Demand drives increasing oil prices
Crude oil futures didn't hit $100 a barrel last week; oil closed Friday at a record $98.18.
Now speculators are guessing when the price will cross the $100 threshold as oil prices rise more quickly and steadily. Many analysts say that the seemingly ever-increasing prices are due to demand rising faster than supply.
Emerging countries such as China and India have rapidly developed a large demand for oil. Over the past decade China has developed a true middle class, one that comprises about 350 million people, and another 1.2 billion are striving to achieve that oil-guzzling status.
If they all succeed, the natural resources needed to meet their energy demands "would take four planets," BP Chief Executive Tony Hayward told the Houston Forum.
There are some alternatives that could help meet demand for a little longer, and higher traditional oil prices make options like oil sands and oil shale more economic.
Sinopec increases imports again
China Petroleum & Chemical Corp., one of Asia's top oil refiners, plans to import 316,000 tons of fuel in December. The increased imports are part of an effort to ease domestic fuel shortages, a representative for Sinopec Group said.
About 237,000 tons of fuel has been imported so far in November. A further two diesel shipments totaling 80,000 tons will arrive at ports and delivered to the Guangdong and Zhejiang markets before the end of the month, the company said.
To date, Sinopec has imported 298,000 tons of diesel and 90,000 tons of gasoline since September.
China's two oil majors, PetroChina and Sinopec, pledged to increase their output, raise imports and delay maintenance to ease supply problems. Meanwhile, state media reported that China National Petroleum Corp. plans to import 200,000 tons of diesel next month, pushing China's imports up to 500,000 tons.
More tension in Iraq could continue to push up oil prices
Iraq's Oil Ministry announced that all contracts signed by the Kurdish Regional Government are null and void. The ministry also issued a warning to foreign companies dealing with the regional administration, saying they would be blacklisted from any future deals with the Iraqi government.
"The government has nullified all the oil contracts signed by the KRG without approval of the Iraqi Oil Ministry," a ministry official said.
The KRG in northern Iraq had signed 15 exploration and exportation contracts with foreign oil companies since August, despite the central government's objection, the Xinhua news agency reported.
"In addition to nullifying the contracts, the government also warned that those companies will be blacklisted from any future deals with the Iraqi central government," the official said.
Iraqi Oil Minister Hussain al-Shahristani has said his ministry is the only institution authorized to sign contracts with oil companies with the absence of the new oil law, adding that any contract outside this framework is "illegal."
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Closing oil prices, Nov. 26, 3 p.m. London
Brent crude oil: $96.42
West Texas Intermediate crude oil: $98.56
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