Opec chief warns of $200 a barrel oil price

I wonder how much oil prices rose because of Hillary’s STUPID comment on obliterating Iran? Obviously she cares more about Israel than Americans.

The president of Opec, the cartel of oil-producing countries, has given warning that the price of crude could hit $200 a barrel, sparking fears that rising fuel costs will force more businesses into bankruptcy.

Chakib Khelil, the Algerian Energy Minister and president of Opec, said that the falling value of the US dollar would continue to drive up oil prices as investors sought to store their wealth in other assets.

Lehman Brothers, the bank, has said that high prices are being sustained by an influx of money into the oil market from investment funds.

snip

Supply shortages are expected to get worse over summer, which is hurricane season in the Gulf of Mexico.

In addition, demand usually rises in hot months when air-conditioning units are operating at full blast. If financial investors continue to pour money into oil funds, as the president of Opec has suggested, this could cause prices to spike even higher.

Today’s price rises came as workers at Grangemouth, which is operated by Ineos, a chemical company, began a two-day walkout yesterday over pension benefits.

This forced the closure of the 700,000 barrel-a-day Forties pipeline and sparked fears that Scotland and the North of England could face petrol shortages.
snip

The oil price was also supported by concern over a surge in violence in oil-rich southern Nigeria, which led to five policemen being shot dead on Sunday.

Attacks by militia forces forced Royal Dutch Shell and ExxonMobile to shut down oil production temporarily two days ago.

Traders were also spooked by continued tensions between the United States and Iran, the world’s fourth-largest oil producer.

A cargo ship hired by the US Navy fired on Iranian forces on Friday.

The rise in oil prices comes despite a 400,000 barrel-a-day reduction in physical demand from the United States, which is consuming less because of its economic slowdown. This has been more than offset by rising financial demand as funds seek alternative investments to the falling US dollar.

Analysts fear that the price will rise even higher as supply shortages get worse in the coming months while both physical and financial demand increase.
http://business.timesonline.co.uk/tol/business/industry_sectors/industrials/article3830383.ece?token

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Hillary is not just dumb, she’s dangerous. I am tired of our politicians taking Israel’s lead by threatening countries in the middle east, when we should have good relations with the people that are the third or forth largest oil producer. The establishment of a VIABLE Palestinian state would get at least five countries off our backs.

Continuing to pressure Iran can only drive up the price of oil.

6 Comments

Mattes on May 5, 2008 at 1:01 pm

The rest of the world is making peace with Iran:

Switzerland leads the way

If a marker is to be put down, the turning point came on March 17 when Iran and Switzerland signed a 25-year gas deal. According to the Swiss government, the deal between Elektrizitats-Gesselschaft Laufenburg and the National Iranian Gas Export Company is worth US$42 billion. It is the first of its kind in the recent past in which a European energy company has actually signed a firm contract with Iran. So far, the practice has been to sign non-binding memorandum of understandings (MoUs).

In terms of the agreement with Switzerland, Iran will deliver 5.5 billion cubic meters (bmc) of gas per year to Europe, starting from 2010 via a pipeline under construction. That the deal signified a watershed in the geopolitics of energy security was apparent from the presence of Mottaki and visiting Swiss Foreign Minister Micheline Calmy-Rey at the signing ceremony in Tehran. Indeed, Calmy-Rey acknowledged that Switzerland has a “strategic interest to secure our gas supplies and diversify our gas suppliers”. She pointed out that the gas deal with Iran would reduce Europe’s dependence on energy supplies from Russia. “We are decreasing our dependence, and the dependence of Europe, on Russian gas,” she stressed in Mottaki’s presence.

Washington is likely angry. The Financial Times of London reported Washington hinted at terminating the arrangement of the US Interest Sections being located in the Swiss embassies in Tehran and Havana. But Swiss officials maintained no international sanctions prevented foreign investment in the Iranian energy sector and that the March 17 gas deal, in fact, was intended to “alleviate” energy shortages in Italy. Looking ahead, the Financial Times added, “Following the [Swiss-Iranian] deal, some European leaders have voiced concern about new investment in liquefied natural gas (LNG), the sector in which groups such as Total, Royal Dutch Shell and Austria’s OMV have struck preliminary agreements [with Iran] but have yet to sign formal contracts. Iran has warned such companies they need to conclude deals by June or it will look elsewhere for investment.”

Iran’s Swiss deal has alerted world capitals. China has speeded up negotiations over its $16 billion gas deal over Iran’s North Pars gas field. China’s National Offshore Oil Corporation (CNOOC) signed a memorandum last year to expand the gas reserves of the North Pars field and also purchase LNG from the output for a 25-year period, but was holding back from signing a contract, given the US-Iran nuclear standoff.

It will be China’s second big energy deal, with the Chinese oil refinery Sinopec having signed in early March a $2 billion deal to develop Iran’s Yadavaran oil field. Defending the CNOOC, Foreign Ministry spokesman Liu Jianchao said in Beijing recently, “Cooperation between CNOOC and Iran is a business act between enterprises. We believe that the actions to address this [nuclear] problem should not undermine normal trade and economic cooperation with Iran.”

India, too, has begun underscoring that the Iran-Pakistan-Iran gas pipeline project is “doable”. In comparison with China, though, India’s decision-making is haphazard. A powerful pro-US lobby also weighs against India dealing with the Iranian regime. The Indian government couldn’t take optimal advantage of the recent stopover in New Delhi by Iranian President Mahmud Ahmadinejad. The Iranian media reported Ahmadinejad did not make any commitments to the Indian side on the pending $25.6 billion LNG deal that India has been negotiating for almost eight years or on the gas pipeline deal.

According to the official Iranian news agency, “With the Indo-US nuclear deal slipping into limbo, the Manmohan Singh government [in Delhi] has shrewdly sensed the importance of reaffirming its ties with Iran, both as a placatory gesture towards its leftist allies opposing the nuclear deal and as a pragmatic alternative source of energy for the country’s growing economy.”

http://www.atimes.com/atimes/Middle_East/JE06Ak01.html

Cee on May 5, 2008 at 7:47 pm

Didn’t India just warn last week that they wouldn’t take orders from us?

dada on May 5, 2008 at 1:25 pm

is not out of the question. the market reaction to all of this plus the uptick in the lSM index sent it over $120.00 bbl, in intraday trading. it’s now at $119.58.

May 5 (Bloomberg):

Crude oil rose above $120 a barrel to a record in New York after a report showed that U.S. service industries expanded in April, signaling higher energy use.

The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, grew for the first time since December, the Tempe, Arizona-based group said today. The report came after an oil pumping station was attacked in Nigeria.

The ISM report “probably gave us a little bit of a bounce psychologically,” said Phil Flynn, a commodities trader for Chicago-based Alaron Trading. “Maybe the demand for oil is going to rebound.”

Crude oil for June delivery rose $3.43, or 3 percent, to $119.75 a barrel at 12:25 p.m. on the New York Mercantile Exchange. Oil surged to an intraday record of $120.21 today…

l recommend jerome a paris’ series on oil, and energy in general, at ET, as well as his essay yesterday at the orange: Gas Tax: it’s still time to increase it..

Mattes on May 5, 2008 at 1:38 pm

Read the whole asia times article. It spells it out pretty well.

Iran/Russia vs. Iran/Europe alliance.

We have lost out because the neo-cons running this country sold us out, placing Israel’s land grab first. They claimed the war would bring us cheap oil…and instead it was for Israel’s security. And of course, reasons to open up ANWR and off shore drilling. IMO.

Big oil/Israel alliance are profitable short term, to hell with the future of our country.
- idredit on May 5, 2008 at 7:01 pm
  
  ya’all not to worry.
  
  Help is on the way. This morning Clinton threatened the money grubbers in Wall Street – that was after
  
  the promised a gas tax holiday
  
  and now she’ll take on OPEC. – they can no longer be a cartel.
  
  Ben Smith Politico
  
  Clinton’s attacks on oil prices as artificially inflated, Enron-style, keep escalating, and today she appeared to threaten to break up the Organization of Petroleum Exporting Countries.
  
  “We’re going to go right at OPEC,” she said. “They can no longer be a cartel, a monopoly that get together once every couple of months in some conference room in some plush place in the world, they decide how much oil they’re going to produce and what price they’re going to put it at,” she told a crowd at a firehouse in Merrillville, IN.
  
  “That’s not a market. That’s a monopoly,” she said, saying she’d use anti-trust law and the World Trade Organization to take on OPEC.
  
  Hmmmm. The WTO?
  
  I’d like to be a fly on the wall somewhere, anywhere in the Gulf States, wouldn’t you?
  - Mattes on May 5, 2008 at 7:55 pm
    
    This should be the MSM headline, but obviously they have become enablers.
    
    CNN and MSNBC have become new and improved Fox. It worked out so well for Fox.

Mattes on May 5, 2008 at 1:01 pm

The rest of the world is making peace with Iran:

Switzerland leads the way

If a marker is to be put down, the turning point came on March 17 when Iran and Switzerland signed a 25-year gas deal. According to the Swiss government, the deal between Elektrizitats-Gesselschaft Laufenburg and the National Iranian Gas Export Company is worth US$42 billion. It is the first of its kind in the recent past in which a European energy company has actually signed a firm contract with Iran. So far, the practice has been to sign non-binding memorandum of understandings (MoUs).

In terms of the agreement with Switzerland, Iran will deliver 5.5 billion cubic meters (bmc) of gas per year to Europe, starting from 2010 via a pipeline under construction. That the deal signified a watershed in the geopolitics of energy security was apparent from the presence of Mottaki and visiting Swiss Foreign Minister Micheline Calmy-Rey at the signing ceremony in Tehran. Indeed, Calmy-Rey acknowledged that Switzerland has a “strategic interest to secure our gas supplies and diversify our gas suppliers”. She pointed out that the gas deal with Iran would reduce Europe’s dependence on energy supplies from Russia. “We are decreasing our dependence, and the dependence of Europe, on Russian gas,” she stressed in Mottaki’s presence.

Washington is likely angry. The Financial Times of London reported Washington hinted at terminating the arrangement of the US Interest Sections being located in the Swiss embassies in Tehran and Havana. But Swiss officials maintained no international sanctions prevented foreign investment in the Iranian energy sector and that the March 17 gas deal, in fact, was intended to “alleviate” energy shortages in Italy. Looking ahead, the Financial Times added, “Following the [Swiss-Iranian] deal, some European leaders have voiced concern about new investment in liquefied natural gas (LNG), the sector in which groups such as Total, Royal Dutch Shell and Austria’s OMV have struck preliminary agreements [with Iran] but have yet to sign formal contracts. Iran has warned such companies they need to conclude deals by June or it will look elsewhere for investment.”

Iran’s Swiss deal has alerted world capitals. China has speeded up negotiations over its $16 billion gas deal over Iran’s North Pars gas field. China’s National Offshore Oil Corporation (CNOOC) signed a memorandum last year to expand the gas reserves of the North Pars field and also purchase LNG from the output for a 25-year period, but was holding back from signing a contract, given the US-Iran nuclear standoff.

It will be China’s second big energy deal, with the Chinese oil refinery Sinopec having signed in early March a $2 billion deal to develop Iran’s Yadavaran oil field. Defending the CNOOC, Foreign Ministry spokesman Liu Jianchao said in Beijing recently, “Cooperation between CNOOC and Iran is a business act between enterprises. We believe that the actions to address this [nuclear] problem should not undermine normal trade and economic cooperation with Iran.”

India, too, has begun underscoring that the Iran-Pakistan-Iran gas pipeline project is “doable”. In comparison with China, though, India’s decision-making is haphazard. A powerful pro-US lobby also weighs against India dealing with the Iranian regime. The Indian government couldn’t take optimal advantage of the recent stopover in New Delhi by Iranian President Mahmud Ahmadinejad. The Iranian media reported Ahmadinejad did not make any commitments to the Indian side on the pending $25.6 billion LNG deal that India has been negotiating for almost eight years or on the gas pipeline deal.

According to the official Iranian news agency, “With the Indo-US nuclear deal slipping into limbo, the Manmohan Singh government [in Delhi] has shrewdly sensed the importance of reaffirming its ties with Iran, both as a placatory gesture towards its leftist allies opposing the nuclear deal and as a pragmatic alternative source of energy for the country’s growing economy.”

http://www.atimes.com/atimes/Middle_East/JE06Ak01.html
- Cee on May 5, 2008 at 7:47 pm
  
  Didn’t India just warn last week that they wouldn’t take orders from us?
dada on May 5, 2008 at 1:25 pm

is not out of the question. the market reaction to all of this plus the uptick in the lSM index sent it over $120.00 bbl, in intraday trading. it’s now at $119.58.

May 5 (Bloomberg):

Crude oil rose above $120 a barrel to a record in New York after a report showed that U.S. service industries expanded in April, signaling higher energy use.

The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, grew for the first time since December, the Tempe, Arizona-based group said today. The report came after an oil pumping station was attacked in Nigeria.

The ISM report “probably gave us a little bit of a bounce psychologically,” said Phil Flynn, a commodities trader for Chicago-based Alaron Trading. “Maybe the demand for oil is going to rebound.”

Crude oil for June delivery rose $3.43, or 3 percent, to $119.75 a barrel at 12:25 p.m. on the New York Mercantile Exchange. Oil surged to an intraday record of $120.21 today…

l recommend jerome a paris’ series on oil, and energy in general, at ET, as well as his essay yesterday at the orange: Gas Tax: it’s still time to increase it..
- Mattes on May 5, 2008 at 1:38 pm
  
  Read the whole asia times article. It spells it out pretty well.
  
  Iran/Russia vs. Iran/Europe alliance.
  
  We have lost out because the neo-cons running this country sold us out, placing Israel’s land grab first. They claimed the war would bring us cheap oil…and instead it was for Israel’s security. And of course, reasons to open up ANWR and off shore drilling. IMO.
  
  Big oil/Israel alliance are profitable short term, to hell with the future of our country.
  - idredit on May 5, 2008 at 7:01 pm
    
    ya’all not to worry.
    
    Help is on the way. This morning Clinton threatened the money grubbers in Wall Street – that was after
    
    the promised a gas tax holiday
    
    and now she’ll take on OPEC. – they can no longer be a cartel.
    
    Ben Smith Politico
    
    Clinton’s attacks on oil prices as artificially inflated, Enron-style, keep escalating, and today she appeared to threaten to break up the Organization of Petroleum Exporting Countries.
    
    “We’re going to go right at OPEC,” she said. “They can no longer be a cartel, a monopoly that get together once every couple of months in some conference room in some plush place in the world, they decide how much oil they’re going to produce and what price they’re going to put it at,” she told a crowd at a firehouse in Merrillville, IN.
    
    “That’s not a market. That’s a monopoly,” she said, saying she’d use anti-trust law and the World Trade Organization to take on OPEC.
    
    Hmmmm. The WTO?
    
    I’d like to be a fly on the wall somewhere, anywhere in the Gulf States, wouldn’t you?
    - Mattes on May 5, 2008 at 7:55 pm
      
      This should be the MSM headline, but obviously they have become enablers.
      
      CNN and MSNBC have become new and improved Fox. It worked out so well for Fox.

Opec chief warns of $200 a barrel oil price

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