Economidies Says U.S. At The Mercy Of Oil Countries

[Bronco_Beerslug]

Micheal Economidies (University of Houston Professor of Petroleum Engineering) was just on CNBC and made some eye opening statements. Said we are basically controlled by a few oil producing countries that don't like us very much. Went on to say that as China and other Asian countries continue to grow (who need more and more oil) that gives these oil countries more power to cut us off at their leisure. Another point he made was there is no ceiling on oil prices.

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Commodities is another problem for us now which will push everything higher. Steel, copper, coffee, sugar, etc... are all skyrocketing up.

If you're thinking of a new vehicle purchase anytime soon, a high MPG vehicle would probably be a good idea.

(Oil just passed $55 as I write this)

[Rascal]

And this is news?

Hopefully nobody hear will disagree with this, but the question on how to fix it is not so easy to determine.

[Spider]

Horse and Buggy ........

[Bronco_Beerslug]

Originally Posted by rascal

And this is news?

Hopefully nobody hear will disagree with this, but the question on how to fix it is not so easy to determine.

The news is now there is someplace else for these countries to sell their oil not just us. Before, they were dependent on us to make their trillions, not anymore.

[Bronco_Beerslug]

Another cause for concern is speculation that some Saudi fields have hit their peaks. The Saudis vehemnetly deny this but won't allow independent auditors to survey their fields.


They just rasied gas prices here today by 17 cents.
Cold Weather Boosts Oil Near Record High
NEW YORK (Reuters) - U.S. crude oil prices came within pennies of their record peak on Wednesday as lingering worries over rapid global demand growth overshadowed rising stockpile levels in the United States.

Cold weather in the U.S. Northeast, the world's largest heating oil market, also helped support red-hot prices, which have surged more than 25 percent since the start of the year.

U.S. light crude for prompt-month April delivery on the New York Mercantile Exchange rose $1.06 to $55.65 a barrel, 2 cents below the record $55.67 hit in late October.

London's Brent crude rose $1.21 to a record $54.05 on the International Petroleum Exchange.

Prices surged despite U.S. Energy Information Administration data showing crude oil stocks were 3.2 million barrels greater last week at 302.6 million barrels -- a fourth straight weekly rise and the biggest stockpile in eight months.

"The data is being overshadowed by macro factors -- the weakness of the U.S. dollar, the uptrend on the (technical) charts and OPEC (news - web sites) giving no indication it will produce more," said Jim Ritterbusch of Ritterbusch and Associates.

"So there is no reason for the funds to part with their recent accumulations of long positions. It will take a lot more than one bearish inventory report," he added.

FUNDS FLEE FOREX, EYE TIGHT OIL

Strong demand growth from the United States and Asia and lower-than-expected production from countries like Russia have put pressure on world supply this year.

Spare capacity from producers in the Organization of Petroleum Exporting Countries is also considered tight.

The U.S. EIA and the International Energy Agency have recently revised upward their global demand forecasts, including expected consumption from China, which has roared into second place among world energy users.

The price rally has also gathered pace as a steep fall in the dollar -- the currency of international oil -- spurred funds to switch money out of foreign exchange and into commodities such as energy, metals and coffee.

So far there have been few concrete signs that high oil prices are denting economic growth.

"Oil prices appeared to have risen very much in dollar terms, but they have not risen much in terms of other currencies," South Korea (news - web sites)'s deputy finance minister, Bahk Byong-won, said in a radio interview on Wednesday.

The New York Mercantile Exchange said an option with a strike price of $100 a barrel traded on Tuesday, the highest level thought to have traded on the exchange.

The United States said it had contacted OPEC members to let them know high oil prices hurt the U.S. economy. The White House said, however, there was no current need to tap the nation's emergency oil reserve to bring prices lower.

Plentiful crude stocks have convinced many OPEC members that production should remain unchanged after next week's meeting in Iran (news - web sites). OPEC's own oil market experts expect the cartel to keep its quotas unchanged.

"The market is well supplied now, but OPEC needs to be cautious because we're expecting demand to stay robust," an OPEC source said.

Indonesia, Iran, Venezuela, Qatar and Algeria have lined up against pumping more oil, and OPEC President Sheikh Ahmad al-Fahd al-Sabah has said supply was adequate. But Nigeria has called for action to stem rising prices.
http://story.news.yahoo.com/news?tmp...markets_oil_dc

[Rascal]

I had heard rumors about that 6 months ago but it wasn't anything firm (my Grandpa was pretty high up in Baker & Taylor and my Dad still has some connections). The warning signs about changing from oil are going off, hopefully the government will start to listen.

[El Guapo]

hold on..

you mean, it took a study (or something) to figure this one out? They have us by our *****, and it blows.

[Bronco_Beerslug]

On CNBC now, pretty bleak commentary on oil demand and reserves! China has blown through all estimates of oil consumption and oil output is near maximum.

Incredible block trades today on oil companies! In the course of 20 minutes there were 14 million, 6 million and 4 million block trades in XOM (Exxon) at over $60 a share.

[L.A. BRONCOS FAN]

Originally Posted by rascal

...the question on how to fix it is not so easy to determine.

Getting rid of the Mad Cowboy in the WH who is constantly pissing the rest of the world off and alienating us from the rest of the world would be a good start.

[Bronco_Beerslug]

IEA raises 2005 oil demand estimate by 330,000 bpd to 84.3 million bpd
PARIS (AFP) - Demand for oil this year will be higher than expected because of cold weather, expected robust growth in the United States and consumption in China, the International Energy Agency forecast.

The agency raised its estimate for global oil demand in 2005 by 330,000 barrels per day to 84.3 million barrels per day on Friday.

It revised upwards its estimate of global demand for oil from OPEC (news - web sites) this year by 200,000 barrels per day to 28.6 million barrels. This was half a million barrels more than the 2004 global demand figure of 28.1 million barrels.

"The revision is most pronounced in the first half of 2005, before higher non-OPEC output takes effect," the report said.

But it also said that in February world supply had surged by 885,000 barrels per day to 84.3 million barrels.

The IEA, the energy monitoring arm of the OECD, published its monthly report against a background of a recent surge in oil prices and concern that the market is set to be tight for some time, and even years.

There is a growing belief that high oil prices could increase the risk of inflationary pressures and therefore vigilance by central banks about any need to increase interest rates.

The agency said: "Cold weather in the northern hemisphere has caused a surge in demand. Heating fuel prices have tightened globally, but more significantly in Europe and Asia."

The IEA also remarked: "The reality is that oil consumption has caught up with crude and refining capacity.... If supply continues to keep up, more policy attention may come to be directed at oil demand intensity in our economies and alternatives."

It also said: "Recent reports indicate that the US economy is more likely to carry the momentum that has built in the latter part of 2004 into the first half of 2005. On the whole, US demand growth is revised upwards by 120,000 barrels per day," the report said.

"China's demand growth has been revised upwards by 100,000 barrels per day," the IEA said, arguing that one reason why oil demand remained high despite high prices was that high oil prices were pushing labour-intensive activities to areas where labour costs were low. But this involved transportation costs.

"A more robust US economic outlook should boost China's exports and help sustain this trend," the IEA said. The Chinese government was also increasing efforts to counter "the construction of non-approved power projects, mostly coal-fired... this pressure could have a marginal impact on oil consumption".

Although the growth of demand for oil by China was expected to slow in 2005 from the rate of growth in 2004, strength of the US economy had caused the IEA to increase its estimate of Chinese demand growth by 100,000 barrels per day in 2005.

Overall: "The latest OECD data show that, while US stocks were building in January, crude inventories were drawing in in Europe and, to a lesser extent, in the Pacific/Asia region. Anecdotal evidence also suggests stock draws in non-OECD Asia over the month, particularly in China."

Supplies by members of the Organisation of Petroleum Exporting Countries rose by 390,000 barrels per day in February to 29.0 million barrels per day owing to increased production by Kuwait, Nigeria, Saudi Arabia and Iraq (news - web sites).

The IEA said that it was revising up its estimate of supplies from non-OPEC countries by 75,000 barrels per day for last year and by 90,000 barrels per day this year. "It averages 51.0 million barrels per day this year, 925,000 barrels per day above 2004."

In February, production by non-OPEC countries rose by 445,000 barrels per day on a recovery of output in North America and from the North Sea. Output by Russia rose after a four-month decline.



The agency commented: "Cold weather and strong global demand pushed benchmark IPE Brent and spot Dubai crude prices to record levels in early March, reaching 54.30 dollars per barrel and 45.47 dollars respectively.

"Distillate and jet fuel prices were also strong globally, but particularly in Asia and Europe, where temperatures were below seasonal norms."

Stocks held by industry in the area covered by the Organisation for Economic Cooperation and Development fell by 3.0 million barrels per day in January to 2,573 million barrels, closing 66 million barrels above a year ago.

"Upward revisions to OECD demand for the first quarter of 2005 kept forward cover steady at 51 days," the report said.

And US gasoline stocks amounted to 224 million barrels at the beginning of March, an increase of 21.5 million barrels on a 12-month comparison.
http://story.news.yahoo.com/news?tmp...0311131910&e=1

[L.A. BRONCOS FAN]

Originally Posted by Maverick_7

hold on..

you mean, it took a study (or something) to figure this one out? They have us by our *****, and it blows.

Indeed it does.

Quotes

"Bush has given political blowjobs to the oil companies all of his political career and now Americans need a home-equity loan just to fill up the gas tanks of their cars. Every oil company that has poured millions into the campaign coffers of Bush and his Republican party is reporting record profits but gas prices keep going up. It doesn’t take a degree in economics to realize the people who benefit from this klavern of crooks, thieves and con-men are those who pony up the big bucks."

- Doug Thompson

http://www.capitolhillblue.com/artma...cle_6373.shtml

[L.A. BRONCOS FAN]

"It's a good thing that friendly nations like Saudi Arabia, Russia, and Venezuela are willing to sell us oil. That way, we don't have to use up all our remaining oil in four years. And its a good thing we can pay for that oil in dollars. What else could we trade for it? Tanning booth hours? Back episodes of "Sex in the City?" Free day passes to Six Flags?"

- James Kunstler