Oil Slick Stuff

Sort by newest Sort by date
Just a reminder:worried:

Friday, November 21, 2008

Oil Companies Storing Oil on Tankers, Waiting for Higher Prices


javascript:showOdiogoReadNowFrame (...rs waiting for higher prices', '0', 290, 55);I am not making this up, and this is NOT Iran, which has stored oil on tankers due to a lack of sufficient refining capacity for its heavy, nasty crude.

Even though the long-term outlook for oil is for higher prices, holding oil already produced off the market is no panacea. But the intent is not to buffer declines, since the amount contracted to be stored at sea is still only a fraction of daily world demand. This is a a speculative move by the oil companies themselves rather than an effort to shift the supply/demand equation (although the oil companies may hope that the information value of their move, that they are confident enough that prices are "too low" to spend money on storage, may help put a floor under oil prices). And due to the falloff in shipping rates generally, tankers can be contracted at very low prices, making this a cheaper gamble than it would ordinarily be.

We have noted before that above-ground oil storage is costly and not as tidy as one would imagine, so in cases like this, oil is not as easily stored as one might imagine.

From Reuters (hat tip reader Michael)
Oil companies plan to store millions of barrels of crude at sea as they wait for demand to pick up and prices to rise.

So far oil companies have booked ships capable of holding up to 10 million barrels, brokers have said, more than the daily output of top exporter Saudi Arabia.

On Thursday U.S. oil trader Koch and Royal Dutch Shell were the latest to confirm bookings of additional Very Large Crude Carriers (VLCC), brokers said...

Brokers said the cost of hiring vessels at current depressed rates would be less than the gains from waiting for an upturn in crude prices and in refiners' profit margins.

More oil and trading firms were also considering floating storage, they said...

Some of the vessels were to load crude in the North Sea, the first time large volumes have been placed in floating storage there since the oil price crashed to below $10 a barrel in 1998.

'All this oil has to go somewhere, especially if the refiners aren't running at capacity,' a Singapore-based crude oil trader said....

Although prompt delivery oil is very weak at around $50 a barrel on Thursday, its lowest level since January 2007. Contracts for March and April next year are above $53.

That has triggered some speculation big oil producers in the Organization of the Petroleum Exporting Countries could also store crude on ships for later sale.

But for Middle Eastern exporters, responsible for the bulk of any OPEC output cut, it is still cheaper to keep the oil in the ground.

'The only reason as a producer you would pay money to put crude in floating storage would be if you would otherwise struggle to get it out of the ground,' said one Gulf industry source.
http://www.nakedcapitalism.com/2008/11/oil-companies-storing-oil-on-tankers.html
​
 
I like the Boortz idea of "looser pays."

You want to sue somebody and you loose, you pay your attorney fees and the attorney fees of the person you sued.
If you win then the looser pays both attorneys fees.
 
KevinD said:
I like the Boortz idea of "loser pays."

You want to sue somebody and you lose, you pay your attorney fees and the attorney fees of the person you sued.
If you win then the loser pays both attorneys fees.
Click to expand...

I may be a loser but at least I'm consistent. :o
 
Ecuador president announces oil production cuts
Sat Dec 27, 1:07 pm ET

QUITO, Ecuador – President Rafael Correa has announced Ecuador will suspend oil production by Italy's Agip and reduce quotas for other companies to comply with new OPEC cuts.

Correa said on Saturday that he has ordered Ecuador's oil minister to cut off all production by Agip, a subsidiary of Eni SpA, Italy's largest natural gas and oil company.

Agip produces 28,000 barrels of oil a day from Ecuador's Amazon jungle. Correa criticized terms of the government contract with Agip.
An Eni spokesman in Italy declined to comment. Agip officials in Ecuador were not available.

The president announced cutbacks for other private oil producers without identifying the companies.

The Organization of Petroleum Exporting Countries, which accounts for about 40 percent of global supply, has announced crude production cuts totaling more than 4 million barrels per day as it tries to stop declining prices.

OPEC members, however, have a history of ignoring announced quotas and crude traders have been waiting for concrete evidence that the 13-nation group was tightening the spigot.
 
While at the same time....

Ecuador president plans foreign debt buyback
Saturday December 27, 1:04 pm ET
President says Ecuador plans to buy back of foreign debt at discount after default

QUITO, Ecuador (AP) -- Ecuador is looking to buy back its bonds at a steep discount after defaulting on part of its foreign debt.

President Rafael Correa says Ecuador may attempt to buy back its foreign debt in January, without specifying which bonds it might purchase.

In his Saturday radio address, the president says, "Let's make a proposal: at the beginning of January, to repurchase this foreign debt, but obviously at a substantially lower value than the face value" of the bonds.

Ecuador is confronting a rising budget deficit, falling oil income and limited access to international credit markets after Correa's decision Dec. 12 to forego a $30.6 million interest payment due on $510 million in debt.
 
It's working!!! Now Drill Baby Drill!!!

With gas falling, trucks come back

Pickups and SUVs will outsell cars this month, according to sales trackers at Edmunds.com.

By Peter Valdes-Dapena, CNNMoney.com senior writer
December 22, 2008: 3:08 PM ET


ford_f150.03.jpg
The introduction of the redesigned Ford F-150 pick-up had been delayed. The truck is just going on sale now.


NEW YORK (CNNMoney.com) -- After nearly a year of flagging sales, low gas prices and fat incentives are reigniting America's taste for big vehicles.
Trucks and SUVs will outsell cars in December, according to researchers at the automotive Website Edmunds.com, something that hasn't happened since February.
Meanwhile the forecast finds that sales of hybrid vehicles are expected to be way down.
"Despite all the public discussion of fuel efficiency, SUVs and trucks are the industry's biggest sellers right now as a remarkable number of buyers seem to be compelled by three factors: great deals, low gas prices and winter weather," commented Michelle Krebs, Senior Editor of Edmunds' AutoObserver.com.
This month, trucks and SUVs will make up 51% all vehicles sold in the U.S., according to Edmunds.com. Before the spike in gas prices earlier this year, market share for trucks and SUVs had been even higher than that, said Edmunds.com sales analyst Jesse Toprak.
"We don't claim they're back to what they used to be," Toprak said "but it's a reversal of the trend."[more]
http://money.cnn.com/2008/12/22/autos/trucks_back/index.htm?postversion=2008122215
 
Seems we have been here before when talking about the price of oil. Problems in the Middle East drives the price of Oil HIGHER!!:mad:

Oil jumps 8% to back above $40

Crude prices rise as violence between Israel and Hamas causes concern over supply from the Middle East.

Last Updated: December 29, 2008: 7:32 AM ET

E-car uses 19th c. technology

More Videos

LONDON (Reuters) -- Oil prices rose above $40 a barrel on Monday, up nearly 8% on the previous session, after violence between Israel and Hamas served as a reminder of tensions that could threaten crude supplies from the Middle East.
U.S. light, sweet crude was up $3.18 at $40.89 a barrel by 5 a.m. EST, below a session high of $42.20.
Oil is on track for a nearly 60% loss this year, the biggest annual fall since futures began trading 25 years ago.
London Brent crude rose $3.24 to $41.61 a barrel, after touching a session high of $43.18.
"Geopolitics had disappeared from the oil scene for the last couple of months but will regain some price premium with the latest Israeli attack in Gaza," Olivier Jakob, of consultants Petromatrix, said in a research note.[more]
http://money.cnn.com/2008/12/29/news/economy/oil.reut/index.htm?postversion=2008122907
 
Better go fill up the tank today, while the price of gas is down.

Looks like jumps in oil price today due to production cutbacks, combined with Gaza Strip unrest. Israel may be getting the tanks ready to roll in. If they do that, watch the price of oil jump again.


From Netherlands News Radio: http://www.radionetherlands.nl/news/international/6114084/Israeli-tanks-seal-off-Gaza-Strip

Israeli tanks seal off Gaza Strip
Last updated: Monday 29 December 2008 14:14 UTC

Israeli planes have attacked Hamas targets across the Gaza Strip for a third day. The latest targets included Gaza's interior ministry and the Islamic University. Palestinian sources say 310 Palestinians have been killed and 1,400 injured. A Palestinian rocket has killed a second person.

Israel is massing tanks along the border with Gaza and has declared the area a "closed military zone", barring civilians and journalists. Israel has also called up 6,500 reservists. Israeli Defence Minister Ehud Barak says Israel is in an "all-out war against Hamas" but did not mention the possibility of a ground offensive. Palestinian diplomats have ruled out further talks with Israel while the bombardments continue.

The Israeli strikes, which come two years after Israel invaded Lebanon, have further increased tensions across the region. In Lebanon Hizbollah leaders called for extra vigilance and Syria has broken off exploratory peace talks with Israel. Thousands of students in Iran have taken to the streets in a show of support for Hamas. Hamas has asked Arab countries for help.
 
Even within Israel, this is causing quite a stir: Here is today's story from the publication "Haareetz", referring to Defense Minister Ehud Barak, who also happens to be a candidate for Prime Minister for the election next month. Some are saying the fighting is a political move:

http://www.haaretz.com/hasen/spages/1050940.html

"...Barak told the assembled lawmakers that the defense establishment spent months preparing for the Gaza operation.

Likud chairman MK Benjamin Netanyahu criticized the Arab protests while calling on Prime Minister Ehud Olmert to dismiss minister Raleb Majadele, the lone Arab serving in the cabinet.

Arab MKs repeatedly accused the government of waging a war for electioneering purposes and the defense minister of intentionally killing children. Russian-Israeli MK Avigdor Lieberman (Yisrael Beiteinu) proposed that the Arab lawmakers relocate to Gaza and not return. The Arab MKs retorted by calling him a "Fascist," and insisted that he should return to the country where he came from.

"There are those who are counting bodies and at the same time counting Knesset seats," Israeli Arab MK Ahmed Tibi (Ra'am-Ta'al) said. "Bodies for votes - this is done primarily by the Labor Party."

"There are those who are profiting from Palestinian blood in order to get elected," Hadash chairman MK Mohammed Barakeh said. Barakeh and MK Taleb a-Sana were subsequently evicted from the plenum. "


Geeze- what a mess.
 
We know that Iran is behind this whole thing. If Iran starts throwing stones at isreal, that's when Oil will fly to the sky!!:worried:
 
Oil falls again after 12% pop

Crude is on target for a 60% loss, the biggest annual fall in 25 years.

December 30, 2008: 6:02 AM ET

Gaza war pushes oil higher


LONDON, (Reuters) -- Oil fell below $40 a barrel on Tuesday, pressured by gloom about prospects for world economic growth which outweighed heightened tensions in the Middle East due to the Israeli-Hamas conflict.
Prices had jumped as much as 12% on Monday after Israel launched its fiercest air offensive in the Hamas-ruled Gaza strip in decades.
At 6 a.m. ET, U.S. crude was down 50 cents at $39.42 a barrel, having earlier touched a session high of $40.39.
"With most global economies struggling and credit markets still in an impaired state, it is hard to get too excited about the upside potential in energy markets attributable solely to geopolitical factors unless, of course, these are directed at the heart of the oil supply system," said Edward Meir of futures broker MF Global.
Oil is heading for a loss of nearly 60% this year, its biggest annual fall since futures began trading 25 years ago. It has dropped more than $100 from a record peak above $147 a barrel in July.
"People are still wary of the global economic problems. There is still pessimistic news coming out of the States," said Gerard Rigby, an analyst at Fuel First Consulting in Sydney.
He said he would also be watching the dollar and stock markets moves.
The dollar slipped against the euro and a basket of currencies, depressed partly by the Israeli offensive, which has helped to dampen dollar sentiment.
The Organization of the Petroleum Exporting Countries has agreed its biggest-ever production cut of 2.2 million barrels per day (bpd) to fight the oil market slide.
The group has cut output three times in an effort to remove about 5% of world supply.
OPEC oil supply, excluding Iraq and Indonesia, is expected to fall by 400,000 barrels per day in December as members boost compliance with their deal to reduce output, consultant Petrologistics said.
The estimate indicates OPEC has more than delivered on its pledge to lower supply from 11 members to 27.3 million barrels per day from Nov.1 to prop up prices.
A poll of analysts forecast that U.S. crude stocks will have fallen by 1.4 million barrels last week, while distillate inventories will have risen by 1 million barrels and gasoline stocks increased by 1.5 million barrels. EIA/S
Weekly U.S. fuel inventory data is due on Wednesday.
http://money.cnn.com/2008/12/30/news/economy/oil.reut/index.htm?postversion=2008123006
 
OPEC supply falls

OPEC countries curb production by 400,000 barrels per day in December.

December 30, 2008: 6:11 AM ET


LONDON (Reuters) -- Output from OPEC members bound by supply targets fell by 400,000 barrels per day (bpd) in December, consultant Petrologistics said on Tuesday, as the group more than complied with a deal to try to boost oil prices.
Supply from 11 exporters was expected to average 27.1 million bpd in December, down from about 27.5 million bpd in November, said Conrad Gerber of Petrologistics, an established tracker of oil tankers.
The Organization of the Petroleum Exporting Countries had pledged to lower supply to 27.3 million bpd from Nov. 1 in a pact that excluded only Iraq, which does not have a production target, and Indonesia, which leaves OPEC at the end of the year.
"They are taking off barrels, there is no doubt about that," Gerber told Reuters. "The reductions from the main Gulf producers have been drastic."
Supply is likely to decline further in January after OPEC agreed earlier this month to curb production by an additional 2.2 million bpd from Jan. 1.[more]
http://money.cnn.com/2008/12/30/news/economy/opec_cuts.reut/index.htm?postversion=2008123006
 
Yes it looks like Oil is destined to go higher after it reaches new lows, but it's not there IMHO. If Our government doesn't do something we will be back at the same place again, paying $4.50 a gallon for gas and our economy suffering. DRILL DRILL DRILL is all I can say. If I was an investor I would invest in Oil after the near term bottom, where ever that is?:cool:
 
Last edited:
I suggested that a while back. Cut Oil inports and we Cut grain exports, and see who can last the longest!!:cool:
FEED ME! FEEEEDD MEEEE! reminds me of a movie!!:laugh:
 
This oil man favors a gas-tax hike

If the government raises the cost of driving, it surely would be bad for the energy business. So what's the CEO of Western Refining thinking?

By Nicholas Varchaver, senior editor
Last Updated: December 30, 2008: 9:39 AM ET

paul_foster.03.jpg
Paul Foster, chairman and CEO of Western Refining.

NEW YORK (Fortune) -- It's not often you hear a corporate executive advocate a tax on the product he sells, particularly not in the oil business, where opposition to gasoline taxes is fervent. But Paul Foster, the chairman and CEO of El Paso-based Western Refining, is (dare we use the word after the presidential campaign?) a maverick.
Foster, 51, is a conservative Republican who has spent his entire career in the energy industry. He founded Western Refining (WNR, Fortune 500) in 1997 and in a decade built it into a $7.3 billion giant (No. 342 on the Fortune 500) that refines various fuels and also sells gasoline to consumers, mostly in the Southwest under the Giant and Mustang brand names.
Foster contends that the country needs to raise the federal gas tax significantly. He points out that, in real terms, we're paying less than we did decades ago. (At 18.4 cents per gallon, the federal tax is currently 16% lower, adjusted for inflation, than it was in 1970.)
Foster argues that the levy should be increased, in steps, to $2 per gallon or more. He's even willing to credit the Europeans with a good idea or two on this score, as he explains in an interview with Fortune.
Q: What's your argument in favor of a higher federal gasoline tax?
A: Well, first of all, I believe that the best remedy for high gasoline prices is high gasoline prices. That's kind of a play on words, but the fact is there's a reason that everybody in Europe drives roller skates and here we drive SUVs. It's because Europe has a huge tax on gasoline. As a result, gasoline at the pump is expensive and people go out of their way to consume less fuel.
If we had started back in the 1970s, increasing the tax periodically or annually,I believe that we would be consuming far less gasoline than we do today.
And I think we have our head buried in the sand if we think that keeping our gasoline tax at the same [real level] as in the 1970s is somehow the right energy policy. It's just not.
The other thing is that all that extra money that we're spending, since we import 65% of our crude oil, goes to foreign nations. Whereas, if it was in the form of a tax at home, a lot of additional money we spend would be used for our own [benefit] - whether it's highway infrastructure, or whatever the use of the funds would be.
I'm in the refinery business. What I'm suggesting is not necessarily good for our business long term. But it's good for the nation and it's good for the economy and it's what I believe.
Q: How much should the tax be?
A: I think that the tax on gasoline needs to be at least $2 a gallon. But I don't think you can go there all at once.
OK, THAT'S ENOUGH THIS GUY IS AN A------.:nuts: If you want to read more click here!!
http://money.cnn.com/2008/12/30/new...ning.fortune/index.htm?postversion=2008123009
 
You must log in or register to reply here.
Back
Top