! Just wait until spring when we bomb Iran. Bend over and get ready America. The GOP/DEM corruption machine is coming for YOU...
222 agree | 191 disagree
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