$4 gas at a pump near you ?

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Speculators must be jumpin' for joy...

Nigerian Oil Pipeline 'Attacked'; Chevron Halts Production
June 21, 2008 - Nigerian militants have reportedly blown up one of Chevron Corp.'s pipelines in its Nigerian unit, halting onshore oil production.

The U.S. corporation Chevron said on Saturday that the breach on its Escravos oilfields is a suspected act of sabotage. The company had to reportedly stop the production of about 120,000 barrels per day, which is around 6.6 percent of Nigeria's total daily crude output.

Nigeria, which is considered as Africa's top producer, may suffer from the current situation as crude is one of its main exports. The country produced an average 2.13 million barrels per day in the year 2007 and it was listed as number 13 among biggest producer in the world.

"The company is currently assessing the situation," the San Ramon, California-based company said in an e-mailed statement today. "The joint venture's onshore production has been shut in to protect the environment. At this stage, we are assessing the situation and cannot provide specific production figures."

The reports said that the attack was carried out on one of the pipelines near the Abiteye-Olero crude oil line near Chevron's Escravos terminal. The local authorities said no group has taken the responsibility for the latest attack and estimated that the attack have been carried out by militants using dynamites and rocket-propelled grenades.

Nigerian Oil Pipeline 'Attacked'; Chevron Halts Production | AHN | June 21, 2008

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Should help ease oil prices - if the truce holds...

Rebels blamed for oil attacks announce truce
22 June `08 - Nigerian rebels say truce will begin midnight Tuesday; covers Niger Delta region; Rebels have bombed pipelines and kidnapped hundreds of foreign oil workers; They claim to be motivated by a desire to get more oil wealth for people in the region; On Thursday, the group took credit for attacking a Shell oil facility

A Nigerian rebel movement blamed for an number of recent attacks on the African country's oil industry announced a unilateral truce Sunday after an appeal for negotiations by tribal leaders. "Effective 12 midnight on Tuesday, June 24, 2008, the Movement for the Emancipation of the Niger Delta will be observing a unilateral cease-fire in the Niger Delta region of Nigeria until further notice," the rebels said in a statement attributed to Jomo Gbomo, their leader's nom de guerre.

"We are respecting an appeal by the Niger Delta elders to give peace and dialogue another chance." MEND has bombed pipelines and kidnapped hundreds of foreign oil workers, typically releasing them unharmed, sometimes after receiving a ransom payment. The rebels hope to secure a greater share of oil wealth for people in the Niger Delta, where more than 70 percent of the population lives on less than $1 a day.

Nigeria is the fourth-largest supplier of oil to the United States, and analysts say that strife there is among several factors that have helped fuel a year-long spike in crude oil prices. The Nigerian government has proposed a peace summit to find a solution to the region's problems, but an immediate resolution is not apparent. Last Thursday, oil production was shut down at an offshore Nigerian facility after an armed attack by a powerful militant group from the Delta region, Shell said.

More Rebels blamed for oil attacks announce truce - CNN.com

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High gas prices hurtin' rural towns...

High gas prices threaten to shut down rural towns
2 July `08 - Those who can least afford it are hit the worst

The price of gas isn't an annoyance here. It's a calamity. Peggy Hanley uses a generator that burns a gallon of diesel fuel every hour — at about $5 a gallon— to power Forks General Store, the only place to buy groceries for miles around. There's no electric service, so Hanley, the owner, uses the generator to run eight refrigerators, nine freezers, lights and two ice machines for the store, which has been in a trailer since a fire destroyed the original building in 1994.

There are no utilities and no public transportation in this unincorporated town of a couple hundred people along a narrow road that winds through the mountains 314 miles north of Sacramento. Many people here buy gas for their vehicles and gas or diesel for generators that power their homes. "I'm scared to death" of rising fuel prices, Hanley says. At the store, the hub for visiting whitewater rafters and residents of other isolated towns, gas cost $5.30 a gallon on a recent day when the national average was $4.07.

This community may be an extreme example of how rising gas prices are hitting rural Americans particularly hard, but people in small towns from Maine to Alaska are in a similar bind as those here. Soaring gasoline prices are a double whammy for many rural residents: They often pay more than people who live in cities and suburbs because of the expense of hauling fuel to their communities, and they must drive greater distances for life's necessities: work, groceries, medical care and, of course, gas.

Meanwhile, incomes typically are lower in rural areas, making increasingly high gas prices an especially urgent concern. Rural households also are more likely to have older, less-fuel-efficient vehicles such as pickups, the Federal Highway Administration (FHWA) says. The average age of a vehicle in a rural household: 8.7 years, compared with 7.9 years for an urban vehicle. Rural residents do more driving, too — an average of 3,100 miles a year more than urban dwellers, the FHWA says.

More USATODAY.com

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Fearless W after offshore oil...

Bush Continues Push For More Offshore Oil Drilling
12 July 2008 - U.S. President George Bush wants Congress to expand offshore oil drilling to help bring down record high gasoline prices.

President Bush says rising energy costs are hurting the U.S. economy, so he wants Congress to expand oil drilling on America's Outer Continental Shelf (OCS). "Experts believe that the OCS that is currently off-limits could produce enough oil to match America's current production for almost ten years," he noted. "The problem is that Congress has restricted access to key parts of the OCS since the early 1980s. Since that time, technological advances have allowed us to explore oil offshore in ways that protect the environment."

In his weekly radio address, the president said once Congress lifts its legislative ban on more offshore drilling, he will remove presidential restrictions. In the Democratic radio address, Maryland Congressman Chris Van Hollen said Democrats support more drilling but want oil companies to explore the more than 27 million hectares of land they have already leased from the federal government.

"What the president hasn't told you is that the oil companies are already sitting on 68 million acres of federal lands with the potential to nearly double U.S. oil production," he said. "That is why in the coming days congressional Democrats will vote on use-it-or-lose it legislation requiring the big oil companies to develop these resources or lose their leases to someone else who will." President Bush also wants congressional Democrats to allow for drilling in an Alaskan wildlife refuge, action that environmentalists have successfully blocked for decades.

More VOA News - Bush Continues Push For More Offshore Oil Drilling

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Big Oil playin' the money game...

Big Oil spends on search, splurges on investors
Mon., July. 21, 2008 - Focus on stock, dividends reaps more immediate rewards than exploration

As giant oil companies like Exxon Mobil and ConocoPhillips get set to report what will probably be another round of eye-popping quarterly profits, just where is all that money going? The companies insist they're trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends. It's good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers making drastic cutbacks to offset the high cost of fuel.

The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University's James A. Baker III Institute for Public Policy. The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits. The issue has become more sensitive as lawmakers and Americans frustrated by high gas prices have expressed concern over gaudy reports of oil industry profits. ConocoPhillips is scheduled to kick off the latest round of Big Oil earnings reports Wednesday.

Oil prices are set on the open market, not by the oil industry. But that hasn't stopped public protests, a series of congressional grillings for top oil executives, and a failed attempt by lawmakers to slap Big Oil with a windfall profits tax. In the first three months of this year, Exxon Mobil Corp., the world's biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone, compared with $5.5 billion on exploration and other capital projects. ConocoPhillips has already told investors that its stock buybacks for April to June of this year will come to about $2.5 billion — nine times what it spent on exploration.

More Big Oil spends on search, splurges on investors - Oil & energy - MSNBC.com

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Nigerian rebels disruptin' oil supply...

Shell issues Nigeria oil warning after attack
July 29, 2008 -- Shell says it may not be able to meet supply contracts after Nigerian attack; Two of Shell's oil pipelines sabotaged by rebel groups on Monday; Company is working to repair the lines and get production running normally

Royal Dutch Shell said Tuesday that it may not be able to meet its oil supply obligations in Nigeria after an attack on its major pipeline. The Movement for the Emancipation of the Niger Delta (MEND), a rebel group, said "detonation engineers backed by heavily armed fighters" sabotaged two of Shell's pipelines early Monday. After a helicopter flyover of the area, Shell confirmed that parts of its large Nembe Creek "trunk line" were damaged, company spokeswoman Caroline Wittgen said. The company shut down some production "to limit the amount of crude that will spill into the environment," she said. Hours later, it declared "force majeure," a legal term meaning it could not meet its supply obligations in the region because of the attack. "[Shell] is working hard to repair the line and restore production," Wittgen said.

Nigeria is the fourth-largest supplier of oil to the United States, and attacks by rebels have helped fuel the year-long spike in crude oil prices. It's one of many factors pushing up the price of gas in the U.S., where one in every 10 barrels of oil comes from Nigeria. MEND -- the largest rebel group -- has targeted foreign oil companies since 2006. It has bombed pipelines and kidnapped hundreds of foreign oil workers, typically releasing them unharmed, sometimes after receiving a ransom payment. MEND hopes to secure a greater share of oil wealth for people in the delta, where more than 70 percent of the population lives on less than a dollar a day. Its attacks on oil facilities have taken a toll.

"Anytime a pipeline is affected, anytime any production gets shut down, you see oil prices jump up one or two dollars a barrel just because there is no slack in the system," said Jim LeCamp, a senior vice president with RBC Wealth Management, which manages assets for wealthy clients worldwide. Exxon and Shell are two of several companies that have been extracting 2 million barrels of oil a day in Nigeria. Recent rebel attacks on oil pipelines in the Niger Delta have cut overall production by roughly 10 percent -- meaning 200,000 fewer barrels of oil on some days. That decrease in production comes at a time of increased demand from oil-hungry regions such as China, Russia and Latin America. "Anytime there's a disruption there, it really affects the system," LeCamp said in a recent interview with CNN.

Shell issues Nigeria oil warning after attack - CNN.com

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Why expensive oil is here to stay...

Why oil won't fall below $100
August 21, 2008: With a surge in the price of global commodities, it's costing more to produce a barrel of oil than ever before.

Last week, falling oil prices looked unstoppable. The last few days have seen a halt in that slide. Still with prices well below the record set in July and a shaky world economy threatening demand, the question remains: How low can oil go?

Many analysts say oil is unlikely to go much lower than $100 a barrel, and it has to do with the rising cost of production. The the overall cost to produce oil has gone up, especially oil from tough to reach places like Canada's tar sands and the deep water Gulf of Mexico.

These areas require massive investment and materials to produce oil and that expense has risen as the price of commodities surge. And while they represent a small fraction of total worldwide production, they're important because some analysts believe prices won't fall below the cost of the most expensive barrel of oil.

"I don't think it will go down below $100 for very long," said Christopher Ruppel, an energy analyst at Execution LLC, a broker and research firm for institutional investors like hedge and mutual funds. "Once you go down too low, you'll shut down new production, and prices will go right back up."

Tar sands: A sticky situation

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Hurricane Ike wreckin' havoc with gas prices...

Nearly 25% of U.S. fuel production shut
September 13, 2008: 14 of 26 Texas refineries, producing about 3.8 million barrels of fuel a day, are shut down after Hurricane Ike hits the state's refinery base head on.

Nearly a quarter of U.S. fuel production was shut down in the wake of Hurricane Ike, according to a government assessment released Saturday after the storm slammed into the heart of the Texas coast's refinery base. By noon ET, 14 of the 26 Texas refineries, representing a production capacity of 3.8 million barrels of fuel a day, had been shut down, the Energy Department said. Almost all of those had been shut ahead of the storm and reports about the extent of damage were not yet available.

But even if the refineries were lucky enough to escape damage from the hurricane that came ashore at Galveston, Texas, early Saturday, they could remain shut due to near total power outages in the area. Texas accounts for more than a quarter of the nation's total capacity to produce gasoline and other petroleum fuels. In normal operation, facilities there can produce up to 4.8 million barrels a day, according to the government. About half of the state's capacity is in the Houston/Galveston area, which took the brunt of the storm. The eye of the hurricane passed directly over the ExxonMobil refinery in Baytown, Texas, the nation's largest refinery.

CNN correspondent Ali Velshi reported Saturday morning that there was no apparent damage to the refinery that could be seen from outside it, despite extensive damage in Baytown. Kevin Allexon, spokesman for ExxonMobil, said the company has yet to determine if there is damage that could further disrupt operations. "There's still some pretty significant weather that affects how safe it is to do assessment work," he said.

More Nearly 1/4 of U.S. fuel production shuts down - Sep. 12, 2008

See also:

Ike's aftermath: $4 gas
September 14, 2008: Gas prices poised to climb towards record levels again as hurricane hits center of nation's oil refining base; Ike could also cost insurers up to $18 billion.

Gas prices are poised to shoot back toward record highs after Hurricane Ike's direct hit to the heart of the nation's oil refineries, analysts said. The average price of gasoline nationwide has already shot up 12 cents in the past two days to $3.795 a gallon, according to figures released by the AAA Sunday. And the average price of gas is now at or above $4 in Alaska, Georgia, Hawaii, Illinois, Indiana, Michigan and South Carolina.

In addition, Hurricane Ike could turn out to be the third-most expensive natural disaster in U.S. history, according to preliminary forecasts from a firm that does loss estimates for the insurance industry. Experts say it's too soon to know exactly how much damage the hurricane - which slammed into Galveston, Texas, early Saturday - did to the refineries.

Some early reports suggested that the damage could be limited despite the nearly direct hit. But the output at the refineries, which produce nearly 25% of the nation's gasoline, could still be affected if it takes weeks or months to restore full power to the region. The uncertainty left experts projecting everything from a nationwide gasoline spike above $5 a gallon to a jump to just below the $4 mark.

Gas prices already climbing