tagged w/ Oil Prices
-
Why have oil prices spiked wildly? Some argue that the volatility is a result of supply-and-demand fundamentals. More and more observers, however, believe that excessive speculation in the oil futures market by investors is driving oil prices sky high.
A June 2 article in the Wall Street Journal said it all: "Wall Street is tapping a real gusher in 2011, as heightened volatility and higher prices of oil and other raw materials boost banks' profits." ExxonMobil Chairman Rex Tillerson, testifying before a Senate panel this year, said that excessive speculation may have increased oil prices by as much as 40 percent. Delta Air Lines general counsel Richard Hirst wrote to federal regulators in December that "the speculative bubble in oil prices has concrete detrimental consequences for the real economy." An American Trucking Association vice president, Richard Moskowitz, said, "Excessive speculation has caused dramatic increases in the price of crude oil, which harms end-users like America's trucking industry."
I released records last month that documented the role of speculators and put the information on my Web site for three reasons.
First, the American people have a right to know why oil prices are artificially high. The CFTC report proved that when oil prices climbed in 2008 to more than $140 a barrel, Wall Street speculators dominated the oil futures market. Goldman Sachs alone bought and sold more than 860 million barrels of oil in the summer of 2008 with no intention of using a drop for any purpose other than to make a quick buck.
Wall Street, of course, wants to hide this information. They don't want the American people to know the extent to which speculators keep oil prices artificially high and the great damage that does to our economy. After the information became public, it was suggested that some on Wall Street may stop trading in the oil futures market. Good!
Second, Congress recognized last year that excessive oil speculation must end. The Dodd-Frank financial reform legislation required the CFTC to eliminate, prevent or diminish excessive oil speculation by Jan. 17, 2011. Months after that deadline, the commission still has failed to enforce the law, and speculators still are making out like bandits.
Third, the commodity regulators' claim that they cannot end excessive oil speculation because they lack sufficient data is nonsense. As the information I released makes clear, the commission has been collecting this information for more than three years. The time for studying is over. It is time for action.
I agree with those who say trust in government is at an all-time low. That's not because Washington is too heavy-handed with Wall Street. Quite the contrary! The American people are angry and disillusioned because they see our government act boldly to protect Wall Street CEOs but not ordinary Americans. When Wall Street needed a $700 billion bailout, the government was there for them. When working families need an end to excessive oil speculation and real relief at the gas pump, the government has failed to act.
The same Dodd-Frank bill that required commodity regulators to limit speculators included my amendment calling for an audit of the Federal Reserve from Dec. 1, 2007, to July 21, 2010, the period of the financial crisis. What we learned was that the Fed provided $16 trillion in secret, low-interest loans to every major American financial institution and to other central banks, large corporations and wealthy individuals. The audit provision was vigorously opposed by the Federal Reserve chairman.
It was right, however, that the veil of secrecy at the Fed was lifted and the American people learned about its actions.
Now it is appropriate to lift the veil of secrecy in the oil futures market. The American people have a right to know how much excessive speculation has driven up oil prices and which Wall Street firms are doing it.Why have oil prices spiked wildly? Some argue that the volatility is a result of... more
-
-
(Warning: Contains some moderate language, some adult material and flashing images)
Wondering why prices at the petrol station have gone up lately, chances are, you've may have not been checking the news abroad. Luckely the folks at Next Media Animation have created this rap to explain all about it...
Video from Next Media Animation: http://www.nma.tv/oil-prices-today-nma-raps-crude/(Warning: Contains some moderate language, some adult material and flashing images)... more
-
-
-
-
Just when companies have finally stepped up hiring, rising oil prices are threatening to halt the U.S. economy's gains.
Some economists are scaling back their estimates for growth this year, in part because flat wages have left households struggling to pay higher gasoline prices.
Oil has topped $108 a barrel, the highest price since 2008. Regular unleaded gasoline now goes for an average $3.69 a gallon, according to AAA's daily fuel gauge survey, up 86 cents from a year ago.
The higher costs have been driven by unrest in Libya and other oil-producing Middle East countries, along with rising energy demand from a strengthening U.S. economy.
Airlines, shipping companies and other U.S. businesses have been squeezed. The rising prices are further straining an economy struggling with high unemployment and a depressed housing market.
"The surge in oil prices since the end of last year is already doing significant damage to the economy," says Mark Zandi, chief economist at Moody's Analytics.
Unlike other kinds of consumer spending, gasoline purchases provide less benefit for the U.S. economy. About half the revenue flows to oil exporting countries like Saudi Arabia and Canada, though U.S. oil companies and gasoline retailers also benefit.
For consumers, more expensive energy siphons away money that would otherwise be used for household purchases, from cars and furniture to clothing and vacations.
High energy prices are "putting a drain on consumer budgets," says James Hamilton at the University of California, San Diego. "To the extent they're having to spend more on gasoline, they have to make cutbacks elsewhere."
Two-thirds of Americans say they expect rising gasoline prices to cause hardship for them or their families in the next six months, according to a new Associated Press-GfK Poll. The telephone poll conducted March 24-28 had a sampling error margin of plus or minus 4.2 percentage points.
Seventy-one percent say they're cutting back on other expenses to make up for higher pump prices. Sixty-four percent say they're driving less. And 53 percent say they're changing vacation plans to stay closer to home.
"I try to leave the car parked at home all day Saturday," says Curt Lindsay, who commutes an hour each way to his job as a computer systems administrator outside Washington, D.C. "I'd rather not spend the money on gasoline."
Since gasoline prices topped $3 a gallon, Lindsay has also been trying to drive more slowly to conserve fuel.
His co-worker Albert Zaza canceled family trips to New York and Boston after the cost of filling up his Honda CRV surged from $35 to $47. Zaza spends four to five hours in traffic each day and has to fill up every other day.
Rising fuel prices are pinching businesses too.
In Tipton, Iowa, Grasshopper Lawn Care is tacking 5 percent onto customers' bills to compensate for higher fuel costs. The company has to buy more than 8,000 gallons of gasoline a year. It plans to keep the surcharge until gasoline prices dip back below $3 a gallon, owner Dan Kessler says.
The oil shock and global instability are diluting the benefits of an improving job market. The unemployment rate, though still high, is at a two-year low. And the economy has just produced the strongest two months of hiring since before the recession began.
Bernard Baumohl, chief economist at the Economic Outlook Group, has slashed his estimate for growth this year to 2.8 percent from 3.5 percent. In 20010, the economy grew 2.9 percent.
Consumer spending accounts for about 70 percent of the economy. After adjusting for inflation and for seasonal factors, consumers spent 0.3 percent more in February than in January.
But that's unlikely to last. Gasoline prices are surging just as inflation-adjusted incomes are falling. More expensive gas is draining much of the cash Americans are receiving from a cut in Social Security taxes this year.
Zandi estimates that higher oil prices shaved 0.5 percentage point from growth in the January-March quarter. He predicts the economy grew 2.6 percent during the quarter.
If oil prices average $100 a barrel for the year, Zandi says, growth will be 0.3 percentage point lower than if prices had stayed at last year's level - an average of less than $80 a barrel. A few months of $125-a-barrel oil would slash economic growth by a full percentage point, Zandi says. And a few months at $150 a barrel could push the economy back into recession.
Surging oil prices don't hurt everybody in the United States. Oil companies, for example, stand to gain. In 2008, Exxon Mobil Corp. earned $45 billion - a record for a U.S. company - after oil prices hit a record $150 a barrel.
Oil services companies such as Halliburton Co., Schlumberger Ltd. and Baker Hughes Inc. also benefit as the oil industry rushes to find and produce more oil. And the products of biodiesel and other alternative energy companies become more competitive the higher oil prices go.
In a speech last week, Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, offered hope that higher oil prices won't persist long enough to do much damage.
"Large increases in food or energy prices tend to be temporary," Pianalto said. "History shows that they are often followed by sharp declines."
But Mark Pawlak, a market strategist at Keefe, Bruyette & Woods, says he worries about a repeat of what happened to the economy last year: It built momentum at the start of 2010, only to stall in the face of a European debt crisis and a run-up in oil prices from February to April.
http://www.forbes.com/feeds/ap/2011/04/06/general-energy-us-oil-prices-economy_8393632.htmlJust when companies have finally stepped up hiring, rising oil prices are threatening... more
-
-
Something you would never hear or see on Mainstream Media today - a three hour news special on the Gas/Oil crisis in 1973. It's here - all three hours worth. Give it a listen and realize how much hasn't changed in 38 years.Something you would never hear or see on Mainstream Media today - a three hour news... more
-
-
Crude oil prices rose to 2-1/2 year highs on Monday as worries about supply disruption increased due to deepening unrest in Libya, while Asian stocks declined as concerns about the Middle East also weighed.
:http://news.yahoo.com/s/nm/20110307/bs_nm/us_markets_global;_ylt=AoCxReCnb3URdp5WJz6T5ZCyBhIF;_ylu=X3oDMTJpY2g4dDB2BGFzc2V0A25tLzIwMTEwMzA3L3VzX21hcmtldHNfZ2xvYmFsBGNwb3MDMQRwb3MDMgRzZWMDeW5fdG9wX3N0b3J5BHNsawNhc2lhbnN0b2Nrc3M-Crude oil prices rose to 2-1/2 year highs on Monday as worries about supply disruption... more
-
-
suzane
-
added this
-
11 months ago
- |
-
[Visit article link for video and more on this story. What I found very telling is that this rescue is for 150 British oil workers - which means: BP. As harrowing as things may be for the people there - here at home, my advice is to fill up now because this is really going to hurt at the pump and it's not looking to improve. Have some reserves, too ~ G]
Further rescue missions are planned to airlift an estimated 300 British nationals still stranded in Libyan desert camps.
Two RAF Hercules flew 150 oil workers, many of them British nationals, to the safety of Malta on Saturday.
Looters are known to operate in the territory south of Benghazi, controlled by opponents of leader Muammar Gaddafi.
Meanwhile, 53 Britons were among 100 on the last government-chartered flight out of Libya to Gatwick on Saturday.
The BBC's Europe editor Gavin Hewitt, who is in Malta, says the RAF flights on Saturday were into an area which was "relatively safe" because the landing strip had been secured by local militia, and by oil company security.
He says "there are much more complicated and difficult places where there are still British workers", and rescue plans for them are being worked out.
"The biggest fear is of landing in area that is not in under the control of one side or the other," he added.
Meanwhile the Hungarian government has organised a charter flight out of Tripoli International Airport later on Sunday and is willing to accept British nationals.
The Romanian government is also sending a plane to Tripoli later on Sunday, with availability for approximately 40 EU citizens, including those from the UK if there is space available.
More details are on the Foreign Office website and the British government said it will also be regularly updating on all options to depart Libya via Twitter.
The Royal Navy frigate HMS Cumberland is heading back to Benghazi to help with further evacuations.
The Foreign and Commonwealth Office (FCO) has revised upwards its original estimate of the number of British oil workers still in the desert.
'No soldiers'
It is understood that many of their employers had not registered them with the embassy in Tripoli, which meant consular staff had been unaware of their whereabouts when the first protests against Col Gaddafi's regime broke out two weeks ago.
The FCO now estimates there could be between 280 and 380 British nationals still in the country - and is urging those who have already left to contact them on 0207 008 0000 to ensure they have been accounted for.
Before the operation got the final go-ahead, British diplomats were flown out of Tripoli to Malta.
The embassy has now been temporarily closed.
http://www.bbc.co.uk/news/uk-12589779[Visit article link for video and more on this story. What I found very telling is... more
-
-
Colonel Qaddafi has ordered the disruption of Libyan oil exports by destroying pipelines to the Mediterranean, sources tell Time's Robert Baer:
"There's been virtually no reliable information coming out of Tripoli, but a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse. Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports. The sabotage, according to the insider, is meant to serve as a message to Libya's rebellious tribes: It's either me or chaos."
Oil has been spiking on fears of a Libyan disruption. Already today the country declared force majeur, effectively canceling oil contracts.
Libya produces 1.9 million barrels of oil per day.
Read more: http://www.businessinsider.com/qadaffi-pipelines-2011-2#ixzz1EjwWJF4eColonel Qaddafi has ordered the disruption of Libyan oil exports by destroying... more
-
-
Latest Complete News Updates Today Royal Wedding Invitation, The first lady Ms. Michelle Obama listed as the hope of being invited to the wedding Mr. Prince William and Ms. Kate Middleton. President Barack Obama and First Lady Ms. Michelle have not been invited to Prince William and Kate Middleton’s wedding.Latest Complete News Updates Today Royal Wedding Invitation, The first lady Ms.... more
-
-
The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.
The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.
The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.
However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.
According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as "peak oil".
Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.
One cable said: "According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray."
It went on: "In a presentation, Abdallah al-Saif, current Aramco senior vice-president for exploration, reported that Aramco has 716bn barrels of total reserves, of which 51% are recoverable, and that in 20 years Aramco will have 900bn barrels of reserves.
"Al-Husseini disagrees with this analysis, believing Aramco's reserves are overstated by as much as 300bn barrels. In his view once 50% of original proven reserves has been reached … a steady output in decline will ensue and no amount of effort will be able to stop it. He believes that what will result is a plateau in total output that will last approximately 15 years followed by decreasing output."
The US consul then told Washington: "While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist. His pedigree, experience and outlook demand that his predictions be thoughtfully considered."
Seven months later, the US embassy in Riyadh went further in two more cables. "Our mission now questions how much the Saudis can now substantively influence the crude markets over the long term. Clearly they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period."
A fourth cable, in October 2009, claimed that escalating electricity demand by Saudi Arabia may further constrain Saudi oil exports. "Demand [for electricity] is expected to grow 10% a year over the next decade as a result of population and economic growth. As a result it will need to double its generation capacity to 68,000MW in 2018," it said.
It also reported major project delays and accidents as "evidence that the Saudi Aramco is having to run harder to stay in place – to replace the decline in existing production." While fears of premature "peak oil" and Saudi production problems had been expressed before, no US official has come close to saying this in public.
In the last two years, other senior energy analysts have backed Husseini. Fatih Birol, chief economist to the International Energy Agency, told the Guardian last year that conventional crude output could plateau in 2020, a development that was "not good news" for a world still heavily dependent on petroleum.
Jeremy Leggett, convenor of the UK Industry Taskforce on Peak Oil and Energy Security, said: "We are asleep at the wheel here: choosing to ignore a threat to the global economy that is quite as bad as the credit crunch, quite possibly worse."
http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaksThe US fears that Saudi Arabia, the world's largest crude oil exporter, may not... more
-
-
The Guardian reports that Sadad al-Husseini, former head of exploration at the Saudi oil monopoly Aramco, told the U.S. consul general in Riyadh that the Saudi oil company could not keep up with the 12.5 million barrels a day needed to keep prices low. Peak oil, he said, could be reached as early as 2012.The Guardian reports that Sadad al-Husseini, former head of exploration at the Saudi... more
-
-
A leak discovered on Saturday morning has led to the shutdown of the Trans Alaska Pipeline System, operated by a consortium in which BP holds the largest share.A leak discovered on Saturday morning has led to the shutdown of the Trans Alaska... more
-
-
Alstom
-
added this
-
1 year ago
- |
-
-
Oil prices are starting to spin out of control once again. In London, Brent North Sea crude for delivery in February hit 91.89 dollars a barrel on Friday. New York crude moved above 88 dollars a barrel on Friday. Many analysts believe that 100 dollar oil is a virtual certainty now. In fact, many economists are convinced that oil is going to start moving well beyond the 100 dollar mark. So what happened the last time oil went well above 100 dollars a barrel? Oh, that's right, we had a major financial crisis. Not that subprime mortgages, rampant corruption on Wall Street and out of control debt didn't play major roles in precipitating the financial crisis as well, but the truth is that most economists have not given the price of oil the proper credit for the role that it played in almost crashing the world economy. In July 2008, the price of oil hit a record high of over $147 a barrel. A couple months later all hell broke loose on world financial markets. The truth is that having the price of oil that high created horrific imbalances in the global economy. Fortunately the price of oil took a huge nosedive after hitting that record high, and it can be argued that lower oil prices helped stabilize the world economy. So now that oil prices are on a relentless march upward again, what can we expect this time?Oil prices are starting to spin out of control once again. In London, Brent North Sea... more
-
-
-
-
Arguments favoring a recovery in Gulf of Mexico rig activity are plentiful (once we get past the politics surrounding the oil spill) and include:
* Strong reliance on production from the region. According to the EIA the Gulf of Mexico accounted for 30% of domestic crude oil production and 13% of natural gas production during 2009. With U.S. consumption at 18.7 million bbls/day for oil and natural gas totaling 22.8 Tcf last year, the Gulf of Mexico is too large a component of US energy policy to ignore – especially deepwater which accounts for approximately 80% of domestic oil production.
* Operators/Drillers have vested interests in the region. Recent negotiations between operators and drillers suggests that both parties are looking to the future once the U.S. government decides how to proceed with deepwater drilling with optimism. We point to the recently renegotiated contract for Diamond Offshore's Ocean Confidence as evidence. Here, the operator is relocating the rig to W. Africa in the near-term but still left contractual terms in place to relocate the rig back to the Gulf of Mexico and resume drilling once the ban is lifted.
* Oil prices are supportive of continued exploration. Commodity prices, especially oil, have been quite stable over the last twelve months with spot prices for West Texas Intermediate averaging $75 per barrel. Taking the wide assumption that finding and development costs (F & D) are somewhere between $10 to $35 per barrel; it is obvious that economics for continued sustained drilling are quite compelling.
* New regulations will not be overly disadvantageous. Industry sources are suggesting that the new government regulations will not be so onerous as to discourage investment in the Gulf of Mexico. They point to the North Sea and that even with its high regulatory standards the region continues to draw investments. Parallels pointing to continued development of the Gulf of Mexico are relevant considering both are more mature fields and the new regulations for the Gulf will not likely exceed the requirements mandated in the North Sea.
* Permitting activities beginning to show some hope. As evidenced by the table below, shallow water activities in the Gulf persist as operators' revisions are starting to get green lights from the Feds. Furthermore, in the last two weeks two operators (Chevron and Apache) were able to put rigs back to work and in the process renounce force majeure provisions. Thus, we view the flow of activity as improving in shallow-waters with both regulators and operators beginning to adapt to the new rules (NTLs N05 & N06) that were put in place in the wake of the oil spill. Specifically, revised permits approved since the beginning of June now equal 28 for shallow water activities.Arguments favoring a recovery in Gulf of Mexico rig activity are plentiful (once we... more
-
-
Futures crude oil is among the most popular and widely watched futures markets. Everyday people keep talking about crude oil prices on television shows, in newspapers or magazines. Futures for crude oil trade on more than one exchange and are available nearly twenty-four hours a day. Such the channels are watched widely by speculators, hedgers, and the general public since petroleum products can affect nearly every facet of life. Are you interested in learning more about crude oil future price and light sweet crude futures and brent crude futures? Interesting and dynamic information will be gathered at one for use.
http://futurescrude.comFutures crude oil is among the most popular and widely watched futures markets.... more
-
-
The International Energy Agency (IEA) released new findings Tuesday April 13 that global oil demand will reach a record high level in 2010, as the world economy recovers and developing nations’ demand for oil grows to new heights. IEA forecasts that average annual world oil demand will have rebounded 2% from 84.9 million barrels per day (mb/d) in 2009 to 86.6 mb/d in 2010. Susan Lyon, Special Assistant on CAP’s Energy Opportunity team, has the story.
In its April 13 Oil Market Report, a monthly update on world oil market trends, IEA forecasts world oil demand growth this year at 1.67 mb/d, up by 100,000 bpd from its previous forecast. Accordingly, the agency finds that “crude oil futures hit 18-month highs in early April, with expectations for an accelerating economic recovery.” Since the last oil market report, global oil demand has been revised up by 30,000 barrels per day (b/d).
The report warns that rising oil prices may threaten continued economic recovery:
Ultimately, things might turn messy for producers if $80-$100 per barrel is merely seen as the new $60-$80, stunting economic recovery while prompting resurgent non-oil and non-OPEC supply investment.
On the supply side, due to lower OPEC output, global oil supply fell by 220,000 b/d in March as well. The new data also reveals a new trend in global oil refinery throughput: “While China, India and Russia all posted record highs in February, European throughputs fell to their lowest level in 17 years.”
IEA’s report comes on the heels of last week’s 2010 Joint Operating Environment (JOE) report by the U.S. Joint Forces Command (USJFCOM) lays out the energy crunch that lies before us and its likely consequences. The projected growth of overall energy demand for decades to come, led by oil and coal, is alarming to the U.S. armed forces:
By the 2030s, [energy] demand is estimated to be nearly 50% greater than today. To meet that demand, even assuming more effective conservation measures, the world would need to add roughly the equivalent of Saudi Arabia’s current energy production every seven years.
Without tremendous energy efficiency efforts and a massive shift toward renewable energy, they note that the U.S. and world economies may suffer production bottlenecks as well as regional instability due to resource scarcity and price volatility.The International Energy Agency (IEA) released new findings Tuesday April 13 that... more
-
