Crude oil futures did hit $100 bbl for one brief shining moment today. The number was reached with an asterisk, however. More on that record trade, in a moment.

   I have joined the ranks of those that believe we will see many many trades at $100 bbl or higher in the coming sessions. Today, we saw 1,000 barrels, or one NYMEX futures’ contract, trade at that level. Again, more on that trade in a moment (tease, tease).

    This is written in some haste, so please excuse me if this isn’t snappy, wry, or witty. We began 2008 with the proverbial confluence of events that all conspired to send prices sharply higher. There was Nigerian unrest (giving the continent of Africa bookends of misery); huge sums of money pouring into commodities in general, and oil specifically; a brewing Winter storm; and a U.S. Dollar that performed today with all the vim and vigor of the 2007 Miami Dolphins.

   Crude oil closed at $99.62 bbl, up $3.64 bbl on the first business day of 2008. That compares with a $63.14 bbl close on the first business day of 2007.  It also compares with a $21.01 bbl closing price on the first business day of 2002.  We are staring at a potential five fold increase in the price of crude in just a little over six years time. I was in college siphoning gas during the Arab Oil Embargo, but this oil price escalation may indeed match that one in shear scope.

  Some other year-ago and six year comparisons:

      Jet fuel was worth about $2.80-$2.85 gal today in bulk markets, versus $1.83-$1.87 gal a year ago, and just 56-61cts gal on the first business day of 2002. These are accurate numbers, and so I have to reiterate that I am not pulling them out of my keester.

      Wholesale heating oil prices ended today at about $2.76 gal in New York, compared with $1.77 gal last year and 52cts gal when 2002 started. Again, real numbers, not obtained through an anatomical orifice.

     Wholesale gasoline is the only product that didn’t see an all time record established today. It’s January after all, and the next eight weeks typically represent the most miserable time of the year demand-wise.

   If crude oil stays close to triple digits, we can expect wholesale gasoline prices to eclipse $3.00 gal and put the $4.00 gal retail number in play as an “average”. I still suspect that this will not be the case, but today weakened my case and strengthened the case for the bulls.

   Some solid predictions for the next ten days, herewith:

-         We’ll soon see retail diesel prices top $3.50 gal for the first time ever. We already find retail home heating oil prices in the $3.50 gal neighborhood and some homeowners may indeed get deliveries for $3.75 gal, based merely on the wholesale price movement in the last ten days. My neighbor delivers cookies in a diesel-powered truck - - he will not be a happy camper this month, but he would be even more riled if he heated his home with heating oil (I live in a natural gas neighborhood, where bills may be puzzling, but less apocalyptic).

-         We’ll see street prices for gasoline flirt with $3.10 gal by the Feast of the Epiphany. Whether they proceed from $3.10 directly to $3.50-$3.75 gal may depend on whether investors and speculators get the typical midwinter epiphany and recognize that Winter gasoline is always an amply supplied fuel. Spring gasoline has a different dynamic, but that’s a subject for a later column.

-         December PPI and CPI numbers due later this month will actually show some moderation in the price of fuels like gasoline, heating oil, and diesel. But it an anachronistic view that should be calculated against the backdrop of the highest prices ever for January 2, and January 3, and so on.

 Now, back to that $100 bbl crude trade.  That particular trade was a trophy for a single floor trader in New York.  The trader, who has so far remained anonymous, must have realized that for a few hundred dollars, he (it was indeed a male) could go down in history as the first person who ever paid a triple digit number for a crude oil futures’ contract. I don’t think that the paper documentation of the $100 bbl deal (for one 1,000 bbl contract that was held for seconds, rather than minutes, hours or days) will match the Magna Carta in the global archives, but it was indeed a moment in history. Again, the $100 bbl price was paid for 1,000 bbl - - we routinely trade about 500-million bbl of WTI on any given regular business day.

  Here’s the story we put out on it within minutes of its consummation:

008-01-02 12:52:07 EST

***NYMEX FLOOR TRADE GETS DONE AT $100 BBL, BUT WITH AN EXPLANATION

   Yes, there was indeed a transaction in February WTI today at $100 bbl, and yes, it did represent an actual purchase at the psychologically important and historically magical number.  But reliable sources stress that the deal was more about "the moment" and less about the "momentous" rally. You might think of it as something that would occur on E-Bay, rather than the NYMEX.

  Most of the action has been in the Globex or electronic trading, and indeed, action for February WTI in that venue has surpassed 100,000 contracts in the last half hour. The high consummated in Globex trading so far was $99.60 bbl. 

   The $100 bbl price was seen for a single lot on the NYMEX floor when Globex was trading at or near $99.60 bbl. Apparently, one floor trader with a keen sense of history, decided to overpay a bit and do the first deal at $100 bbl. It is likely that the trader then sold the contract at a loss, but can now claim to be the first earthling to do a $100 bbl crude trade on the NYMEX stage.

   A purchase at $100 bbl and a subsequent sale at the Globex high of $99.60 bbl would represent a mere $400 bbl loss on the single lot, sources add.

  Evidently, it was determined that the loss was worth it.

   Crude oil was still within easy reach of $100 bbl with about 100 minutes to go in today's NYMEX session, with prices around $99.30 bbl as of 12:45 P.M. ET.

                       - Tom Kloza, tkloza@opisnet.com