From Expat-Village.com
Oil rises above $126 a barrel
By
May 10, 2008, 08:30
Expat Village is edited and published by
Iain Williams in Caracas and Porlamar,Margarita Island, Venezuela.
A story from The Associated Press
NEW YORK: Oil rose above $126 a barrel Friday for the first time, as investors questioned whether a possible confrontation between the United States and Venezuela could cause a reduction in exports from the OPEC member.
The Wall Street Journal published a report Friday that suggested closer ties between President Hugo Chávez of Venezuela and rebels attempting to overthrow Colombia's government. Chávez 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 United States could impose sanctions on one of its biggest oil suppliers.
"If we put on sanctions, I'm sure Chávez would threaten to cut off our oil supply," said Phil Flynn, an analyst at Alaron Trading. "Obviously that would have a major impact on oil prices."
Light, sweet crude for June delivery settle up $2.27 at $125.96 a barrel before rising to a record $126.25 in late post-settlement trade.
Even if Chávez cut oil shipments to the United States, Venezuelan oil would still make its way to the country via middlemen, Flynn said. But that new layer in the supply chain would bump up costs.
Oil prices also were raised Friday by the dollar, which declined against the euro. The European Central Bank has said it is unlikely to consider interest rate cuts to cool the strong euro against the slumping dollar. Investors often buy commodities like oil as a hedge against inflation when the dollar falls. A weaker dollar also makes oil less expensive to overseas investors.
Many analysts say they believe the protracted decline of the dollar has much to do with the doubling in oil prices since this time last year.
Others say that tight global supplies of oil, driven by growing demand in countries like China, Brazil and India, are the primary factor driving oil higher.
Oil's surge is lifting retail gasoline prices in the United States. Prices at the pump have risen above an average of $3.67 a gallon.
The U.S. Department of Energy expects gasoline 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.
Click here for more Venezuelan news
Expat Village is edited and published by
Iain Williams in Caracas and Porlamar,Margarita Island, Venezuela.
Chavez: Venezuela won't tolerate secession in Bolivia
CARACAS, Venezuela (AP) — President Hugo Chavez says Venezuela will not tolerate a movement for secession in Bolivia's eastern lowland states.
Chavez says his government has not meddled in the domestic affairs of other Latin American nations, but would if Bolivian states now seeking greater autonomy from Bolivia's central government push for total independence.
He did not say Thursday what specifically Venezuela would do.
Bolivia's largest and richest state overwhelmingly backed a May 4 referendum seeking greater autonomy from the leftist government of President Evo Morales. Leaders insist they have no interest in full independence.
Chavez, a close Morales ally, accuses the U.S. of fomenting the state's autonomy movement, a charge U.S. officials deny.
© Copyright 2003 by Expat-Village.com