OPEC upset over low gas prices -

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Assault at gas pumps related to attacks on Nigerian pipelines...

Nigerian pipeline attacks affect gas cost
Nigeria accounts for one of every 10 barrels of oil that arrives in the United States; Exxon and Shell are extracting 2 million barrels of oil a day in Nigeria; The disruptions in Nigeria began around the beginning of 2006

Violence in oil-rich southern Nigeria is having a ripple effect thousands of miles away -- at gas stations in the United States. One reason for record high gas prices, analysts say, is a spate of attacks on oil pipelines in Nigeria, the fourth largest supplier of oil to the United States. The attacks are relatively small, but the fallout is substantial.

The average price of a gallon of gas in the United States climbed to $3.831 on Thursday -- the 16th consecutive day of a price increase and the 15th consecutive record high, according to AAA. While analysts cite various factors in various countries for the increases, the price could keep going up with more attacks on pipelines in Nigeria, which accounts for one of every 10 barrels of oil that arrives in the United States.

"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 had been extracting 2 million barrels of oil a day in Nigeria. Yet a rebel group's 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.

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Would imagine OPEC is enjoying the benefit of increasing prices while demand eases up a bit...

Oil rises despite falling demand
May 28, 2008: Analyst says prices can go to $150 a barrel, even as U.S. demand for oil-based products continues to slump.

Oil prices moved higher Wednesday despite a stronger dollar and signs that U.S. demand for oil products is waning in light of a slumping economy and record prices.

Oil fell nearly $3 earlier in the day, but rebounded after Morgan Stanley's co-head of global economics, Richard Berner, said crude prices could easily reach $150 a barrel this year, and that high prices will not be enough to curb demand in developing countries. "It seems that these big banks are driving oil prices, where instead it used to be the other way around," said Alaron Trading senior market analyst Phil Flynn.

As the U.S. economy has deteriorated in the past six months, many investors have engaged in speculative trading of commodities such as oil to serve as a hedge against a generally weakened dollar. Banks' predictions of rising prices only gives credence to oil traders that their investment will deliver a strong return. Light, sweet crude oil for July delivery rose $2.18 to settle at $131.03 on the New York Mercantile Exchange. The contract fell $3.34 Tuesday, and was about $4 off its all-time high of $135.09 a barrel, which it hit last Thursday.

Slumping demand takes prices off highs

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UK Prime Minister to ask hard questions about oil
Wednesday 28th May, 2008 - UK Prime Minister Gordon Brown has warned of a world oil shock if there is no coordinated global action.

Mr Brown has said there will be no easy answer for families over fuel prices without a comprehensive international strategy to bring prices back.

Brown, who had to answer to hundreds of protesting British truck drivers who caused road chaos in London on Tuesday, has pledged to put global action on oil price rises at the top of the agenda at the Group of Eight summit in Japan in July.

Brown is meeting oil industry executives in Scotland in an effort to secure increased output from Britain's dwindling North Sea oil fields. Nevertheless, Mr Brown has said that in the long term, oil dependency will need to be reduced and other sources of energy explored and exploited.

UK Prime Minister to ask hard questions about oil

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Cause and effect??...

US Regulators Push to Strengthen Oversight of Energy Markets
May 30, 2008 - Faced with enormous political pressure to tighten the oversight of energy trading, federal regulators said Thursday that they have been investigating oil and derivative markets for six months to look into potential price manipulation.

The revelation came as the agency, the Commodity Futures Trading Commission, also announced a series of measures intended to heighten regulatory supervision of energy trading and bring “greater sunshine” into the commodities markets. The commission, which does not typically disclose ongoing investigations, said that since December 2007 it had been conducting a nationwide inquiry of “practices surrounding the purchase, transportation, storage and trading” of oil contracts. It did not say whom it was investigating, nor did it say when it expected the investigation to be completed.

The commission seems keen to address concerns raised in Congress this year that oil prices have been somehow artificially lifted by investors’ enthusiasm for energy commodities. Oil futures have risen 32 percent this year and have more than quadrupled since 2003. On Thursday, oil futures fell $4.41 a barrel to $126.62 on the New York Mercantile Exchange. Gasoline prices touched a national average of $3.95 a gallon, up from about $3.20 a gallon a year ago.

The commission said the new measures would “improve oversight of the energy futures markets to ensure they reflect fundamental economic forces of supply and demand, free of manipulation and fraud.” But some analysts said the rules would do little to reduce volatility in the oil market, or lead to lower prices. The new measures include, for example, an extended agreement with the commission’s British counterpart to expand the surveillance of energy futures contracts with delivery points in the United States.

More http://www.nytimes.com/2008/05/30/bu...l?ref=business

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Oil prices take a slide
May 29, 2008: Cap day of big prices swings as inventories plummet, economy grows and government unveils oil trading probe.

Oil prices fell over $4 Thursday, a day of wild price swings on the back of plummeting crude supplies, signs of a strong economy, and news the government is six months into an oil trading investigation. U.S. light crude for July delivery settled down $4.41 at $126.62 a barrel on the New York Mercantile Exchange. The 3.37% decline was the biggest on a percentage basis since March 19, according to the Energy Information Administration. A report on oil inventories was perhaps the most closely watched factor.

In its weekly inventory report, the Energy Information Administration (EIA) said crude stocks decreased by 8.8 million barrels last week. Analysts were looking for an increase of 750,000 barrels, according to a survey from Platts, an energy research firm. But the report issued online by the EIA said "the drop was due to temporary delays in crude oil tanker off-loadings on the Gulf Coast."

Oil futures, down $1.80 to $129.23 just prior to the report, surged as high as $133.12 minutes after the 10:30 a.m. ET release. "Everybody reacted to the headline number, but then the report says that a lot of the drawbacks are due to imports," said Phil Flynn, senior market analyst at Alaron Trading. He said the oil that was missing from the report could very well be floating in tankers on the Gulf of Mexico, where fog often closes ports this time of year.

More Oil futures tumble on questions about supply and economy - May. 29, 2008

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Granny says, "Dats' right - Big Oil just thumbs its nose at Washington"...

U.S. oil trade surveillance won't burst "bubble"
Fri May 30, 2008 - A move by U.S. regulators to boost surveillance of energy trading may cool speculation in the red hot market but it won't do much to pull down prices that have more than doubled in a year.

Under pressure from U.S. lawmakers blaming gung-ho speculation for the rapid inflation in oil prices that is threatening U.S. economic growth, the Commodities Futures Trading Commission said this week it was investigating oil-market trading and beefing up reporting requirements to make the market more transparent. Energy experts said the move could spook some big investors into trimming back their positions to stay under the regulatory radar and defend against the possibility that other big investors will do the same.

"Just as traders may have been more willing to bet on prices rising higher in the belief that there was this ongoing flow of buying to drive it to new highs, now there's more of a question mark," said Tim Evans, analyst for Citi Futures Perspective in New York. Oil prices have risen sixfold since 2002 to a record over $135 a barrel as surging demand in China and other developing economies strains global supplies, drawing in billions of dollars in cash from short-term speculators to longer-term investors like pension funds.

Money tracking commodity index funds, which give investors exposure to a basket of commodity futures, has swelled from $70 billion at the beginning of 2006 to $235 billion in mid-April, according to Lehman Brothers estimates. Some analysts argue a steep increase in investment these indexes in recent months is responsible for the 30 percent rise in crude this year, sending prices to levels not supported by supply and demand fundamentals and creating an oil "bubble".

More U.S. oil trade surveillance won't burst bubble | Special Coverage | Reuters

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Oil trading probe may uncover manipulation
May 31, 2008: But overall, any wrongdoing is likely to play a small part in soaring crude prices. Meanwhile, speculators aren't expected to hang.

Amid soaring oil prices that some say are caused by nothing more than rampant speculation, the government Thursday announced a wide ranging probe into oil price manipulation and said it would get more information on the effect investors are having on the market. The measures, undertaken by the Commodity Futures Trading Commission after pressure from angry lawmakers, do two things.

First, they'll attempt to gather more information from index funds and other non-commercial users of oil. They'll also seek information on oil trades made outside the U.S. on exchanges like the IntercontinentalExchange Europe (ICE) where the CFTC has no oversight and has been unable to get more detailed information.

The second thing on the CFTC's agenda is an actual investigation into possible price manipulation - most likely by a commercial user of oil like a production company, shipping company, or storage company.

Information gathering

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Check out his sly grin in the link photo...

Cheney calls suspending gas tax a 'false notion'
Jun 2, `08 WASHINGTON (AP) - Vice President **** Cheney on Monday rejected a suspension of the federal gasoline tax as proposed by his party's presumptive presidential nominee, Sen. John McCain.

Cheney said it would offer little help to consumers coping with gas prices around $4 a gallon. The vice president's critique went further than President Bush's own comments on the idea, which appears dead anyway. "I think it's a false notion, in the sense that you're not going to have much of an impact, given the size of the gasoline tax on the total cost of the gallon of gas," Cheney said when asked about the matter during a luncheon appearance. "You might buy a little bit of relief there, but it's minimal."

The national average for a gallon of regular gasoline on Monday was $3.98, according to a survey of stations by AAA and the Oil Price Information Service. Of that total, the federal tax on gasoline is 18.4 cents per gallon. Both McCain, R-Ariz., and a contender for the Democratic presidential nomination, Sen. Hillary Rodham Clinton of New York, have proposed suspending the tax.

Bush has said he would consider any idea from Congress, but he was not enthusiastic about it. Democratic leaders in Congress have shown little interest, too, and no votes are anticipated on the matter in the House or the Senate. The gas tax is the main source of revenue for the Highway Trust Fund that provides grants for highway and bridge construction and repair.

More My Way News - Cheney calls suspending gas tax a 'false notion'

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Spanish upset over high fuel prices...

Spanish hauliers on fuel strike
Monday, 9 June 2008 - Tens of thousands of Spanish lorry drivers have begun an indefinite strike against the soaring price of diesel, which has risen by 20% this year.

Some 90,000 hauliers stopped work at midnight on Sunday (2200 GMT) and are expected to stage blockades and demonstrations in coming days. Reports suggest traffic between Spain and France has been disrupted. The Spanish government says it is preparing a package of measures to assist the transport sector. These measures include emergency loans, more flexible contracts and cash payments to older lorry drivers who are willing to retire.

Wide support

Most of the hauliers are self-employed, or working for small and medium-sized haulage companies, and they have warned that supermarkets will run out of goods within days. They are receiving strike support from counterparts in south-eastern France, who had threatened to disrupt the flow of traffic along one of the main border routes into Spain. A police spokesman in the province of Gerona told Spanish news agency Efe that cross border traffic is completely blocked.

The drivers want the Spanish government to establish, by law, a minimum price for their services, and to ensure that haulage contracts better reflect the fluctuating cost of fuel. Their strike follows action by hauliers in France and other European countries. They are following the lead of Spanish fishermen, many of whom are already on strike because of soaring fuel costs. Fishermen in the northern regions of Galicia and Cantabria are expected to join the strike on Monday.

BBC NEWS | Europe | Spanish hauliers on fuel strike

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What if our truckers decide to strike? Will the same happen here?...

Gas Stations in Spain Running Out
Monday, Jun. 09, 2008 — Gas stations in Madrid and the northeastern Catalonia region began running out of fuel Monday as an indefinite strike by truckers began to bite.

The protest over soaring fuel costs began at midnight Sunday. Antonio Onieva, president of Madrid's station owners organization, told reporters that by 5:30 p.m., 15 percent of the capital's outlets had run out of fuel. Manuel Amado, president of Catalonia's owners' federation, said 40 percent of Catalonia's 1,714 stations had sold out.

The stoppage led to lengthy lines at many gasoline stations across the country as drivers rushed to fill up. Truckers also blocked a number of roads around the country, including some leading into the center of Barcelona and the international border with France.

"We are the ones who move the goods that this country needs to keep working. If we stop because we haven't got the money to buy fuel then the country will stop," Julio Villascusa, president of the transport association Fenadismer, told Cadena SER radio.

Fenadismer said more than 90,000 drivers have been called to take part in the strike. The strike was not expected to have a major effect on city food markets until later in the week. There was almost no movement of trucks early Monday at Mercamadrid, the main wholesale food market for the Spanish capital.

MORE

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Protests erupt in Nepal after fuel price hike
Tuesday 10th June, 2008 - Violent protests erupted across Nepal Tuesday as the government hiked fuel prices from midnight in a desperate measure to keep parity with increased oil prices in India.

Students, who had played a decisive role in toppling King Gyanendra's government two years ago, spearheaded the protests that started in major college and university campuses and spilled over to the districts. Burning tyres to block roads in the capital, students also shut down the East-West highway, Nepal's lifeline, connecting the landlocked nation with India and providing the major route for supplies.

Demonstrations were reported from Chitwan district in the Terai plains as well as Makwanpur in central Nepal with indications that the protests could snowball. The new disruption came after Nepal Oil Corporation (NOC), the state agency that is the sole importer of petro-products, decided to hike prices from Monday midnight in a frantic bid to stem its losses following a price rise in India, from where Nepal gets its supplies.

The price rise, ranging from nine to 28 percent, will hit the common man hard, leading to an escalation in the price of essential commodities and transport. The country is already grappling with high rates of inflation and unemployment.

More Protests erupt in Nepal after fuel price hike

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British gettin' antsy over petrol...

Prime Minister Urges British Motorists Not To Panic, Buy Fuel
June 10, 2008 - British Prime Minister Gordon Brown asked motorists not to panic buy fuel amid threats by over 500 tanker drivers to go on a four-day strike starting Friday morning.

The planned halt in fuel deliveries could affect up to 10 percent of U.K.'s gas stations. Brown assured Britons emergency measures have been put in place to ensure fuel would still be available to drivers. A spokesman of Brown said, "The most responsible thing the public can do is to continue to buy as normal."

Among the measures being implemented are for Shell service stations on two highways, Fleet on M3 and Taunton Deane on M5, to carry sufficient supply of fuel at all times. Brown has the option of exercising extra powers provided by the 1976 Energy Act, if the fuel crisis would worsen.

Unite, the truck drivers' union, is slated to meet with haulers in an attempt to negotiate their demand for a 13 percent salary increase. Brown's spokesman added, "We do not believe that any strike action is justified because that would disproportionately impact on the lives and livelihoods of millions of people in the country not involved in this dispute."

Prime Minister Urges British Motorists Not To Panic, Buy Fuel | AHN | June 11, 2008

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Spain, Portugal Truckers' Strike Turns Violent, Kills Two Picketers
Two striking truck drivers died in Portugal and Spain while one picketer was injured as protests against high fuel cost in the two countries turned violent on Tuesday.

A 52-year-old Portuguese driver who climbed a truck to prevent it from passing through a strikers' barricade fell under the wheels and died near Alcanena in northern Lisbon. A striking Spanish driver was run over by a non-striking truck driver while manning a picket line in Granada. The driver was arrested.

In the port of Motril near Granada, police clashed with picketers trying to prevent tankers from delivering fuel cargo to petrol stations, injuring one of the strikers. One picketer was detained by police and two other strikers were arrested in Irun at the French border for puncturing lorry tires to prevent the trucks from operating.

The Spanish truckers' strike started on Monday with picketers using trucks to block roads in major cities. The blockade caused traffic jams up to 10 kilometers long and shortage of fuel and food supplies in petrol stations and supermarkets. The strikers are demanding cuts in fuel taxes and the imposition of a minimum price for fuel. The government is offering lower social security payments and financial facilities for retiring drivers.

Spain, Portugal Truckers' Strike Turns Violent, Kills Two Picketers | AHN | June 11, 2008

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Relief is on the way...

Saudis seen increasing oil output in July
Sat Jun 14, 2008 - Saudi Arabia plans to increase its oil output in July by some half-million barrels a day, a sign the country is growing concerned about the impact of high crude prices on the global economy, The New York Times reported.

Citing analysts and oil traders briefed by Saudi officials, the Times said in its Saturday editions the plans by the world's largest oil exporter had been privately disclosed recently by Saudi officials. The analysts declined to be identified for fear of being cut off from information from the Saudis in future. "We would welcome any and all increases in oil production, including from Saudi Arabia," White House spokesman Tony Fratto told the newspaper. President George W. Bush pressed for increased production in two visits to Saudi Arabia earlier this year.

Ibrahim al-Muhanna, an adviser at the Saudi Petroleum Ministry, declined to comment on the production increase, the Times said, although he noted Saudi Arabia was uncomfortable with oil prices, saying, "Our goal is to bring back stability to the oil market." The increase, which the Times said may be made public as early as next week, could put the Saudis' output at 10 million barrels a day, which would be its highest-ever output if sustained, the Times said. The current level is 9.45 million barrels daily.

The move was seen as an indication Saudi Arabia was nervous about the political and economic impact of higher oil prices, the report added, with oil demand dropping in developing countries, including the United States. Oil prices have risen 40 percent to nearly $140 a barrel this year, causing record U.S. gasoline prices, and some analysts forecast $200 a barrel prices this year. "This clearly represents the biggest test for them," the newspaper quoted John Kilduff, a senior vice president at the brokerage firm MF Global, as saying, as the move could backfire if investors fail to respond to the extra supplies.

Saudis seen increasing oil output in July | Reuters

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World economy threatened by oil, food prices
Saturday 14th June, 2008 - Rising oil and commodity prices are posing a threat to the global economy, the finance ministers of the Group of Eight (G8) said Saturday.

'Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable, and may increase global inflationary pressure,' the G8 finance minsters said in their final communique.

At the meeting in Osaka, which concluded Saturday, the G8 finance ministers urged oil producers to increase production and increase transparency in the oil market in order to slow down skyrocketing crude prices. According to the New York Times newspaper, key OPEC member Saudi Arabia said it planned to hike production by 500,000 barrels per day as crude prices peaked just below $140 per barrel.

The oil markets could be made 'more efficient by promoting greater transparency and reliability in market data, including on oil stocks,' and on the size of financial flows coming into the oil markets, the ministers said. The G8 consists of the world's seven richest nations - the United States, Japan, Germany, Britain, France, Canada and Italy - as well as Russia.

World economy threatened by oil, food prices

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Dollar and a half cheaper per gallon in Mexico...

Drivers head south for $2.54 gasolina
Sun., June. 15, 2008 - Drivers make run for the border to save on gas; $2.54 a gallon due to price supports — but lots of idling to get back to U.S.

If there's pain at the pump in the U.S., Mexico may just have a remedy. A gallon of regular unleaded gasoline in San Diego retails for an average price of $4.61 a gallon. A few miles south, in Tijuana, it's about $2.54 — even less if you pay in pesos. More and more people appear to be taking advantage of the lower price. "I used to buy exclusively in the U.S. before gas started really going up," said Patrick Garcia, a drama teacher at an elementary school in San Diego who lives in Tijuana. "Since then, I've been buying all my gas in Tijuana."

The lower prices mean a U.S. motorist could save almost $54 filling up a two-year-old Ford F150 pickup with a 26-gallon fuel tank in Mexico. The differential in diesel is even greater, selling at $5.04 a gallon in San Diego County and $2.20 in Tijuana. Paul Covarrubias, 26, who lives in Chula Vista and works in construction in San Diego, crosses the border each week just to refuel his dual-cab Ford F-250 pickup.

"I fill it up with diesel in Tijuana for $60," he said. "It would be almost twice that in San Diego." Gas is cheaper in Mexico because of a government subsidy intended to keep inflationary forces in check. Still, international gas-buying trips don't make sense for everyone. The wait getting back into the U.S. at the border in Tijuana frequently takes longer than two hours and cars can burn about a gallon of gas for each hour they idle.

Drivers head to Mexico for $2.54 a gallon gas - MSNBC Wire Services - MSNBC.com