Overview: The doubling of the oil price from early March to mid June has led to suggestions that as in 2008, financial speculation could be exacerbating market moves including the significant volatility in the crude oil market. News that a London-based rogue trader contributed to a price spike in 2009 may return attention to the role of non-commercial traders in price discovery. The recent rally in oil prices like that of many commodities has been fueled in part by the increase in liquidity, search for dollar hedges and expectations of an improved macroeconomic enviroment * FT: a rogue trader for PVM, an oil trading company may have accounted for half the oil price spike Tuesday June 30 which had previously been attributed to a geopolitical supply shock (pipeline outages in Nigeria). A single trader placed a $10 million (7 million GBP bet in the Brent crude market and then other traders followed the rally and trading volume surged to 16m barrels from the approximately 500,000 barrels that tends to trade at that time. * Regulators are in the process of closing loopholes that may have facilitated speculation. Policy responses include redefining the blurred line between commercial (those that have an interest in trading oil for hedging purposes in their businesses) and non-commercial traders. Regulatory changes involve more oversight for OTC trading platforms like the ICE. Pending legislation establishes tougher disclosure rules and position limits How Much Do Speculators Affect Prices? * Masters: Index speculators are the primary cause of the 2008 price spikes in commodities * Lukken (via Bloomberg): Jeff Masters lacks access to data needed to draw his conclusions * Thoma: July reclassification of large trader Vitol meant that 49% of all crude-oil bets outstanding were held by non-commercial traders * CFTC, Dale/Zyren: Noncommercial traders follow and exacerbate price trends but they don't set them * Norges, Hamilton, Krugman: If speculators were driving oil prices above the physical market equilibrium, then inventories would be higher than what oil consumers demand. Speculation in paper oil doesn't change physical supply/demand balance * Hussman: It doesn't matter that speculators don't take delivery. What matters is the extent that speculators take one-sided trend-following positions - their purchase of a futures contract crowds out the purchase that a hedger would otherwise be able to make from a producer * Soros (via Senate): Bubble in housing and oil are part of a 25yr-old super-bubble built on belief that markets tend toward equilibrium and deviations are random * WP: Highest oil price forecast is by Goldman Sachs, which runs the largest commodity index fund, provides oil investment advice and trades oil on its own account - too many institutional conflicts of interest * CIBC: Sometimes exuberance is perfectly rational. Short-term prices may spike above level that clears market but in the longer term, prices must ultimately meet a real world market test - physical, not paper, oil supply/demand Overview: The doubling of the oil price from early March to mid June has led to suggestions that as in 2008, financial speculation could be exacerbating market moves including the significant volatility in the crude oil market. News that a London-based rogue trader contributed to a price spike in 2009 may return attention to the role of non-commercial traders in price discovery. The recent rally in oil prices like that of many commodities has been fueled in part by the increase in liquidity, search for dollar hedges and expectations of an improved macroeconomic enviroment * FT: a rogue trader for PVM, an oil trading company may have accounted for half the oil price spike Tuesday June 30 which had previously been attributed to a geopolitical supply shock (pipeline outages in Nigeria). A single trader placed a $10 million (7 million GBP bet in the Brent crude market and then other traders followed the rally and trading volume surged to 16m barrels from the approximately 500,000 barrels that tends to trade at that time. * Regulators are in the process of closing loopholes that may have facilitated speculation. Policy responses include redefining the blurred line between commercial (those that have an interest in trading oil for hedging purposes in their businesses) and non-commercial traders. Regulatory changes involve more oversight for OTC trading platforms like the ICE. Pending legislation establishes tougher disclosure rules and position limits
Iran spent approximately $6 billion on gasoline imports in 2007. Under the rationing system, implemented in June 2007, Iran’s gasoline imports declined from an estimated 204,000 bbl/d in May 2007, to an estimated average of 94,000 bbl/d for the remainder of 2007. Large, multinational wholesalers such as BP, Reliance, Total, Trafigura, and Vitol provide Iran with gasoline.
In 2007, Iran exported approximately 2.4 million bbl/d of oil. Iranian Heavy Crude Oil is Iran’s largest crude export at 990,000 bbl/d followed by Iranian Light at 746,000 bbl/d. In 2007, Iran’s oil export revenues amounted to approximately $57 billion. nearly one-third of government revenues and 85 percent of total exports earnings. Top Iranian Crude Oil Export Destinations, 2007 Japan 523,000 Bbl/d China 411,000 Bbl/d India 374,000 Bbl/d South Korea 258,000 Bbl/d Italy 197,000 Bbl/d France 131,000 Bbl/d South Africa 128,000 Bbl/d Greece 113,000 Bbl/d Netherlands 93,000 Bbl/d Spain 79,000 Bbl/d Other 151,000 Bbl/d
Wave green flags at Iranian oil tankers docking and off loading crude oil in Europe. Port towns receiving crude oil from Iran should know that Iranians support cause through out the world Iranians in the UK ============= Iran Noach Crude Tanker is currently moored in Noth Sea near Southwold, UK Iranians in France ============= Iran Saveh Crude Tankeris currently discharging crude oil in Le Havre, France
The US House’s Agriculture and Financial Services Committees will hold a joint hearing on Obama administration proposals to regulate over-the-counter derivative markets in Room 345, the Caucus Room of the Cannon House Office Building, at 10 a.m. US Treasury Secretary Timothy F. Geithner will be the only witness. Why it matters: Neither Collin C. Peterson (D-Minn.), who chairs the Agriculture Committee, nor Barney Frank (D-Mass.), who chair the Financial Services Committee, have been reticent about their interest in seeing financial derivatives more closely regulated, especially after last summer’s crude oil price spike. Oil and gas producers who use future markets as price hedges are concerned that over-the-counter transactions may become so tightly regulated that they’re no longer workable. This hearing will provide a glimpse into what these two key House players, as well as the Obama administration, have in mind. A spokeswoman for one of the committees said that it probably will be webcast and might be broadcast on C-SPAN.
French petroleum giant Total says its talks with Iran for development of the Iranian South Pars gas field "are not in a very advanced state". Last month Iran signed a $4.7 billion deal with China National Petroleum Corporation (CNPC) to develop the upstream sector of South Pars Phase 11, saying it replaced Total because of the French company's repeated delays. However, the French company says it is still involved in the project. "They (negotiations) have not been broken and they have not been resumed either. They are not in a very advanced state," Reuters quoted Total's Chief Executive Christophe de Margerie as saying. He said the company considers Iran as an important country, but added, "We are waiting for things to calm down after all the news that came out, incidentally, in the run up to the elections." Iran became the scene of opposition rallies after the announcement of the incumbent Mahmoud Ahmadinejad as the winner of the 10th presidential election with nearly two-thirds of the votes. At least 20 people were killed and many more injured when some of the protests turned violent. De Margerie acknowledged that Chinese companies are good investors, but they do not have good expertise to develop the Iranian project because "liquefied natural gas is a complicated thing." The managing director of the National Iranian Oil Company (NIOC) Seyfollah Jashnsaz, who signed the deal in Beijing with his CNPC counterpart, said Total could continue negotiations with Iran for the development of Phase 11's downstream sector and LNG production. Total was officially commissioned to develop Phase 11 of South Pars. However, Iran announced in March that it had found a new partner to replace Total in the project. The French company has been under US pressure to abandon cooperation in Iran's energy projects.
Europe Solar Thermal US needs to catch up or you will miss the boat again. You can find all stats in below link!!!!!!!!!!! Market Data - Publications - ESTIF
Neda, 'Angel of Freedom' Top 10 Ahmadinejad-isms PHOTOS: Mahmoud Ahmadinejad - SPENCER PLATT / POOL / AFP / GETTY; Nuclear Bomb Explosion - Department of Energy 1. "Those who speak of change must apologize to the Iranian people and try to repair their past crimes." (Speaking of U.S. President Barack Obama.) 2. "Presidency of a woman in a country that boasts its gunmanship is unlikely." (Speaking of U.S. presidential candidate Hillary Clinton.) 3. "Nuclear weapons are so 20th century." 4. "In Iran, we don't have homosexuals, like in your country." (Speaking to the U.S.) 5. "Those who think they can revive the stinking corpse of the usurping and fake Israeli regime by throwing a birthday party are seriously mistaken." 6. "We are also human beings, and sometimes we catch a cold." (NOT so! You, your boss Khamenei, the Guardian Council (‘The Infamous Gang of 14’), the Police, the Revolutionary Guard, the Basiji Militia, and the Military, who bludgeon, maim, and murder defenseless men, women and children, are INHUMAN!!!) 7. "The world is becoming rapidly Ahmadinejadized, if I'm allowed to make a joke." (“Ahmadinejadized” is synonymous with NUCLEAR BOMBED!!! World, if you don’t exercise your power and courage now to bring down this cruel, morally bankrupt and dangerous regime, you will realize your worst nightmare! Don’t forget, you sat on your hands while Adolph Hitler ranted and raved you into WORLD WAR II!!! You lost 30 million then. Do you want to loose a BILLION or MORE in WORLD WAR III?) 8. "Israel should be wiped off the map." 9. "We thank God that our enemies are idiots." 10. "They have invented a myth that Jews were massacred and place this above God." QUESTION: If every nation in the world and every company in the world, who purchases Iranian oil and other exports, were to immediately stop doing so, how long would it take to relegate Khamenei’s ruthless, murderous, dictatorial regime to history’s garbage heap? Freedom-loving Consumers of the world, contact your governments now and let your voices be heard! Contact your oil and fuel suppliers and ask them if they purchase any products from Iran. Only purchase non-Iranian oil and fuel. If only oil and fuel purchased from Iran is available to buy, then ride bicycles or walk. We can all suffer a little hardship to achieve VICTORY! PHOTO: Hand/2 finger "V" sign - is for VICTORY! Victory Chant: “YES, WE CAN! YES, WE CAN! YES, WE CAN!” (NOTE: The above 10 quotes – not the comments and question – were borrowed from TIME IN PARTNERSHIP WITH CNN’s “Top 10 Ahmadinejad-isms” web page: http://www.time.com/time/specials/packages/article/0,28804,1874579_1874596,00.html) PHOTOS: Neda, dying on the street in Tehran; Blood-stained face of Neda poster; 2 photos of Iranian police beating women. Neda, ‘Angel of Freedom’, shedding her blood for a free Iran. Police brutally beating old women protesters with their batons, in Shiraz, Iran. Neda, beautiful daughter of Iran, may you rest in peace, and please rest assured the World’s Consumers shall unite and avenge your senseless, unnecessary and preventable murder, and the cruel imprisonment, abuse, torture and murder of many of your countrymen and women over the past 30 years! World, please do not let them die in vain! Cease talking and arguing, and ACT! ‘We the People’ shall courageously accomplish what timid politicians are afraid or unwilling to do! “Power to the People!” “Failure is not an option!” When We prevail over tyranny, the world will be a safer place to live! ‘The World’s Consumers Liberation Army’ is on the march! Iran, brace yourself, your liberation is on the horizon! In the 1700’s, when the American Colonists were fighting and dying to secure Freedom for themselves and their posterity, France came to their aid! You have a choice. Either do your small part to stand up for Freedom in the world and avenge the blood of the martyrs in Iran, by taking a few minutes to send this email to everyone you know, or delete it. Thank you for being a caring, Freedom-loving human being! 1. "کسانی که از تغییر صحبت می کنند باید به مردم ایران عذرخواهی کنید و سعی کنید به جرایم گذشته خود را تعمیر کنید." (صحبت از رئیس جمهور ، باراک اوباما ،.) 2 "ریاست جمهوری یک زن در یک کشور است که دارای gunmanship آن بعید است." (صحبت از نامزد ریاست جمهوری ، هیلاری کلینتون.) 3. "به سلاح هسته ای هستند تا 20th قرن". 4. "در ایران ، ما همجنسگرایان را نداشته باشند ، می خواهم در کشور خود". (صحبت به ایالات متحده آمریکا) 5. "آنها که فکر می کنم آنها می توانند به جسد متعفن رژیم جعلی اسرائیل usurping و با پرتاب یک مهمانی روز تولد دوباره زنده هستند به طور جدی اشتباه". 6. "ما نیز انسان و گاهی یک سرد ما گرفتن." (نه پس! شما ، شما را وردست خامنه ای ، شورای نگهبان ( 'باند ننگین 14') ، پلیس ، سپاه پاسداران ، به شبه نظامیان بسیجی و نظامی ، که با چماق زدن ، ضرب و جرح ، دفاع و قتل مردان ، زنان و کودکان ، غیر انسانی دارند!) 7. "در جهان است که به سرعت در حال تبدیل شدن به Ahmadinejadized ، اگر من مجاز به ایجاد یک شوخی". ( "Ahmadinejadized" ، مترادف است با بمباران هستهای! جهانی ، اگر قدرت و شجاعت خود را تمرین کنید حالا به پایین آوردن این مقابل مجازات بیرحمانه ، از نظر اخلاقی ورشکسته و خطرناک رژیم ، شما خود را بدترین کابوس! تحقق فراموش نکنید ، شما جستجوی پیشرفته در دست های خود را در حالی که آدولف هیتلر ranted و شما را به جهان raved جنگ جهانی دوم! شما را گم کرده و سپس 30 میلیون. آیا می خواهید به بی بند و یک میلیارد یا بیشتر را در جنگ جهانی سوم؟) 8. "اسرائیل باید محو از نقشه". 9. "ما با خدا سپاسگزارم که دشمنان ما هستند idiots". 10. "آنها را اختراع کرده است که یک اسطوره یهودی قتل عام شدند و در این محل در بالا با خدا". سوال : اگر در هر کشوری در جهان است و هر شرکت در جهان است ، که به خرید نفت ایران و صادرات دیگر ، متوقف شد ، بلافاصله بهانم این کار ، چه مدت طول می کشد تا واگذار کردن خامنه ای 'sظالم ، سبع ، رژیم دیکتاتوری را به توده زباله سابقه است؟ آزادی مصرف کنندگان دوستدار از جهان ، تماس با دولت های خود را ایجاد کنید و اجازه دهید صدای شما شنیده می شود! تماس با روغن و سوخت خود را از تامین کنندگان و از آنها بخواهید آنها را در صورت هر گونه کالا از ایران به خرید. فقط خرید غیر نفتی ایران و سوخت. اگر تنها روغن و سوخت از ایران خریداری شده است که در دسترس به خرید ، سپس سوار دوچرخه و یا پیاده. همه ما می تواند یک کمی سختی برای رسیدن به پیروزی رنج می برند! برای پیروزی! پیروزی سرود : "بله ، می توانیم! بله ، می توانیم! بله ، می توانیم! " (توجه : در نقل قول فوق 10 -- و نه به نظرات و سوالات -- از زمان با مشارکت در سی ان ان "بالا 10 احمدینژاد قرض گرفته بودند ، ایسمهای" صفحه وب : http://www.time.com/time/specials/packages/article/0,28804,1874579_1874596,00.html) ندا ، 'فرشته آزادی' ، 'shedding خون او را برای یک ایران آزاد. پلیس وحشیانه ضرب و شتم زنان معترض ساله با باطوم خود را ، در شیراز ، ایران. ندا ، دختر زیبای ایران ، ممکن است شما را در آرامش استراحت ، استراحت و لطفا مطمئن مصرف کنندگان جهان باید متحد و تلافی بی معنی ، غیر ضروری و قابل پیشگیری خود را به قتل و حبس مقابل مجازات بیرحمانه ، سوء استفاده ، شکنجه و قتل بسیاری از هموطنان خود و زنان بیش از در 30 سال گذشته! جهان ، لطفا اجازه نمی دهد آنها را در بیهوده جان! بس صحبت و استدلال ، و ایسیتی! 'ما مردم' شجاعانه باید چه سیاستمداران ترسو واهمه دارند و یا تمایل به انجام کار! "قدرت را به مردم!" "عدم یک گزینه نیست!" وقتی که ما در غلبه بر ظلم و ستم ، در جهان خواهد شد را به مکان امنی برای زندگی! 'در جهان مصرف کنندگان ارتش' است که در مارس! ایران ، به خودتان اکولاد ، آزادی است که خود را در افق! در 1700 است ، زمانی که آمریکا مستعمره بود و مبارزه با مرگ به امن آزادی برای خود و اعقاب خود را در فرانسه به کمک آنها آمد! شما از یک انتخاب. در هر دو صورت کار خود را به بخش های کوچک روی پا ایستادن را برای آزادی در جهان است و خونخواهی کردن خون شهدا در ایران ، توسط گرفتن از چند دقیقه برای ارسال این ایمیل را برای کسانی که می شناسید ، و یا حذف آن. با تشکر از شما که به مراقبت ، آزادی خواه انسان!
This entire coup dressed up as a sham election was done because the of the IRG's economic interests. They need ahamad-the-fag in charge because he will help them protect their money base. So if you hit them in the wallet, seriously, really hit them in the wallet, they will crumble. We need to organize good campaigns to do just that. Boycott businesses who deal with them, countries that recognize them, etc. Protest where their oil tankers dock. blockade them so the crew cannot get off. Make their lives miserable. Green Peace does a decent job harassing whaling boats, they need to start harassing Iranian oil tankers. We can do it, but we need it to be well organized and we need to get a lot of people on board. This is the thing they really fear. You can bet their online agents are going to try and disrupt anything that is being organized, so watch out for them. And fuck them. The IRG needs to be strangled dry, so they don't have a single penny. They raped their nation so they could keep their money flow. We need to make sure that the rape of Iran becomes a hollow victory for them.
Oil price Culprits under attack The United States and Europe have signaled possible crackdowns on oil speculators - the investors who trade daily in the fuel. They argue that the sharp price changes are not borne out by the small shifts in supply or demand for oil. Authorities believe speculators may be pushing the price higher for their own gains. Crude oil futures, traded on the New York Mercantile Exchange, are at the centre of the dispute. The Commodity Futures Trading Commission, a US regulatory agency, said this week it is considering tougher regulations on energy markets. That could mean limits on how much traders can bet at any given time. 'Governments can no longer stand idle,' French President Nicolas Sarkozy and British Prime Minister Gordon Brown wrote in an editorial published Wednesday in The Wall Street Journal. The oil price was 'seemingly defying the accepted rules of economics.' The two leaders called for an international effort to boost transparency and supervision of oil markets. They warned that 'a new period of instability could undermine confidence just as we are pushing for recovery.' Why is oil price rising? Speculators under scrutiny (News Feature) - Monsters and Critics
This is the beginning of a Squeeze CFTC Chairman Gary Gensler said he wants to crack down on rampant speculation in the energy markets, by using a trick at work in the agricultural markets. The commission is planning hearings on a proposal to impose "position limits for commodities of finite supply." See full story. Reuters CFTC Chairman Gary Gensler. Simply put, the rule would be the government's first effort at reining in speculation since investors drove the price of oil to more than $140 a barrel last summer. The price spike was linked to index traders and and swap dealers, and there's evidence that a similar speculative force may be at work again. A MarketWatch analysis last week showed that passive investors increased their crude-oil holdings to the equivalent of more than 600 million barrels in June, up more than 30% from the end of last year, likely supporting the climb in oil prices. Crude futures have since slipped a bit. See full story. The government's use of free markets via auctions to help find prices for hard-to-sell assets in the financial sector shows how adept supply and demand are at setting values. But when it comes to commodities that people, industries, economies and nations depend on, the susceptibility of free markets to manipulation can prove dangerous. Last year's price spikes in oil, for instance, created trade imbalances and left fuel-sensitive industries such as airlines all but bankrupt. Requiring market participants to have a reason to be there other than profiteering is a legitimate mission of a regulator entrusted not only to ensure market integrity but to look out for consumers. Keeping the forces of supply and demand at the center of the trading floor is the best way to do that.
Oil prices fell to just above $60 a barrel Wednesday as the government reported unused gasoline held in storage surged again. In just over one week, oil prices have fallen more than 18 percent. Gasoline prices have also fallen, but to a much lesser degree. The average price of unleaded regular gas in Chicago was $2.79 a gallon Wednesday, down from $2.84 a gallon a week earlier, or less than 2 percent. "Unfortunately gas prices don't come down as quickly" as oil prices, said Gianna Bern, president of Flossmoor-based Brookshire Advisors and Research Inc., an energy analyst. Energy markets are undergoing an extended sell-off, the longest in 10 months, with new economic reports dampening optimism about an economic recovery. Benchmark crude for August delivery fell more than 4 percent or $2.79, to settle at $60.14 a barrel on the New York Mercantile Exchange Wednesday. Americans are driving billions fewer miles than they had in recent years as millions have lost their jobs, and even though refiners have been slashing production, gasoline continues to pile up. The Department of Energy reported that gasoline supplies grew by another 1.9 million barrels last week, the fifth straight week that storage levels have grown. Prices are "coming back down to reflect this decrease in demand and historic levels of inventory," said Bern. "I expect continued weakness in crude oil markets." She expects gasoline prices to fall more significantly after Labor Day, when the summer driving season ends. Oil speculation targeted Goldman Sachs Group Inc. and Morgan Stanley may never have the same leeway in commodities as they did when oil reached a record $147 a barrel last year. The Commodity Futures Trading Commission will consider greater regulation of oil, gas and other energy markets at hearings this month. It plans to review exemptions to trading limits that allowed Goldman and Morgan to build multibillion-dollar ventures in futures, swaps and over-the- counter markets. The two accounted for about half of the $15 billion in revenue that the world's 10 largest investment banks generated from commodities in 2007.Oil prices fell to just above $60 a barrel Wednesday as the government reported unused gasoline held in storage surged again. In just over one week, oil prices have fallen more than 18 percent. Gasoline prices have also fallen, but to a much lesser degree. The average price of unleaded regular gas in Chicago was $2.79 a gallon Wednesday, down from $2.84 a gallon a week earlier, or less than 2 percent. "Unfortunately gas prices don't come down as quickly" as oil prices, said Gianna Bern, president of Flossmoor-based Brookshire Advisors and Research Inc., an energy analyst. Energy markets are undergoing an extended sell-off, the longest in 10 months, with new economic reports dampening optimism about an economic recovery. Benchmark crude for August delivery fell more than 4 percent or $2.79, to settle at $60.14 a barrel on the New York Mercantile Exchange Wednesday. Americans are driving billions fewer miles than they had in recent years as millions have lost their jobs, and even though refiners have been slashing production, gasoline continues to pile up. The Department of Energy reported that gasoline supplies grew by another 1.9 million barrels last week, the fifth straight week that storage levels have grown. Prices are "coming back down to reflect this decrease in demand and historic levels of inventory," said Bern. "I expect continued weakness in crude oil markets." She expects gasoline prices to fall more significantly after Labor Day, when the summer driving season ends. Oil speculation targeted Goldman Sachs Group Inc. and Morgan Stanley may never have the same leeway in commodities as they did when oil reached a record $147 a barrel last year. The Commodity Futures Trading Commission will consider greater regulation of oil, gas and other energy markets at hearings this month. It plans to review exemptions to trading limits that allowed Goldman and Morgan to build multibillion-dollar ventures in futures, swaps and over-the- counter markets. The two accounted for about half of the $15 billion in revenue that the world's 10 largest investment banks generated from commodities in 2007.
Your actions are working Crude oil for August delivery fell 19 cents, or 0.3 percent, to $59.70 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $58.32, the lowest since May 18. Prices are down 59 percent from a record $147.27 a barrel reached on July 11, 2008.
Eu and Turkey signed a gas agreement for transfer of gas from Central Asia to Europe. Iran sadly cut out of Nabucco pipeline project. I guess there is an economic cost to pay for misbehaviour Another crushing defeat for the Oil lobby for cheap Iranian oil products
This is it !!!!!!!!!! Director of oil refinery arrested due to protests at the refinery. If the oil workers are striking WONDERFUL. Cannot confirm yet.
Raymond J. Learsy - "Over a Barrel: Breaking Oils Grip on our Future" Well there is something that could be done immediately to show the world's solidarity with the courage of the demonstrators and to show its disgust with the behavior of the Iranian Government. We, the world, can stop buying Iranian oil. Though the United States does not currently import Iranian crude, the fungiblity of oil is such that our government espousing such a boycott would carry a meaningful impact. The cut off of Iranian oil shipments through a buyer's boycott is entirely feasible in the structure of today's oil market. Inventories throughout the world are filled to overflowing, supertankers are loaded with 100's of millions barrels oil, lying at anchor at sea waiting for customers or storage on shore. Most tellingly is the production capability from other sources. Saudi Arabia alone has 4.5 million barrels daily crude production and shipping capability shut in and readily accessible. These 4.5 million/bbl daily production now sitting idle is more than twice the level of Iran's daily exports of some 2.1 million barrels/day. Without the income from oil, Iran's dictatorship will be increasingly vulnerable. It is long past time that the world draws the line on the political and ethical perversion imposed by those who control the supply of oil. It would be a significant step in breaking oil's grip on our future and an enormous gesture of support to Iran's brave people. Let the boycott begin as the world's answer to the murder of "Neda".
Good info on Commodity Futures Exchange Commission This week the Commodity Futures Exchange Commission (CFTC), responding to a national and international outcry that enough is enough, and in keeping with the Obama administration's goal of tougher oversight, has finally decided to act. Reacting to Congressional pressures, a struggling industrial landscape and a beleaguered public, the CFTC announced that a series of restrictions on energy trading would be set forth. And here the CFTC and the American public's outrage is not alone. Earlier this week the Wall Street Journal printed an Op-ed Essay (July 8,2009) jointly written by Prime Minister Gordon Brown of Great Britain and President Nicolas Sarkozy of France calling for "transparency and supervision of the oil futures market in order to reduce damaging speculation" (The WSJ, signaling its take on the issue placed the piece at the bottom of its pg.15 Opinion column). To arrest the clear evidence of speculation driven trading by financial/non-commercial interests (by "non-commercial" meaning neither oil producers nor oil users) speculating heavily and erratically, pushing markets usually higher, the CFTC has committed itself to take the issue in hand. A glaring example of runaway speculation was reported as recently as July 3rd by the Financial Times(FT) that a rogue trader in London moved the market by over $2. a barrel , and according to the FT,"without apparent justification" (which please read as having had no commercial interest other than rank speculation). The CFTC has announced it was ready to place volume limits on energy futures by pure financial traders/investors, tougher information requirements to identify the role of hedge funds and traders who swap contracts on the barely regulated nor visible over the counter markets. Thereupon, almost immediately, the New York Times ("U.S. Weighs Curbs..." 07.08.09) cautioned "...proposals could encounter fierce opposition from big banks and Wall Street firms, which each are big traders in the commodity markets" All this raises an even bigger question. What are these Bank Holding Companies doing using Fed monies and programs, with access to the Fed's discount window, and FDIC insured deposits, speculating in the commodity futures markets? The irony is that Fed monies, instead of going to business lending and real estate mortgage financing which is what the economy desperately needs, goes to provide exceedingly cheap and voluminous funding to play the commodities casino. Thereby the American public is hit twice. -First, taking away funds that are desperately needed in the economy and making them available at practically no cost to the 'futures commodities market' gamblers who have virtually no commercial interest in the commodities being traded being neither consumers nor producers. -Second, by enabling and fueling speculation by the likes of the Bank Holding Companies they are helping to drastically distort the market's pricing mechanism, driving the cost of commodities higher than they would be by large measure in many cases, placing enormous further strains on the general public and the economy through significantly higher commodity prices reflected in day to day cost of goods and gasoline. But consider, at present Bank Holding Companies the likes of Citigroup, JPMorgan, Morgan Stanley as well as such as Barclays are exercising their "banking responsibilities" to assist this difficult economy by playing what is termed the "contango" game. Misusing their access to cheap money, acting as principals (i.e. for their own account and risk) they are chartering supertankers for months to a year at a time, loading them with hundreds of millions of barrels of crude oil and oil products, taking the oil and oil products off the market thus helping to sustain and propagate ever higher oil prices at vast additional cost and burden to the nation's consumers. The oil is held at sea for months, thereby tying up hundreds of millions of dollars, in anticipation of yet higher prices for the oil/oil products cargo at the end of the tanker charter period. What has this to do with banking as we had come to understand it, especially in this time of crisis? There is too much at stake here, not least of which determining the role of banks, especially Bank Holding Companies, after the disasters of the past year. Are banks meant to help the economy or to go back to business as usual in helping to destroy it?! Here we go again. The same Financial Class that brought us to the edge of economic meltdown is now pressing its well connected pals and cronies on Wall Street, in Congress as well as its allies in the press and our OPEC cheering oil industry, to lay hands off the continued stripping America's wealth through the gamed racket and egregiously profitable world of oil futures trading. This week the Commodity Futures Exchange Commission (CFTC), responding to a national and international outcry that enough is enough, and in keeping with the Obama administration's goal of tougher oversight, has finally decided to act. Reacting to Congressional pressures, a struggling industrial landscape and a beleaguered public, the CFTC announced that a series of restrictions on energy trading would be set forth. And here the CFTC and the American public's outrage is not alone. Earlier this week the Wall Street Journal printed an Op-ed Essay (July 8,2009) jointly written by Prime Minister Gordon Brown of Great Britain and President Nicolas Sarkozy of France calling for "transparency and supervision of the oil futures market in order to reduce damaging speculation" (The WSJ, signaling its take on the issue placed the piece at the bottom of its pg.15 Opinion column). To arrest the clear evidence of speculation driven trading by financial/non-commercial interests (by "non-commercial" meaning neither oil producers nor oil users) speculating heavily and erratically, pushing markets usually higher, the CFTC has committed itself to take the issue in hand. A glaring example of runaway speculation was reported as recently as July 3rd by the Financial Times(FT) that a rogue trader in London moved the market by over $2. a barrel , and according to the FT,"without apparent justification" (which please read as having had no commercial interest other than rank speculation).
economist forecast Outlook for 2009-10: Economic growth Iranian real GDP growth is likely to decline considerably over the forecast period as a result of lower oil prices and, in 2009, declining oil output (after OPEC-imposed production cuts). The drop in oil earnings in 2009 will impede the government's plans for an expansionary fiscal policy, which in turn will affect the rate of private consumption and investment growth. To add to the government's woes, net oil export growth will be held back by a lack of refining capacity, which is largely a result of political interference and subdued foreign investor interest. This will leave Iran increasingly reliant on fuel imports, which have been rising despite the imposition of petrol rationing in 2007. Owing to a drought in early 2009, imports of wheat and other agricultural produce will also rise. In view of this, Iranian real GDP is forecast to grow by just 0.5% in 2009/10, although we expect growth to recover slightly, to 2.9%, in 2010/11. Given the dependence of Iran on oil revenue and the growing need for greater investment in the hydrocarbons industry in order to raise oil and gas production capacity, the imposition, and even the threat, of further sanctions is likely to have a long-term detrimental impact on the economy. The controversy over Iran's nuclear programme is beginning to deprive the country of much-needed European investment, and expectations that Asian investors would fill the breach have not materialised. Although the likelihood of direct sanctions on the oil sector remains low at present, future punitive measures against the sector may exacerbate the deteriorating economic outlook.
OMV Investment - Economist Economic performance: OMV hesitates over South Pars investment Investors' caution may increase if political unrest worsens in Iran and relations with the West slump further. One of Iran's leading would-be foreign partners, OMV, an Austrian oil and gas firm, announced in late June that it might not commit more investment to the giant South Pars gasfield, given the deterioration in the political climate. In 2007 OMV signed a preliminary agreement to work with an Iranian company, Petropars, to develop Phase 12 of South Pars and to take a 10% stake in the gas liquefaction plant. The agreement also included the purchase of 5bn cu metres/year of natural gas through the proposed Nabucco pipeline, to be built by an OMV-headed consortium to pump Caspian and Iranian gas to Austria through Turkey, Bulgaria and Romania.
Economic cost of oil extraction increase July 28 (Reuters) - The cost of pumping a barrel of oil out of the ground depends on a variety of factors, including the size and accesibility of the field. Oil companies are often reluctant to give precise cost information. The following provides estimates of the cost of running a field for OPEC members and other individual countries, obtained from traders and industry analysts. It also gives the International Energy Agency's more general assessment of costs for the oil-producing regions of the world. ESTIMATES BY COUNTRY Saudi Arabian crude is the cheapest in the world to extract because of its location near the surface of the desert and the size of the fields, which allow economies of scale. The operating cost (stripping out capital expenditure) of extracting a barrel in Saudi Arabia has been estimated to be around $1-$2, and the total cost (including capital expenditure) $4-$6 a barrel. Extraction of Iraqi oil is in theory also very cheap, although there are political and security challenges. Industry analysts estimated total costs at between $4-6, although they said some fields could be more expensive. In the United Arab Emirates, operating and capital costs combined were estimated to be around $7 a barrel. Oil extraction from mature and deep water offshore fields is much more expensive than from the accessible hydrocarbon territory of the Gulf. In Nigeria, production in ultra-deep water fields can reach $30 a barrel compared with onshore costs of around $15, according to analysts. In offshore Angola, it costs around $40 to produce one barrel of oil (operating and capital costs), traders told Reuters. Operating and capital costs in Algeria, Iran, Libya, Oman and Qatar were all estimated to be around $10-15 a barrel. In Kazakhstan, where reserves are big and largely unexploited, the cost to produce a barrel for medium-sized producers, such as Kazakh state oil company KazMunaiGas [KMG.UL] is around $15-18, and for Kazakhstan's largest operator Tengizchevroil, it is about $10-12, the Kazakh-British Chamber of Commerce said. Analysts said these were operating costs, probably including transport, as it is expensive to move the oil to distant ports. In Venezuela, where fields tend to be mature and small and it is difficult to make new discoveries, production costs were generally estimated at $20 a barrel (operating and capital costs). Those figures do not include the more expensive Orinoco oil from the country's sand deposits. One analyst said the extraction of one barrel of Orinoco was around $30 (operating and capital costs). Ecuador, where fields are also small and the distance to ports add to costs, analysts pegged extraction costs at $20 a barrel. In the mature British North Sea, where the remaining oil is difficult to access, the industry body Oil & Gas UK said the break-even cost was around $50 a barrel. One analyst said operating and capital costs were $30-40 a barrel. The International Energy Agency (IEA) -- in its latest November 2008 world energy outlook -- gave the following estimates for the all-in costs of producing oil from various types of hydrocarbons in different parts of the world: Oilfields Estimated Production /source Costs ($ 2008) Mideast/N.Africa oilfields 6 - 28 Other conventional oilfields 6 - 39 CO2 enhanced oil recovery 30 - 80 Deep/ultra-deep-water oilfields 32 - 65 Enhanced oil recovery 32 - 82 Arctic oilfields 32 - 100 Heavy oil/bitumen 32 - 68 Oil shales 52 - 113 Gas to liquids 38 - 113 Coal to liquids 60 - 113 Source: International Energy Agency World Energy Outlook 2008 (Compiled by Martina Fuchs, Christopher Johnson, Karen Norton, Joe Brock and Barbara Lewis, Editing by James Jukwey)
WASHINGTON, DC, Aug. 21 -- The US Commodity Futures Trading Commission announced further amendments on Aug. 20 to terms under which ICE Futures Europe may makes its electronic trading and order matching system available to exchange members in the US. CFTC said the new conditions were designed to enhance the US commodities trading regulator’s ability to conduct market surveillance and oversight. The InterContinental Exchange division lists cash-settled natural gas contracts for trading which settle based on prices of contracts trading on the New York Mercantile Exchange, which the CFTC regulates. The conditions will apply to any ICE Futures Europe contracts currently linked to a CFTC-regulated exchange contract and those listed in the future, CFTC said. Under the conditions, it continued, ICE Futures Europe will be required within 120 days to provide CFTC’s staff with trade execution and audit trail data for the US regulator’s trade surveillance system for all of ICE Futures Europe’s linked contracts; on-site visits to oversee the exchange’s ongoing compliance with its no-action relief; advance copies of all rules, rule amendments, circulars, and other notices which it publishes; and copies of all disciplinary notices involving its linked contracts upon closure of the action. CFTC added that in the event that it directs NYMEX to take emergency action with respect to a linked contract, ICE Futures Europe would be required to take similar action with respect to the linked contract on its exchange. The moves followed CFTC’s July 30 announcement that it would begin to integrate ICE Futures Europe’s large trader data into the regulator’s commitment of traders report. The US commodities regulator said the new actions, which were embodied in a revised “no-action letter,” supplemented a June 17 amendment to ICE Futures Europe’s no-action relief which added conditions including requirements to report large trader positions, publish daily trading information in the linked contracts, and establish position limits or accountability levels comparable to the ones for the counterpart linked NYMEX contracts. The new conditions also built on a November 2006 memorandum of understanding between the CFTC and its British counterpart, the Financial Services Authority, which concerns consultation, cooperation and the exchange of information related to market oversight and the detection of potential abusive or manipulative trading practices that involve trading in related contracts on British and US derivatives exchanges. The two regulatory agencies agreed on Aug. 20 to strengthen that agreement.
Iran oil industry about to collapse due to anger of workers Peiknet 70 managers of NIOC met with Masoud Mirkazem, AN's new candidate for the post of Iranian oil minister. The nomination of Masoud Mirkazem and his early meeting with oil industry directors, prior to vetting and acceptance by the Iranian parliament, has created a great deal of concern in political circles. Masoud Mirkazem mentioned that his nomination by AN is a done deal and that he has accepted his new mission. He would not like to lose any more time and intends to start preparing his tenure within the ministry. His mission is to cleanse and revitalise the oil industry. Most managers in the oil industry, specifically those in the southern oil fields, are now fearing the loss of their jobs because most previous oil ministers were nominated from southern oil fields management. Workers and managers have lost heir will to work and are extremely unhappy with the current government and situation. They are unhappy with the nomination of a new minister with no oil industry expertise. The Iranian Oil industry is close to an explosive event leading to strikes and angry conflicts.
Where is Iran Oil Company? A consortium of Russian oil companies – Rosneft, Gazprom, Lukoil, TNK-BP and Surgutneftegaz – has agreed to establish a joint venture with Petroleos de Venezuela SA to develop the Junin 6 block in the Carabobo area of the Orinoco heavy oil belt. The agreement was announced by Russia’s Vice Prime Minister Igor Sechin, who said that the priority task is to realize projects on the development of territories where they will be carried out, including output and processing of oil, and the construction of the infrastructure. “We’re ready for such cooperation and we have good relations with our partners in Venezuela,” said Sechin, who noted that representatives of the Russian companies already have departed for the region to discuss details of the future project with their Venezuelan partners. Meanwhile, Sechin said, “We’re completing estimating operations. We’re working on the feasibility study and specifying investments.” Earlier, Russian Prime Minister Vladimir Putin said his country plans to use the most up-to-date equipment in its effort to locate and develop oil in the South American country. "If we operate in Venezuela, implement all our plans, then the technological processes and technology that will be used in Venezuela will be even more up-to-date, because our companies will be using the very latest available on the world market," said Putin after meeting with Venezuela’s Minister of Oil Rafael Ramirez. Are the Russians setting themselves up for disappointment in Venezuela? After all, more than one Western firm already has found to its cost that the government of Hugo Chavez is not to be trusted. Or do you think the Russians will fare better than their Western colleagues?
Where is Iran Oil Company Petroleos de Venezuela (PDVSA) has again delayed a heavy oil tender for a total of seven blocks in the Carabobo area of the Orinoco Belt. Initially, the tender results were to have been announced in May but an earlier delay extended that date to this month. No new timetable for the bidding process has been released. Nineteen international oil companies are participating in the tender, including BP, Chevron, Petrobras, Total SA and China National Petroleum Corp. Venezuelan oil minister Rafael Ramirez reportedly said that companies had requested more time to prepare their bids. But IHS Global Insight reports that the tender is less attractive now due to the oil price volatility over the past year, combined with the international financial crisis. The analyst further noted that “less favorable fiscal and contract terms and the ongoing regulatory uncertainty faced by investors in the Venezuelan oil sector will also not have helped.” IHS Global Insight points to yet another factor that may have discouraged potential investors: the business model selected for the development of the Carabobo area. It says that PDVSA wants the winning companies to invest in oil upgrade projects and to blend the upgraded oil with lower-quality oil. “This means that the final product available for export will not be worth as much as the synthetic crude exported from the former strategic associations in the Orinoco heavy oil belt,” the analyst said. What do you think is behind this latest delay in the Carabobo tender? Is it down to excessive demands on the part of PDVSA? Have potential investors been frightened off by Chavez’s nationalization of various industries? Or is there something else going on?
Iran Oil 2009 Update (Reuters) - Following are some details about Iran's principal energy partners and joint projects: ASIA: * JAPAN - Biggest single buyer of Iran's crude. Imported 519,518 barrels per day (bpd) in Q1 2009. Iran was Japan's third-largest supplier. -- INVESTMENT -- Japan's INPEX holdings saw its 75 percent stake in Iran's huge Azadegan oilfield cut to 10 percent in 2006 when talks fell through on a development plan. * CHINA - Second-largest buyer of Iran's oil. Imported 484,093 bpd in Q1 2009. Iran is China's second-largest crude supplier. -- China's state-run Zhuhai Zhenrong, which started buying oil from Iran more than a decade ago and was among the first buyer to heed Tehran's call to pay in euros instead of U.S. dollars, extended its agreement with National Iranian Oil Co (NIOC) to import 240,000 bpd of crude for 2009. -- Top refiner Sinopec Corp. agreed to import 150,000-160,000 bpd of Iranian crude this year, unchanged from 2008. -- INVESTMENT -- China's National Petroleum Corporation (CNPC) signed a $4.7 billion contract with a Chinese state firm in June to develop a phase of South Pars, replacing France's Total. -- CNPC signed a memorandum of understanding for development of the South Azadegan field earlier this year. Under that deal, it would pay 90 percent of the costs of a $2.5 billion project. -- CNPC is in talks with Iran for $3.6 billion deal to buy LNG from Phase 14 of South Pars project. CNPC is also in talks to explore and develop energy reserves in Iran's Caspian. -- CNPC signed a deal with the NIOC in January to develop the north Azadegan oilfield. The deal is worth $2 billion in its first phase. Under the first phase lasting 48 months, the capacity would reach 75,000 barrels per day (bpd). The tenure of the project is 12 years. -- China's Sinopec Group finalized a $2 billion pact to develop Iran's huge Yadavaran field in December 2007. -- The China National Offshore Oil Corp (CNOOC) is in talks to finalize a $16 billion dealt to develop the North Pars gas field and build a liquefied natural gas (LNG) plant. * INDIA - India imported 426,360 bpd of Iran's oil in the fiscal year 2008/09, or 9.5 percent more crude versus a year earlier. Iran was India's second-largest supplier. India has supplied Iran's imported oil gasoline and diesel. -- INVESTMENT -- India's ONGC, IOC and Oil India Ltd are in talks to invest $3-$5 billion to develop gas reserves at the Farsi block. ONGC and the Hinduja group are negotiating for a role in Azadegan oilfield development and to buy gas from South Pars. ONGC is also in talks to develop Caspian oil and gas reserves. -- India had been part of the $7 billion so-called "peace pipeline" project, but stayed away from talks last year as it wanted a bilateral deal with Pakistan on transit costs first. Iran said in May India could still join the project. * MALAYSIA - Malaysia's SKS group signed a gas deal worth $14 billion with NIOC in December 2008. The deal involves a project to produce LNG and the development of two gas fields, Golshan and Ferdows. Exports of crude and 120,000 barrels of gas condensates are also part of the agreement. * INDONESIA - State oil firm Pertamina said in March a refinery joint venture project with Iran may be delayed until 2016 from 2010. In 2006, Pertamina's unit PT Elnusa signed a preliminary deal with National Iranian Oil Refining and Distribution Company to build a 300,000-barrels-per-day oil refinery in Indonesia, which was expected to be completed in 2010. * PAKISTAN - Iranian news agencies reported in May that Iran and Pakistan had signed a framework agreement to export Iranian natural gas to Pakistan. * SOUTH KOREA - Imported up to 244,989 bpd of Iran's oil in the first quarter 2009. Iran was South Korea's fourth-largest supplier. * TAIWAN - Imported 82,411 bpd of Iran's oil in the first quarter of 2009. Iran was Taiwan's third-largest supplier. * RUSSIA - Russia is building Iran's first nuclear power plant and supplying the fuel it will use. -- INVESTMENT -- Russia state controlled energy giant Gazprom GAXP.MM agreed in February to take on new projects in Iran, including a bigger role in South Pars and drilling for oil. Gazprom has invested about $4 billion in Iran since 2007 and was involved in an earlier phase at South Pars. EUROPE: * AUSTRIA - Austria's biggest energy company OMV (OMVV.VI) is leading a consortium planning to build the Nabucco pipeline to carry gas from Turkey to Austria through Bulgaria, Romania, and Hungary by 2013. Iran has touted its gas as essential to the project, but the U.S. has stated its opposition to Iran's participation. OMV signed an MOU for participation at South Pars in 2007 and was also involved in exploration at the Mehr oilfield, but both deals have stalled. * FRANCE - Oil giant Total (TOTF.PA) was replaced by China's CNPC on the South Pars field earlier this year. Total has said talks on the project were at a standstill. Total put the project on hold last year due to international political tension between Iran and the West. It had struggled to finalize the deal amid haggling over contract terms. * ITALY - Italy's oil and gas group Eni (ENI.MI) is leading the $1 billion second phase development of the Darkhovin oilfield development to take output to 160,000 bpd from 50,000 bpd. Italian power utility Edison and NIOC signed a $107 million exploration contract in January 2008 for the Gulf Dayyer offshore block. * GERMANY - In 2006, Germany's ABB Lummus signed a $512 million contract with NIOC and a consortium of Iranian companies to develop the Bandar Abbas refinery. The group intends to raise gasoline production to 13 million liters per day from 4.8 million liters currently. * POLAND - Polish gas monopoly PGNiG (PGNI.WA) has signed a preliminary deal with Iran's Offshore Oil Company to cooperate on managing already-discovered gas reserves. * SPAIN - Repsol (REP.MC) had planned to participate with Shell in developing South Pars and building an LNG plant, but Shell pulled out last year. Iran had given a May 20 deadline for Shell and Repsol to clarify their involvement in the project. * SWITZERLAND - Swiss energy group EGL signed a 25-year gas purchase deal worth over $13 billion with Iran last year. * TURKEY - Turkey signed a preliminary deal in November 2008 for gas to be exported to Europe through Turkey and for Turkey to produce gas in the South Pars field. The investment would amount to $3.5 billion. * UNITED KINGDOM - Oil major Royal Dutch Shell (RDSa.L) pulled out of Phase 13 of the giant South Pars gas field last year but said it may yet join later development stages there. (Compiled by Simon Webb in Dubai, and Jijo Jacob and Carl Bagh, Bangalore Editorial Reference Unit; Editing by David Cutler and Keiron Henderson)* TURKEY - Turkey signed a preliminary deal in November 2008 for gas to be exported to Europe through Turkey and for Turkey to produce gas in the South Pars field. The investment would amount to $3.5 billion. * UNITED KINGDOM - Oil major Royal Dutch Shell (RDSa.L) pulled out of Phase 13 of the giant South Pars gas field last year but said it may yet join later development stages there. (Compiled by Simon Webb in Dubai, and Jijo Jacob and Carl Bagh, Bangalore Editorial Reference Unit; Editing by David Cutler and Keiron Henderson)
Oil Prices rising again Rising Oil Facts: Reasons Why Crude Oil Futures Prices Are Soaring: OVER SPECULATION Deep pocketed hedge funds who trade billions of dollars in commodities like a video game is a main driver behind the markets. Yes, there are fundamental reasons behind the current run in prices, but make no mistake that the hedge funds are a MAJOR source behind the over-zealous move in crude oil at this time. Maybe because they know that the US is about to enter a hard recession, so now is the time to run prices as high as possible to before the economy turns south. DOLLAR WEAKNESS The fall in the value of the dollar against other major currencies has helped drive buying across commodities as investors view dollar assets as relatively cheap. It has also reduced the purchasing power of OPEC's revenues and increased the purchasing power of some non-dollar consumers. OPEC oil ministers have noted that although prices are rising to record nominal levels, inflation and the dollar have softened the impact. The group's OPEC reference price in nominal terms was $74.18 in September, but was valued at $50.98 when adjusted for inflation and the weak dollar. Some analysts say investors have been using oil as a hedge against the weaker dollar. FED FUNDS Since the Federal Reserve cut U.S. interest rates in mid-August and central banks pumped billions of dollars into financial markets to ease a credit crunch, oil prices have surged 30 percent and gold has risen 20 percent. Investment flows from pension and hedge funds into commodities including oil have boomed, as has speculative trading. At the same time, the credit crunch has brought some other markets, notably the U.S. asset-backed commercial paper market, to a virtual standstill. In the United States, the size of the asset-backed commercial paper market has fallen for 11 consecutive weeks, to $883.7 billion this week from a peak of $1.17 trillion at the end of July, according to data from the Federal Reserve. In Europe, according to analysts at BNP Paribas, the market shrunk to $192 billion at the end of September from $297 billion at the end of July. Some of that money has found its way into energy and commodities. DEMAND While previous price spikes have been triggered by supply disruptions, demand from top consumers the United States and China is a driver of the current rally. Global demand growth has slowed after a surge in 2004 but is still rising and higher prices have so far had a very limited effect on economic growth. Analysts say the world is coping well with high nominal prices because, adjusted for exchange rates and inflation, they are lower than during previous price spikes and some economies have become less energy intensive. OPEC SUPPLY RESTRAINT The Organization of the Petroleum Exporting Countries, source of more than a third of the world's oil, started to reduce oil output in late 2006 to stem a fall in prices. Fewer OPEC barrels entering the market helped propel this year's rally and consumer nations led by the International Energy Agency for months urged OPEC to pump more oil. At a meeting last month, OPEC agreed to increase oil output by 500,000 barrels per day from Nov. 1. OPEC's heads of state summit in Riyadh next month may turn into a full-blown meeting to consider raising oil output, but few in the group believe there is much they can do to tame a market they say defies logic. NIGERIA Supply of crude from Nigeria, the world's eighth-largest oil exporter, has been cut since February 2006 because of militant attacks on the country's oil industry. Oil companies have detailed about 547,000 bpd of shut Nigerian production due to militant attacks and sabotage. IRAN Oil consumers are concerned about supply disruption from Iran, the world's fourth-biggest exporter, which is locked in a dispute with the West over its nuclear programme. Western governments suspect Iran is using its civilian nuclear programme as a cover to develop nuclear weapons. Iran denies this, saying it wants nuclear power to make electricity. On Oct 25, Washington designated Iran's Revolutionary Guard Corps a proliferater of weapons of mass destruction and its elite Qods force a supporter of terrorism. IRAQ Iraq is struggling to get its oil industry back on its feet after decades of wars, sanctions and underinvestment. Exports of Kirkuk crude from the country's north are sporadic as sabotage and technical problems have mostly idled the pipeline since the U.S.-led invasion of Iraq in March 2003, preventing exports returning to the pre-invasion rate. REFINERY BOTTLENECKS Refiners in the United States, the world's top gas guzzler, struggled with unexpected outages which drained inventories ahead of the summer, when motor fuel demand peaks. In the latest weekly figures from the U.S. government, issued on Oct. 24, distillate stocks and heating oil inventories fell and are below their levels of a year ago.
Enery Position Limits UPDATE: ICE Wants Regulators To Set Energy Position Limits (Updates with CME declining to comment) NEW YORK -(Dow Jones)- The two biggest U.S. commodity exchange operators now have dueling plans to cap speculative bets on energy futures, with IntercontinentalExchange Inc. (ICE) proposing Thursday that federal regulators take the lead in administering position limits. With few details emerging from the U.S. Commodity Futures Trading Commission on how it will enforce position limits, ICE and CME Group Inc. (CME) have this week stepped in to fill the void with plans of their own. CFTC Chairman Gary Gensler has said that the government should be responsible for setting and running position limits in energy, though the agency hasn't said what action it will take. ICE agrees that the CFTC should set limits that cover trading in a commodity across all markets, similar to how the agency regulates agricultural markets that have long-standing position limits. The CFTC should also be in charge of granting exemptions to limits for companies that need to purchase large numbers of futures contracts to manage their physical commodities business. "The CFTC has the experience, systems, and increasingly, the budget to administer this type of regime," ICE said in a statement, adding that the regulators are "uniquely able to determine compliance with limits and appropriateness of exemptions." The proposal is markedly different from one released by CME Group on Wednesday, which would have exchanges manage their own position limits, with the CFTC capping the size of bets made in the over-the-counter market. Limits would work as a percentage of open interest in a contract. ICE CEO Jeffrey Sprecher called the CME plan "anti-competitive," contending that it would "lock in incumbents" by allowing exchanges with bigger trading volume to set higher limits. CME owns the New York Mercantile Exchange, home to the light, sweet crude futures market, the most actively traded U.S. commodity contract. A CME spokeswoman declined to comment on ICE's statement.
Iran goes it alone Iran's President Mahmoud Ahmadinejad has ordered the replacement of the US dollar by the euro in the country's foreign exchange accounts. The September 12 edict was issued following a decision by the trustees of the country's foreign reserves, Mehr News Agency reported. Earlier, the Islamic Republic of Iran had announced that the euro would replace the greenback in the country's oil transactions. Iran has called on other OPEC members to ditch the sinking dollar in favor of the more credible euro. Following the switch, the interest rate for the facilities provided from the Foreign Exchange Reserves will be reduced from12 to 5 percent. Since being introduced by the European Union, the euro has gained popularity internationally and there are now more euros in circulation than the dollar. The move will also help decouple Iran from the US banking system.
What is next The Iranian Threat: The Bomb or the Euro? By Dr. Elias Akleh 03/24/05 "AMIN" - - Iran does not pose a threat to the United State because of its nuclear projects, its WMD, or its support to "terrorists organizations" as the American administration is claiming, but in its attempt to re-shape the global economical system by converting it from a petrodollar to a petroeuro system. Such conversion is looked upon as a flagrant declaration of economical war against the US that would flatten the revenues of the American corporations and eventually might cause an economic collapse. In June of 2004 Iran declared its intention of setting up an international oil exchange (a bourse) denominated in the Euro currency. Many oil-producing as well as oil-consuming countries had expressed their welcome to such petroeuro bourse. The Iranian reports had stated that this bourse may start its trade with the beginning of 2006. Naturally such an oil bourse would compete against London’s International Petroleum Exchange (IPE), as well as against the New York Mercantile Exchange (NYMEX), both owned by American corporations. Oil consuming countries have no choice but use the American Dollar to purchase their oil, since the Dollar has been so far the global standard monetary fund for oil exchange. This necessitates these countries to keep the Dollar in their central banks as their reserve fund, thus strengthening the American economy. But if Iran — followed by the other oil-producing countries — offered to accept the Euro as another choice for oil exchange the American economy would suffer a real crisis. We could witness this crisis at the end of 2005 and beginning of 2006 when oil investors would have the choice to pay $57 a barrel of oil at the American (NYMEX) and at London’s (IPE), or pay 37 Euros a barrel at the Iranian oil bourse. Such choice would reduce trade volumes at both the Dollar-dependent (NYMEX) and the (IPE). Many countries had studied the conversion from the ever weakening petrodollar to the gradually strengthening petroeuro system. The de-valuation of the Dollar was caused by the American economy shying away from manufacturing local products — except those of the military -, by outsourcing the American jobs to the cheaper third world countries and depending only on the general service sector, and by the huge cost of two major wars that are still going on. Foreign investors started withdrawing their money from the shaky American market causing further devaluation of the Dollar. The keen observer of the money market could have noticed that the devaluation of the American Dollar had started since November 2002, while the purchasing power of European Euro had crept upward to reach nowadays to $1.34. Compared to the Japanese Yen the Dollar had dropped from 104.45 to 103.90 yen. The British pound climbed another notch from $1.9122 to $1.9272. Economic reports published at the beginning of this month (March) had pointed towards the deep dive of the American economy and to the quick rise of the deficit up to $665.90 billion at the end of 2004. The worst is still to come. These numbers worried the international banks, who had sent some warnings to the Bush administration. In its economical war Iran is treading the same path Saddam Hussein had started when he, in 2000, converted all his reserve from the Dollar to the Euro, and demanded payments in Euro for Iraqi oil. Many economists then mocked Saddam because he had lost a lot of money in this conversion. Yet they were very surprised when he recuperated his losses within less than a year period due to the valuation of the Euro. The American administration became aware of the threat when central banks of many countries started keeping Euros along side of Dollars as their monetary reserve and as an exchange fund for oil (Russian and Chinese central banks in 2003). To avoid economical collapse the Bush administration hastened to invade and to destroy Iraq under false excuses to make it an example to any country who may contemplate dropping the Dollar, and to manipulate OPEC’s decisions by controlling the second largest oil resource. Iraqi oil sale was reverted back to the petrodollar standard. There is only one technical obstacle concerning the use of a euro-based oil exchange system, which is the lack of a euro-denominated oil pricing standard, or oil ‘marker’ as it is referred to in the industry. The three current oil markers are U.S. dollar denominated, which include the West Texas Intermediate crude (WTI), Norway Brent crude, and the UAE Dubai crude. Yet this did not stop Iran from requiring payments in the euro currency for its European and Asian oil exports since spring 2003. Iran’s determination in using the petroeuro is inviting in other countries such as Russia and Latin American countries, and even some Saudi investors especially after the Saudi/American relations have weakened lately. This determination had also invited an aggressive American political campaign using the same excuses used against Iraq: WMD in the form of nuclear bomb, support to "terrorist" Lebanese Hezbollah organization, and threat to the peace process in the Middle East. The question now is what would the American administration do? Would it invade Iran as it did Iraq? The American troops are knee-deep in the Iraqi swamp. The global community — except for Britain and Italy- is not offering any military relief to the US. Thus an American strike against Iran is very unlikely. Iran is not Iraq; it has a more robust military power. Iran has anti-ship missiles based in "Abu Mousa" island that controls the strait of Hermuz at the entrance of the Persian Gulf. Iran could easily close the strait thus blocking all naval traffic carrying gulf oil to the rest of the world causing a global oil crisis. The price of an oil barrel could reach up to $100. The US could not topple the regime by spreading chaos the same way it did to Mussadaq’s regime in 1953 since Iranians are aware of such a trick. Besides Iranians have a patriotic pride of what they call "their bomb". America has resorted to instigate and encourage its military bastard, Israel, to strike Iranian nuclear reactors the way it did to Iraq. Leaked reports had revealed that Israeli forces are training for such an attack expected to take place next June. Israel is afraid of an Iranian bomb. Such an "Islamic" bomb would threaten Israel’s military hegemony in the Middle East. The bomb would extract some Israeli concessions and would create an arm race that would gobble a lot of Israeli defense expenditure. Further more the bomb would force the US to enter into negotiations with nuclear Iran that may limit Israeli expanding ambitions. Iran had invested a lot of money and effort to obtain nuclear technology and would never abandon it as evident in its political rhetoric. Unlike Iraq Iran would not keep quiet of Israel strikes its nuclear facilities. Iran would retaliate aggressively which may lead to the destabilization of the whole region including Israel, Gulf States, Iraq, and even Afghanistan. Dr. Elias Akleh is an Arab writer of Palestinian descent, born in the town of Beit-Jala. Currently he lives in the US.
Another switch to Euro Indian state-run Mangalore Refinery and Petrochemicals Ltd has offered to pay in euros for spot purchase of Sudanese Nile Blend crude and traders said most sellers preferred the currency as Sudan faced US sanctions. "We have given this additional option to increase competition. It is based on the market feedback," MRPL Director of Finance L.K. Gupta told Reuters on Monday. The company issued an amendment on Friday to its latest tender, allowing euro payments. Mr Gupta did not elaborate, but a trade source said: "Market was not offering Nile Blend in MRPL's import tender because most of us need payments in euros for Nile Blend and MRPL was only making payments in dollars." The trader said MRPL had been regularly seeking Nile Blend, which suits its refinery, in its spot tenders but never bought the grade through spot tenders as it did not get good offers because of dollar-payment clause. Most sellers of Nile Blend crude prefer payments in euros because of the United States' sanctions on Sudan. The United States imposed economic sanctions on Sudan in 1997 and labeled it a "state sponsor of terrorism". Khartoum has been pushing for full normalization of relations with Washington and an end to more than a decade of US sanctions. MRPL, a subsidiary of state-run exploration firm Oil and Natural Gas Corp, runs a 194,000-bpd coastal refinery in the southern Indian state of Karnataka. ONGC frequently sells its share of Nile Blend crude in Greater Nile project to MRPL. In the current financial year, MRPL bought 10,000-12,000 bpd of ONGC's share of Nile Blend and it aims to buy 10,000 bpd in the next fiscal. ONGC has 25 per cent stake in Greater Nile project, China National Petroleum Corp (CNPC) owns a 40 per cent share and Malaysia's state oil company Petronas hold 30 per cent stake. Sudan's national oil company Sudapet owns 5 per cent.
Oil majors worried about this path Targeting ‘fossil energy subsidies’ It’s official, now. The Obama administration isn’t simply trying to raise federal revenue to pay for its economic recovery programs by taking away oil and gas tax breaks. It wants to eliminate “fossil energy subsidies” to fight global climate change, and it would like the rest of the world to join the effort. “Over the last few weeks, we have worked to build consensus on important new commitments to phase out fossil energy subsidies over time,” US Treasury Secretary Timothy F. Geithner said during a Sept. 24 press briefing at the G-20 conference in Pittsburgh. “And I can say today, based on the important work of countries around the table, we're seeing a lot of support for that proposal, and we think this will have a dramatic impact on our collective effort to reduce carbon emissions.” For example, he said that estimates by the Organization for Economic Cooperation and Development suggest that if all countries followed the G-20’s lead in agreeing to phase out fossil fuel energy subsidies over the medium term, this would reduce global greenhouse gas emissions would be 10% lower by 2050. Geithner called this “a very substantial down payment” on US President Barack H. Obama’s objective to reduce global emissions to 50% below 2005 levels by 2050. Cutting what the administration considers fossil fuel subsidies would not just reduce US vulnerability to future energy price shocks and substantially reduce air pollution, he continued. “Eliminating hundreds of billions of dollars spent on these subsidies would help promote faster growth and improve our capacity to use the taxpayers' resources more effectively for other priorities,” Geithner maintained. The Obama administration and Congress face many difficult choices if they decide to comply with this G-20 commitment, American Petroleum Institute President Jack N. Gerard warned on Sept. 25. ‟Above all else, [they] should not use this commitment as an excuse to raise energy taxes on American consumers and businesses,” he said. “Does the president really think it wise to eliminate tax provisions that encourage investment in technology and exploration and development and would likely constrict future energy supplies, raise energy costs and kill jobs?” The pledge to the G-20 also raises questions about the White House’s commitment to efforts such as the Low Income Home Energy Assistance Program, which helps ensure that economically disadvantaged citizens won’t be denied winter heat; the US Strategic Petroleum Reserve; and the Highway Trust fund, Gerard pointed out. “What America really needs is energy from all sources, including renewables and oil and gas, to fuel its economy and remain competitive in global markets,” he said. “According to the US Energy Information Administration, fossil fuels account for 83% of total domestic energy demand. As our nation attempts to stimulate an economic recovery, now is not the time to lay on new taxes that would stifle job creation and growth.”
Lower profits for US Oil Lobbyists have told me that the August congressional recess can be one of the most crucial periods in making important points to legislative staff members. There are so many issues affecting oil and gas in 2009 that it’s hard to pick one on which to focus, unless you’re an independent producer. Then it’s relatively easy: the Obama administration’s proposals to repeal what it considers tax breaks for the oil and gas industry, and what the industry considers vital incentives. There are signs of slow, but steady, progress. On Aug. 3, the Independent Petroleum Association of Mountain States reported that Colorado’s two US senators, Michael F. Bennet and Mark Udall (both of whom are Democrats), wrote Finance Committee Chairman Max Baucus (D-Mont.) that they oppose the White House’s tax proposals, which include repealing expensing of intangible drilling costs. IDCs are similar to costs which other manufacturing and production industries can expense under federal law, according to IPAMS President Marc W. Smith. “Without the IDC deduction, the domestic natural gas industry would further contract, and capitol which otherwise would be reinvested in American energy will be reduced by 30% to 50%. These tax increases will render many natural gas projects in the Rocky Mountain region uneconomic at today’s prices, and will have the perverse effect of destroying thousands of green jobs that already exist in the natural gas industry,” he explained. A new report from Energy Policy Research Foundation Inc. (EPRINC) looks not only at the proposed production tax changes, but also on the greenhouse gas emission reduction plan using a carbon cap-and-trade program which the House approved earlier this summer and the administration’s proposal to deny refiners a manufacturing cost exemption available to other industries. (The report can be found online at Do Higher Oil and Gas Taxes Pose a Threat to U.S. Energy Security? EPRINC.) EPRINC’s conclusions? “Using existing US government evaluations of the financial cost of imported oil, increased tax revenues forecasted from the removal of upstream production incentives will be offset through lost domestic production as a result of lower investment in domestic exploration and development. Much of the production loss occurs from the accelerated closure of marginal wells, which are particularly reliant on free cash flow to sustain operations, as a result of the repeal of percentage depletion. “The tax proposals will also lead to greater emissions of GHGs as domestic natural gas production is curtailed in favor of greater coal use in the generation of electricity, at least in the very near term. “Finally, recent reforms in corporate tax treatment to place US manufacturers on a level playing field with foreign manufacturers would be repealed for the petroleum sector only. These new taxes would assist foreign refiners in gaining greater market share of the domestic market. The share of the US gasoline market now claimed by foreign refiners has doubled over the last nine years and likely will continue to grow as refiners face higher costs from the loss of the manufacturers’ tax credit.” The National Stripper Well Association said on Aug. 12 that the US Energy Information Administration, the federal government’s independent energy analysis and forecasting service, predicted that the Obama administration’s tax changes, if enacted, will likely reduce future oil output by 1.32 million bbl a day (15.4%) and natural gas by 8.9% annually by the end of 2012. “By 2019, EIA predicts that restrictions and new taxes will have reduced the federal tax take from oil and gas production by more than $118 billion, or about four times the expected yield of the new taxes,” NSWA continued. “By 2030, EIA predicts these proposed policies will have the effect of lowering oil production in the United States by just over 3 million b/d (approximately 28%) and natural gas by 30%. Also, by 2030 EIA forecasts the cumulative reduction in federal tax take from the oil and natural gas industry will be more than $780 billion, under current administration policies.” One NSWA member, Arlene P. Snyder of Parish Oil Production Inc. in Newton, Ill., put the situation in stark terms: “If I had lost the oil depletion allowance during last fiscal year ending April 30, 2009, my company’s federal taxes would have increased by 170%, wiping out most year’s profit needed to reinvest in stimulating oil production on existing wells, retooling oilfield/fleet equipment and plans to drill for new oil reserves. Losing the depletion allowance would be a devastating blow to all stripper oil well operators, the ‘Mom and Pop’ small businesses of the oil and natural gas industry.”
Oil Giants and the recession Public debate is currently focusing on the banking sectors greed issues and the cause of the current recession. Please do not forget that OIl companies played an even greater role in this recession. Their greed also needs to be tempered. Go Obama. Don't get blocked by all the health issues.
Oil Regulations Commodities market regulation in the US seems to be moving towards higher capital requirements and bureaucratization with relatively little impact on prices in the long run, said Paul Horsnell, managing director and head of commodities research at Barclays Capital in London. However, he warned, “Expect the center of gravity of world oil trading to move further away from US markets.”
Stop buying petrol from Total TEHRAN, Oct 10 (Reuters) - Iran's state oil firm and Total (TOTF.PA) have resumed talks about the French energy company's participation in a major liquefied natural gas (LNG) project after a gap of several months, a news agency said on Saturday. The semi-official Mehr News Agency said a new round of negotiations had begun in Tehran, without specifying when it happened. "In the meeting between the two companies' officials, the French party once more announced its readiness to undertake the project," Mehr said. A Total spokeswoman declined to comment. In June, the official Iranian news agency IRNA said Tehran had signed a $4.7 billion contract with China National Petroleum Corporation (CNPC) to develop phase 11 of the South Pars gas field, replacing Total which it had accused of delays. "If interested, Total can cooperate with the Chinese company in the downstream sector of the project," Mehr on Saturday quoted Seiffollah Jashnsaz, head of the National Iranian Oil Company (NIOC), as saying. Total has a memorandum of understanding (MOU) with NIOC to develop Phase 11 but the project was overshadowed by haggling over contract terms. Total Chief Executive Christophe de Margerie said in July that its negotiations with Tehran on a multi-billion dollar contract to develop the gas field were at a standstill. Iran has the world's second largest gas reserves, almost 16 percent of the world's total, but currently has no major net exports partly because U.S. and U.N. sanctions have deterred investment by Western firms with expertise and technology. Iran is drawing interest from Indian and Chinese firms seen as less susceptible than many other companies to such pressure, but industry experts say it will be many years before Iran becomes a major gas exporter despite its resources. The South Pars reservoir is shared by Iran and Qatar. The Iranian part is divided into 24 phases. (Reporting by Hashem Kalantari; writing by Fredrik Dahl; editing by Andy Bruce)
Reliance Oil Industries has stopped buying Iran Crude Oil. They are concentrating on expanding in US refined petroleum markets and are scared of sanctions
Resolution passed in House of Representatives H.R. 3795, Over-the-Counter Derivatives Markets Act of 2009, ordered reported to the House, as amended, with a favorable recommendation by a record vote of 43 yeas and 26 nays. (FC- 49)
