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Oil hits new record high to start off the week

Posted Oct 29th 2007 9:00AM by Michael Fowlkes (RSS feed)
Filed under: Before the bell, Major movement, International markets, Consumer experience, Mexico, Oil

The week has barely gotten under way and oil has already reached new record highs. Last Friday we saw a new intraday high of $92.22, but that record was shattered today with prices moving up as high as $93.20 earlier in the session, and are currently trading up $0.97 to $92.83.

Last Friday I took a look at a look at several factors that have been pushing prices higher, and these are all still in effect, but today's move comes from a new source of supply concerns out of Mexico. Today's jump to new highs was spurred on by news that a storm in the Gulf of Mexico was forcing Petroleos Mexicanos, or Pemex, to cut back about 600,000 barrels a day worth of oil production.

Pemex announced yesterday that bad weather had already forced the oil company to cut back about 200,000 barrels of production and that another 400,000 barrel cut was on the way. The company produces on average around 3.2 million barrels a day.

Continue reading Oil hits new record high to start off the week

Sabotage blamed for Pemex pipeline explosions in Mexico

Posted Sep 10th 2007 1:33PM by Michael Fowlkes (RSS feed)
Filed under: International markets, Bad news, Consumer experience, Hershey Co (HSY), Mexico, Politics, Oil

Mexico announced today that Petroleos Mexicanos, also known as Pemex, was the victim of several explosions that affected at least five different pipelines in the country.

Pemex, the Mexican state oil monopoly, has stated that today's attacks were deliberate in nature, and forced the evacuation of around 12,000 people. Luckily, as of now there are no reported deaths resulting from today's attacks.

This is not the first time this summer that Pemex has been attacked. In July it was reported that a leftist guerrilla group (the Popular Revolutionary Army) attacked not only another major Pemex pipeline, but also carried out attacks on at least a dozen other major companies. The companies attacked included big names such as Honda Motor Co. (NYSE: HMC), Kellogg Co. (NYSE: K) and Hershey Co. (NYSE: HSY).

Following the attacks earlier this summer, the Mexican government increased security at "strategic installations" around the country, but that did not stop the wave of violence today.

According to a report on Bloomberg, it appears as though the five pipelines were hit by six different explosions, and that four of these explosions resulted in fires, which have since been put under control.

There are still no estimates as to the effect that today's attacks will have on the country's energy supplies, but the attack in July reportedly resulted in more than 100 companies having to cut or suspend production due to lack of gas.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.

Pemex and others clear oil rigs for Hurricane Dean

Posted Aug 20th 2007 9:30AM by Douglas McIntyre (RSS feed)
Filed under: Forecasts, Bad news, Exxon Mobil (XOM), Chevron Corp (CVX), Valero Energy (VLO), Oil

Watch for oil to go up early this week as Hurricane Dean moves through the Gulf of Mexico. The FT says that Pemex, the large Mexican oil company, has taken over 13,000 workers off its rigs. These rigs account for about 70% of the company's output. The storm could move toward Texas after it hits Mexico in the next 48 hours.

Oil futures began to rise on Friday anticipating production shutdowns due to the storm. But, the possible has now become the probable, and companies including Chevron (NYSE: CVX), Exxon (NYSE: XOM), and Valero (NYSE: VLO) will begin to close facilities and move workers out of harm's way.

The storm is likely to point to how fragile the oil pricing ecosystem is. In August 2005, Katrina sent oil prices to $69, which, at that time, was a record price for crude. In some ways the current situation is worse than it was two years ago. OPEC has refused to up production and just over a week ago The International Energy Agency said that demand for oil would likely push prices higher in the near term.

How long the upcoming spike in oil prices will last will depend on how badly the oil drilling and refining infrastructure around the Gulf is damaged. But, a troubled market does not need more to worry about.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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DJIA-38.7010,412.25
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S&P 500-2.851,103.39

Last updated: November 24, 2009: 12:19 PM

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