http://news.independent.co.uk/world/middle_east/article2132569.ece Future of Iraq: The spoils of war How the West will make a killing on Iraqi oil riches
So, we have the 3rd largest Oil reserves and them NOT being a part of Opec.....lol....so oil and gas get cheaper, and the economies of Opec take a hit.... Yeah, the Iraq war was not about Oil at all......and in 30 years alternative fuel sources will be the rage. DD
Here's something that might get oil to go up again, not drastically but...: http://www.nytimes.com/2007/01/09/world/europe/09belarus.html MOSCOW, Jan. 8 — Supplies of Russian crude oil headed to European markets came to a halt overnight, officials said Monday, in the latest manifestation of rapidly deteriorating relations between Russia and Belarus. Skip to next paragraph Multimedia Audio Back Story With Steven Lee Myers (mp3) The head of Russia’s oil pipeline monopoly accused Belarus of illegally siphoning oil beginning Saturday in an escalating dispute over duties and transit fees. Belarus’s foreign ministry acknowledged the halt but denied responsibility, suggesting that the Russians had instead caused the stoppage at their common border. Regardless of the cause, the disruption along the Druzhba, or Friendship, pipeline affected supplies of crude oil headed to Poland, Germany and Ukraine. In the short term, at least, the halt should have a minimal effect, because refineries in both countries maintain reserves. In the longer term as well, the disruption is not as threatening as a shut-off of natural gas, because alternative sources of oil are more readily available. Still, a prolonged disruption could be worrisome. Oil prices rose on the news, and the dispute rekindled concerns in Europe about the reliability of energy supplies from Russia. “This shows us once again that arguments among various countries of the former Soviet Union, between suppliers and transit countries, mean that these deliveries are unreliable from our perspective,” Poland’s deputy economics minister, Piotr Naimski, said in televised remarks, according to The Associated Press. The shutdown of Druzhba, one of the highest-capacity pipelines in the world, took place a week after Russia and Belarus negotiated a last-minute agreement that sharply raised the price Belarus would have to pay for natural gas. The deal came after brinkmanship by each side that raised the specter of disruptions of natural gas deliveries across Europe, like one that followed a dispute between Ukraine and Russia in 2006. Belarus, led by an autocratic president, Aleksandr G. Lukashenko, has reacted furiously to the terms of that deal and to Russia’s tactics in the talks that led to it. Last week, Belarus called Russia’s conduct shameless. Russia has responded by saying that it is simply raising the costs of oil and gas to market prices. Belarus and other former republics of the Soviet Union have long bought oil and gas at a discount, compared with European customers. “Belarus has cast prudence to the wind,” Andrei V. Sharonov, a deputy economic development minister, said in remarks on the Moscow radio station Ekho Moskvy, referring to what he, too, called the illegal siphoning of oil. “This looks like a trade war.” He later said that Russia would suspend all oil shipments through Belarus, blaming it for the initial disruptions. His remarks suggested that the disruption could last indefinitely. For the last decade, Russia and Belarus, two countries bound by history and deep ethnic, cultural and social ties, have moved haltingly toward the creation of a union, with a common currency and even, ultimately, the creation of a single unified state, as negotiated in a 1996 treaty between Mr. Lukashenko and President Boris N. Yeltsin. The union has never come to fruition under President Vladimir V. Putin. In the past month, the two countries have seemed instead to be negotiating the terms of their divorce, which, like many, is becoming nasty. Beginning New Year’s Day, Russia began charging Belarus $100 per thousand cubic meters of natural gas, compared with the $46 it charged last year. The price is to increase steadily to the level charged in Europe — now $265 on average — by 2011. As those negotiations dragged on bitterly, Russia also imposed a separate duty of $180 a ton on oil it sold to Belarus, which has been sold at steeply subsidized prices. Mr. Lukashenko’s government responded to the oil duty last week by announcing a $45 a metric ton fee on shipping oil across Belarus on its way to other parts of Europe. These are the fees are at the heart of the dispute that has shut down the pipeline. Mr. Sharonov, in his radio interview, said Mr. Lukashenko’s government had begun seizing the oil as payment for the transit fee. The head of Russia’s pipeline monopoly, Semyon M. Vainshtok, said in a statement that Belarus had siphoned 79,900 metric tons of oil since Saturday “without warning anyone.” He said, “Transit is a sacred cow,” and vowed to use other means of transport to supply customers in Europe. On Sunday, prosecutors in Belarus filed suit against Mr. Vainshtok, accusing him of having violated customs duties by not paying the new transit fee. A hearing scheduled for Monday, however, was canceled. In Belarus, there were conflicting reports about what had unfolded. While the foreign ministry denied responsibility, an official from the Druzhba pipeline told Russian news agencies that operations had been halted on orders from Belneftekhim, the Belarus pipeline monopoly. Neither the ministry nor the companies would elaborate. Belarus has used its cheap supplies of oil and gas to shore up a Soviet-style economy and earn hard currency, in the case of oil, by exporting refined products at world prices. For Mr. Lukashenko’s government, the changing economics could weaken his iron control on the country of 10 million. “The Belarussian people may not realize the extent to which they have been propped up by Russian energy, the extent to which the Belarussian miracle that Lukashenko talks about was built on legs of clay,” said Rory MacFarquhar, an economist with Goldman Sachs in Moscow. The impact in Belarus, where the news media is tightly controlled by the state, remains uncertain. Pavel Daneyko, the director of the Institute for Privatization and Management, a business consultancy in Minsk, the capital of Belarus, said Mr. Lukashenko’s government faced two difficult options: a liberalization of the country’s economy or a populist propaganda war against Russia. “If there is a clear war with Russia,” he said by telephone, “then the society may be able to weather the situation.”
Yeah, I would have thought so, too. But it didn't. Oil went down yesterday. AND IT'S DOWN A $1.34 AS OF 10 A.M. TODAY. IT'S TRADING AT $54.75/BARREL RIGHT NOW.
That's great then. What's funny though is I have yet to see gas prices drop in my area. It is still being sold for $2.09 and above. When oild was at the $57 mark last year it got down to $1.90 quickly. I'll check again today.
yeah, i'm hearing you'll start seeing the change this weekend. the "analysts" are saying what you're paying right now for gas will be as high as it gets until May.
It turns out that almost all of the sell-off is attributable to two primary factors. 1) Producers hedging their oil price exposure entering the new year (When producers hedge they are selling contracts and if too much selling occurs at once prices will fall) 2) Commodity indices altering their commodity exposure by re-weighting certain sectors such as energy after the new year. The 5-year deferred market has settled down now around $62.50/barrel. As for the February contract, the fact that it broke through the $55 level is important since that was a technical support level. If there is any more bearish news in the oil markets the prompt price could drop further, although it will still be temporary.
everything in a market is temporary. it's a question of when and how low will it go before it starts rising again. not whether it will ever rise again.
Apologies for the ambiguity, by temporary I mean no more than a few weeks. February will likely be the worst month, with prices increasing marginally thereafter.
i said before i thought prices would ultimately settle on average around $50-$55/barrel. i still think that's where we're headed. we'll see.
http://www.chron.com/disp/story.mpl/headline/biz/4459509.html Mother Nature calls shots on oil Analysts say there's little OPEC can do to counter weather's effects By KRISTEN HAYS Copyright 2007 Houston Chronicle On the decline Daily closing price Oil prices could continue to fall whether or not OPEC intervenes with more production cuts unless a cold snap interrupts the Northeast's balmy winter and jump-starts weak demand, an oil economist said Tuesday. Continued warm weather in what is supposed to be the coldest month of the year is leaving robust stockpiles of heating oil. That, coupled with weak demand in the U.S. and other developed countries, will exert more downward pressure on crude prices no matter what OPEC does to reduce supplies, said Philip Verleger, an independent economist who heads PK Verleger in Aspen, Colo. "There's nothing OPEC can do about this problem short of figuring out how to force Mother Nature to make it cold," he said. But for consumers, who relate to oil prices mainly by what they pay for gasoline, the drop is good news. "Without doubt, there is downward pressure on all the markets, especially in the East, where we're just overflowing with heating oil," said Dan Gilligan, president of the Petroleum Marketers Association of America in Arlington, Va. He said the 3-cent drop in gasoline last week is "definitely attributable" to that pressure, which he expects to continue for the foreseeable future. Oil prices fell Tuesday to their second-lowest point in seven months amid the continued warmer-than-normal Northeast winter as well as the sell-off by hedge funds and commodity investors leaving the market. Several analysts said the Organization of the Petroleum Exporting Countries has lost some credibility as a reliable entity to stem price declines because of its spotty follow-through on production cuts announced last year. "OPEC could well emerge as a downward catalyst for oil prices in 2007 if its demonstrated inability to meaningfully implement stated production targets continues to worsen," Eurasia Group analyst Greg Priddy said in a research note Tuesday. Oil prices closed at $55.64 on the New York Mercantile Exchange. That's a nickel higher than last Thursday's $55.59, but far lower than last July's high of $77.03. Gilligan said that in general, it takes two or three weeks to see a 3- to 5-cent drop in the price of a gallon of gasoline after crude drops by a dollar. Merrill Lynch & Co. analysts Francisco Blanch, Sabine Schels and Gustavo Soares said in a report Tuesday that mild temperatures in the Northeast reduced oil demand by 80,000 barrels a day in December and 90,000 this month. The Northeast is the world's largest market for heating oil. Reduced demand Worldwide, temperatures reduced demand in developed countries by 350,000 barrels a day in November, 300,000 in December and will likely trim January demand by 700,000 barrels a day, the report said. In total, that demand could fall by nearly 38 million barrels relative to normal seasonal needs. OPEC had announced a 1.2-million-barrel-a-day cut to begin in November, but Priddy said output has been reduced by less than 700,000 barrels a day. OPEC announced an additional cut of 500,000 barrels a day at its meeting in mid-December to be implemented Feb. 1. The Merrill report noted Saudi Arabia, the United Arab Emirates and Kuwait "have been the most compliant members of the cartel," trimming output by 460,000 barrels a day, while Indonesia and Venezuela have "barely" reduced production. Sell-offs play role Citigroup analyst Doug Leggate said another factor plays into the decline: continued sell-offs by hedge funds and commodity investors that entered the market as or before prices rose to a summit of $77.03 a barrel last July. "Weather may not be the major factor here," Leggate said in a report Tuesday. "Heating oil margins have held up relatively well, suggesting oil prices have come under separate pressure." He said Citigroup's research shows that the influx of funds into the commodity sector since 2003 has accounted for $35 per barrel of the move in oil prices. "The severity of the recent move lower points to fund exits as the only plausible explanation, in our view," he said. Leggate advised investors to be cautious regarding expectations of oil sector performance "until a positive catalyst re-emerges," such as an OPEC cut, a cold snap "or, more likely, the run-up to the summer driving season." The Merrill report noted that a softened manufacturing sector in the fourth quarter of 2006 compared to the previous quarter as well as a continued decline in construction spending has likely dampened industrial energy demand. Transportation demand also has lightened up. However, the report said strong payroll growth and low unemployment are raising consumer spending and confidence, and low gasoline prices as well as healthy equity markets open the door to more disposable income. "Combined with positive economic sentiment in Europe and Asia, this supports our view that the global growth momentum is improving," the Merrill report said.
Look at the last paragraph. Where was this guy last year???????? I hadn't heard anyone say it was headed for $40/barrel. http://chron.com/disp/story.mpl/headline/biz/4463531.html Jan. 11, 2007, 9:30AM Oil prices fall amid rise in U.S. energy inventories By GEORGE JAHN Associated Press TOOLS Email Get section feed Print Subscribe NOW VIENNA, Austria — Oil prices extended their declines today, briefly falling below $53 a barrel, after U.S. government data showed a larger-than-expected increase in domestic inventories of gasoline and heating oil. The easing of tensions between Russia and Belarus and the resumption of oil shipments through Belarus toward EU consuming countries also contributed. Light, sweet crude for February delivery dropped 60 cents to $53.42 in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract had fallen $1.62 on Wednesday to end at a 19-month low of $54.02 a barrel, and touched a low of $52.94 in today's trading. Brent crude for February delivery dipped 16 cents to $53.53 a barrel on the ICE Futures exchange in London. Heating oil futures were down nearly a cent at $1.5170, while natural gas prices dipped nearly 17 cents to $6.588 per 1,000 cubic feet. Oil prices have declined more than 11 percent the past two weeks, as speculators have sent futures lower on expectations of lower winter demand and a belief that the Organization of Petroleum Exporting Countries lacks the discipline to comply with its recent output cuts. The U.S. Energy Information Administration reported that commercial stockpiles of gasoline jumped 3.8 million barrels last week to 213.3 million barrels, while inventories of distillate fuels, which include heating oil, climbed 5.4 million barrels to 141 million barrels. "The market is overwhelmingly bearish and in Asia, the market is reacting to the very bearish product increase which went up quite a bit," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. It's not just energy prices that have been falling. The broader commodities market have taken a hit in 2007 by what some analysts say has been an exodus of investment fund money. Industrial metals such as copper, and precious metals including gold, have dropped since the year began. "The financial market is rebalancing its portfolio and shifting money out of commodities. Oil has been plunging together with metals," Shum said. Adding to the selling pressure today was news that Russia and Belarus had resolved their dispute over oil supplies. Russian oil was flowing again through a Belarusian pipeline late Wednesday, according to Belarusian official Alexei Kostuchenko, general director of pipeline operator Gomeltransneft-Druzhba. Still, Vienna's PVM Oil Associates suggested that even if the dispute had continued it would not have added too much upward pressure to prices, noting that "shortfalls in crude oil supply to Europe can be easily replaced from strategic reserves and by utilizing OPEC's rising excess production capacity." Crude oil's steep decline has spurred predictions of further losses and even an end to the eight-year bull market, which led oil from a low of $10.35 in 1998 to the record highs of last summer. Speculators who for years bet on rising energy prices have started adding to bets on falling prices, according to the latest U.S. government data. "I've already said last year that oil prices should be going towards $40 a barrel so there's nothing special. Its no surprise to see it drop below $55," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.
Some interesting points in this article: Supply is high, long-term. Too high to support prices like we've seen. OPEC is falling apart...despite threats of cutbacks, this article indicates that their exports will actually increase. Pgabriel -- I bolded the part about what comprises the cost of gasoline for you from our old discussion about that. http://www.chron.com/disp/story.mpl/ap/business/4467010.html Jan. 12, 2007, 2:54PM Oil prices rebound toward $53 a barrel By MADLEN READ AP Business Writer © 2007 The Associated Press NEW YORK — Oil prices rebounded by more than $1 a barrel Friday, but analysts are hesitant to call a turnaround in a market that's down more than 13 percent this year on dampened heating fuel demand. Unless prices rally hard next week, U.S. drivers should see some cost savings _ at least until the spring driving season begins. Gasoline prices have fallen by about six cents, on average, since the year started. "Roadside, you're going to see much lower prices. We're already seeing 15 states with prices below $2 a gallon," said Tom Kloza of the Oil Price Information Service. However, the usual demand pop for gasoline in the spring will likely drive crude prices higher once again, and in turn, pump prices. "Demand is terrific. That's what people need to recognize. In first 10 days of this January, we've used more gasoline than in first 10 days any other year," Kloza said. The average U.S. retail price for a gallon of gasoline has slipped from $2.33 on Jan. 1 to $2.27 on Friday, according to data from AAA. If crude prices hold at around $52 a barrel, experts estimate that pump prices could fall about 15 cents further. About half of the retail cost of gasoline is determined by the price of crude oil, says the U.S. Department of Energy. The rest takes into account distribution and marketing, refining costs and profits, and taxes. Oil distributors are reluctant to cut retail costs too much based on short-term fluctuations in the market _ the market price of crude would have to stay at current levels for consumers to see significant savings at the gas station. "Prices at the pump have only inched down, even though prices at the wholesale level have fallen down dramatically," said James Cordier, president of Liberty Trading Group in Tampa, Fla. "The oil companies are holding their premiums, and then some." Light, sweet crude rose $1.11 to settle at $52.99 on the New York Stock Exchange, after plummeting to a new 19-month trading low of $51.56 earlier in the day. It's down nearly 6 percent on the week and 13.2 percent since closing 2006 at $61.05 a barrel. Many traders decided to buy into the oil market on Friday, in a typical end-of-the-week short-covering move _ in other words, traders who had bet on an even sharper decline this week bought back their positions. Some analysts are predicting prices to extend their drop to $40 a barrel, a price not seen since 2004. The energy market has had a hard time maintaining rebounds lately, despite several factors that have given prices a boost in the past: the possibility of another OPEC cut, tensions in the Middle East are high, global energy demand is growing, and violence in Nigeria has escalated. Attempts to rally this year have been rebuffed by persistent mild weather in parts of the United States, Europe and Asia that consume heating oil; a number of investment funds taking short positions, or bets that prices will fall; and skepticism that OPEC is carrying out the production cuts it has promised. Reports have circulated that OPEC is planning to make further cuts. Dow Jones Newswires cited on Friday a senior delegate of the cartel saying that OPEC is discussing whether to hold an emergency meeting Jan. 20-21 and make an additional 500,000 barrel-a-day cut to the previously announced 500,000 barrel-a-day cut set to begin Feb. 1. The Organization of Petroleum Exporting Countries' credibility, though, has dwindled in the eyes of many traders. On Thursday, Dow Jones Newswires reported that tanker tracker Oil Movements said crude exports from OPEC countries are expected to rise 350,000 barrels a day to 24.5 million barrels a day in the four weeks ending Jan. 27, despite OPEC's announcements to reduce production by 1.2 million barrels of oil a day starting last November. "The cohesiveness that OPEC used to enjoy is somewhat unwinding," Cordier said, adding that based on various reports it appears that while some nations such as Saudi Arabia are complying with cuts, others including Venezuela haven't been so diligent. "Let's face it _ some OPEC producers produce oil for $10 a barrel. So it's not like they're giving it away if it's at $52," Cordier said, noting that he estimates OPEC has only delivered on about half of its promised reductions. Because the cuts began in November, they have only just begun to hit the market. "If OPEC can improve compliance, then prices will be pushed higher in February. If OPEC fails in balancing the market, and gets little help from the weather, then the price fall could continue over the entire quarter," wrote Global Insight oil analyst Simon Wardell in a research note. At this point, though, demand seems to be the big market driver, Cordier said, noting that the world's had ample supply for years. "That OPEC is talking about cutting 500,000 barrels here, a million barrels there, it really doesn't matter," he said. The historically warm winter has caused a glut in U.S. petroleum products. On Wednesday, government data showed big increases in domestic gasoline and heating oil inventories. The National Oceanic and Atmospheric Administration said Thursday that some below-normal temperatures are expected to hit soon in the Northern U.S., but it expects warmer-than-normal weather overall in the region through March. Crude oil had been in an eight-year bull market until last summer's high above $78 a barrel. In 1998, oil traded as low as $10.35. In Nymex trading Friday, heating oil gained 2.32 cents to settle at $1.5036 a gallon; gasoline rose 4.15 cents to settle at $1.4320; and natural gas rose 30.9 cents to settle at $6.601 per 1,000 cubic feet. Brent crude on London's ICE Futures exchange rose $1.25 to settle at $52.95 a barrel.
http://www.chron.com/disp/story.mpl/headline/biz/4473530.html Saudi says it won't support more OPEC cutbacks. They know they can't defend this price with a straight face. And they know that the talk of cutbacks without real cutbacks makes them all look silly, going forward. Oil is down about $1/barrel so far today.
Well, gasoline in my city has fallen below the $2 mark again and at some stations it is as low as $1.89/gallon. Looks like the fall continues today as oil is below $52/barrel right now.
