Gas prices to soar once again...

[waltky]

Speculators takin' advantage of China's earthquake...

Oil price soars on the back of natural disaster
Sunday 18th May, 2008 - Goldman Sachs says crude oil has hit record new prices following the Chinese earthquake.

Analysts believe the rebuilding which will be needed after the huge earthquake will mean a sharp increase in diesel fuel use.

US light crude started the year at $100 a barrel, dipped in January and February before starting a relentless rise to almost $128. Brent has been well above $126.

Goldman Sachs is predicting oil in the second half of the year will average $141 a barrel.

Goldman was one of the first to point to triple-digit oil more than two years ago. Earlier this month it said the price could shoot up to $200 a barrel within the next two years.

Oil price soars on the back of natural disaster

[waltky]

Isn't it strange how gas prices go up whenever Big Oil has to appear before Congress??...

Big Oil defends profits before irate senators
WASHINGTON - On a day oil prices leaped to unheard-of highs, senators lined up Big Oil's biggest executives and pummeled them with complaints that they're pretending to be "hapless victims" while raking in record profits.

Where is the corporate conscience?" Sen. **** Durbin, D-Ill., asked the top executives of the five largest U.S. oil companies. It's all about economics, came the reply. Supply and demand. The company leaders tried to shift attention from motorists' anger over $4-a-gallon gasoline to a debate over new areas for drilling. But senators at the Judiciary Committee hearing weren't having any of that. They wanted to press the executives about public anguish over paying $60 or more to fill up a car's gas tank.

"People we represent are hurting, the companies you represent are profiting," Sen. Patrick Leahy, D-Vt., told the executives. He said there's a "disconnect" between legitimate supply issues and the oil and gasoline prices motorists are seeing. The executives, sitting shoulder to shoulder in the hearing room, said they understood people were hurting, but they tried to blunt the emotion with economic analysis.

Profits have been huge "in absolute terms," conceded J. Stephen Simon, executive vice president of Exxon Mobil Corp., but they "must be viewed in the context of the massive scale of our industry." And high earnings "in the current up cycle" are needed for investments in the long term, including when profits will be down. "'Current up cycle,' that's a nice term when people can't afford to go to work" because gasoline is costing so much, replied Leahy with sarcasm.

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[waltky]

Hurricane season just beginning...

Direct hurricane hit could push oil to $150
Fri., May. 30, 2008 - 'There's a lot of areas of infrastructure that can be disrupted'

Meteorologists are predicting a busy hurricane season this year, and any direct hit on the Gulf of Mexico's extensive oil and gas infrastructure could easily send already sky-high oil prices rocketing past $150 a barrel. But predicting whether, much less where a big storm will strike, is tricky business. Energy markets haven't priced in a potential catastrophe, and won't factor in a hurricane until a storm actually forms. The 2005 hurricane season was one of the most destructive in history. It sent oil prices soaring into the then-unfathomable $60s. Natural gas futures rose above $14 per 1,000 cubic feet, prices that haven't been seen since.

But oil trades at double that amount today, and a turbulent summer in the Gulf could easily send prices well beyond the record $135 per barrel it reached last week. "If we get anything that disrupts Gulf production in a meaningful way ... I think it could easily push prices to the $150 level," said Brad Samples, an analyst at Summit Energy Services Inc. in Louisville, Ky. The Gulf is home to hundreds of oil and gas drilling platforms and pipelines which are typically shut down when a storm approaches. Hurricanes can damage platforms or scatter pipelines, and that can take months to repair.

Storms also disrupt tanker traffic and the Gulf Coast ports that receive the vast majority of the nation's petroleum imports. The huge refineries that dot the coast grind to a halt when a hurricane approaches land, driving the price of gasoline and other petroleum products upward. "There's a lot of areas of infrastructure that can be disrupted," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. The National Oceanic and Atmospheric Administration says the 2008 Atlantic hurricane season, which begins June 1, could be slightly busier than average, with a good chance of six to nine hurricanes forming. Two to five of those storms could be major, NOAA said.

More Direct hurricane hit could push oil to $150 - Oil & energy - MSNBC.com

[waltky]

More refineries would help...

Paulson: no 'quick fix' on oil
June 1, 2008: U.S. Treasury Secretary Henry Paulson says rising price of oil is due to more to supply and demand issues; sees no short-term solution.

U.S. Treasury Secretary Henry Paulson said Sunday that there was no quick fix to high oil prices, which he called an issue of supply and demand. Paulson said inflation in the Gulf is "significant" but suggested that Gulf countries pegging their currencies to the weak dollar was not the only reason for it. He said it was a "sovereign decision" by each country whether it wants to de-peg its currency from the dollar. Speaking to reporters in the tiny Gulf nation of Qatar, Paulson also acknowledged the U.S. economy was experiencing a "downturn" and reiterated that a strong dollar was in the U.S. interest.

The Treasury chief was in the Mideast to deliver a message to officials of Saudi Arabia and other oil-producing nations that soaring oil prices are putting a burden on the global economy. He is urging the countries to open up their oil markets to investment that can boost yields, exploration and production. With oil at record-high prices, Paulson said there is "no quick fix" because it is an issue of supply and demand. Global demand remains strong while "production capacity has not seen new development," Paulson said.

"I don't see a lot of short-term answers," he added. He said he would like to see "increased investment throughout the world in oil and gas and alternative sources of energy." On Wednesday, David McCormick, Treasury's undersecretary for international affairs, said that Paulson will not make any specific request for nations to boost their production.

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[waltky]

Its been a while since we last had a spike like this most recent one. Seems like every once in a while they decide to find out what the traffic will bear. Guess they've found out. Look for oil to remain in the $120-125 range. Looks like the commodities investigation is having an effect...

Oil drops sharply below $124
June 3, 2008: Fed chairman Ben Bernanke suggests more rate cuts are unlikely due to inflation worries.

Oil prices fell sharply Tuesday, dropping below $124 a barrel as demand concerns grew and Federal Reserve Chairman Ben Bernanke indicated that more interest rate cuts are unlikely. Bernanke's comments sent the dollar higher and raised questions about oil's ability to reach new highs in the short term.

Oil prices: Light, sweet crude for July delivery fell $3.45 to settle at $124.31 a barrel on the New York Mercantile Exchange. Prices continued falling in after-hours electronic trading, dipping as low as $123.87. It was oil's lowest trading and settlement levels since May 15. Prices peaked at $135.09 on May 22.

Retail gas prices, meanwhile, rose slightly to a new record near $3.98 a gallon, but could fall if oil prices continue to decline. The latest MasterCard SpendingPulse survey found that demand for gasoline fell by 4.7% last week - which included the long Memorial Day holiday weekend - compared to the same week last year. Averaged over the last four weeks, demand was down 6% last week compared to last year.

That dovetails with recent data from the Energy Department and Federal Highway Administration, as well as several other surveys suggesting high prices are cutting American's appetite for fuel. A new survey by RBC Capital Markets finds about 90% of Americans have made changes in their daily lives to counter high energy prices, including driving less and taking public transportation more often.

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[waltky]

Why we don't use more of our own untapped oil to be energy independent...

U.S. Policies Put Most U.S. Oil Off-Limits to Drilling
June 06, 2008 - Huge basins of untapped oil can be found on federal lands throughout the United States, according to a new report from the federal government.

But much of it cannot -- and may never be -- recovered, because it lies under national parks and national monuments, or it is subject to environmental laws and restrictions that make drilling prohibitive. The report, which was produced at the request of Congress by the U.S. Department of Interior's Bureau of Land Management (BLM), said there are 279 million acres under federal management where oil and gas could potentially could be extracted. More than half of it is totally off-limits to drillers.

"The total onshore resource is 31 billion barrels," said BLM's lead scientist Richard Watson, who authored the report. "Of that, 19 billion barrels are currently inaccessible or 62 percent. A little over 2 billion barrels, or 8 percent, is accessible under what we call standard lease terms." If you add in the 85.9 billion barrels of oil that lie offshore, as determined by the Interior Department's Minerals Management Service, there are 117 billion barrels of oil on lands owned or managed by the U.S. government. But all expansion of offshore oil recovery is currently off-limits.

Adding in what's available on privately held land, the figure rises to 139 billion barrels of oil, according to the government - more than the known oil reserves of Iran, Iraq, Russia, Nigeria or Venezuela, respectively. The biggest untapped land-based oil deposit in the United States lies within ANWR, the Artic National Wildlife Refuge, which is currently off-limits.

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Lawmakers Split on Drilling for Vast Amounts of Oil in USA
June 06, 2008 - Members of Congress interviewed by Cybercast News Service on Thursday were split on what to do about huge amounts of oil within U.S. territory that remains untapped because of U.S. laws and regulations.

A report released by the Interior Department's Bureau of Land Management (BLM) last month estimates there are 139 billion barrels of untapped, recoverable oil onshore and offshore in the United States. Two Republican congressmen say they support removing regulations in order to drill for the oil, while two Democrats say they oppose immediate action.

Sen. Orrin Hatch (R-Utah) told Cybercast News Service he was aware of the BLM report . "You've got that right," he said. "We can't get it (the oil) because the environmental elitists are preventing that with moratoria saying it would take ten years to get it developed," he said. Rep Mike Pence (R-Ind.) also said Congress ought to deregulate to allow more drilling. "I am more concerned about global warming and the impact of fossil fuel," he said.

House Ways And Means Chairman Charlie Rangel (D-N.Y) told Cybercast News Service he needs to study the issue more before deciding if regulations should be removed to allow more drilling. "I haven't studied enough to make that decision," Rangel said. When pressed on whether he thinks some of the oil resources estimated by BLM ought to be available for American consumption, Wrangel replied: "Yes, but there are other issues that could cause damage. That's what hearings are for. We have to have hearings and have experts and study the pros and cons."

The 139 billion barrels of undiscovered oil that the Interior Department estimates the U.S. possesses is more oil than is reported by U.S. Energy Information Administration to exist in the proven reserves of all countries except Saudi Arabia and Canada.

Source

[waltky]

Ya-da, ya-da, ya-da, yeah, yeah, yeah. If you really want to know why gas prices have skyrocketed, watch the 60 Minutes piece on Dubai City, the outlandish plans and development. That is the real reason gas is going through the roof, so that the rest of the world can pay for their excesses.

Oil's record jump defies single explanation
Mon Jun 9, 2008 - Oil's record jump to $139 a barrel at the end of last week defies any single explanation, although some leading analysts and producers predict the price could yet go higher.

Crude jumped $10.75 on Friday to $139.12, taking two-day gains to more than $16. Some put the move down to comments by an Israeli minister about a possible attack on Iran, the world's fourth-largest producer. Others cited strong oil market fundamentals.

"There is a strong fundamental baseline to all of this," said Kevin Norrish, oil analyst at Barclays Capital. "On top of that, Iran has come back onto people's radar screens." Iran's dispute with the West over Tehran's nuclear work had until last week faded in importance to oil investors, although the comments from Israel's transport minister Shaul Mofaz sparked a scramble to buy.

Banks such as Goldman Sachs and Barclays are prominent among those saying oil market fundamentals are a key factor in rising prices. Producers, including OPEC, tend to blame factors other than supply, such as speculation. Citigroup, in a note on Monday, said the broader themes behind oil's latest jump were probably disappointing growth in supply and robust world demand, and prices could rally even further.

More Oil's record jump defies single explanation | Special Coverage | Reuters

[waltky]

Public blamin' speculators...

'Unethical behavior' to blame for gas prices - poll
June 11, 2008: 62% of survey respondents say record runup in prices is fault of actions by players in the gasoline supply chain.

The question nags at Americans every time they fill up their gas tanks: Why is it costing $4 a gallon? A poll released Wednesday finds that 62% of Americans blame "unethical behavior" by industry players, while 32% attribute the price increases to supply and demand.

The CNN/Opinion Research Poll highlights a growing debate among American consumers, policymakers and oil executives over the exact causes of skyrocketing gas prices. Retail gas rose to another record Wednesday, with half the states in the nation paying more than $4 a gallon on average, according to AAA. Gas prices have risen nearly 9% from $3.718 last month and are 32% higher than the $3.066 average price a year ago. The poll reflects telephone interviews with 1,035 adults conducted June 4-5. The margin of error is plus or minus 3 percentage points

While gas prices have taken a toll on consumer budgets, oil companies have seen record profits. Last month, industry executives faced lawmakers on Capitol Hill to explain those profits, which critics claim are excessive. The executives testified that the price runups belie tight margins and reflect fundamental economic factors such as a weak dollar, increased demand abroad for oil and speculative investment. The weaker dollar encourages buying by investors who view oil and other commodities as a hedge against inflation. It also increases the appeal of dollar-denominated commodities like oil to overseas investors.

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[waltky]

Wonder if gas is still $11/gal. in Greece?

Philippine motorists struggle to cope with high fuel prices
Saturday 14th June, 2008 - Businessman Marlon Quejada rolled down the window on the driver's side despite the sweltering heat as he manoeuvred his van out of their house in Manila's suburban Caloocan City.

Quejada said that since the price of gasoline soared to 56.35 pesos ($1.28)) per litre last week, he stopped using his car air conditioner. Quejada added that he has also limited the use of his van to three days a week in travelling to his office some 36 km away from home. 'Not using the car aircon and taking a public ride have saved me a lot of money,' he said. 'The cost of gasoline is taking a huge chunk off from whatever I earn everyday.'

Like Quejada, thousands of motorists in the Philippines have been feeling the pinch of high fuel prices, which have risen 24 percent since the start of the year, and have resorted to various measures to save on fuel. Government data showed that since January 2008, oil prices in the Philippines increased by 12.50 pesos per litre. Economic analysts warned of continued weekly price increases as oil companies try to recoup their losses from previous spikes in world crude prices.

Raul Concepcion, chairman of consumer welfare advocacy group Consumer and Oil Price Watch, said there was no end in sight for the rise in oil prices and warned that prices of gasoline could go up to 65 pesos per litre. 'This is not only happening in the United States or in the Philippines but worldwide,' he said. Augusto Santos, director general of the government National Economic Development Authority, said that if world oil prices hit $200 per barrel, the country's economic growth would be substantially cut.

More Philippine motorists struggle to cope with high fuel prices

[waltky]

Goin' after the speculators drivin' up the price of oil...

US cracks down on oil speculators
Tuesday, 17 June 2008 - US regulators slap limits on oil contracts traded overseas amid fears speculators are artificially boosting oil prices.

The US Commodity Futures Trading Commission said the London-based electronic exchange would have to comply with US rules. The move comes as oil prices notch up record highs, amid fears that speculators are distorting the market.

As a result, fuel costs have shot up hitting the global economy. Airlines have been hit badly, with near record losses expected for 2008 in the US. US airlines were forecast to report $10bn (£5bn) of losses this financial year as sky-high fuel costs erode profits, according to the industry group Air Transport Association (ATA).

Oil prices slipped from their record highs near $140 a barrel reached during Monday trade as investors were cautious ahead of plans by Saudi Arabia to increase production in July. US sweet, light crude finished down 60 cents at $134.01, while London Brent settled 99 cents lower at $133.72.

Speculators to blame?

See also:

Airlines reeling from fuel hikes
June 18, 2008 - MAJOR US airlines say they could lose $US10 billion ($10.65bn) this year due to skyrocketing fuel costs, a staggering sum that would almost match the industry's worst-ever year loss in 2002.

James May of the Air Transport Association also told a joint US Senate hearing on speculative trading in the oil markets that up to 200 communities could lose airline service as a result of carrier capacity cuts that are being imposed to save money. "This nation's economy is inextricably linked to the viability of its air transportation system. If the airlines continue to spiral downward, so will the economy," Mr May said.

Wall Street analysts are also predicting multibillion-dollar losses for big airlines that are spending 50 per cent more on fuel this year. United's disclosure was made as part of Mr May's push in Congress for tougher regulation of oil futures trading.

Airlines believe market manipulation and speculation are behind the record run-up in global crude prices although the Bush administration believes recent price spikes are due mainly to supply and demand. Virgin America, the low-cost US airline partly owned by Britain's Virgin Group, said overnight it would cut flying capacity about 10 per cent in the fourth quarter from previously estimated levels, as it deals with high oil prices.

More Airlines reeling from fuel hikes | NEWS.com.au Business