Gas prices to soar once again...

[waltky]

Granny say, "Abdullah shoulda tol' Hugo to shut up...

OPEC summit starts with USD 200 oil warning
18 Nov 2007, OPEC leaders began a summit on Saturday with Venezuelan President Hugo Chavez issuing a chilling warning about oil prices in a speech that also urged the group to be actively involved in foreign policy.

The fiery leftist leader warned in an opening speech that crude prices could double from their current already- record level of near USD 100 a barrel if the US attacked Iran or Venezuela. "If the US was mad enough to attack Iran or aggress Venezuela again the price of a barrel of oil could reach USD 150 or even USD 200," he said.

He urged assembled leaders from the Organisation of Petroleum Exporting Countries, meeting for only the third time in the cartel's 47-year history, to club together for geopolitical reasons. "The basis of all aggression is oil. It is the underlying reason," Chavez said, pointing to the war in Iraq and US threats against Iran. "Today OPEC stands strong. It is stronger than it has ever been in the past," he said. "OPEC should set itself up as an active geopolitical agent."

His remarks were tempered by King Abdullah of Saudi Arabia, the OPEC kingpin and key US regional ally, who said that "oil is an energy for construction and must not become an instrument for conflict." OPEC's 12-strong membership is dominated by pro-Western Gulf states but includes an anti-US bloc of Iran and Venezuela.

Source

[waltky]

Wonder if Chavez will jump on the bandwagon?...

Iran stops accepting US dollars for its oil
Dec 9, 2007 - Iran has stopped selling its oil for US dollars, the Iranian ISNA news agency reported, citing the country's Oil Minister Gholamhossein Nozari.

'In line with a policy of selling crude oil in currencies other than the US dollar, the sale of our country's oil in US dollars has been completely eliminated,' ISNA reported Saturday. He also said, 'The dollar is no longer a reliable currency.'

Iran is the world's fourth-largest crude oil producer. At the November summit of Organization of the Petroleum Exporting Countries (OPEC) heads of state, Iran proposed that oil sales be carried in a variety of currencies, excluding dollars, but was not supported by any other member except Venezuela.

Iranian President Mahmoud Ahmadinejad had previously called the US currency a 'worthless piece of paper.' 2007 has seen a significant fall in the value of the US dollar against other major world currencies. Tensions remain high between Iran and the US, which has accused the Islamic Republic of attempting to build nuclear weapons, as well as providing assistance to insurgents in Iraq.

More Iran stops accepting US dollars for its oil

[waltky]

Subprime bailout results in higher oil prices...

Oil climbs on central bank plan
Thursday, 13 December 2007, Oil prices have been volatile on fears over the health of the US economy

Oil prices rebounded on fresh hopes that the global economy could remain robust after unprecedented action taken by a number of key central banks. The plan to make available billions of dollars worth of loans to cash-strapped banks pushed a barrel of New York light crude up $4.37 to $94.39 a barrel.

A US government report showing an unexpected fall in crude stocks and heating oil raised supply fears. Brent crude also hit $94 a barrel after sinking to $88 a barrel last week. By the end of last week, world oil prices had fallen more than $10 from their November peak of near $100 a barrel.

The sell-off came when traders took profits as the certainty that the US economy would weather the sustained housing slump and financial market turmoil snapped and the spectre of a recession dawned.

Dramatic move

See also:

UK welcomes world cash injection
Thursday, 13 December 2007, Weakness in sub-prime loans have destabilised the financial sector

A joint plan by five central banks aimed at easing the credit crunch in financial markets has been welcomed by UK Prime Minister Gordon Brown.

Up to $110bn (£54bn) in loans will be made available to world money markets by central banks including the Bank of England and the US Federal Reserve.

In an interview with the Times newspaper, Mr Brown said there should be more focus on such co-operation. Analysts say the unprecedented move is a sign of the severity of the problems.

Auctions

[waltky]

Can't take much more than this...

$3 gas: America's braking point
December 18 2007: After shrugging off high prices for years, American drivers are finally starting to cut back. Is it a sign of shifting habits, or looming recession?

Gasoline demand has fallen for the first time in years as drivers appear to recoil from near-record prices, throwing doubt on America's seemingly insatiable thirst for fuel. Growth in gasoline demand has been slowing all year. In five of the last seven weeks, the amount of gas that Americans consume has actually fallen compared to the same time last year, according to retail sales data gathered by MasterCard SpendingPulse, a research report that tracks gasoline sales using MasterCard, other credit cards and cash purchases at approximately 140,000 service stations around the country.

"With prices over $3 a gallon, there seems to be some real resistance from the consumer," said Michael McNamara, director of research for MasterCard SpendingPulse. In some weeks demand has fallen by as much as 3 percent. Although the public has seen $3 gasoline before, 2007 has been different. Where previous price spikes were short-lived, this one seems to be here to stay. Another reason demand is falling could be due to a slowing economy, or even fears of a recession. Since topping $3 back in April, gasoline has stayed consistently high, with the nationwide weekly average price never dropping below $2.70 a gallon, according to the Energy Information Administration. For 19 of the last 33 weeks, gasoline has averaged over $3 a gallon.

The first time in recent memory that gasoline prices hit $3 was September 2005, following Hurricane Katrina, and then once again in the summer of 2006. (Gasoline prices were also over $3 in the early 1980s, adjusted for inflation.) Analysts reported a slight drop in consumer demand growth following each of those spikes, but they where short lived. Gasoline eventually returned to the low $2 range and demand quickly resumed its normal rate of growth of around 1.5 percent per year.

MORE

See also:

RIP for the SUV
December 18 2007: Stick a fork in them, they're done. SUVs once ruled the Earth but like the dinosaurs, they've outlived their time

Never easy, the automobile business has gotten exponentially more difficult in recent months, as manufacturers rewrite their new model plans to cope with the eventual tightening of fuel economy standards. The latest victim is Volvo. According to a report in a Swedish auto magazine, Volvo is performing euthanasia on its popular sport-utility, the XC90. A revamped XC90 that was due to hit the market in 2010 has been cancelled because Volvo had no hybrid powertrain to put in it. For a brand that aspires to greenness as Volvo does, such an absence could be highly damaging to its environmental image. So after a facelift that will keep it on the market until 2012, the popular and highly-profitable XC90 will go wheels-up.

Although Volvo denied any plans to kill the XC90, it wouldn't be the first SUV headed off to the automotive graveyard. According to intelligence work by Global Insight, the Waltham, Massachusetts research and consulting firm, General Motors (GM, Fortune 500) has decided not to replace the old Chevy TrailBlazer and GMC Envoy when they expire in 2010. And Lexus has designated no successor to the FX 470 when it goes away at the end of the 2009 model year. "They have to do it," says senior analyst John Wolkonowicz. "It is what consumers want." Other manufacturers area are moving old SUV nameplates over to new-style SUVs, known as crossovers, that weigh less, deliver better fuel-economy, and are less in-your-face than the old trucky ones.

Both consumers and automakers will wind up paying for the changeover. Switching from old-style SUVs is expensive for automakers, who have to scrap their profitable truck engineering for more cost-constrained car mechanicals. That additional cost is likely to be passed along to consumers - along with all the other expenses of meeting the new fuel-economy requirements that could stretch as high as $5,000 a vehicle. It is an ignoble end to a proud motoring era. Not more than 15 years ago, SUVs ruled the automotive landscape and produced record profits during Detroit's last golden age. Now the most popular SUV of that era, the Ford Explorer, is headed to the scrap heap, done in by fuel economy and the lingering effects of tire-shredding and rollover issues from several years ago.

MORE

[waltky]

China to force prices even higher...

Oil Takes Center Stage in China's Diplomacy
Saturday 29 December 2007 - The Chinese dragon has woken up and with it has gone up its energy needs - adding a new dimension to the already strained global energy balance.

In an era where security of supplies is a crucial, top national objective for major crude importing nations, China cannot and is not oblivious to its future needs. After all, to continue fuelling growth and its rise to a superpower status, economy managers in Beijing need to ensure regular, smooth crude supply. China’s crude oil dependency is expanding rapidly and is now expected to exceed the 50 percent mark. “China’s demand for oil is expanding steadily and it is an inevitable trend for oil dependency to exceed 50 percent,” Dai Yande, deputy director general of the Energy Research Institute of the National Development and Reform Commission, said.

Chinese domestic output has failed to pace with its rising demands. Beijing became a net importer of oil some 10 years ago and became the world’s second largest oil consumer in 2002 following the United States, overtaking Japan in the process, Dai said. As per the Energy Development Report of China - 2007, the country will be dependent on crude imports to meet more than half of its energy needs by 2010 and around 60 percent by 2020. Key measures to optimize China’s energy structure, reduce environmental pollution and achieve sustainable development by working on alternative and renewable energy, remain top objectives today in Beijing. Some efforts in the direction seem to be under way already.

To maintain stability in domestic markets in the wake of fluctuating markets and ominous developments on the global energy chessboard, China is now undertaking steps to enhance its oil strategic reserves capacity. Earlier the month, China released a draft of a long-awaited energy law that called for the country to keep larger reserves of oil, uranium and other key resources and to set up a new government department. One major focus of the draft law is energy security — a comparatively new obsession for a country growing increasingly dependent on imports of oil, coal and other key commodities. As per the draft, still to be ratified by the National People’s Congress, Chinese oil companies would have to build their own oil reserves to supplement a government-owned inventory that begun last year as a buffer for supply crunches.

MORE

[waltky]

But will it be more than the speculators are able to bid up?...

'OPEC ready to pump more oil to keep market stable'
Thursday 31st January, 2008 - The Organisation of the Petroleum Exporting Countries (OPEC) would take every necessary measure to maintain market stability, including pumping more oil, OPEC member United Arab Emirates' energy minister said Thursday.

Mohammed bin Dhaen Al Hamli made the comments before travelling to Vienna for the extraordinary OPEC meeting that will open Friday, WAM news agency reported. He said world oil prices might remain volatile due to the current state of the global economy that has been exacerbated by the sub-prime mortgage crisis in the US.

Al Hamli remained non-committal on whether or not OPEC would increase output in view of the of the current market volatility. 'Any decision to maintain or increase the current production ceiling will be based on informed opinions, studies and analyses that will be presented to the ministers', he said.

'All market and economic indications are that the world economy is heading towards recession. Nevertheless, it is predicted that the global economy will continue to grow by 4.8 per cent during 2008, a growth rate that is closer to last year's level.' While underlining OPEC commitment to strike a balance between supply and demand, Al Hamli cited weakening US dollar, speculation and US housing sector crisis as the main factors responsible for oil price volatility.

'OPEC ready to pump more oil to keep market stable'

[waltky]

OPEC does an about-face...

OPEC Rejects Call for Higher Output
1 Feb. 2008 - OPEC's 13 members, meeting in Vienna Friday, rejected calls by the United States to increase oil output. The oil cartel said supplies meet current demands.

Following talks in Vienna, OPEC members decided to keep daily output at its current levels at nearly 29.7 million barrels a day. Their meeting comes after oil prices - which saw an unprecedented high of more than $100 per barrel of crude in early January - tumbled by 10 percent, to below $90 a barrel Thursday. U.S. President George Bush urged OPEC to increase production during a visit to Saudi Arabia earlier this month, arguing high oil prices could hurt world economies.

But OPEC members argue the steep prices reflected speculation activity rather than a supply shortage. Members also fear that a weaker world economy, rocked by the U.S. mortgage crisis and other economic problems, may translate into less demand for oil. Algerian oil minister and OPEC President Chakib Khelil, who headed the Vienna conference, said oil supplies were not the problem. "Supplies are going to be there, if of course there is a demand, it is going be there and I don't feel the world economy should be concerned about the lack of oil," he said.

"It should be more concerned about the, you know, the financial crisis that we are witnessing and the impact on the world growth." OPEC is particularly concerned about the U.S. economic slowdown and the weak dollar, which hurts the purchasing power of its members. OPEC's humanitarian branch separately announced Friday it had approved $5 million for health, sanitation and other key services to help residents in Gaza amid an ongoing blockade of the territory which is run by the militant Palestinian group Hamas.

VOA News - OPEC Rejects Call for Higher Output

See also:

OPEC not gonna help world economy...

OPEC Keeps Barrel Production At Current Levels; No Price Relief
February 1, 2008 - The Organization of Petroleum Exporting Countries (OPEC), which supplies 40 percent of the world's crude oil demand, will likely maintain its current rate of production; 29.67 million barrels a day.

OPEC ministers meeting in Vienna, Austria on Friday are expected to agree to maintain the current quota despite the call of the United States to increase output to lower oil prices and despite a looming slow down of the U.S. economy.

Oil ministers of OPEC members Saudi Arabia, Qatar, Algeria and Libya already told reporters upon arrival in Vienna on Wednesday that there was no need to raise oil production based on the current supply and demand situation in the world market.

Analysts are supporting the impending decision of the oil cartel. In their meeting on Dec. 5 in Abu Dhabi, the OPEC ministers decided against increasing oil quota saying market supply is adequate and the high prices of crude oil, which reached $100 a barrel, was due to traders' speculation.

OPEC Keeps Barrel Production At Current Levels; No Price Relief | February 2, 2008 | AHN

[waltky]

Explosion Rocks Texas Oil Refinery...

Explosion at Texas Oil Refinery Hurts 4
Feb 18, 2008 - Explosion at West Texas Oil Refinery Shuts Down Major Interstate; 4 Workers Injured

A thunderous explosion rocked an oil refinery Monday, injuring four workers and shaking buildings miles away. One employee was hospitalized for burns, while the others were treated and released, said Blake Lewis, a spokesman for refinery owner Alon USA. All workers were accounted for about an hour after the explosion, he said. The refinery employs about 170 people. Fires caused by the blast were under control but still burning in the afternoon, Lewis said. The Dallas-based company was waiting for access to the site to investigate the cause of the explosion.

The blast sent black smoke billowing into the sky, and forced the closure of schools and an interstate. "It was extremely scary. You shook you were so scared," said Laura McEwen, the mayor's wife who lives about two miles from the refinery. "Our walls shook. It jolted your bed. It was like an earthquake." John Moseley, managing editor of the Big Spring Herald whose downtown office is also about two miles from the refinery, said, "I thought it would knock the walls down."

Two elementary schools were evacuated, then classes were canceled at all nine campuses in the Big Spring school district, assistant superintendent Carie Dunnam said. Classes also were canceled at Howard College, according to the two-year junior college's Web site. The explosion forced open the doors of the school district's administration building about four miles from the plant, Dunnam said. "Literally pieces of my ceiling came on top of my head," she said. Bus routes were affected by road closures and that emergency officials were warning of the potential for more explosions, Dunnam said. Parents were asked to pick up their children, she said. Interstate 20 was shut down near the plant, Big Spring police spokesman Roger Sweatt said. "There's some fire and a whole bunch of smoke," Sweatt said. Big Spring is about halfway between Dallas and El Paso.

ABC News: Explosion Rocks Texas Oil Refinery

See also:

Chavez, Exxon Feud Bumps Oil Prices Up
Feb 18, 2008 - Venezuelan President Says He'll Cut Oil to the U.S. if His Country is Attacked

Oil advanced for a fourth day on Monday, supported by an escalating row between OPEC member Venezuela and oil major Exxon Mobil. The quarrel between Venezuela and Exxon, plus fears of new supply disruptions from Nigeria, has helped oil bounce back from this year's low of $86.11. But worries about a slowdown in top oil consumer the United States could hamper a return to record highs of $100 a barrel struck in early January.

U.S. crude was up 61 cents at $96.11 a barrel by 1812 GMT. On Friday it had closed 4 cents higher at $95.50, after touching a one-month high of $96.67. London Brent crude was up 30 cents at $94.93. Trading was relatively slow because of a holiday in the United States. "Oil prices are remaining at firm levels, buttressed by perceived supply side risks," David Moore, a resource analyst at the Commonwealth Bank of Australia, said in a research note. There is also evidence of investors moving back into oil, which could point to further price strength.

Speculators on the New York Mercantile Exchange, for example, increased net long positions last week, according to data from the Commodity Futures Trading Commission released on Friday. Net crude long positions increased to 39,922 in the week ending February 12, up from to 27,448 in the previous week. The data showed large speculative funds ending a four-week run of reductions in net long positions in oil futures, according to Olivier Jakob of oil consultants Petromatrix. "Investment flows have improved, with large speculators increasing their net length across oil commodities," he said.

VENEZUELA VS EXXON

[waltky]

Oil hits $102/bbl...

Oil spikes above $102 amid weaker dollar
27 Feb,`08 - Investors pump more money into energy as a hedge against inflation

Oil prices broke through a new intraday high of $102 a barrel Wednesday as a slide in the U.S. dollar prompted investors to pump more money into energy futures as a hedge against inflation. The dollar sank to a record low against the euro after the release of three disheartening U.S. economic reports Tuesday that show that the economy is slowing as prices for consumer goods rise. The dollar’s decline prompted investors to seek a safe haven from turmoil in the financial markets and the threat of inflation.

“Crude has cracked through the $100-level again and that’s driven by financial investors moving money into commodities markets,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “The U.S. dollar weakened against the euro and the economic data also indicated that inflation in the U.S. rose in January, and commodities are generally considered a hedge against inflation,” Shum said. “We are therefore seeing these strong prices that have really little to do with oil market fundamentals.”

Light, sweet crude for April delivery spiked as high as $102.08 a barrel in electronic trading on the New York Mercantile Exchange before slipping back to $101.23, up 35 cents. The contract on Tuesday jumped $1.65 to settle at $100.88 a barrel, a record close. In London, Brent crude added 33 cents to $99.80 a barrel on the ICE Futures exchange, below the intraday record of $100.30 a barrel set earlier in the session.

More Oil spikes above $102 amid weakening dollar - Oil & energy - MSNBC.com

[waltky]

Oil surges to new record above $104...

Oil prices surge to new record above $104
Wed., March. 5, 2008 - Government reports surprise drop in stockpiles; OPEC stands firm

Oil surged Wednesday, rising a remarkable $5 a barrel to a new record over $104 after the government reported a surprise drop in crude oil stockpiles and OPEC held production levels steady. Most analysts had expected the Energy Department’s Energy Information Administration to report oil supplies rose last week for the eighth straight time. Instead, they fell by 3.1 million barrels.

In Vienna, meanwhile, the Organization of Petroleum Exporting Countries said it would hold production levels steady, at least for now. The EIA report and OPEC announcement fed a new frenzy of investing in oil futures, which have risen to new inflation-adjusted records this week as the falling dollar drew new investors to the market.

Light, sweet crude for April delivery jumped $5 to settle at a record $104.52 a barrel on the New York Mercantile Exchange after earlier rising to $104.64, a new trading record. Earlier this week, oil prices broke the previous inflation-adjusted price record of $103.76, set in 1980 during the Iran hostage crisis. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is falling.

At the pump, meanwhile, gas prices rose a cent to a national average of $3.178 a gallon, according to AAA and the Oil Price Information Service. Gas prices have been following oil’s recent rally, and are 69 cents higher than a year ago. Many analysts expect prices to rise to near $4 a gallon this spring and summer as driving demand picks up.

More Oil surges to new record above $104 - Oil & energy - MSNBC.com