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Hurricane Could Leave 1 Million Homeless By MATT CRENSON, AP National Writer
1 hour, 19 minutes ago
When Hurricane Katrina hits New Orleans on Monday, it could turn one of America's most charming cities into a vast cesspool tainted with toxic chemicals, human waste and even coffins released by floodwaters from the city's legendary cemeteries.
Experts have warned for years that the levees and pumps that usually keep New Orleans dry have no chance against a direct hit by a Category 5 storm.
That's exactly what Katrina was as it churned toward the city. With top winds of 165 mph and the power to lift sea level by as much as 28 feet above normal, the storm threatened an environmental disaster of biblical proportions, one that could leave more than 1 million people homeless.
"All indications are that this is absolutely worst-case scenario," Ivor van Heerden, deputy director of the Louisiana State University Hurricane Center, said Sunday afternoon.
The center's latest computer simulations indicate that by Tuesday, vast swaths of New Orleans could be under water up to 30 feet deep. In the French Quarter, the water could reach 20 feet, easily submerging the district's iconic cast-iron balconies and bars.
Estimates predict that 60 percent to 80 percent of the city's houses will be destroyed by wind. With the flood damage, most of the people who live in and around New Orleans could be homeless.
"We're talking about in essence having — in the continental United States — having a refugee camp of a million people," van Heerden said.
Aside from Hurricane Andrew, which struck Miami in 1992, forecasters have no experience with Category 5 hurricanes hitting densely populated areas.
"Hurricanes rarely sustain such extreme winds for much time. However we see no obvious large-scale effects to cause a substantial weakening the system and it is expected that the hurricane will be of Category 4 or 5 intensity when it reaches the coast," National Hurricane Center meteorologist Richard Pasch said.
As they raced to put meteorological instruments in Katrina's path Sunday, wind engineers had little idea what their equipment would record.
"We haven't seen something this big since we started the program," said Kurt Gurley, a University of Florida engineering professor. He works for the Florida Coastal Monitoring Program, which is in its seventh year of making detailed measurements of hurricane wind conditions using a set of mobile weather stations.
Experts have warned about New Orleans' vulnerability for years, chiefly because Louisiana has lost more than a million acres of coastal wetlands in the past seven decades. The vast patchwork of swamps and bayous south of the city serves as a buffer, partially absorbing the surge of water that a hurricane pushes ashore.
Experts have also warned that the ring of high levees around New Orleans, designed to protect the city from floodwaters coming down the Mississippi, will only make things worse in a powerful hurricane. Katrina is expected to push a 28-foot storm surge against the levees. Even if they hold, water will pour over their tops and begin filling the city as if it were a sinking canoe.
After the storm passes, the water will have nowhere to go.
In a few days, van Heerden predicts, emergency management officials are going to be wondering how to handle a giant stagnant pond contaminated with building debris, coffins, sewage and other hazardous materials.
"We're talking about an incredible environmental disaster," van Heerden said.
He puts much of the blame for New Orleans' dire situation on the very levee system that is designed to protect southern Louisiana from Mississippi River floods.
Before the levees were built, the river would top its banks during floods and wash through a maze of bayous and swamps, dropping fine-grained silt that nourished plants and kept the land just above sea level.
The levees "have literally starved our wetlands to death" by directing all of that precious silt out into the Gulf of Mexico, van Heerden said.
It has been 40 years since New Orleans faced a hurricane even comparable to Katrina. In 1965, Hurricane Betsy, a Category 3 storm, submerged some parts of the city to a depth of seven feet.
Since then, the Big Easy has had nothing but near misses. In 1998, Hurricane Georges headed straight for New Orleans, then swerved at the last minute to strike Mississippi and Alabama. Hurricane Lili blew herself out at the mouth of the Mississippi in 2002. And last year's Hurricane Ivan obligingly curved to the east as it came ashore, barely grazing a grateful city.
"Order From Chaos" anyone?????..........
Rogue
Pretty well said Len. I an SO SO TIRED of all those that "fall prey" to the Left/Right paradigm of Hegal.
http://www.calvertonschool.org/waldspurger/pages/hegelian_dialectic.htm
Tha above link is a start to deeper understanding of the "dialectic" and the developing "New World Order".
Adolph Hitler was a big user/manipulator of the "Hegelian Dialectic", ....divide and conquer ....and it is alive and well today.
We have alot of "emotional hooliganism" alive today instead of a thoughtful examination of the issues.
I hear alot of inane rhetoric from OTCBargains....he should have been a speech writer for one of our "puppet" Presidents.
Rogue
Posted by: roguedolphin
In reply to: rsadey who wrote msg# 3630 Date:8/26/2005 11:19:11 PM
Post #of 3652
HOGC.....The insider buying certainly caught my eye.
http://finance.yahoo.com/q/it?s=HOGC.OB
Chart is getting stronger....
Keep us informed here.....Do you think this is a good fundamental asset play in energy here?
Rogue
Montana's governor eyes coal to solve U.S. fuel costs
By Adam Tanner
http://news.yahoo.com/s/nm/20050825/pl_nm/energy_montana_dc
HELENA, Montana (Reuters) - Montana's governor wants to solve America's rising energy costs using a technology discovered in Germany 80 years ago that converts coal into gasoline, diesel and aviation fuel.
The Fischer-Tropsch technology, discovered by German researchers in 1923 and later used by the Nazis to convert coal into wartime fuels, was not economical as long as oil cost less than $30 a barrel.
But with U.S. crude oil now hitting more than double that price, Gov. Brian Schweitzer's plan is getting more attention across the country and some analysts are taking him very seriously.
Montana is "sitting on more energy than they have in the Middle East," Schweitzer told Reuters in an interview this week.
"I am leading this country in this desire and demand to convert coal into gasoline, diesel and aviation fuel. We can do it in Montana for $1 per gallon," he said.
"We can do it cheaper than importing oil from the sheiks, dictators, rats and crooks that we're bringing it from right now."
The governor estimated the cost of producing a barrel of oil through the Fischer-Tropsch method at $32, and said that with its 120 billion tons of coal -- a little less than a third of the U.S total -- Montana could supply the entire United States with its aviation, gas and diesel fuel for 40 years without creating environmental damage.
An entry level Fischer-Tropsch plant producing 22,000 barrels a day would cost about $1.5 billion, he said.
The Democratic governor of this Republican state said he had met with Shell president John Hofmeister, General Electric's CEO Jeff Immelt, as well as officials from the
Department of Defense, and the Burlington Northern Santa Fe Railroad to discuss his proposals.
Schweitzer added that the recently passed federal energy bill includes an 80 percent loan guarantee for a Fischer- Tropsch plant.
A former cattle rancher who lived for seven years in Saudi Arabia working on irrigation projects, Schweitzer is also seeking energy deals with other states, especially California.
California "says they need 25,000 megawatts of electricity during the next ten years," he said. "We'll give you a delivered price and we'll forward contract that for the next 20 years.
"Transmission companies from England, from Canada, from all over America are coming to my office and saying 'we'll build these transmission lines as soon as you have the contracts to build the generation."'
Rogue
tatrader11....do you like this for purely technical/chart or "momo" reasons??
Or do you have a belief that there is fundamental "value" in this company??
Rogue
HOGC.....The insider buying certainly caught my eye.
http://finance.yahoo.com/q/it?s=HOGC.OB
Chart is getting stronger....
Keep us informed here.....Do you think this is a good fundamental asset play in energy here?
Rogue
Cliffb/Tatrader....I don't know why he "ruffled so many feathers" here. I have no problem with him ....he seems like an intelligent man with some reasonably good ideas. I would like him to contribute to the boards we have here.
Let's be "open" PLEASE to new opinions from new posters..... within reason of course.
Rogue
Oil....Oil/Gas reserves in the ground represent value even if they are currently not getting the oil out of the ground and turning the barrels into $Dollars. I'm VERY VERY interested in investing in Oil reserves right now regardless of current earnings. The "Big Picture" dictates some prudent accumalation of Oil reserves I do believe.
But to be strict I guess the zip-code board would be more appropriate for Oil/Gas asset plays without current earnings.
Rogue
THAT is a primary reason to be worried about an "attack' on Iran and an overthrow of their government. Maybe Billy Graham will comment on assassinating some Iranian Chiefs of State. LOL!!!What a crazy world we live in.
Watch out for a contrived "terrorist" attack here in the US as the "coverstory" for demolishing Iran.
Rogue
China-insatiable appetite for energy
August 25, 2005
The Times
Continent is conquered again
CHINA is celebrating the 600th anniversary of the spectacular journeys of Admiral Zheng, a Muslim eunuch who made seven voyages with fleets of 300 ships and 28,000 men that took him as far afield as the shores of Africa.
Today the Chinese are making new journeys to Africa, driven by their almost insatiable appetite for energy and raw materials.
In contrast to the 1960s, when China wooed African nations as part of Chairman Mao’s policy of international revolution and considered itself the Third World’s leader, it is now courting them for their oil. It also wants African support in the United Nations and hopes to lure away those countries that still recognise Taiwan.
Its merchants, tobacco buyers, soybean traders, oil companies, construction workers and diplomats are converging on Africa, and ties have burgeoned since the creation of the Forum on China-Africa Co-operation in 2000.
Earlier this year China scrapped £770 million of African debt and lifted certain tariffs on goods imported from 25 of Africa’s least-developed countries. This week senior African officials are in Beijing to discuss China’s large trade surpluses, but countries with oil to sell to energy-hungry China have few complaints.
The Nigerian National Petroleum Corporation agreed last month to sell 30,000 barrels of crude a day to China. PetroChina International submitted bids for two oil blocks in the 2005 licensing opening this month and has expressed interest in taking over the Kaduna Refinery and Petrochemicals in the event of privatisation.
The state-owned China National Petroleum Company (CNPC) has invested £8 billion in oil projects in Sudan, which accounts for 6 per cent of total Chinese imports. CNPC has sent about 10,000 Chinese workers to build a 900-mile pipeline to Port Sudan on the Red Sea. CNPC has interests in Algeria and is involved in building a pipeline in Libya. Angola has become China’s second-largest trading partner in Africa, based on its role as yet another alternative source of energy supplies.
Africa is also an important source of raw materials, such as aluminium and platinum, and China is the biggest buyer of Zimbabwean tobacco. At the same time cheap Chinese goods are pouring into Africa.
Between 2002 and 2003, trade soared by 50 per cent to $18.5 billion — faster than with any other region of the world — and it is expected to surge to $30 billion by 2006. President Hu Jintao paid a highly publicised visit last year to Gabon, an important oil producer.
African leaders also visit China. Eyebrows were raised at a trip there by the Zimbabwean leader Robert Mugabe, to whom few doors are open. China said that, as an elected president, he is welcome.
http://www.timesonline.co.uk/article/0,,3-1749613,00.html
Rogue
tatrader11....I follow your logic on the Chinese Yuan revaluation and think you'll do well on the SNP calls.
I look forward to some of your input on the boards here. I'll be keeping an eye on your various posts. Interested in good fundamental value in the areas of China and Oil/Energy/natural resources.
Rogue
tatrader11....I'd be intersted in hearing about your "oil plays".
Please "expound" if you may be so kind.
Rogue
Looks like we're ready to breakout to the upside here. I added another 5,000 shares today.
I think we will have an "assault" on the yearly highs soon.
Rogue
Tubber/YDHCF.... YANTAI DAHUA HOLDINGS COMPANY LIMITED .....Chinese company recent research report dated February 2005.
http://www.jmdutton.com/research/ydhcf/reports/ydhcf_report_021105.pdf
Analyst estimate is for .03 cents for 2005 and .06 cents for 2006. The last trade in YDHCF was at .09 cents.
33.4 million shares outstanding.....less than 4 million in the tradeable float. Could "rocket" with some good news and a little buying pressure!
Rogue
YDHCF.... research report from February 2005.
http://www.jmdutton.com/research/ydhcf/reports/ydhcf_report_021105.pdf
Rogue
YDHCF,Lentinman.....I've already posted this, I'll post this again for your benefit.
http://www.pinksheets.com/quote/print_filings.jsp?url=%2Fredirect.asp%3Ffilename%3D0001144204%252D04...
They have not filed since last year. I'll take it to "zip-code changers" if you like.
While your at it, if anyone wants to sell me another 100,000 shares....I'll have bids in tommmorow near the bid.(I'll double down at these levels).
UNTIL/WHEN they file again it's a speculation. Not for everyone....but it's decent bet down here.
Rogue
YDHCF....not sure why they haven't filed recently. They were late last year. Anyone else know exactly the problem?
http://www.pinksheets.com/quote/filings.jsp?symbol=YDHCF
Will they file again someday soon??....the "market" seems to be saying NO at these depressed levels. But if they DO....this could be a BIG BIG winner.
Rogue
CXTI.....in retrospect it was a "classic" long-term washout bottom in the .50 cent area. It's "in play" now and I would keep some shares to see how far it run's in the next year.
My biggest "home-run" of all time was CYD......a China company too. By the time it ran to the $4.25 area my block of 100,000 shares(purchased at less than .50 cents) was reduced to 20,000 shares.
Those remaining 20,000 shares were traded(or 'wittled" away") very successfully until the last was sold for good at the $24 area. I missed the top by quite a bit though....it ran to $37 and change!
Always looking for the next huge home-run. Usually it is a major change in "investor perception" that allows for such massive capital gains. CXTI had "the goods" in that department(George Soros called that the "inflection point or theory of reflexivity or something" I believe in one of his books on speculation). That's where an experienced speculator can notice the subtle shift in thinking/valuation/perception by the masses in an "investment".
In retrospect I was out way too early on CXTI.
Still think YDHCF might be a big "sleeper" someday. My boat is loaded on it.
Rogue
YDHCF....they are late with their filing and are on the pinks now.
http://www.pinksheets.com/quote/filings.jsp?symbol=YDHCF
When they file we can see a huge move up in my opinion.....not sure about what the actual earning may be for 2004.
It's an intelligent spec at these levels IMHO.
Rogue
CXTI.....in retrospect it was a "classic" long-term washout bottom in the .50 cent area. It's "in play" now and I would keep some shares to see how far it run's in the next year.
My biggest "home-run" of all time was CYD......a China company too. By the time it ran to the $4.25 area my block of 100,000 shares at less than .50 cents was reduced to 20,000 shares.
Those remaining 20,000 shares were traded(or 'wittled" away") very successfully until the last was sold for good at the $24 area. I missed the top by quite a bit though....it ran to $37 and change!
Always looking for the next huge home-run. Usually it is a major change in "investor perception" that allows for such massive capital gains. CXTI had "the goods" in that department(George Soros called that the "inflection point").....I was out way too early on it.
Still think YDHCF might be a big "sleeper". My boat is loaded on it.
Rogue
YDHCF....Belize incorporation is not a problem in my opinion. Many Chinese companies are set up that way. YDHCF is not alone in that sort of setup....
Here's a little about my former "100-bagger" Chinese company CYD...
"China Yuchai International Limited (NYSE-CYD) ("China Yuchai") is a Bermuda holding company which owns 76.4% of the outstanding common shares of Guangxi Yuchai Machinery Company Limited ("Yuchai")."
Belize, Bermuda. British Virgin Isles....are all somewhat common incorporations in the China listed companies trading here.
YDHCF could explode "To da moon" soon just as CXTI has done recently! It's available at "clearance sale" prices right now....that should change.
Got YDHCF?????
Rogue
YIWA and YDHCF are "10-bagger" China picks from these levels.
These have not run at all yet......they will, as almost every "dog" has it's day!
Rogue
YDHCF will be next China stock that will move explosively like CXTI has as "perceptions" change.
It can be bought here under .10 cents. Get it NOW while it's on "clearance sale"!! ....
Then you can have cheap stock to sell to the "MOMO" crowd at $1.00 and above later on......just like CXTI!!
Got YDHCF??????
Rogue
Venezuela Slams Robertson Over Remarks By CHRISTOPHER TOOTHAKER, Associated Press Writer
37 minutes ago
CARACAS, Venezuela - Venezuela's vice president accused religious broadcaster Pat Robertson on Tuesday of making "terrorist statements" by suggesting that American agents assassinate President Hugo Chavez.
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On Monday, Robertson said on the Christian Broadcast Network's "The 700 Club": "We have the ability to take him out, and I think the time has come that we exercise that ability."
"We don't need another $200 billion war to get rid of one, you know, strong-arm dictator," he continued. "It's a whole lot easier to have some of the covert operatives do the job and then get it over with."
Vice President Jose Vicente Rangel said Venezuela was studying its legal options, adding that how Washington responds to Robertson's comments would put its anti-terrorism policy to the test.
"The ball is in the U.S. court, after this criminal statement by a citizen of that country," Rangel told reporters. "It's huge hypocrisy to maintain this discourse against terrorism and at the same time, in the heart of that country, there are entirely terrorist statements like those."
The U.S. government distanced itself from Robertson's comments.
Secretary of Defense Donald H. Rumsfeld, appearing at a Pentagon news conference, said when asked: "Our department doesn't do that kind of thing. It's against the law. He's a private citizen. Private citizens say all kinds of things all the time."
State Department spokesman Sean McCormack called Robertson's remarks "inappropriate."
"This is not the policy of the United States government. We do not share his views," McCormack said.
There was no immediate comment from Chavez, who was winding up an official visit to Cuba on Tuesday. Scores of journalists awaited Chavez at the airport, where he was to board a plane for a trip to Jamaica to discuss a Venezuela initiative to supply petroleum to Caribbean countries under favorable financial terms.
Chavez has emerged as one of the most outspoken critics of President Bush, accusing the United States of conspiring to topple his government and possibly backing plots to assassinate him. U.S. officials have called the accusations ridiculous.
"You know, I don't know about this doctrine of assassination, but if he thinks we're trying to assassinate him, I think that we really ought to go ahead and do it," Robertson said. "It's a whole lot cheaper than starting a war ... and I don't think any oil shipments will stop."
Rangel called Robertson "a man who seems to have quite a bit of influence in that country," adding sarcastically that his words were "very Christian."
The comments "reveal that religious fundamentalism is one of the great problems facing humanity in these times," Rangel said.
Robertson's remarks appear likely to further stoke tensions between Washington and Caracas. Chavez has repeatedly claimed that American officials are plotting to oust or kill him — charges U.S. officials have denied.
The United States is the top buyer of Venezuelan crude, but Chavez has made it clear he wants to decrease the country's dependence on the U.S. market by finding other buyers.
Chavez has survived a brief 2002 coup, a devastating two-month strike that ended in early 2003 and recall referendum in 2004. The former army paratroop commander, a close ally of Cuban leader Fidel Castro, is up for re-election next year, and polls suggest he is the favorite.
Rogue
FA...You didn't ask me but I think GOOG is going to try to break thru the last swing low of $267.43....maybe down to $260 or so???
Breaking that low($267.43) will induce alot of technical selling.....I'm sure stops are sitting below there. The BIG BOYS will be LOADING UP and getting long and covering shorts on the very,very oversold condition. I'll look to get long there too for a trade.
We'll see how it plays out from there. Lot's of overhead price resistance to chew through....I'm not sure how far it will get to the upside?? BUT we are probably getting close to a swing bottom in GOOG.
Rogue
Article on coal mining...
As older miners retire, a younger crew prepares to dig in
Demand for coal feeding industry's new job boom
By Chris L. Jenkins, Washington Post / August 21, 2005
NORA, Va. -- A new generation of miners is in training in central Appalachia, where a onetime hub of the nation's coal industry is recovering from prolonged slumps that shuttered mines, bankrupted companies, and whittled away the life from communities.
Vernon Johnson, 34, left his job in the trucking industry to become one of the new faces entering the midnight blackness of the subterranean mazes. Now he works for Alpha Natural Resources, a Washington County-based coal company, wearing the soot-crusted red helmet of an apprentice miner while working under this patch of southwest Virginia.
He and other new miners are replacing older workers who are retiring just as the world market is demanding more coal. Johnson said he hopes that by early next month, he will be a full-fledged miner making more than $50,000, plus health and pension benefits.
Standing on the cool, muddy floor, in muddy boots, with a mud-splattered face in Roaring Fork Mine No. 3, Johnson explained what lured him to work underground, doing work that has felled thousands of men and crippled thousands more.
''Yeah, it's tough, and yeah, it's dirty," he said, his raised voice barely a peep over the jackhammer clatter of a machine tearing into the earth on a relentless search for the black rock. ''But when I heard there was a chance to work in the mines, I hopped right to it. . . .Good work close to home hasn't been easy to come by around here."
When coal companies had their first job fairs last year, 800 people showed up in Castlewood, an Appalachian hamlet not far from Nora. The companies had expected 200 to show up. Community colleges in this area that five years ago could not find enough students who wanted to take mining certification or safety classes are ramping up their programs.
''Coal jobs have always been the best-paying jobs around here," said Lawrence Hollyfield, 56, a second-generation coal miner who retired several years ago and now teaches courses in mining safety at Mountain Empire Community College in Big Stone Gap. ''The pay is better than Wal-Mart, better than a job in the prisons. That's why these kids are going back into the mines."
Today's mining is a mix of 21st-century technology and old-era grit. Cramped shaft elevators and rickety, open-air shuttle cars still sink into the mountains and take miners to the low-slung alleys and tunnels. Workers still move on all fours in crawl spaces, so they can mine hard-to-reach seams. And it's still dark, dirty, dusty, and, in some cases, dangerous.
But the pickax and shovel days are long gone. Heavy cutting and lifting are executed in a ballet between remote-controlled rock-cutting machines -- called ''continuous miners," they tear into the vaults of coal -- and shuttles that, looking as if they should be on a lunar surface, zip loads of coal through battleship-gray passages. Automatically controlled conveyer belts haul the coal hundreds, sometimes thousands, of feet to the surface -- work once done by pit ponies.
Often, workers in the mines stand yards from the action, controlling the continuous miners and other equipment as if they were a powering a hulking, remote-controlled toy car.
''If you like playing video games, this is the job for you," said George Owens, a former miner-turned-executive for Abingdon-based Alpha, somewhat jokingly referring to the digital automation that much of mining has become. .
For years, coal companies large and small in central Appalachia -- a three-state region that largely includes southwest Virginia, southern West Virginia and eastern Kentucky -- did not need to recruit anyone new.
Coal prices through much of the 1980s and 1990s were down, as the industry nationwide was struck by oversupply and by the decline of the US steel industry.
In addition, new technologies meant that fewer strong backs were needed to burrow into the coal-bearing stretches. The Appalachian coal miner seemed a vanishing species as recently as several years ago, and the numbers appeared to prove it: Virginia, which produces the ninth-largest amount of coal in the country, had 10,000 miners in 1987; by last year, the state had 5,000.
The average age of a coal miner is about 52, according to federal statistics, meaning that over the next decade, a steady supply of workers will be leaving the mines for good.
But coal still produces more than half the electricity generated in the United States, and expanding economies in this country and China have created a huge demand for electricity.
The National Mining Association expects US coal production to be a record 1.14 billion tons this year, up from 1.11 billion last year. And the increase comes amid rising coal prices: The price of coal from central Appalachia has risen to nearly $60 a ton from roughly $30 a ton two years ago, according to industry analysts.
Rogue
Coal Supplier Proves There's More Than One Kind Of Black Gold
Investor's Business Daily
Friday August 19, 7:00 pm ET
Alan R. Elliott
http://biz.yahoo.com/ibd/050819/newamer.html?.v=1
When two coal trains tumbled off the tracks just north of Bill, Wyo., in May, the price of Powder River Basin coal began rising.
Crews continued repairing the damaged tracks through July. Consumers cranked up air conditioners against the long, hot summer. Electric utilities throughout the West and Midwest felt the pinch, shoveling up their coal stockpiles to meet demand.
The combination throttled already tight coal markets across the U.S.
"Over the past three to four years, demand for coal has actually outstripped production," said James Roberts, chief executive of Foundation Coal Holdings (NYSE:FCL - News). "Utilities and other major coal consumers have been using everything that's been produced and also eating into their inventories."
For utilities, lower coal inventories mean less insurance against interrupted deliveries in the future.
For Foundation Coal, which went public in December, the rising prices and solid outlook were just plain dumb luck.
The company processes and sells coal from 13 mines spread from the Appalachian mountain range in the eastern U.S. to the Powder River Basin in the Rockies.
Foundation initially formed as a group of acquisitions under German conglomerate RAG Aktiengesellschaft in 1999. RAG boosted the subsidiary's output from 2 million to 60 million tons of coal a year, creating the fifth-largest U.S. coal producer.
Coal Soar
Roberts came aboard in 2000 to unite the disjointed operations. He grew the group's production and bottom line while scrambling to create accounting and production operations.
Then, out of the blue in 2004, RAG announced it would exit the coal mining business and sell off its global mining operations.
"The announcement that we were on the auction block again was a bit of a surprise to us," Roberts said.
As Roberts worked to cement the operations together between 1999 and 2003, U.S. coal markets peaked, then crashed, then rose again. In 2003, demand from China helped nudge coal prices into a more steady upward trend.
While production of the hard, hot-burning Appalachian coals has been on the decline since 1988, mines in Wyoming, Utah and New Mexico have helped fill in the gap. In some cases, prices for the softer Rocky Mountain coal began to rise last year.
Western coal is a lower octane fuel than coal in the East, so more of it is needed to create the same amount of heat. While more U.S. coal is being produced in terms of sheer tonnage, the total fuel value has been slipping.
"Under normal circumstances, when a commodity is this hot, supply generally responds," said analyst William Burns of Johnson Rice & Co. "That hasn't happened."
In the West, coal is typically quarried from surface pits. Supply tends to be restricted by the number of rail lines and coal cars available.
In the East, where most coal is mined underground, the highest hurdles involve labor shortages and environmental and land acquisition issues.
Foundation Coal operates in both regions. This year the company plans to spend about $43 million to boost efficiency and output, and open markets across its operations, Roberts says
One plan is to upgrade Foundation's Emerald Mine complex near Waynesburg, Pa. The improvements will let the facility guarantee the load weight of individual rail cars, opening new markets along the weight-restricted rail lines in the northeast U.S.
This year's spending program also will extend Foundation's Eastern "longwall" mine operations. Automated equipment in the high-output, longwall mines shaves coal veins lengthwise, efficiently whittling away tons of high quality coal.
IPO Fever
Foundation's initial public offering was backed by an investment group led by Blackstone Group LP and First Reserve Corp. It was one of three coal IPOs in the past three quarters.
At least two more coal companies, International Coal Group and Trout Coal -- both based in West Virginia -- have also said they are planning initial offerings.
The IPOs are part of a move to finance new equipment and mineral assets.
The Energy Information Administration reports the U.S. exports only 2% of its coal production and imports about half that amount.
New China Syndrome
Companies such as Foundation increasingly are formed and act according to market demand issuing from overseas. Most of the current demand comes from China.
China's influence on coal might be for the better, says Luke Popovich, spokesman for the National Mining Association.
In the past, coal demand and prices climbed quickly but fell back even faster when production at many independent mines overcompensated for demand.
The combination of high prices and broad consolidation might provide a more consistent industry approach.
"That may give us a little more rationality in terms of production and therefore a little more discipline," Popovich said. "Some of the mining companies believe that is why we may see a longer upcycle this time."
The current upcycle is borne out in Foundation's recent financial returns.
The company posted second-quarter revenue of $329.5 million, up 31% from the prior year. Earnings came in at 44 cents a share vs. a 5-cent loss a year earlier.
Analysts polled by First Call expect full-year earnings to reach $1.45 a share, then move up 47% to $2.13 in 2006.
Rogue
DOES ANYONE REALLY CARE ABOUT OIL PRICES? August 19, 2005.
It’s hard to believe that crude oil prices have more than tripled just since early 2002, that gasoline was $1.10 a gallon less than three years ago, and is now approaching $3 a gallon.
But who cares?
Apparently not many. There has certainly been no slowdown in demand at the gasoline pumps, no reluctance to pay the price. Highways are more packed than normal this summer. Boats with ever larger engines are still crowding the waterways. Airlines have tacked fuel surcharges onto ticket prices. But who cares?
Yet, in previous periods when oil and gasoline prices surged up, consumers cut back on fuel consumption long before prices reached these levels. Home-owners took dramatic steps to offset the rising cost of heating oil, with wood-burning stoves and solar heating panels becoming all the rage. The advice of government agencies and consumer-oriented groups to adjust thermostats, up into the discomfort zone in the summer to conserve air-conditioning energy, and down in the winter to conserve heating fuel (while wearing more layers of clothing indoors), were followed with considerable enthusiasm and determination.
This time around? Ho-hum, energy costs just hit another new record high.
No one even seems to mind that the trend of energy costs is accelerating rather than leveling off. It took three years for oil prices to rise $26 a barrel, from $18 in early 2002, to $44 in June of this year. It has taken just three months for it to rise another $22 a barrel, to this week’s new record high of $66. Forecasts of $80, $90, $100 oil are widespread.
So what gives with the lack of concern this time around? It’s called the ‘wealth effect’.
When the stock market was surging up into its bubble in 1999, no one worried about the worrisome conditions that were building. Federal Reserve Chairman Alan Greenspan called it the “wealth effect”. Why worry about the things that are beyond your control when your mutual fund or stock portfolio is gaining 25% a year?
The stock market is no longer providing any wealth effect. It has been in a narrow trading range for a year and a half now, since just before the Federal Reserve began raising interest rates to cool off the economy, and that situation has even worsened, with both the Dow and Nasdaq down almost 2% so far this year.
So what is keeping investors complacent, and consumers still confidently spending?
Greenspan calls it the new “wealth effect”, not created by a stock market rising 25% a year, but by home-owners seeing the value of their homes gaining 25% a year. Why worry about higher gasoline and energy costs, when you’re ‘making’ 25% a year on the investment in your home?
And the new wealth effect has been a huge support for the economy, not only by fueling the robust real estate sector, but by providing consumers with the confidence to undertake the crucial consumer spending of the last few years.
But you say, a home is not a liquid asset. It can’t be sold as easily as a stock or mutual fund. It does not pay a dividend. How can it fuel consumer spending? Simple enough. Lenders turned people’s homes into piggy banks, by making it easy to repeatedly take the ‘profit’ out of homes by re-financing mortgages.
However, we need to remember how the wealth effect created in 1999 by several years of 25% gains in the stock market, came to an abrupt end when it was discovered that even in an enthusiastic bubble, there is a limit to what people will pay for a stock.
And with home prices having spiked up so much that the ratio of home prices to income is now two to three standard deviations above the norm, many would-be home buyers are now priced out of the market, regardless of how easy lenders have made it to borrow money. The sharp rise in short-term interest rates, after the Fed’s ten rate hikes since June of last year, is even making it moredifficult for lenders to use low initial short-term ‘teaser’ rates, to entice buyers into mortgages that many won’t eventually be able to afford when the real rates kick in.
Meanwhile, even as home sales remain strong, cracks are beginning to show in the underpinnings. The number of homes coming on the market to take advantage of the high prices is increasing, and with no increase in would-be buyers they are staying on the market longer before being sold.
As random samplings, the Massachusetts Association of Realtors reported there are 35,800 single family homes on the market now in that state, which is 20% more than a year ago. In Texas, Residential Strategies Inc., a housing analysis firm, says Texas builders now have a two and a half month supply of unsold finished houses on the market, “the most in years”.
Historically, as inventories of unsold homes rise, sellers begin to lower prices in an effort to get their home sold before the competition, and the trend begins to feed on itself.
However, even though a decline in real estate prices is likely, it would not take a decline in prices, or a bursting of the real estate bubble, to end the “wealth effect” euphoria. To simply have their ‘investment’ no longer making gains would be a significant blow to current consumer confidence that it’s okay to continue to borrow, run up credit card debt, and spend.
When (not if) that happens, the tripling of energy costs, and higher interest rates, will no longer seem like a minor nuisance to consumers, and the economy will likely lose its two most important supports, the thriving real estate sector, and consumer spending. The stock market, which anticipates conditions six months out, may already be anticipating that outcome.
Sy Harding is president of Asset Management Research Corp., DeLand, FL, publisher of The Street Smart Report Online at www.StreetSmartReport.com and author of 1999’s Riding The Bear – How To Prosper In the Coming Bear Market!
Rogue
Bear Claws Out as Big Guns Short Gold Aggressively
By Gene Arensberg
20 Aug 2005 at 01:06 PM EDT
http://www.resourceinvestor.com/pebble.asp?relid=12208
COT GOLD REPORT: A weekly update combining the commitment of traders (COT) data usually released each Friday by the major exchanges, with reporting on the difference between the long and short positions of the largest traders in gold, the Large Commercials (LC’s) as of the previous Tuesday, with technical commentary by Gene Arensberg.
COT Synopsis: As of Tuesday, 8/16, the current combined large commercial net short position (LCNS) stood at 193,366 contracts! This is the highest net short position by the LC’s since April 5, 2004, which was just before the April 2004 plunge in gold.
Outlook Snapshot: August 19, 2005. (Bearish). Again, caution flags are flying. Given the very high LCNS for gold, and the abrupt winding down of the huge Dollar Index short positions, it is apparent that the largest traders in the paper gold markets have positioned for a good deal more than just the $8.73 move lower in gold since the Tuesday, 8/16 COT cutoff peak of $446.32. Until we can see the next COT report, the odds strongly favor further weakening in the metal absent any exogenous natural or geopolitical shocks to the system.
Please see largely expanded commentary below.
Weekly comments beginning 7/5/2005: Snapshots of the weekly change in the reported positions of the Large Commercials and how they relate to the closing gold price of that weekly period. Remember, the COT data is usually released on Friday after the bell, but it reflects the previous Tuesday’s close.
Mark possible peak in LCNS* here.
7/5/2005 Gold $427.40 (-$12.51 or -2.8%) LCNS 140,341 (-25,233 or -15%) Minor reduction in net short positions relative to large move down in gold, but follows Friday raid and Monday holiday.
7/12/2005 Gold $426.85 (-0.55 or -0.1%) LCNS 110,908 (-29,433 or -21%) Very large reduction in net short positions relative to flat gold, as expected. Catch-up to previous $13 reduction in the metal just before and after the July 4 holiday.
7/19/2005 Gold $420.10 (-$6.75 or -1.6%) LCNS 84,048 (-26,860 or – 24%) A pace of 3,979 contracts per dollar reduction. Slightly elevated pace of reduction relative to drop in gold. In line with expectations and consistent with bottom closure. Follows two consecutive days of gold testing below $420.
7/26/2005 Gold $423.40 (+$3.30 or 0.8%) LCNS* 82,809 (-1,239 or virtually flat). Small reduction in LCNS despite increase in the metal price. Equivalent to a decrease on flat gold. Note further reduction in open interest to 256,866.
Trend of LCNS reductions ends, mark change of trend here.
8/1/2005 Gold $432.55 (+$9.15 or 2.2%) LCNS* 99,807 (+16,998 or +21%) Below average increase in LCNS relative to the increase in gold. Open interest plunges another 12,398 contracts to 244,488, lowest open interest of the year.
8/9/2005 Gold $435.10 (+$2.55 or 0.6%) LCNS* 150,830 (+51,023 or +51%) Alarming increase in LCNS on small move up for gold. Open interest spikes by 43,351 contracts to 287,839.
8/16/2005 Gold $446.32 (+$11.22 or 2.6%) LCNS* 193,336 (+42,536 or +26%) Alert. Highest LCNS since April 5, 2004 when the LCNS peaked at 196,307. Open interest balloons to 331,633, an increase of 43,794 contracts.
Last 4 weeks: Gold +$22.92 LCNS* +111,527 contracts net short or the equivalent of 4,866 contracts added net short per dollar increase in the metal. An alarmingly high increase.
*LCNS means the combined Large Commercial Net Short positions.
This Week’s Observations: Friday, 8-19-05
COT Changes. For the week ending at the COT cutoff on Tuesday, 8/16, the LC’s piled on another 42,536 contracts net short on top of the previous week’s big spike up of 51,023 contracts. As of Tuesday, the current combined large commercial net short position (LCNS) stood at 193,366 contracts! This is the highest net short position by the LC’s since April 5, 2004 which was just before the April 2004 plunge in gold.
To give some perspective on how much that is, over the past 4 weeks (3 reporting weeks), the LC’s increased their net short positions by 111,527 contracts, the equivalent of over 341 tonnes of gold. Also over the past 4 weeks, the LC’s have increased their net short positions by 134% from 82,809 to 193,366 contracts net short.
Remember, that was as of Tuesday, the cutoff day for the commitments of traders (COT) and that day gold closed at $446.32, the high close for the week. Since then gold has given back $8.37 to close Friday at $437.59.
Increases in the LCNS are expected with higher gold, and it is the pace or rate of the change which this report tends to focus on. Generally when the rate of change is strongly higher than average, caution flags are raised. Despite an $8 drop in the metal after Tuesday’s COT cutoff, we must respect the near record LCNS position and much higher than average increase in the LCNS. Caution flags remain at least until we can see the changes in the next COT report.
Gold Chart. As expected, gold has weakened and appears to have made an interim turning high with last Friday’s intra-day peak of $449.60. It now looks to be set up for a challenge of the 50 and 200-day moving averages as it works off the extended and overbought condition of last week. (See Gold chart at bottom).
Gold ETF. There has been no change in the amount of gold bullion held by the largest gold ETF (NYSE:GLD) since 8/1 and its holdings remain at the high water mark of 191.38 tonnes. This suggests that there has been a pause in new funds moving into the gold ETF. However, as of Friday there had not been any reduction of the gold holdings either. (Neutral) (See Link to streetTRACKS Gold Trust below)
Euro Gold. Since last Friday, the Euro gave ground against the Dollar. Euro gold moved more or less sideways for the week, actually closing up a little from last week at €359.01 Friday 8/19. In other words, while the Greenback gained purchasing power against the Euro and gold, the Euro lost a little purchasing power relative to gold. But, as the Euro retreated against the paper currencies, that was only partly reflected in relative terms in gold. (Neutral to slightly bullish) (See the Dollar, Euro and Gold performance comparison chart below).
US Dollar. The Dollar Index caught a bid this week, bouncing up off the implied support of 87. (See Dollar Index chart below). As noted last week, “I suspect that we will see another significant reduction in the LCNS for the Dollar Index in the next COT, unless the Dollar rallies strongly by Tuesday.” That turned out to be the understatement of the week as the LC’s very nearly went net long by the COT cutoff.
In just the past reporting week ending 8/16, the LC’s reduced their net short positions in the Dollar Index by an astounding 9,508 contracts. That is a white-hot pace. (Too bad we couldn’t see it in real time. Continue to lobby for real-time COT data.) Since the July 5 peak and record net short position of 22,454 contracts, by Tuesday the LC’s had reduced their net short positions in the Dollar Index by over 93% to just 1,476 contracts net short. That suggests that the LC’s were quickly reversing course for the Dollar rally. (Bearish for gold.)
Gold Indexes. The HUI gold share index answered the move lower in gold this week and is re-testing the breakout from above.
HUI, Daily, April 2004 to Date
Interestingly, despite the $8 haircut on the metal, the HUI:Gold ratio actually held its 200-day moving average, but a test of that important line in the sand is underway. Should that test hold, a bullish signal will be sent around the globe, because it will suggest that traders in the shares are unconvinced in gold’s retreat. But if the 200-day gives way, a sharp low-liquidity summer-style correction in the shares becomes much more likely. Bargain hunters will want to keep an eye on this ratio.
HUI:Gold Ratio, Daily, June 2003 to Date
Commentary and Outlook: (Bearish, Caution Flags Flying).
Since the trend change just 4 weeks and 3 reporting periods past, up to Tuesday’s interim peak COT reporting day gold price of $446.32, the LCNS had spiked up by 111,527 contracts to near record territory of 193,336 contracts net short, while the metal booked a $22.92 gain. That means the rate of change in the LCNS during the advance for gold was a hot pace of 4,866 contracts per dollar increase in the metal.
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As noted last week: “The rate of change of the LCNS this week is consistent with near-term Top closure.” Indeed it does appear that last Friday’s (8/12) intra-day peak of $449.60 marks an interim pivot and turning high. The second higher high since the important turning low of $413.85 on May 31.
Despite the mushroom cloud-style increase of the LCNS to near record proportions, I continue to suspect that short-term we are in for one of the normal trading corrections seen in a bull market for gold. Trading corrections tend to be sharp this time of year due to increasingly low liquidity (through the end of August).
Given the very high LCNS for gold, and the abrupt winding down of the huge Dollar Index short positions, it is apparent that the largest traders in the paper gold markets have positioned for a good deal more than just the $8.73 move lower in gold since the Tuesday, 8/16 COT cutoff peak of $446.32. Until we can see the next COT report, the odds strongly favor further weakening in the metal absent any exogenous natural or geopolitical shocks to the system.
This report turned bearish last Friday, 8/12, with gold at $446.20. As of the close Friday, 8/19, gold had retreated by $8.61 to settle Friday at $437.59 (cash market), once again justifying the need to keep an eye on what the largest gold traders on the planet are doing.
With that said, as always, MIND YOUR STOPS.
To see the change in the COT graphically, try this link
The above contains opinion and commentary of the author. Each person should study the issues carefully and, as always, make their own informed decisions. Continue to lobby for real time COT data wherever you think it might do some good. (There is no reason in this day and age for us to have to work under a 4-day delay).
Graphs and Links:
Gold, 6 Month, Daily
US Dollar, 1 Year, Daily
Gold:US Dollar Ratio, 2 Year, Weekly
streetTRACKS Gold Shares (NYSE:GLD) financial info
Gold, Dollar Index, Euro Index Comparison
Rogue
MSGI...I agree with you on the Wall Street Biggies and the games they play. I just hope they have their "shakeout" now so by October we can rock in OIL/GOLD, Etc.
Your quote...
"Lets face it, Wall Street is a bunch of crooks and it isn't a level playing field out there."
... brings back memories of one of my early "mentors" in the market, Richard Ney.
He was always on the Chicago WCIU Stock Market TV program with his views.I was a young guy and spoke with him regularly ....usually about the DOW 30 stocks. He was a very colorful, "tell it like it is" character."
I highly recommend reading at least one of his old market bestsellers.
Here's his interesting biography...
http://www.imdb.com/name/nm0628647/bio
http://www.imdb.com/name/nm0628647/#guest-appearances
Biography for
Richard Ney
Spouse
Greer Garson (24 July 1943 - 25 September 1947) (divorced)
Marsha McMartin (? - ?)
Mei-Lee Ney (? - 18 July 2004) (his death)
--------------------------------------------------------------------------------
Trivia
Met and married actress Greer Garson after playing her son in the classic war film "Mrs. Miniver." She was actually 10 years old than he.
His career was fatally interrupted by war service and by his stormy divorce to Greer Garson, who was beloved by the public. The struggling Richard was viewed as a hanger on and it did not go over well. It was also alleged that he made derogatory remarks about her age during the proceedings.
Graduated from Columbia University with an economics degree.
When his first book, "The Wall Street Jungle" came out in 1970 it was on the New York Times best seller list for 11 months. Yet it met major resistance. Not only would the New York Times not review the book, but the Wall Street Journal went so far as to refuse to take an ad from a New York bookstore that featured the book. Two other of his books were "The Wall Street Gang" (1974) and "Making It in the Market" (1975). He gained nationwide notice in 1962 for accurately predicting the stock market crash that year.
There were only two people who weren't allowed to be guests on Johnny Carson's "Tonight Show" on NBC. One was Ralph Nader and the other was Richard. He was at one time a financial-advice show host.
Godfather to Brian Hooper, a Harvard Law graduate and Washington, D.C.-based attorney.
Became an investment counselor and author of best-selling books about the stock market after retiring from the film industry.
In 1943 his soon to be wife Greer Garson portrayed his mother in the film Mrs. Miniver.
He drove a Rolls Royce to assure people that he firmly believed in capitalism.
Became an investment counselor in 1961.
He has a step-daughter named Marcia McMartin.
He has an economics degree from Columbia in New York.
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Personal quotes
"I became an investment advisor so people would leave me alone."
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Rogue
I thought GOLD, OIL and CHINA would all be strong at the years's end..... hence my picks.
Hopefully I DO have the "Macro-Picture" correct and I have the right companies in those sectors to win this contest.
Laying low currently at #27 and patiently waiting for the "final stretch" in this horse race.
Rogue
AWRCF...Asia Wire and Cable. Heartland Advisors owns 10.5% of the outstanding shares.
I've made a really good amount of money in the past by BUYING their(Heartland are known deep value guys) company holdings when they have "stumbled" or hit the new lows list.
I remember a few years back I bought into ICN Pharmacueticals when it had made a new low in share price. I spoke with a potrfolio manager from Heartland and he said he was holding strong or adding. I bought some ICN and did very well the next year or so with it.
It may be time to add to or buy AWRCF again.
Rogue
MCHFX....Matthews China is a great fund and those managers do "know" China.
I personally don't own it(the Fund) but have in the past few years have bought some of their picks in the pink-sheets. Still own Denway Motors ,Tsingtoa Brewery and Cp Pokphand with very large profits in those names.
I expect they will appreciate even much more over the next decade.
Investing can be very "eclectic". One of my "angles" over the years has been to study the holdings of some of the great value fund managers and create watchlists of stocks they own. Once you know the great "value" funds you can do that on Morningstar by studying their top 25 holdings.
http://quicktake.morningstar.com/Fund/Holdings.asp?Country=USA&Symbol=MCHFX&fdtab=portfolio
There is nothing more "appealing" than buying a value stock favored by a great value manager when it is technically bottoming on the charts.
Some of the Funds I've followed in the past are 3rd Avenue Value, Longleaf Partners, Heartland Value , Robertson Stephens Contrarian etc. There are many more. It can "pay well" to take a "look" at their holdings and "pick and choose" (fundamentally and technically) amongst their better stock ideas.
The Robertson Stephens Contrarian Fund was the fund that I found CYD (China Yuchai Diesal) from years ago. They owned it from much higher levels than I did.....when it traded down to pennies I knew the time was right to "load the boat". Made a small fortune on that one alone.
Rogue
Gold & Oil
By: Eric Hommelberg
http://news.goldseek.com/EricHommelberg/1124460002.php
This piece is an update on chapter VIII Gold & Oil of the Gold Drivers Report.
Oil is getting more and more media attention lately since its price is heading high into the stratosphere and poised to launch for the moon…At least that’s what oil expert Matthew Simmons wants us to believe.
Now why oil is heading to such highs you wonder, is it because of Middle East tension ? Is it because of Saudi Arabia’s king Fahd death (uncertainty about next regime and terrorist threats )? Or could it very well be that industry experts such as Matthew Simmons, Colin Campbell, Kenneth Deffeyes were right all along and that planet earth has approached the peak in world-oil production ? Or even worse, could it be that we are at the verge of world peak production here and now ? And if that’s the case why is it so important to the future prospects of gold ? The Gold/Oil ratio tool says that gold is way undervalued compared to oil but is it still a valid tool (many analysts are pointing to the Gold/Oil ratio and argue that this ratio has dropped to such an extreme that buyers of gold could be very well on the right side of the trade for next coming years if oil prices do not come down) or has it lost its credibility ? Does it make sense anyhow to compare a commodity which will be consumed to zero over time with a commodity which is only being accumulated over time ?
Enough questions here. I’ll address them in two parts :
PEAK-OIL : bunch of alarmist speaking ? OPEC to the rescue ?
Gold/Oil ratio : why oil does matter for gold !
PEAK-OIL : bunch of alarmist speaking ? OPEC to the rescue ?
Since this is an update on chapter VIII Gold & Oil let’s first start off with the chapter’s highlights and see what ever happened next :
Highlights chapter VIII Gold & Oil
Oil discoveries have peeked already 40 years ago.
According to M King Hubbert Production peaks follow Discovery peaks after approximately 40 years.
US Oil production already peaked in 1970.
Non OPEC oil production already peaked in the early 90’s.
World oil production will peak when OPEC peaks
OPEC peaks when Saudi Arabia peaks
Saudi Arabia peaks when Ghawar peaks
Ghawar is aging rapidly and its life expectancy isn’t rosy. Matthew Simmons says that the end is in sight.
Prof. Kenneth Deffeyes predicts PEAK-OIL to happen in 2005
Bank of Montreal says that Gharwar is in already in decline.
World oil peak production means the end of cheap oil
The end of cheap oil means continuing rising oil prices which translates itself into oil shocks.
French investment bank Ixis-CIB has warned crude oil prices could touch $380 a barrel by 2015.
Previous oil shocks were an perfect call for recession/Inflation
Gold is the ultimate Hedge against Inflation
Rising oil prices brings the historical Gold/Oil average way out of balance
Historical average of the Gold/Oil ratio suggest a price of Gold exceeding $800 nowadays.
Now fast forward to August 2005, are there any signs of relief ? Can OPEC live up to its expectation to increase oil production substantially ? Can Saudi Arabia double its oil production to 20-25 million barrel/day (compared to less than 10 million barrels a day now) as they said they could ? Is Matthew Simmons still convinced of his own dire predictions made earlier this year ? What do the optimists say ?
Let’s start with the optimistic scenario. This scenario forecasts Saudi oil production of 20-25 million barrels a day within the next two to three decades. This scenario is backed by US government energy planners and the International Energy Agency.
Now Matthew Simmons says that that is impossible, he says that Saudi Arabia could never grow above its current production level (10 million barrels a day) since he believes that Saudi Arabia already exceeded its sustainable peak oil production. Now who is wrong and who is right will be answered by Mr. Time. In other words, even when Matthew Simmons is right, we’ll never know until several years from now. The same can be applied for the optimists. We’ll never know if they are right since all information regarding the contribution that each oil field makes to the reported 261 billion barrels of proven Saudi oil reserves is treated as a state secret …
Matthew Simmons just released his new book ‘Twilight in the Desert – the coming Saudi Oil Shock and the World Economy -) in which he presents a powerful case for Saudi Arabia nearing its sustainable peak oil production fast. Simmons sounds very convinced. He says :
A jury examining this evidence would, I believe, find it difficult not to share my concern about the future sustainability of Saudi Arabia’s high-volume oil output. END.
During an on-line Q & A session with the Washington Post (Aug 04) Simmons was asked about his opinion regarding Saudi Arabia’s high volume output. He replied :
Matthew Simmons: The biggest worry I have as a result of doing the research on Saudi Arabia's oil is that there is a real risk that they have already exceeded sustainable peak oil production and the longer the produce at current risk the higher the risk that they could start into a production collapse. If that turns out to be true than the odds are 95% that the world has then exceeded sustained peak oil production. What the people that get into the peak oil debate often don't think about is that peak oil is not the maximum amount of oil you could produce in a single day, it's realistically the amount you could produce per day for at least a half decade. Therefore it could already be happening. And we'll never know that until we get better data. END Entire Transcript can be read – here –
A few days later (August 6) Simmons did an interview with Jim Puplava (Financial Sense News hour) and Simmons repeated his dire prediction using even stronger words;
Matt Simmons : I think it’s highly likely that they (Saudi Arabia) have actually exceeded sustainable peak production already. And I think at the current rates they are producing these old fields, each of the fields risks entering into a rapid production collapse.
Jim Puplava : If this is indeed the case then, by assumption, we have to assume global peak is at hand then.
Matt Simmons : Absolutely. Once it’s clear that Saudi Arabia cannot sustain increases in its production on a sustained basis, then in my opinion, with a certainty of 99.9% the world has actually passed sustainable peak production. END. Entire Transcript can be read - here –
Well, not a pretty picture indeed ! But wait, what about the Cambridge Energy Research Associate’s analysis ? They project a less urgent picture and plenty of oil for the next coming years.
When asked about this report Matt Simmons replied :
I'm one of three co-authors of an op-ed piece that we have just submitted to The Washington Post that hopefully will get published. What the three of us collectively feel is that it is a very unrealistic assessment, it is not a detailed, bottom up field by field, they ignore by and large depletion issues, and it's based on an enormous belief that technology and enthusiasm and urgency will create new oil supplies. That is precisely the same logic that CERA used very loudly in 2001 and 2002 to dispute the critics views that natural gas in North America was running into trouble. And it took less than 24 months after they had dismissed any problems in natural gas before they made a discovery that we had a natural gas crisis. I think what they're doing being as casual on future oil supplies, let alone predicting we're headed toward another oil glut, is doing the world a great disservice. END.
OK, but what about OPEC ? Didn’t they assure us to increase oil production substantially if necessary ? Indeed they did but where do you think this oil should come from ? Indeed, Saudi Arabia is considered to be the only oil producing country which could increase its oil production substantially to meet world demand. And yes, many economists assume that Saudi Arabia could double its oil production during the next 15 years. Simmons says that’s impossible since he believes that Saudi Arabia already exceeded sustainable peak oil production.
Now please be aware that Simmons is not the only one playing the shortage tune, even some Saudi energy officials admit that meeting future demand will be “extremely difficult”. The Financial Times reported on July 6, 2005 :
Senior Saudi energy officials have privately warned US and European counterparts that Opec would have an "extremely difficult time" meeting that demand. Saudi Arabia calculates there is a 4.5m b/d gap between what the world needs and what the kingdom can provide.
Saudi Arabia pumps 9.5m b/d and has assured consumer countries that it could reach 12.5m b/d in 2009 and probably 15m b/d eventually. But a senior western energy official said: "They said it would be extremely difficult to move above that figure". END. More à
So there it is, “meeting future demand will be extremely difficult”
Again, nobody can tell with any certainty when peak-oil will arrive but to me it’s clear that when 4 out 5 of major oil companies are showing a decline in their oil production it certainly doesn’t contradict Simmons statements… Just take peek at the production decline of the major oil companies over the first 6 month of 2005 :
Oil production first 6 month 2005
Chevron : -6%
Shell : -6%
Exxon : -4%
BP : +4%
This should be a wake up call for the investor but ignorance seems to be the tune of the day. One investor however who does take these figures seriously is 77 year old oil tycoon Boone Pickens, chairman of BP Capital Management, a billion-dollar hedge fund focused on energy commodities. He thinks that world oil production peak is near and he sees no other direction for oil-prices to go other than up !
Boone Pickens Sees Oil Prices Going Higher
By Brad Foss, AP Business Writer
Riding High on Crude Futures, Oil Tycoon Boone Pickens Sees Prices Going Even Higher
NEW YORK (AP) -- Oil tycoon Boone Pickens' bet that energy prices would rise made him more money in the past five years than he earned in the preceding half century hunting for riches in petroleum deposits and companies.
And even as crude futures have doubled since 2000 to almost $60 a barrel, the 77-year-old Texan sees no reason to take his chips off the table. "I can't tell for sure where we're going, other than up," Pickens said in an interview with The Associated Press.
His outlook stems from the belief that a world oil production peak is near and that, while the world won't soon run out, supplies will remain tight due to rising consumption and geopolitical uncertainty in the Middle East. The high prices haven't yet taken the wind out of the U.S. economy, he said, because of efficiency gains made over the past 25 years. Down the road, however, he anticipates more serious pain at the pump until, eventually, fossil fuel consumption tapers off and alternatives become more popular. END
Now that the awareness is growing that the end of cheap oil has arrived it could be paying off to examine the gold/oil ratio chart again. Many analysts are pointing to the Gold/Oil ratio and argue that this ratio has dropped to such an extreme that buyers of gold could be very well on the right side of the trade for next coming years if oil prices do not come down. So when oil doesn’t come down gold should be catching up right ? The historical gold/oil ratio suggest a gold price far above $700 these days. Is it really that simple ?
After writing chapter VIII Gold & Oil I received plenty of critics indeed form people arguing that you can’t compare a commodity (oil) which will be consumed to zero over time with a commodity (gold) which is only being accumulated over time.
Since that critic is getting louder these days I’ll try to explain why I think that oil does matter to gold.
Gold/Oil ratio : why oil does matter for gold !
Please keep in mind that I’m not preaching higher gold prices just because of rising oil prices. Gold & Oil is just one single chapter of the Gold drivers report and oil is just one of the critical drivers for gold but not the leading one. Therefore I’ve made some referrals to other chapters of the report as well because it’s the big picture what counts and oil is just a part of that picture.
Now in order to shine a light on the validity of the gold/oil ratio I would like to answer the following question which I got from a well known hedge-fund.
Question :
Eric, you make an argument for gold increasing in price on the basis that there is a historical relationship between the price of oil and the price of gold that is now out-of-line with historical trends (currently 8 barrels of oil /ounce of gold versus ~16 on a historical basis). You then assert that since oil wont go down (which I agree with, due to scarcity), then gold must go up, in order to preserve the historical relationship between the prices of the two.
My question to you is why is it that this historical relationship between the price of the two commodities must be preserved? Over the last 30 years, oil has not been treated by the financial markets as being near-peak. Gold has no similar scarcity issues as does oil. Isn't it possible that the new relationship between the price of gold and the price of oil is the correct one and that the historical relationship has been the wrong one? After all, you yourself argue that the financial markets have been woefully negligent in fairly pricing oil for many years now. Why should the real relative value be 16:1. Why not 8:1?
Answer :
First of all it’s almost impossible to determine what a ratio SHOULD be. All we can do (and that’s what I did) is to determine historical averages. We’re talking about 35 year averages and those averages are suggesting a Gold/Oil ratio of 16:1 , not 8:1. Of course one could argue that the historical average from 1970 till 2001 was wrong (16:1) and the current one is right (8:1) but that would be the same analogy as saying that today’s oil prices are normal while the average oil prices of the past 30-years were too cheap. In order to find out what makes sense and what doesn’t we should try to figure out why this historical average is 16:1 and what kind of relation there is between oil and gold (if there is any).
Some analysts claim that it just doesn’t make sense at all to compare gold and oil since oil is an item which is being consumed at a very rapid pace and its reserves will dwindle down to zero over time while gold on the other hand is an item which is NOT being consumed at all but accumulated only so its above ground stock-pile will continue to increase over time. So therefore you can’t compare gold to oil and a gold/oil ratio doesn’t make any sense at all they claim.
Although this seems a logical explanation I couldn’t disagree more. It’s a far more complex issue than a simple commodity being consumed (oil). The thing is that oil is so extremely important for our entire society and well-being that without oil (or a lack of oil) our society would plunge back into 19th century living standards.
Oil is as important for our entire society as water for a human being. No water no life, no oil no flourishing society, it’s that simple. A human being can survive two days without drinking water but needless to say that person would feel terrible and certainly not in shape to qualify for the Olympic trials. Same analogy can be applied to the world economy, for sure we would survive a cut-back in oil supplies (for whatever reason, PEAK-OIL, Middle-East War, lack of refinery capacity etc..) but please forget about economic growth. Not one serious economist believes that you can have significant economic growth without the availability of cheap energy since economic growth has always been fueled by cheap fossil fuel energy. And yes, a lack of cheap fossil fuel energy has always led to economic slowdowns in the past, (see also Stephen Leeb’s Oil Indicator described in chapter VIII Gold & Oil)
So when we’re entering a time of rising energy prices it automatically means we’re entering a time of economic slowdown. Now here’s where gold comes into the picture. There’re times when it’s good to buy financial assets (economic booms) and there’re times when it’s good to buy real assets (economic weakness) as a protection of wealth.
The 1968 – 1980 period showed a poor return on financial assets (DJIA 1000 pts in 1968, DJIA still 1000 pts in 1980) while commodities and precious metals were booming (Gold rose from $35 in 1968 to $850 in 1980).
The 1980- 2000 period showed an inversed picture, good returns on financial assets (DJIA rose from 1000 pts in 1980 to almost 12.000 pts in 2000), poor returns on commodities/precious metals, Gold dropped from $850 in 1980 to $250 in 2001) The chart which makes this painfully clear is the DOW/GOLD ratio chart.
DOW/GOLD ratio.
More detailed explanation see : Gold & Historical Norm
Conclusion :
Sharp rising energy prices will eventually cause an economic slowdown.
Times of economic weakness are good for gold says the DOW/GOLD ratio chart.
Higher oil prices à higher energy prices à economic slowdown à higher gold prices
So that’s the big picture over a multi-decade time-frame, but what about the gold-oil relation on a smaller time-scale, is there a correlation indeed ?
Well, let’s start off by examining the correlation between gold and oil itself. In order to do so I’ve charted gold against oil in 2005 dollars. Please take peek at the Gold vs Oil chart below and see how stunning the correlation really is.
No matter how you look at this chart, you simply can’t deny a very strong correlation between gold and oil. A strong correlation means a constant ratio which happens to be 16:1 over the last 35 years.
Now at the end of this chart you’ll notice that gold is lagging the price of oil. According to this chart a price of gold exceeding $800 dollars shouldn’t be categorized as ‘abnormal’. This becomes more evident when looking at the Gold/Oil ratio chart.
Now that we’ve seen how important oil is for our entire society and what rising oil prices could do to the economy and what consequences that could have on gold let’s try to focus more on the immediate consequences of rising oil prices.
Again, let me state that things are far more complicated than a simple commodity rising in price due to its own scarcity. We’re living in an oil based society, almost everything you see around has its roots in oil. More than 80% of all manufactured goods are indirectly oil-related. The cost of food-production is oil related (pesticides, fertilizers, transport…), the list goes on and on so it ain’t hard to understand that rising oil prices will cause a general price increases for tonnes of stuff thereby fueling inflation.
In fact the latest PPI report confirms that inflation is picking up steam due to higher energy prices..
WASHINGTON, Aug 17 (Reuters) - U.S. producer prices rose a sharp 1.0 percent last month, twice expectations, on soaring energy costs, government data showed on Wednesday, while prices excluding food and energy also topped forecasts in a sign of building inflation pressures. END.
So if higher energy costs do cause inflation we should expect a strong correlation between historic oil and inflation numbers right ? Well, I’ve charted the oil price vs the inflation rate since 1970 and judge yourself , see chart below :
This chart shows a strong correlation between oil and inflation, the only anomaly we see is during the last couple of years where inflation didn’t catch up with sharp rising oil prices. Inflation will catch up sooner or later since oil prices aren’t likely to come down. The funny thing is however that inflation is picking up steam already but it just isn’t being reported by government.
The government insists that there is NO INFLATION. They (government) even manage to come up with declining gasoline prices in their CPI statistics month after month in the face of sky-rocketing oil prices. Needless to say this is raising many eyebrows among respected market observers (eg PIMCO’s Bill Gross), see also Chapter III GOLD&INFLATION) .
Now that we’ve seen a strong correlation between rising oil prices and inflation let’s have look at the correlation between inflation and gold. Is gold the ultimate hedge against inflation ? Is there a strong correlation indeed ? Well, just take peek at the chart below and judge yourself :
This chart proves beyond any doubt that there’s a strong correlation indeed between gold and inflation.
Highlights :
Oil prices do have a strong correlation with gold since oil prices do have a tremendous impact on the world economy and so on financial markets. Since gold is money and trades like money it will react to inflationary pressures caused by rising oil prices since gold is the ultimate safe heaven in times of economic weakness.
The Gold/Oil ratio has dropped to such an extreme that buyers of gold could be very well on the right side of the trade for next coming years if oil prices do not come down.
Comments and feedback are welcome at :
The Gold Drivers Report
E-mail : ehommelberg@golddrivers.com
Web-site: www.golddrivers.com
August 18, 2005
Rogue
Published on 17 Aug 2005 by The Oil Drum. Archived on 18 Aug 2005.
Oil prices also affect oil costs
by J and Heading out
I suspect that few of our readers have to buy a lot of the materials that go into an oil drilling operation. But those that do can tell you that the same rise in prices that is hitting your pocket is also hitting a lot of theirs. (And supply lead times are getting to be beyond a year for some metal stock). In this regard I am delighted to turn the podium back to J, for some comments both on this and the rock that oil is found in.
I plan on using that part of his post to help me explain, this weekend, why just making a hole in the oil-bearing rock does not turn out to be a good idea. Over to J:
In a comment by gabor on my last guest post was this comment
“But the profit margin is the function of the oil price! therefore if the well becomes uneconomical at $60 it will reenter production at $120! Therefore there will be backside curve. I think what you should rather look at is thermodynamical balance of exploiting oil. When it becomes zero the well must be shut up, until that point the well will resume operations as long as the price rises enough.”
OK - so now we have some non-engineer declaring that it is thermodynamics that controls oil exploration. AAARRRRGGGGHHHHH!!!!!
However, even beside that point, the major points of the comment are that people really do believe that if it isn't economical to produce oil at $60, then at $120 it will become profitable again, and poof! - the field is back online!
Sadly, they are skipping this one, all-important fact: once the oil is gone, it is gone, and no increase in price will make it reappear.
And they are missing the point that there are significant amounts of oil that simply will NEVER come to surface, because the permeability in the reservoir has changed since the oil first migrated, and as the rock moves it blocks the passages through which the oil was reaching the well bore! In many cases, this damage to the rock is due to the company using overly agressive high volume production methods.
Changing the price for the oil, even to $200/bbl, simply cannot fix these changes in permeability and free the trapped oil. The methods that can be used to fix the problem are already available and have been used at today’s prices, but they require the one thing that is in short supply - TIME. And even when the well is restored, the recovered oil flow will never provide the high volumes of oil that we are currently operating with and used to. As a result these techniques, and the wells they are used in, are no longer qualified for the portfolios that the large corporations want to pursue.
Have any of you guys ever seen a "Christmas tree" depletion drawing? When you place a well in the middle of oil and start pulling oil out, the oil moves to the lower pressure around the well. This moving oil looks kind of like a Christmas tree, with the midline being the producing well. As pumping continues, branches get disconnected from the tree, and isolated from the rest of the big mass of oil.
Water flooding can chase some of these isolated patches to the well, but it is usually a 7/10 to 1 chase ratio – in other words it takes between 7 and 10 barrels of water to be pumped in in to produce every barrel of oil that comes out. And the barrel out is coming out WITH the 7 to 10 barrels that we used to flush it out with. Each of these gallons of now-contaminated water must be disposed of by being pumped into another, specially drilled well, which usually means it must also be trucked from the first well to the disposal one. And in-between times, the produced water must be separated from the oil, and that requires further energy input.
Due to the random nature of permeability and porosity within any sandstone reservoir, there is a certain percentage of oil that will always remain trapped. There are entire volumes of oil that will never flow to the well, because there is no effective path for them to reach it. This structural reality effectively divides the reservoir into compartments. To reach the larger, and more valuable ones, we have to drill a separate well into each compartment, and as the cost to drill climbs, larger and larger parts of the oilfield get left behind.
People will argue that CO2 injected fields CAN be put on stripper production. And yes, they just might be able to do that. But stripper wells operate at a lower than surface pressure, and the oil is manually pumped out, just like the water from a water well. What happens to the injected CO2 that we used to renew the reservoir pressure and drive the remaining oil to the producing wells? It doesn't just disappear - it has to be released into the atmosphere or injected elsewhere at high cost!! Frankly, this is a climate disaster waiting to happen.
What those who see oil production just as a process limited by price, are NOT getting is that rigs and pipe and cement and energy are all costs that oil producers have to pay. And that additional cost is also reflected in the new higher prices for everything made with oil. As we look harder and harder for more oil, this demand drives prices for the equipment and materials we use through the roof. For example the loss of the 5 jackup rigs leaving the GOM and heading for Saudi Arabia will we are estimating, drive prices for these rigs from $65,000 per day to $100,000 per day, and last year they were at $35,000!! This does NOT make the production of smaller fields more economical, because the price for oil is still too low to pay the new price for the rigs!!
When old equipment is retired, the new equipment, built with higher costs, must be purchased to replace it. With steel at a premium due to demand, these costs have risen 300%! Today, our basic costs have doubled in a single year, which matches what has happened to oil prices. So the net return on our investment is back to the same level - no change in overall extraction economics. All new projects now reflect the higher energy price inputs, and these basically equal the current price change of oil! We need a 300% increase in oil prices just to match the increased price we have to pay for steel!! (And there is a LOT of steel in the platforms like Thunder Horse).
Yes, moving the minimum price of oil from $30 to $50 for our calculations will help, but with a (roughly) 65% increase in drilling costs, it is just not a big enough offset to make companies drill for every little stranded drop. Oil prices are still too low for that.
To be blunt, no modern oil company is going to move their internal calculated price significantly until they are satisfied that Saudi Arabia is honestly into major depletion. There must be no possibility of a price collapse. This is why the oil companies are not going crazy with mega-projects and chasing every little bit of oil just yet. They are all sensing that there might still be a major collapse in the oil price, but they are unsure what it might take to trigger it.
Why are they so nervous? Because historically, EVERY SINGLE TIME oil prices have increased dramatically to this sort of relative level, they have then been followed by a severe price collapse. As the increased energy and transport costs filtered into the economy, the price pass-through let to a forced widespread inflation. When oil booms, the economy busts. This has been our bitter lesson for the entire era of oil.
When oil becomes priced like gold, then the smaller fields will become economical. At that point there may be somebody chasing every little speck of oil in every little field. But by that time, demand may be destroyed by the global economic collapse. Because OUR WORLD IS BUILT OF CHEAP OIL! If oil had been priced according to its intrinsic value as a fuel, we would not be where we are today.
So, what/who is to blame?
Rogue
5 bucks a gallon for gas? Expert sees it in 2006
August 17, 2005
BY MARK J. KONKOL Transportation Reporter
If you think all this flirting with $3-a-gallon gas is already a pain in the pocketbook, brace yourself.
Oil expert Craig Smith predicts gas prices will skyrocket next year, jumping to five bucks a gallon.
And if terrorists successfully strike a major Middle East oil field, Americans might end up paying $10 a gallon -- about $110 to fill a Ford Focus' 11-gallon tank.
Smith, a self-proclaimed geopolitical know-it-all hawking his new book Black Gold Stranglehold, says Americans -- tree-hugging politicians and car-addicted commuters alike -- should blame themselves for the coming spike in prices.
"Why are they charging higher prices for gas? Because people will pay it. Apparently, we're not changing our driving habits much," he said. "Blame this on ourselves. This country has not built a new refinery in 30 years, we stopped new oil exploration . . . and put a moratorium on offshore drilling."
Smith -- who last year predicted $3-a-gallon gas and $65-a-barrel crude oil prices this year -- says oil prices will jump to $80 a gallon by the end of 2006.
On Tuesday, the national average was $2.52 a gallon, according to AAA. And the price of gas topped $3 here last week.
If you don't believe the average cost of gas will double in 12 months, Smith points to places such as Hong Kong, Korea and France, where gas prices regularly top the $5 mark.
The solution here for high oil prices: "find it, drill it, refine it and burn it" domestically, Smith said, pointing to untapped crude reserves in Alaska, Colorado, Utah, off the California coast and in the Gulf of Mexico.
Rogue
YDHCF...I must warn you they said the same thing about CYD (China Yuchai Diesal) when it was trading at .26 cents!!!
I had 100,000 shares of CYD at an average below .50 cents. They were sold between $4.25 and $23.75 PPS. CYD eventually went to over $37.
I just want to let you know they said the EXACT same thing about CYD when it was "available" for pennies as you are saying about YDHCF today!!
If ANYONE ever declares a "dividend" for YDHCF as CYD did.....THIS IS A HOME RUN!!
It's called...."the art of speculation"! It's a fair bet at these "don't believe" levels. "They" didn't believe in other China companies at the bottom either.
Rogue
YDHCF/ YANTAI DAHUA HLDG CO ....This Chinese paper company is so beat up and cheap (scraping along at all-time lows) if it doesn't start moving north soon I'm going to have to personally call Jonathan Lebed up and have him "Pump It" mass email style! LOL!!
It seems as if it has "capitulated" ala CXTI a few short weeks ago. It wouldn't surprise me to see "10-bagger" from here. Timimg is everything and I think the time to buy YDHCF may be now.(I bought too early....UGH) I'm sure everyone has "given-up" on this one but me.
It seems like a very cheap call option on China.
Also check out YIWA (One of my pick 6) about .38 cents....it has yet to run but it should move north of a buck soon.
Rogue
Research Report Says China's Oil to Be Exhausted Within 14 Years
By Winnie Zhu
12 Aug 2005 at 09:43 AM EDT
SHANGHAI (Interfax-China) -- A recent report released by the Shanghai Academy of Social Sciences (SASS) points out that the country's crude oil reserves will be exhausted within 14 years, based on the current proven oil reserve and scale of production. However an energy expert with the State Information Center told Interfax that the estimation is too pessimistic.
China has a total national oil reserve standing at 2.38 billion tonnes. If the country continues to produces 180-200 million tonnes every year, current reserves will be exhausted within 14 years, said the SASS report.
"The proven oil reserve figure will definitely rise with the development of technology, and therefore, the reserves cannot be exhausted so quickly, " Niu Li, an energy expert with the Economic Prediction Center of the State Information Center, told Interfax.
Niu added that reserves usually rise more quickly than actual production rates.
Niu also said that the country may find more resources in the East China Sea and Xinjiang in the intervening years.
"However, rapid economic growth will lead the country to import even more crude from the global market in the near future," said Niu.
About 68% of the 390 Chinese cities that rely on local mineral reserves to sustain their economies are in the "mature production stage" while another 12% are facing depletion. The Daqing Oilfield, the country's largest, produced 50 million tonnes of oil per annum for 27 years in a row until 2004, but plans to allow output to fall by 40% by 2010, reaching only 30 million tonnes per year.
The SASS report also said that the country's oil market faces many challenges.
The country's net oil imports stood at 120 million tonnes in 2004, becoming the world's second largest oil consumer after Japan. Demand will inevitably rise even further in the future, said the report.
China's annual crude demand is expected to rise by 9.7% to 318 million tonnes this year, suggesting that the country will need to import 135 million tonnes this year, accounting for 42.45% of total demand and exceeding last year's figure of 40.5%, said a recent report by the Development Research Center under the State Council.
The country's daily oil demand is predicted to reach 9.3 million barrels by 2010, increasing by 37% from 2005, the Deutsche Bank predicted.
The SASS report further stated that the country's oil transportation security is not guaranteed, because 90% of its total imports are by sea and most of it is delivered via the narrow and vulnerable Malacca Strait.
Moreover, China's main oil importers are the Middle East, Central Asia and Russia. However the U.S. is strengthening its control over the oil resources in the Middle East and is interfering with China's collaboration with Kazakhstan, Turkmenistan and Russia.
Zhang Guobao, the vice director of the National Development and Reform Commission, revealed on Wednesday that China's mid-to-long-term energy scheme has been completed after two years of effort.
According to the scheme, the country's energy consumption will be based on coal and the diversification of the energy structure will be encouraged. The core of the scheme is energy conservation and increased efficiency. The localization of energy production and the expansion of the overseas market are also important aspects of the plan.
Rogue
Homebuilders are getting pretty oversold. I'm waiting for the next rally and overbought levels to lay out shorts.
I'll lean on the former highs and overhead price resistance to control risk. I think there is still plenty of time to pick a spot to get short with minimal risk.
Rogue