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China Oil Demand Projected To Hit 11 MM/bpd By 2015, Up 25% From Now; Will Reach Consumption Parity With US By 2030
Tyler Durden's picture
Submitted by Tyler Durden on 05/24/2011 13:02 -0400
Crude
Crude Oil
Standard Chartered
With the topic of oil once again dominating the air waves courtesy of Goldman's most recent flip flop on Brent, we look at one of those thing that few if any have actually done much analysis on over the past decade, namely supply and demand. As it is no secret that the primary driver in price formation of virtually all commodities has been excess liquidity, the actual fundamentals have been drowned for a long time. Yet they still remain. Of all "demand fundamentals", the biggest one is and will be China. Should the world indeed proceed to tighten across the globe, the question of Chinese demand will increasingly become one of substantial importance. Here is how Platts sees Chinese oil demand in the next several years: "China's demand for oil will grow 4-5% a year to hit 530 million-560 million mt (10.6 million b/d-11.3 million b/d) in 2015, with transport fuel and chemical feedstocks driving the increase, a senior Chinese researcher said Wednesday." Platts estimates that China's current oil consumption is about 450 million mts, a 12.2% increase over the past year. And following 2015, "Growth will then slow to 2%-3% a year, to reach 590 million-650 million mt by 2020, said Liu Xiao Li of the Energy Research Institute, part of China's economic planning agency, the National Development and Reform Commission. With oil production in 2020 expected to be 200 million-230 million mt, that would imply an import dependence of around 65%, she added." One can thus see why China is ever so cautious proceeding to procure E&P exposure and infrastructure projects around the world: the country realizes that without a friendly foreign "import" base, there is no way it can grow into its energy demand. Lastly, for those who collect parity facts, "in a presentation at the International Air Transport Association's Aviation Fuel Forum, Standard Chartered Bank said China would overtake Europe as the world's second largest consumer of oil before 2020, with around 13 million-14 million b/d of demand. The bank's data indicates China would catch up with the US sometime after 2030. Standard Chartered's data has China's oil demand approaching 17 million b/d around that year and still rising, with US oil demand around 18 million b/d and falling." Luckily by then we should have far more evidence whether the Peak Oil theory is indeed true, in which case the world will have far greater problems in the next 19 years than anything seen to date.
More from Platts:
China's strategy to mitigate the risk associated with such a high dependence on imports includes efforts to improve energy conservation and efficiency; increased focus on domestic exploration and production; increased investments in oil and gas abroad; diversification of import sources; and the development of alternative transport fuels.
The NDRC's research showed that China's apparent oil and oil product consumption in 2010 was 449 million mt, up 12.2% over 2009.
China does not release official oil demand statistics, and reporting agencies often have differing figures for the country's apparent oil demand.
Platts calculates the country's oil demand based on official data on refiners' crude throughput and net oil product imports.
Platts' analysis for 2010 put China's apparent oil demand up 11.43% year- on-year at a record 434.40 million mt, or an average 8.71 million b/d.
Transport fuel made up 65% of the demand and agriculture and fishing 15%, said the NDRC's Liu; and crude oil imports were at 236 million mt in 2010, up 19% over 2009. Import dependence last year was 53.8%.
As a benchmark, "US demand for crude oil and other liquid fuels is currently running about 19 million b/d."
O.T. Shell is making the largest object ever to float on water.
Shell is making good on its promise to build the largest object ever to float on water, announcing Friday it would build the Prelude FLNG Project to harvest offshore natural gas fields. The gargantuan ship will suck up the equivalent of 110,000 barrels of oil per day.
The floating liquified natural gas facility will dwarf the biggest warships, weighing in at 600,000 metric tons. By contrast, the U.S.’ next-generation Ford-class supercarrier will displace 101,000 metric tons of water. Shell says its ship will be able to withstand a category 5 typhoon.
http://www.popsci.com/technology/article/2011-05/harvest-natural-gas-ocean-shell-building-worlds-largest-man-made-floating-object
TORONTO, April 7 /CNW/ - Exile Resources Inc. (TSXV:ERI.V) ("Exile" or the "Company"), today announced the reserves estimates for the Company's Akepo property, which is located offshore Nigeria. The reserves estimates are based on Exile's working interest in Akepo and were prepared by DeGolyer and McNaughton Canada Ltd (D&M").
The estimate of reserves ascribed to Exile from the Akepo Property are: 80,786 gross barrels of oil equivalent ("BOE") of total proved reserves; 491,492 gross BOE of total proved plus probable reserves; and 1,734,284 gross BOE of total proved plus probable plus possible reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. A summary of the reserves estimates for the Akepo field is as follows:
Oily You Came Within 8 Cents Of Being Correct This
Time. Must be one of your closes predictions.
Maybe Mark Or Oily Can Chime In And Tell Us What's Going On. lol
Mostly O.T. Exxon Struggles To Find New Oil
HOUSTON—Exxon Mobil Corp., the world's largest publicly traded oil company, is struggling to find more oil.
In its closely watched annual financial report released Tuesday, the company said that for every 100 barrels it has pumped out of the earth over the past decade, it has replaced only 95.
It's a conundrum shared by most of the other large Western oil-producing companies, which are finding most accessible oil fields were tapped long ago, while promising new regions are proving technologically and politically challenging.
Exxon said in the report that it more than made up for the shortfall in oil by stocking up on natural gas, mostly through its acquisition of XTO Energy Inc. last year.
But the shift toward gas is troubling some investors, because gas sells for less than the equivalent amount of oil. Many observers feel the move toward gas—a trend across the oil industry—is dictated more by shrinking access to oil fields than by a strong desire to emphasize gas production.
"The good old days are gone and not to be repeated," says Fadel Gheit, an analyst with Oppenheimer and Co. Bringing additional reserves from gas "is not going to give you the same punch" that oil would, he said.
Finding the equivalent, in either oil or natural gas, of a barrel in the earth for every one the company produces—a 100% reserve replacement rate—has become extraordinarily tough. Exxon boasted this was the 17th consecutive year of hitting this mark, but analysts agree that without the XTO deal, Exxon would have fallen far short this year.
Investors look at these reserve figures as an important gauge of future profitability and business strength.
Exxon now has more natural gas in reserve for future production than oil. And while the company has been very successful at finding or buying new natural gas, it has struggled to do the same with oil. For every 100 cubic feet of gas it has extracted , it has found or bought an additional 158.
Company spokesman Alan Jeffers says the company's "focus is on resources and projects that add shareholder value." That can be accomplished by finding oil, he says, but value can also be delivered through a corporate acquisition.
Exxon has become the largest U.S. company by market capitalization with a business model that stresses size and integration of assets. It has traditionally found crude oil, refined it into gasoline and other fuels and then sold these products.
But the stock market has recently favored oil companies, such as ConocoPhillips, that are shedding assets to get smaller. Smaller oil and gas finds can have a material impact on slimmed down companies.
The shift toward gas—and troubles with finding oil—has emerged as a theme for the giant Western oil companies. Royal Dutch Shell PLC's chief executive said last month the European company will produce more gas than oil next year for the first time in its 104-year history.
[EXXON]
In the past few years, new technologies have unlocked vast resources of natural gas, depressing prices in North America and raising the possibility of falling prices in other regions also. Meanwhile, growing demand from emerging economies has sent crude-oil prices up strongly since prices cratered in 2008 during the worst of the recession. Natural gas prices closed today at $3.98 per million British thermal units, down 25% from a year ago, whereas a barrel of West Texas crude is up about 9.5% over that time, closing at $84.32 in trading on the NYMEX Tuesday.
Big oil companies are having trouble cashing in on the strong prices for crude oil. They have limited ability to drill in many oil-prone regions, such as Russia and part of the Middle East, due to politics. And even in promising Iraq, where many Western companies have won contracts, much infrastructure must be rebuilt. Exxon and others have also flocked to the oil-rich sands of Northern Alberta, Canada, but digging out the oil across vast swathes of forest comes at relatively high cost and generates concerns about the environmental impact.
One place where Western oil companies have found open doors is in deep-water exploration, because state-backed oil companies in Russia, China and the Middle East have little experience drilling these tricky wells. This has given Western companies access to new opportunities, such as Exxon's recent deal with Russian oil giant OAO Rosneft to explore the Black Sea.
The hunt for oil explains why these companies are so keen to restart work in the Gulf of Mexico, after a halt imposed by the Obama administration following the Deepwater Horizon spill. Some companies also are seeking permission to drill exploratory wells above the Arctic Circle. The Arctic remains one of the few unexplored regions of the world and the region above Alaska and western Canada is believed to be oil rich.
But deep-water projects take a long time to turn from a prospect that a geologist has identified into a producing asset. Chevron Corp.'s chief executive said last week that he expects to add new barrels of oil to its reserves from "several major deep-water projects" in future years. In 2010, he warned that Chevron added only one new barrel for every four it produced.
Given the difficulties these companies are facing, some investors have begun to wonder if Exxon bought XTO last year to "mask the extent of their replacement problem," said R. Blair Thomas, chief executive of EIG Global Energy Partners, an energy asset -management firm.
The market didn't like Exxon's announcement, sending the bellwether stock down 2.3% to $82.97 in 4 p.m. trading Tuesday on the New York Stock Exchange.
Write to Russell Gold at russell.gold@wsj.com and Angel Gonzalez at angel.gonzalez@dowjones.com
Sounds Like Someone Wants To Buy Back In. eom
New drilling method opens vast oil fields in US
By JONATHAN FAHEY, AP Energy Writer Jonathan Fahey, Ap Energy Writer – Thu Feb 10, 3:55 am ET
A new drilling technique is opening up vast fields of previously out-of-reach oil in the western United States, helping reverse a two-decade decline in domestic production of crude.
Companies are investing billions of dollars to get at oil deposits scattered across North Dakota, Colorado, Texas and California. By 2015, oil executives and analysts say, the new fields could yield as much as 2 million barrels of oil a day — more than the entire Gulf of Mexico produces now.
This new drilling is expected to raise U.S. production by at least 20 percent over the next five years. And within 10 years, it could help reduce oil imports by more than half, advancing a goal that has long eluded policymakers.
"That's a significant contribution to energy security," says Ed Morse, head of commodities research at Credit Suisse.
Oil engineers are applying what critics say is an environmentally questionable method developed in recent years to tap natural gas trapped in underground shale. They drill down and horizontally into the rock, then pump water, sand and chemicals into the hole to crack the shale and allow gas to flow up.
Because oil molecules are sticky and larger than gas molecules, engineers thought the process wouldn't work to squeeze oil out fast enough to make it economical. But drillers learned how to increase the number of cracks in the rock and use different chemicals to free up oil at low cost. "We've completely transformed the natural gas industry, and I wouldn't be surprised if we transform the oil business in the next few years too," says Aubrey McClendon, chief executive of Chesapeake Energy, which is using the technique.
Petroleum engineers first used the method in 2007 to unlock oil from a 25,000-square-mile formation under North Dakota and Montana known as the Bakken. Production there rose 50 percent in just the past year, to 458,000 barrels a day, according to Bentek Energy, an energy analysis firm.
It was first thought that the Bakken was unique. Then drillers tapped oil in a shale formation under South Texas called the Eagle Ford. Drilling permits in the region grew 11-fold last year.
Now newer fields are showing promise, including the Niobrara, which stretches under Wyoming, Colorado, Nebraska and Kansas; the Leonard, in New Mexico and Texas; and the Monterey, in California.
"It's only been fleshed out over the last 12 months just how consequential this can be," says Mark Papa, chief executive of EOG Resources, the company that first used horizontal drilling to tap shale oil. "And there will be several additional plays that will come about in the next 12 to 18 months. We're not done yet."
Environmentalists fear that fluids or wastewater from the process, called hydraulic fracturing, could pollute drinking water supplies. The Environmental Protection Agency is now studying its safety in shale drilling. The agency studied use of the process in shallower drilling operations in 2004 and found that it was safe.
In the Bakken formation, production is rising so fast there is no space in pipelines to bring the oil to market. Instead, it is being transported to refineries by rail and truck. Drilling companies have had to erect camps to house workers.
Unemployment in North Dakota has fallen to the lowest level in the nation, 3.8 percent — less than half the national rate of 9 percent. The influx of mostly male workers to the region has left local men lamenting a lack of women. Convenience stores are struggling to keep shelves stocked with food.
The Bakken and the Eagle Ford are each expected to ultimately produce 4 billion barrels of oil. That would make them the fifth- and sixth-biggest oil fields ever discovered in the United States. The top four are Prudhoe Bay in Alaska, Spraberry Trend in West Texas, the East Texas Oilfield and the Kuparuk Field in Alaska.
The fields are attracting billions of dollars of investment from foreign oil giants like Royal Dutch Shell, BP and Norway's Statoil, and also from the smaller U.S. drillers who developed the new techniques like Chesapeake, EOG Resources and Occidental Petroleum.
Last month China's state-owned oil company CNOOC agreed to pay Chesapeake $570 million for a one-third stake in a drilling project in the Niobrara. This followed a $1 billion deal in October between the two companies on a project in the Eagle Ford.
With oil prices high and natural-gas prices low, profit margins from producing oil from shale are much higher than for gas. Also, drilling for shale oil is not dependent on high oil prices. Papa says this oil is cheaper to tap than the oil in the deep waters of the Gulf of Mexico or in Canada's oil sands.
The country's shale oil resources aren't nearly as big as the country's shale gas resources. Drillers have unlocked decades' worth of natural gas, an abundance of supply that may keep prices low for years. U.S. shale oil on the other hand will only supply one to two percent of world consumption by 2015, not nearly enough to affect prices.
Still, a surge in production last year from the Bakken helped U.S. oil production grow for the second year in a row, after 23 years of decline. This during a year when drilling in the Gulf of Mexico, the nation's biggest oil-producing region, was halted after the BP oil spill.
U.S. oil production climbed steadily through most of the last century and reached a peak of 9.6 million barrels per day in 1970. The decline since was slowed by new production in Alaska in the 1980s and in the Gulf of Mexico more recently. But by 2008, production had fallen to 5 million barrels per day.
Within five years, analysts and executives predict, the newly unlocked fields are expected to produce 1 million to 2 million barrels of oil per day, enough to boost U.S. production 20 percent to 40 percent. The U.S. Energy Information Administration estimates production will grow a more modest 500,000 barrels per day.
By 2020, oil imports could be slashed by as much as 60 percent, according to Credit Suisse's Morse, who is counting on Gulf oil production to rise and on U.S. gasoline demand to fall.
At today's oil prices of roughly $90 per barrel, slashing imports that much would save the U.S. $175 billion a year. Last year, when oil averaged $78 per barrel, the U.S. sent $260 billion overseas for crude, accounting for nearly half the country's $500 billion trade deficit.
"We have redefined how to look for oil and gas," says Rehan Rashid, an analyst at FBR Capital Markets. "The implications are major for the nation."
___
Associated Press writer James MacPherson contributed reporting from Stanley, N.D.
http://news.yahoo.com/s/ap/20110210/ap_on_re_us/us_shale_oil
WTI, Brent & NYMEX Futures Explained...
Article...
I've been asked lately with Brent crude prices rising over $100/bbl and WTI crude staying near $90 what the differences are. Many times, there are price differences between different types of oil as well, as some oils are more desirable than others. We'll cover that as well.
For an answer to this popular question, I'll turn it over to a FAQ provided by the U.S. Energy Information Administration. Ready to learn? Here you go!
According to The International Crude Oil Market Handbook, 2004, published by the Energy Intelligence Group, there are about 161 different internationally traded crude oils. They vary in terms of characteristics, quality, and market penetration. Two crude oils which are either traded themselves or whose prices are reflected in other types of crude oil include West Texas Intermediate and Brent. Comparing these two crude oils with EIA's Imported Refiner Acquisition Cost (IRAC), the OPEC Basket, and NYMEX futures is important to understand the differences among the various types of crude oil that are often referred to in the press and by analysts. Generally, differences in the prices of these various crude oils are related to quality differences, but other factors can also influence the price relationships between each other.
West Texas Intermediate
West Texas Intermediate (WTI) crude oil is of very high quality and is excellent for refining a larger portion of gasoline. Its API gravity is 39.6 degrees (making it a “light” crude oil), and it contains only about 0.24 percent of sulfur (making a “sweet” crude oil). This combination of characteristics, combined with its location, makes it an ideal crude oil to be refined in the United States, the largest gasoline consuming country in the world. Most WTI crude oil gets refined in the Midwest region of the country, with some more refined within the Gulf Coast region. Although the production of WTI crude oil is on the decline, it still is the major benchmark of crude oil in the Americas. WTI is generally priced at about a $5 to $6 per-barrel premium to the OPEC Basket price and about $1 to $2 per-barrel premium to Brent, although on a daily basis the pricing relationships between these can vary greatly.
Brent
Brent Blend is actually a combination of crude oil from 15 different oil fields in the Brent and Ninian systems located in the North Sea. Its API gravity is 38.3 degrees (making it a “light” crude oil, but not quite as “light” as WTI), while it contains about 0.37 percent of sulfur (making it a “sweet” crude oil, but again slightly less “sweet” than WTI). Brent blend is ideal for making gasoline and middle distillates, both of which are consumed in large quantities in Northwest Europe, where Brent blend crude oil is typically refined. However, if the arbitrage between Brent and other crude oils, including WTI, is favorable for export, Brent has been known to be refined in the United States (typically the East Coast or the Gulf Coast) or the Mediterranean region. Brent blend, like WTI, production is also on the decline, but it remains the major benchmark for other crude oils in Europe or Africa. For example, prices for other crude oils in these two continents are often priced as a differential to Brent, i.e., Brent minus $0.50. Brent blend is generally priced at about a $4 per-barrel premium to the OPEC Basket price or about a $1 to $2 per-barrel discount to WTI, although on a daily basis the pricing relationships can vary greatly.
NYMEX Futures
The NYMEX futures price for crude oil, which is reported in almost every major newspaper in the United States, represents (on a per-barrel basis) the market-determined value of a futures contract to either buy or sell 1,000 barrels of WTI or some other light, sweet crude oil at a specified time. Relatively few NYMEX crude oil contracts are actually executed for physical delivery. The NYMEX market, however, provides important price information to buyers and sellers of crude oil in the United States (and around the world), making WTI the benchmark for many different crude oils, especially in the Americas. Typically, the NYMEX futures prices tracks within pennies of the WTI spot price described above, although since the NYMEX futures contract for a given month expires 3 days before WTI spot trading for the same month ceases, there may be a few days in which the difference between the NYMEX futures price and the WTI spot price widens noticeably.
ERHC has proven: Don't Think Anyone Suggests Going To Such Extremes. "blocking 1/3rd of the solar radiation reaching our land mass" And Cause An Ice Age. It would just be used in conjunction with everything else. From used french fry oil to nuclear.
O.T. Excretes Liquid Hydrocarbons
A brave new world of fossil fuels on demand
NEIL REYNOLDS | Columnist profile | E-mail
From Monday's Globe and Mail
In September, a privately held and highly secretive U.S. biotech company named Joule Unlimited received a patent for “a proprietary organism” – a genetically adapted E. coli bacterium – that feeds solely on carbon dioxide and excretes liquid hydrocarbons: diesel fuel, jet fuel and gasoline. This breakthrough technology, the company says, will deliver renewable supplies of liquid fossil fuel almost anywhere on Earth, in essentially unlimited quantity and at an energy-cost equivalent of $30 (U.S.) a barrel of crude oil. It will deliver, the company says, “fossil fuels on demand.”
We’re not talking “biofuels” – not, at any rate, in the usual sense of the word. The Joule technology requires no “feedstock,” no corn, no wood, no garbage, no algae. Aside from hungry, gene-altered micro-organisms, it requires only carbon dioxide and sunshine to manufacture crude. And water: whether fresh, brackish or salt. With these “inputs,” it mimics photosynthesis, the process by which green leaves use solar energy to convert carbon dioxide into organic compounds. Indeed, the company describes its manufacture of fossil fuels as “artificial photosynthesis.”
Joule says it now has “a library” of fossil-fuel organisms at work in its Massachusetts labs, each engineered to produce a different fuel. It has “proven the process,” has produced ethanol (for example) at a rate equivalent to 10,000 U.S. gallons an acre a year. It anticipates that this yield could hit 25,000 gallons an acre a year when scaled for commercial production, equivalent to roughly 800 barrels of crude an acre a year.
By way of comparison, Cornell University’s David Pimentel, an authority on ethanol, says that one acre of corn produces less than half as much energy, equivalent to only 328 barrels. If a few hundred barrels of crude sounds modest, recall that millions of acres of prime U.S. farmland are now used to make corn ethanol.
Joule says its “solar converter” technology makes the manufacture of liquid fossil fuels 50 times as efficient as conventional biofuel production – and eliminates as much as 90 per cent of carbon dioxide emissions. “Requiring only sunlight and waste C0{-2},” it says, “[this] technology can produce virtually unlimited quantities of fossil fuels with zero dependence on raw materials, agricultural land, crops or fresh water. It ends the hazards of oil exploration and oil production. It takes us to the unthinkable: liquid hydrocarbons on demand.”
The company name honours James Prescott Joule, the 19th-century British scientist. Founded only four years ago, it has begun pilot-project production in Leander, Tex. Using modular solar panels (imagine an array of conventional panels in a one-acre field), it says it will quickly ramp up production this year toward small-scale commercial production in 2012.
Joule acknowledges its reluctance to fully explain its “solar converter.” CEO Bill Sims told Biofuels Digest, an online biofuels news service, that secrecy has been essential for competitive reasons. “Some time soon,” he said, “what we are doing will become clear.” Although astonishing in its assertions, Joule gains credibility from its co-founder: George Church, the Harvard Medical School geneticist who helped initiate the Human Genome Project in 1984.
Joule began to generate buzz toward the end of 2010. When U.S. Senator John Kerry toured the company’s labs in October, he called the technology “a potential game-changer.” He noted, ironically, that the company’s science is so advanced that it can’t qualify for federal grants or subsidies: The government’s definition of biofuels requires the use of raw-material feedstock.
In December, the World Technology Network named the company the world’s top corporate player in bio-energy research. Biofuels Digest named it one of the world’s “50 hottest” bio-energy enterprises, moving it ahead 10 places in the past year (from 32nd to 22nd). Selected from 1,000 eligible companies around the world, 37 of the “50 hottest” are American-based – another reason not to count out the U.S. just yet.
Conventional fossil fuels are formed from solar energy, too – in a process that takes zillions of bugs and millions of years. Joule’s technology ostensibly produces the same products in less time. In other energy-producing roles, vast quantities of microbes are already hard at work underground, loosening hard-to-recover crude oil. It could be time for science to bring these bugs up into the light of day.
Never Mind, I Got It. EOM
How Does One "find the URL of your page" to delete ones information on spokeo.com?
Stocks2rise, thanks for the heads up.
O.T. Oil prices could reach as high as $120 a barrel this year, oil billionaire T. Boone Pickens said Tuesday.
“You’ll see it over $100 a barrel, not $100 average over the year,” Pickens told National Journal in a phone interview. “But you could see it as high as $110 to $120 a barrel.” And those prices, he said, would translate into about $4 per gallon of gasoline at the pump.
He said the high gas prices should compel Congress to enact an energy plan. “When you get into that [gas price] area people will become focused and very concerned, which will mean Congress will become very concerned,” said Pickens, whose career in the oil industry took off in the 1970s and ‘80s and has more recently shifted into the financial sector. He added that he thinks predictions made by some energy experts that gas prices could reach as high as $5 a gallon in the next two years is a long shot, but he wouldn’t rule it out. Regardless, gas prices continue to go up, he said.
Gas prices have spiked since the end of November: from $2.88 to $3.07 a gallon this week, according to the Energy Information Administration. If oil and corresponding gasoline prices continue to rise, the problem—and solutions to solve it—would take center stage on Capitol Hill.
“Everybody would be tripping over themselves to fix the problem,” Sen. Lindsey Graham, R-S.C., said late last month in the Capitol. “We’re a headline-driven Congress, so you’re going to look at $4-gallon gas, and we’re all going to come in here and do something about it.”
Incoming House Energy and Commerce Committee Chairman Fred Upton, R-Mich., had similar words Tuesday after a luncheon address by American Petroleum Institute President Jack Gerard. “We’ve got problems ahead of us that we have to be prepared for,” Upton said, after citing the latest prices of both oil and gasoline.
Specifically, Pickens wants Congress to pass legislation he has backed to address the problem. His measure would offer tax incentives as a way to encourage the use of natural gas as a fuel for heavy-duty vehicles like semi trucks and moving vans. The policy has bipartisan support in both chambers of Congress. It did not pass because lawmakers could not agree on a way to pay for the $5-billion bill, which had been offset by increasing taxes on the oil and gas industry.
Pickens may have been down for the count last Congress, but he’s already making the rounds for the 112th Congress. He spoke with President Obama’s top adviser, David Axelrod, shortly after the November elections to talk about the chances of passing the bill in the lame-duck session and the prospects for it this year. He has met with presumptive House Speaker John Boehner, R-Ohio, since the election and is working to schedule a meeting this month with Upton, who supported Pickens’s bill in the last Congress. Pickens said he has also been in touch with many other lawmakers.
“I think they got very busy at the end of the year, and it got kind of pushed off the table,” Pickens said. “I think it’s going to come up pretty quick.” He added, “We’ll get it introduced. We’re going to get it passed.”
Evidence suggests that some type of legislation on natural gas could likely come up in the 112th Congress. Obama has continually cited natural gas as an area where the parties could find agreement, and Senate Majority Leader Harry Reid, D-Nev., is a big fan of Pickens and his plan.
O.T. OPEC may hold an emergency session, if oil prices will have an upward trend in the near future. This was stated by the Iraqi Oil Minister Abdul Karim al-Luaibi on Friday.
“We are pleased with the current oil prices, but if there is a sharp rise in prices we will hold an emergency session of OPEC”, said al-Luaibi to BBC. The regular session of OPEC is scheduled for June 2011.
Last Thursday, the price per barrel of oil at the New York Mercantile Exchange reached U.S. $ 91.51, which is the highest since early October 2008. London Petroleum Exchange closed on Friday with the per barrel price of Brent blend at 94.13 dollars.
Independent experts believe that in the first half of 2011, oil price per barrel will cross the $ 100 mark in global exchanges. Many regard this level as a limit for the current state of global economy.
As a result, Western countries are exerting increasing pressure on OPEC in order to prevent the oil prices go beyond $ 100 per barrel, according to informed business community. Statement by the Oil Minister of Iraq about the possibility of convening an emergency session of OPEC is regarded as an indirect confirmation of the ongoing secret consultations between them.
O.T. OPEC targets $100/barrel, as oil price hits $91
Written by Samuel Ibiyemi, Lagos, with Agency Reports Friday, 24 December 2010
THE Organisation of Petroleum Exporting Countries (OPEC) has expressed optimism that the price of crude oil will hit $100 per barrel, as the price peaked at $91 per barrel on Thursday.
Oil shot to a more than two-year high for a second day in a row, on Thursday, while some analysts said a run at $100 a barrel was inevitable.
With cold weather stoking demand and helping drain United States (US) stockpiles at the fastest pace in 12 years, traders were now looking unto OPEC to signal when it might begin pumping more crude.
The chairman of Libya National Oil Corporation, Shokri Ghanem, told Reuters in Cairo, Egypt, ahead of a meeting of Arab oil exporting countries, that the price needed to improve, so as to reach a fair price of $100 per barrel.
According to him “it’s fair to say it (the price) is about right, but still, I think that it needs to improve a little bit more. About $100 would be a fair price for the time being.”
Ghanem added that the current oil prices were reflecting the situation in the market, which was a well-balanced market.
Nearly three years after oil first traded at $100, demand was again rising swiftly, but one key factor had changed significantly.
Unlike the start of 2008, when OPEC was already pumping flat out, the group now had a sizeable amount of idle capacity it could use to douse the rally, if it chose.
The rise in price above $100 per barrel might, however, prompt the National Assembly to adjust the 2011 budget benchmark above $65 per barrel proposed in the appropriation bill submitted by President Goodluck Jonathan.
This will also boost the revenue of the country, at a time the Federal Government was in need of fund to finance infrastructure projects.
However, experts feared that extra revenue accrued from oil in 2011 might end up as expenditure on 2011 elections, as the Federal Government was determined to organise credible elections next year.
Everyday Is April Fools Day For Oily" Alias Born 04/01/2006
Oilphant May I Wish You A Merry CXOMAS
"Merry CXOMAS all!
5 players 5 presents
Do we create a Chrome message board in the New Year?"
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=15778023
O.T. Crude Drops a Second Day After U.S. Fuel Supplies Gain, Dollar Strengthens
Oil dropped for a second day after an industry report showed U.S. fuel stockpiles rose last week and the Federal Reserve said the recovery in the world’s biggest crude user has been “disappointingly slow.”
Futures fell as much as 0.9 percent after the U.S. central bank said it would maintain a stimulus plan because the economic recovery was insufficient. Heating oil stockpiles climbed to the highest since the week ending Oct. 29 while gasoline inventories built for a third week, the industry-funded American Petroleum Institute said yesterday. The Energy Department will report its own stockpile data today.
“The U.S. economy is not doing as well as it should be and the plan reiterates the concern that the Fed and the government have,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. Fuel stockpiles are “building into a market that already has excess supply,” he said.
The January contract fell as much as 75 cents to $87.53 a barrel in electronic trading on the New York Mercantile Exchange. It was at $87.84 at 1:48 p.m. in Singapore after dropping 0.4 percent yesterday. Prices are up 10.8 percent this year.
Futures also declined as a strengthening dollar limited the appeal of commodities. The U.S. currency rose against all except two of its 16 major peers and was 0.2 percent higher versus the euro.
Stockpile Reports
The American Petroleum Institute yesterday reported that crude inventories fell 1.44 million barrels.
The Energy Department’s report, scheduled to be released at 10:30 a.m. in Washington today, will probably show gasoline supplies increased 2 million barrels in the week ended Dec. 10, according to the median of 17 analyst responses in a Bloomberg News survey. Crude oil supplies probably dropped 2.5 million barrels. Analysts were split over whether stockpiles of distillate fuel rose or fell.
U.S. gasoline demand at the pump slid 2.7 percent last week as retail prices rose to the highest level in 25 months, according to data in a MasterCard Inc. SpendingPulse report.
Fuel demand was 1.3 percent below the same period a year earlier, MasterCard said. That’s the largest drop in year-over- year consumption since Oct. 29.
Brent crude for January settlement dropped as much as 52 cents, or 0.6 percent, to $90.69 a barrel on the ICE Futures exchange in London.
The January future expires tomorrow. The more actively traded February contact fell as much as 48 cents, or 0.5 percent, to $90.02 a barrel.
O.T. OPEC holds back on oil to keep prices up
QUITO, Ecuador, Dec. 13 (UPI) -- OPEC nations kept crude oil production in check to ensure prices remained strong, a strategy that was in evidence as markets edged upward in response to the producer group's weekend talks in Ecuador.
Leading producer and Western ally Saudi Arabia sought to reassure consumer countries it would restrain price hawks within the 12-member Organization of Petroleum Exporting Countries as Venezuela led calls for prices to hit $100 a barrel.
Venezuela, Iran and other hard-line advocates for higher prices argued the prices could go beyond the current $80-90 level but Saudi Arabia ruled out moves -- including further output cuts -- that could encourage a further price spike. OPEC expects higher global demand in 2011 but won't change current oil production quotas.
Both the International Energy Agency and OPEC, in separate reports, saw global oil demand rising through 2011. The IEA said oil demand for 2011 could reach 88.8 million barrels a day, up 260,000 barrels a day from the current outlook.
OPEC also sounded warnings of further currency squabbles and exposure of banks to new pressures.
OPEC is reluctant to trigger any consumer moves away from its oil to non-OPEC suppliers, which could also produce a glut and cause prices to ease or even crash.
The group cited "lagging private consumption as well as persistently high unemployment" among its reasons for caution against any hasty response to the current economic climate. OPEC members are known to grow restless as prices move upward and often flout agreed quotas to profit from price spikes.
On the New York Mercantile Exchange, the price of January delivery light, sweet crude oil added $1.53 to $89.32 per barrel. Heating oil prices rose 3.38 cents to $2.4909 per gallon. Reformulated blendstock gasoline prices added 3.25 cents to $2.3418 per gallon. Natural gas prices gained 2.6 cents to $4.443 per million British thermal units.
Added to internal discipline that kept production in check, several OPEC members are seeking to increase production. Venezuelan wants to restore production lost in recent years and host Ecuador is taking draconian measures to boost investment in its conflict-ridden oil sector.
Ecuador seized licenses from Petroleo Brasileiro SA, Noble Energy Inc. and other companies active in the country after they declined to alter contracts. Ecuador hopes to cash in by attracting government-to-government contracts with cash-rich OPEC countries or high net worth corporates from the gulf.
Despite evidence that government-to-government partnerships don't necessarily translate into higher performance in the oil sector, Ecuador seems to be taking the path chosen earlier by Venezuela, with uncertain results for its oil industry.
Ecuador, the smallest OPEC member that returned to the group in 2007 after quitting in 1992, plans to offer licenses for new oil fields in April after forcing companies to switch to service contracts from output-sharing accords. Those who refused to switch, including Petrobras and Noble, lost their concessions, some of which may be up for grabs.
The circumstances in which the concessions became available have made investors -- both private and state -- wary of investment in Ecuador.
Ecuador aims to boost production as early as next year. If successful, additional Ecuador oil could enter a market with low demand, or profit from a substantial price surge.
OPEC members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
O.T. Christmas gas prices likely to break records across U.S. and Canada
(c) Patrick DeHaan
With Christmas just eleven days away, there is a real potential that many areas across the United States and Canada will see their highest ever gasoline prices on December 25.
With many recent events contributing positive sentiment to Wall Street, oil and gasoline futures have surged on hopes the economy is beginning to chug once again. Week-on-week demand vs. a year ago is showing healthy gains in the United States, while supply continues to be lower than last year's levels. While supply remains adequate, traders and investors are seemingly only looking at year ago levels and investing based on improvements seen this year.
The U.S. national average has never been over $3/gal on Christmas Day, while the Canadian average has never been over 106c/L on the same day.
While it appears prices in Canada will easily beat the record for the highest average price on Christmas, the United States will still need to see prices climb to beat 2007's average on December 25, coming in at $2.976/gal. This morning's average was $2.97 and has since moved to $2.977/gal, so at this moment we're there.
If futures continue to climb or find additional traction before the holiday, it seems that a new record will be set for a majority of the United States. Only in a few select cities have prices been higher on Christmas in 2007.
This surely won't be welcome news for many motorists driving to holiday destinations, but I'm hopeful that when February arrives we'll see less pressure on prices as the coldest months generally see the lowest gasoline demand.
Spring 2011, however, is entirely different. Let's not go there for now.
O.T. OPEC Cheating Most Since 2004 as $100 Oil Heralds More Supply
OPEC is breaching its production limits the most in six years, signaling the world’s biggest suppliers are ready to pump more crude next year as oil rallies toward $100 a barrel.
The Organization of Petroleum Exporting Countries excluding Iraq pumped 26.78 million barrels a day this year, exceeding the quotas by an average of 1.934 million a day, the highest level since 2004, according to data compiled by Bloomberg. Crude rose 12 percent in 2010 as demand recovered, trading at about $90 for the first time in two years. Options to buy at $100 next December are near a five-month high.
Flouting quotas lets OPEC, which provides about 40 percent of the world’s oil, boost profits without changing targets set when the first global recession since World War II caused prices to tumble 78 percent. Analysts say the rally may lead the 12- member group to raise output next year after leaving quotas unchanged at this weekend’s meeting in Quito, Ecuador.
“Definitely $100, that would be a trigger,” said Leo Drollas, the London-based director and chief economist at the Centre for Global Energy Studies, a market researcher founded by former Saudi Oil Minister Sheikh Ahmad Zaki Yamani. “Bells are ringing in the corridors already. If this carries on, if it’s a really cold winter, we can see prices heading up to $100. At some stage even the Saudis will realize there’s something going on here, and that they should respond. And they will.”
Raising Forecasts
OPEC has maintained a production target of 24.845 million barrels a day since December 2008, the longest period that quotas have stayed unchanged since they were first used in 1982. The 11 members with quotas pumped 26.7 million barrels a day last month, 1.9 million more than targeted, Bloomberg data show.
Wall Street is raising its price forecasts for next year after crude on the New York Mercantile Exchange reached $90.76 a barrel on Dec. 7, the highest level since Oct. 8, 2008. Futures for January delivery traded at $89.11 a barrel as of 7:16 a.m. local time. Oil is up 30 percent from this year’s low on May 20, though down 40 percent from the record $147.27 on July 11, 2008.
“We are more inclined to believe that Saudi Arabia will act responsibly and encourage OPEC members to increase output early next year” to avoid a surge in oil prices, Francisco Blanch, head of commodity research at Bank of America-Merrill Lynch in New York, said in an e-mail after the Quito meeting.
Goldman Sachs Group Inc. said Dec. 1 that crude will average $100 in 2010 and $110 in 2012. In June last year, Goldman had predicted oil would rally to $85 by the end of 2009, though that level wasn’t attained until this April. JPMorgan Chase & Co. said Dec. 3 oil will average $93 in 2011, increasing its estimate from $89.75, and reach $120 before the end of 2012.
Higher Revenue
“OPEC will sequentially need higher revenues to pay for increasing social, investment and energy costs,” analysts at JPMorgan led by New York-based Lawrence Eagles wrote Dec. 3. “If the world economy can bear it, they will allow the acceptable price range to step up both in 2011 and 2012.”
Options that give investors the right to buy December 2011 futures at $100 rose to $7.10 on Dec. 7, the highest price since August, according to Nymex data. They averaged $6.39 this year. There are 44,981 outstanding contracts, the largest open interest for any oil-options contract in New York.
Higher prices are a tax on consumers that may stunt growth, Blanch wrote in an Oct. 17 report. Every $10-a-barrel increase adds $42 billion to the cost of U.S. imports, $49 billion in Europe, $19 billion for China and $16 billion to Japan, he said.
“Within about two weeks of oil being at $100, I think you would get more consumer-nation pressure on OPEC” to increase production, said Ann-Louise Hittle, a senior analyst at Wood Mackenzie in Boston. “Their number one concern is not to damage heavily the economic recovery that is under way.”
Consumer Confidence
Confidence among U.S. consumers increased more than forecast in December to the highest level in six months at the same time Americans began stepping up holiday spending. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 74.2 from 71.6 in late November.
Stockpiles in Organization for Economic Cooperation and Development nations unexpectedly fell in the third quarter, dropping 11.5 million barrels, according to the International Energy Agency, compared with the five-year average gain of 38.6 million for that period. Growth in demand last quarter was “giddy,” with North America “remarkably strong,” the Paris- based agency said in a Dec. 10 report.
“Against a backdrop of much stronger-than-expected global oil demand growth and oil prices above two-year highs, OPEC may come under pressure to increase supplies to the market in the new year,” the IEA said in its monthly Oil Market Report.
Forward Curve
The narrowing difference between prices for futures of different maturities has pushed part of the market into so- called backwardation, where crude for soonest delivery is more expensive than for later months. That’s another sign dropping stockpiles will drive oil higher, according to Adam Sieminski, chief energy economist at Deutsche Bank AG.
Falling inventories make rallies “more sustainable,” Washington-based Sieminski wrote Dec. 3, raising his 2011 average forecast to $87.50 a barrel, from $80.
Crude for December 2011 delivery traded at $91.01 a barrel on the Nymex, 97 cents higher than December 2012 futures. It was 87 cents less than the 2012 contract on Nov. 30.
OPEC’s gathering in Quito two days ago was the seventh meeting with no change in production quotas. The group meets next in June. Asked what price level is appropriate, Saudi Arabian Oil Minister Ali al-Naimi told reporters: “How many times do I have to tell you. $70 to $80 is a good price.”
‘Fundamentals Wrong’
An increase to $100 may indicate “something wrong with fundamentals” in the market and lead OPEC to act, Abdalla El- Badri, the organization’s secretary-general, said on Dec. 9.
Venezuelan Energy Minister Rafael Ramirez told reporters after the Dec. 11 meeting ended that $100 is “fair” and he expects oil to reach that level next year.
Higher prices rather than increased production may help Iran, which can’t lift output as fast as other nations, and Venezuela, whose heavy crude deposits make drilling more expensive, according to Wood Mackenzie’s Hittle.
Iraq will account for 54 percent of the increase in OPEC’s supply capacity in the six years ending 2015, according to the IEA, replacing Iran as the biggest producer after Saudi Arabia.
Saudi Aramco, the world’s largest state-owned oil company, will start pumping 500,000 barrels a day from its Manifa field in 2013, Chief Executive Officer Khalid Al-Falih said in Dubai on Dec. 8. The kingdom has the capacity to pump 12.08 million barrels a day, of which it is now using 8.3 million barrels a day, IEA data show.
Above $100
“I don’t think you’ll see Saudi Arabia starting to eat out of the spare capacity until inventories go below the five-year average or oil prices go above $100 a barrel,” said Torbjoern Kjus, senior oil-market analyst at DnB NOR in Oslo.
OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the quota system.
The group agreed on a record 4.2 million barrel-a-day supply cut at the end of 2008 in response to the recession. Adherence to that pledge peaked at 89 percent in March 2009 and was 56 percent last month, according to Bloomberg estimates.
“They could raise the quotas by a million and a half barrels a day and in theory it wouldn’t matter,” said Sieminski. “It wouldn’t change anything. They’d still be producing more than their targets.”
O.T. Speculators, not supply and demand, are driving oil prices up
Read more: http://www.miamiherald.com/2010/12/12/1968168/speculators-not-supply-and-demand.html#ixzz183gFXVa3
By KEVIN G. HALL
McClatchy Newspapers
WASHINGTON -- Why? If demand is down and supplies are plentiful — and they are — why would prices be going up?
Because Wall Street speculators are driving up oil and gasoline prices again — just in time to dampen holiday cheer.
“It’s all about investor optimism, and that’s been the story about 2010 ... that’s the primary reason why we’re seeing oil prices at $90 (a barrel) and gasoline making an uncharacteristic climb in December towards $3 a gallon,” said Troy Green, a national spokesman for the AAA Motor Club, which monitors gasoline prices.
AAA’s Fuel Gauge Report shows the nationwide average for a gallon of regular unleaded gasoline stood at $2.968 on Wednesday. That’s up 11 cents a gallon from a month ago and 33 cents a gallon over one year ago. That means it costs about $1.65 more per fill-up than a month ago and $4.95 more than a year ago.
It’s even worse on the West Coast, where this week prices have averaged higher than $3.15 a gallon, according to Energy Department data.
If oil prices keep climbing beyond $100 per barrel, as Goldman Sachs projects for 2011, higher fuel prices may blunt efforts by the Obama administration and the Federal Reserve to stimulate the weak economy.
“I think we’re at that point. With (nearly) 10 percent unemployment, it’s a much more impoverished consumer that can’t afford it. It’s almost a bludgeoning instrument in terms of what it will do to consumer sentiment,” said John Kilduff, a veteran energy analyst and partner in the hedge fund Again Capital. “What might have been a very bright shopping season could get the wind taken out of its sails by these high prices.”
Rising prices could erase the stimulus coming from the 2 percentage point reduction in payroll taxes proposed this week by President Barack Obama and Republican congressional leaders. This would hit the working poor particularly hard.
“The money they get from government tax relief, they’ll have to go pay in higher prices for food and energy,” said Michael Masters, head of Masters Capital Management and a frequent witness before Congress about financial speculation in oil contracts.
The Energy Information Administration, the statistical arm of the Energy Department, said Wednesday that there is, in fact, increasing demand for oil compared with last year’s low demand amid the recession.
But supplies are abundant, it said in its weekly report, This Week in Petroleum — especially when compared with a few years ago.
Obama’s departing chief economic adviser, Lawrence Summers, shrugged off rising oil prices Wednesday.
“Oil goes up, oil goes down,” he said.
Economic growth in emerging markets and China has raised global demand for oil, the EIA said, while U.S. demand for oil year-over-year grew by 750,000 barrels per day in August and 900,000 in September. The numbers, it said, are of “an order approaching, or even exceeding, growth levels seen in China.”
However, the EIA cautioned that “even given strong growth this year, U.S. oil demand remains well below peak levels seen in 2005, and recent growth rates relative to year-ago levels are not expected to continue.”
There’s been so much oil in storage on land this year that oil tankers were actually converted into floating storage facilities.
Read more: http://www.miamiherald.com/2010/12/12/1968168/speculators-not-supply-and-demand.html#ixzz183g88yg4
“Those (oil inventory) numbers were extremely high two months ago, but pretty much the majority of that floating storage has been liquidated,” said Joe Poscillico, an account executive at MF Global. “The inventories on land are starting to decrease week by week and getting more toward average numbers.”
Another explanation for falling inventories, one that belies the justification for higher prices, is that refiners who convert oil into gasoline are operating at extremely low utilization rates. They were operating at 86 percent of their capacity on average during the first nine months of the year.
That’s higher than last year’s average of 82.9 percent but well below the late 1990s and a period from 2000 to 2006, when refiners operated at well over 90 percent of their installed capacity to make gasoline.
Lower production runs create tightened supplies, which in turn drives up prices and sets the table for speculators.
“I really don’t remember a period where we’ve had refinery run rates so low for this long,” said Kilduff, who likened the low production to “draining the swamp.”
“Financial physics” is again behind high prices, he warned, adding that crude oil “represents a store of value, the way gold and some other commodities do.”
The Federal Reserve is also driving investment into oil contracts, Kilduff said, because of its moves to force investors out of the safe haven of government bonds and into risk taking — a process called quantitative easing.
That’s a view shared by Masters, who thinks that “financial flows are the primary reason why you are getting increases in prices, because investors are trying to ‘hedge,’ because of quantitative easing and who knows what else,” Masters said. “They’ve decided that they want to own crude and other commodities anyway because they just want to own them.”
Read more: http://www.miamiherald.com/2010/12/12/1968168_p2/speculators-not-supply-and-demand.html#ixzz183fvaH5H
O.T. Global oil demand forecast raised
The International Energy Agency on Friday raised its forecast for global oil demand, citing stronger-than-expected consumption in North America and emerging Asian countries, especially China.
The Paris-based agency noted that under such conditions OPEC could come under pressure next year to boost supply.
Global demand in 2011 should hit 88.8 million barrels a day, 260,000 daily barrels more than previously expected, the agency said. The IEA also raised its estimate of 2010 consumption to 87.4 million barrels a day, up 130,000 daily barrels from its previous projection.
Oil has hovered in the upper-$80s this week — reaching a two-year high of $90.76 US a barrel on Tuesday — as traders have gauged how much demand may grow in 2011. The January oil futures contract closed Friday at $87.79, down 58 cents.
Officials of the 12-nation Organization of Petroleum Exporting Countries are likely to leave the group's production quotas unchanged at Saturday's meeting in Ecuador, the IEA said in its latest monthly report.
"Pre-meeting statements by OPEC ministers suggest the group is planning on a quick agreement to roll over existing output targets," said the report from the agency, which is the energy arm of the Organization for Economic Co-operation and Development, a grouping of the world's richest nations.
But "against a backdrop of much stronger-than-expected global oil demand growth, however, OPEC may come under pressure to increase supplies to the market in the new year if prices continue their relentless rise," the report said.
China oil demand up 12.6%
The agency said OPEC will likely need to produce 29.5 million barrels a day next year — 100,000 daily barrels more than the IEA's previous estimate.
Preliminary data from China suggests that demand was up by 12.6 per cent in October compared with a year earlier, the IEA said.
"The strength of China's oil demand is consistent with other indicators suggesting that the economy is in danger of overheating," the report said.
"Not only does GDP growth continue to hover around the 10 per cent mark, but inflation is also creeping up."
Read more: http://www.cbc.ca/money/story/2010/12/10/iae-oil-forecast-raised.html#ixzz17xnAbRN0
O.T. OPEC ministers make no change in output
QUITO, Ecuador (AP) - OPEC ministers decided Saturday to keep oil output at current levels, citing ample inventories amid persisting global economic uncertainty and a price of just under $90 a barrel.
The 12-member cartel said after an unusually short meeting that it based its decision on projections showing demand for crude would grow more slowly in 2011 than this year.
It's statement also cited the "challenging risks to the fragile global economic recovery" including "fears of a second banking crisis in Europe."
The world's major industrialized nations continue to face "lower industrial output, lagging private consumption as well as persistently high unemployment," the ministers added.
"The market is in balance and is stable," Oil minister Ali Naimi of Saudi Arabia, OPEC's biggest producer, told reporters. "The fundamentals are good." Suffering a cold, he left quickly after the closed-door meeting, which lasted less than two hours.
OPEC's next scheduled gathering is June 2 in Vienna, its home. Asked whether it could convene earlier if prices were to shoot up, the group's secretary-general, Abdulla Salem El-Badri said that is always a possibility.
"OPEC is always ready to meet when there is important change in the market," he said.
There was much discussion about whether oil would soon broach the psychological price barrier of $100 - or even climb nearer its 2008 historic peak of $147 a barrel.
Venezuela's minister, Rafael Ramirez, said he thought such a price was "proper" considering how much producers invest in removing crude from the ground.
The "no-change" announcement was widely anticipated and four of the cartel's ministers - from Iraq, Kuwait, Qatar and Nigeria - did not even make the trip, sending lower-level delegates to this Andean capital.
OPEC, which is responsible for 35 percent of global oil production, has not changed its output quotas since late 2008. Last month, Naimi said prices from $70 to $90 per barrel were tolerable for consumers. On Saturday, he lowered the high end to $80 when asked.
The 50-year-old cartel has had a good year, with prices hovering in the mid-$80 range and profits up 32 percent over 2009 to $750 billion, according to U.S. Energy Department estimates. OPEC does not release profit numbers.
Oil reached a two-year high of nearly $91 on Tuesday - as traders gauged the dimensions of 2011 demand and responded to a particularly harsh onset of winter in Europe.
The Paris-based International Energy Agency, or IEA, said Friday that stronger-than-anticipated consumption next year in North America and emerging Asian economies led by China could compel OPEC to boost supply "if prices continue their relentless rise."
Issuing its global oil demand forecast, the IEA said it anticipated a rise in demand next year to 88.8 million barrels a day, 260,000 daily barrels more than previously forecast.
OPEC's monthly market report, released Friday, forecast a boost in demand of 1.2 million barrels per day in 2011 over this year's levels to an average of 87.1 million.
While ministers expect demand for crude to continue to grow, "At this moment, demand is not good," Iran's oil minister, Masoud Mir-Kazem, told reporters.
"If demand does turns out to be stronger than they've expected, there is still a safety cushion out there and they can come back later and increase production," analyst David Kirsch of PFC Energy in Washington told The Associated Press. "Or more likely, what happens is that individual members cheat."
El-Badri said compliance was currently around 60 percent.
Oil supplies in major industrialized nations and China are currently well above normal, and while OPEC forecast a demand boost in North America and China in the monthly market report it published Friday, it believes western Europe's festering debt crisis will dampen consumption there.
El-Badri said oil stocks were at seven days above the five-year average. "There is plenty of oil in the market," he added. "At OPEC we have six or 7 million barrels a day of excess capacity."
OPEC averaged 29.1 million barrels of production last month, a drop of 70,000 barrels from October, according to Platts, which surveys industry officials and analysts.
OPEC last changed output in late 2008 when it capped a record series of cuts to help boost prices that had plummeted with the global financial meltdown.
Some analysts believe conditions are now conspiring against much more upward pressure on prices as the effects wear off from the U.S. Federal Reserve Bank's decision to issue and buy up to $2.3 trillion in U.S. Treasury bonds.
The post-meltdown move - essentially printing money - made U.S. exports cheaper abroad and boosted the price of oil. It also encouraged the Chinese to buy and store more oil.
Many analysts believes $100 a barrel for oil is inevitable in 2011 though it could be months before it gets there.
"Everyone is worked up about $100 a barrel," said Barbara Shook, a Houston-based analyst with the Energy Intelligence Group. It's a psychological number. A hundred-dollar oil means that you've got $3 gasoline at every market in the U.S.
"And that's another tipping point. It could drop consumption, decrease discretionary driving, things like that," she added.
Ecuador, which rejoined OPEC in 2007 after 15-year absence, held the rotating presidency this year. Iran will take over for 2011.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
dat; No Worries.
O.T. Rise in crude oil prices adds to costs at the pump
By Steven Mufson
Saturday, December 11, 2010
Crude oil prices have flirted with the $90 a barrel threshold this week, pushing up gasoline prices at the pumps and crimping consumers in the middle of the peak shopping season.
The $90 level was last seen in early October 2008 when crude oil prices were plunging along with the economy.
But oil prices have retraced their steps in the halting global recovery. The International Energy Agency on Friday raised its monthly forecast for global crude oil demand in 2011 for the third consecutive time.
That's good news for the Organization of Petroleum Exporting Countries, whose members are meeting Saturday in Quito, Ecuador. The group, which accounts for about 40 percent of world supplies, is expected to make no change in its output quotas.
For U.S. consumers, the news is not so good. The nationwide average price for regular gasoline prices has risen to $2.98 a gallon, up a dozen cents in the past month and 35 cents higher than a year ago.
Oil analysts blamed the rise in oil prices in recent weeks to a variety of factors: The Federal Reserve's plan to buy Treasury bonds to stimulate the economy; the ramping up of new refineries in China this fall; and an unusually cold start to winter in Europe and Asia, leading to a drawdown of petroleum inventories.
"It's a winter wonderland," said Edward Morse, a veteran energy analyst at Credit Suisse who cited the cold snap.
But Morse and others predicted that crude oil prices - which have fluctuated between $68 and $89 a barrel this year - would probably stay within a relatively narrow range. The price of oil for January delivery fell 58 cents Friday to $87.79 a barrel.
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Roger Diwan, an oil expert at PFC Energy, a Washington advisory firm, said that despite a rise in consumption, there was plenty of oil supply, refinery capacity and transportation available.
"There are seasonal issues and money allocation issues," he said, "but I don't think there's the making of a big bubble."
Indeed, despite widespread concern about a weaker dollar and inflation, oil traders and investors are also worried that China's moves to rein in inflation could lead to a slowdown in its rapid growth rate.
On Friday, the People's Bank of China boosted financial reserve requirements for the nation's banks, a step aimed at curbing lending.
China is a key engine of growth in world petroleum demand; over the past year, it has accounted for about half of the growth in oil demand outside the 34-nation Organization for Economic Cooperation and Development. But the recovery in U.S. demand from depressed levels last year has been almost as great, according to the Energy Department's Energy Information Administration.
OPEC's leading member, Saudi Arabia, has said it is content with prices fluctuating from $70 to $90 a barrel. The kingdom, which is the world's largest oil exporter, is one of just three OPEC members to have curtailed output to prop up prices. But it also has the most leeway to boost production to limit price increases.
Some OPEC members are planning to increase output over the coming months. Iraq, where Western oil companies are working to repair damaged facilities and increase production at some of the country's most prolific fields, is planning to increase output by 300,000 to 500,000 barrels a day, Morse said.
In addition, production is rising from fields being developed off the west coast of Africa.
Rising production in Iraq and Nigeria will boost OPEC capacity to 36.94 million barrels a day by 2015, the IEA forecast said. Currently OPEC is producing approximately 29.25 million barrels a day.
Even if prices decline slightly, their level is relatively high given the weakness of the global economy. That has encouraged big oil companies planning capital spending budgets.
On Thursday, Chevron announced that it would sharply increase its capital spending in 2011, boosting it to $26 billion, up $4.4 billion from this year. Eighty five percent of that will go to exploration and production of oil and natural gas.
O.T. Liquefied natural gas station to open in Conn.
HARTFORD, Conn. – A new type of gas station is opening in Connecticut, selling liquefied natural gas to trucks to reduce polluting diesel fumes while potentially saving money.
Bill Malone, owner and operator of Enviro Express Inc., which transports waste to landfills and transfer stations, is opening the LNG station Friday at his company in Bridgeport near busy Interstate 95, a key East Coast highway that extends from Maine to Florida.
The Bridgeport station also will sell compressed natural gas that fuels cars. Malone and other promoters of LNG for vehicles say the fuel stations, established years ago in the West, are only now beginning to move east, starting with the Connecticut site.
The 53-year-old Malone, who said he has been in the trucking business since he was 18, was looking to cut pollution from his fleet of diesel-fuel trucks. He heard of Clean Energy Fuels Corp., which designs, builds and operates natural gas fueling stations. Malone said he met recently with T. Boone Pickens, a co-founder of the Seal Beach, Calif., company and Texas oil man, now a booster of alternative fuels.
"He convinced me that to be viable as a trucking firm, I need to go LNG," Malone said.
Liquefied and compressed natural gas are initially being used for corporate and government vehicle fleets. Malone plans to initially convert 18 of his own trucks to LNG, and said he has won a commitment from AT&T Inc. to buy fuel for 48 trucks.
The station will be open to trucks and cars that can fill up using credit cards linked to their company fleet accounts.
Promoters of natural gas say LPG and CNG are cleaner than gasoline and reduce U.S. reliance on imported oil because most natural gas is from North America.
The cost savings will grow as oil prices continue to climb, with a difference of between 50 cents and $1 per gallon, said Bruce Russell, spokesman for Clean Energy Fuels Corp. Large trucks can consume up to 20,000 gallons a year or more, he said.
Patrick Davis, vehicle technologies program manager at the U.S. Department of Energy, said the Bridgeport station is among numerous projects receiving $300 million total in federal stimulus funding. That represents about one-third of the overall investment in these projects, which includes money committed by businesses such as Enviro Express.
The $6.2 million cost of the Bridgeport station is split between Enviro Express and federal stimulus money.
"I would be buying new trucks anyway. I couldn't have planned it better," Malone said.
The Bridgeport station, which Davis said is the first to open east of the Mississippi River, and other LNG and CNG stations are intended primarily to reduce U.S. dependence on foreign oil and provide a fuel that does not pollute.
Liquefied natural gas is condensed after being taken to temperatures as low as minus 200 degrees, said Bruce Wilding, a research scientist at the Idaho National Laboratory. Compressed Natural Gas can be used for cars, which he said are more common in the West than on the East Coast.
Russell said LNG is "coming along" as an alternate fuel for trucking.
Clean Energy has reached a deal to install LNG stations at truck stops nationwide and is building three stations, one in Texas and two in southern California.
LNG vehicles have plied the highways of California before moving to other states because of demands for cleaner air, Russell said.
In the meantime, Malone said he will keep his diesel trucks as backups if the LNG station has technical troubles.
"If we have a problem with the fueling station, I can't run down the road to another fueling station," he said.
3 Out Of The Last 5 Years (Counting This One) We Have Gone Down To $.20 (Or Lower) At The End Of The Year. And so far always recover in Jan. or Feb. Even though we're all sick of them, it looks like another buying opportunity.
O.T. Cape Verde and Sao Tome and Principe seek to improve business climate [ 2010-11-18 ]
Praia, Cape Verde, 18 Nov – Cape Verde and Sao Tome and Principe plan to create mechanisms to allow for the development of businesses and creation of companies that can serve the two archipelagos, the prime ministers of the two Portuguese-speaking countries agreed.
The decision was made during a visit by Sao Tome Prime Minister, Patrice Trovoada, to Cape Verde, at the invitation of his Cape Verdean counterpart, José Maria Neves, who said that the two States were working to improve the business climate, allowing for a rise in bilateral trade.
In the oil exploration sector, Trovoada said that, at the moment this was in an exploratory phase but that, later, business opportunities would likely emerge in the services sector of Cape Verdean could take advantage.
Another area on which the two prime ministers focused was the financial sector, and they agreed they would cooperate in macroeconomic terms.
Neves said that both Cape Verde and Sao Tome and Principe had a foreign exchange cooperation agreement with Portugal, with the two currencies “tied” to the euro and there are common goals of macroeconomic management and monetary stability, and thus it made sense to cooperate and share good practices in this sector.
As part of the cooperation between Cape Verde and Sao Tome and Principe in the education sector, places will be made available in Cape Verde’s universities and professional training schools for Sao Tome students, as well as the 68 Sao Tome university students already studying in Cape Verde.
The meeting also led to the decision to raise the Cape Verdean Consulate General in Sao Tome to embassy status, and an ambassador is due to be nominated soon. (macauhub)
O.T. Millennium Challenge Corporation mission studies new financing for Sao Tome and Principe [ 2010-10-19 ]
Sao Tome, Sao Tome and Principe, 19 Oct – Sao Tome and Principe may be elected this coming November for a new Millennium Challenge Corporation (MCC) compact programme, an official from that US development aid programme said on Monday in Sao Tome.
“The results will be announced in November and with the new indicators we’ll see how the points are and what Sao Tome and Principe can achieve and then be elected for the compact programme,” said Malik Chaka after an audience with Prime Minister Patrice Trovoada.
The amount was not revealed, though a source from the Ministry of Finance and International Cooperation told Portuguese news agency Lusa that “the compact programme involves a financial package worth US$60 million”.
Chaka heads a mission that is in Sao Tome to discuss with the authorities “the progress in implementing the MCC programme in Sao Tome and Principe”.
The mission’s trip to the island country is meant to measure progress with respect to the recommendations made by the previous delegation, which visited Sao Tome last year.
The MCC has been working with the Sao Tome authorities for more than three years and has provided US$8 million to finance reform projects in the areas of taxes, customs and the port of Sao Tome. (macauhub)
O.T. European mission due in Sao Tome and Principe to evaluate country’s place on aviation blacklist [ 2010-10-19 ]
Sao Tome, Sao Tome and Principe, 19 Oct – A mission from the European civil aviation authority arrives this week in Sao Tome to help authorities in their efforts to remove the island country’s civil aviation from the European Union blacklist, a government source said on Monday in Sao Tome.
“It is a mission from that institution’s inspection department, to provide support so that the country can be removed from the blacklist,” Infrastructures and Natural Resources Minister Carlos Vila Nova told Portuguese news agency Lusa.
Sao Tome’s National Civil Aviation Institute (INAC) was placed on the European civil aviation authority’s blacklist in November 2008 due to lax security at the Sao Tome international airport.
After placing Sao Tome and Principe on the blacklist, the European authorities urged the island country to fulfil a number of recommendations concerning lighting and fencing around the airport, INAC personnel training and the acquisition of new fire-fighting vehicles.
Another problem complicating the situation concerns Sao Tome’s accumulated debt with the European regulatory authority resulting from failure to regularly pay fees.
The late payments date to 2000 and currently total a debt of US$500,000.
“The government will have to make an extra effort early next year to honour at least 2009 and 2010, to reopen the process of rescheduling the debt and also to continue paying the agreed amounts annually,” Vila Nova said. (macauhub)
Ban on Gulf of Mexico oil drilling to be lifted
Deep water oil rig in the Gulf of Mexico There had long been calls for the ban to be ended
The moratorium on deep-water drilling in the Gulf of Mexico is to be lifted, the US government has confirmed.
The six-month ban was introduced in the aftermath of April's BP oil spill, but calls had been growing for it to be ended because of its economic impact.
Before oil firms can resume deep-water work in the region they will first have to meet a range of new safety rules.
A federal report said the moratorium had caused a temporary loss of between 8,000 and 12,000 jobs in the Gulf.
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White House spokesman Robert Gibbs said new rules imposed after the spill had reduced the risk of a similar disaster
Officials said it would now take "at least a couple of weeks" before permits to resume drilling are approved.
Interior Secretary Ken Salazar said: "Operators who play by the rules and clear the higher bar can be allowed to resume [drilling].
"The oil and gas industry will be operating under tighter rules, stronger oversight, and in a regulatory environment that will remain dynamic as we continue to build on the reforms we have already implemented."
BP's Deepwater Horizon rig exploded on 20 April, killing 11 works, and ultimately leaking an estimated 4.9 million barrels of oil into the Gulf.
The well was finally permanently sealed on 19 September.
Oil Rises above $82 as OPEC Meets Today
By Chika Amanze-Nwachuku with agency report, 10.13.2010
Crude oil price rose above $82 yesterday ($83.79 as I paste this), ahead of the 157th (ordinary) meeting of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna, Austria, today.
US crude for November rose 40 cents to $82.07 by 0350 GMT, while ICE Brent gained 30 cents to $83.80.
The 12-member group, which supplies one third of world’s oil, had left its members' production quotas unchanged since December 2008, when it announced the last of a series of cuts aimed at bringing their output down by 4.2 million barrels per day.
OPEC adopted its current output policy after oil prices had fallen from record highs of close to $150 per barrel to below $40 owing to the global banking crisis, which pushed many economies into their deepest recession since the Second World War.
With oil prices hovering between $70 and $80 per barrel since over one year, and the current price above $80 per barrel, indications are that oil ministers of OPEC are likely to maintain current output levels at today’s meeting.
The group in its latest Oil Market Report had announced that prices between $70 and $80 per barrel, were favourable both to producers and consumers. Most oil ministers who are currently in Vienna for the conference are optimistic that the group would likely hold output steady.
Ecuadorian minister Wilson Pastor-Morris was quoted by AFP as saying "the quotas will be maintained. No changes are foreseen."
He also predicted that oil prices, which have been trading in a range of 70-80 dollars per barrel this year, would "hold steady" at those levels.
The secretariat of OPEC has "talked of a range of 72-82 dollars in order to give (prices) a bit of an impulse, to be optimistic," the minister said.
Ecuador is chairing OPEC this year and the cartel is meeting today to decide whether to change production levels.
Also, Saudi Oil Minister Ali al-Nuaimi was also quoted by the newswire as saying he was satisfied with the current price of oil and saw no reason to change quotas, as he arrived in Vienna late on Monday.
"The market is very well balanced, everybody is happy with the market, consumers, producers, very happy," Saudi Arabia's oil minister said.
"I think the supply is adequate and the demand is quite active," he added.
Similarly, Qatar's Energy Minister Abdullah bin Hamad al-Attiyah, while speaking to reporters in Doha, said current oil prices were "comfortable" and that OPEC would most likely maintain output levels today, a view echoed by Libya.
Meanwhile, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who led the Nigerian delegation to the conference, has noted that the country’s membership of OPEC is crucial for the sustenance of recent growth and stability in the oil and gas industry.
Marty: Stock Market Holidays U.S. 2010 & 2011
http://www.rightline.net/calendar/market-holidays.html
Umbra I Do Not Think Your Are Being Connected With The 1st Paragraph (Bashers). I think you are being connected with the FOLLOWING paragraph. People who believe "That theme is that the intolerable delays are primarily due to the ‘Powers That Be’ looking to eliminate the small rights owners of Blocks 2 thru 4 and at the same time keep the share price down to buy shares from disgusted and dissolute stockholders."
(Sorry I see he has already responded.)
We Are In A Game Of Leap Frog. 1st Postpone the EEZ Auction until after the announcements of findings in the JDZ Phase 1, & comments to Phase 2. And now postpone announcements in the JDZ until after the EEZ Auction. So here we sit.
Rubymartin
(Not Ruby1100)
Fifties.
My Take Is, The Drilling Results Are Out, And ERHE Has The Results. Now it takes a day or so for the lawyers to write the PR.
Hmmmmmmm. Fri. after close?
Didn't Oily Disappear Along With Mark?