DOHA (Reuters) - OPEC ministers conceded on Monday there was nothing they could do to halt surging oil prices that threaten consumer nations' economies and could trigger a collapse in demand disastrous to producer states.
The group, already pumping as much as refiners can handle, concluded at talks here that raising its 28 million barrels per day output ceiling would not rein in runaway prices.
"The market determines the oil price," Saudi Oil Minister Ali Al-Naimi, OPEC's most influential voice, told reporters. "You know and I know that the reason the price is where it is is not from a shortage of (crude oil) supply," he said. OPEC ministers, meeting during global energy talks here, had little enthusiasm for a Kuwait proposal to offer up all the organization's spare capacity of two million bpd as they did in September when oil spiked above $70 a barrel."

(to pop another issue up to top-level, don't believe the CNW Marketing Research hybrid study

Fuel prices hit new vehicle sales

Australians held off making new vehicle purchases in March as the onward march in fuel prices kept consumers away from car yards.

Australian new motor vehicle sales fell two per cent in seasonally adjusted terms to 79,634 units in March, from a downwardly revised 81,249 units in February, the Australian Bureau of Statistics said.

This was below economists' expectations of a 0.6 rise in new motor vehicle sales.

Commonwealth Bank senior economist John Peters said heavy fuel prices were continuing to weigh on car sales.

"It appears that the annual total of new car sales will stay just under the one million mark until there is some signs of lower petrol prices or lower new car prices," Mr Peters said.

In many European countries they are very popular, being much faster and regular than buses; and much more affordable than regular taxis or a personal car. I suppose they will also be a good idea for small-scale personal business in the future to come.

As I understand it, on one day each month (second last Friday?), anyone who holds a net sell position is obligated to deliver oil, and anyone who holds a net buy position is obligated to receive it. I have been told there are large fines for not being able to fulfil these obligations. Does that not mean, clearly and precisely, that, at least on that one close, the market is composed of actual buyers and sellers, and that speculating money has been displaced?

I can understand how speculation can happen during the month. Looking at the most recent month, it looks a little to me like speculators tried to short oil once it got up near $70. Unfortunately for them, the price kept rising, and they were forced to buy their way out of trouble before the final close last Friday. According to this interpretation, the shorters were surpressing the price in the final days leading up to the close, but speculation was shaken out before the end of the month, rushing prices back to fair value as the close approached.

I can also understand how speculation could effect more distant contracts, and that the more distant the contract is (from the point of obligation), the more speculation could effect the contract price.

I'm still confused about the front month contract however. The MSM is often referring to speculation driving up prices, but according to my perhaps simplistic understanding, the effect of this just cannot be very big in the front month contract.

Am I wrong, if so, how? Thanks.

http://www.theadvertiser.news.com.au/common/story_page/0,5936,18919311%255E5003680,00.html

but since this is an open thread, let's talk tv and pop-culture's take on peak oil.  i finally saw the cnn fantasy piece, "we were warned."  its re-airing followed a very good environmental piece that was truly scary.  makes one wonder which disaster will come first: the chicken of oil depletion or the egg of the abrupt climate change.  (A: they will come together: great news, eh?!)  it also stood in stark contrast to the ludicrous "we were warned" piece.

is it me, or was "we were warned" worse than bad?  it communicated very few facts and its overall message seemed to be don't worry about oil and gas unless something extrinsic (hurricane, terrorism) that is really bad happens, and probably only if 2 really bad things happen in the same week.

i mean, is THAT the right message to send to joe hummer?  i suppose anything that sheds light on the issue of our dependence on oil and the ramifications of its depletion is marginally positive, but this was almost negative, imo.

then i saw saw roundtable discussion on fox "news" that had juan williams shilling to be the "balance" on o'reily central saying that the current price o' gas is a combo of politics and greed, as opposed to economics and geology, because there is no shortage of oil and supply is the highest it's been in 8 years.  you can't argue with that, he argued, because it's a fact.  huh?  didn't you just see "we were warned"?!  oh yeah, it said basically the same thing, but with cooler special effects.

we are toast, folks.  and we're toasting ourselves.
have a nice day,
pop

http://www.cbsnews.com/stories/2006/04/24/world/main1535625.shtml

We do live in interesting times.

There are some who argue that the United States is  on the verge of morphing into a full-blown dictatorship, police-state, and surveillance-state.  For example, see the following URL:

http://www.antipasministries.com/html/file0000228.htmhttp://www.antipasministries.com/html/file00002 28.htm

Your thoughts on the evidence and arguments presented would be greatly appreciated.

WASHINGTON (CNN) -- Congressional GOP leaders on Monday formally called on President Bush to launch an investigation into possible price gouging by oil companies, as gas costs shot up nearly 25 cents a gallon in two weeks.

...With political analysts suggesting that Democrats are within striking distance of taking over control of Congress, each party is working to gain the upper hand on the gasoline issue.

"Anyone who is trying to unfairly profit by forcing American families to make tough choices over whether to fill the car up with gas or severely cut back on their budgets should be investigated and prosecuted," said Ron Bonjean, spokesman for House Speaker Dennis Hastert, R-Illinois.

Meanwhile, on the international front...

Three explosions hit resort town in Egypt

AP is reporting that at least 100 people are dead.  It's assumed it's a terrorist attack.

1. Richard Berner, "How Vulnerable is the Economy to Another Energy Shock?" Not much will be new to regular readers of TOD, but still, it's a nice summary piece.

2. Richard Berner and Eric Chaney, "Oil Alert: No Relief on Supply." At the risk of letting the cat out of the bag, here's a brief excerpt:

·         We think that crude prices (WTI/Brent) are likely to range between $70 and $80/bl for the reminder of this year; we raise our 2006 annual average forecast from $61 to $73/bl (+19%);

·         We believe that markets will remain tight next year, as new refinery capacity is coming slower than we had thought; We raise our 2007 annual average forecast from $48 to $68/bl (+43%);"

...but I won't list any more, just so you'll be motivated to read the piece. It's short, won't take more than two minutes.

I don't know what they're smoking, but whatever it is, it's enough to make them think that $40 to $50/barrel is a band where they believe the long term equilibrium price to be. They must have some really good hydroponics going on over there...

http://www.bloomberg.com/apps/news?pid=10001013&sid=aLUmzdUcB9o8&refer=commodity_futures

In other news, the dollar took quite a tumble today.

March 28 Speech by Bill Clinton at London Business School

The Indians and Chinese are in this huge fight now to see who can get the most oil. We may be at a point of peak oil production. You may see $100 a barrel oil in the next two or three years, but what still is driving this globalization is the idea that is you cannot possibly get rich, stay rich and get richer; if you don't release more greenhouse gases into the atmosphere. That was true in the industrial era; it is simply factually not true. What is true is that the old energy economy is well organized, financed and connected politically. The new energy economy is underfinanced, under organized, entrepreneurial and in need of the type of research and development work that we routinely did when we were trying to sequence the human genome or go into space. But just with existing technologies for conservation and clean energy, we can more than meet the Kyoto protocols if we were remotely serious about the targets and in the process create jobs in the developed and developing world on a scale that is otherwise unimaginable to me. It is just a question of whether we accept this, but I can only tell you that I have studied this data seriously. I consider it an existential threat to your future. It may be the most remote security threat you face, but the only one who has the chance to change the life of everybody on the plant for the worst. And yet it is a phenomenal opportunity.

Interesting that he said it overseas, where there would be limited coverage by the U.S. press.  

http://www.thetruthaboutcars.com/content/11458007011007960902/index.php

And yet, as always, physics trumps bullshit-- er, marketing savvy. Even with Toyota's hidden subsidy, the Prius is simply too heavy, complicated, expensive and yes inefficient to quickly and easily justify its premium price. Recent media focus on the discrepancy between hybrids' real world mileage and the official EPA numbers only reveals part of the truth. If consumers considered the fact that the Prius uses every non-hybrid trick in the book to raise its fuel efficiency (de-contenting, skinny tires, lightweight materials, etc.), if they compared like-for-like (the Prius vs. a similarly equipped, same-sized gas-powered car with equivalent horsepower), they'd see that the efficiency gap between competing propulsion technologies is narrower still.

So, I imagine Odo will weigh in.

Then, how PR works:

http://www.thetruthaboutcars.com/content/1145583906231181372/

Robert B. Reich is an economist, journalist and commentator who once worked for President Clinton in the Labor Department. He currently enjoys a regular slot on NPR's nationally-syndicated "Marketplace" program. On Wednesday, Reich announced that he'd been approached by a "public relations firm working for General Motors." Reich said the flack asked him to praise GM's buyback deal for its workers. He then offered to pay Reich "remuneration" for a positive story "out of respect" for his reputation. Reich declined the unspecified offer.

The man attempting to bribe the twenty-second United States Secretary of Labor was Richard Strauss of Strauss Media Associates of Washington, DC. According to the company's website, Strauss Media uses its "integrity, perseverance, and skill" to help clients "realize the power and influence of radio." The PR company's client roster includes Nike, Eastman Kodak, Coca-Cola and General Mills. Although Strauss Media Associates doesn't list GM as a benefactor, a description of recent projects includes work on the Saturn brand's Second Annual National Donor Day.

http://www.theweeklystandard.com/Content/Public/Articles/000/000/012/132tcvll.asp

CONSERVATIVES SHOULD ALSO be asking whether our energy policy makes any sense. The president is right to want to encourage the development of oil-saving technologies, although it is a mystery why auto companies need subsidies to develop products for which they believe the market is clamoring, and which would not be needed if we were to price oil properly. And Bush is right, too, to want to remove any uneconomic barriers to the development of domestic resources. But neither of those measures is likely to break our dependence on oil imports soon, or probably ever.

That will take bolder steps. The arguments in favor of making imported oil more costly to use are virtually unanswerable: Higher prices would cut consumption and encourage new technologies far more efficiently than government bureaucrats who think they can pick technological winners, despite a dismal history of playing at that game. For those who share the president's infatuation with wood chips and switch grass, I recommend a study of the massive failure of government-favored coal liquefaction projects in the 1970s. Conservatives are entitled to be disappointed that their president prefers to have his bureaucrats pick technological winners rather than leave that decision to the market. Greater reliance on getting the price of fossil fuels right by having them reflect all the costs of their consumption, and less reliance on government subsidy schemes, would remind us more of the Bush who rode into town from Crawford, and less of the Bush who now lives among the Washington bureaucracy.

Secretary of State Condoleezza Rice told the Senate Foreign Relations Committee earlier this month, "I can tell you that nothing has really taken me aback more as secretary of state than the way that the politics of energy is--I will use the word warping--diplomacy around the world." Yet, we are doing nothing about the fact that we rely for a steady flow of oil on the likes of Saudi Arabia, which uses its oil revenues to finance terrorists in the hope of diverting them to external targets, but whose oil facilities are nevertheless subject to attack and disruption; Iran, which is threatening to turn off its spigot if the world angers it by moving against its nuclear weapons program to forestall it from achieving its stated goal of wiping Israel from the face of the earth; Venezuela, controlled by an anti-American Castro clone who has already seized several oil fields from major oil companies; Iraq, in a state of turmoil; Russia, in which oil is seen by Vladimir Putin more as a weapon in the geopolitical wars than as a commodity; and unstable regimes in Africa, all now supported by oil-hungry China, a leading investor in Iran.

That reliance--addiction, if you prefer--forces us to send billions of dollars to regimes that finance terrorists or, at minimum, do not wish us well. The cost of that addiction should be borne by the addicts, Americans who drive their cars and heat their homes with a fuel that is dangerous to the nation's health. So conservatives concerned with national security, with the "warping" of our diplomacy, with the ability of our economy to continue growing, and with the need to develop market-oriented environmental policies, should be clamoring for a tax on oil use. That would be fairer than taxing gasoline alone: It shares the burden between regions of the country that use oil for heating (the Northeast), and regions in which drivers cover long distances to get to work and the supermarket (the West).

Such a tax on oil use would, of course, generate huge revenues, not a good thing from the point of view of anyone already appalled by the president's LBJ-like expansion of government. No problem: Those revenues can be offset by reductions in the regressive, job-destroying payroll tax now levied on salaries. "Tax dangerous oil consumption, not wealth-creating jobs" is a slogan that just might have some popular appeal.

There are two constituencies: a very small number of people with the bucks, and a very large number of people with the votes. The whole idea is to make  deals with the people with the bucks so as to get the money to run campaigns in order to promise the people with the votes that you have their interests at heart and get them to vote for you.

 The candidate with the most bucks is usually the candidate with the most successful propaganda, and hence the candidate who wins.

That's about all you need to know about American politics.

I personally am not voting anymore. Why? Because my vote is meaningless, and my vote only validates a corrupt system, and I no longer want to be part of that. So, essentially, my non-vote is a vote of 'no confidence'.  Which I feel is a stronger statement than a vote for the lesser of two evils.

I am in the passive-aggressive mode right now.

Increased domestic exploration

That sounds to me like you are out of Pepsi, and your answer is to keep checking the fridge.

   http://turbulence.org/Works/oilstandard/

"converts all prices from U.S. Dollars into the equivalent value in barrels of crude oil."

  http://www.bostongasprices.com/retail_price_chart.aspx

with lots of fun adjustments for looking at the data.

For example you can overlay the price of oil.  This chart

  http://xrl.us/kzyb

pretty much forces the answer to the question: "What the current run up in petrol prices is due to?"  But recognize that other time window's are less compelling.

I'm not an expert but I do know that when supply is down and demand is up prices go up. But, what about an artificial lowering of supply?
I work in the the tug industry. The vessel I work on and it's sister are primarily assinged to assisting and escorting tankers entering Puget Sound. Recently my vessel and our sister were shut down for a few daysdue to a lack of work. The lay up are more common.
Several years ago we would assit 2 or 3 tankers a day. Now 1 aday or less. The refinery docks are empty. This also applys to our primary competitor. And yet the refieries claim they are work at capacity. Where are the tankers? Iwonder.

http://blogs.king5.com/archives/2006/04/are_we_complain_1.html

If there are about 7 barrels of oil to a ton. then this means that the Chinese think their oil will be $83/b this month and $91/b next month.

"But if crude oil prices keep going up, and we don't fully understand why crude oil prices are going up at this rate, then indeed they may well create the price of petrol above a pound a litre."

Quote is from BBC business news

When Robert Sanders was sent by the Army to inspect the construction work an American company was doing on the banks of the Tigris River, 130 miles north of Baghdad, he expected to see workers drilling holes beneath the riverbed to restore a crucial set of large oil pipelines, which had been bombed during the invasion of Iraq.What he found instead that day in July 2004 looked like some gargantuan heart-bypass operation gone nightmarishly bad. A crew had bulldozed a 300-foot-long trench along a giant drill bit in their desperate attempt to yank it loose from the riverbed. A supervisor later told him that the project's crews knew that drilling the holes was not possible, but that they had been instructed by the company in charge of the project to continue anyway.

A few weeks later, after the project had burned up all of the $75.7 million allocated to it, the work came to a halt.

Another debate: (emphasis added)

MONTEREY, California (Reuters) - The record Atlantic hurricane season last year can be attributed to global warming, several top experts, including a leading U.S. government storm researcher, said on Monday.

"The hurricanes we are seeing are indeed a direct result of climate change and it's no longer something we'll see in the future, it's happening now," said Greg Holland, a division director at the National Center for Atmospheric Research in Boulder, Colorado.

Holland told a packed hall at the American Meteorological Society's 27th Conference on Hurricanes and Tropical Meteorology that the wind and warmer water conditions that fuel storms that form in the Caribbean are "increasingly due to greenhouse gases. There seems to be no other conclusion you can logically draw."