Libya Warns of Production Cut

Crude oil jumped more than $4 a barrel as the dollar weakened,and as SPECULATION now by a OPEC member Libya...as it threatened to cut production and OPEC's president said prices may reach $170 by the summer. This is now PURE SPECULATION by OPEC!!!!

This comment will no doubt help crude producers and speculators increase their profits....
Libya may curb output because of U.S. efforts to intimidate OPEC, the head of the national oil company said. The group's president, Chakib Khelil, said crude may surge on a European interest rate increase, France 24 reported. Oil, gold and copper climbed today as the dollar dropped because the Federal Reserve gave no signal of higher interest rates yesterday.

OPEC's president said prices might be going to $170 at the same time Libya said it may cut output, which touched off buying in a market that was already moving higher on the weak dollar, this attitude will have a negative inpact on the already souring Middle East inflation...as demand will be less and alternative energy sources continue to be developed..

Crude oil for August delivery rose $4.09, or 3 percent, to $138.64 a barrel at 11:02 a.m. on the New York Mercantile Exchange, after rising as much as $4.40 a barrel. Prices reached a record $139.89 on June 16.
The dollar is also lower on a forecast that the European Central Bank will boost interest rates. The currency's drop against the euro made commodities cheaper for buyers outside the U.S. The dollar was at $1.5737 per euro as of 10:42 a.m.

There's no reason for prices to rise $4 in 10 minutes, things are very unsettled and now the worry is that the European Central Bank may raise rates, which would be the same as another Fed cut.

Threats against Iran would also support prices during the summer. A political crisis that would stop Iran's oil production would push prices over $200 a barrel, to possibly $400 a barrel!!!!!
Saudi Arabia pledged it will pump an extra 200,000 barrels a day next month to calm the oil market at a June 22 meeting. The kingdom hosted the summit of 35 producing and consuming countries in the Red Sea port of Jeddah.

The Saudis go out of their way to have this specific meeting outside the OPEC frameworks, and if you're the OPEC president, you want to be important, so you come out of it and say $150 to $170,..

He's trying to prove he matters and OPEC matters and the Saudis don't make all the decisions.
Libya's National Oil Corp. Chairman Shokri Ghanem declined to say when a decision would be made on whether to lower Libyan production or give any indication of the size of the cut under consideration. Libya ranks third in terms of oil production in Africa, behind Angola and Nigeria.

He said the reductions may also be made because of threats of sanctions against Iran and U.S. legislation allowing lawsuits against the Organization of Petroleum Exporting Countries.
President George W. Bush has said he'd veto a so-called NOPEC bill passed in May by the House of Representatives, because it may limit the availability of gasoline and further increase fuel prices.
Brent crude oil for August settlement rose $3.43, or 2.1 percent, to $137.17 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $139.32 on June 16.
OPEC members should calmdown and stop using excusses to inflate crude prices .... remember that George W. Bush will soon be out and its possible a Hussein Obama will rule...