Better Fill up today

[Wilma]

Remember when the gallons used to go around faster than the dollars?

[Dee Gee]

Yes, I remember that.  When I was a young man and worked in a service statation (full service) the very first time I put in $10.00 + of gas in a car, which was over 30 gallons of gasoline, what a big deal.

[frawin]

Oct-08 Crude is trading at $107.67, up $1.445, the back months are trading up in the +$3.50 range, Oct-08 Natural Gas is trading at $7.57, up $0.121. The hurricane threats may push crude higher in the coming days. Regular Gasoline is $3.39 in Bartlesville.

[frawin]

Here is who controls the price of world oil, not the American Oil Industry.
OPEC to Pump at Near Record as Prices Stunt Growth 

By Fred Pals and Ayesha Daya

Sept. 8 (Bloomberg) -- OPEC, the supplier of 40 percent of the world's oil, will probably keep producing at a near record pace as $107-a-barrel crude squeezes the global economy.

``Nothing significant,'' Nigerian Petroleum Minister Odein Ajumogobia responded, when asked by Bloomberg News today what OPEC was likely to decide at a meeting in Vienna tomorrow. ``Our position is to leave everything unchanged,'' Ecuador's Energy Minister Galo Chiriboga told reporters in the Austrian capital yesterday. ``The market is well supplied.''

The 13-nation Organization of Petroleum Exporting Countries will keep production unchanged, according to 29 of 32 energy analysts surveyed by Bloomberg last week. Iran and Venezuela will urge the group to trim supplies to prevent oil prices retreating below $100 a barrel.

``They want to prevent a build-up of crude stocks, which rules out an increase, but don't want to send prices skyrocketing by announcing a cut,'' said Mike Wittner, head of oil research at Societe Generale SA in London. ``OPEC won't take any formal action.''

Oil has plunged $40 a barrel, or 27 percent, from its record $147.27 on July 11 as economies slowed, the dollar halted a three-year slide against the euro and Hurricane Gustav caused almost no damage to U.S. drilling platforms and refineries. Demand for crude will increase 1 percent in 2009, the slowest growth in seven years, according to an Aug. 15 OPEC forecast.

Exceeded Quota

The OPEC members with quotas produced about 592,000 barrels a day more than their official limit of 29.673 million last month, according to Bloomberg estimates. Iraq has no quota. Output from all 13 members slipped 200,000 barrels a day from July's record.

All the countries except Saudi Arabia are pumping at close to capacity to meet rising demand and compensate for declining supplies from Nigeria and Venezuela.

While leaving quotas unchanged, the group may curtail production to prevent inventories from swelling, said Adam Sieminski, Deutsche Bank AG's chief energy economist in Washington.

``If prices are rising, they will leave production alone, and if they are falling, they will trim a little,'' he said.

Slower Growth

Record oil prices spurred European inflation to 4 percent in July and contributed to the first quarterly contraction in the region's economy since the euro was introduced almost a decade ago. In the U.S., gasoline demand fell for 19 consecutive weeks, according to MasterCard Inc., with fuel now near $3.70 a gallon.

The world economy is ``precariously close'' to a recession in 2009, UBS AG said last month as it cut next year's global growth forecast to 2.9 percent. It considers a 2.5 percent rate as one that is consistent with a recession.

Oil for October delivery rebounded from a five-month low in New York today, rising as much as 2.7 percent to $109.12 a barrel as the approach of Hurricane Ike delayed the resumption of production in the Gulf of Mexico. It was at $107.30 as of 10.50 a.m. in London.

``The rise of the U.S. dollar makes it easier for the group to agree to keep the status quo,'' said Stephen Schork, editor of the Schork Report. ``If they cut output, they put themselves in the headlines and increase animosity among the U.S. electorate protesting foreign oil's grip on the U.S. economy.''

Above Average

Oil stockpiles in industrialized nations, excluding government reserves, were above average in July and enough to meet 54 days of demand, according to the International Energy Agency.

The agency's executive director, Nobuo Tanaka, recommended in a Sept. 4 interview in Brussels that OPEC maintain output levels, adding that recent price declines reflect ``the slowdown of the economy.''

``If stocks were ballooning then you could see pressure mounting within the cartel for a cut,'' said Harry Tchilinguirian, senior oil analyst at BNP Paribas SA.

Most of OPEC's extra pumping in the past few months has come from Saudi Arabia, the world's largest oil producer, which raised output by 500,000 barrels a day in June and July to calm markets.

An OPEC production cut would ``surprise'' the market, Jan Stuart, a global oil economist with UBS Securities LLC, said in a Sept. 5 Bloomberg Radio interview from New York.

Saudi Arabia

``Where Saudi Arabia is in this debate is crucially important; that is your linchpin,'' Stuart said. ``We don't know what the Saudis are ready to defend, and we do know the Saudis are the ones that would have to do most of the production cutting.''

Venezuela and Iran, OPEC's second- and third-largest producers, want the group to consider reducing supply. Venezuelan President Hugo Chavez said on Aug. 27 he considers prices of just over $100 a barrel as ``fair.''

The oil market is over-supplied, Iranian Oil Minister Gholamhossein Nozari said today ahead of the OPEC meeting. ``We will review the market and then we will decide,'' he told reporters upon his arrival in Vienna.

The group meets again Dec. 17 in Algeria.

[frawin]

Oct-08 Crude Oil is trading at $105.225 down $1.115 and Oct-08 Natural Gas is trading at $7.31, down $0.217.

[frawin]

We will see if OPEC holds the line or cuts. It is very disturbing that our energy supply and price are totally in the hands of our enemies and Congress is doing absolutely nothing. The day will come when we will pay big time for our inaction now.

Crude Oil Falls After OPEC's Al-Naimi Says Market Is `Balanced'

By Alexander Kwiatkowski

Sept. 9 (Bloomberg) -- Crude oil fell in New York as Saudi Arabia's oil minister said supplies are sufficient to meet demand, signaling that OPEC may maintain production levels when it meets today.

The oil market is ``well-balanced'' and inventories are ``healthy,'' Saudi Arabian Oil Minister Ali Al-Naimi said this morning in Vienna. Most analysts polled by Bloomberg expect the 13 members of the Organization of Petroleum Exporting Countries, which supplies more than 40 percent of the world's oil, to keep quotas unchanged and output near record levels.

``At the moment they are very satisfied with what is happening,'' said Eugen Weinberg, a commodity analyst at Commerzbank AG in Frankfurt. ``The oil price is still above $100. From what we have heard they will come short of cutting production.''

Crude oil for October delivery fell as much as $2.11, or 2 percent, to $104.23 a barrel and traded at $104.79 at 12:49 p.m. London time on the New York Mercantile Exchange. Oil has dropped 29 percent from the record $147.27 reached on July 11.

Oil also declined as Hurricane Ike weakened to Category 1 on the 5-step Saffir-Simpson scale of intensity as it passed over Cuba, easing concerns it will damage Gulf of Mexico oil facilities. Sustained winds dropped to 80 miles (130 kilometers) per hour, the U.S. National Hurricane Center said on its Web site at 5 a.m. Miami time.

Output Disruption

The contract climbed as much as 3.5 percent yesterday as Ike delayed the restoration of Gulf of Mexico output that was closed because of Hurricane Gustav last week. Ike was moving across Cuba's western tip and was forecast to strengthen as it turns west into the Gulf of Mexico. The centre's 5-day forecast shows the storm making landfall near Corpus Christi, Texas, early on Sept. 13.

``It is very early days yet, the storm tracker looks a little less dangerous than it did last night,'' said Mike Wittner, head of oil research at Societe Generale SA in London. ``It is a given they will shut everything down. The question is how much damage is sustained and how quickly it can be bought back up.''

U.S. energy producers have resumed 21 percent of oil production and 36 percent of natural-gas output in the Gulf of Mexico after Hurricane Gustav.

Energy companies reported 15 rigs and 200 production platforms are evacuated, the Minerals Management Service said in a statement on its Web site. About 1 million barrels of daily oil production and 4.7 billion cubic feet of gas remain shut in.

Brent crude oil for October settlement fell as much as $2.17, or 2.1 percent, to $101.27 a barrel on London's ICE Futures Europe exchange. It was at $101.98 a barrel at 12:50 p.m. local time.

OPEC Meets

The Gulf of Mexico accounts for 26 percent of U.S. oil production and 14 percent of natural-gas output. The Gulf produces 1.3 million barrels of oil and an estimated 7.4 billion cubic feet of gas a day, according to the Minerals Management Service, part of the U.S. Interior Department.

Natural gas for October delivery fell 4.1 percent to $7.218 per million British thermal units, while gasoline futures fell 2.9 percent to $2.6704 a gallon.

OPEC will review production targets for the fourth quarter at a meeting tonight. The group will probably keep output unchanged, according to 29 of 32 energy analysts surveyed by Bloomberg last week.

U.S. Relations

Prices will continue to fall irrespective of what the group decides to do, OPEC President Chakib Khelil said in a Bloomberg television interview today.

``A production cut would not serve much of a purpose,'' Khelil said in Vienna. ``Rather, it will damage the advantage the organization has got by making a positive gesture toward consuming countries,'' he said.

Khelil, who is also Algeria's oil minister, said there probably wouldn't be any need for OPEC to meet again between now and December.

OPEC does not want to jeopardize its relations with the U.S. by cutting output, possibly sending prices back towards the record $147.27 a barrel reached in July, said Stephen Schork, president of energy markets analysis firm Schork Group Inc., in a Bloomberg radio interview.

``Crude oil is still well over $100, gasoline, heating oil prices and fuel oil prices here in the United States and in Europe are still very expensive,'' he said. ``OPEC would like to cut production, but given the elections in the United States, I think they will refrain.''

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net

Last Updated: September 9, 2008 08:08 EDT

   

[frawin]

This is about right, Nancy Pelosi is 3 years behind. The Democrats continue to play games while the possibility of a major energy cutoff by our enemies looms somewhere in the future. 

Dems' offshore drilling plan comes with catch

Zachary Coile, Chronicle Washington Bureau

Tuesday, September 9, 2008

(09-09) 04:00 PDT Washington - -- Just three years ago Richard Pombo, the cowboy boot-wearing Tracy Republican lawmaker, faced an outcry from Democrats for pushing a bill to lift the 27-year-old ban on drilling off the East and West coasts and let states choose whether to allow oil rigs off their shores.

In a sign of how much the energy debate has shifted in an era of nearly $4-a-gallon gasoline, virtually the same proposal that Pombo floated will be introduced on the House floor this month - by Democratic House Speaker Nancy Pelosi.

But Republicans aren't exactly cheering the new Pelosi proposal. She plans to tie new offshore drilling to measures that are loathed by the GOP - such as revoking billions of dollars in tax breaks for oil companies and forcing utilities to get more of their energy from wind and solar.

As Congress returns this week for a three-week legislative sprint, the two parties will face off in a chess match over energy with high stakes for both the November elections and the nation's energy future.

For weeks, Republicans have dominated the debate by demanding more domestic drilling. Polls show that strong majorities of Americans support the idea. It was a leading refrain at last week's Republican convention in St. Paul, Minn., where delegates chanted, "Drill, baby, drill."

Beyond drilling

But Democrats believe the GOP may have overplayed its hand by focusing on drilling when polls also show Americans want the country to quickly develop new cleaner, renewable energy sources.

"All the Republicans want to talk about, all Sen. (John) McCain has talked about is drilling," Senate Majority Leader Harry Reid, D-Nev, said Monday. "I don't oppose drilling, but this isn't a be-all, end-all. We need a comprehensive approach."

House Democrats are expected to make public their energy bill as early as this week, but Democratic aides are already indicating it will include a "state options" plan that would give coastal states the right to choose whether to allow drilling - and perhaps a share of the royalties.

To win support from environmentalists, who have long opposed lifting the drilling ban, Democrats also plan to repeal at least $18 billion in subsidies to oil companies and shift that money to tax credits for renewable energy. Democrats also plan to revive a plan, passed by the House last year, to require electric utilities to get at least 15 percent of their energy from wind, solar, geothermal or other renewable sources by 2020.

But House Republicans are already complaining that the Democratic plan would keep too much of the nation's energy locked up. They want to force Pelosi to allow a vote on their energy plan, which also would open areas of the eastern Gulf of Mexico and Alaska's Arctic National Wildlife Refuge to oil and gas exploration.

"Clearly, they're inching toward some sort of domestic supply component so we have to look at that," said Rep. Joe Barton, R-Texas, the top Republican on the House Energy and Commerce Committee. "But I can't imagine accepting a half a slice of bread when the whole loaf is out there."

Senate Democrats are plotting a similar strategy as their House counterparts, planning to vote next week on three separate energy provisions that include both drilling and renewable energy provisions.

Senate amendments

The Senate will vote on an amendment being crafted by Sen. Jeff Bingaman, D-N.M. and Sen. Max Baucus, D-Mont., that would revoke tax breaks for oil companies, open areas off the eastern Gulf of Mexico and the East and West coasts to drilling, renew expiring wind and solar tax credits and new energy-efficient building codes.

Reid said he also would allow a vote on an energy plan proposed by the "Gang of Ten," a group of five Democrats and five Republicans, that would allow drilling off the coast of four states - Virginia, North Carolina, South Carolina and Georgia - while also revoking tax breaks for oil companies and offering new incentives for wind and solar, biofuels, coal-to-liquid fuels and nuclear energy.

Most Capitol Hill insiders believe there's little chance any of the measures will become law. Congress has a short time to act - it's just three weeks before the House is set to adjourn. President Bush has promised to veto any legislation that raises taxes on oil companies, which he believes would limit production. Oil companies may never let the legislation reach his desk.

Kevin Book, a senior energy policy analyst at FBR Capital Markets, said he's betting the only energy legislation that's likely to pass is an extension of the tax credits for wind and solar, which expire at the end of the year and are popular with both parties.

"The Republicans could still potentially strike a deal, but it's not clear whether the Democrats have any incentive," Book said. "They can paint Republicans as objecting to cutting a deal - particularly as all the political analysis suggests they are going to come back next year with the upper hand" by picking up seats in the House and Senate in November.

Decision time

Both parties are already game-planning for another scenario: On Sept. 30, the congressional moratorium on offshore drilling and a similar ban on oil shale development are set to expire. President Bush already has lifted the presidential moratorium on offshore drilling.

Congress also must move a temporary spending bill by Sept. 30 to keep the government funded and prevent a government shutdown. Democrats are expected to include a renewal of the two moratoriums as part of the spending bill, arguing that the only way they will let the bans lapse is as part of a broader energy bill that moves the country toward renewable sources.

But Republicans say they may call the Democrats' bluff and risk a government shutdown, and then lay the blame at Pelosi's doorstep.

It would be a huge gamble. The last time Republicans took the risk of forcing a temporary government shutdown - during a 1995 budget showdown with President Bill Clinton - they faced a major public backlash and ended up losing seats in the 2006 House elections.

[frawin]

Oct-08 Crude settled at $103.26, down $3.08 on the day, the back months were down in the $3.00 + range as well, Oct-08 Natural Gas settled at $7.535 on the day, down less than one cent on the day, the back months were down 4 to 5 cents on the day.

[frawin]

Oct-08 crude is $103.525 in overnite trading, up $0.265, and Oct-08 Natural Gas is trading at $7.350, down $0.185. The Hurricane threats are probably going to end up pushing both markets up some.

[frawin]

This is disappointing but not surprising. Unfortunately OPEC controls our supply and the price and with the do nothings in congress that is only going to get worse.

Oil rises in Asia after OPEC vows to lower output

By ALEX KENNEDY Associated Press Writer

Sept. 10, 2008, 3:34AM

SINGAPORE — Oil prices rose Wednesday in Asia after OPEC said it would cut more than 500,000 barrels a day of production that exceed its self-imposed output quotas.

Light, sweet crude for October delivery rose 77 cents to $104.03 a barrel in electronic trading on the New York Mercantile Exchange midafternoon in Singapore. The contract fell $3.08 overnight to settle at $103.26, the lowest close since April 1.

A statement by the Organization of Petroleum Exporting Countries issued after oil ministers ended their meeting Wednesday in Vienna said the organization had agreed to produce 28.8 million barrels a day. OPEC President Chakib Khelil said that quota in effect meant that member countries had agreed to cut back 520,000 barrels a day of excess production.

OPEC members regularly churn out oil above the organization's overall quota, last set in November at 27.3 million barrels a day. The new production limit of 28.8 million barrels a day is above that November quota, and the statement said it reflected adjustments to include new members Angola and Ecuador and exclude Iraq, as well as Indonesia, which is withdrawing from the cartel.

The move was viewed as a compromise meant to avoid new turmoil in crude markets while seeking to prevent prices from falling too far.

"This isn't a fundamental shift in OPEC policy," said John Vautrain, an energy analyst at consultancy Purvin & Gertz in Singapore.

The output cut won't likely spark a sustained rally in oil prices as most investors remained concerned over slowing economic growth in the U.S, Europe and Japan,

"I don't think this is enough to change the bearish market sentiment in New York or London," Vautrain said. "The market already expected OPEC would scale back some of the extraordinary production of the last few months."

Keeping a lid on oil prices were expectations Hurricane Ike would veer to the west of the oil refineries and off-shore drilling platforms of the Louisiana coast region.

Early Wednesday, Ike was about 95 miles west of Havana, Cuba, moving west-northwest at 10 mph with sustained winds near 75 mph. It was expected to cross the Gulf of Mexico, strengthening to a Category 3 with winds of up to 130 mph.

Forecasters said that it could hit on Saturday morning just about anywhere along the Texas coast, with the most likely spot close to the Corpus Christi area.

"Just a few days ago it looked like it was heading for New Orleans and the coast of Louisiana," Vautrain said. "Now Ike has come off the radar screen some and the market is discounting the threat of hurricane damage."

Investors are also waiting for the U.S. Energy Department's Energy Information Administration to release its report on U.S. oil stocks for the week ended Sept. 5 later in the day. The petroleum supply report was expected to show that oil stocks fell 3.9 million barrels, according to the average of analysts' estimates in a survey by energy information provider Platts.

The Platts survey also showed that analysts projected gasoline inventories fell 4.7 million barrels and distillates went down 2.3 million barrels during last week.

In other Nymex trading, heating oil futures rose 3.66 cents to $2.9613 a gallon, while gasoline prices gained 4.82 cents to $2.7008 a gallon. Natural gas for October delivery fell 2.6 cents to $7.509 per 1,000 cubic feet.

In London, October Brent crude rose 47 cents to $100.81 a barrel on the ICE Futures exchange.