Search, view and share videos about news and entertainment from around the Web.
See Videos »

Blog Chatter

NEWS ALERTS

Get the latest updates sent straight to your inbox.

Sign up to receive AOL News alerts by e-mail.

Gas jumps above $3.67, oil passes $126 on Venezuela concerns

By JOHN WILEN,
Associated Press
Posted: 2008-05-09 11:15:50
NEW YORK (AP) - 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 in morning trading on the New York Mercantile Exchange before retreating to trade up $1.09 at $124.78 a barrel.

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 doubling in oil prices since this time last year has much to do with the dollar's protracted decline. 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 7 cents to $3.5798 on the Nymex after earlier setting a trading record of $3.6125. 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 3.72 cents to $3.175 a gallon, and June natural gas futures rose 13.2 cents to $11.395 per 1,000 cubic feet.

In London, June Brent crude futures rose $1.79 to $124.63 a barrel on the ICE Futures Exchange.

____

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. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
05/09/2008 10:49 ET
Bookmark

Recent Comments

1 - 10 of 17
17 comments

retiredpolock 03:41:18 PM May 09 2008

4 buck$ by Memorial Day, 5 buck$ by the 4th of July, and 6 buck$ by Labor day , and you have to thank BU$H and BUDDIE$ for all of this great prosperity !! It took them 8 years to trash the unions, the economy, let the ILLEGALS drive down wages, increase health costs, incarceration rates, schooling costs, cut taxes for corporations, enen though ther are located off-shore,
start 2 un-winnable wars, have the corporations running the country, and as a last request, want a really great legacy ???? Yup, gotcha a middle finger pal !!!

pollymomme 03:13:54 PM May 09 2008

Yup----we don't need a war on terrorism---OPEC is already ruining this country with the price of oil. There must sure be more money around that this government has to waste on a war with no victory and no end in sight--it'll go at least as long as the Vietnam war--and this country will owe so damn much money to foreign countries-we 'll never be able to pay off this debt. In the meantime-OPEC can ruin our economy with the price of oil. Oil was 20$ a barrel when Bush took office and not it's almost 130$ a barrel. We need new blood in the White House--we don't need McCain--we need Obama--there's no way he could do worse than Bush or McCain.

gfrati8 03:12:24 PM May 09 2008

billcac99 02:25:23 PM May 09 2008

Report This! WHATS REALLY KIND OF FUNNY...IS THE SAME PEOPLE WHO DRIVE THEIR SUV'S TO THE NO WAR FOR OIL RALLIES. WILL BE THE FIRST ONES DEMANDING THAT THE U.S. GOES OVER A KICKS SOME ASS FOR SOME CHEAP OIL --------------------------------------------------------------------------

500 INDEPENDENT SMALL TRUCKING COMPANIES HAVE GONE BELLY UP AND THAT INCLUDES THE PEOPLE THAT HAVE WORKED FOR SAID COMPANIES AND YOUR INANE COMMENT ABOUT IDIOTS IN SUV'S DEMANDING LOWER GAS PRICES BASICALLY SAYS FU TO THOSE COMPANIES WHO ARE DYING FOR LOWER GAS PRICES.
YOU SEEM TO FIND IT A JOKE THAT THE AVERAGE AMERICAN IS BEING SQUEEZED TO THE LIMIT BY SAYING PEOPLE IN SUV'S ARE THE ONLY ONES COMPLAINING...

ddsmith43081 02:55:18 PM May 09 2008

Bush and Cheney are both Oilmen. HMMMMMMMM

paulchristenson 02:33:52 PM May 09 2008

Gee, and if you get McCain into office...you'll be paying $7.00/gallon...

paulchristenson 02:32:40 PM May 09 2008

Boy...I'll bet all you Republicans are sure glad you put BUSH in office, so you can pay $3.70/gal of gas...

billcac99 02:25:23 PM May 09 2008

WHATS REALLY KIND OF FUNNY...IS THE SAME PEOPLE WHO DRIVE THEIR SUV'S TO THE NO WAR FOR OIL RALLIES. WILL BE THE FIRST ONES DEMANDING THAT THE U.S. GOES OVER A KICKS SOME ASS FOR SOME CHEAP OIL AS SOON AS THEY ARENT ALLOWED TO DRIVE THIER GIRLY BOYS TO THEIR SOCCER GAMES..
WHEN THE OIL STARTS TO RUN OUT OR OUTRAGEOUSLY HIGH WE WILL SEE HOW STRONG THEIR BELIEFS ARE..

gerkonig2 02:12:05 PM May 09 2008

<<The United States has enough of our own oil to last 60-70 years. They will lower their prices when we stop buying and their stock piles just accumulate.>>

Please get your facts straight...

usmcf4j 01:55:11 PM May 09 2008

Hey Teddybear,

Better read up on your current events. One of the reasons we are paying so much for gas is because of Hugo Chavez, the Presisent of Venezuela and owner of Citgo... He's very anti-American. What we need to do is ban the importaion of any foreign oil until they lower the price to a resonable amount. The United States has enough of our own oil to last 60-70 years. They will lower their prices when we stop buying and their stock piles just accumulate.

teddybear02842 01:27:15 PM May 09 2008

gas in venezula is only 7 cents we need to start buy oil from them then we wouldn't be paying 4 or 5 dollars at the pump this shit is getting redicous

1 - 10 of 17
17 comments

Add your own Comments

The world's top-ranked tennis player hangs up her racket. The world's top-ranked tennis player hangs up her racket.
1 of 7

* Want the latest Hot Seat polls delivered to your Vista desktop? Hot Seat Vista Gadget »

Top News Photos

Jury President Sean Penn and Natalie Portman chat Wednesday at the opening of the 61st International Film Festival in Cannes, France.
Jeff Christensen, AP

Jury President Sean Penn and Natalie Portman chat Wednesday at the opening of the Cannes Film Festival.

Top Videos

News Bloggers

Ada Calhoun
Dinesh D'Souza
Mo Rocca
Ben Greenman
  • Ben Greenman
  • Ants!
  • 05/14/08 05:00 PM by Ben Greenman
The Young Turks