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LONDON (AFP) - World oil prices rose as traders geared up for the latest weekly snapshot of US commercial crude inventory data, expected to show falls in stockpiles of distillates according to analysts.
New York's main contract, light sweet crude for delivery in March, climbed 37 cents to 47.63 dollars a barrel in electronic deals.
In London, the price of Brent North Sea crude oil for delivery in April, advanced 12 cents to 45.51 dollars a barrel.
The US inventory data was expected to show that recent cold weather in the US northeast -- a major consumer of heating fuel -- led to stockpiles of distillates falling by 1.1 million barrels in the week ending February 11, analysts at the Sucden brokerage firm said.
Crude inventories were expected to rise by 1.1 million barrels and stocks of gasoline, or petrol, by 300,000 barrels a few months away from the start of the so-called US driving season, when American motorists hit the open roads for their vacations.
"The market has been relatively quiet; it's really at a point where the outcome of the US inventories report is the driver of stocks across the board, from heating oil to gasoline," said Daniel Hynes, a Melbourne-based energy analyst with ANZ Bank.
Aside from stocks, traders were digesting news that oil consumption in energy-hungry China would rise sharply by 2010, with more than half of the country's demand being met through imports, according to state press.
China's demand for oil was expected to hit 350 million to 380 million tonnes by 2010, the Oriental Morning Post cited Gao Shixian, a director with the Energy Research Institute under the National Development and Reform Commission, as saying.
Gao estimates that China would need 180 million to 200 million tonnes, or more than 50 percent, of imported oil in five years if it is to power the factories responsible for last year's economic growth of 9.5 percent.
Already the world's second largest user of oil after the United States, China's total consumption of crude oil this year was expected to reach 320 million tonnes, an almost 12-percent rise over the 288 tonnes used last year.
"The Chinese demand story is an ongoing one, and the report backs up the International Energy Agency's latest monthly oil report that OPEC if anything should be increasing its output," Sucden broker Robert Montefusco said.
Oil prices began rising Monday after OPEC secretary general Adnan Shihab-Eldin was reported as saying the oil cartel might need to cut supply for the second quarter at its meeting on March 16 to Isfahan in Iran, even if global oil consumption remained robust.
He reportedly added that the Organization of Petroleum Exporting Countries might need a faster, bigger cut if demand fell sharply in the second quarter at the end of the northern hemisphere winter when demand for heating fuel dropped off.
The 11-nation oil cartel maintained output levels last month at 27 million barrels per day.
http://www.turkishpress.com/business/news.asp?id=050216130726.8a8yst6q.xml
mods please move to financial section, I didn't see that what I posted
LONDON (Reuters) - Oil prices hovered under $52 a barrel on Wednesday, as forecasts for lower U.S. heating oil stocks and freezing weather boosted demand for products.
U.S. light crude futures (CLc1) slipped 10 cents to $51.58 a barrel in New York, after hitting a four-month high of $52.28 on Monday. London Brent (LCOc1) was 5 cent up at $50.16.
``Each time prices showed signs of moving down, the dips get bought fairly quickly and they go back up. I would have expected prices to ease due to the high gasoline stock levels as we are already moving out of the winter and into the gasoline season,'' said Tony Nunan, a manager at the international petroleum section of Mitsubishi Corp.
``It would seem that the market is more focused on the macro factors like OPEC having little spare capacity, strong demand from the U.S., China and India. This is the best chance for prices to fall and if they don't fall now, I would hate to think what prices will be later.''
Traders said the tight global supply-and-demand balance, along with the weaker U.S. dollar, had attracted increased interest from speculative funds in recent weeks.
``The downside is minimal as OPEC can always cut its capacity, as they have considered doing in recent weeks, if they feel the price is falling,'' Nunan said.
Yet OPEC producers are backing away from talk of a possible production cut for the second quarter as oil prices have stayed high above $50 a barrel.
Kuwait, Qatar, Venezuela and Indonesia have come out in favor of keeping OPEC's formal output limits unchanged when the cartel meets in Iran on March 16.
Acting Secretary-General Adnan Shihab-Eldin has said OPEC saw a growing consensus that a $40-50 range was sustainable, backing up comments by Saudi Oil Minister Ali al-Naimi last week that prices could stay in that range this year.
http://www.nytimes.com/reuters/business/business-markets-oil.html
Oil Prices Ease from Near Record Highs
Thu Mar 10, 2005 04:19 AM ET
By Emma Graham-Harrison
SINGAPORE (Reuters) - Oil prices eased from near record highs on Thursday, but held above $54 a barrel amid heavy heating oil use in the wintry U.S. Northeast and concerns global demand growth could stretch above expectations.
The weak dollar, which hit a two-month low against the euro, also provided support as it encouraged investors to stick with the soaring oil market, which has climbed 25 percent since the start of the year.
U.S. light crude (CLc1: Quote, Profile, Research) traded down 40 cents to $54.37 a barrel, after coming within 2 cents of last October's all-time high of $55.67 on Wednesday.
London Brent crude (LCOc1: Quote, Profile, Research) was down 29 cents at $53.09, after touching a record high of $54.30 on Wednesday.
Prices held firm despite another increase in U.S. crude oil inventories, which topped 300 million barrels for the first time since last July after four consecutive weeks of rises, the Energy Information Administration (EIA) reported on Wednesday.
"(The) U.S. statistics were not bearish enough to change the market mood," said SG Commodities Research in a note.
"The cold still hitting the Atlantic Basin and widespread betting that global oil demand will continue to surprise us by its strength are far more important."
The U.S. EIA this week upgraded its forecasts for oil demand this year and slashed its estimate of non-OPEC production, the latest in a string of revisions that have painted a far tighter picture for the oil market than initially expected.
The weak dollar has boosted oil markets by encouraging speculators to pile into commodities and has helped protect demand by insulating many European and Asian consumers from the full impact of the climb in dollar-denominated oil costs.
A late-winter cold snap buffeting the U.S. Northeast is expected to relent slightly at the weekend, but below-normal temperatures should still keep demand running strong, testing thin heating oil inventories, traders fear.
OPEC HIKE SEEN UNLIKELY
The United States said on Wednesday it was in contact with OPEC countries to let them know that high oil prices hurt the U.S. economy, although most cartel officials have scotched talk of a possible increase in output at the March 16 meeting in Iran.
Iran, Qatar, Venezuela and Algeria have come out in favor of keeping production steady and high U.S. crude stock levels appear to back their stance that markets are well supplied.
Saudi Arabia, the world's biggest oil exporter, this week informed its customers that it would be supplying the same volume of crude in April as it shipped in March, market sources said.
Traditionally, the cartel is wary of pumping more crude going into the second quarter because demand falls off as the northern hemisphere winter draws to a close.
With demand expectations running high and supporting prices, investors are keenly watching for any signs of slackening growth in China, the world's second-largest oil consumer, particularly after crude imports tumbled 24 percent in January.
Chinese data showed total imports fell 5 percent on the year in February, reflecting the country's economic cooling measures.
http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=7862239
Link to additional stories here:
http://www.wincoast.com/forum/showthread.php?p=53090&posted=1#post53090
al-Canine
03-13-2005, 09:57 PM
mods please move to financial section, I didn't see that what I posted
Considering how much this issue affects the world's economies--and, subsequently, foreign policies--I think this thread still belongs here. Thanks for the updates, NYC. :)
Considering how much this issue affects the world's economies--and, subsequently, foreign policies--I think this thread still belongs here. Thanks for the updates, NYC. :)
Well it never got moved and you're right it should be here. I read the financial definition and actually it didn't fit.
Crude futures once again shot up above the $ 55 per barrel mark yesterday, as market players punted on the fact that Chinese demand may rise further, and OPEC's limited ability to raise output. OPEC should raise its quota by 500,000 barrels to 27.5 million a day to meet higher demand later this year, Saudi Oil Minister Ali al-Naimi said yesterday in a faxed statement from Riyadh. OPEC president Sheikh Ahmad Fahd al-Sabah said the amount members need to pump later this year is "a little high", and said New York prices could climb to $ 60 per barrel.
Crude oil for April delivery was little changed at $54.97 a barrel, up 2 cents, in electronic after-hours trading on the New York Mercantile Exchange at 11.50 am Sydney time. Oil traded as high as $ 55.05. April crude last week came within 2 cents of the intra-day record of $ 55.67 a barrel in October as rising demand from China, India and the US strained the ability of OPEC and other producers to keep pace. Last week, the International Energy Agency said it expects demand to rise 2.2% this year. China's oil consumption increased by 1 million barrels a day last year, a rate of growth that has only been seen once before, in 1977, after the US came out of a recession, Daniel Yergin, chairman of Cambridge Energy Research Associates, told an audience at the World Bank in Washington. (agencies)
http://expressnewsline.com/asia.php?action=fullnews&showcomments=1&id=422
Oil set to hit record $US60: analyst
March 16, 2005
OIL prices will hit $US60 a barrel before the end of the year, an analyst warned today. After dropping sharply towards the end of last year, oil has rebounded strongly in recent months to just short of the all time high of $US55.67 per barrel.
"We are confident that new highs north of $US60 per barrel will be forthcoming this year," Fat Prophets said in a research note today.
"We believe oil is in a primary bull market that will ultimately take the price up towards $US75 a barrel and beyond over the longer term."
Crude prices have been in an upward trendline for more than three years, and with oil presently trading well above the trendline some consolidation is possible in the near term, Fat Prophets said.
But it expected any respite in the trend would be temporary. ;)
The International Energy Agency recently predicted oil consumption would rise again this year by 2.2 per cent or 1.8 million barrels per day, driven mainly by strong demand from Asia and China.
"This is not hard to believe considering that China's oil consumption increased by one million barrels a day last year," Fat Prophets said.
Cambridge Energy Research Associates recently advised the World Bank that China's oil imports would further increase by another one million barrels a day this year and next.
"This magnitude of growth has not been experienced since 1977 when the US emerged from recession."
Adding to the tight market, Fat Prophets said it believed the Organisation of Petroleum Exporting Countries (OPEC) was finding it difficult to meet demand.
"One OPEC minister intimated that the price of oil could reach $US80 in the next few years," Fat Prophets said.
"With the exception of Iraq, OPEC has a quota of 27 million barrels of oil a day and any increase in production would need to be largely met by Saudi Arabia, as we believe most member nations are already operating near capacity.
"It would seem that the potential for OPEC to expand current production beyond existing levels is somewhat limited over the short term."
OPEC, which accounts for about 40 per cent of world oil production, is due to meet in Iran on March 16 to discuss output targets and prices.
"We anticipate that quotas will be revised upwards, however we believe this will have only a token impact on the oil market given the current over production that is occurring."
Fat Prophets said primary bull markets, such a that currently being experienced by oil, typically last longer and travel much further than what is initially conceived possible by investors and analysts alike.
"Accordingly, we remain committed to the energy sector and believe energy stocks such as Oil Search and Woodside will continue to outperform," it said.
http://dailytelegraph.news.com.au/story.jsp?sectionid=1274&storyid=2819477
Goldman sees oil price 'super spike' to $105 a barrel
NEW YORK (AFX) - Oil prices have entered the early stages of trading that could lead to a 'super spike' with the potential to move prices to $105 per barrel, enough to meaningfully reduce energy consumption, according to a Goldman Sachs analysis.
The call, which would mean a possible doubling of oil prices from their current level, sent crude back above $55 per barrel for the first time in a week. The contract for May delivery was last quoted up 2.4 percent at $55.30, having earlier touched a high of $55.55.
'The strength in oil demand and economic growth, especially in the United States and China, following a year of $40-$50 per barrel WTI oil has surprised us... The reason for this adjustment in view is that persistent high prices are improving the financial position of key oil exporting countries and could serve to keep potential revolution at bay,' said analyst Arjun Murti.
Phil Flynn, senior market analyst at Alaron.com, said $105 oil is technically possible but not likely for at least 3 years and only if a major supply disruption, such as a halt to imports from Saudi Arabia, occurred.
'The timing of the report was conducive to the rally,' Flynn said. 'It's just another reason to be long. There's no doubt we're in a new bull market for crude oil.' Hear audio interview.
John Kilduff, energy risk analyst Fimat USA, agreed that the $105 price assumes a major supply disruption in Saudi Arabia or a Venezuelan embargo on shipments to the U.S.
'I don't know how they get to that number, short of a significant supply disruption event occurring,' he said.
'It's more reflective, to be fair, of the psychology of the energy market right now that there's going to be tremendous demand growth in the late third and the fourth quarter of this year. That's going to put the producers of crude oil in an extremely challenging position in terms of meeting that demand, and that's what is being priced in right now.'
Analyst Kevin Kerr of Kerr Trading International said the Goldman call was irresponsible and 'clearly an attempt to talk up the market on nothing more than hot air. Goldman has huge speculative energy positions and they have no interest in watching it go down right now.'
Goldman's previous 'spike' high for oil was $80 a barrel. The brokerage also raised spot forecasts for WTI spot oil - West Texas Intermediate spot oil, the benchmark crude that trades daily on the New York Mercantile Exchange -- to $50 for 2005 and $55 for 2006. Its previous forecasts were $41 in 2005 and $40 in 2006.
Murti also said earnings consensus for oil and gas companies ought to grow by 21 percent and 35 percent, respectively in 2005 and 2006, as those stocks stand to outperform the broader market.
The return could be 80 percent if prices hit a super spike, he said.
Murti recommends adding to positions in the oil sector 'at current prices, on a pullback, or even after rallies,' and raised 2005 and 2006 earnings estimates across the board.
His top picks in the sector continue to be Exxon Mobil (NYSE: XOM - news) , Amerada Hess (NYSE: AHC - news) , Bill Barrett Corp (NYSE: BBG - news) . , Devon Energy (NYSE: DVN - news) , EnCana Corp. , Murphy Oil (NYSE: MUR - news) , Newfield Exploration (NYSE: NFX - news) , Pioneer Natural Resources (NYSE: PXD - news) , Premcor , Questar Corp (NYSE: STR - news) . and Suncor Energy .
This story was supplied by MarketWatch. For further information see www.marketwatch.com.
http://uk.biz.yahoo.com/050331/323/ffes2.html
Oil prices surge to new records
Crude oil prices hit record levels on Friday, with leading investment bank Goldman Sachs warning the cost of a barrel could eventually top $100.
Goldman Sachs said that the oil market may be in the early stages of a "super spike", which could push prices as high as $105 a barrel.
It said strong global demand, allied to potential instability in oil producing countries, could inflate prices.
US light crude rose as much as $2.40 to $57.70 a barrel in New York.
The previous high was $57.60, set on 17 March.
In late, trading it had slipped back to $57.40 a barrel.
In London, the benchmark contract of Brent crude climbed $2.22, or 4.1%, to $56.51 a barrel.
Consumption effect
The last time prices were at these levels, economists highlighted the potential dangers to global economic growth and inflation.
Oil production cartel Opec was prompted to lift production quotas by 500,000 barrels a day.
In its report, Goldman Sachs said the possibility of political turmoil in major oil producers such as Saudi Arabia could lead to a significant rise in prices over the long-term.
The fundamental situation is not nearly as bad as what current oil prices would suggest
David de Garis, ANZ Investment Bank
The firm has raised its average US price forecasts for 2005 and 2006 to $50 and $55 a barrel from $41 and $40 respectively.
"Oil markets may have entered the early stages of what we have referred to as a 'super spike' period," said Goldman Sachs analyst Arjun Murti.
This would result in "a multi-year trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion only after which will lower prices return".
Tight supply
Prices have remained above $55 a barrel in recent days after data showed that US gasoline stocks fell last week while demand was 2% higher than this time last year.
Markets are also nervous about disruptions to supply after the recent fatal explosion at BP's largest refinery in the United States and a power failure which caused the closure of a Venezuelan refinery on Thursday.
However, other analysts said it would require a major disruption in supply to cause a spike in prices of such magnitude.
"The market is still of the mind that supply/demand is still very tight but the fundamental situation is not nearly as bad as what current oil prices would suggest," said David de Garis, an economist at ANZ Investment Bank.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4399537.stm
Crude oil futures top US$58 a barrel; analyst says market is 'unstable'
06:24 PM EDT Apr 04
BRAD FOSS
http://www.cbc.ca/cp/business/050404/b0404138.html
WASHINGTON (AP) - Oil prices briefly climbed to record territory above $58 US a barrel Monday, as concerns about growing demand and potential supply disruptions once again overshadowed improving crude inventories.
"I've been doing this for 22 years and I've never seen anything like this," said oil analyst Ken Miller at Purvin & Gertz in Houston. "I view this as a very unstable situation."
Late in the day traders took profits and considered a possible production increase by the Organization of Petroleum Exporting Countries, sending light, sweet crude for May delivery down 26 cents to $57.01 a barrel on the New York Mercantile Exchange.
Prices had climbed as high as $58.28, topping the previous intraday record of $57.70 a barrel reached Friday, when futures settled at a record $57.27.
In London, Brent crude futures fell 28 cents to $56.23 a barrel on the International Petroleum Exchange.
With oil prices up nearly $15 a barrel since the year began, U.S. motorists are spending an average of $2.22 per gallon for regular unleaded gasoline and analysts believe pump prices could rise further as the summer driving season approaches.
Energy traders have attributed the recent runup to a wide range of concerns: a limited global supply cushion, growing demand in the U.S. and China and the weakness of the U.S. dollar against other currencies. They also say increased speculation by hedge funds is magnifying the runup.
While the U.S. supply of crude oil has been growing steadily for more than a month, refiners are expected to draw down those inventories in the weeks ahead as they ramp up gasoline production to meet summer demand, said oil broker Ed Silliere of Energy Merchant Intermarket Futures in New York.
The surge in fuel prices has strained segments of the U.S. economy, such as airlines, independent truckers and low-income families, but rapid economic growth and improved energy efficiency have blunted the broader impact.
Regardless, some long-time energy analysts say the market is too focused on dire what-if scenarios and not accurately reflecting the fundamentals of supply and demand.
Although OPEC was caught off guard last year by the surge in global oil demand, geopolitical turmoil abounds and tight worldwide refining capacity leaves little wiggle room in the supply chain, Miller insisted "there's no shortage of crude and no shortage of products," a reference to gasoline, diesel and other fuels.
OPEC president Sheik Ahmed Fahd al-Ahmed al-Sabah, who is Kuwait's energy minister, said Monday that consultations started two days ago about a possible half-million-barrel-a-day increase to the cartel's output quota. But he said ministers believe "we have to wait to see exactly how" prices behave in the next two weeks.
Any production increase would occur in May, al-Sabah said before a Parliamentary session, noting that OPEC already is exceeding its current production ceiling of 27.5 million barrels a day by about a half million barrels a day.
Lorraine Tan, director of research at Standard & Poor's investment services in Singapore, said the timing of OPEC's actions is crucial in affecting crude prices.
"If OPEC acts quicker, prices would come off," she said.
Nymex crude futures are 65 per cent higher than a year ago, but well below the inflation-adjusted peak of $90 set in 1980.
Heating oil prices fell 2.16 cents to $1.6422 a gallon, while unleaded gasoline was down about a penny at $1.7216 a gallon.
Last week the U.S. government said America had 214.4 million barrels of gasoline, or six per cent above year ago levels. The supply of crude oil - after growing for five weeks straight and by more than 17 million barrels - was 314.7 million barrels, or nine per cent above year ago levels.
The government's next petroleum supply report is scheduled to be released Wednesday.
NEW YORK, April 26 (newratings.com) –Saudi Arabia, world’s leading oil producer and exporter, Tuesday announced a $50 billion expansion plan to boost its oil production capacity in a bid to help stabilize global oil and gasoline prices.
The plan was announced during Saudi Crown Prince Abdullah’s talks with the US President, George W Bush, at his Texas ranch. Oil prices have been rising steadily over the past one year and have crossed the $58 per barrel mark. As per the plan, the Saudi Kingdom intends to increase its output from 9.5 million barrels a day to 12.5 million a day by the end of the decade and boost production to 15 million barrels over the longer term. Adel al Jubeir, Crown Prince Abdullah's foreign-affairs adviser, said that although the Kingdom was ready to boost capacity, the consumer countries should look for other solutions, such as expansion of refining capacities, to solve the problem of rising prices.
http://www.newratings.com/analyst_news/article_794941.html
WEB SOURCE SUGGESTS STATE OIL COMPANIES WANT NEW PIPELINE TO CHINA...
Speaking on Ekho Moskvy on 2 May, ej.ru editor and economist Mikhail
Berger said Russian state oil company Rosneft is seeking to build an
oil pipeline from Eastern Siberia to the Chinese city of Datsin.
Rosneft, which recently acquired former Yukos subsidiary
Yuganskneftegas, believes such a pipeline would provide a far cheaper
solution than rail transport, he said. The jailed former head of
Yukos, Mikhail Khodorkovskii, reportedly was lobbying for such a
project before his arrest on fraud and other charges in October 2003
and Yukos's subsequent legal and financial woes. Now that Rosneft has
an added incentive to see such an export pipeline, Berger said, it
has dropped its opposition to such a project. VY
...AS RUSSIA IS SAID TO HAVE PICKED ROUTE FOR FAR EAST PIPELINE.
Industry and Energy Minister Viktor Khristenko has signed a directive
on the phased construction of a strategic pipeline to deliver oil
from Eastern Siberia to Russia's Pacific Coast, opec.ru reported on
29 April. The website reported that the plan calls for an early
section of the pipeline, with an annual output of 30 million tons
(180 million barrels), to reach from Taishet in Irkutsk Oblast to
Skovorodino in Amur Oblast, near the Chinese border; at the same
time, an oil terminus with the same annual capacity will be
constructed in Pervoznaya, near Nakhodka, on the Pacific Coast. Oil
will be transported by rail from Skovorodina to Pervoznaya if it is
intended for the Japanese market, or it will continue by rail to
reach the Chinese market. Such a network will give Russia flexibility
in supplying either of those major markets, opec.ru noted.
Oil Prices Fall Below $49 a Barrel as U.S. Supplies Rise
By George Jahn Associated Press Writer
Published: May 4, 2005
VIENNA, Austria (AP) - Oil prices fell below $49 a barrel Wednesday after the U.S. government released data that showed rising supplies of crude oil and gasoline.
Light, sweet crude for June was down 70 cents at $48.80 in early trade on the New York Mercantile Exchange.
"Expectations are that both crude and product stocks are going to rise - that means even higher stocks that already are very high" in the world's greatest energy consuming nation, said analyst Ehsan Ul-Haq of Vienna's PVM energy consultants. "Prices are going down all over the world, but most severely in the West."
more (http://ap.tbo.com/ap/breaking/MGBH9KSNB8E.html)
Oil prices arise to almost $60 a barrel; Pickens predicts $3 gasoline
By The Associated Press
NEW YORK — Oil prices marched to new nominal heights, closing near $60 a barrel even as the president of OPEC said Monday the group will consider raising its output ceiling by half a million barrels as early as this week.
The Organization of Petroleum Exporting Countries raised its output target by that amount just last week. The move appeared to have little impact on prices, which have risen by almost $12 a barrel in the past month because of rising demand for gasoline and diesel fuel and doubts about refining capacity.
Light sweet crude for July delivery climbed 90 cents to settle at $59.37 a barrel, a record close on the New York Mercantile Exchange, where oil futures have been traded since 1983.
While Nymex oil futures are more than 56 percent higher than a year ago, they are still below the inflation-adjusted high set in 1980. Oil prices in today's dollars would have to reach $90 to match the price at that time.
Gasoline prices in the U.S. average about $2.13 a gallon, an increase of more than 40 percent over the past two years, but government data released last week showed that demand is up almost 3 percent from a year ago over the past four weeks at nearly 9.5 million barrels a day — a growth rate that surprised many analysts.
"The economy has accepted $50 oil. We accepted $2 gasoline too," said oil tycoon Boone Pickens, who runs a billion-dollar hedge fund that invests in energy commodities and equities.
"I think within a year from now, you're probably looking at $3 gasoline and you're probably looking at something over $60 for oil."
While soaring jet fuel costs have been a major problem for the airline industry, higher energy prices have not taken as much of a toll on the broader economy as many analysts had feared. In the first three months of the year, the U.S. economy grew at a 3.5 percent annual rate, according to the Commerce Department, slightly slower than the 4.5 percent pace a year earlier.
The prospect of another attempt by OPEC to cool prices did not impress brokers, who said the effort could actually backfire by highlighting the group's dwindling excess production capacity.
Some traders seemed baffled.
"It looks like we might have difficulty holding these levels," said Mike Fitzpatrick, an oil broker at Fimat USA in New York. "You're seeing a great deal of reluctance among buyers to pay these higher prices."
Oil analyst Andrew Lebow at Man Financial in New York said "once we're in this $55-$60 area, it's been kind of hard to justify. But it is what it is. It seems like we'll hit $60 at this point."
OPEC President Sheik Ahmed Fahd Al Ahmed Al Sabah said Monday that "if the prices continue to the end of this week at the same level, I will start consulting my colleagues to release the 500,000."
Last week the oil cartel agreed to raise its official production ceiling to 28 million barrels, starting July 1, but that failed to soothe traders because OPEC's output is already pumping 30 million as producers seek to cash in on high prices.
Another development brokers were watching on Monday was the threat of a strike by oil workers in Norway, the world's third-largest exporter. A strike could begin as soon as Wednesday because of a salary dispute, potentially slicing the country's daily output of 3 million barrels by a third.
"If you take off 1 million barrels a day in this market, it's going to get ugly," said oil broker Tom Bentz of BNP Paribas Commodity Futures in New York. "Let's just hope it doesn't happen."
Analysts said unlike the record prices last year, which were driven largely by concern over geopolitical events in oil-producing countries such as Nigeria, Saudi Arabia, Iraq and Venezuela, this year's trend has more to do with speculative buying, continued supply fears and limited excess production capacity.
http://www.journalstar.com/articles/2005/06/21/business/doc42b741218c65c876953692.txt
June 27 (Bloomberg) -- Crude oil reached a record in New York for a third straight day, approaching $61 a barrel, as the election of a nationalistic government in Iran raised concern foreign investment may suffer in OPEC's second-largest producer.
Mahmoud Ahmadinejad, who won the runoff for the Iranian presidency, said yesterday he would favor domestic companies to develop the country's oil reserves, the world's second-biggest. He also plans to pursue a nuclear energy program to generate electricity, which may heighten tensions with the U.S.
``It's going to be very challenging for Iran to increase oil production,'' said Francisco Blanch, senior energy strategist at Merrill Lynch & Co. in London. ``What the country needs now is money. The new government has made it clear that foreign investment isn't going to be very welcome.''
Crude oil for August delivery rose as much as 80 cents, or 1.3 percent, to $60.64 a barrel, the highest price since oil started trading on the New York Mercantile Exchange in 1983. Oil, up 55 cents at 1:45 p.m. London time, has gained 67 percent from a year ago. It averaged less than $19 from 1995 through 1999.
``I want to expand the domestic industry,'' said Ahmadinejad, who will take office in early August. ``In the oil field, the priority will be on domestic contractors, specialists, investors and workers.''
If Iran's Ahmadinejad ``gives preference to the national oil company, over Shell for example, there's a possibility that Iran's oil production may have peaked and now be set to decline,'' said Deborah White, an economist at Societe Generale SA in Paris, referring to Royal Dutch/Shell Group. ``The refining jitters that drove the market to records last week are aggravated by the fact that we've seen a regime change in Iran.''
OPEC Output
Governments of some oil-producing nations, such as Russia and Venezuela, are increasing control over their domestic energy industries, seeking to benefit from higher market prices for crude and rising tax receipts from oil companies. Mexico has a ban on exploration by foreigners, which may hamper the development of deposits and slow production growth.
The Organization of Petroleum Exporting Countries is considering a proposal to raise output quotas by 500,000 barrels a day to help lower prices, OPEC President Sheikh Ahmad Fahd al- Sabah, who is also the Kuwaiti oil minister, said today.
Saudi Arabia, the world's largest oil exporter, would be willing to raise the limit, a Saudi official familiar with the nation's oil policy said today. Nigerian President Olusegun Obasanjo also said he backs an increase. Nigeria was OPEC's No. 5 producer in May.
Distillates, Gasoline
OPEC, the source of about 40 percent of the world's oil, is pumping almost as much crude as it can to boost inventories and meet increasing use in countries led by the U.S. and China.
Oil prices surged in 1979 after the Iranian revolution reduced the country's exports. An eight-year war in the 1980s between Iran and Iraq also curbed exports from the two Middle Eastern producers, sending prices to a record when adjusted for inflation. For U.S. refiners, oil cost $35.24 a barrel in 1981, according to the Energy Department. That's $75.44 in today's dollars.
Brent crude for August settlement today advanced as much as 85 cents, or 1.5 percent, to $59.21 a barrel, the highest since the contract started trading on London's International Petroleum Exchange in 1988.
Oil has gained about 16 percent this month on concern U.S. refiners will strain to store enough distillates for the northern hemisphere winter while they meet summer gasoline demand. As the world's biggest oil consumer, the U.S. burns about a quarter of the world's oil output, using about 10 percent of global supplies to make gasoline.
Energy Demand
``Until we get a clearer picture that demand is slowing, we can expect the market to test new highs,'' said Tor Kartevold, an oil analyst at Statoil ASA, Norway's No. 1 oil company. ``High prices are already affecting demand in Asia, where higher retail prices have started to bite. That's probably not enough because the market focuses on the U.S.,'' where consumption of gasoline and diesel keeps surging, he said.
U.S. demand for distillates, a category of fuels that includes heating oil and diesel, jumped 6.9 percent in the four weeks ended June 17 compared with the year earlier period, according to the U.S. Energy Department. Refineries are struggling to make enough transport and heating fuels before the fourth quarter, when global consumption peaks.
``The market feels very concerned that as we go into the fourth quarter, there's not going to be enough spare capacity to supply peak demand,'' Merrill's Blanch said.
Global oil use in the fourth quarter is expected to rise to 86.4 million barrels a day, a record, according to an International Energy Agency forecast. That's the amount of oil that about 43 supertankers can carry.
Foreign Investment
Outgoing Iranian President Mohammad Khatami, who has governed since 1997, passed a law on foreign investment in mid-2002 that boosted spending by international oil companies. Shell, Europe's second-biggest, has been working on a project for Iran's state oil company to increase production at the Soroush and Nowruz offshore oil fields.
BP Plc Chief Executive John Browne said in January that the company he runs, Europe's largest oil producer, would avoid doing business in Iran because of U.S. sanctions. The U.S. says Iran wants to build weapons from its nuclear program and calls Iran a sponsor of terrorism. Iran has rejected the charges.
``The U.S. will probably put pressure on Europe and Japan to withhold investments'' in Iran's oil industry, said Anthony Nunan, manager of international petroleum business at Mitsubishi Corp., Japan's biggest trading company.
Iran `Hawkish'
Iran is one of OPEC's most ``hawkish'' members in terms of production quotas, advocating output cuts more than most members. Saudi Arabia has favored higher production when prices rise.
``We are afraid that Iran will become more of an OPEC hardliner,'' White of Societe Generale said. ``If it's a more conservative government, they may decide to cut their production. It's like the transition to Chavez in Venezuela.''
Venezuelan President Hugo Chavez helped OPEC recover its ability to restrain output and increase prices by sticking to his country's output quota. A strike by Venezuelan oil workers against Chavez throttled the country's oil production at the end of 2002 and in early 2003.
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aUAOOoaaw3Kg&refer=home#
More bad news on the alternative energy front ...
Study says ethanol not worth the energy
By MARK JOHNSON
Associated Press Writer
ALBANY, N.Y. (AP) -- Farmers, businesses and state officials are investing millions of dollars in ethanol and biofuel plants as renewable energy sources, but a new study says the alternative fuels burn more energy than they produce.
Supporters of ethanol and other biofuels contend they burn cleaner than fossil fuels, reduce U.S. dependence on oil and give farmers another market to sell their produce.
But researchers at Cornell University and the University of California-Berkeley say it takes 29 percent more fossil energy to turn corn into ethanol than the amount of fuel the process produces. For switch grass, a warm weather perennial grass found in the Great Plains and eastern North America United States, it takes 45 percent more energy and for wood, 57 percent.
It takes 27 percent more energy to turn soybeans into biodiesel fuel and more than double the energy produced is needed to do the same to sunflower plants, the study found.
"Ethanol production in the United States does not benefit the nation's energy security, its agriculture, the economy, or the environment," according to the study by Cornell's David Pimentel and Berkeley's Tad Patzek. They conclude the country would be better off investing in solar, wind and hydrogen energy.
The researchers included such factors as the energy used in producing the crop, costs that were not used in other studies that supported ethanol production, said Pimentel.
The study also omitted $3 billion in state and federal government subsidies that go toward ethanol production in the United States each year, payments that mask the true costs, Pimentel said.
Ethanol is an additive blended with gasoline to reduce auto emissions and increase gas' octane levels. Its use has grown rapidly since 2004, when the federal government banned the use of the additive MTBE to enhance the cleaner burning of fuel. About 3.6 billion gallons of ethanol were produced last year in the United States, according to the Renewable Fuels Association, an ethanol trade group.
The ethanol industry claims that using 8 billion gallons of ethanol a year will allow refiners to use 2 billion fewer barrels of oil. The oil industry disputes that, saying the ethanol mandate would have negligible impact on oil imports.
Ethanol producers dispute Pimentel and Patzek's findings, saying the data is outdated and doesn't take into account profits that offset costs.
Michael Brower, director of community and government relations at SUNY's College of Environmental Science and Forestry, points to reports by the Energy and Agriculture departments that have shown the ethanol produced delivers at least 60 percent more energy the amount used in production. The college has worked extensively on producing ethanol from hardwood trees.
Biodiesel can be used in any diesel engine with few or no modifications. It is often blended with petroleum diesel to reduce the propensity to gel in cold weather.
http://hosted.ap.org/dynamic/stories/E/ETHANOL_STUDY?SITE=CODER&SECTION=HOME
The US thirst for gasoline and fears of a hurricane have pushed the oil market further into uncharted territory, as US prices reached $67 a barrel on Friday.
In late trading US light crude rose by more than $1 a barrel, while London Brent crude was up $1.08 at $66.46.
Worldwide petrol and gasoline prices are at unprecedented levels.
US refinery stoppages have come just as car sales and demand hit highs, and amid persistant security fears.
US demand
The latest surge has been partly triggered by more than a dozen breakdowns at US installations, the latest of which hit a ConocoPhillips refinery in Illinois.
And fearsTropical Storm Irene, which could intensify to hurricane strength, is heading for the US Gulf Coast have added to worries about supply interruptions.
The petrol and gasoline situation in the US is probably the most worrying factor at the moment
Simon Wardell, Global Insight
Earlier this week, US government figures showed a 2.1 million barrel decline in US stockpiles during the first week of August.
With US economic growth strong and the latest data showing car sales at their highest level since the consumer slump following 11 September 2001, the stage is set for further upward pressure on oil, analysts said.
"The petrol and gasoline situation in the US is probably the most worrying factor at the moment," said Simon Wardell, at Global Insight.
"It looks like it could be an ongoing problem, because a shortage of refining capacity is not something that can be resolved quickly."
Production worries
Thursday brought a report from a Paris think tank, the International Energy Agency, which warned that producers outside the 11-member oil cartel Opec were likely to reduce output.
And the ever-present security jitters are focused on Saudi Arabia, after a string of alerts from Western countries warning of imminent attacks, and Iran, where the new government is preparing to break seals on uranium reprocessing equipment.
The two states are Opec's biggest producers.
In real terms, stripping out inflation, oil is well below the $80 a barrel on average for the year after the 1979 oil crisis.
But the average price this year more than $53 per barrel is higher in real terms than the level during the l973-4 first oil crisis.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4144246.stm
keith
05-12-2006, 09:46 PM
Tariff-free US ethanol demand too much for Brazil
Fri May 12, 2006 6:47 PM ET
By Reese Ewing
SAO PAULO, Brazil (Reuters) - The sugar cane industry in Brazil, the world's No. 1 exporter of ethanol, would not be able to satisfy all U.S. demand for ethanol if Congress cuts import tariffs on the fuel additive, experts said.
As the United States faces an ethanol squeeze and filling stations are forced to close due to lack of supplies, President Bush and lawmakers have been debating whether to lift the 54 cents-per-gallon tariff for ethanol until domestic production increases to meet U.S. demand.
"This would be significant and would benefit all sides involved. It would have strong benefits for and impact on U.S. foreign policy as well," President of sugar-ethanol analysts Datagro, Plinio Nastari, told Reuters in an e-mail response.
A senior U.S. Energy Information Administration official estimated this week that ending the tariff would raise U.S. imports of the fuel by 10,000 to 20,000 barrels per day in the short term, nearly doubling current imports of 22,000 bpd.
But Brazil would only be able to cover about 5,000 to 7,000 bpd of new ethanol demand from the U.S. market in the short term, according to Datagro.
Nastari wrote from New York this week at an industry dinner of the Sugar Club that Brazil could manage only a modest increase in ethanol exports in the near term.
"The most immediate beneficiary would be China," Nastari said, adding that China is the world's No. 3 ethanol producer (from corn) and has had a surplus of the fuel to export to Japan, the Korean Peninsula and Central America.
Although mills have long dreamed of world trade in ethanol and of seeing the fuel as a full-fledged fungible commodity, their pocketbooks remain with the local market, Nastari said.
Brazilian motorists consume around 13 billion liters of ethanol annually, dwarfing total exports in recent years of around 2.5 billion liters.
Datagro estimates that a zeroing of the U.S. ethanol tariff would result in an extra 300-to-400 million liters in U.S. imports of Brazilian ethanol, which would raise total annual U.S. ethanol shipments from Brazil to 1 to 1.2 billion liters.
Brazil exported about 450 million liters to the United States in 2005.
In 2005, Brazil exported ethanol to the United States via dehydration plants in Caribbean and Central American countries such a Jamaica. In this way, the imports avoid the tariff because of a Caribbean Basin trade accord.
"U.S. ethanol prices have risen over 40 percent since November," said FCStones' consultant on sugar and ethanol Marcos Escobar. "We'll probably see direct ethanol shipments to the U.S. even with the tariff."
Caribbean plants have already approached their capacity of around 500 million to 600 million liters a year, say ethanol specialists.
"Talk of suspending the U.S. tariff will slam the brakes on new capacity investments in ethanol in the Caribbean," Tarcilo Rodrigues at Bio Agencia consultants said. "They are only profitable with the tariff."
He added that the sugar market was watching how much cane Brazilian mills allocate for sugar or ethanol production this year. World sugar prices have been hovering near 25-year highs.
Mills, which harvest from March through December, can divert cane that would go to sugar production to ethanol if sugar prices begin to flag. "High oil prices and strong U.S. ethanol demand should support sugar prices," said Rodrigues.
Mills have played down any negative effects strong export demand for ethanol and sugar could have on local ethanol supplies and prices. The government was uneasy with recent price rises earlier in 2006 before the cane harvest started.
It is an election year and the government is bent on keeping inflation on target and interest rates falling.
When asked if the government might put an export tariff on Brazilian sugar or ethanol, FCStone's Escobar said: "I doubt it. The government has long been interested in fostering world ethanol trade."
--------------------------------------------------------------------------------
© Reuters 2006. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
Largest Hummer to Go the Way of the Dodo
DETROIT, May 12 — General Motors is preparing to give a final salute to the hulking Hummer H1, the ultimate in sport utility might and, to its many critics, the ultimate in environmental incorrectness. G.M. said Friday that it expected to stop building the H1, flagship of its Hummer line, next month. The move comes 14 years after it first went on sale to the public.
http://www.nytimes.com/2006/05/13/automobiles/13hummer.html?pagewanted=print
keith
05-18-2006, 01:49 PM
Jakarta eyes palm oil for fuel
By Bill Guerin
JAKARTA - Spiking global oil prices have fuel-importing countries everywhere examining the potential of lower-cost biofuels to save on their fuel bills and shore up national energy security. That's particularly true for Indonesia, which currently imports 30% of its energy needs but also boasts Asia's biggest bounty of the tropical resources used to produce the most efficient biofuels.
Government officials are preparing plans to make Indonesia a major player in the still-nascent global biofuel industry, which if oil prices stay high will have enormous export potential. For years, the government has backed research into biofuels, including various biotechnological research and development projects through the state-run Agency for Assessment and Application of Technology (BPPT).
But only after the government last year slashed fuel subsidies did the private sector aggressively take up the biofuel cause. Speculation in Indonesia's biofuel potential has recently driven the share price of the country's main publicly listed producer of crude palm oil (CPO), Astra Agro Lestari, to all-time highs.
Plantation company PT Bakrie Sumatera Plantations, meanwhile, plans to build the country's first privately owned bio-diesel plant in a US$25 million joint venture with construction firm PT Rekayasa Industri. The plant will have a capacity of 60,000-100,000 tons of bio-diesel a year and will adopt a "multi-feed" concept using several different raw materials, such as CPO and castor oil.
In hopes of sparking grassroots activity, the government has earmarked $33 million to build four pilot bio-diesel plants, meant to serve as national models for alternative-energy production. The plants in Kalimantan and Sumatra, with a combined annual capacity of 6,000 tons, will reportedly be operative by the end of this year.
A new government roadmap lays down hard targets for using less petroleum and more alternative energy sources in the future, mostly biofuels. The biofuel-promoting plan aims aggressively to reduce the country's use of petroleum, which currently represents 60% of national fuel consumption, down to 30% by 2025.
Indonesia is the world's second-largest producer of palm oil, the material most commonly used in producing bio-diesel, a biofuel that may be blended directly with conventional petroleum-based diesel. From an efficiency perspective, the yield from Indonesia's CPO plantations is way ahead of other tropical biofuel options, including the use of coconut oil.
Because bio-diesel contains veritably no sulfur, it proponents note that bio-combustion produces few of the harmful oxides-of-sulfur emissions that petroleum-based fuels do. Moreover, the modification of most diesel-burning engines to use biofuels is a straightforward process.
Global demand for biofuels is surging, particularly in fuel-strapped, environmentally conscious Western Europe. European Union member countries are increasingly chasing up global supplies of bio-diesel to meet stringent European emission standards. European bio-diesel production meets a mere one-sixth of current demand, which is projected to grow much higher as long as global petroleum prices hover at or above US$60 per barrel.
Barriers to burn
While Indonesia's biofuel future may initially look bright, there are still plenty of barriers to burn before the country maximizes its potential. High initial investment costs, an absence of state incentives for growers and producers, and the lack of credit facilities for small-scale entrepreneurs all threaten to stymie the industry's development.
Moreover, the government has a history of squandering its natural resource endowments. Indonesia, long plagued by mismanagement and chronic official corruption, is the only member of the Organization of Petroleum Exporting Countries (OPEC) that despite its huge resources is actually a net importer of fuels.
President Susilo Bambang Yudhoyono is moving to lower at least some of the hurdles. A recent Presidential Instruction for the provision and utilization of biofuel sets out new parameters for its supply and usage - although details governing the policy's actual implementation are thin. The instruction will be incorporated into a draft law on national energy due soon for debate in the House of Representatives.
Energy and Mineral Resources Minister Purnomo Yusgiantoro says the government is considering fiscal and administrative investment incentives for biofuel producers - although his plans simultaneously conjure up the specter of new bureaucratic tangles for the infant industry. Yusgiantoro said at a seminar this month that the Finance Ministry plans to formulate tax and import duty incentives for biofuel-production equipment.
Other ministries and governmental offices have been charged with formulating incentives other than plain fiscal ones, he said. For example, local administrations have been ordered to simplify arrangements for land-use permits, the Agriculture Ministry to encourage more raw-material production, and the Industry Ministry to simplify plant-licensing procedures.
If all the proposed incentives are actually adopted, the targets for biofuel production would steadily increase, starting at 720,000 kiloliters a year through 2010, ramped up to 1.5 million kiloliters per year from 2010 to 2015, and more than trebled at 4.7 million kiloliters per year in the decade ending in 2025, according to Yusgiantoro's projections.
Domestic bio-diesel retail sales in Indonesia are now estimated by his ministry at a mere one tonne per day. Indonesian regulators now allow fuel retailers to blend in up to 10% biofuel in their mixes. State-owned oil giant Pertamina recently unveiled two types of bio-diesel - known simply as B10 and B5 - in several fuel stations in Jakarta. Both fuels are supplied from the government's Agency for Assessment and Application of Technology, which currently runs a bio-diesel plant with a production capacity of 1.5 tonnes a day from CPO.
The new 'crude cartel'
Indonesia is currently the world's second-largest producer of CPO, lagging behind only neighboring Malaysia. Together, the two Southeast Asian countries account for 84% of total world production and 88% of global exports. Significantly, Indonesia and Malaysia are now in talks about the establishment of a cartel-like strategic alliance. Although key issues such as profit-sharing and technology transfer are still under negotiation, once up and running a CPO cartel would potentially give the two countries a large degree of supplier control over the commodity's global price.
That is, if all goes according to plan. CPO production in Indonesia is forecast at 15.2 million tonnes this year, enough perhaps to transform it into Asia's largest bio-diesel producer. Domestic consumption is currently estimated at 30-40% of total production, leaving about 9 million tonnes for biofuel processing and export.
Commodity analysts note that Indonesia's and Malaysia's palm-oil industries differ in important ways that, unless rectified, could result in Malaysia gaining significantly more from the emerging global appetite for biofuels.
While Indonesia has plenty of land and cheap labor, it lacks the capital and technical know-how needed to maximize these advantages. Malaysia, which has a substantially more skilled workforce, has already hit a significant land barrier to palm-plantation expansion and rising labor costs have contributed to stinting new investments.
Nearly 25% of Indonesia's current CPO production is derived from Malaysian investments. Indonesian nationalists, some represented in parliament, have long complained that Indonesia serves as merely a source of raw material and cheap labor for Malaysia's better-funded, more sophisticated and considerably more profitable operations.
Moreover, Malaysia has recently gone on a buying spree of Indonesian oil-palm plantations. Global capital, too, is increasingly bidding to get in on the act: a US-Malaysian joint venture recently announced plans to build a new biofuel-processing plant on Batam, in Indonesia's Riau province, a mere 30 kilometers southeast of Singapore. Riau, after massive deforestation, has emerged as the largest palm-oil-producing area in Indonesia.
How the two sides handle these potentially volatile issues will go a long way in deciding the success or failure of their emerging cartel arrangement. Another big question is whether plantation owners will actually assist the Indonesian government's new drive toward more biofuel production and agree to sell their CPO locally rather than exporting it.
The latter issue cannot be taken for granted. Indonesian CPO producers have recently complained that the government views them merely as another source of state revenue now that global demand for the commodity is surging. Agriculture Minister Anton Apriyantono has notably started to play the nationalist card in appealing to CPO farmers. "For the sake of the national interest, I hope the industry will sacrifice some of its profits in order to develop the bio-diesel industry," he recently said.
Indonesian Palm Oil Producers Association (GAPKI) chairman Derom Bangun said its members would not be willing to sacrifice without considerably more government support for the industry. He said the government should "learn from Malaysia", where CPO producers receive a healthy subsidy for selling their oil to the bio-diesel industry.
Agustino Sudjono, a senior executive at the publicly listed CPO producer London Sumatra Indonesia (Lonsum), notes that while Malaysia is expected to have a production capacity of 1.2 million tonnes of bio-diesel by 2007, which will inevitably increase its demand for CPO, in comparison, "we are still lagging behind and waiting for the regulation to be made official".
CPO: Environmental friend or foe?
So, is this the dawn of a new biofuel-driven era of economic prosperity in Indonesia? There are still many unanswered questions concerning the long-term sustainability of biofuels, chief among them the future price of oil. While reducing dependence on fossil fuels is now globally en vogue because of sky-high pump prices, it could be a passing trend if petroleum prices eventually return somewhere close to their historical moving average.
The adverse impact of palm plantations on Indonesia's and the broader region's natural environment is also a potential deal-breaker. A recent report by the environmental group Friends of the Earth claims that the development of oil-palm plantations was responsible for an estimated 87% of all deforestation in Malaysia. Forest fires in Indonesia, which sometimes cover neighboring countries in smog, are started mainly by palm growers to clear land for new planting.
There is a social cost to plantation expansion, too. In Indonesia, palm-plantation owners frequently clash with local residents over land-ownership rights, while aggrieved locals often protest violently over what they perceive to be only half-hearted corporate-led community development programs. Thousands of indigenous people have been evicted from their lands in recent years, with some beaten and even tortured when they resist, according to rights groups' accounts. This has predictably led to widespread local opposition to the establishment and expansion of plantations.
Environmentalists have already drawn blood over Jakarta's plan, funded by China, to create the world's largest integrated oil-palm plantation, including processing facilities, which would run along the mountainous 850km border with Malaysia in Kalimantan. The environmental group WWF warns that the plan would have a devastating impact on the forests, wildlife, and indigenous community. Most of the mountainous region, known as the "Heart of Borneo", is covered in prime forests and is considered one of the richest areas of biodiversity on Earth.
Minister Apriyantono announced last week that only 180,000 hectares, or 10% of the planned 1.8 million hectares of rainforests, would be used for palm-oil development. However, law enforcement is still dicey in Indonesia's hinterlands. As the country gears up for more biofuel production - before the industry has even taken root - hard questions about long-term sustainability are certain to crop up.
Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has worked in Indonesia for 20 years, mostly in journalism and editorial positions. He has been published by the BBC on East Timor and specializes in business/economic and political analysis related to Indonesia. He can be reached at softsell@prima.net.id.
keith
05-18-2006, 01:52 PM
'Wonder plant' to fuel India
By Siddharth Srivastava
NEW DELHI - Runaway crude oil prices have lent new urgency to India's quest for alternative and renewable fuels, and biofuels, especially biodiesel using the jatropha plant and, to a lesser extent, ethanol, are increasingly being seen as an appealing option.
Recently, private sector giant Reliance Industries Limited (RIL) set aside US$500 million to set up a biodiesel refining plant and earmarked 200 acres of land at Kakinada in Andhra Pradesh as a pilot project to cultivate jatropha shrubs.
Jatropha, a tree originating in the Western hemisphere (species name Jatropha curcus), produces fruit which, though inedible, contains a nut with a very high oil content; once extracted, the oil can be used as a fuel without further refining. The RIL facility, near the existing 33 million tonne per annum crude oil refinery at Jamnagar, Gujarat, is expected to be ready by 2008.
Last month, venture capitalist Vinod Khosla set off an exponential rise in the share price of a mid-sized Pune-based company, Praj Industries, by buying a 10% equity stake. Praj is a technology leader in ethanol production.
According to Khosla, ethanol as an alternative to petrol (gasoline) would break even in the US at crude price levels of $35 per barrel (prices are currently hovering around $70 and many are predicting they will soon breach $100). Khosla notes that "E85" (a blend containing 85% ethanol and 15% gasoline) is far less polluting than gasoline.
In February, global energy major British Petroleum (BP) announced that it would invest $9.4 million in biodiesel production in India. The 10-year project aims to cultivate 8,000 hectares of wasteland with jatropha to produce 9 million liters of biodiesel every year.
Allaying fears that the cultivation could affect farm produce, BP vice president Phil New said, "Because Jatropha is drought-resistant and can grow on marginal land, it offers the possibility of an economically, socially and environmentally sustainable contribution to energy security challenges in India."
The Indian government has identified 39 million hectares (almost 100 million acres) of land suitable for growing jatropha, cheerily termed "the wonder plant" by Rajasthan state's "Center of Excellence for Jatropha Biodiesel Promotion".
The government claims that, if fully exploited, the said 100 million acres could produce biodiesel that can substitute for 20% of the country's diesel consumption in five years, far higher than the present 2%. Jatropha cultivation is part of a $300 million biodiesel program, in which plant oils are blended with regular diesel.
Indian Railways, one of the biggest diesel guzzlers, has planted jatropha on thousands of acres of land along rail tracks. The railway is preparing a "bio-locomotive" to run on August 10, International Biodiesel Day.
India is not alone in tapping biodiesel's potential. Across the world, there is a search for crops that can help reduce dependence on imported oil. Palm oil, sugar cane, coconuts, castor oil and even cow dung have been explored as alternatives. Ethanol (typically mixed with gasoline) is distilled mostly from corn in the United States and sugarcane in Brazil and Asia. Biodiesel comes mostly from rape seed in Europe, vegetable oil in the US and oil palm, coconut oil or jatropha oil in Asia.
In the US, a $40 million biodiesel refinery, probably the country's largest, will be built in Grays Harbor County, in western Washington state. Seattle-based Imperium Renewables is aiming to open the facility by the end of next year and produce as much as 100 million gallons of the plant-based fuel annually - a big boost to the incipient industry, now struggling to break even.
The investment followed the Energy Freedom legislation passed in the state earlier this year, which made it mandatory that 2% of all diesel used in Washington be biodiesel by 2008. The US Department of Agriculture says biodiesel can reduce carbon emissions by 78%.
Both India and China are seriously looking at Brazil's success with alcool, as ethanol is called in Portuguese. Brazil is estimated to save $50 billion per annum in terms of petroleum imports. India, like Brazil, has large tracts of land under cane cultivation. Both the Chinese and Indian governments are extending tax incentives to make biofuels economically feasible. China has set itself a goal of generating 30 gigawatts (GW) of installed power generation capacity using renewable sources within the next 15 years.
Europe has dominated the biodiesel industry to date, accounting for 90% of global production. The EU produced 2.4 million tons of biofuels in 2004, amounting to 0.8% of EU gasoline and diesel consumption. Of this, ethanol made up 0.5 million tons and biodiesel 1.9 million tons. The EU has ruled that all fuels should contain 5.75% biofuels by 2010.
Experts, however, warn that over-enthusiasm about biofuel cultivation could affect agricultural production for human consumption and result in famines in areas of scarcity and drought. The balance needs to be right, especially for a country such as India which has shown anemic increases lately in agricultural production and productivity.
But there is no doubt that fast-growing countries such as India and China need to act fast, given spiraling domestic fuel demands. After China, India has the fastest-growing motor vehicle industry in the world, currently totaling over 8 million vehicles sold per year (including passenger cars, utility vehicles, commercial trucks, and two- and three-wheeled vehicles).
Booz-Allen Hamilton and McKinsey has estimated that the Indian domestic passenger car market of 1 million (70% of which are currently small cars) will double by 2010 and cross 3.5 million by 2015.
In China and India, with populations of 1.3 billion and 1.1 billion, respectively, fewer than 10 in 1,000 driving-age inhabitants currently own a car. Yet purchasing power in these two countries continues to rise, as shown by projected 2006-2020 GDP annual growth forecasts of 5.5% for India and 5.2% for China.
The developments related to biodiesel are concomitant with efforts to develop other renewable energy sources. There have been recent big-ticket announcements by the Indian wind-energy firm Suzlon Energy, which said it planned to invest $60 million in a factory in the eastern Chinese port city of Tianjin. The company has also acquired Belgium's Hansen Transmissions International NV, one of the largest wind energy and industrial gearbox manufacturers in the world, for $500 million.
India's Planning Commission, in its draft integrated energy policy, has estimated power generation capacity requirement reaching 627,088 MW in the year 2031, up from the present capacity of 130,000 MW. It is estimated that wind, small hydroelectric and biomass sources have the potential to generate 80,000 MW of this.
Siddharth Srivastava is a New Delhi-based journalist.
Another reason to continue NASA's funding. (http://www.asi.org/adb/02/09/he3-overview.html)
Another reason to continue NASA's funding. (http://www.asi.org/adb/02/09/he3-overview.html)
"Without getting too technical about it: the theory of fusion power says that helium-3 will work in a nuclear power plant and would yield a much safer and more reliable power source than alternative methods of producing power with nuclear reactions." - Wow I've never heard of that
Crude oil rose above $78 a barrel
Crude Oil Rises to Record as Middle East Conflict Escalates
July 14 (Bloomberg) -- Crude oil rose above $78 a barrel for the first time as concern mounted that escalating violence in the Middle East, supplier of 30 percent of the world's oil, may cut supply.
Israeli forces attacked Lebanon for a third day. Iran, embroiled in a dispute with the United Nations over its nuclear research, warned Israel against expanding the conflict. Chevron Corp. today said 40 workers in Nigeria were released after being held by kidnappers.
``I'm not going to say we're going to $100 a barrel right away, but neither am I going to rule it out,'' said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant. ``If events drag Iran into the situation and it deteriorates to the point that they want to block the Strait of Hormuz, and we get a hurricane, yes, we will see $100.''
Crude oil for August delivery rose $1.10, or 1.4 percent, to $77.80 a barrel at 10:33 a.m. on the New York Mercantile Exchange. Futures touched $78.40, the highest since trading began in 1983. Prices are up 5 percent this week, the biggest one-week gain since January. Oil is up 35 percent from a year ago.
``It will be hard to go home short when we are facing what may be the biggest threat to oil supplies in decades,'' said Phil Flynn, vice president of risk management at Alaron Trading Corp. in Chicago.
Shorts are bets that prices will fall.
Oil prices jumped 27 percent this year amid concern Iran might cut exports because of efforts to curb its nuclear program. Iran has the second-biggest proved oil reserves, about 12 percent of the world's total. Almost a quarter of the world's oil flows through the Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf.
Nervous Traders
``Certainly if the Syrians or the Iranians were to somehow get involved in this fracas, things could get really ugly, really fast in terms of a commodity pricing standpoint,'' said Ted Harper, who helps manage $8 billion in assets at Frost National Bank in Houston. ``Given the geopolitical tensions, the wrong kind of event could easily move oil above $100.''
The conflict was sparked by the capture of Israeli soldiers by Hezbollah, a Lebanese terrorist group. Hezbollah has fired about 140 rockets into northern Israel in the past 48 hours, including one that reached Haifa late yesterday, the army said. A separate operation in the Gaza Strip began June 28 after a soldier was abducted by Palestinian groups, including Hamas.
``The high level of violence a few hundred miles from the oil fields makes traders nervous,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``I don't think this is spreading but every possibility has to be accounted for.''
Message From Iran
Iranian President Mahmoud Ahmadinejad told Israel not to take action against Syria, Agence France-Presse reported, citing Iranian state television. ``This will be the same as an aggression against the entire Islamic world,'' Ahmadinejad told Syrian President Bashar al-Assad, according to the report.
``We are waiting for the situation to worsen,'' said John Kilduff, vice president of risk management at Fimat USA in New York. ``All fingers are pointing to Iran being behind the Hezbollah operation.''
Israel has ``specific information'' that Hezbollah plans to move the abducted soldiers to Iran, Israeli Foreign Ministry Deputy Director General Gideon Meir said yesterday.
``There is no shortage of rhetoric from either side, which is keeping us on edge,'' Kilduff said. ``If the kidnapped Israeli soldiers end up in Tehran, oil will get close to $100 a barrel.''
Nigerian Kidnapping
Chevron said the Nigerian contract workers were set free yesterday morning after being held overnight by the kidnappers. Conflict in Nigeria this year has cut oil output as much as 631,000 barrels a day. The nation accounts for about 10 percent of crude oil imports to the U.S., where refiners favor its low- sulfur grades because of their high gasoline yield.
Crude oil may rise from a record next week on concern the conflict in the Middle East will disrupt shipments from the region, according to a Bloomberg News survey. Twenty of 34 analysts and traders, or 59 percent, said prices will rise. Five projected a decline and nine said futures will be little changed.
Brent crude oil for August settlement rose 99 cents, or 1.3 percent, to $77.68 a barrel on the London-based ICE Futures exchange. Futures touched $78.03 a barrel, the highest since the contract was introduced in 1988.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aBEjDi4er6jI&refer=home
Crude oil rose above $78 a barrel
Crude Oil Rises to Record as Middle East Conflict Escalates
July 14 (Bloomberg) -- Crude oil rose above $78 a barrel for the first time as concern mounted that escalating violence in the Middle East, supplier of 30 percent of the world's oil, may cut supply.
Israeli forces attacked Lebanon for a third day. Iran, embroiled in a dispute with the United Nations over its nuclear research, warned Israel against expanding the conflict. Chevron Corp. today said 40 workers in Nigeria were released after being held by kidnappers.
``I'm not going to say we're going to $100 a barrel right away, but neither am I going to rule it out,'' said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant. ``If events drag Iran into the situation and it deteriorates to the point that they want to block the Strait of Hormuz, and we get a hurricane, yes, we will see $100.''
Crude oil for August delivery rose $1.10, or 1.4 percent, to $77.80 a barrel at 10:33 a.m. on the New York Mercantile Exchange. Futures touched $78.40, the highest since trading began in 1983. Prices are up 5 percent this week, the biggest one-week gain since January. Oil is up 35 percent from a year ago.
``It will be hard to go home short when we are facing what may be the biggest threat to oil supplies in decades,'' said Phil Flynn, vice president of risk management at Alaron Trading Corp. in Chicago.
Shorts are bets that prices will fall.
Oil prices jumped 27 percent this year amid concern Iran might cut exports because of efforts to curb its nuclear program. Iran has the second-biggest proved oil reserves, about 12 percent of the world's total. Almost a quarter of the world's oil flows through the Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf.
Nervous Traders
``Certainly if the Syrians or the Iranians were to somehow get involved in this fracas, things could get really ugly, really fast in terms of a commodity pricing standpoint,'' said Ted Harper, who helps manage $8 billion in assets at Frost National Bank in Houston. ``Given the geopolitical tensions, the wrong kind of event could easily move oil above $100.''
The conflict was sparked by the capture of Israeli soldiers by Hezbollah, a Lebanese terrorist group. Hezbollah has fired about 140 rockets into northern Israel in the past 48 hours, including one that reached Haifa late yesterday, the army said. A separate operation in the Gaza Strip began June 28 after a soldier was abducted by Palestinian groups, including Hamas.
``The high level of violence a few hundred miles from the oil fields makes traders nervous,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``I don't think this is spreading but every possibility has to be accounted for.''
Message From Iran
Iranian President Mahmoud Ahmadinejad told Israel not to take action against Syria, Agence France-Presse reported, citing Iranian state television. ``This will be the same as an aggression against the entire Islamic world,'' Ahmadinejad told Syrian President Bashar al-Assad, according to the report.
``We are waiting for the situation to worsen,'' said John Kilduff, vice president of risk management at Fimat USA in New York. ``All fingers are pointing to Iran being behind the Hezbollah operation.''
Israel has ``specific information'' that Hezbollah plans to move the abducted soldiers to Iran, Israeli Foreign Ministry Deputy Director General Gideon Meir said yesterday.
``There is no shortage of rhetoric from either side, which is keeping us on edge,'' Kilduff said. ``If the kidnapped Israeli soldiers end up in Tehran, oil will get close to $100 a barrel.''
Nigerian Kidnapping
Chevron said the Nigerian contract workers were set free yesterday morning after being held overnight by the kidnappers. Conflict in Nigeria this year has cut oil output as much as 631,000 barrels a day. The nation accounts for about 10 percent of crude oil imports to the U.S., where refiners favor its low- sulfur grades because of their high gasoline yield.
Crude oil may rise from a record next week on concern the conflict in the Middle East will disrupt shipments from the region, according to a Bloomberg News survey. Twenty of 34 analysts and traders, or 59 percent, said prices will rise. Five projected a decline and nine said futures will be little changed.
Brent crude oil for August settlement rose 99 cents, or 1.3 percent, to $77.68 a barrel on the London-based ICE Futures exchange. Futures touched $78.03 a barrel, the highest since the contract was introduced in 1988.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aBEjDi4er6jI&refer=home
Senate approves Drilling in Gulf. (http://washtimes.com/functions/print.php?StoryID=20060802-125323-3227r)
"The price of gas continues to go up. To give you an idea how expensive gas is, Keith Olbermann has been car-pooling with Bill O'Reilly all week. "
Jay Leno
Prices Going Up Again (http://apnews.myway.com/article/20060807/D8JBAG9G0.html)
In a sudden blow to the nation's oil supply, half the production on Alaska's North Slope was being shut down Sunday after BP Exploration Alaska, Inc. discovered severe corrosion in a Prudhoe Bay oil transit line.
BP officials said they didn't know how long the Prudhoe Bay field would be off line. "I don't even know how long it's going to take to shut it down," said Tom Williams, BP's senior tax and royalty counsel.
Once the field is shut down, in a process expected to take days, BP said oil production will be reduced by 400,000 barrels a day. That's close to 8 percent of U.S. oil production as of May 2006 or about 2.6 percent of U.S. supply including imports, according to data from the U.S. Energy Information Administration.
kotzi
08-08-2006, 01:04 AM
Prices Going Up Again (http://apnews.myway.com/article/20060807/D8JBAG9G0.html)
In a sudden blow to the nation's oil supply, half the production on Alaska's North Slope was being shut down Sunday after BP Exploration Alaska, Inc. discovered severe corrosion in a Prudhoe Bay oil transit line.
That sounds like a good place to spend some of the record earnings.
That sounds like a good place to spend some of the record earnings.
Record earnings reflect record demand ... It is, after all, a market economy.
First Drive: Tesla Roadster (http://www.popularmechanics.com/blog/automotive/3700136.html)
We’ve taken a look at the Tesla Roadster from afar and we’ve taken a ride in the spunky electric sports car too. But recently we had a chance to pry the keys away from a Tesla engineer and climb behind the wheel of a hand-built $350,000 Development Prototype Tesla Roadster.
http://media.popularmechanics.com/images/Tesla-Roadster.jpg
The Tesla’s transmission has two speeds but for our drive, the car was purposely locked in Second. Step on the gas, whoops, I mean the accelerator, and it scoots away nearly silently in a rush of instant torque. First gear would essentially double that torque, but unless we were racing a Vette or a Viper, Second is enough. Even without the lower First gear the Tesla really hauls. Tesla’s claim of running 0-60 in around 4 seconds sounds plausible. You squirt through traffic holes without the hesitation—it’s absolutely always in meat of the powerband. And all you hear from the powertrain is a hushed turbine-like wail from behind your head. Ferraris and Lamborghinis are known for making great noises. But the Tesla plays it’s own tune and it’s a futuristically cool one.
Cool, indeed ...
A Clue About Oil Prices. (http://www.captainsquartersblog.com/mt/archives/008000.php)
China is the elephant in the room ...
Hydrogen Beemers (http://www.rogerlsimon.com/mt-archives/2006/09/hydrogen_beemer.php)
Coming to a showroom next year ...
Sell - Off? (http://seattletimes.nwsource.com/html/businesstechnology/2003257679_oilconsumers14.html)
No doubt this is Bush's fault too.
Here's a good one. From the DOE itself. It says oil is going bye bye. Maybe not by 2008 but over the next several years.
http://www.eia.doe.gov/pub/oil_gas/petroleum/presentations/2000/long_term_supply/sld019.htm
Or do you want to believe the Saudis?
Abdallah S. Jum'ah, president and CEO of the state-owned Saudi Arabian Oil Co., known better as Aramco, said the world has the potential of 4.5 trillion barrels in reserves -- enough to power (http://www.playfuls.com/bizworld/#) the globe at current levels of consumption for another 140 years.
http://www.playfuls.com/news_09_40_Only_18_of_Worlds_Oil_Supplies_Have_Bee n_Consumed.html
Apotheosis of Ani
10-09-2006, 01:23 PM
Gas prices still need to drop. The gas companies got to greedy and everyone reacted by buying hybrid cars, selling there SUVs, buying cars that get 32mpg. I keeped my truck but bought a Matrix as my primary car, its a fun little car gets lots of millage. Gas companies are hoping that becuse they drop the price a bit people will buy the big cars again and drive more. People still need to car pool, still drive econimically. So dont be fooled by this slight decline.
I honestly think what we really should do is not use gasoline at all and use alternative resources, we all know there out there or make one tank of gas work for over 1000 miles but this is a topic for conspiracy, and i will write aboyt that later.
Iran is being a real bitch to the USA so if we want to really piss them off what we need to do is not need them, if US no longer imported there precoius gas then they would be begging for our aid and that phyco presidenty of theres would come to his senses.
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