Oil prices soar after Energy Department report

[raccoon]

Source: Associated Press

Oil prices soar to near $137 a barrel after Energy Department reports falling supplies

NEW YORK (AP) -- Oil prices soared Wednesday as the dollar fell and the Energy Department issued a mixed report on the nation's fuel inventories. At the pump, gas prices rose to a new record over $4.05 a gallon.

Light, sweet crude spiked up nearly $5.50 to $136.80 a barrel soon after the report's release, then retreated to trade up $3.06 at $134.37 a barrel on the New York Mercantile Exchange.

The dollar's travails again sent oil prices rising. The euro bought $1.5539, up from $1.5449 Tuesday. Oil prices have closely tracked dollar moves; prices rose sharply last week when the dollar fell, then retreated more than $7 earlier this week as the dollar gained ground.


Many investors buy commodities such as oil as a hedge against inflation when the dollar falls. Also, a weaker greenback makes oil less expensive to investors dealing in other currencies. Many analysts believe the dollar's protracted decline is the primary reason oil prices have doubled over the past year.








Read more: http://biz.yahoo.com/ap/080611/oil_prices.html

---

Bold is my own.

[liberal N proud]

1. Energy Department? Our own fucking government is part of this scam

The bu$h regime appointed department officials making sure the price stays inflated.

[SpiralHawk]

2. Nice work, Republicon oil cronies. Ptooey.

Why do republicon oil cronies want to rape America?

[Barrett808]

3. Other analysts believe that flat supply and rising demand is the primary reason for high oil prices

We're at the plateau. Better get used to it.

[Hydra]

4. Enron 2.0

And they're getting away with it AGAIN.

[Barrett808]

5. We should distinguish between a manufactured supply crisis and a real one

With Enron and associated power companies, the crisis was entirely engineered; they essentially cornered the West Coast power market.

Petroleum production is a different animal, and is this case, the production shortage is quite real.

[Hydra]

7. I stand by what I said

I've read the reports and the behind the scenes info. This is a deliberate shortage, all over again.

People told me the same thing when I called it in California. "It's a supply problem!"

It was a supply problem- the problem was the supplier.

[Barrett808]

8. We have every right to be suspicious after the Bush mob rigged the West Coast energy market...

...but there is no swing capacity left in the world's oil fields. OPEC and all the oil majors are producing as fast as possible just to offset production declines in the aging fields. We are "running to stand still"; production and exports are declining at an alarming rate. Discovery of new fields lags far behind production -- we burn 4 barrels for every new barrel we find. World oil supply hovers around 86 mbpd, but demand is over 87 mpd. The scarcity is real and worsening. I expect by next year we'll long for the days of $137/bbl oil.

[Hydra]

10. $200 oil

Exactly how Bush wants it.

I'm not going to argue the point. The reports are out there, the admissions of reduced production, the calculated effects of Bush to raise the prices.

Honestly, if we weren't completely dependent on it, I wouldn't care. The era of black gold should have been over decades ago.

[lakeguy]

21. no president is going to affect prices without

a national energy plan investing heavily in alternatives. mexico, out third or fourth largest importer, is declining and will be done provided oil in 5-7 years. saudis are flat and will decline. russia is or will be in export decline soon. norway is way past peak production and is in decline. the reduced production is due to declining oil in the worlds largest fields. how is bushitler or any other pres going to change that?

you can pretend it's some grand bush conspiracy or look at the worlds production #s and what's actually left in the ground. the only country with substantial untapped reserves in iraq. no surprise why we invaded the country given the current situation.

blaming bush for purposfully reducing supply (even though he can't) only makes the situation worse. we are running out of oil and need to do something about it now.

[Texifornia]

11. Speculation is a part of it....

but the production situation is real. It is possible that your "behind the scenes" info tells you where 4+MMBBD worth of production per year will come from.

The northern section of Ghawir is pulling a 50% water cut. I'm certain you know the implications.

My estimate is that there is about $40/bbl worth of war premium/speculation in the price. That still leaves a price around $100, and that is supply driven.

[Finishline42]

12. Consolidation of Big Oil sure didn't help.

Mergers and buyouts concentrated production in a few major companies that allows them to control supply.

Exxon and Mobil
Conoco and Phillips
Marathon and Ashland

[Javaman]

13. I understand your frustration...

however, you might want to read this, it comes out each week...

Peak oil review -- June 9, 2008
http://www.energybulletin.net/45650.html

it will arm you with the facts.

[Hydra]

14. I already have the facts

and have posted them here. I don't like to fight about this issue, though, because other than the supply controlled disaster, my heart isn't in the issue.

We shouldn't be using oil anyway.

[Javaman]

15. huh, okay, so you know full well how 70% of the worlds major

oil fields are in decline, right?

you know that mexicos cantarall field, their largest oil field declined 24% in the last year alone, right?

You know that both russian and norwegian oil fields are in decline, right?

You know that aside from canada and saudi arabia, all of the countries we import oil from are in decline, right?

you know that nigeria's oil fields have been 1/2 million barrels off due to the MEND attacks, right?

If so, I'm glad you are well informed.

[Hydra]

16. Like I said, my heart isn't in the fight

If everyone wants to excuse the people at the top for their crimes, who am I to object? Besides, it doesn't matter- I was right about the California energy crisis "in defiance of all facts", but I didn't even get a "you were right" from that.

By all means, carry on and blame it on external factors, if it makes you happy.

[Javaman]

17. so, just because I point out the fact that oil is in decline

you still refuse to believe that it is playing a role in its high cost?

or the fact that oil transactions are based on the US dollar which is currently in the toilet also has nothing to do with the high price?

fine. whatever.

I agree there is some manipulation going on, but not to the level you believe.

we are at plateau. there will be and have been wild fluctuations.

I'll see you on the other side of the peak.

[Barrett808]

19. Hydra, you were right about California.

There's no doubt that the Enron energy "crisis" was completely engineered, with political cover provided by Bush and Cheney.

But the world oil production situation is quite different. There's some speculation, certainly, and maybe some gaming, but the dominant factor is the tight supply. Frankly, it's much scarier to think that high fuel costs are caused by fundamental geological constraints -- gaming, while very bad, could be detected and stopped.

[David__77]

6. This is NOT a bubble!

Just saying. I strongly believe that oil prices were held low relative to the actual economic value of oil due to the offensive to neo-liberalism and the weak state of developing country institutions during the 1990's and later 80's. The US is not able to keep everything in line any more, thankfully.

[TomClash]

9. When you have to buy with Bush Dollars

you are poorer.

[ohio2007]

18. House Panel Defeats Coastal Drilling Expansion

WASHINGTON -- A leading congressional proponent of more offshore oil drilling along the Atlantic and Gulf Coasts promised to continue his fight Wednesday, after being dealt yet another defeat.
A Democratic-controlled House panel voted 9 to 6 in a party-line vote against lifting the 27-year-old offshore drilling moratorium at a time when gasoline prices are expected to float at or above $4-a-gallon for the summer.
The amendment by Rep. John Peterson, R-Pa., would have opened drilling off Florida’s Gulf Coast and off the Atlantic coasts of North Carolina, Virginia and South Carolina in now-protected areas 50 to 200 miles offshore. His measure also would have opened the Pacific coast to oil drilling.

The first 50 miles off shore would be closed to drilling.

“There is no valid reason for Congress to continue keeping Americans from the energy resources they own and are in dire need of,” said Peterson, whose district includes what once was a major oil- and gas-producing area and former home of Quaker State Oil.


snip


http://www.mgwashington.com/index.php/news/article/house-panel-defeats-coastal-drilling-expansion/1233

<crickets>

[paparush]

20. PS - The US has NO Grain Reserves nt

[UNCLE_Rico]

22. I'm afraid 'many analysts' don't see this the right way ...

This analyst believes the primary reason for the dollar's protracted decline is the fact that oil prices have doubled over the past year.

Think about it.

The primary value of our currency to other nations lies in the dollars capacity to BUY OIL. If a dollar cannot buy as much oil, one can reasonably say that it has lost it's value.