OPEC Cuts Thwarted as Brazil, Russia Grab U.S. Market

[ben_jenne]

Source: Bloomberg

By Mark Shenk

April 14 (Bloomberg) -- As OPEC nations make their biggest oil production cuts on record, Brazil, Russia and the U.S. are pumping more, sending crude back below $50 a barrel as demand slows.

U.S. imports from the Organization of Petroleum Exporting Countries fell 818,000 barrels a day, or 14 percent, to 5.02 million in January from a year earlier, according to the latest monthly report from the Energy Department. At the same time, imports from Brazil more than doubled to 397,000 and Russia’s increased almost 10-fold to 157,000, a trend that continued in February and March, according to data from each country.

While the median forecast in a Bloomberg News survey of 32 analysts shows crude in New York averaging $61 a barrel in the fourth quarter, up from the second-quarter’s estimate of $50, traders are increasing bets on a decline. The fastest-growing options contract on the New York Mercantile Exchange is for prices to fall below $40 a barrel by May 14.

“OPEC has done a good job keeping oil in the $50 area but they will have to cut substantially more, maybe more than they are capable of, if they want higher prices,” said John Kilduff, senior vice president of energy at MF Global Inc. in New York. “You are going to hear greater calls for non-OPEC producers to cooperate and make cuts.”



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aiSCDyK4CWmI&refer=home

---

How about that for a big FU to those F'ing Pirates?

[WillParkinson]

1. And yet...

Gas prices continue to go up. Go figure.

[pampango]

5. At least since December, the price of oil has increase 46% ($33.87 to $49.58) while gas

has increased 38% ($1.65 to $2.032). That's using the dates and information in the link in the OP. If you choose other starting and ending dates I'm sure the figures would differ.

"On December 21, 2008, oil was trading at $33.87 a barrel, less than one fourth of the peak price reached four months earlier. Prices did not rebound once 2009 started. Instead, after initially climbing above $48, prices descended by mid-February to below $34..."

http://en.wikipedia.org/wiki/Price_of_petroleum

As of December 21, 2008, the United States average price of self-serve regular unleaded gasoline was $1.65/gal.

According to national figures from the US Department of Energy, in March 2007 52% of the cost of gasoline went to pay for crude oil, 24% for refining, 15% to taxes, and 9% for distribution and marketing. By April 2008, these had changed to 72.7% for crude oil, 10% for refining, 11% to taxes, and 6% for distribution and marketing.

http://en.wikipedia.org/wiki/Price_of_Gas

As of April 14, 2009, the United States average price of self-serve regular unleaded gasoline was $2.032/gal.

http://www.gasbuddy.com/

[southern_dem]

6. The recent bump up was due to

the switch from winter blend to summer. The summer formula costs slightly more to make.

[tomm2thumbs]

2. record profits for oil companies - have been keeping mighty quiet lately

I guess they figure if they move, they'll be come a target along with Wall Street and the rest -

[groundloop]

3. Time to shut a couple of refineries for "maintenance"

That'll create a fake shortage and drive up prices.

[happyslug]

10. And it is the time of the year such maintenance is done.

We ar now in the traditional high price time for gasoline. That is the time when refineries switch from making home heating fuel for winter use to gasoline for summer driving, The Price traditionally peaks around Memorial Day, then declines all summer. Thus the recent price increase may just be a product of what happens normally.

Side note: while the US claims its inflation rate is below 10%, that is more an affect of how inflation is calculated today as compared to how it was calculated pre 1990s. Prior to Clinton's Administration (And while the new rules on how to Calculate Inflation came into use under Clinton, they had been written and implemented under Bush I administration) Inflation reflected the increase in price of a group of item people have a tendency to buy. In the 1980s right wing economist said this tended to increase the inflation rates to much for some of the goods produced more value then the items they had replaced (Computers are the classic example, a mini-Computer in 2000 had more value then the computer it replaced from 1990 do to the huge increase in computer technology between 1990 and 2000 and thus you were getting more for the buck in 2000 then 1990 for the same item. Other electronics had similar jumps in performance over the last 30-40 years but the Consumer Price Index treated the electronics of today as just replacements for electronics of the 1970s and 1980s. While there was some basis for this treatment, most people viewed the difference as minor, so what if you can run the latest video games only on the latest computer, you could do the same in 1970. What was hot in 1970 is old hat today, but what people enjoyed, using the latest technology, is the same. Yes I am going far adrift in this thread, but to understand what happened in 1992-1993 I have to give you the above history.

Anyway, the change in inflation calculation has affected how inflation is calculated today. Some people, using the methods of the 1970s, says we are already in double digits inflation, the worse since Carter (And have been since Bush was President). This would also drive up the price of Gasoline since OPEC and Russia buy most of what their import from Euro countries but sell their oil in Dollars. Thus part of the increase in the price of oil may just be inflation.

[ddss75]

4. WTF!!

I thought that when Obama and his crew got into office, things would change in this department. This was one of his tent pole issues against the republicans. He needs to have some balls like Truman and call out some of these companies. Change you can believe in indeed.

[woundedkarma]

7. LOLOLOLOLOLOLOLOLOL

For some reason I find this hillarious. If the prices had not stayed the same/gotten higher lately it would be even more humorous. If it were anyone else other than Russia taking advantage of OPEC's greed I could really enjoy this story. :>

[safeinOhio]

8. The price is set by

what the "market will bear". Free markets, 101.

[dipsydoodle]

9. Is a thwart

worse than a poke in the eye with sharp stick. :shrug: