Uncertainty, volatility plague global oil markets

[lovuian]

http://feeds.bignewsnetwork.com/?sid=124da77b96ff2018

Uncertainty, volatility plague global oil markets
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Big News Network.com Monday 7th March, 2005 (UPI)

A surprising and strong rally in the New York oil market late Monday showed that while OPEC may insist the world is adequately supplied with crude, the sentiment among traders is that there is very little margin for error.

When Iran's OPEC representative told reporters Monday that the cartel would likely keep its export quotas intact when it meets later this month, the statement triggered a price retreat of an uneasily short duration.

"If we cut now, it will send the wrong signal to the market," said Hossein Kazempour Ardebili, who also predicted in Tehran that the OPEC ceiling of 27 million barrels per day would probably be extended when he and his colleagues meet in the Iranian capital on March 16.

The statement came after a bellicose weekend in which Iran hinted it was willing to use oil for leverage in its dispute with the West over its alleged nuclear weapons program and Venezuelan President Hugo Chavez warned the days of inexpensive crude were now over.

more...

The interesting statistic coming out this week is how much US reserves America really has???

[cliss]

1. I think prices can only go one direction: up

Hugo Chavez is pushing for price increases. Iran would like for prices to come up, as well. And they probably have to, because the Petrodollar is becoming less and less valuable as it goes down.

Saudi Arabia is probably the only member that's keeping a low profile, and vowing to "increase production until the spigot blows". All for their American addicts.

As far as US reserves: I don't think there is very much here. Certainly not more than a few weeks' worth (?). Just storage facilities in the Gulf of Mexico, I've read.

[nadinbrzezinski]

2. and the saudis will be buying ruskie weapons

new alliances aer being formed as we speak... I guess even them are taking PNAC seriously now

[megatherium]

7. We have a strategic petroleum reserve

which can hold 700 million barrels, and currently can replace oil imports for 53 days.

[NickB79]

8. Well, the conflict in Iraq has been raging for 2 yrs now

What makes you think we'd be done with Iran in less than 53 days?

Also, I was under the impression the SOR's are only half-full at this point, and they're still working to fill them entirely.

On edit: I forgot to ask: how much of those oil reserves will have to be used up on our fighters, bombers, and vehicles in a conflict with Iran? Those planes and tanks are awefully thirsty.

[LdyGuique]

3. I watched Nightline tonight which focused on rising oil prices

I'm surprised at how little the public seems to care about rising oil prices and how little our government is doing about it. In fact, my opinion is that the Bush Administration is exacerbating the issue with all of its sabre-rattling against two of the OPEC nations: Iran and Venezuela, and is currently occupying Iraq. OPEC nations are Saudi Arabia, Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, United Arab Emirates and Venezuela.

Speculation is that the price of gasoline will rise at least 25c/gal during March and will be at least $2.50/gal by Memorial Day. It will affect the economy at all levels, from the average consumer in what they pay at the pump, in inflationary rising prices of consumer goods, and in the prices of local taxing organizations, such as cities, counties, and states for their various fleets of vehicles. We are currently up 25% from a year ago and due to increase another 20%.

Iraq is barely producing any oil to export as pipeline after pipeline is damaged and black-market syphoning is ongoing. Iran is openly threatening the U.S. with a severe disruption of oil production and exporting if the U.S. follows through with bombing. They also control the Straits of Hormuz, where many of the oil tankers must traverse to ship oil from Saudi Arabia and Kuweit (see Map and article quoted below). Venezuela is actively finding other markets for their oil as the U.S. increases its level of arrogance and antagonism.

The Strait of Hormuz connects the Persian Gulf with the Arabian Sea and has been the focus of potential conflict between competing regional and international powers. The straits are strategically important and represents one of the nine major water chokepoints in the world, being only 50km wide at its shortest point. For this reason it is of great strategic importance, as it is the only sea route where oil from Kuwait, Iraq, Iran, Saudi Arabia, Bahrain, Qatar, as well as most of the United Arab Emirates can be transported from. Much of this oil is transported to Japan, Western Europe, and the United States who have a vital interest in securing free passage through this strait. The potential for conflict over these straits and the resources that traverse them are great. The anti-western regimes of Iran and Iraq oppose the United States presence within the Persian Gulf and the security support that the US provides for many of the Gulf states. If war were to break out in this region oil would certainly be used as a weapon, and the enviornmental consequences could be disastrous.

The Freepers are responding with their usual "we'll just kick their ass" mentality (http://www.freerepublic.com/focus/f-news/1355264/posts).

[screembloodymurder]

4. I now think WW3 is inevitable.

We want Syria for it's location and Iran for it's oil.

[bemildred]

5. I'm not fully convinced.

Maybe some more proxy wars to aggravate the imperial overstretch,
and economic war. It is the internal contradictions of US society
that will bring Bush down, getting in a big war would delay his
demise rather than accellerate it, so one can expect the smart
players to avoid being our "enemy" no matter what, to use our own
rhetoric against us.

Given the display of incompetence and disorganization in Iraq, the
sort of fear that drives governments to prepare for and carry out
a big pre-emptive war are not present. The threat posed by the
US military is much clearer than it was before the war. Hence one
see various leaders of smaller states now ignoring and even
challenging US dictates. You may be sure that is not done lightly.

It seems clear that Bush will have few allies if he does pick
another fight.

Edit: to put it bluntly, if he wants Syria, the big players may
well let him take it, then he would have both Iraq and Syria to
manage.

[cliss]

6. Nice post. And don't forget Iran.

I didn't realize Bush was in the adoption business.

I've been thinking about what the Neo-Cons have been trying for several months now. The PNAC is really all about world domination. Domination is all about power. Power comes from energy = oil.

If they can control the oil, they rule the world. It's as simple as that. I would like to create a Board Game, and call it "Oil Hegemony". It would be a map of the world, and the players would fight about Saudi Arabia, Venezuela, Kuwait, and so on.

But you can't just take the countries. You have to "pay" for them, in terms of leases, or pushing down the Muslim Masses, and brutally squashing dissent. It's not easy being a Hegemon.

Everybody would try to get their claws on Russia, because it's a "Bonus Deal" where you get a huge country in the bargain, with lots of goodies like mineral deposits, strategic location, etc.

Alll the players will toss the dice on "Gambling in Antarctica". As the Polar Ice caps melt, players will get to gamble on maybe finding Oil under the polar ice caps. It will be a fun game. LOTS of money to be made and lost on this one.

BACK TO THE PNAC

One night, as I was drifting off to sleep, as I was puzzling about the Dilemma the US finds itself in, it suddenly occurred to me why the PNAC will fail.

And it's not because they will run out of money, or bullets or the world will turn against them which they certainly are. All of those reasons are very real, and they are destroying this country as the Sands of the hourglass run low.

The REAL reason is because they are focused on consumption. That's the entire dilemma of this Oil Game. All they want to do is glom onto the oil. They forget that a country is only as good as its labor force. Natural resources are less important than a motivated, productive labor force. Japan is a very good example of that.

A nation's true wealth is its people. As Americans move further down in health, productivity and wealth, this will become only too apparent.

That was my Archimedes "Aha" moment.

[bemildred]

9. Right, it's the flat-earth US management style in the international arena.

And it truly does suck, it has failed every time it's been
tried because it is only really suitable for agrarian empires,
with a small ruling class and a big underclass, which is what
they long for, the old days of the inherent God-given right to
rule.

It is no accident that US decline is matched with the erosion of
the New Deal and the level of human investment here.

The Iraq occupation was a perfect example, they went at it exactly
like they would a corporate takeover, downsizing, belt-tightening,
asset mining, and all.