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I am reminded of the message sent from Pearl Harbor on December 7, 1941, "Air Raid Pearl Harbor, This is No Drill."
A message today should probably read, "Net Oil Export Crisis is Here, This is No Drill."
It appears that Morgan Stanley issued a call for $150 oil by July 4th, basically because importers are bidding for available oil exports.
I can't imagine that the problem is more acute than on the Gulf Coast, where refiners have two choices: (1) Bid the price up, and bid it up damn fast and/or (2) Curtail the refinery utilization rate.
As I have previously said, I expect that it is when, not if, that we hear calls for oil from the SPR, specifically because of supply problems on the Gulf Coast. Given the political season, I expect the Bush Administration to give in and release oil. This will be the ultimate sign of Peak Oil/Peak Export Denial--using emergency reserves to keep the cars on the road for at least one more summer of fun.
Over $134 dollars now! What a climb last two days.
I recall many first PO-ers expected increased volatility as an indication of PO. Well, here it is.
Well gosh I was all ready to go out and buy a hummer since the oil bubble had very clearly burst the last couple of days and the price was supposed to go back down to something reasonable. Why is it going up again?! I bet it's speculators, or communists... or hippies. Yeah, definitely those environmentalist hippies, it's all their fault. /sarcanol :)
Sliding dollar. Lack of investment. Resource nationalism. OPEC cartel power politics. Above ground factorzzz. Sure thing.
Thank you, thank you very much...
How to explain peak oil to everybody
If the person is an Aging Hippie:
What to say: "You were right about everything. Absolutely everything. Growing your own food. Renewable energy. The economy. Drugs. How sexy greying ponytails are. Not trusting old people ... oh wait ..." Well, almost everything.
What to suggest: Stop looking so smug.
http://gristmill.grist.org/story/2008/5/22/83951/6190
The DFH Rat :>)
I got no dime, but I got some time to hear your story...
...I'll get up and fly away...
I know that the life I'm livin's no good...I'll get a new start, live the life I should...
The one I'm listening to right now, and that applies to our current "leadership" is..."If you plant ice, you're gonna harvest wind"
Hah! Stop looking so smug: I got a chuckle out of that one. As we've discussed here before though, it doesn't necessarily help you in the court of public opinion if you were right, but at the wrong time! They'll still think you're nuts.
*edit* I moved my nytimes clipping to lower in the thread.
Cassandra Dee Rat runs into that problem all the time.
Never trust anyone over 68. You have to adjust the limit from time to time.
It's all just the declining dollar, Jeff, dontchaknow? :-)=
Seriously, it does look like speculators were temporarily holding the price down. And it does look like things are happening fast. The "bomb Iran" comments by the Israelis aren't helping, but I don't think that accounts for more than a small part of today's runup.
Nymex front month is right around $134 at 9:30.
TPTB have to realize the outcome of an attack on Iran. And it is looking more and more like it is going to eventually happen.
I guess the only question is: What is their primary motivation? I refuse to believe that they are so naive to think that it will end well for anyone.
TBTB don't care, AT ALL, if it will end well for anyone (read: you, me, Iranian civilians). If Iran is attacked you have WWIII. Obviously Iran will counterattack. Even when done unilateraly by Israel US troops in the region are in harms way. Bush has plegded to defend Israel IN ALL CASES, also when Israel is the agressor. Russian officials have already stated that an attack on Iran will be seen as an attack on Russia itself. Russia will not stand by idle. Me thinks China will also join the "fun".
This could escalate much, much faster and serious then even Michael T. Klare can imagine.
This is like watching WWI unfolding live on the Internet. Russia was involved at the start of that one too.
Archduke Ferdinand was assassinated in Sarejevo; Austria sent an army to "punish" the Serbs; Russia intervened to defend their "brothers"; and then the alliances kicked in Russia-France-England+empires versus Austria-Hungary-Germany+empires. 40 million dead and the world map redrawn.
The strange thing is that none of the participants wanted a major war - in fact, most of the monarchs were related to one another.
WWI
Of course, this time will be different - I hope :(
The difference, of course, is that energy would have to play a big part in the next war, and with Russia, Saudi Arabia, China, and others closer to the source, the US could be hamstrung very rapidly. What then, nukes?
Um, what makes you think WW1 and WW2 weren't about energy (and oil)? Other resources as well, of course.
Actually, no one is sure of the causes of WWI, but oil was definitely not one of them. The sparking of course was the assasination, but the kindling was a complicated interrelationship of nationalities, past promises, and public and secret treaties. WWII was caused by the insanity of one man: Hitler. The war would never have occurred without his cult of The Leader. Even the Japanese military couldn't work up the nerve to attack the US until they were confident Hitler's invasion of Russia was successful; infact, they had a hard time deciding whether to attack Russia or the US. Unfortunately for them, the early German victories in Russia were a bit misleading. These wars weren't for oil, but for a combination of reasons, including nationalism, colonialism, militarism, and racial pride. Yes, Japan invaded Indonesia for the Netherland's oil, which they needed to continue their expansion; and Hitler went after Romania's oil for the same reason. However, they didn't go to war because they wanted the oil; they went after the oil so they could continue the war.
The Chinese would assert [and I agree with them] that WWII started in the early 1930s in Manchuria. Definitely a resource war.
This is basically true. WWII is something of a misnomer. There were many wars happening at the same time, that involved much of the world. Because the U.S. was fighting in both, from our perspective it was one World War. Although the wars in the 30's were more contained.
If that's the conclusion, then it actually started in 1907 when Japan essentially took control of Korea, then solidified in 1910 when they annexed Korea. The reason? Resources (food, i.e. rice) and the land connection to... Manchuria.
BTW, all with the blessings of the US via the secret Taft-Katsura agreement.
Oh, what tangled webs we weave...
Cheers
i'll try not to make this a drive by, and go and dig out some links to respond with if i can find them in my way-too-long bookmark list...
but, i do recall reading a very convincing case that overlooked in the WWI triggers WAS a resource grab question regarding oil (iirc Baku)
You are quite mistaken. One of the causes was the Baghdad-Berlin railway. And one of the first British offensives was - guess where? Basra Iraq. The British Navy was already using oil in many of its ships.
Quick question: WWI began and Britain sent if first TWO brigades where?
Answer: Baghdad, to cut off the Orient Express, which was the delivery mechanism for oil to Germany.
In the 1970s, Saudi Arabia cut off the US by a mere few percent and caused all that economic chaos. Back in 1940, the USA was the Saudi Arabia of the world. Roosevelt wanted a way to get into WWII. What did he do? He cut off Japan from oil. Japan imported nearly 100% of its oil from the USA. The USA cut it ALL off. Japan attacked various other nations as a result in an effort to secure supplies of oil (and other things as well).
Energy was not the only factor in WWI or WWII but it was definitely a factor in both wars.
A couple of years ago, Stirling Newberry wrote a piece called Billionaires for Peak Oil. He argues that the world wars were the result of the "energy transition."
I've just spent several months studying the causes of WW1, and the main one was the alliance system:
Germany-AustriaHungary-Italy
vs
Britain-France-Russia
I see a reather scary symmetry here:
Israel-USA-Britain
vs
Iran-Russia-All the arab countries that hate Israel.
All it takes is for one member (Israel) to go to war with another (Iran) and we have WWIII. But this time we have slightly bigger countries involved. And they have nukes.
Pray that Israel has some sense. Otherwise we are all doomed.
Italy was on the Allied side in WW1.
As Fischer in Germany's Aims in the First World War documents, the Kaiser most definately wanted war, and it was to be a race war between the teutons and the slavs. The authentic German documnets prove these facts.
Get the book. Read it. Educate yourselves.
I believe they were all first cousins, if only Francis F. had put up the top of his convertible and/or drove right out of town after the first attack or even if he had a driver who knew not to stall out a car or if the assassin had not been standing outside the deli when they stalled out WWI would have been averted (until perhaps the next time). Disruption from P.O. will not be so easily avoidable.
I have written before on TOD that the U.S. will not attack Iran over the nuclear issue, and haven't changed my mind. Never going to happen. But as to the Israelis, we can't be too sure. They've attacked nuclear facilities of hostile countries twice before, apparently with good success, and I'm sure they would have done it with Iran already if the risk wasn't so horrific. That's holding them back, and may prevent it from ever happening. Unlike Iraq in 1981 and Syria last year, Iran would hit back.
The Jews won't settle for anything less than 6 million heads. They've been causing trouble in the middle east ever since their inception. How do people stomach their crap? They have one of the biggest nuclear weapon ansenals in the area and constantly bang on about Iran, not to mention the haven't signed the NPT. What I do find amusing more than anything is the amount yank tax money goes into funding Isreaili (or however you spell it) terrorism when the US is going to the dogs. Rant off. If Russia and China (who have vested interests in Iran) jump into the fray then things might start to look interesting.
Marco.
Being outnumbered and surrounded by people who want you dead will cause you to worry about your neighbors having nukes. I don't think they want any number of heads, but people certainly do want theirs, so they have to be careful. I have known many Jews and have never heard them express any desire to kill.
The reason that the Islamic countries in the ME talk so much about Israel and the US is very simple. It's easier to blame others for your problems than to fix them. It's a lot easier for the leader of Iran to tell his people that the Isrealis are causing their problems, so they don't focus on his lack of good leadership.
Clearly you don't read the comments section of the Jerusalem Post. Or the Torah/Bible for that matter.
The core problem of the Middle East was the betrayal of the Arabs in 1918 by their British and French allies. The Arabs understood their alliance with Britain to be intended to liberate Iraq, Syria-"Lebanon", "Kuwait", and part of the Arabian peninsula from Turkish control, followed by a single Arab kingdom ruled by Prince Faisal. But the British and French had already signed a secret deal to split these lands between themselves (oil was discovered in Iraq in 1910). The British also had a deal to give some of the land to form a Jewish homeland. Triple-dealing.
When the Arabs rose up against the betrayal, the British and French destroyed them, even using poison gas from aircraft. The Arab regimes that were permitted were traitors to their own people.
That single Arab kingdom would have had Damascus as its capital, then the most sophisticated city in the Arab world, where modern ideas about nationalism were fermenting. It would have had the port of Beirut. It would have had the oil of Iraq and Kuwait, and probably would have absorbed the Saud family's nasty little gangland and gotten its oil too. Instead the Arab world was brilliantly divided between haves and have-nots; the kings with more oil than people had to prevent Arab unification at all costs and became Anglo-American stooges; the Arabs with more people than oil were poorer and organized armies and became radicalized. Do you think the British monsters had no experience in such manipulation? Britain has attacked Iraq in 1914, 1921, 1941, 1968, 1991 and 2003.
The leader of the Zionist settlement movement, Jabotinsky, said back then that the colonists would have to eradicate the Arab presence in Palestine as the whites of America had done to the Indians. That's not my analogy, that's his. He's still a hero in Israel. The whole intent of the leaders was ethnic cleansing based on what was done to Native Americans. No intent to kill? Only if they starve quietly on the reservation.
All in all, it looks like a white plan for Arab elimination to me.
No, the core problem of the Middle East is the same as the core problem just about everywhere else: leadership that doesn't care about the people.
So some Jewish guy said something bad 100 years ago, and this is currently causing the suffering of the Middle Eastern population?
If this was a plan for Arab elimination, it went pretty poorly. There are more than 100 million Arabs in the ME, and less than 7 million Jews. There is/was plenty of oil wealth to go around, but the fact that it was not well distributed and used is hardy Israel's fault.
One should also be careful not to confuse the terms "Isreali" and "Jew".
There are a lot of Jews living other places, and there are a lot of Israelis who aren't Jews. The Druze serve in the IDF and support Israel while the Ultra-Othodox Jews don't. Israel is actually one of the most religiously diverse countries around.
Also, not all of the Israeli Jews are white. Many are black (from Ethiopia).
And Iranians are not Arabs they are Persian.
There is an Arab minority in Iran, but in general you are correct. This is another one that bothers me when people confuse those terms. I think I did say that ISLAMIC leaders in the ME want to blame the US/Israel for their people's problems (I would name the current guy, but I can't spell it).
To me, it's no different from the problems in many African countries currently (like Zimbabwe); or the problems that we will be having here in the U.S. in the future. It's easier for our Gov to blame "terrorists" and Arabs than our own crappy leadership.
A plan for Arab elimination that resulted in the Arab population in Israel almost doubling. Pull the other one, sir.
150 nukes. Is there something about this number you do not understand? Israel has all the defense against attack they will ever need.
The rest is just bullshit.
Check out the Israeli's friendship to the US.
http://www.whatreallyhappened.com/ussliberty.html
http://www.counterpunch.org/stclair1126.html
And what about those dancing Israelis on 911?
I have no dog in this hunt, but the idea that Israel is a in any way innocent is bull pucky in the extreme.
Cheers
If Israel were going to strike Iran they wouldn't be announcing it.
In poker, big talk = bluff.
Depends on what outcome you want. Blow things up big time enough and maybe God will step in.
Does God step in to magically change the cards in Poker if you have a poor hand? Do you play against people who believe that she does?
Besides, Israel doesn't have the means to attack Iran directly. Even if they were given permission to fly over Iraq, their planes don't have the legs to make it to Iran, make a combat strike, and return to base without massive refueling. I highly doubt that the U.S. would provide that refueling without participating in the raid itself. Unless Israel has an aircraft carrier hidden away somewhere, they're not going to attack Iran.
6 months ago I was convinced that we were out ouf the woods on an Iran attack. For a number of reasons. Iraq was a mess, the 2nd tier neocons had been forced out of the administration, Rice was given the lead on resolving the Iranian "problem", and most-importantly the NIE came out that said there was no evidence of a weapons program.
It looked like a US/Iranian deal. The US backed down, the Iranians decreased their military aid to the militias. But since then everything has started shifting back. The "surge" has given new credence to the hawks, Fallon is out at Central Command, and sabres have started rattling again in Washington and Jerusalem.
If there is to be a catastrophe, it is due to one particular miscalculation. If the US attacks it will be because they believe that a limited attack will result in a limited Iranian response. And this is wrong. Tehran has been hinting for a couple of years that they feel they can win a military confrontation with the US. Not a narrowly limited engagement (high altitude bombing) like the US seeks. Not an all-out nuclear engagement (of course). But a significantly escalated drawn-out conflict that means ground troops, holding territory, and attrition.
They'll close the straights. They'll target export facilities with ballistic missiles. They'll send the Revolutionary Guard into Basra. They'll pull Israel into any conflict. Their bottom line will be to prevent exports until the US leaves the entire Gulf region.
And a US attack on Iran will rally otherwise unhappy Iranian citizens right back around their flag. The best way for us to change Iran is to not attack them and allow internal dissent to work itself out without any interference from us.
But will we do that? Have we ever done that?
Note that a late summer attack on Iran, if successful helps McCain. And worse, an unsuccessful attack that involves an Iranian response against US forces also helps McCain, at least in the short term. People will want a "military" leader. Politically an attack on Iran looks like a short term win-win situation. (Longer term more people would begin to reject it again but initially Americans will rally round the flag as reliably as Iranians will.)
It would be interesting to see how voters respond when gasoline triples in price...
Even though there is that recommendation "economize, localize, produce" out there, this is in fact intrinsically contrary to the role of the privileged elite (of any society). "..the privileged elite has always--and, I submit, will always--consist of members who perform unproductive services under one form or another. Whatever the title under which this elite may receive its share, this share will never be that of worker's wage." (p. 310, The Entropy Law and the Economic Process
Attacking Iran is the prelude to the rise of the next elite group. Our elite today consists of "captains of industry, commerce and banking" (p.315) but they obviously feel that they can't continue to dominate politics and such given Peak Oil. Little by little their power and position will weaken, their beautiful cars and luxury homes and Ivy League educations will become worthless.
What do they need? They want the next phase----the next elite (they hope to be included)----to rise to the surface. Probably the space in the top of a society as envisioned by Obama doesn't interest them, maybe because Obama doesn't want to let these current elite people continue to play much role as elite (he has said as much). (Obama's message is kind of ELP, for a federal govt). I mean that Obama has a different elite in mind, not the ones that are in power now.
A war with Iran is unfortunately the only way the current elite can see a chance for themselves. Their houses, their cars, stock portfolios, etc, will lose value, but they need to buy some time to put their money into things which will let them minimize their suffering. They need to have the government keep people in line so that they can keep their advantage. They will be fighting so they won't have to "produce, economize and localize". ELP makes them shudder.
Very possibly anti-war demonstrations in the US will also turn into places where people form so-called "rebel" forces to counter the Bush-McCain government's more and more repressive (the govt will be probably trying to stay in power by doing all sorts of unpleasant things) policies. I suppose localization of power will take hold at some point as things fragment.
One wishes that things could be different, that there was a way to accomplish ELP without the suffering, the war, that seems to be rumored now.
I myself personally favor ELP. Yet there are many who really don't want to try it and see no reason why they should!!
There has always been a cyclic process of new money displacing old money, with some old money adapting to the new paradigm. The Imperial process, OTOH, is linear, yet competitive, the latter is something Ted Rall does a good job of explaining, the former being a product of time.
The US Imperial Elite will not allow an attack on Iran, primarily because it's against their interst: The Empire is woefully overstretched both financially and militarily, and they understand the thesis that proves the case of The Rise and Fall of Great Powers. As I have mentioned here and elsewhere, it's in their interest to lead the Paradigm Change to alternative transport and energy systems because that's where the next new money will be made and the new power will reside. The faction of Neocons is quite small in comparison with the whole of the Imperial Elite and had their chance with 9/11 and Iraq and failed to build on those "victories," which is a good thing for the world. You can be certain that without the Iraqi insurgents halting the US Military, the Neocons would have attempted to roll-up Iran and Syria. The Taliban should also get some credit for making Afghanistan a "victory" too.
It should be remembered that the US Empire is very vulnerable on two points: Oil and Finance. Engdahl made himself a fool by embracing abiotic oil, but his analysis of how the US Empire could be attacked and defeated using assymetric methods is excellent and should be read by those unfamiliar with it. Some will recall Bush saying "If this were a dictatorship, it'd be a heck-of-a-lot easier." Well, both him, Cheney and a compliant Congress--excepting a few--tried, but the push-back was forceful and they failed in that attempt too. Yes, the push-back has yet to become a rollback, but the momentum behind that builds as energy inflation races ahead, the economy further deteriorates, and more people fall behind, which will lead to Populism American-style with its demonizing of elites, which is highly threatening to the intersts of the Imperial Elite.
The Iranians bought a lot of the latest Russian advanced weaponry recently including TOR-M1 and Mosket Systems. I don't think an attack on Iran would go as smoothly as most neo-cons would expect. The Iraqis on the other hand only had access to 1970s Soviet arms so were easily overrun.
I wouldn't be surprised if some military analysts in the pentagon have pushed back a bit on the feasibility of a easy/no consequences Iranian strike.
a little tidbit i heard on npr. the us navy is trying to outfit almost all of it's agies cruiser's with the highly controversial(as it does it even work considering the evidence that they scew the tests) anti ballistic missile shield system by october.
Those are some scary remarks by Ohlmert. One of the strongest indications that an attack will happen I've ever seen. But then again, I've been saying for years Iran is toast.
Didn't Bush Jr. just go over there recently and pat Ohlmert on the back for something? I'm sure he supports Ohlmert in whatever he wants to do.
The pat on the back was for joining the corruption club:
http://news.bbc.co.uk/1/hi/world/middle_east/7035526.stm
Watch the press ditch this story in anticipation of supporting him.
Why bother when we can back an honest madman like Netanyahu instead?
I've said this on multiple occasions before that an attack on Iran will not happen. People and the MSM tend to jump on comments by the Israeli elite and Iranians as if war is imminent. Both sides spew rhetoric, but a war with oil prices in the $130's, the Iraq/Afghanistan fiasco, is not going to happen....There is absolutely no way that the American public would stomach a war with Iran, or Israel ( by proxy the US) vs Iran. Even less likely with an Obama presidency, of course.
wt, would you explain for the benefit of the uneducated (me) what the implications of curtailing the refinery utilisation rate are?
Does this mean that the area would go below MOL?
If so, how long does the 'air bubble' in the supply pipeline usually last, and how is the pipeline adapted to lower levels of supplies?
Thanks - it can be confusing for those of us not in the oil industry!
It's the opposite. If a given market won't support a sufficiently high price for refined products that would allow a refiner to pay the current (hourly?) going rate for imported oil, the refiner will have to curtail the utilization rate, because they will not allow their crude inventories to reach crisis levels. I discussed the issue in this article:
Declining Net Oil Exports Versus “Near Record High” Crude Oil Inventories: What is going on? (September, 2007)
http://www.theoildrum.com/node/2975
Mark Haines on CNBC this morning:
WT
Clearly, they should put you on CNBC. I think they would be better off just sticking to one mantra: "supply and demand". Part of the apparent conundrum may be that commentators like Haynes are not focusing on the two variables simultaneously. Just because demand is down doesn't mean prices are set to fall. The decrease in net exports may be more than keeping up with the decrease in demand.
Further, the financial networks really should quit trying to explain the ups and downs of the oil market until they actually begin to understand the ups and downs of the oil market. In any event, the light vs heat ration would be increased if people like you were put on the tube.
You ascribe "bumbling
" as the cause.
I say that people like Haynes/CNBC have a figurative gun pointed at their head
and they say the wrong thing, they're gone, kinda like Donahue.
Global demand is not down. US gasoline demand is down. However diesel demand is up, even in the US, and diesel is driving global oil prices. Declining US gasoline demand is going to do nothing to overall demand for oil, because sufficient gasoline to meet America's needs is produced as a by-product of diesel production.
WT, I agree that the refinery utilization rate is a telltale. Jeffvail is right: contango means that fear has truly gripped the markets. My article on the subject this week:
It Takes Two to Contango
Sorry for being dense here. I am new to the forum and no oil expert, just interested and trying to become informed. I see quite a few acronyms being used. SPR? S P Reserves?
Strategic Petroleum Reserve. When governments hoard oil, they put it in their SPR. In the US the SPR consists of underground storage areas. The government stashes oil there against some kind of an emergency.
In Iran, the SPR consists of tankers on the water.
Strategic Petroleum Reserve
http://www.spr.doe.gov/
Welcome. The alphabet soup can get kind of confusing around here. Here's a guide that may be helpful:
Acronym Guide
Also, Google is surprisingly useful. Google SPR oil and see for yourself. :-)
Yeah but when I google ELM I get:
:-)
Elm is what we will be cutting down and burning when the ELM really bites.
Export Land Model has a great Wikipedia page :-)
Given the events of today and its portents for the near future, here's another acronym for the list:
FUBAR
F**ked Up Beyond All Recognition.
or SNAFU
Situation Now All F**ked Up.
Alternative meaning:
Situation normal, all f&%$#d up.
Situation Normal: AFU
And let's not forget the ever (un)popular BOHICA.
Leanan:
Do you think the acronym guide link deserves a permanent link on the top of the oil drum?
I often have had to break off reading a thread to google alphabet soup.
Having a "quick and dirty" access to commonly used acronyms specific to TOD is quite helpful.
Maybe on the right hand side of the bar with the following?
"< DrumBeat: June 5, 2008 DrumBeat acronyms"
Steve
It used to be on the sidebar. Not sure why it was moved. I'll ask.
OMFG.
Crude up $6.45.
TV should be going commercial free now.
Something huge is happening.
We might make my $145 target yet( by today)!
I'm betting it has something to do with Cantarell, the
the loading ports and this:
http://www.ssd.noaa.gov/GOES/EAST/gmex/loop-ir2.html
And Bloomberg specifically mentions shipping patterns cited by Morgan Stanley. It's pretty much Jeff Brown's fault. Whew $10 in two days.
Morgan Stanley, the second-biggest U.S. securities firm, said current shipping patterns suggested that U.S. benchmark West Texas Intermediate crude may reach $150 a barrel by July 4.
Those tanker rates and distances coupled with proximity/demand and falling production from V&M. Oh and we had a crude draw for 3 weeks despite all this demand destuction and refineries stepping up. At the end of a long pipe with plenty of takers along the way.
"It's pretty much Jeff Brown's fault"
This is one of those increasingly doomerish DB's, but I couldn't help ROFLMAO.
It's pretty much Jeff Brown's fault
Oh-oh !
Best Hopes for that "secure, undisclosed location",
Alan
Someone speculated about a Nobel Prize for the ELM. I suggested a more likely outcome would be angry FWO's (Formerly Well Off's) going after the Peak Oil/Peak Export messengers with pitchforks and torches (PG chimed in and said don't forget boiling oil).
And why didn't someone warn us of the critical need for electrified light rail and streetcars!
I think you're safe on that count. Nobody will have oil to boil, let alone the fuel to boil it with. ;-)
Maybe tar sands and feathers?
Boil you in vegetable oil, using biofuel. Then they can eat you :(
As noted down the thread, I have decided to tell the truth. My true name is Matt Savinar.
That's a hoot!! Interesting how you can shape-shift too!
And why didn't someone warn us of the critical need for electrified light rail and streetcars!
Yes a measure of bitumen & eiderdown for that one too!
Gawd the panic on CNBC this morning was a riot. Rick Santelli at one point was fighting off the entire cast along with one other voice of sanity. His central point was that all other explanations other than supply and demands would be much easier to solve.
Easier to blame the messengers for sure. (Lime green Volvo's are in contango)
For survival of civilization ELM (as well as understanding of PO) is more important than any of these - http://nobelprize.org/nobel_prizes/economics/laureates/
Gasoline in short supply in Venezuela, the Saudi Arabia of Latin America
http://www.ibdeditorials.com/IBDArticles.aspx?id=297385042418670
Also cooking gas (they mistakenly call it oil in the link above) in short supply. Citizens foraging forests for wood to burn.
What are you seing in this image that I am not? (I can't get the animation loop)
Hello, Marco
I never see storms in the Bay of Campeche. I mean I looked
closely all last year. Every day of Hurricane
But when Mexico closed it's oil ports last year, the pattern looked like
the one you see.
Also,this is the remnants of Arthur, I believe.
Could be reforming.
I don't know, but everything's moving north.
"...DISCUSSION...
GULF OF MEXICO...
AN UPPER RIDGE ANCHORED OVER THE N GULF NEAR BILOXI MISSISSIPPI
COVERS THE GULF N OF 26N WHILE AN UPPER TROUGH CONTINUES TO
UNDERCUT -----
THE UPPER RIDGE EXTENDING FROM THE YUCATAN CHANNEL TO
NEAR TAMPICO MEXICO AND COVERS THE REMAINDER OF THE GULF S OF
26N. SCATTERED SHOWERS/ISOLATED THUNDERSTORMS ARE MAINLY
CONFINED INLAND OVER S MEXICO/GUATEMALA AND AN AREA ACROSS THE
BAY OF CAMPECHE FROM 18N-21N BETWEEN 91W-96W DUE TO THE UPPER
LEVEL TROUGH.-----(my edit)
SCATTERED SHOWERS ARE ALSO FROM 22N-24N BETWEEN
92W-95W. A SURFACE RIDGE EXTENDS FROM THE W ATLC ACROSS N
FLORIDA AND ALONG THE N GULF COAST TO SW LOUISIANA. COUPLED WITH
THE LOWER PRESSURE LOCATED OVER THE CENTRAL US...MODERATE TO
STRONG SOUTHERLY 15-20 KT SURFACE WINDS WILL PERSIST THROUGH THE
WEEKEND ACROSS THE GULF W OF 87W. STRONG SUBSIDENCE AND DRY AIR
COVERS THE GULF WITH ONLY EXCEPTION BEING THE BAY OF
CAMPECHE...THUS MOSTLY CLEAR SKIES RESIDE N OF 24N.
CARIBBEAN...
UPPER LEVEL TROUGH IS LOCATED OVER THE W ATLC AND EXTENDS ACROSS
CUBA AND HISPANIOLA RE-ENFORCED BY AN UPPER LOW JUST S OF THE
WINDWARD PASSAGE NESTLED BETWEEN CUBA...HAITI...AND JAMAICA
DEEPENING THE TROUGH TO THE NRN COAST OF COLOMBIA. AN UPPER
RIDGE ANCHORED OVER S MEXICO AND GUATEMALA COVERS THE W
CARIBBEAN WHILE A SECOND UPPER RIDGE ANCHORED OVER NE VENEZUELA
COVERS THE SE CARIBBEAN. STRONG SUBSIDENCE AND DRY UPPER AIR
COVERS THE AREA N OF 18N TO ACROSS CUBA AND JAMAICA INHIBITING
ANY SIGNIFICANT SHOWER/TSTM ACTIVITY. THE REMAINDER OF THE
CARIBBEAN IS DOMINATED BY DEEP LAYERED MOISTURE WITH MOSTLY
ISOLATED SHOWERS...BUT SOME SCATTERED MODERATE TO ISOLATED
STRONG CONVECTION IS OVER THE SW CARIBBEAN ALONG COASTAL
NICARAGUA...COSTA RICA...PANAMA AND N COLOMBIA DUE TO AN UPPER
LEVEL DIFFLUENT PATTERN."
http://www.nhc.noaa.gov/text/refresh/MIATWDAT+shtml/032320.shtml
It's either that or war.
Nothing else can move oil $6.
And someone is going bankrupt right now because they're being squeezed.
Note story above - Israel's transport minister said that they would have to destroy Iran's nuclear facilities since the West has been unable to stop them.
Yes. That's why I said it's either weather or war.
Per the story, BTW-
http://www.rawstory.com/news/mochila/Israel_to_attack_Iran_unless_enrich...
" "Attacking Iran, in order to stop its nuclear plans, will be unavoidable," said the former army chief who has also been defense minister.
It was the most explicit threat yet against Iran from a member of Olmert's government, which, like the Bush administration, has preferred to hint at force as a last resort should U.N. Security Council sanctions be deemed a dead end.
My Edit- the US controls ALL airspace (E Caspian the exception) around Iran.
Israel cannot get thru unless the US lets them. The instant Israeli jets
get thru the US screen, Russia will know.)
Iran has defied Western pressure to abandon its uranium enrichment projects(not illegal under NPT, which Israel refuses to sign), which it says are for peaceful electricity generation rather than bomb-building. The leadership in Tehran has also threatened to retaliate against Israel -- believed to have the Middle East's only atomic arsenal -- and U.S. targets in the Gulf for any attack on Iran.
Mofaz also said in the interview that Iranian President Mahmoud Ahmadinejad, who has called for Israel to be wiped off the map(he did not. A said the current regime needs to be removed, and Olmert is corrupt), "would disappear before Israel does(while Israel HAs used Shoa and Iran together in the same sentence).
Just to clarify foir future historians, eh? ;}
I just noticed that we were covering the same war with Iran scenario for the rise in prices. The uptick is now $9. I think it means war. The comments by the Israeli leadership seem obvious; we probably have just days...
Don't forget Moe Gamble's suggestion of Chinese buying as well.
Natural gas prices going through the roof and nobody's screaming at all. Nice call in your post the other day.
Cars, and maybe food (in that order) are all people care about.
Until winter. Or until the lights go out.
Sure, but that's later - probably more than a couple of weeks even. Nothing to worry about now!
You routinely get big moves like this within an expected trading range. Trading ranges will get bigger as the price gets higher, so these moves within the range will get bigger too.
What's more significant than the $6 move is that we moved above the previous record close, tested it twice, and are still well above it. If we were going to stay in a trading range, we should be moving down toward the bottom of the range.
Speculators have definitely been returning to the market today, but not in excessive numbers.
Well looks like there might be a bit of a break out. Oil is now up over $9 and might hit trading limits today ($10 a day?). Heating oil went limit up, I guess that means the same thing...
Right, and with the breakout we see system speculators getting their signal to buy, and bubble believers, who would have sold around the old highs, getting squeezed out of shorts.
But if you look at the market structure, I still don't see that we're anywhere near any speculative excess, even with all the index funds permanently long in the market.
I would think we'd see a lot of short covering today. A short-covering rally could really put a surge on the already-zooming price. I'd wait to see what happens in the next couple days to see if this is really a breakout or whether some part of it panic
selling by people who were shorting earlier in the week.
I agree that normally you'd expect to see these guys putting shorts back on (the price is coming down from the high as we speak), and some kind of back and forth here around the breakout.
But if Morgan Stanley is right and our inventory reports are going to look grim in the coming weeks (and the commercials are certainly getting a feel for next week's report by now) who in their right mind is going to want to go short over the near-term?
But I also agree Monday and Tuesday are very important.
shargash, best guess I think it's the China-finally-buying-for-the-Olympics scenario. A move to close to $150, then a seasonal correction back to $135ish, maybe a buck or two below. Beyond that, we have to see what's going on. I bet China increases gasoline prices to consumers after the Olympics, for one thing.
Good Lord, you guys, are you watching this close?
Over $138 almost at $139 as I type...
I FULLY expected this. Oil at $135=fear. Oil down to $122 in two weeks=greed. Two days later, fear gets back in the driver's seat and a new high is set.
Volatility will increase as we go up the repricing curve...
I say $200+ oil and $7 gasoline within 1 year...
Right, I think it would be embarrassing for China if the TV cameras showed gas lines during the Olympics. They want to showcase their economy and progress.
What I so far not really understood... If the gulf coast has issues get crude short-termish, why should prices elsewhere jump too? How much storage does M$ own and what patters are they referring to? Price jump smells to me like short-covering and nervousness in market, eg speculation.
"eg speculation."
well is the price is rising because there is *****speculation***** of military action in iran, what else can it be called?
As noted a couple of weeks ago, over the last year the price has behaved in two month cycles of down 10%, up 20% for a net gain of 10% plus every two months. This last down and now up fit into that cycle although I would expect the up to start to be much more than 20%. All of this baring anything like a hurricane or war which will distort it a lot. I think the 10% drop reflects Soros' "froth" in the market. Even tho everyone is quoting him as saying there is a bubble my understanding of his words is that he thinks the majority of the price is fundamentals and the rest is misinformed speculative froth. Anyway, storms are fun to watch of you are safely on the beach! Oh my, the tide never went out that far before .. run for the hills!
Yeah, I think he was talking more about the potential for a bubble than an actual current bubble, but of course all anybody ever sees is a headline with the word bubble in it.
I wonder if the $10 rise in the last two days is the market signalling that an attack on Iran is imminent... Someone in the pipeline (pardon, but I couldn't resist) might have knowledge that we don't yet have...though there has been a lot of saber rattling lately.
Time to call/email your congress critters to let them know that you don't want war with Iran (and as a result, the rest of the world!)
I did, and got zero reply. They aren't listening, probably because it's an election year. Or, perhaps, they're out shaking hands at AIPAC.
the latter. most of them get a all expenses paid trip to isirial upon being elected to make sure they tow the line.
Hey...BushCo has to stop the Obama campaign somehow, don't they? Obama might give away all the secret budgets and agencies they worked so hard on creating these last 8 years.
I have a feeling this may have a little to do with all the sabre-rattling today:
http://www.redorbit.com/news/general/1419234/did_iranian_agents_dupe_pen...
Oh, you haven't heard? We're all wrong! Ha!
Why oil prices will tank
I remember test taking hints for the SATs. The biggest one, was when you see a sentence with a word of absolution, like 'always', it's usually false.
That's a gem. There are so many good nugs in there. I don't disagree that oil prices may come down a bit, but oil does stuff that other things don't do. That's the point.
I'll have to rush home and go through my heirloom oil collection to see if I have a few barrels in the cupboard I'm willing to part with.
We don't know where the new abundance will come from, we just know it will appear.
Faith-based indeed.
Westexas, I posted this late in yesterday's drumbeat and just wonder what you make of this statement by the president of OPEC.
Dollar Weighs on Crude Oil Prices, OPEC's Khelil Say
That OPEC, in aggregate, can't increase production.
"Non-OPEC supply was important this year and is expected to be very important next year"
Is this an admission OPEC peaked? This year, non-OPEC supply is "important", but the next year it is "very important"? Or, if Iran is indeed attacked, that will also explain it.
And a message to Bush/Cheney perhaps: "Don't bother begging us for more oil. Try begging to Putin. PS: Good Luck!"
I would be interesting to know who is the current governing person in Russia. Sure, Putin is still powerful. However I presume it neither Putin nor Medvedew. Russia's become a very politicall and economically powerful country with a lot of wealth concentrated in a few person's hands (this is at least the picture which is told here in in the european mainstream media.
I expect Russia to become even more powerful in future. This is a time for oil exporters.
From Bloomberg:
"Oil yesterday advanced $5.49, or 4.5 percent, to $127.79 a barrel. It was the biggest one-day gain since March 26. "
According to my records its the single largest one day gain, period(maybe not in percentage).
Notice the way the Chinese have been allowing the yuan to appreciate. It's a good bet that they will allow it to appreciate a loooooong way, albeit slowly, if they feel they need to bid for those exports. That's power.
US has been haranguing China for years to allow the yuan to appreciate. I think it may be our worst nightmare.
There is another big increase in inflation feeding into the costs of everything Chinese sailing to ports around the world. The cost of shipping a standard container is skyrocketing along with the fuel oil needed to power the container ships. Here are some numbers compliments of the great, all knowing, seer, guru, swami, oracle and connoisseur of pizza and beer...the one and only... (imagine a drum roll)...Mogambo Guru.
'Exploding transport costs may soon remove the single most important brake on inflation over the last decade - wage arbitrage with China."
How "exploding" are these transport costs? Well, the report finds that "the cost of shipping a standard 40-foot container from East Asia to the North American east coast has already tripled since 2000 and will double again as oil prices head towards US$200 per barrel." Double!
The report notes that "it currently costs US$8,000 to ship a standard 40-foot container from Shanghai to the North American east coast, including in-land transportation. That's up from just US$3,000 in 2000 when oil was US$20 per barrel. At US$200 per barrel of oil, the cost to ship the same container is likely to reach US $15,000."
To see how this is reflected in prices, Mr Rubin says, "To put things in perspective, today's extra shipping cost from East Asia is the equivalent of imposing a 9% tariff on East Asian goods entering North America. And at oil prices at US$200 per barrel, the tariff equivalent rate will rise to 15%.'...snip...
http://www.atimes.com/atimes/Global_Economy/JF07Dj01.html
China and Kazakhstan started construction of an electrified standard gauge (Russian Empire used broad gauge) rail line from China to the EU earlier this year.
Two paths, one south from Caspian Sea to Turkmenistan, Iran, Turkey, Bulgaria. The other north from Caspian Sea through Russia and Ukraine to Poland. Negotiations continue as tracks are laid in Kazakhstan.
Best Hopes for Electrified Rail,
Alan
You may have just described the center of what will remain of civilization one day, just as it was after the fall of Rome.
Very interesting. Do you have a link about this new rail connection?
http://findarticles.com/p/articles/mi_m0BQQ/is_8_44/ai_n6173518
It does not cover the Northern alternative as well as the Southern route.
Best Hopes,
Alan
Thank you!
I read that article this morning. Gotta love the Mogambo.
westtexas,
So right about the enraged villagers demanding SPR release. But we'll have to wait to see George's response. IMHO, I bet he won't. I've never expected the SPR to be tapped, to any significant degree, for public consumption. Though it was never admitted, I suspect it has always been reserved for the military. The US DOD is the largest single user of oil on the planet. The DOD doesn't publish their fuel reserves for obvious reasons but we've all seen various estimates of consumption in the Iraq theater alone. Given the potential for increased resource conflicts involving our military I really wouldn't want the SPR squandered on civilian use.
On the otherhand, the gov't does have another option few are aware of: in 2007 the US gov't was the largest seller of crude oil in the US: 585 million barrels. This was the royalty oil the Feds receive mostly from the offshore. Second biggest sellers was BP at 525 million barrels. The royalty oil is titled to the gov't and thus they can take it in kind and sell it to whomever they want. The gov't could, in theory, transfer title of some of that oil to the DOD and they could send it to the refiners and pay to have converted to military fuel. But that would, of course, take oil out of the public market and would likely raise public prices. And there would be political hell to pay when/if they angry villagers learned of that ploy.
Bush needs the SPR to fuel planes, tanks, and trucks. This is a reserve for the war with Iran, which is why they have been pumping (at Cheney's direction, since he has been given charge of the project -- or took it over) at a furious rate. When war starts (and a $10 increase in the price of a barrel may now be indicating it is just around the corner) fuel will eventually have to be rationed in the U.S. (Those drivers who think they will get to use refined product from the SPR are living in imaginary SUV-heaven.) I can't help feeling something desperate is up, especially when I read links like this from AlterNet titled Rumors of War: Is Bush Gearing Up to Attack Iran?
http://www.alternet.org/module/printversion/87079
The lead paragraph includes a comment that on May 8 Rep. Conyers sent a letter to Bush warning him that an attack on Iran would be an impeachable offense.
Pumping at a furious rate?
SPR additions Jan 2002 to August 2005, 150 million barrels in 44 months. That's 3.409 million barrels per month
SPR additions August 2005 to date - 4 million barrels ( net ). If we take the post-hurricane minimum of 682 million barrels of Feb 2006 to date - that's 22 million barrels in 27 months, ie 810 thousand barrels per month ( ie 25% of pre-Katrina rate _
If we take the recent SPR run up that began in September of last year, when the SPR was at 689 million barrels, then it's 15 million barrels in 9 months ( ie 1.66 million barrels per month, which is a tad less than 50% of the pre-Katrina rate. )
The SPR additions will suspend - again - in a few weeks time.
Anybody looking at the pre and post-Katrina figures for SPR additions could quite readily conclude that the hurricane season of 2005 constituted an inflexion point in global oil supplies.
I stand corrected.
Per the EIA: The week before Katrina 700,500,000 barrels.
Currently 704,102,000 Barrels IN SPR.
http://tonto.eia.doe.gov/dnav/pet/hist/wcsstus1w.htm
http://tonto.eia.doe.gov/dnav/pet/pet_stoc_wstk_dcu_nus_w.htm
Yes, I'm back. The runup today so far is $7.00. Can the reason be found in this article? It sounds to me like a declaration of war by Israel without a timeline for execution. Perhaps the oil market has taken note...I don't know, but $7 in one day and $11 dollars in two days should have a solid market reason, or is the result of speculators gone mad, or is just plain wierd...which is it?
http://www.reuters.com/article/latestCrisis/idUSL06251958
It's normal-trading-range + morgan-stanley-report-on-product-shipping-to-Asia-not-here + nobody-wants-to-get-short-after-Israel-threat + (probably) another-drop-coming-in-next-week's-inventory-report.
Whatever portion is the Israel threat will come out of the price fast.
Right now it looks as if commercials expect only a short-term spike, with a price drop late this summer, though not the major price drop the bubble-believers are expecting.
We probably ought to take the comment by Israeli Transport Minister Shaul Mofaz with a considerable grain of salt. Unlike the U.S. cabinet and most countries, the ministers in the Israeli government cabinet do not all sing from the same sheet of music; they are often very publicly at cross-purposes. This current Israeli government is likely to fall in the next few weeks anyway due to a scandal involving the Prime Minister taking cash money in envelopes. Mofaz wants to run for the new head of his party, and most of his comments are for domestic political consumption rather than sending messages to foreign countries.
I've seen similar comments...the problem is, has the market? If there is no war, as mentioned by someone in a previous post, there will probably be a sharp drop in prices. However, we could get the same result if some leading authority in Israel flatly stated that no attack was going to occur (at least anytime soon). So far there has been silence. If Bush and Co. want to see oil prices drop, they should put pressure on Israel to cool their jets; so far, that hasn't happened either.
Interesting, Rockman,
re: "Given the potential for increased resource conflicts involving our military I really wouldn't want the SPR squandered on civilian use."
Without qualification?
And if "no", then is there any limit to US military use?
(Do you consider the military use to be something other than "squandering"? I mean, unequivocally so?
What's your take on the military use for the prosecution of the Iraq invasion?)
re: "The royalty oil is titled to the gov't and thus they can take it in kind and sell it to whomever they want. The gov't could, in theory, transfer title of some of that oil to the DOD and they could send it to the refiners and pay to have converted to military fuel."
Are these sales records public? i.e., is there transparency WRT these transactions?
If so, where does one find the information?
In terms of the price rise, actually, it might be hard to pin down.
Wouldn't this depend on the relative percent SPR-source v. "other", and the timing?
... is there any limit to US military use?
Yes, there is. When the SPR is empty, the military will stop using it.
The McPaper has "oil up $11" as the top story.
Even over "Barry Bonds pleads not guilty to felony charges."
And over at PO.com, people are reporting their husbands and wives are suddenly much more supportive of this "prepare for peak oil" thing.