Oilcast #10: It’s the refeneries stupid

In our tenth Oilcast we look at the quarterly OPEC meeting this week in Vienna. Does the oil cartel want to avoid being viewed as the oil-movie bad guys? They reminded us that they are pumping all they can.

And all of this in the middle of another week of sustained price increases.

Plus, another speech by George W. Bush about elusive “energy independence”, some harsh decline rates from British North Sea production and the struggle facing China over their gigantic energy needs.

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Singapore petrol price war

In the midst of crude prices going up even as OPEC lifted production quotas, counter-intuitively, Singapore seems to be having a petrol price war going on.todayonline.com : The battle began at the start of the week when Shell raised its discount from 10 per cent to 13 per cent. The other companies quickly responded, and […]

Gold Prices Climb to Seven-Week High as Energy Costs Gain

Gold prices in New York rose to the highest in seven weeks as an increase in energy costs boosted the appeal of the precious metal as a hedge against inflation. The Organization of Petroleum Exporting Countries, already producing near its limit, agreed yesterday to boost output quotas for a fifth time in a year with […]

Bush Says ‘What, Me Worry?’ on Global Warming

Bush’s most stunning lack of curiosity concerns global warming. The heat wave this spring, prairie droughts, melting glaciers — all flukes to him. Bush is always awaiting yet another study to prove a link between greenhouse gases and global warming because the one in his hands isn’t good enough. To make sure he didn’t get […]

US Warns IAEA It Won’t Allow Iran To Develop Nuclear Arms

The U.S. Thursday warned it would never allow Iran to develop nuclear arms. “We will not accept a nuclear-weapons capable Iran,” Jacki Sanders, the chief U.S. delegate at the meeting of the International Atomic Energy Agency, told the U.N. nuclear agency’s board meeting. Iran cautioned Thursday that it might soon end its freeze on uranium […]

Mexico and Norway Can’t Help on Oil Prices

The top oil officials from Mexico and Norway on Thursday said they do not have any spare capacity to help ease crude oil prices with increased supply. The two non-OPEC members met the day after the oil cartel resolved to raise its oil production target by 500,000 barrels per day, a move that did little […]

Oil Jumps to 2-Month High as Rising Demand May Tax OPEC Supply

Crude oil rose to the highest in more than two months amid signs that surging global fuel consumption will tax the production capacity of OPEC and other exporters. Fourth-quarter demand will average 85.91 million barrels a day, a monthly report by the Organization of Petroleum Exporting Countries showed. Members need to pump 30.6 million barrels […]

The balance scale is swinging negative

As the picture is starting to develop for global oil supplies this winter many of the discussions seems to focus on the overall size of the demand/supply levels. And when you are talking about numbers on the order of 85 mbd a variation of 100,000 bd is not a very large number. Thus the seeming risks of small changes in production are not evident.

However if we focus more narrowly on the likely difference in range between available supply and overall demand, then the range between potential oversupply and shortage is somewhere in the region of 1 mbd or less. It is in this framework that we need to look at some of the likely influences on supply between now and the end of the year, as demand is likely to grow steadily from this point forward. It was Everett Dirksen who first said

INTERNATIONALIZING U.S. ROADS

The US is undergoing what is perhaps the most frenzied road building effort since the 1950s and 60s. Why? Peak Oil is here now. What purpose does this serve? I suspect that it is perhaps one of the largest giveaways of federal funds to corporate cronies in history. Much of the money will find its […]

OPEC Trims 2005 World Oil Demand Growth Forecast

The Organisation of Petroleum Exporting Countries (OPEC) has revised downwards its estimate for 2005 world oil demand by 20,000 barrels per day (bpd) to 83.9 million bpd, the group’s monthly report said on Thursday. It said it was projecting a a growth rate of 2.2 percent or 1.8 million bpd. “The downward revision to last […]

Pirates raid supertanker at Iraq’s Basra

Armed pirates raided a supertanker anchored close to Iraq’s Basra oil export terminal in the early hours of Wednesday, in the latest serious security breach at the facility. Gulf Agency Company (GAC) said the raid comes only two weeks after pirates attacked the crew of a supertanker waiting to load crude oil at the southern […]

Saudi Arabia Exempt From Nuke Inspections

VIENNA, Austria – Board members of the U.N. atomic watchdog agency approved a deal Thursday that exempts Saudi Arabia from nuclear inspections, despite serious misgivings about the arrangement in an era of heightened proliferation fears. Although the Saudis resisted Western pressure to compromise and allow some form of monitoring, the board of the International Atomic […]

G8 climate change research under threat

A new draft communique on climate change for next month’s Group of Eight summit in Scotland has removed plans to fund research and put into question top scientists’ warnings that global warming is already under way. The text seen by Reuters, titled Gleneagles Plan of Action and dated June 14, has been watered down from […]

Homegrown Fuel Supply Helps Brazil Breathe Easy

While Americans fume at high gasoline prices, Carolina Rossini is the essence of Brazilian cool at the pump.Like tens of thousands of her countrymen, she is running her zippy red Fiat on pure ethanol extracted from Brazilian sugar cane. On a recent morning in Brazil’s largest city, the clear liquid was selling for less than […]

At long last, it’s ‘nuclear option’ time

T here is now a great deal of scientific evidence showing nuclear power to be an environmentally sound and safe choice. A doubling of nuclear energy production would make it possible to significantly reduce total [greenhouse gas] emissions nationwide. In order to create a better environmental and energy-secure future, the [United States] must once again […]

U.S. checking possibility of pumping oil from northern Iraq to Haifa, via Jordan

The United States has asked Israel to check the possibility of pumping oil from Iraq to the oil refineries in Haifa. The request came in a telegram last week from a senior Pentagon official to a top Foreign Ministry official in Jerusalem. The Prime Minister’s Office, which views the pipeline to Haifa as a “bonus” […]

Drip, drip, drip … What will the end of the oil era look like?

James Howard Kunstler was “very vexed” upon arriving in Boston Tuesday afternoon for a talk at the Boston Public Library. If you have read any of Kunstler

Bid to ban strikes in oil, energy

WORKERS in Australia’s power, oil and gas industries could lose their rights to strike under a radical proposal being considered by the Howard Government.A new business-backed taskforce, advised by law firm Clayton Utz, has told Workplace Relations Minister Kevin Andrews to effectively ban strikes in essential service industries.

Huge onshore wind farm is opened

The most powerful onshore wind farm in the UK, which has cost

Opec raises price target to $50 a barrel

The Organisation of the Petroleum Exporting Countries unofficially raised its price target on Wednesday to more than $50 a barrel, citing firm demand growth, refining bottlenecks and lack of economic damage from high oil prices.(…) For the new basket to increase above $50 a barrel, this would translate to US and European benchmark crudes of about $57-$58 a barrel or near the record nominal levels reached in April. (…) Saudi Arabia claims it has another 1.5m b/d in production capacity on top of its current output of 9.5m b/d, but it has not sustainably produced more than 10m b/d since the early 1980s. Ali Naimi, Saudi Arabia oil minister, said the kingdom’s spare capacity was largely made up of low quality oils, known as heavy and sour crudes, which many refineries cannot use.

FT

Energy said to be focus of new European Commission

Energy will be the main focus of the new European Commission, according to a recent memo from Energy Commissioner Andris Piebalgs. “Energy is one of the key sectors of the European economy, vital to competitiveness, essential to meeting Europe’s Kyoto [Treaty on Climate Change] obligations, and a major factor in terms of security,” Piebalgs said.

OGJ

Energy Independence Through Hydrogen

To significantly reduce our dependence on fossil fuels, our electric generating plants will have to switch to renewable sources of energy, and the marketplace will have to agree on standards for producing, storing, transporting and utilizing hydrogen. That will take some time. Meanwhile, in the United States more than two-thirds of our power is generated […]

Morgan Stanley Economist Sees Oil Crash

The oil market may be quickly headed for a massive crash as global economic growth slackens, alternative energy gains ground and financial traders sense a price peak, an economist with Morgan Stanley said on Thursday. His projection for a multi-year bear cycle stands in sharp contrast to the super-spike scenario envisioned three months ago by […]

Power Outage Affects Thousands in Texas

A power outage darkened more than 70,000 homes in southeast Texas and forced some state prisons into lockdown mode as a precaution Wednesday night. The outage affecting Entergy customers in at least seven counties was blamed on a transmission failure. “At this point, we don’t know if it’s storm-related,” Entergy Texas spokesman David Caplan said. […]

Dutch energy research institute speaks plainly about Peak Oil

ECN published an excellent essay on the whole practical scope of peak oil and climate change. Very well structured, balanced and complete without sacrificing truth insofar as I can tell. http://www.ecn.nl/docs/library/report/2005/c05057.pdf p. 18: Presently the optimistic view prevails Mainstream thinking about the future of oil is generally optimistic about the timing and consequences of an oil […]

House budget would end rail service to 31 states

Peepers Comments: Let’s see….Amtrak’s federal debt-service payments are $250 million per year and its mandatory federal railroad retirement payments are $150 million annually. This proposed budget leaves only $150 million to tackle a multi-billion-dollar backlog of infrastructure safety and security repairs left neglected by years of scant federal funding. Or, the $150 million left over can be used to keep a few routes running that serve only 28 percent of the nation’s population, but on increasingly neglected infrastructure. Wouldn’t the ride down from the crest in peak oil be more bearable if we had a bigger and better rail system? Wouldn’t it make more sense to have each route offer more than one train a day so the entire route’s fixed costs could be spread among multiple trains generating multiples of revenue?

Chicago Sun-Times

Search for solutions must start now to avoid another energy crisis

From Doug Clifton, the editor of the Cleveland Plain Dealer:

In a world powered by oil and its derivatives, it takes no imagination to see the consequences of life without it – or even less of it. The economy would be the first to go. As oil supplies shrink, the price of everything, from gasoline to groceries, will soar.

Suburbs whose growth was fueled by cheap gas will shrivel and die. The trucks that brought goods to market will sit idle, as will the drivers who operated them. Entire industries will disappear. Our toasty warm homes will go cold.

Of course, we won’t do nothing. But will we do enough? And will we do it fast enough?

Plain Dealer

Plains Looks to Cash in on Rising Demand for Oil Storage

Plains All American Pipeline’s (PAA) (PAA) plans to build a new oil storage terminal at St. James, La., come as the market is rewarding refiners and marketers who build up oil inventories in storage for later use. The oil market has seen a shift to “a pronounced contango market,” wherein the price of near-term delivery […]

Flat Iraq Oil Exports in ‘05 A Shock, Critical – Libyan Oil Minister

Libyan Oil Minister Fathi bin Shatwan said Wednesday that news that Iraq’s oil exports would flat-line at a low 1.5 million barrels a day for the rest of the year were a shock and made the supply-demand balance far more critical. Iraqi Oil Minister Ibrahim Bahr al-Uloum said early Wednesday that the country’s oil exports […]

‘Twilight in the Desert’ author Simmons talks oil supply, int’l economy

Are the Saudis running out of oil, and are their reserve estimates accurate? What other sources might help fill the gap if Saudi production declines? And what will be the effects on the U.S. and world economies from steep drops in Middle East oil production? On today’s OnPoint interview … E&E Daily’s Brian Stempeck talks with Matthew Simmons, veteran oil analyst and author of a new book, “Twilight In The Desert: The Coming Saudi Oil Shock and World Economy,” about the future of world oil supplies and what it means for the international economy.”

E&E TV Video

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