Oil Slick Stuff

[nnuut]

MMS: Number of Platforms Destroyed by Hurricanes Increased to 60

by Susan Daker Dow Jones Newswires Wednesday, November 26, 2008

HOUSTON (Dow Jones Newswires), November 26, 2008
The U.S. Minerals Management Service announced on Wednesday that 60 oil and natural gas platforms were destroyed in the Gulf of Mexico by Hurricanes Gustav and Ike, an increase from a previous assessment.

The number is a final tally, the agency said. In October, the agency said it counted 54 destroyed platforms.

"Some platforms which had been previously reported as having extensive damage were re-assessed and determined to be destroyed," MMS said in a release.

The destroyed platforms accounted for about 1.05% of the oil and 1.3% of the gas produced daily in the Gulf of Mexico, according to the MMS.

In its final assessment, MMS confirmed that 31 platforms with extensive damage could take between three and six months to repair.

The 93 platforms with moderate damage could take one to three months to repair.

Ike hit near Galveston, Texas on Sept. 13 and Gustav landed along the central Louisiana coast on Sept. 1. http://www.rigzone.com/news/article.asp?a_id=70057

 

[nnuut]

Gas prices: Lowest since 2005

Price at the pump slips for the 72nd day in a row to $1.835 a gallon, according to AAA.

By Kenneth Musante, CNNMoney.com staff writer
November 28, 2008: 10:21 AM ET

NEW YORK (CNNMoney.com) -- Gas prices fell to their lowest level since 2005, coming within 4 cents of $1.80 a gallon, according to a daily survey of gas station credit card swipes by motorist group AAA.

Gas prices slipped 1.1 cents to a national average of $1.835 a gallon, according to Friday's survey.
Prices have fallen by more than 55% since hitting a record high of $4.114 a gallon in mid-July as the price of crude oil, gasoline's main ingredient, has plummeted.
Concern about falling fuel consumption in the midst of the current economic crisis has propelled oil prices down more than 60% since July.
Typically, energy expenditures are the first to be trimmed back during periods of economic sluggishness as business activity declines and consumers try to save money by driving less, say economists.
Gasoline prices are now below $2 a gallon, on average, in 43 states. Missouri had the lowest prices at $1.546 a gallon. Alaska continues to have the highest prices at an average of $2.817 a gallon.
Diesel: The price of diesel fuel, which is used by most trucks and commercial vehicles, fell 1.2 cents to a national average of $2.775 a gallon, according to AAA.
Diesel prices have fallen more than 40% since hitting a high of $4.845 in July.
Ethanol: Meanwhile the price of E85, an 85% ethanol blend made primarily corn, has also fallen 1.2 cents to $1.617 a gallon on average, according to AAA.
E85 can be used as a gas substitute in special configured "flex-fuel" vehicles. However, it is difficult to find outside of the corn-producing Midwest region, and it is not sold at the pump in some states.
The AAA figures, compiled by Oil Price Information Services, are state-wide averages based on credit card swipes at up to 100,000 service stations across the nation. Individual drivers may see lower fuel prices in different areas of each state.
http://money.cnn.com/2008/11/28/news/economy/gas/index.htm?postversion=2008112810

 

[nnuut]

Our Friends at OPEC are at it again`~

Oil falls ahead of OPEC meeting

Crude down nearly $2.50 as the oil cartel prepares to hold an informal meeting in Cairo to discuss further production cuts.

See all CNNMoney.com RSS FEEDS (close)

Last Updated: November 28, 2008: 10:58 AM ET






-- Oil prices fell below $52 a barrel Friday as a gloomy outlook for global crude demand overshadowed expectations that OPEC might announce a production cut this weekend.


By mid-afternoon in Europe, light, sweet crude for

 

[James48843]

From that Energy Dept report that you posted, Nnut:

Total products supplied over the last four-week period has averaged nearly 19.2 million barrels per day, down by 6.6 percent compared to the similar period last year. Over the last four weeks, motor gasoline demand has averaged about 9.0 million barrels per day, down by 2.8 percent from the same period last year. Distillate fuel demand has averaged 4.0 million barrels per day over the last four weeks, down by 2.2 percent from the same period last year. Jet fuel demand is 17.7 percent lower over the last four weeks compared to the same four-week period last year.



So autofuel demand is down 2.8 percent, but jet fuel use is down a whopping 17.7 percent.

People not flying, airlines going belly up and downsizing fleets.

That's what a big chunk of that price of gas drop should be attributed to...

 

[nnuut]

You've got that right Jmes, it should even out in the end. Airlines have been blaming their problems on the cost of fuel for over a year, What now? Bail me out!!!! We are losing money because fuel is CHEAP ------ NO~!!!!!! LOWER YOUR FARES an take off that extra charge for a second bag, then you might have more business!!:notrust:

 

[The_Technician]

Our Friends at OPEC are at it again`~

Oil falls ahead of OPEC meeting

Crude down nearly $2.50 as the oil cartel prepares to hold an informal meeting in Cairo to discuss further production cuts.

See all CNNMoney.com RSS FEEDS (close)

Last Updated: November 28, 2008: 10:58 AM ET






-- Oil prices fell below $52 a barrel Friday as a gloomy outlook for global crude demand overshadowed expectations that OPEC might announce a production cut this weekend.


By mid-afternoon in Europe, light, sweet crude for

Hey Nnuutt...I see our illustrious friend (or is it opportunist) the Saudi King thinks its a fair price for oil to be $75 a barrel...

It sure looks like he doesn't understand economics 101.....it's only worth what someone is willing to pay for it, not what you think you should get....(what a piggish attitude, heck at this point, I hope he does drive it up....then alternate energy will take hold firmly and the oil shieks will be eating sand soon), ....and if its too much....buy its competitor!

 

[James48843]

For the first time since September 18, gasoline prices have stabilized and flattened out.

View attachment 5164

Around the country, prices vary, with New York having the highest average prices, and Missouri and Oklahoma both showing the lowest prices. Here is this morning's "Gasbuddy.com" map of the price of gas across the country:

View attachment 5165

Time to fill up and be happy.



​

​

 

[nnuut]

Hey Nnuutt...I see our illustrious friend (or is it opportunist) the Saudi King thinks its a fair price for oil to be $75 a barrel...

It sure looks like he doesn't understand economics 101.....it's only worth what someone is willing to pay for it, not what you think you should get....(what a piggish attitude, heck at this point, I hope he does drive it up....then alternate energy will take hold firmly and the oil shieks will be eating sand soon), ....and if its too much....buy its competitor!

Yep, "GREED is GOOD" still prevails. Just how much money do these Oil Countries need DAMNIT!! View attachment 5166

 

[nnuut]

For the first time since September 18, gasoline prices have stabilized and flattened out.

View attachment 5164​

Around the country, prices vary, with New York having the highest average prices, and Missouri and Oklahoma both showing the lowest prices. Here is this morning's "Gasbuddy.com" map of the price of gas across the country:​

View attachment 5165​

Time to fill up and be happy.​

​

Good info Jim, but I think that Oil at $50 a barrel is a more than fair price and well above their claimed Break-Even price. It looks like Consumption and GREED will drive Oil back up to around $100 a barrel as soon as the world economy gets over this crash or at least that seems to be the plan. I guess they would like to build another Dubai or something?

 

[budnipper1]

For the first time since September 18, gasoline prices have stabilized and flattened out.

Around the country, prices vary, with New York having the highest average prices, and Missouri and Oklahoma both showing the lowest prices. Here is this morning's "Gasbuddy.com" map of the price of gas across the country:​

View attachment 5165​

Time to fill up and be happy.

*Average price by state, Low to High​

View attachment 5169​

http://www.gasbuddy.com/GB_Price_List.aspx
​

 

[nnuut]

And the Saudis are the GOOD GUYS, they say?:worried:

Saudis: Oil should be $75 a barrel

OPEC ministers not expected to act at Cairo meeting, may act at Algeria in December.

November 29, 2008: 7:56 AM ET


CAIRO, Egypt (AP) -- Saudi Arabia's king says the price of oil should be $75 a barrel, much higher than it is now, but his oil minister indicated Saturday that no measures will likely be taken until OPEC meets again next month.

Saudi Oil Minister Ali Naimi said the Organization of Petroleum Exporting Countries will "do what needs to be done" to shore up falling oil prices when the cartel meets Dec. 17 in Algeria.
Naimi did not entirely rule out the chance that the cartel would slash output at a hastily convened meeting of OPEC members in Cairo on Saturday, but he said the bloc needs to wait until the Algeria meeting to assess the impact of earlier production cuts.
His comments came after Saudi King Abdullah told the Kuwaiti newspaper Al-Seyassah in an interview published Saturday that oil should be priced at $75 a barrel.
"We believe the fair price for oil is $75 a barrel," he said, without saying how the price could be raised.
The price of crude stood at about $147 a barrel in mid-July. On Friday, the U.S. benchmark West Texas Intermediate crude for January delivery was trading at about $54 per barrel.
The king was echoed by Qatar's Oil Minister Abdullah Bin Hamad al-Attiya, who told the Arab news channel Al-Arabiya that prices needed to rise to guarantee investment into the oil sector.
"The price between 70 to 80 (dollars a barrel) is the one encouraging in investment and developing new or current oil fields," he said. "It falls below 70 (dollars), the investment would freeze, which will lead to a crisis in supply in the future."
The cartel has already held an emergency meeting in Vienna on Oct. 24 to announce a production cut of 1.5 million barrels per day.
The cut failed to stop the price drop, and the cartel hastily convened the Cairo gathering on the sidelines of the Organization of Arab Petroleum Exporting Countries' meeting.
"There is total confusion" among OPEC's 13 members, said Fadel Gheit, managing director of oil and gas research at Oppenheimer & Co. in New York. "These people ... really have no business model. They basically thrive when oil prices go up, and now they are crying uncle when prices go down."
And down they have gone, in an avalanche sped along by a world financial meltdown that also threatens to cut deeply into OPEC member states' government budgets.
Kuwait's oil minister, Mohammed al-Aleem, said he believes there is no need for OPEC to make a decision in Cairo on cutting output. But he warned the market is oversupplied, and didn't rule out the need for OPEC to cut production further.
"We believe a decision could be taken ... but I think it will happen in Algeria," he said.
Al-Aleem said current prices could undercut investment in future projects and were not good for either producers or consumers.
The recent price drop has left OPEC price hawks Venezuela and Iran clamoring for further reductions of at least 1 million barrels a day. Both countries need crude at about $90 per barrel to meet spending needs aimed in part at propping up domestically unpopular regimes.
Other OPEC members, such as Nigeria and Ecuador, face budget problems too, making them reluctant to implement more cuts that might shrink revenues further.
The Saudis are better positioned to cope with the drop in prices. The International Monetary Fund estimates Riyadh needs crude in the range of about $50 per barrel for 2008 fiscal accounts to break even.
OPEC itself, along with the International Energy Agency, has significantly revised down its projections for demand growth in 2009.
Meanwhile, global crude inventories are growing, as evidenced by a U.S. government report showing a surprisingly large 7 million barrel build in stocks last week in the world's largest energy consumer.
OPEC's last round of cuts would put its total production at about 30.5 million barrels per day, according to the IEA. That is about 500,000 barrels per day higher than the forecast call on OPEC crude in much of 2009.
A Nov. 24 Oppenheimer research report says that for oil to rebound to $65 a barrel, OPEC would need to cut crude production by more than 3 million barrels per day from its September levels - a move it called highly unlikely.
http://money.cnn.com/2008/11/29/news/international/opec.ap/index.htm?postversion=2008112907

 

[nnuut]

How do you like these apples?


Opec refuses oil production cuts

Oil is far below the record of $147 a barrel reached in July


Opec energy ministers have decided to leave oil production quotas unchanged after talks in the Egyptian capital following falls in the price of oil.
Opec President Chakib Khelil said any such decision would be made at a meeting in Algeria next month.
The price of a barrel of oil has tumbled to below $55 after peaking at a record $147 dollars in mid-July.
Opec members have lost billions of dollars as demand has dropped in the face of the global economic downturn.
Opec member Venezuela favours a cut in output of a million barrels a day to try to boost prices.
But several Opec ministers had already dampened expectations that a cut in production would be announced this weekend.
Balancing demand
After Saturday's meeting, Opec President Chakib Khelil said ministers had agreed "to take any additional action on 17 December to balance oil supply and demand".
Falls in demand in the US, the world's top energy consumer, and other industrialised countries, have helped drive prices down from a record peak of more than $147 a barrel.
Opec, which accounts for 40% of global oil production, cut output by 1.5 million barrels a day last month, but the move failed to stop prices from declining. While cartel members have not ruled out making another output cut, some say the impact of the existing cuts still have to be felt. "Combined with weakening non-Opec supplies, the projected...output curtailment suggests that the oil market could actually tighten moving into 2009," Barclays Capital said in a research note.

http://news.bbc.co.uk/2/hi/business/7756168.stm

 

[Buster]

Here is my thinking why OPEC didn't cut production....

Buying oil from them is better than not buying oil from them at all..as long as oil prices go below $50.00/bbl, the US industry along with all the bureaucrats will not see a profit in drilling and exploration and we'll continue to buy from OPEC..in other words, status quo as usual will prevail and we will get lazy about finding our own oil too soon again...

Kinda like shooting yourself in the foot..eventually the demand for oil will return to this past year's glut..and we'll see oil prices eventually creep back up...Ergo..OPEC is in the money again.

 

[Silverbird]

They already lowered production at their last meeting. And prices have not risen. It may be there hasn't been time for the lower production to affect prices. However, it may be that demand has dropped so much lowering production right now will just deliver the double kick of lower prices and less production right between the eyes of OPEC. :toung: Also, if they play too much, the world does remember oil for over $100 a barrel and there will be a point where it's not worth playing anymore.

 

[nnuut]

They might just want to fill up their tankers, for some reason? Where are those Pirates when you need'em?

Friday, November 21, 2008

Oil Companies Storing Oil on Tankers, Waiting for Higher Prices


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
​

 

[nnuut]

Video from the BBC:

Opec has decided to leave oil output unchanged after talks in Egypt following falls in the price of oil.
The cartel has said it will take any action necessary to balance the market next month at a meeting in Algeria. Joe Lynam reports.
http://news.bbc.co.uk/2/hi/business/7757032.stm

 

[nnuut]

BUY LOW!!!


Price Swings Put Oil Dealers At Risk

From Sky High To Low: Dramatic Swings In Heating Oil Prices Threaten New England Dealers

Nov. 28, 2008

(AP) There is no business plan for what New England heating oil dealers and customers have gone through this year.

Thousands of people locked into heating oil contracts as the price of crude soared close to $150 in July, then watched prices descend below $50 even faster. Many are stuck with the contracts they signed and are in for a very expensive winter during the most severe economic downturn in at least a generation.

Now dealers, amid a severe credit crisis, are scrambling to secure money needed to fund operations during the coldest part of winter to keep their most vulnerable customers warm.

Heating oil dealers are for the most part mom-and-pop operations in the Northeast and a bad decision in the current environment could be crippling.

"This is the most extraordinary circumstance I've seen in 30 years," said Chris Keyser, owner of Services Inc. in central Vermont that sells fuel products to about 5,000 customers.

In these conditions where oil prices swing wildly from one day to the next, one bad choice could put dealers out of business, said Shane Sweet, president and chief executive of the New England Fuel Institute, which represents about 1,100 dealers.

"If you bet wrong in this environment, there is no room for error," Sweet said.

Already under siege from a weak economy, declining home prices and rising food and electric prices, low- and middle-income families in particular face the prospect of exorbitant fuel bills based on record summer prices.

The worries are particularly acute in New England where [more]
http://www.cbsnews.com/stories/2008/11/28/ap/business/main4637416.shtml

 

[nnuut]

POOR, POOR HUGO!! And he wants a Constitional amendment to allow him unlimited reelection or he goes in 2012, this is his second try. It will be OK though Russia has taken him under their wing. What do the Red Shirts signify?

Is Venezuela's oil boom set to bust?

By James Painter
BBC Latin America analyst

President Chavez is busy campaigning for key local elections next month

The dizzying collapse in oil prices has started a heated debate in Venezuela about the possible effect on its oil-dependent economy - and the political future of left-wing President Hugo Chavez.
Venezuela is particularly vulnerable to oil prices. It is the Western hemisphere's largest oil exporter. More than 90% of its export revenue and more than half of the government's annual expenditure comes from oil.
President Chavez's right-wing opponents are hoping a sustained drop in the oil price could curb his heavy spending on social programmes and undercut his support.
"Some Venezuelans - the wannabe Yankees - are praying for a continued drop in oil prices," Mr Chavez said recently. "But a price range of US$70 to US$90 a barrel will give us more than enough room."
Foreign reserves
The Venezuelan economy is set to grow for the fourth year running this year on the back of strong oil prices. Last July the price reached more than US$147, but has slumped at one point recently to below US$60. Oil analysts Goldman Sachs say it could drop to US$50 in the event of a world recession.

OIL PRICE DECLINE
The former head of the Venezuelan central bank, Domingo Maza Zavala, thinks that anything less than US$70 a barrel would mean current levels of economic activity could not be sustained.

"We are on the edge of a precipice and we should prepare for contingencies," says Mr Maza Zavala.
"The government is presenting a different panorama to Venezuelans, which is dangerous because the best way of confronting dangers and risks is the truth."
Analysts point out that the key factor is the average price of Venezuelan oil over several months and not the price on any particular day.
"There is no chance of an economic collapse this year," Jose Manuel Puente, from the Public Policy Centre in Caracas, told the BBC.
"Even if the price stays low for the rest of the year, the average price for 2008 will still be around US$95 a barrel".
Government officials are also quick to point out that Venezuela has large foreign exchange reserves of nearly US$40bn. That figure rises to well over US$50bn when a special discretionary development fund (Fonden) is included which President Chavez has used to spend mostly on foreign policy initiatives. 'Illusion of harmony' [more] http://news.bbc.co.uk/2/hi/americas/7694757.stm

 

[nnuut]

Now it's POOR, POOR OPEC. I'm going to organize a candle Lighting Ceremony tonight for all of the Poor unfortunates. View attachment 5177
Sunday, November 30, 2008

Has OPEC Lost its Mojo?


OPEC's meeting over the weekend, which held off from making further cuts despite oil prices hovering in the low $50s per barrel, a level that is causing distress among the cartels' members.

What was eyecatching, however, was not the failure to act per se but the byplay. As we noted earlier, OPEC members tend to cheat even in good times and pump in excess of quotas. The incentive to exceed limits is even greater when national budgets are strained by a plunge in oil revenues, the mainstay of these economies. We had posted on the fact that Nigeria, which had conformed to the latest production cut, would not implement an additional reduction until other OPEC members lived up to their recent commitment.

OPEC members said they would like to reduce production a further million to million and a half barrels in December, but the Saudis, backing Nigeria's position, are apparently asking for proof that other members are indeed living up to quotas.

This could get interesting.

Note some further novel moves, again signs of strain:

1. OPEC has set a target price of $75 a barrel (note they had abandoned targets four years ago). A lot of oil stock analysts have their targets at $90.

2. OPEC is now calling for non cartel-members to help. This is further evidence of the producer group's diminished power. Consider this bit from Bloomberg:

[OPEC Secretary General] El-Badri called for outside help to halt the plunge in prices. “All non-OPEC should come and help, it is a big burden for OPEC,” he told reporters. As well as Russia, “the ones we know that have the capability to cut are Norway and Mexico.”

Russia’s energy minister is expected to attend the Algeria meeting, El-Badri said. His plea for help elsewhere may fall on deaf ears after Norway, the world’s fifth-biggest oil exporter, ruled out production cuts earlier this month. “I don’t see any scenarios with regards to that,” Norwegian Oil Minister Terje Riis-Johansen said in a Nov. 18 interview.
​

Russia also seems unlikely to cooperate, given its dependence on oil revenues and the fact that it has already spent a fifth of its FX reserves defending its currency.
Some analysts also seem newly-skeptical of the likelihood of oil reaching higher levels any time soon. From Reuters:
$75 a barrel doesn't look doable in the short term," said Raja Kiwan of consultancy PFC Energy. "Given the fractious nature of OPEC on quota compliance, they may have some problems."
http://www.nakedcapitalism.com/2008/11/has-opec-lost-its-mojo.html
​

 

[nnuut]

Oil drops after OPEC defers production cut

Investors on hold as cartel decides to wait until Dec. 17 meeting in Algeria to determine output levels.

By Kenneth Musante, CNNMoney.com staff writer
Last Updated: December 1, 2008: 10:28 AM ET


Trader: $45 oil ahead


NEW YORK (CNNMoney.com) -- Oil prices fell nearly $4 a barrel Monday after OPEC said it would wait until its next scheduled meeting in mid-December to consider further production cuts designed to stabilize prices.
U.S. crude for January delivery slipped $3.85 to $50.58 a barrel.
The Organization of Petroleum Exporting Countries, a coalition of nations that produce about 40% of the world's oil, held an emergency meeting in Cairo this past weekend to discuss the global decline in demand that has driven crude prices down more than $95 a barrel from $147.27 on July 17.[more]
http://money.cnn.com/2008/12/01/markets/oil/index.htm?postversion=2008120110