[steinravnik]

Oil futures extended their seemingly relentless advance Wednesday, rising to a new record near $124 a barrel as investors captivated by the market's upward momentum looked past the government's report of an increase in crude and gasoline supplies. At the pump, gas prices rose for the first time since last week.

Light, sweet crude for June delivery hit a new trading record of $123.89 in after-hours activity on the New York Mercantile Exchange after settling up $1.69 at a record close of $123.53 a barrel.

Analysts attributed oil's rise to continued buying from the surge that pushed prices past $120 for the first time earlier this week. The fact that prices didn't decline sharply after the inventory report was released signaled to some investors that the market was ripe for another rally.

"It shows you that this market ... at times just ignores bearish news," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "It's just momentum."

Earlier, oil prices waffled as traders were torn between relief that crude and gasoline supplies are rising and worries about rising demand and falling distillate stockpiles.

The Energy Department's Energy Information Administration said in a weekly report that distillate fuels, which include diesel and heating oil, fell unexpectedly while gasoline demand rose slightly last week.

Traders chose to focus on those numbers and shrug off crude inventories, which rose much more than analysts predicted, and gasoline supplies, which increased when analysts forecast a decline.

http://mny.mobile.msn.com/en-us/articles.aspx?aid=12400801&acid=1&afid=1

 

[BrickTamland]

They always call it "light, sweet crude" - Did someone taste it? They could just call it crude oil and stop using that cliche that is starting to annoy me.

 

[AndrewGS]

I'd sure as hell love to switch from oil to another source of energy, but there are no real alternatives right now so we're all just screwed. Every single thing in our lives has a dependency on oil at some point.

 

[Ttple]

It just won't stop going up.

 

[PA Dweller]

Guess at this point I will have to settle for a 4 cylinder engine.........

 

[iamwin]

Simple reason. Light refers to oil that contains mostly shorter chain hydrocarbons, such as the one you find in Gasoline. Sweet refers to low sulfur content. Easy enough for you?

They always call it "light, sweet crude" - Did someone taste it? They could just call it crude oil and stop using that cliche that is starting to annoy me.

 

[ChevyRacing48]

This is quickly how it works:

There is conventional oil and Heavy oil/bitumen.

Coventional oil may already be refinery ready or 'light sweet crude' and therefore does not need further upgrading. It basically goes right from the mine to the refinery, so whoever mines it, will sell it at the price per barrell of sweet crude oil to the refinery.

The heavy oil/bitumen is simply too heavy and too dirty for refineries to handle and therefore must be upgraded before going through the refining processes.

Most upgraders to date, will react as pure as possible hydrogen and the heavy crude feed stock with a catalyst under extreme pressure's and temperature's to create more, but shorter chain hyrdrocarbons to lighten the heavy crude feed stock.

The sweet refers to the fact that further down the process, this lightened crude is further reacted with hydrogen, in a series of reactors with another catalyst to remove the hydrogen sulphide (sour content) to then become "refinery ready light sweet crude".

The product Naptha/Jet and Gas oil streams from the upgraders are then sent to the refineries for further purification where the final products IE. pump gasoline and lubricants etc. are produced.

The light sweet crude price, is the price that refineries pay for their feed stock and that same price is the price that the upgrader and/or mine will recieve for producing/having refinery ready light sweet crude.

Therefore, the higher the price of a barrell of light sweet crude, the more money being made by the upgrading process and/or mining process as it is sold for a higher price but consequently, since the refinery is now buying this sweet crude at a higher price, they then must charge a higher price for their products, the pump gas, oil, lubricants etc.

The final destination, the gas station, will then have to charge more per gallon because they have now purchased the product at a higher price.

Companies that own the downstream (oil fields/mines), the midstream if needed (upgrading) and the upstream (refineries) are making huge profits, as you all have most likely read about the record profits.

 

[silvergoat2k6]

Seems as if it goes up $1-$2/day these days...not a bad return on investment if you ask me. Wish I had the money to play along...