Zeev's Turnips Patch-No Politics (ZEEV)

[Bearmove]

$60+ oil prices are in the bag. Consider the following....


**So who’s to blame for the oil price inflation Jubak expects? "You can thank Vladimir Putin and those apparatchiks who run Russia's economy for the run-up," he says. "They’ve just about guaranteed that Russia's oil industry won’t get the foreign capital it needs to expand the number of barrels the country pumps annually."

Jubak points out that is bad news for heavy oil consumers ranging from airlines to commuters, since Russia accounted for about 75% of growth in oil production from non-OPEC (Organization of Petroleum Exporting Countries) sources in 2004, according to Jubak. Russian production growth peaked at a 12% annual rate in the middle of 2003, he says, before easing to 8% growth year-over-year in 2004, and then plunging to just a 4.6% annual growth rate in the first quarter of 2005. He cites the State Committee of the Russian Federation figures showing crude oil output climbed even more slowly as of first quarter 2005, by just 4.3% year-to-year. "Official projections call for 5.7% growth in 2005, well above the first quarter’s rate but way below the 8% average annual growth from 2000-2003," he writes.**