Showing posts with label oil. Show all posts
Showing posts with label oil. Show all posts
Sunday, January 1, 2012
geopolitical news out of Iran along with the perce
Crude oil bulls get a Christmas gift from our friends in Iran, but will it hold? Oil closed above $100 a barrel for the first time in nearly two weeks on geopolitical news out of Iran along with the perce of oil shortige
Sunday, July 25, 2010
Tony Hayward's departure from his job as BP's, steps down ?
Tony Hayward's departure from his job as BP's chief executive will be at the center of the agenda when the company's board of directors meets Monday night, according to a source close to the company.
The board is meeting in advance of Tuesday's release of quarterly results, and the directors will weigh how best to confront or defuse criticism as the company unveils its best estimates of massive losses arising from the oil spill in the Gulf of Mexico.
Hayward, a geologist who has spent his entire career at BP, recognizes that he has become "a liability going forward" and is ready to step down, the source close to the company said. The source asked for anonymity because the company has not yet announced its intentions.
Hayward has come under sharp criticism from members of Congress, President Obama and many investment analysts for events leading up to the exploration well blowout. Some of his comments about the spill have been called insensitive to gulf coast residents.
Moreover, the company has struggled to stop not only the flow of oil but the flow of bad publicity, from complaints about the speed of payment of claims to gulf residents to doctoring photographs on its Web site. Some analysts say Hayward's exit would be a statement that someone is taking full responsibility.
One of the front-runners to succeed Hayward would be Robert Dudley, a Mississippi native who joined BP from Amoco after the two companies merged in 1998. Dudley, who was just put in charge of leading gulf coast cleanup efforts, would be the first American to run the company originally known as British Petroleum.
Another source who spoke on condition of anonymity said that other top executives might also be ousted, but the source close to the company said that decision would be left to the new chief executive.
Among the executives whose positions are widely considered to be tenuous are Andy Inglis, the Houston-based head of global exploration and production who is also leading the relief well effort; Doug Suttles, the chief operating officer who has played a prominent public role in addressing questions about BP's response to claims and cleanup issues; Lamar McKay, the president of BP America who had no responsibility for the exploration well but who has been given the unenviable task of defending the company before Congress.
Additional ousters could come of less prominent people further down the chain of command who might have made improper decisions about the design of the exploration well.
The board is meeting in advance of Tuesday's release of quarterly results, and the directors will weigh how best to confront or defuse criticism as the company unveils its best estimates of massive losses arising from the oil spill in the Gulf of Mexico.
Hayward, a geologist who has spent his entire career at BP, recognizes that he has become "a liability going forward" and is ready to step down, the source close to the company said. The source asked for anonymity because the company has not yet announced its intentions.
Hayward has come under sharp criticism from members of Congress, President Obama and many investment analysts for events leading up to the exploration well blowout. Some of his comments about the spill have been called insensitive to gulf coast residents.
Moreover, the company has struggled to stop not only the flow of oil but the flow of bad publicity, from complaints about the speed of payment of claims to gulf residents to doctoring photographs on its Web site. Some analysts say Hayward's exit would be a statement that someone is taking full responsibility.
One of the front-runners to succeed Hayward would be Robert Dudley, a Mississippi native who joined BP from Amoco after the two companies merged in 1998. Dudley, who was just put in charge of leading gulf coast cleanup efforts, would be the first American to run the company originally known as British Petroleum.
Another source who spoke on condition of anonymity said that other top executives might also be ousted, but the source close to the company said that decision would be left to the new chief executive.
Among the executives whose positions are widely considered to be tenuous are Andy Inglis, the Houston-based head of global exploration and production who is also leading the relief well effort; Doug Suttles, the chief operating officer who has played a prominent public role in addressing questions about BP's response to claims and cleanup issues; Lamar McKay, the president of BP America who had no responsibility for the exploration well but who has been given the unenviable task of defending the company before Congress.
Additional ousters could come of less prominent people further down the chain of command who might have made improper decisions about the design of the exploration well.
Saturday, July 17, 2010
BP's oil spill is all messed up & could be much worse ?
Found a grat artical on BP ......
T. -Westra
Sunday, July 17, 2010
The Deepwater Horizon oil spill has been with us nearly three months, and the news just isn't getting better. Even when there's hope of a cleanup, an accident sends us back nearly to square one. The American public is incensed, the finger-pointing refuses to end, the U.S.-British "special relationship" is straining, an offshore moratorium is declared but overruled, and even as the blown-out gulf well was sealed Thursday, anxiety lingered about whether the cap would hold. It's a mess in every sense of the word.
But this could be far worse. Imagine if BP were a state-owned oil company. Instead of reasoning with an incompetent chief executive, we'd be reasoning with a protectionist prime minister. Regarding BP, this is a thought experiment. But there are plenty of state-owned companies drilling in U.S. waters and abroad. The next oil spill could be more than just an economic and environmental crisis. It could be a diplomatic one.
As it is, the BP spill has caused tension between the United States and Britain. President Obama has been accused by British media and officials of xenophobia, waging a campaign of hate, and general "Brit-bashing." British Prime Minister David Cameron, meanwhile, has been criticized for not taking a stronger stance in favor of BP. At a time when some are saying the "special relationship" is over, a tiff over BP isn't exactly what the friendship needs.
Humor me and picture what would happen if BP were owned by the British government. We would be facing a situation in which a foreign government would be directly responsible for the ever-worsening spill on our domestic shores. The United States and Britain have had arguments before, and the nationalistic vitriol coming from both sides would be 10 times worse as issues of blame, recovery costs, national pride, domestic security, and economic competition are endlessly debated between leaders, economists, and cable pundits.
That's still the rosy scenario, because at least Britain is an ally. There are plenty of countries that are not, and they happen to own their oil companies -- Venezuela, China, Iran, and Russia being among the biggest. These petroleum-rich countries are placing more importance on their nationalized oil companies as a way to ensure a steady supply to guard against growing domestic demand and changing market conditions.
The oil industry is dominated by state-owned companies. Multinationals might have more name recognition with the public -- ExxonMobil, Royal Dutch Shell, BP, Chevron -- but they have full access to 6 percent of worldwide oil reserves. Eighty-eight percent of reserves are held by national oil companies, which also represent the majority of worldwide production. (It's unknown the percentage of oil that state-owned companies get from outside their countries' shores.) Companies such as Aramco, Petrobras, Sinopec and Pemex aren't household names, but they will be as oil becomes scarcer and they can throw around their weight even more due to their dominance of existing oil reserves.
We're already seeing potential hotspots, and the United States isn't the only country that should be worried. Chevron and Rosneft (owned by the Russian government) will begin drilling in the Shatsky Ridge of the Black Sea at the end of 2011. The Black Sea is bordered by Russia, Georgia, Turkey, Bulgaria, Romania and Ukraine -- countries that, to put it lightly, don't always get along. Any substantial accident would be seen as a Russian oil company contaminating its oft-slighted neighbors. Cue the international crisis.
More potential trouble could happen in the South China Sea, where China-owned CNOOC continues to expand its operations. As many as 10 countries surround the South China Sea, and its importance as a major shipping zone and an area of ecological diversity cannot be overstated. It is already a geopolitical hotspot, and any disaster caused by a state-owned company might unravel any diplomatic progress being made.
Even the Gulf of Mexico might see trouble again. Brazil's Petrobras drills in the gulf, and has been ramping up its operations in the area for several years. Brazil has relatively good relations with its neighbors in the Americas, but a Deepwater Horizon-style disaster could significantly change the political dynamics of the region.
It doesn't have to be a blown offshore platform that changes everything. Accidents can happen at any point in the supply chain. A recent death at the Port Arthur, Tex., refinery (owned by Shell and Aramco) highlights the potential for more tension. A substantially destructive accident at any step of the oil extraction, refining or transportation process could stain relations as well.
If we can be sure of one thing in the aftermath of the BP spill, it's that it won't be the last. Countries have not used the BP oil spill to stop offshore development: Deepwater production is anticipated to increase by two-thirds within five years, and state-owned oil companies in general are poised to continue their strong growth.
Strides in renewable energy aren't happening quickly enough to substantially reduce global demand of oil. That oil isn't plentiful enough to be extracted as easily anymore, meaning companies are using more and more potentially dangerous methods to get at it. As BP has shown, danger can only be averted for so long.
Thoughts ? Are you buying BP stock ?
T. -Westra
Sunday, July 17, 2010
The Deepwater Horizon oil spill has been with us nearly three months, and the news just isn't getting better. Even when there's hope of a cleanup, an accident sends us back nearly to square one. The American public is incensed, the finger-pointing refuses to end, the U.S.-British "special relationship" is straining, an offshore moratorium is declared but overruled, and even as the blown-out gulf well was sealed Thursday, anxiety lingered about whether the cap would hold. It's a mess in every sense of the word.
But this could be far worse. Imagine if BP were a state-owned oil company. Instead of reasoning with an incompetent chief executive, we'd be reasoning with a protectionist prime minister. Regarding BP, this is a thought experiment. But there are plenty of state-owned companies drilling in U.S. waters and abroad. The next oil spill could be more than just an economic and environmental crisis. It could be a diplomatic one.
As it is, the BP spill has caused tension between the United States and Britain. President Obama has been accused by British media and officials of xenophobia, waging a campaign of hate, and general "Brit-bashing." British Prime Minister David Cameron, meanwhile, has been criticized for not taking a stronger stance in favor of BP. At a time when some are saying the "special relationship" is over, a tiff over BP isn't exactly what the friendship needs.
Humor me and picture what would happen if BP were owned by the British government. We would be facing a situation in which a foreign government would be directly responsible for the ever-worsening spill on our domestic shores. The United States and Britain have had arguments before, and the nationalistic vitriol coming from both sides would be 10 times worse as issues of blame, recovery costs, national pride, domestic security, and economic competition are endlessly debated between leaders, economists, and cable pundits.
That's still the rosy scenario, because at least Britain is an ally. There are plenty of countries that are not, and they happen to own their oil companies -- Venezuela, China, Iran, and Russia being among the biggest. These petroleum-rich countries are placing more importance on their nationalized oil companies as a way to ensure a steady supply to guard against growing domestic demand and changing market conditions.
The oil industry is dominated by state-owned companies. Multinationals might have more name recognition with the public -- ExxonMobil, Royal Dutch Shell, BP, Chevron -- but they have full access to 6 percent of worldwide oil reserves. Eighty-eight percent of reserves are held by national oil companies, which also represent the majority of worldwide production. (It's unknown the percentage of oil that state-owned companies get from outside their countries' shores.) Companies such as Aramco, Petrobras, Sinopec and Pemex aren't household names, but they will be as oil becomes scarcer and they can throw around their weight even more due to their dominance of existing oil reserves.
We're already seeing potential hotspots, and the United States isn't the only country that should be worried. Chevron and Rosneft (owned by the Russian government) will begin drilling in the Shatsky Ridge of the Black Sea at the end of 2011. The Black Sea is bordered by Russia, Georgia, Turkey, Bulgaria, Romania and Ukraine -- countries that, to put it lightly, don't always get along. Any substantial accident would be seen as a Russian oil company contaminating its oft-slighted neighbors. Cue the international crisis.
More potential trouble could happen in the South China Sea, where China-owned CNOOC continues to expand its operations. As many as 10 countries surround the South China Sea, and its importance as a major shipping zone and an area of ecological diversity cannot be overstated. It is already a geopolitical hotspot, and any disaster caused by a state-owned company might unravel any diplomatic progress being made.
Even the Gulf of Mexico might see trouble again. Brazil's Petrobras drills in the gulf, and has been ramping up its operations in the area for several years. Brazil has relatively good relations with its neighbors in the Americas, but a Deepwater Horizon-style disaster could significantly change the political dynamics of the region.
It doesn't have to be a blown offshore platform that changes everything. Accidents can happen at any point in the supply chain. A recent death at the Port Arthur, Tex., refinery (owned by Shell and Aramco) highlights the potential for more tension. A substantially destructive accident at any step of the oil extraction, refining or transportation process could stain relations as well.
If we can be sure of one thing in the aftermath of the BP spill, it's that it won't be the last. Countries have not used the BP oil spill to stop offshore development: Deepwater production is anticipated to increase by two-thirds within five years, and state-owned oil companies in general are poised to continue their strong growth.
Strides in renewable energy aren't happening quickly enough to substantially reduce global demand of oil. That oil isn't plentiful enough to be extracted as easily anymore, meaning companies are using more and more potentially dangerous methods to get at it. As BP has shown, danger can only be averted for so long.
Thoughts ? Are you buying BP stock ?
Sunday, June 6, 2010
BP CEO Tony Hayward sold shares weeks before oil spill ? Buy Boycott BP Bumper Sticker
Mr Hayward, whose pay package is £4 million a year, then paid off the mortgage on his family’s mansion in Kent, which is estimated to be valued at more than £1.2 million.
There is no suggestion that he acted improperly or had prior knowledge that the company was to face the biggest setback in its history.
His decision, however, means he avoided losing more than £423,000 when BP’s share price plunged after the oil spill began six weeks ago.
Since he disposed of 223,288 shares on March 17, the company’s share price has fallen by 30 per cent. About £40 billion has been wiped off its total value. The fall has caused pain not just for BP shareholders, but also for millions of company pension funds and small investors who have money held in tracker funds.
The spill, which has still not been stemmed, has caused a serious environmental crisis and is estimated to cost BP up to £40 billion to clean up.
There was growing confidence yesterday that a new cap placed over the well was stemming the oil flow. An estimated three million litres a day had been pouring into the sea off the coast of Louisiana since the April 20 explosion, damaging marine life.
The crisis has enraged US politicians, with President Obama yesterday forced to cancel a trip to Indonesia amid a row over the White House’s response.
Mr Hayward, whose position is thought to be under threat, risked further fury by continuing plans to pay out a dividend to investors next month. Boycott BP Bumper Sticker - British Polluters Oil Spill Decal - Environmental
J. Swaie - R. Winett
His decision, however, means he avoided losing more than £423,000 when BP’s share price plunged after the oil spill began six weeks ago.
Since he disposed of 223,288 shares on March 17, the company’s share price has fallen by 30 per cent. About £40 billion has been wiped off its total value. The fall has caused pain not just for BP shareholders, but also for millions of company pension funds and small investors who have money held in tracker funds.
The spill, which has still not been stemmed, has caused a serious environmental crisis and is estimated to cost BP up to £40 billion to clean up.
There was growing confidence yesterday that a new cap placed over the well was stemming the oil flow. An estimated three million litres a day had been pouring into the sea off the coast of Louisiana since the April 20 explosion, damaging marine life.
The crisis has enraged US politicians, with President Obama yesterday forced to cancel a trip to Indonesia amid a row over the White House’s response.
Mr Hayward, whose position is thought to be under threat, risked further fury by continuing plans to pay out a dividend to investors next month. Boycott BP Bumper Sticker - British Polluters Oil Spill Decal - Environmental
J. Swaie - R. Winett
Saturday, January 3, 2009
Israeli Ground Troops In Gaza And Oil Spike Higher
Oil prices rise on stock bounce, Gaza conflict By Agence France Presse (AFP)
LONDON: Crude oil prices rebounded strongly on Friday in volatile trade, after earlier losing about $2.5 on profit-taking, as traders fretted over ongoing unrest in the key oil-producing Middle East. New York's main contract, light sweet crude for delivery in February, jumped $1.45 to $46.05 a barrel, after spiking $5.57 Wednesday on the New York Mercantile Exchange. Markets were closed Thursday.
In late London trade, Brent North Sea crude for February was up $1.30 at $46.89 after gains of $5.55 on Wednesday.
"Oil has continued to rise on supply disruption fears due to the conflict in the Middle East," said CMC Markets dealer James Hughes. "We do need to take the recent strong gains with a pinch of salt [because] the thin volumes has meant a continued period of volatility with a lack of news flow."
Israeli warplanes killed three young brothers and demolished a mosque in Gaza on Friday as Hamas vowed to avenge the deadly week-long offensive on its embattled stronghold.
Israeli Prime Minister Ehud Olmert met with senior ministers as tanks and troops waited on the Gaza border where a ground offensive is expected to start within days.
A missile fired by an Israeli jet slammed into a house in southern Gaza, killing three boys, aged from seven to 10. It was one of more than 40 fresh raids carried out in the overcrowded enclave on Friday.
Since Israel unleashed its air and sea campaign, at least 430 Palestinians have been killed, including 65 children, and 2,250 others wounded, according to Gaza medics.
In earlier trading on Friday, prices had dropped by around $2.50 as traders thought "that the rally was overdone on Wednesday," said Platts analyst Dave Ernsberger. He said prices would remain at current levels until US President-elect Barack Obama takes office on January 20 when his policies on the US economy, key oil producer Iran and the Gaza conflict will come to the fore.
The market experienced a tumultuous 2008, soaring to record highs above $147 a barrel in July before a sharp global economic downturn slashed demand for energy and pulled prices sharply lower.
Prices began this week with sharp gains over Gaza.
Analysts said the market had also been supported by evidence that OPEC was cutting output in line with an announcement earlier this month. Previous OPEC cuts have often been met with only partial compliance.
Crude started 2008 by vaulting above $100 for the first time. Continued geopolitical tensions then saw oil rocket to an all-time highs by mid-year. Overall during 2008 oil prices fell by about 54 percent
LONDON: Crude oil prices rebounded strongly on Friday in volatile trade, after earlier losing about $2.5 on profit-taking, as traders fretted over ongoing unrest in the key oil-producing Middle East. New York's main contract, light sweet crude for delivery in February, jumped $1.45 to $46.05 a barrel, after spiking $5.57 Wednesday on the New York Mercantile Exchange. Markets were closed Thursday.
In late London trade, Brent North Sea crude for February was up $1.30 at $46.89 after gains of $5.55 on Wednesday.
"Oil has continued to rise on supply disruption fears due to the conflict in the Middle East," said CMC Markets dealer James Hughes. "We do need to take the recent strong gains with a pinch of salt [because] the thin volumes has meant a continued period of volatility with a lack of news flow."
Israeli warplanes killed three young brothers and demolished a mosque in Gaza on Friday as Hamas vowed to avenge the deadly week-long offensive on its embattled stronghold.
Israeli Prime Minister Ehud Olmert met with senior ministers as tanks and troops waited on the Gaza border where a ground offensive is expected to start within days.
A missile fired by an Israeli jet slammed into a house in southern Gaza, killing three boys, aged from seven to 10. It was one of more than 40 fresh raids carried out in the overcrowded enclave on Friday.
Since Israel unleashed its air and sea campaign, at least 430 Palestinians have been killed, including 65 children, and 2,250 others wounded, according to Gaza medics.
In earlier trading on Friday, prices had dropped by around $2.50 as traders thought "that the rally was overdone on Wednesday," said Platts analyst Dave Ernsberger. He said prices would remain at current levels until US President-elect Barack Obama takes office on January 20 when his policies on the US economy, key oil producer Iran and the Gaza conflict will come to the fore.
The market experienced a tumultuous 2008, soaring to record highs above $147 a barrel in July before a sharp global economic downturn slashed demand for energy and pulled prices sharply lower.
Prices began this week with sharp gains over Gaza.
Analysts said the market had also been supported by evidence that OPEC was cutting output in line with an announcement earlier this month. Previous OPEC cuts have often been met with only partial compliance.
Crude started 2008 by vaulting above $100 for the first time. Continued geopolitical tensions then saw oil rocket to an all-time highs by mid-year. Overall during 2008 oil prices fell by about 54 percent
Sunday, August 31, 2008
Here we go again higher oil & gas prices !
Oil, Gas, Gasoline Rise in Special Nymex Session Before Gustav
By M. Habiby
(Bloomberg) -- Crude oil, natural gas and gasoline rose in a special trading session today as Hurricane Gustav approached the Gulf of Mexico, halting most oil and gas output and shutting local refineries.
Gustav will make landfall along the Gulf Coast sometime tomorrow as a ``major'' hurricane, according to the U.S. National Hurricane Center. It forced the mandatory evacuation of New Orleans and shut refineries operated by Valero Energy Corp., ConocoPhillips, Marathon Oil Corp. and Exxon Mobil Corp.
``It's a huge storm, and it's got the potential to cause all kinds of problems,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``There's a lot of concern that this is something that could really, really damage infrastructure badly, and this could be another instance of Katria-Rita or worse.''
Crude oil for October delivery rose $2.21, or 1.9 percent, to $117.67 a barrel at 3:27 p.m. on the New York Mercantile Exchange. Prices are up 20 percent this year.
Natural gas for October delivery rose 0.7 cent to $7.95 per million British thermal units.
Gasoline for October delivery gained 9.08 cents, or 3.2 percent, to $2.945 a gallon on the exchange.
To see oil ``up two and a half dollars is a muted reaction to what they're calling the mother of all storms,'' Beutel said.
Electronic trading opened early today to allow traders to respond to Gustav. Trades will be dated Sept. 2 because of the U.S. Labor Day holiday tomorrow.
Gustav was about 270 miles (520 kilometers) from the mouth of the Mississippi River at 1 p.m. New Orleans time and was packing winds of 115 miles an hour. The storm, which may reach Louisiana as early as midday tomorrow, is forecast to strengthen as it crosses the Gulf.
Refinery Capacity
Gulf Coast refineries have cut at least 1.48 million barrels a day of production, 23 percent of regional capacity and 9.3 percent of the U.S. total. Seven refineries have announced shutdowns, and five have reduced capacity.
Personnel from more than 70 percent of the platforms and rigs in the Gulf have been evacuated as the storm approaches, the U.S. Minerals Management Service said today in a statement on its Web site. About 1.25 million barrels a day of oil, and 6.09 billion cubic feet of gas have been shut, or more than 96 percent of offshore oil output and 82 percent of gas production.
The Gulf of Mexico accounts for 26 percent of U.S. oil production and 14 percent of natural-gas output. The Gulf produces 1.3 million barrels of oil and an estimated 7.4 billion cubic feet of gas a day, according to the agency, part of the U.S. Interior Department.
``We're more prepared for this storm than we ever have been for any hurricane that I remember,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``We're better prepared, and demand isn't that strong anyway, so I'm about as optimistic as I can be in this type of disastrous situation.''
Katrina
Hurricane Katrina, which reached Category 5 status, the strongest type of hurricane, closed 95 percent of offshore output in the Gulf of Mexico. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by hurricanes Katrina and Rita in 2005.
``You get a couple of rigs shut down, keeled over from this hurricane, and this is going go take days or weeks to fix,'' said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky. ``The bigger problem is on the refining side and the potential impact on all the refineries that string along the Gulf Coast.''
Almost half of U.S. refining capacity is centered along the Gulf Coast, and refineries have been operating at less than 90 percent of capacity all year, according to the Energy Department.
Regular gasoline, averaged nationwide, rose 0.5 cent to $3.687 a gallon, AAA, the nation's largest motorist organization, said today. Prices reached a record $4.114 a gallon on July 17.
Gasoline cost $3.676 a gallon in Louisiana, up from $3.655 yesterday
By M. Habiby
(Bloomberg) -- Crude oil, natural gas and gasoline rose in a special trading session today as Hurricane Gustav approached the Gulf of Mexico, halting most oil and gas output and shutting local refineries.
Gustav will make landfall along the Gulf Coast sometime tomorrow as a ``major'' hurricane, according to the U.S. National Hurricane Center. It forced the mandatory evacuation of New Orleans and shut refineries operated by Valero Energy Corp., ConocoPhillips, Marathon Oil Corp. and Exxon Mobil Corp.
``It's a huge storm, and it's got the potential to cause all kinds of problems,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``There's a lot of concern that this is something that could really, really damage infrastructure badly, and this could be another instance of Katria-Rita or worse.''
Crude oil for October delivery rose $2.21, or 1.9 percent, to $117.67 a barrel at 3:27 p.m. on the New York Mercantile Exchange. Prices are up 20 percent this year.
Natural gas for October delivery rose 0.7 cent to $7.95 per million British thermal units.
Gasoline for October delivery gained 9.08 cents, or 3.2 percent, to $2.945 a gallon on the exchange.
To see oil ``up two and a half dollars is a muted reaction to what they're calling the mother of all storms,'' Beutel said.
Electronic trading opened early today to allow traders to respond to Gustav. Trades will be dated Sept. 2 because of the U.S. Labor Day holiday tomorrow.
Gustav was about 270 miles (520 kilometers) from the mouth of the Mississippi River at 1 p.m. New Orleans time and was packing winds of 115 miles an hour. The storm, which may reach Louisiana as early as midday tomorrow, is forecast to strengthen as it crosses the Gulf.
Refinery Capacity
Gulf Coast refineries have cut at least 1.48 million barrels a day of production, 23 percent of regional capacity and 9.3 percent of the U.S. total. Seven refineries have announced shutdowns, and five have reduced capacity.
Personnel from more than 70 percent of the platforms and rigs in the Gulf have been evacuated as the storm approaches, the U.S. Minerals Management Service said today in a statement on its Web site. About 1.25 million barrels a day of oil, and 6.09 billion cubic feet of gas have been shut, or more than 96 percent of offshore oil output and 82 percent of gas production.
The Gulf of Mexico accounts for 26 percent of U.S. oil production and 14 percent of natural-gas output. The Gulf produces 1.3 million barrels of oil and an estimated 7.4 billion cubic feet of gas a day, according to the agency, part of the U.S. Interior Department.
``We're more prepared for this storm than we ever have been for any hurricane that I remember,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``We're better prepared, and demand isn't that strong anyway, so I'm about as optimistic as I can be in this type of disastrous situation.''
Katrina
Hurricane Katrina, which reached Category 5 status, the strongest type of hurricane, closed 95 percent of offshore output in the Gulf of Mexico. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by hurricanes Katrina and Rita in 2005.
``You get a couple of rigs shut down, keeled over from this hurricane, and this is going go take days or weeks to fix,'' said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky. ``The bigger problem is on the refining side and the potential impact on all the refineries that string along the Gulf Coast.''
Almost half of U.S. refining capacity is centered along the Gulf Coast, and refineries have been operating at less than 90 percent of capacity all year, according to the Energy Department.
Regular gasoline, averaged nationwide, rose 0.5 cent to $3.687 a gallon, AAA, the nation's largest motorist organization, said today. Prices reached a record $4.114 a gallon on July 17.
Gasoline cost $3.676 a gallon in Louisiana, up from $3.655 yesterday
When will we learn ?? cant we build more refineries and start drilling in Alaska And other coastal areas ??
Saturday, August 30, 2008
Hurricane Gustav is threatening Gas prices ??
As America hits the road over the long Labor Day weekend, Hurricane Gustav is threatening to wreak havoc at the gas pump.
Gasoline prices have been falling nationwide for weeks, bringing drivers needed relief from this summer's record highs. But now Gustav has taken aim at the Gulf Coast, threatening to tear through the region's gasoline refineries and offshore oil platforms. More than one-quarter of all the oil produced in the United States comes from the gulf.
Forecasts show Gustav taking a path uncomfortably close to Hurricane Katrina's, which smashed into New Orleans three years ago and sent gasoline prices soaring throughout the country.
"It could be a big threat," said John Kingston, who directs oil coverage for the Platts energy information service.
If Gustav damages the gulf's network of oil wells, pipelines and refineries, the country could face another severe gas price spike. If Gustav veers from its expected course - a strong possibility with notoriously unpredictable hurricanes - prices will likely continue their slow slide.
"Even though the track has been pretty consistent, you just don't know," Kingston said. "Two hundred miles off isn't much for a hurricane."
California's gas prices are still falling, although the pace slowed this week. The state's average for a gallon of regular, which peaked in June at $4.61, dropped to $3.92 on Friday, according to the AAA auto club. In San Francisco, drivers pay an average of $4.10, in San Jose, $4.
The nationwide average ticked up by a penny Friday to hit $3.67, after falling steadily for weeks. But analysts blame that small increase on the holiday, not the hurricane.
"I'm not sure that's a huge worry or a signal that something's changing in the market," said Michael Geeser, spokesman for AAA of Northern California. "We usually do see a bump right before a holiday weekend."
Gasoline prices this year have followed the rise and fall of crude oil prices, which shot to record highs above $145 per barrel before tumbling. Oil sold on the New York Mercantile Exchange rose earlier this week as traders cast a nervous eye on Gustav, but by Friday, most of those fears had been factored into the price. Crude fell 13 cents on Friday to close at $115.46.
"The formation of Gustav has really put a stop to the drop in crude oil," said Denton Cinquegrana, who tracks West Coast gasoline markets for the Oil Price Information Service. "If we didn't have this storm, we could be talking about crude oil dropping below $110."
The hurricane's full effect on oil prices won't become clear until early next week. Friday's forecast from the National Weather Service showed the storm possibly making landfall west of New Orleans either late Monday or early Tuesday.
By Friday, most of the oil companies that operate in the gulf were evacuating employees from rigs and ships in the Gulf of Mexico, shuttling them to shore via helicopter. San Ramon's Chevron Corp., which has 3,000 employees in the gulf, reported Friday that it had shut some of its offshore oil fields because pipelines carrying crude from those fields had been closed.
"We don't like to say it's routine, but we've been through it many times," said Chevron spokesman Mickey Driver.
If Gustav misses the oil fields, gasoline prices may continue drifting downward, especially because prices typically drop in autumn. But they probably won't fall as low as they were a year ago, when California's average for regular gas was $2.80.
"We generally pay the lowest we pay for gas all year in the next few months, so barring a hurricane, drivers can probably look forward to that," Geeser said. "But remember, the trend of the last few years is prices never go down as far as they went up."
D. Baker
Oil Companies are getting ready for Hurricane Gustav
Aug. 30 (Bloomberg) -- Royal Dutch Shell Plc and BP Plc plan to finish shutting oil and gas production platforms in the Gulf of Mexico and Enbridge Energy Partners LP will close pipelines as Hurricane Gustav gains strength and moves toward the region.
Shell and BP aimed to complete the shutdown of the equivalent of 800,000 barrels a day of oil production today. Enbridge said it will halt Gulf gas shipments effective 9 a.m. local time. Oil producers have shut at least 6.6 percent of output in the Gulf of Mexico, according to U.S. government figures at midday yesterday. Shell plans to halt 510,000 barrels a day and BP said it will stop about 290,000 barrels.
Fields in the Gulf produce 1.3 million barrels a day of oil, about a quarter of U.S. production, and 7.4 billion cubic feet a day of natural gas, 14 percent of the total, government data show. Hurricane Katrina in 2005 closed 95 percent of regional offshore output and, along with Hurricane Rita, idled about 19 percent of U.S. refining capacity.
``We have to wait and see how this storm strengthens, but the industry can fare better than it did three years ago,'' Sara Banaszak, senior economist at the American Petroleum Institute, said on Bloomberg Television. Energy companies installed back-up electricity and purchased emergency supplies to avoid the kinds of disruptions caused by Katrina and Rita, she said.
Oil Prices
Crude oil futures in New York fell 13 cents to $115.46 a barrel in New York yesterday on speculation supplies will be adequate to meet demand after the storm passes. Natural gas futures fell 10.7 cents to $7.943 per million British thermal units on the exchange.
When a hurricane hits, it can curtail demand for oil and natural gas by damaging refineries, lowering temperatures, cutting power lines and reducing the need for power generation and closing businesses, said Kyle Cooper, an analyst at IAF Advisors in Houston.
``The question is, where does it hit, and how much demand does it take out when it does that,'' Cooper said.
Energy producers have idled 6.6 percent of oil output and 1.8 percent of natural-gas production in the Gulf because of Gustav, the U.S. Minerals Management Service said yesterday in a statement on its Web site.
Personnel from 17 rigs and six production platforms had been evacuated as of 12:30 p.m. yesterday in Washington, according to the statement. The shutdowns halted 86,000 barrels of oil and 136 million cubic feet of gas a day.
Storm Forecast
Gustav, now a Category 3 hurricane with winds of almost 115 miles (185 kilometers) per hour, picked up speed as it headed toward western Cuba and the U.S. Gulf Coast, the National Hurricane Center in said in a bulletin. The storm was about 255 miles east-southeast of the western tip of Cuba at 5 a.m. local time.
Exxon Mobil Corp., the world's biggest oil company, began evacuating non-essential personnel from oil and natural-gas platforms expected to be in the path of the storm. Other companies with operations connected to its platforms have shut in ``minimal'' production, the company said in a statement.
Exxon Mobil hasn't cut output at refineries and chemical plants along the Gulf coast, though it's preparing them to weather the storm, the company said.
Chevron Evacuations
Chevron Corp., the second-largest U.S. energy company, began evacuating essential personnel from oil and natural-gas platforms. Some production has been halted because of the shutdown of pipelines operated by other companies, San Ramon, California-based Chevron said yesterday on its Web site.
Anadarko Petroleum Corp. said it plans a full shutdown of all its drilling rigs and operated facilities by tomorrow. It plans to evacuate all non-essential personnel by today and all of its 600 employees and contractors currently working in the Gulf by tomorrow. It pumps more than 150,000 barrels a day of oil equivalent from the Gulf.
ConocoPhillips said it suspended drilling in southern Louisiana Aug. 28. It expected to complete the evacuation of Magnolia, its only offshore platform in the Gulf, by today. It shut the platform Aug. 28.
Swift Energy Co. planned to halt production from Cote Blanche Island yesterday, and said remaining output will be shut-in by tomorrow if storm conditions dictate, according to a company statement.
Helicopter operator ERA Helicopters LLC said it will complete its evacuations of offshore rigs and platforms today. It said evacuations for Hess Corp., Noble Corp., Helix Energy Solutions Group and ATP Gas & Oil Corp. were under way.
The Louisiana Offshore Oil Port, the nation's biggest oil import terminal, is preparing to shut its marine operations today, said Barb Hestermann, a spokeswoman for the LOOP, as the port is known. The port will continue to make deliveries by pipeline from storage facilities, she said.
Murphy Oil Corp., Devon Energy Corp., and Apache Corp. were also working on evacuation plans.
Shell and BP aimed to complete the shutdown of the equivalent of 800,000 barrels a day of oil production today. Enbridge said it will halt Gulf gas shipments effective 9 a.m. local time. Oil producers have shut at least 6.6 percent of output in the Gulf of Mexico, according to U.S. government figures at midday yesterday. Shell plans to halt 510,000 barrels a day and BP said it will stop about 290,000 barrels.
Fields in the Gulf produce 1.3 million barrels a day of oil, about a quarter of U.S. production, and 7.4 billion cubic feet a day of natural gas, 14 percent of the total, government data show. Hurricane Katrina in 2005 closed 95 percent of regional offshore output and, along with Hurricane Rita, idled about 19 percent of U.S. refining capacity.
``We have to wait and see how this storm strengthens, but the industry can fare better than it did three years ago,'' Sara Banaszak, senior economist at the American Petroleum Institute, said on Bloomberg Television. Energy companies installed back-up electricity and purchased emergency supplies to avoid the kinds of disruptions caused by Katrina and Rita, she said.
Oil Prices
Crude oil futures in New York fell 13 cents to $115.46 a barrel in New York yesterday on speculation supplies will be adequate to meet demand after the storm passes. Natural gas futures fell 10.7 cents to $7.943 per million British thermal units on the exchange.
When a hurricane hits, it can curtail demand for oil and natural gas by damaging refineries, lowering temperatures, cutting power lines and reducing the need for power generation and closing businesses, said Kyle Cooper, an analyst at IAF Advisors in Houston.
``The question is, where does it hit, and how much demand does it take out when it does that,'' Cooper said.
Energy producers have idled 6.6 percent of oil output and 1.8 percent of natural-gas production in the Gulf because of Gustav, the U.S. Minerals Management Service said yesterday in a statement on its Web site.
Personnel from 17 rigs and six production platforms had been evacuated as of 12:30 p.m. yesterday in Washington, according to the statement. The shutdowns halted 86,000 barrels of oil and 136 million cubic feet of gas a day.
Storm Forecast
Gustav, now a Category 3 hurricane with winds of almost 115 miles (185 kilometers) per hour, picked up speed as it headed toward western Cuba and the U.S. Gulf Coast, the National Hurricane Center in said in a bulletin. The storm was about 255 miles east-southeast of the western tip of Cuba at 5 a.m. local time.
Exxon Mobil Corp., the world's biggest oil company, began evacuating non-essential personnel from oil and natural-gas platforms expected to be in the path of the storm. Other companies with operations connected to its platforms have shut in ``minimal'' production, the company said in a statement.
Exxon Mobil hasn't cut output at refineries and chemical plants along the Gulf coast, though it's preparing them to weather the storm, the company said.
Chevron Evacuations
Chevron Corp., the second-largest U.S. energy company, began evacuating essential personnel from oil and natural-gas platforms. Some production has been halted because of the shutdown of pipelines operated by other companies, San Ramon, California-based Chevron said yesterday on its Web site.
Anadarko Petroleum Corp. said it plans a full shutdown of all its drilling rigs and operated facilities by tomorrow. It plans to evacuate all non-essential personnel by today and all of its 600 employees and contractors currently working in the Gulf by tomorrow. It pumps more than 150,000 barrels a day of oil equivalent from the Gulf.
ConocoPhillips said it suspended drilling in southern Louisiana Aug. 28. It expected to complete the evacuation of Magnolia, its only offshore platform in the Gulf, by today. It shut the platform Aug. 28.
Swift Energy Co. planned to halt production from Cote Blanche Island yesterday, and said remaining output will be shut-in by tomorrow if storm conditions dictate, according to a company statement.
Helicopter operator ERA Helicopters LLC said it will complete its evacuations of offshore rigs and platforms today. It said evacuations for Hess Corp., Noble Corp., Helix Energy Solutions Group and ATP Gas & Oil Corp. were under way.
The Louisiana Offshore Oil Port, the nation's biggest oil import terminal, is preparing to shut its marine operations today, said Barb Hestermann, a spokeswoman for the LOOP, as the port is known. The port will continue to make deliveries by pipeline from storage facilities, she said.
Murphy Oil Corp., Devon Energy Corp., and Apache Corp. were also working on evacuation plans.
Saturday, August 16, 2008
Georgia & Russia Snarl , Can u make money ?? ( Gold & Oil )
WHAT A SHAME! IT WOULD HAVE BEEN A DREAM TICKET: Edwards and Spitzer. They'd have been a cinch in 2012, if Obama doesn't make it this year, to walk away with the votes of the all-important hot-hormones group, 18-to-29-year-old males. (You know, the coveted cohort that TV networks salivate over as viewers, and not the least of reasons television is not fit for human consumption.)
Just think about what a terrific ad campaign that well-known agency, Smirk and Smirk, would have created showing Edwards and Spitzer winking atop the catchy slogan spelled out in big bold letters: "Vamoose, Viagra! The country needs a real man as president!"
But then Edwards, nary a hair nor a dimple out of place, does his mea culpa bit on the tube and that's a sure turnoff for the testosterone voter, who likes his hamburger raw and his candidate unrepentant. Hang in there, guys, and don't be disconsolate: If history is any guide, you can bet your last dollar we'll never run out of straying Democrats.
Still, we can understand the widespread disappointment. It'd be a wonderfully refreshing change if, when a candidate talked about foreign affairs and conquests, he wasn't boring us to tears with all that guff about realpolitik or boasting about sending in the marines, but, instead, chortling about the liaisons he struck up at the latest boondoggle summit and the sweet nothings he whispered into the ear of one comely lass or another. À la the current president of France.
Alas, the way the world turns these days, there's scant time or inclination for a president to display what Dubya's daddy called a kinder, gentler mien, much less regale the public with accounts of his romantic dalliances. Last week furnished a telling example of the omnipresent pressures the nation's chief executive is prey to.
No sooner was Mr. Bush settling into his privileged perch at the Olympics, poised to enjoy a rare day of fun and games, with his old pal Vladimir Putin nearby, than came the news that the Russians were beating up on their feisty little neighbor, Georgia.
Had the president, as he is wont to do, been able to peer into Mr. Putin's eyes, he might have spotted the venomous black hole where the Putin soul was supposed to be and would have been able to alert the world that serious trouble was brewing. But the wily Russian had slipped on his shades, thus denying Mr. Bush the chance to perform one of his famous soul-searches and perhaps forestall Moscow's power play.
One could argue that Georgia is the latest casualty of Iraq. For if we weren't so inextricably tied down in Iraq or, at least, if our involvement hadn't been so poorly planned and ineptly pursued, it's more than a little doubtful that Russia would have been tempted to flaunt its revived fortunes by unveiling its iron fist.
Maybe it was the competition for traders' attention from the Olympics or that Wall Street merely shrugged it off as a not a really serious business, but the Russian strike and the growls from Washington it triggered caused nary a ripple in markets, whether financial or commodities. Or, it could be that all the nervous types took the week off, giving their frazzled nerves a badly needed vacation.
Stocks ambled on in their by-now familiar unpersuasive fashion, desperately seeking any shred of an excuse to go higher. Oil had the briefest respite from its persistent vertigo, on hopes that the Georgia fracas would interrupt the flow of crude and natural gas, but quickly became discouraged and resumed its skid, hitting a fresh low for the past three months.
Even gold, which feeds on the world's misery and ordinarily would get a nice lift from a confrontation between global heavyweights, extended its swoon. That's the kind of thing that really tests a man's faith: If you can't trust gold to react with quivers (and quantum leaps) when the U.S. and Russia snarl at each, what can you believe in?
Seems like a case of mass narcosis is afflicting investors just about universally. We thought we'd try that one out on some supposedly knowledgeable shrinks, only to discover that in August they all flock to Cape Cod, and studiously leave their cellphones behind.
JUST ABOUT THE LUCKIEST PEOPLE we've ever come across happen to toil in Wall Street and Washington. They vary across a wide spectrum in how much money they make and in the usual distinctions of height, weight, age, intellect and amiability. What they share are three things which are closely related. The first is that, in some significant way, either directly or as mouthpieces, their professional terrain is economics.
The other two things they have in common are: They never need bestir themselves, lay down the book or turn off the television set or tear away from their computer and go out to buy anything, no matter how trivial or important; someone else -- a wife, a husband, say, or an assistant, or perhaps an indentured slave -- performs that task. And, last but not least, they're all of a single mind on inflation -- namely, for all intent and purpose, there isn't any.
Not content with letting the data tell its story (lest, we can only assume, it doesn't comport with their perception), they've devised an alternative to the standard price indexes called "core" inflation, which conforms to what they deem a proper (inevitably sharply lower) measure of inflation. Core is nicely constructed to exclude energy and food, which account for nearly a quarter of consumer expenditures, and occasionally other categories where prices show an untoward tendency to rise.
Last month, reports the Labor Department, consumer prices shot up a scorching 0.8%, twice the consensus guess, and the sharpest rise in 17 years. The core cabal were quick to take comfort in the fact that core inflation was up a much more demur 0.3%, and pooh-poohed the big jump in headline inflation (that's what they snootily dub the consumer-price index, to give it a tabloid veneer, which makes it seem inherently unreliable). Their feverish fetish for the core number also permitted them to blithely ignore that consumer prices in the past 12 months scored the biggest rise since January 1991.
The truth is that inflation, if not rampant, is ubiquitous and gathering strength. It may not be up to the wild inflation we experienced in the 1970s, but it's plenty mean enough and getting worse. It's now firmly embedded in the economy, and it's not going to vanish magically because crude is down to "only" $113 a barrel, or the dollar has inched its way off the bottom, or even if one of the core faithful waves his wand and says Abracadabra!
Getting a true read on consumer prices isn't just an academic exercise. John Williams, proprietor of Shadow Government Statistics, has built rather a brilliant career out of analyzing the official data and showing in exquisite detail where they depart from reality. He points out, moreover, that an awful lot is dependent on the CPI, not least Social Security and other forms of compensation.
On that score, he reckons that changes made over the years aimed at understating inflation have reduced current Social Security payments to half of what they otherwise would have been. In other words, today's Social Security checks would be double what they are, were it not for that serendipitous tinkering, especially during the Clinton years. Ah, well, the geezers never knew what hit them.
Or, as John puts it ever so sweetly, "The CPI worked reasonably well into the early 1980s. In recent decades, however, the reporting system increasingly succumbed to pressures from miscreant politicians, who were intent upon stealing income from Social Security recipients, without ever taking the issue of reduced entitlement payments before the public or Congress."
After World War II, the consumer-price index was included in Detroit's contracts with the auto workers and then "found its way not only into other union agreements, but also into most commercial contracts that required consideration of cost/price changes or inflation." Obviously, then, its reach extends into any number of nooks and corners in the economy.
The changes in the CPI, not a few of them made with the malicious intent of hiding the true rate of inflation, have, John figures, understated inflation by roughly seven percentage points. What this means simply is that the 5.6% rise over the past 12 months officially reported was actually, by his meticulous figuring, a whopping 13.4%. That makes complacency among the core cabal willfully silly.
Or as John neatly puts it, "The Pollyannas on Wall Street like to play games with the CPI...It is common to hear financial pundits cite annual 'core' inflation as a way of showing how contained inflation is. Such comments are moronic and such commentators are due the appropriate respect."
As you can readily tell, we're kinder than John, so, as intimated early on in this screed, we ascribe the core gang's benign view toward inflation not necessarily to a deficient IQ but to their failure to buy even so much as a toothpick on their own.
Just think about what a terrific ad campaign that well-known agency, Smirk and Smirk, would have created showing Edwards and Spitzer winking atop the catchy slogan spelled out in big bold letters: "Vamoose, Viagra! The country needs a real man as president!"
But then Edwards, nary a hair nor a dimple out of place, does his mea culpa bit on the tube and that's a sure turnoff for the testosterone voter, who likes his hamburger raw and his candidate unrepentant. Hang in there, guys, and don't be disconsolate: If history is any guide, you can bet your last dollar we'll never run out of straying Democrats.
Still, we can understand the widespread disappointment. It'd be a wonderfully refreshing change if, when a candidate talked about foreign affairs and conquests, he wasn't boring us to tears with all that guff about realpolitik or boasting about sending in the marines, but, instead, chortling about the liaisons he struck up at the latest boondoggle summit and the sweet nothings he whispered into the ear of one comely lass or another. À la the current president of France.
Alas, the way the world turns these days, there's scant time or inclination for a president to display what Dubya's daddy called a kinder, gentler mien, much less regale the public with accounts of his romantic dalliances. Last week furnished a telling example of the omnipresent pressures the nation's chief executive is prey to.
No sooner was Mr. Bush settling into his privileged perch at the Olympics, poised to enjoy a rare day of fun and games, with his old pal Vladimir Putin nearby, than came the news that the Russians were beating up on their feisty little neighbor, Georgia.
Had the president, as he is wont to do, been able to peer into Mr. Putin's eyes, he might have spotted the venomous black hole where the Putin soul was supposed to be and would have been able to alert the world that serious trouble was brewing. But the wily Russian had slipped on his shades, thus denying Mr. Bush the chance to perform one of his famous soul-searches and perhaps forestall Moscow's power play.
One could argue that Georgia is the latest casualty of Iraq. For if we weren't so inextricably tied down in Iraq or, at least, if our involvement hadn't been so poorly planned and ineptly pursued, it's more than a little doubtful that Russia would have been tempted to flaunt its revived fortunes by unveiling its iron fist.
Maybe it was the competition for traders' attention from the Olympics or that Wall Street merely shrugged it off as a not a really serious business, but the Russian strike and the growls from Washington it triggered caused nary a ripple in markets, whether financial or commodities. Or, it could be that all the nervous types took the week off, giving their frazzled nerves a badly needed vacation.
Stocks ambled on in their by-now familiar unpersuasive fashion, desperately seeking any shred of an excuse to go higher. Oil had the briefest respite from its persistent vertigo, on hopes that the Georgia fracas would interrupt the flow of crude and natural gas, but quickly became discouraged and resumed its skid, hitting a fresh low for the past three months.
Even gold, which feeds on the world's misery and ordinarily would get a nice lift from a confrontation between global heavyweights, extended its swoon. That's the kind of thing that really tests a man's faith: If you can't trust gold to react with quivers (and quantum leaps) when the U.S. and Russia snarl at each, what can you believe in?
Seems like a case of mass narcosis is afflicting investors just about universally. We thought we'd try that one out on some supposedly knowledgeable shrinks, only to discover that in August they all flock to Cape Cod, and studiously leave their cellphones behind.
JUST ABOUT THE LUCKIEST PEOPLE we've ever come across happen to toil in Wall Street and Washington. They vary across a wide spectrum in how much money they make and in the usual distinctions of height, weight, age, intellect and amiability. What they share are three things which are closely related. The first is that, in some significant way, either directly or as mouthpieces, their professional terrain is economics.
The other two things they have in common are: They never need bestir themselves, lay down the book or turn off the television set or tear away from their computer and go out to buy anything, no matter how trivial or important; someone else -- a wife, a husband, say, or an assistant, or perhaps an indentured slave -- performs that task. And, last but not least, they're all of a single mind on inflation -- namely, for all intent and purpose, there isn't any.
Not content with letting the data tell its story (lest, we can only assume, it doesn't comport with their perception), they've devised an alternative to the standard price indexes called "core" inflation, which conforms to what they deem a proper (inevitably sharply lower) measure of inflation. Core is nicely constructed to exclude energy and food, which account for nearly a quarter of consumer expenditures, and occasionally other categories where prices show an untoward tendency to rise.
Last month, reports the Labor Department, consumer prices shot up a scorching 0.8%, twice the consensus guess, and the sharpest rise in 17 years. The core cabal were quick to take comfort in the fact that core inflation was up a much more demur 0.3%, and pooh-poohed the big jump in headline inflation (that's what they snootily dub the consumer-price index, to give it a tabloid veneer, which makes it seem inherently unreliable). Their feverish fetish for the core number also permitted them to blithely ignore that consumer prices in the past 12 months scored the biggest rise since January 1991.
The truth is that inflation, if not rampant, is ubiquitous and gathering strength. It may not be up to the wild inflation we experienced in the 1970s, but it's plenty mean enough and getting worse. It's now firmly embedded in the economy, and it's not going to vanish magically because crude is down to "only" $113 a barrel, or the dollar has inched its way off the bottom, or even if one of the core faithful waves his wand and says Abracadabra!
Getting a true read on consumer prices isn't just an academic exercise. John Williams, proprietor of Shadow Government Statistics, has built rather a brilliant career out of analyzing the official data and showing in exquisite detail where they depart from reality. He points out, moreover, that an awful lot is dependent on the CPI, not least Social Security and other forms of compensation.
On that score, he reckons that changes made over the years aimed at understating inflation have reduced current Social Security payments to half of what they otherwise would have been. In other words, today's Social Security checks would be double what they are, were it not for that serendipitous tinkering, especially during the Clinton years. Ah, well, the geezers never knew what hit them.
Or, as John puts it ever so sweetly, "The CPI worked reasonably well into the early 1980s. In recent decades, however, the reporting system increasingly succumbed to pressures from miscreant politicians, who were intent upon stealing income from Social Security recipients, without ever taking the issue of reduced entitlement payments before the public or Congress."
After World War II, the consumer-price index was included in Detroit's contracts with the auto workers and then "found its way not only into other union agreements, but also into most commercial contracts that required consideration of cost/price changes or inflation." Obviously, then, its reach extends into any number of nooks and corners in the economy.
The changes in the CPI, not a few of them made with the malicious intent of hiding the true rate of inflation, have, John figures, understated inflation by roughly seven percentage points. What this means simply is that the 5.6% rise over the past 12 months officially reported was actually, by his meticulous figuring, a whopping 13.4%. That makes complacency among the core cabal willfully silly.
Or as John neatly puts it, "The Pollyannas on Wall Street like to play games with the CPI...It is common to hear financial pundits cite annual 'core' inflation as a way of showing how contained inflation is. Such comments are moronic and such commentators are due the appropriate respect."
As you can readily tell, we're kinder than John, so, as intimated early on in this screed, we ascribe the core gang's benign view toward inflation not necessarily to a deficient IQ but to their failure to buy even so much as a toothpick on their own.
Wednesday, July 23, 2008
Dolly Hurricane , will it effect Oil prices ??
Hurricane Dolly Strengthens Near Texas-Mexico Border (Update3)
By Gregory Viscusi
July 23 (Bloomberg) -- Hurricane Dolly strengthened in the Gulf of Mexico as it approached the Texas-Mexico border and may grow into a Category 2 storm before making landfall today, U.S. forecasters said.
The system's eye was about 45 miles (70 kilometers) east of Brownsville, Texas, the National Hurricane Center said on its Web site at 7 a.m. Brownsville time. Sustained winds were almost 85 miles per hour. Winds of tropical-storm force swept the coast as Dolly headed northwest at almost 8 mph. The hurricane probably will reach the coast around midday, the center said.
Dolly is the season's first hurricane in the Gulf, home to more than a quarter of U.S. oil production. The predicted path is south of most rigs, which are along the East Texas and Louisiana coasts. Energy companies evacuated some platforms as a precaution and cut production in the Gulf by 4.7 percent, according to the U.S. Interior Department.
Dolly may dump 6 to 10 inches (15-25 centimeters) of rain on South Texas and northeastern Mexico during the next few days, probably causing widespread flooding, forecasters at the Miami- based center said. As much as 15 inches may fall in some areas. A coastal storm surge of 4 to 6 feet (1.2 to 1.8 meters) above normal is predicted near and north of the point of landfall.
``Preparations to protect life and property should be rushed to completion,'' the center said.
Crude Lower
The forecast for Dolly to miss the rigs contributed to a decline in the price of oil. Crude for September delivery fell as much as $2.20, or 1.7 percent, to $125.75 a barrel, and traded at $126.30 at 12:18 p.m. London time on the New York Mercantile Exchange.
Companies that carried out evacuations include BP Plc, Noble Corp., Chevron Corp., Devon Energy Corp., Citgo Petroleum Corp. and Royal Dutch Shell Plc.
A hurricane warning was in place from Corpus Christi, Texas, south to the San Fernando River in Mexico, the center said. That means hurricane conditions are expected in the next 24 hours. The U.S. Coast Guard yesterday warned boaters of high seas and destructive winds and said rescue services may be ``seriously degraded or unavailable'' as the storm neared.
Texas Governor Rick Perry activated 1,200 National Guard personnel and a half-dozen Black Hawk helicopters, which can deliver emergency supplies.
Dolly was a Category 1 hurricane, the weakest on the five- step Saffir-Simpson scale. Category 1 storms have sustained winds of 74 to 95 mph. The sustained winds of Category 5 hurricanes exceed 155 mph.
The systems become tropical storms, and are named, when sustained winds reach 39 mph.
Here is another reason for oil prices to go higher today !!
Friday, July 11, 2008
Will Oil hit 200 a Barrel By year End ??
Oil hit a record trading high Friday as tensions with Iran, the possibility of renewed violence in Nigeria and a planned labor strike in Brazil threatened already tight crude supplies.
Light sweet crude for August delivery was up $5.35 to $147 a barrel in electronic trading on the New York Mercantile Exchange. Earlier prices touched a new trading record of $147.27, eclipsing the mark of $145.85 set July 3.
Iran: Oil rallied more than $5 a barrel late Thursday after the oil producing nation of Iran conducted a second missile test in the Persian Gulf Thursday evening, increasing tensions with Israel and the West over its nuclear program.
The Iraqi Defense Ministry said Israeli warplanes were allegedly practicing over Iraqi airspace and at U.S. military bases in the region Friday, according to regional news reports.
Sources cited in a major Israeli newspaper said they may be training for a potential strike on nuclear sites within Iran.
If Israel does conduct a military operation over Iran during the weekend, the affect on the oil market could be devastating, said Tom Orr, head of research at Weeded & Co.
"I think you could see crude go up $10 to $15 instantaneously," added Orr.
One of the great fears facing oil investors is the possibility that Iran could blockade the nearby Strait of Hormuz, a key waterway that carries a large percentage of the world's oil traffic.
If Iran were to close the strait "even for a week, that would be disastrous," said Orr.
Nigeria: Unrest in Nigeria, Africa's largest oil producer, has also set investors on edge. The nation's main rebel group threatened to renew attacks after the British expressed support for the country's current government. Militants have commonly targeted Nigeria's oil infrastructure.
Brazil: Also adding to concerns was a potential labor strike against Brazilian oil company Petroleo Brasileiro. Brazil's Oil Workers Confederation said it was planning a 5-day strike that could affect 80% of the South American country's oil supply.
Through the beginning of the week, oil dropped more than $10 a barrel after tensions with Iran subsided over the July 4 holiday weekend and the Nigerian rebels maintained an uneasy cease-fire.
But now all those problems seem to be resurfacing at the same time, said Phil Flynn, senior market analyst with Alaron trading in Chicago.
Investors are afraid that "with all of these problems, more than likely something is bound to boil over," said Flynn. He said they don't want to get caught betting against oil if they can help it.
And still lurking at the back of everyone's mind is the value of the dollar, which lost ground against the 15-nation euro.
Gasoline prices slip again
Sizing up Iran's oil threat
Awash in oil money, and problems
Wednesday, July 9, 2008
Oil Rise , Again After Iran Missle Test
Most U.S. Stocks Retreat, Led by Financials, Technology Shares
By Eric Martin
July 9 (Bloomberg) -- Most U.S. stocks declined after Fannie Mae's borrowing costs climbed, analysts said a slowing economy may hurt sales at technology companies and oil prices rose for the first time this week.
Freddie Mac and Fannie Mae, the largest sources of financing for U.S. home loans, posted the steepest declines in the Standard & Poor's 500 Index after Fannie sold $3 billion in notes at higher yields than in past offerings. Cisco Systems Inc. tumbled as UBS AG said the world's biggest maker of computer-networking equipment faces a slowdown in the U.S. and Europe. Continental Airlines Inc. and Wal-Mart Stores Inc. fell as crude advanced. Alcoa Inc. climbed, limiting the market's retreat, after posting earnings that topped estimates.
Eight stocks fell for every seven that gained on the New York Stock Exchange. The Standard & Poor's 500 Index added 1.53 points, or 0.1 percent, to 1,275.23 at 10:31 a.m. in New York. The Dow Jones Industrial Average declined 4.95 to 11,379.24. The Nasdaq Composite Index lost 4.26 to 2,290.18.
``The bottom line is that we are in an environment where there is a high degree of uncertainty,'' said Ian Harnett, an equity strategist at Absolute Strategy Research in London. The high oil price means ``there is a lot of risk out there.''
Profits at S&P 500 companies are forecast to decline 11 percent on average in the second quarter, according to the average estimate of analysts surveyed by Bloomberg. Income is projected to slump 60 percent on average at financial companies.
Global stock markets have erased more than $11 trillion this year as record oil prices and more than $400 billion in credit- related losses threatened to push the U.S., the world's largest economy, into recession.
Fannie, Freddie Slump
Fannie Mae slipped $1.17, or 6.6 percent, to $16.45. Freddie Mac lost $1.04, or 7.7 percent, to $12.42. Fannie's 3.25 percent notes, which mature Aug. 12, 2010, priced to yield 3.27 percent, or 74 basis points more than comparable U.S. Treasuries. Fannie last month sold $4 billion of 3 percent benchmark notes maturing July 12, 2010, that priced to yield 3.036 percent, or 65 basis points more than U.S. Treasuries of similar maturity. A basis point is 0.01 percentage point.
Fannie and Freddie, which are rated Aaa by the world's largest credit-rating companies, are being treated by derivatives traders as if they are rated five levels lower. Credit-default swaps tied to $1.45 trillion of debt sold by the two are trading at levels that imply the bonds should be rated A2 by Moody's Investors Service, according to data compiled by the firm's credit strategy group.
Bank of America Corp., the second-biggest U.S. bank by market value, lost 18 cents to $23.36. Regions Financial Corp., Alabama's biggest bank, declined 29 cents to $10.66.
Dividend Concern
Credit Suisse Group AG lowered its share-price forecasts for the banks and said as many as 40 percent of the top 50 U.S. regional lenders may be forced to cut their dividends or raise ``more expensive and dilutive forms of capital over the next few quarters.''
Cisco Systems declined 62 cents, or 2.7 percent, to $22.26. The world's biggest maker of computer-networking equipment may say fourth-quarter revenue was ``flat to down'' from the third quarter, according to UBS AG.
``Enterprise spending remains challenging and there has been further slowing in the U.S., especially in the West Coast region,'' New York-based UBS analyst Nikos Theodosopoulos wrote in a report today. ``We also see Europe slowing from last quarter.''
Intel lost 45 cents, or 2.2 percent, to $20.47. The world's biggest maker of computer chips may fail to beat earnings estimates in the second half as some customers curb spending and Advanced Micro Devices Inc. introduces new products, Merrill said.
Oil Climbs
Continental dropped 60 cents, or 5.9 percent, to $9.64. Wal- Mart, the biggest retailer, tumbled 97 cents to $58.14.
Crude oil for August delivery rose $1.28, or 0.9 percent, to $137.32 a barrel in New York. Futures tumbled 6.4 percent the past two days, the biggest two-session decline since March 19 and 20. Prices are still up 90 percent from a year ago.
Alcoa, the first company in the Dow to report second-quarter results, climbed $1.26 to $33.59. The company's profit excluding certain items of 71 cents a share, topping the 65-cent average estimate of 17 analysts in a Bloomberg survey.
Mattson Technology Inc. fell 41 cents to $4.51. The provider of equipment used to make semiconductors said its second-quarter loss was wider than it predicted because of ``protracted weakness'' in the chip market.
Mohawk Industries Inc. sank 78 cents to $64.12. The U.S. carpet and tile maker said second-quarter earnings may be $1.23 to $1.26 a share, compared with a previous forecast of $1.36 to $1.45, as the housing market deteriorates.
U.S. shares rallied yesterday, sending the S&P 500 to its steepest advance in a month. Banks and transportation companies led gains after JPMorgan Chase & Co.'s chief executive officer said the credit crisis will ease and oil posted its biggest drop since March.
Tuesday, July 8, 2008
Oil Decline ??? WOW !!!!!!!
U.S. Stocks Push Higher On Oil's Decline, Fed Assurances
U.S. stocks on Tuesday moved solidly up after several visits to negative turf, with a broad sell-off in commodities pushing crude down for a second day and Federal Reserve Chairman Ben Bernanke offering solace to the battered financial sector.
"The market is bouncing back; yesterday there was a lot of negative news, and clearly the Fed's announcement today is helping. Of course oil coming down also helps," said Noman Ali, a portfolio manager with MFC Global Investment Management.
Down at the start, the Dow Jones Industrial Average (DJI) tossed its losses aside within the first 10 minutes of trading, and then struggled to retain its gains in volatile action.
As the final hour of trade approached, the Dow was up 82.64 points to 11, 314.6.
Of the blue-chip index's 30 components, 22 posted gains, recently led by Bank of America Corp. (BAC), up 5.3%, and Pfizer Inc. (PFE), up 4.1%.
The Dow's biggest loser was Alcoa Inc. (AA), off 3.7%, with the aluminum producer due to report on its second quarter after the close, in an unofficial kick off of the earnings season. .
The S&P 500 Index (SPX) rose 9.90 points to 1,262.21, with financials and health care leading sector gains, up 3% and 2.1%, respectively.
Of the S&P's 10 industry groups, energy declined the most, down 2.7%, followed by materials, recently off 0.4%.
Natural-gas shares led declines among energy stocks, with the sell-off continuing even after the U.S. Energy Information Administration said spot prices for crude would likely average $127 a barrel in 2008 and $133 next year. .
In an overall positive for the equities market, the price of crude futures slumped sharply for a second day, with the spot month down $4.67 to $136.50 a barrel, while Treasury prices declined were mixed, with the yield on the two- year note rising to 2.4%. The dollar firmed, with dollar index recently at 72.97, compared with 72.67 earlier on.
The technology-heavy Nasdaq Composite Index (RIXF) gained 27.67 points to 2, 270.99.
VMware Inc. (VMW) was among those dogging the tech sector, with its stock down 26.5% after the EMC Corp. (EMC) spinoff announced the departure of its chief executive and warned that sales would come in below previous estimates. .
Volume on the New York Stock Exchange surpassed 1.1 billion shares, and advancing issues ran ahead of those declining, roughly 9 to 7. On the Nasdaq, nearly 746 million shares traded and advancers topped decliners more than 3 to 2.
Active issues
Ambac Financial Inc. (ABK) soared more than 50% after the bond insurer disclosed collateral-posting requirements for its guaranteed investment contract business were smaller than some investors had feared. .
Office Depot Inc. (ODP) warned that North American same-store retail sales for the second quarter dropped 10%. Pepsi Bottling Group Inc. (PBG) edged past earnings estimates for the second quarter, but cut its revenue outlook for the year.
LCD-TV maker Syntax Brillian (BRLCD) sold some assets to TCV Group and filed for protection from creditors under Chapter 11 bankruptcy rules. It expects the common shares to have no value after the filing and reorganization.
Federal funds
"Unless and until the economic clouds part, we'll likely see the housing market continue to struggle," Mike Larson, analyst at Weiss Research, said of the National Association of Realtors' measure of pending-home sales, which fell 4.7% in May. .
Ahead of the opening bell, stock-index futures had trimmed their losses as Bernanke said that the Federal Reserve might extend the time frame for embattled brokerages to tap the central bank for emergency funds.
The Fed move offered assurances that "there is little risk of actual bankruptcy for the [financial] sector," said Ali.
Worries that Fannie Mae (FNM) and Freddie Mac (FRE) may have to raise more capital, along with a report that Lehman Brothers Holdings Inc. (LEH) was temporarily barred from trading oil contracts reignited financial-sector worries ahead of second-quarter earnings season, prompting stocks to slide on Monday.
On Tuesday, shares of Fannie and Freddie gained some ground with comments by analysts and regulators easing worries the big mortgage buyers might have to return to the capital markets due to pending accounting-rule changes.
Adding his voice to the mix, Richmond Fed President Jeffrey Lacker said the Federal Reserve shouldn't wait too long before raising interest rates.
International stocks saw heavy pressure, with the Nikkei 225 losing 2.4% in Tokyo. The FTSE 100 lost 1.3% in London.
cnn.com
Monday, June 30, 2008
Here We GO $ 150 a Barrel for Oil
Oil Rises to Record on Concern Iran Supplies May Be Disrupted
By R. Tuttle
Crude oil rose to a record above $143 a barrel, completing the biggest quarterly increase in nine years, on concern Israel may attack Iran over its nuclear program and disrupt supply from OPEC's second-largest producer.
Pressure on Iran to end uranium enrichment and the falling value of the U.S. dollar may drive prices to $170 a barrel, OPEC President Chakib Khelil said June 28. Kuwait, the fourth-largest OPEC producer, is taking precautionary steps to export oil if Iran closes the Strait of Hormuz, Kuna news agency reported.
``We are going beyond rhetoric at this point,'' said William Adams, managing director of JKV Global in Chicago. ``Israel's intentions are pretty clear. That's going to keep prices pretty high.''
Crude oil for August delivery rose $1.96, or 1.4 percent, to $142.17 a barrel at 10:01 a.m. on the New York Mercantile Exchange after rising to a record $143.67. The price has doubled in the past year. Oil has risen 34.6 percent so far this quarter, the largest gain since the first quarter of 1999.
Foreign ministers from the Group of Eight nations last week suggested more talks to coax Iran into opening its nuclear program to inspectors, after speculation the Islamic Republic faces an imminent Israeli strike.
Goldman Sachs Group Inc., Wall Street's most profitable bank, said in a report that supply and demand, rather than speculators, are responsible for oil's rally.
`Excessive Speculation'
The U.S. House of Representatives last week approved a bill calling on the Commodity Futures Trading Commission to use its emergency powers to ``curb immediately the role of excessive speculation'' in any market it oversees where energy futures or swaps are traded.
Brent crude oil for August settlement rose $2.21, or 1.6 percent, to $142.52 a barrel on London's ICE Futures Europe exchange, after reaching a record $143.91.
Nigeria's rank among producers in the Organization of Petroleum Exporting Countries has slipped behind that of Angola amid violence by militants. Chevron Corp., Royal Dutch Shell Plc. and Eni SpA have all shuttered fields in Nigeria this month.
``Tensions ratchet up in Iran and troubles continue in Nigeria, drawing funds into the market,'' said Robert Montefusco, a broker at Sucden (U.K.) Ltd. in London. ``The weak dollar is also helping. The market does not want to break down just yet.''
The European Central Bank is expected to raise interest rates a quarter-percentage point to 4.25 percent, according to a survey of economists by Bloomberg News. The dollar has declined 8 percent this year against the euro.
Avoid the dollar ``at all costs,'' investor Jim Rogers said in Shanghai today. ``The best investments in 2008 are commodities and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything including seeds.''
Rising Prices
Hedge fund managers and other large speculators almost doubled their bets on rising prices in the week ended June 24, according to U.S. Commodity Futures Trading commission data.
Net-long positions in New York oil contracts, the difference between contracts to buy and sell the commodity, rose to 24,217 contracts. Long positions climbed from a five-month low a week earlier while contracts to sell oil fell a second week to a two- month low.
By R. Tuttle
Crude oil rose to a record above $143 a barrel, completing the biggest quarterly increase in nine years, on concern Israel may attack Iran over its nuclear program and disrupt supply from OPEC's second-largest producer.
Pressure on Iran to end uranium enrichment and the falling value of the U.S. dollar may drive prices to $170 a barrel, OPEC President Chakib Khelil said June 28. Kuwait, the fourth-largest OPEC producer, is taking precautionary steps to export oil if Iran closes the Strait of Hormuz, Kuna news agency reported.
``We are going beyond rhetoric at this point,'' said William Adams, managing director of JKV Global in Chicago. ``Israel's intentions are pretty clear. That's going to keep prices pretty high.''
Crude oil for August delivery rose $1.96, or 1.4 percent, to $142.17 a barrel at 10:01 a.m. on the New York Mercantile Exchange after rising to a record $143.67. The price has doubled in the past year. Oil has risen 34.6 percent so far this quarter, the largest gain since the first quarter of 1999.
Foreign ministers from the Group of Eight nations last week suggested more talks to coax Iran into opening its nuclear program to inspectors, after speculation the Islamic Republic faces an imminent Israeli strike.
Goldman Sachs Group Inc., Wall Street's most profitable bank, said in a report that supply and demand, rather than speculators, are responsible for oil's rally.
`Excessive Speculation'
The U.S. House of Representatives last week approved a bill calling on the Commodity Futures Trading Commission to use its emergency powers to ``curb immediately the role of excessive speculation'' in any market it oversees where energy futures or swaps are traded.
Brent crude oil for August settlement rose $2.21, or 1.6 percent, to $142.52 a barrel on London's ICE Futures Europe exchange, after reaching a record $143.91.
Nigeria's rank among producers in the Organization of Petroleum Exporting Countries has slipped behind that of Angola amid violence by militants. Chevron Corp., Royal Dutch Shell Plc. and Eni SpA have all shuttered fields in Nigeria this month.
``Tensions ratchet up in Iran and troubles continue in Nigeria, drawing funds into the market,'' said Robert Montefusco, a broker at Sucden (U.K.) Ltd. in London. ``The weak dollar is also helping. The market does not want to break down just yet.''
The European Central Bank is expected to raise interest rates a quarter-percentage point to 4.25 percent, according to a survey of economists by Bloomberg News. The dollar has declined 8 percent this year against the euro.
Avoid the dollar ``at all costs,'' investor Jim Rogers said in Shanghai today. ``The best investments in 2008 are commodities and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything including seeds.''
Rising Prices
Hedge fund managers and other large speculators almost doubled their bets on rising prices in the week ended June 24, according to U.S. Commodity Futures Trading commission data.
Net-long positions in New York oil contracts, the difference between contracts to buy and sell the commodity, rose to 24,217 contracts. Long positions climbed from a five-month low a week earlier while contracts to sell oil fell a second week to a two- month low.
Saturday, June 28, 2008
Bear Market 2008 !
Battered by Oil, Dow Touches Bear Territory
By MICHAEL M. GRYNBAUM
Published: June 28, 2008
After eight brutal months on Wall Street, the Dow Jones industrial average finally made it official: Blue-chip stocks have stumbled into bear territory.
After a brief rally in April, stocks indexes have resumed a downward trend. For the week the Dow industrials fell nearly 4.2 percent.
A trader at the New York Mercantile Exchange on Friday, where the price of crude oil settled at $140.21 a barrel, up 57 cents.
A brief 155-point slide on Friday afternoon brought the decline in the Dow to 20 percent from its October peak, an ignominious figure that is generally regarded as marking the start of a bear market. The index ended down 107 points, a mere 0.1 percent above the threshold. The broader Standard & Poor’s 500-stock index has not fallen quite as much.
The eight-month journey has roughly followed the twists of the subprime mortgage crisis, with a significant drop after the Bear Stearns collapse and a tantalizing rally when the economy appeared to recover slightly last month.
But in June, as the price of oil kept rising and the pain in the financial industry showed no signs of easing, the losses gained momentum. Many investors concluded that the economy was in worse shape than they had initially feared. This month, as the price of crude has gained about $13, the Dow has shed more than 1,000 points. The index closed at 11,346.51.
Few of the 30 companies in the Dow industrial index were spared Friday, reflecting growing concern among investors that the ongoing credit squeeze and record energy prices are taking a severe toll on industries throughout the economy. Procter & Gamble fell 2.2 percent. Boeing sank almost 1.9 percent. General Motors, which had plunged to its lowest level in decades on Thursday, eked out a small gain.
“The problem is, right now, things are too simple,” said Brian Gendreau, a strategist at ING Investment Management. “Whether it’s for airlines or automobiles or industry after industry, the market as a whole has become a play on energy, on oil.”
The broader stock market has fared better than the Dow, but only slightly. The Standard & Poor’s 500-stock index, a broader measure of American stocks, fell 0.37 percent on Friday to close at 1,278.38. It is 18.3 percent off its October high.
Entering a bear market is a bleak milestone, if primarily a symbolic one. But it would make official what investors have known for months: The economy is in trouble, with little relief in sight.
Since the Dow reached its record high last October, all but three of the 30 stocks in the index have lost value. The biggest losers are General Motors (down more than 70 percent), Citigroup (down 64 percent) and the American International Group (down 60 percent).
Wal-Mart has gained almost 25 percent. Chevron Corporation and I.B.M. have posted modest gains.
“Three months ago, I could have said, well, we’re in a dual economy,” Mr. Gendreau said. “Some sectors like housing or finance aren’t doing well. Other sectors are doing fine. Now, a lot of those assumptions have been called into question. It’s all been driven by developments in a single commodity market.”
A similar pattern has popped up all over the world, where several central banks have warned about encroaching inflation, primarily as a result of the run-up in energy prices.
Nearly halfway through the year, stock-market investors the world over are nursing losses. Blue-chip indexes in France, Germany and other European countries are down more than 20 percent. Emerging markets in China and Vietnam have lost about half their value.
And there appears to be little on the horizon to stanch the losses.
“We still have worries about high oil prices, worries about inflation, in my mind still questions about the economy,” Richard Sparks, an analyst at Schaeffer’s Investment Research, said. “Even though we’ve seen consumer spending bump up with the retail checks, my question is what happens at the end of next month when there are no stimulus checks coming out any more.”
The last bear market, as measured by the broad S.& P. 500 index, stretched from March 2000 to October 2002. During that time, the S.& P. 500 fell almost 48 percent.
During the 20th century, the stock market went through three great bear runs: 1901-21, 1929-48 and 1965-82. Those periods coincided with geopolitical or economic turbulence — wars, the Depression, stagflation. Of course, all of those periods eventually gave way to great bull markets.
While stock prices have fallen this year, shares still are not all that cheap by historical standards. On Friday, the 500 stocks in the S.& P. 500 traded at an average of 21.2 times those companies’ earnings per share. Since 1990, that price-earnings ratio has averaged 24.3.
The Nasdaq Composite Index, heavily weighted with technology stocks, closed down 0.25 percent, or 5.74 points, at 2,315.63. Treasury bond yields fell, and the dollar weakened against the euro.
The benchmark 10-year Treasury note rose 17/32, to 99 8/32. Its yield, which moves in the opposite direction, fell to 3.97 percent, from 4.03 percent.
By MICHAEL M. GRYNBAUM
Published: June 28, 2008
After eight brutal months on Wall Street, the Dow Jones industrial average finally made it official: Blue-chip stocks have stumbled into bear territory.
After a brief rally in April, stocks indexes have resumed a downward trend. For the week the Dow industrials fell nearly 4.2 percent.
A trader at the New York Mercantile Exchange on Friday, where the price of crude oil settled at $140.21 a barrel, up 57 cents.
A brief 155-point slide on Friday afternoon brought the decline in the Dow to 20 percent from its October peak, an ignominious figure that is generally regarded as marking the start of a bear market. The index ended down 107 points, a mere 0.1 percent above the threshold. The broader Standard & Poor’s 500-stock index has not fallen quite as much.
The eight-month journey has roughly followed the twists of the subprime mortgage crisis, with a significant drop after the Bear Stearns collapse and a tantalizing rally when the economy appeared to recover slightly last month.
But in June, as the price of oil kept rising and the pain in the financial industry showed no signs of easing, the losses gained momentum. Many investors concluded that the economy was in worse shape than they had initially feared. This month, as the price of crude has gained about $13, the Dow has shed more than 1,000 points. The index closed at 11,346.51.
Few of the 30 companies in the Dow industrial index were spared Friday, reflecting growing concern among investors that the ongoing credit squeeze and record energy prices are taking a severe toll on industries throughout the economy. Procter & Gamble fell 2.2 percent. Boeing sank almost 1.9 percent. General Motors, which had plunged to its lowest level in decades on Thursday, eked out a small gain.
“The problem is, right now, things are too simple,” said Brian Gendreau, a strategist at ING Investment Management. “Whether it’s for airlines or automobiles or industry after industry, the market as a whole has become a play on energy, on oil.”
The broader stock market has fared better than the Dow, but only slightly. The Standard & Poor’s 500-stock index, a broader measure of American stocks, fell 0.37 percent on Friday to close at 1,278.38. It is 18.3 percent off its October high.
Entering a bear market is a bleak milestone, if primarily a symbolic one. But it would make official what investors have known for months: The economy is in trouble, with little relief in sight.
Since the Dow reached its record high last October, all but three of the 30 stocks in the index have lost value. The biggest losers are General Motors (down more than 70 percent), Citigroup (down 64 percent) and the American International Group (down 60 percent).
Wal-Mart has gained almost 25 percent. Chevron Corporation and I.B.M. have posted modest gains.
“Three months ago, I could have said, well, we’re in a dual economy,” Mr. Gendreau said. “Some sectors like housing or finance aren’t doing well. Other sectors are doing fine. Now, a lot of those assumptions have been called into question. It’s all been driven by developments in a single commodity market.”
A similar pattern has popped up all over the world, where several central banks have warned about encroaching inflation, primarily as a result of the run-up in energy prices.
Nearly halfway through the year, stock-market investors the world over are nursing losses. Blue-chip indexes in France, Germany and other European countries are down more than 20 percent. Emerging markets in China and Vietnam have lost about half their value.
And there appears to be little on the horizon to stanch the losses.
“We still have worries about high oil prices, worries about inflation, in my mind still questions about the economy,” Richard Sparks, an analyst at Schaeffer’s Investment Research, said. “Even though we’ve seen consumer spending bump up with the retail checks, my question is what happens at the end of next month when there are no stimulus checks coming out any more.”
The last bear market, as measured by the broad S.& P. 500 index, stretched from March 2000 to October 2002. During that time, the S.& P. 500 fell almost 48 percent.
During the 20th century, the stock market went through three great bear runs: 1901-21, 1929-48 and 1965-82. Those periods coincided with geopolitical or economic turbulence — wars, the Depression, stagflation. Of course, all of those periods eventually gave way to great bull markets.
While stock prices have fallen this year, shares still are not all that cheap by historical standards. On Friday, the 500 stocks in the S.& P. 500 traded at an average of 21.2 times those companies’ earnings per share. Since 1990, that price-earnings ratio has averaged 24.3.
The Nasdaq Composite Index, heavily weighted with technology stocks, closed down 0.25 percent, or 5.74 points, at 2,315.63. Treasury bond yields fell, and the dollar weakened against the euro.
The benchmark 10-year Treasury note rose 17/32, to 99 8/32. Its yield, which moves in the opposite direction, fell to 3.97 percent, from 4.03 percent.
Thursday, June 26, 2008
Peru Stock Rising higher ! BPZ Resources
BPZ Resources rallies on Shell pact in Peru
By Steve Gelsi
NEW YORK (MarketWatch) -- BPZ Resources Inc. (BZP: )
BZP 27.77, +3.34, +13.7%) on Thursday said it reached a memorandum of understanding with a unit of Royal Dutch Shell (RDSA:
Sponsored by:
RDSA 78.83, -0.52, -0.7%) to develop oil and gas ventures in Northwest Peru. Shell Exploration Company (West) B.V. (Shell) will commit to an exploration and appraisal program worth up to a proposed $300 million. Regional power generation, gas supply for local and regional industry and liquid natural gas production are all in the works. Shares of Houston-based BPZ jumped 14% to $27.88 in recent trades.
Monday, June 23, 2008
Oil still going higher !!
Oil Rises as Saudi Pledge Fails to Ease Nigeria Supply Concern
By Mark Shenk
June 23 (Bloomberg) -- Crude oil rose on signs that Saudi Arabia's output increase may not raise global supply enough to make up for production disruptions in Nigeria.
Attacks on a Royal Dutch Shell Plc platform and a Chevron Corp. pipeline last week halted 300,000 barrels a day of Nigerian output. Nigeria's white-collar oil union began a strike against Chevron today. Saudi Arabia will pump an extra 200,000 barrels a day next month, Oil Minister Ali al-Naimi said yesterday.
``The attack on the offshore platform and the Chevron pipeline point to an escalation,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``The Saudi news was widely expected, so it's had little effect. There were some hopes for a more substantial increase.''
Crude oil for August delivery rose $1.74, or 1.3 percent, to $137.10 a barrel at 11:31 a.m. on the New York Mercantile Exchange. Prices touched a record $139.89 on June 16.
An attack on Shell's Bonga platform, off the coast of Nigeria, on June 19 may halt deliveries for as long as six weeks, the company said last week. The field produces about 190,000 barrels a day. Chevron halted 120,000 barrels a day of onshore production after its pipeline was blown up last week.
After the latest round of attacks, the Movement for the Emancipation of the Niger Delta said it will declare a cease-fire starting tomorrow to ``give peace and dialogue another chance.'' Action against foreign oil companies in Nigeria will end at midnight local time tomorrow, the group said in a statement yesterday.
High Quality Oil
``If the truce comes true it will be very big news,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``It would be very bearish for the markets because a great deal of high quality, distillate rich, crude would be made available.''
Nigeria produces low-sulfur, or sweet, oils prized by refiners because of the high proportion of gasoline and distillate fuels it yields. Distillate fuel is a category that includes heating oil and diesel.
``The employees belonging to the Petroleum and Natural Gas Senior Staff Association of Nigeria have declared a work stoppage,'' Chevron spokeswoman Margaret Cooper said today in a statement.
Cooper said it's too early to comment on the impact of the strike on operations. Chevron in 2007 produced about 350,000 barrels of oil a day from its 32 fields in Nigeria, according to the company's Web site.
Jonathan Omare, secretary of the local Chevron union, said a full-scale strike had begun, though production was not yet affected. ``The strike is everywhere,'' Omare said by telephone. `Nobody's working apart from the guys in the field.''
Saudi Increase
Saudi Arabia first pledged to increase production by 200,000 barrels a day after a meeting between King Abdullah and United Nations Secretary-General Ban Ki-Moon that was reported on June 16. The kingdom will offer more oil if there is demand and also plans to increase its production capacity to 12.5 million barrels a day by the end of next year, al-Naimi said yesterday.
``People were expecting an increase of about this size, so it's a minor element in the market today,'' Lynch said. ``There would have had to be an increase of 1 million barrels to have a major impact.''
Saudi Arabia may need to sell its oil cheaply to complete deliveries after proposing its production increase, the London- based Centre for Global Energy Studies said in a monthly report today.
Brent crude oil for August settlement rose $1.54, or 1.1 percent, to $136.40 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $139.32 on June 16.
By Mark Shenk
June 23 (Bloomberg) -- Crude oil rose on signs that Saudi Arabia's output increase may not raise global supply enough to make up for production disruptions in Nigeria.
Attacks on a Royal Dutch Shell Plc platform and a Chevron Corp. pipeline last week halted 300,000 barrels a day of Nigerian output. Nigeria's white-collar oil union began a strike against Chevron today. Saudi Arabia will pump an extra 200,000 barrels a day next month, Oil Minister Ali al-Naimi said yesterday.
``The attack on the offshore platform and the Chevron pipeline point to an escalation,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``The Saudi news was widely expected, so it's had little effect. There were some hopes for a more substantial increase.''
Crude oil for August delivery rose $1.74, or 1.3 percent, to $137.10 a barrel at 11:31 a.m. on the New York Mercantile Exchange. Prices touched a record $139.89 on June 16.
An attack on Shell's Bonga platform, off the coast of Nigeria, on June 19 may halt deliveries for as long as six weeks, the company said last week. The field produces about 190,000 barrels a day. Chevron halted 120,000 barrels a day of onshore production after its pipeline was blown up last week.
After the latest round of attacks, the Movement for the Emancipation of the Niger Delta said it will declare a cease-fire starting tomorrow to ``give peace and dialogue another chance.'' Action against foreign oil companies in Nigeria will end at midnight local time tomorrow, the group said in a statement yesterday.
High Quality Oil
``If the truce comes true it will be very big news,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``It would be very bearish for the markets because a great deal of high quality, distillate rich, crude would be made available.''
Nigeria produces low-sulfur, or sweet, oils prized by refiners because of the high proportion of gasoline and distillate fuels it yields. Distillate fuel is a category that includes heating oil and diesel.
``The employees belonging to the Petroleum and Natural Gas Senior Staff Association of Nigeria have declared a work stoppage,'' Chevron spokeswoman Margaret Cooper said today in a statement.
Cooper said it's too early to comment on the impact of the strike on operations. Chevron in 2007 produced about 350,000 barrels of oil a day from its 32 fields in Nigeria, according to the company's Web site.
Jonathan Omare, secretary of the local Chevron union, said a full-scale strike had begun, though production was not yet affected. ``The strike is everywhere,'' Omare said by telephone. `Nobody's working apart from the guys in the field.''
Saudi Increase
Saudi Arabia first pledged to increase production by 200,000 barrels a day after a meeting between King Abdullah and United Nations Secretary-General Ban Ki-Moon that was reported on June 16. The kingdom will offer more oil if there is demand and also plans to increase its production capacity to 12.5 million barrels a day by the end of next year, al-Naimi said yesterday.
``People were expecting an increase of about this size, so it's a minor element in the market today,'' Lynch said. ``There would have had to be an increase of 1 million barrels to have a major impact.''
Saudi Arabia may need to sell its oil cheaply to complete deliveries after proposing its production increase, the London- based Centre for Global Energy Studies said in a monthly report today.
Brent crude oil for August settlement rose $1.54, or 1.1 percent, to $136.40 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $139.32 on June 16.
Saturday, June 21, 2008
Need More Oil ??
U.S. Energy Secretary says more oil needed to tame price
JEDDAH, Saudi Arabia (Reuters) - Producers must pump more to ease the pain felt in the United States and elsewhere from record fuel prices, U.S. Energy Secretary Sam Bodman said on Saturday. He blamed tight supplies for fuelling a rally which lifted..."
JEDDAH, Saudi Arabia (Reuters) - Producers must pump more to ease the pain felt in the United States and elsewhere from record fuel prices, U.S. Energy Secretary Sam Bodman said on Saturday.
He blamed tight supplies for fuelling a rally which lifted oil close to $140 a barrel this week, sparking protests across Asia and Europe.
"Anything that will add supply to the market is important," he said.
"While increases in near term oil production are welcome and necessary, fundamentally the market needs to see investment in increasing the longer term production capability."
Bodman, representing the world's biggest oil consumer, was in Jeddah for a Saudi-hosted emergency meeting of energy powers on Sunday.
"The world faces an extraordinary time that, in my view, demands responsible action from both consuming and producing nations," he said.
Top oil exporter Saudi Arabia already has vowed to boost supply by 200,000 barrels per day (bpd) in July -- to the highest rate in decades.
And other major producers with the ability to pump more may join in, according to a senior Gulf OPEC official.
Bodman said prices would soar higher if more oil was not forthcoming.
"In the absence of any additional crude supply, for every one percent of crude demand, we will expect a 20 percent increase in price in order to balance the market."
"These are very high oil prices. They have a severe impact certainly on the families of the United States, but also on the families of other countries as well."
JEDDAH, Saudi Arabia (Reuters) - Producers must pump more to ease the pain felt in the United States and elsewhere from record fuel prices, U.S. Energy Secretary Sam Bodman said on Saturday. He blamed tight supplies for fuelling a rally which lifted..."
JEDDAH, Saudi Arabia (Reuters) - Producers must pump more to ease the pain felt in the United States and elsewhere from record fuel prices, U.S. Energy Secretary Sam Bodman said on Saturday.
He blamed tight supplies for fuelling a rally which lifted oil close to $140 a barrel this week, sparking protests across Asia and Europe.
"Anything that will add supply to the market is important," he said.
"While increases in near term oil production are welcome and necessary, fundamentally the market needs to see investment in increasing the longer term production capability."
Bodman, representing the world's biggest oil consumer, was in Jeddah for a Saudi-hosted emergency meeting of energy powers on Sunday.
"The world faces an extraordinary time that, in my view, demands responsible action from both consuming and producing nations," he said.
Top oil exporter Saudi Arabia already has vowed to boost supply by 200,000 barrels per day (bpd) in July -- to the highest rate in decades.
And other major producers with the ability to pump more may join in, according to a senior Gulf OPEC official.
Bodman said prices would soar higher if more oil was not forthcoming.
"In the absence of any additional crude supply, for every one percent of crude demand, we will expect a 20 percent increase in price in order to balance the market."
"These are very high oil prices. They have a severe impact certainly on the families of the United States, but also on the families of other countries as well."
Friday, June 20, 2008
Another excuse for oil to rise again !!
Oil Rises $4 on Israeli Army Exercise
By TATYANA SHUMSKY and GREGORY MEYERJune 20, 2008 Crude-oil futures jumped Friday as traders mulled a report hinting at a showdown between Israel and Iran and expressed uncertainty over the impact of an international oil summit in Saudi Arabia this weekend.
Light, sweet crude for July delivery was recently up $3.11, or 2.4%, at $135.04 a barrel on the New York Mercantile Exchange after briefly jumping as high as $136.08. The July contract expires Friday. more actively traded August Nymex crude was up $3.22, or 2.4%, to $135.82 a barrel.
August Brent crude on the ICE futures exchange rose $3.08 to $135.08 a barrel.
The New York Times reported in Friday's editions that Israel this month carried out an airborne military exercise that American officials say looked like a "rehearsal" for a potential bombing attack on Iran's controversial nuclear facilities.
International tensions over Iran, the second-largest crude producer in the Organization of Petroleum Exporting Countries, have helped rattle the market amid oil's rise of more than 40% this year. Iran also lies on the Strait of Hormuz, a crucial conduit for the export of Gulf crude.
"At the very least it's noteworthy and potentially concerning," said Eric Wittenauer, an energy analyst at Wachovia Securities in St. Louis. "However, at this point in time the imminence of an attack isn't there. Certainly geopolitical tension in the region can prove price-supportive."
The market partly recovered from a fall precipitated Thursday by China's decision to raise the domestic price of gasoline by 17% and diesel by 18%.
"It gave us a one-day selloff," said Walter Zimmermann, an analyst at brokerage ICAP/United Energy in Jersey City, N.J. "It remains to be seen whether that is going to translate into a decrease in demand."
On Sunday, Saudi Arabia has scheduled a summit of major oil producers and consumers. Traders continue to search for clarity over whether the meeting will result in a production boost.
OPEC President Chakib Khelil said Friday that a production increase doesn't make sense.
"To ask the oil producers to increase their output is illogical and irrational," Mr. Khelil told the Algerie Presse Service. Earlier reports have indicated Saudi Arabia, OPEC's de facto leader, will increase output by at least 200,000 barrels a day after the meeting.
Front-month July reformulated gasoline blendstock, or RBOB, rose 5.89 cents, or 1.8% to $3.4115 a gallon. July heating oil rose 9.38 cents, or 2.5%, to $3.8073 a gallon.
By TATYANA SHUMSKY and GREGORY MEYERJune 20, 2008 Crude-oil futures jumped Friday as traders mulled a report hinting at a showdown between Israel and Iran and expressed uncertainty over the impact of an international oil summit in Saudi Arabia this weekend.
Light, sweet crude for July delivery was recently up $3.11, or 2.4%, at $135.04 a barrel on the New York Mercantile Exchange after briefly jumping as high as $136.08. The July contract expires Friday. more actively traded August Nymex crude was up $3.22, or 2.4%, to $135.82 a barrel.
August Brent crude on the ICE futures exchange rose $3.08 to $135.08 a barrel.
The New York Times reported in Friday's editions that Israel this month carried out an airborne military exercise that American officials say looked like a "rehearsal" for a potential bombing attack on Iran's controversial nuclear facilities.
International tensions over Iran, the second-largest crude producer in the Organization of Petroleum Exporting Countries, have helped rattle the market amid oil's rise of more than 40% this year. Iran also lies on the Strait of Hormuz, a crucial conduit for the export of Gulf crude.
"At the very least it's noteworthy and potentially concerning," said Eric Wittenauer, an energy analyst at Wachovia Securities in St. Louis. "However, at this point in time the imminence of an attack isn't there. Certainly geopolitical tension in the region can prove price-supportive."
The market partly recovered from a fall precipitated Thursday by China's decision to raise the domestic price of gasoline by 17% and diesel by 18%.
"It gave us a one-day selloff," said Walter Zimmermann, an analyst at brokerage ICAP/United Energy in Jersey City, N.J. "It remains to be seen whether that is going to translate into a decrease in demand."
On Sunday, Saudi Arabia has scheduled a summit of major oil producers and consumers. Traders continue to search for clarity over whether the meeting will result in a production boost.
OPEC President Chakib Khelil said Friday that a production increase doesn't make sense.
"To ask the oil producers to increase their output is illogical and irrational," Mr. Khelil told the Algerie Presse Service. Earlier reports have indicated Saudi Arabia, OPEC's de facto leader, will increase output by at least 200,000 barrels a day after the meeting.
Front-month July reformulated gasoline blendstock, or RBOB, rose 5.89 cents, or 1.8% to $3.4115 a gallon. July heating oil rose 9.38 cents, or 2.5%, to $3.8073 a gallon.
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