Oil Jumps on Surprise Supply Drop

[lonestarnot]

Oil Jumps on Surprise Supply Drop
By JOHN WILEN – 5 hours ago

NEW YORK (AP) — Oil surged Wednesday, rising a remarkable $5 a barrel to a new record over $104 after the government reported a surprise drop in crude oil stockpiles and OPEC held production levels steady.

Most analysts had expected the Energy Department's Energy Information Administration to report oil supplies rose last week for the eighth straight time. Instead, they fell by 3.1 million barrels.

In Vienna, meanwhile, the Organization of Petroleum Exporting Countries said it would hold production levels steady, at least for now.

http://ap.google.com/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB-tAD8V7G1L80

[TheCowsCameHome]

1. It's pretty obvious no one is watching the store.

Boy, are we screwed.

No matter who is in office the little guy gets the shaft. Again.

[Xipe Totec]

2. I'm shocked! Shocked, I tell you! n/t

[The_Casual_Observer]

3. Gasoline at $4.00 in So Cal.

[lonestarnot]

6. Wow, we didn't even have to wait for spring!

[Captain Angry]

4. Got a site in your bookmark list that details actual stockpile levels?

Something that shows whose stockpiles are being referred to by the article?

I'm still trying to find the article from a couple of weeks ago that talked about the tankers full of crude lining up at refineries since so many are offline.

As I understand it, if oil supply doubled tomorrow morning, oil/gas prices wouldn't change since it is useless until it's refined.

[lonestarnot]

5. No I do not. I've been asking, but nothing from anyone yet either.

Lo siento.

[Captain Angry]

7. Found it.

http://www.eia.doe.gov/

Spreadsheets, international data, etc.

[dweller]

8. let me guess ...

:think: ... no oil shortage?

demand was down over 12/07-01/08 from what i've read, and still the oil conglomerates made record profits, and the price went up. What? We used less so they raised the price to make up the difference?

Until the control is either wrested from their greedy paws, or else they are taxed on windfall profits, nothing will change.

Even OPEC recognizes the problem.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3211719#3211765

dp

[Captain Angry]

9. OPEC does not see a problem.

The very article that's been posted several times today shows OPEC saying that refining capacity is the problem, not access to oil.

Furthermore, it's speculation in the futures markets, and the flow of investment into commodities to escape the low returns on bonds and cash that has spiked the price of oil.

Yes, oil companies had record profit. There's a record number of people on the planet. India and China are seeing economic growth that lead to demand for refined oil products such as gasoline. If refining capacity is not sufficient, the supply of gasoline will create higher prices at the pump.

The refiners are able to adjust their capability to capitalize on this. The US government shouldn't be in the business of taxing a business for having a good year. It should be removing any pricing supports, subsidies and tax breaks given to these wildly profitable companies.

The solution is simple. Give a tax break to car companies that increase their FLEET average MPG by 50%. That would be fantastic incentive for a company to increase the efficiency of their vehicles, discontinue less efficient models, etc. This could be manifested in many ways. Tell the major car makers that the first car company to release a vehicle that costs $12000 with a 75mpg and a 5-star crash rating for all tests that they get an exclusive sale to all Federal agencies for the next 3 years. Guaranteed fleet rollover sales.

The car companies would fall over themselves for that one. And to make it more profitable for them, they need to work in scale. So if they can produce more of those vehicles, it reduces their internal cost per unit. Put those cars on the street, and tell OPEC to go have a nice day, we can produce enough of our own oil at that point.

[dweller]

10. then we're reading 2 different articles

the one i'm linking says the problem is 'mismanagement' pushing oil to higher prices, and " because crude supplies are plentiful and demand is expected to weaken in the second quarter."

Your solution is beneficial to those that could afford a new car (made by which manufacturer that would produce a $12K vehicle?) and does nothing for the rest of the millions that have vehicles they want to keep (or have to keep/payoff/can afford for now).

but as somone else pointed out once Alt energy vehicles take off, watch oil prices fall to record lows.

dp

[Hannah Bell]

14. I remember....

"The very article that's been posted several times today shows OPEC saying that refining capacity is the problem, not access to oil."


when the Cali power crisis was supposedly due to "lack of generating capacity," too.

[2Design]

11. Don't believe the BS - they are going for Record Profits and BFEE authorized the mission n/t

[CGowen]

12. What is the life expectation of the petrodollar? n/t

[CGowen]

13. OPEC Faults U.S. As Oil Hits New High

(CBS/AP) OPEC on Wednesday accused the U.S. of economic "mismanagement" it said is pushing oil prices to new record highs, rebuffing calls to boost output and laying the blame at the feet of the Bush administration.

Oil prices surged past $104 a barrel for the first time after the OPEC announcement and the release of a U.S. government report showing a surprise drop in crude oil stockpiles.

The 13-nation Organization of Petroleum Exporting Countries said it would maintain current production levels because crude supplies are plentiful and demand is expected to weaken in the second quarter.

OPEC President Chakib Khelil told reporters the global market is being affected by what he called "the mismanagement of the U.S. economy," and that America's problems were a key factor in the cartel's decision to hold off on any action.

"If the prices are high, definitely they are not due to a lack of crude. They are due to what's happening in the U.S.," Khelil said. "There is sufficient supply. There's plenty of oil there."

...


http://www.cbsnews.com/stories/2008/03/05/business/main3907823.shtml?source=mostpop_story




Unexpected draws on U.S. inventories drove oil over $105 in early trading, reports AFP. That comes a day after OPEC again brushed off pleas by President Bush and held output steady; for the cartel, a weak dollar is behind much of the recent price rise, in the NYT. (Video) “Can I control the speculation?” asks Qatar’s oil minister, in the WSJ (sub reqd).

...

http://blogs.wsj.com/environmentalcapital/2008/03/06/green-ink-another-day-another-105/?mod=googlenews_wsj

[Hannah Bell]

15. .

The Commodity Bubble, The Metals Manipulation, The Contagion Risk To Gold And The Threat Of The Great Hedge Fund Unwind To Spread Product

Speech given to Global Central Bankers at the World Bank Executive Forum - by Frank Veneroso


"In the first part of this paper on the “Commodity Bubble”, I make the case that, in real terms, we have had an unprecedented commodity bubble in this decade. This bubble has occurred because of unprecedented investment and speculation in commodities, largely by way of derivatives. The far more important engine of this bubble has been leveraged speculation by hedge funds....

If you take all the economies in the world, valuing GDP based on exchange rates, the overall global growth rate has not significantly changed since the mid 1970’s. And so the demand pressures on commodities should not have significantly changed either.

So if it is not a new era of supercycle demand growth and supply restraint, what has led to such a high amplitude and long duration bull market in commodities in this cycle. My answer is speculation – nothing more. And speculation on an unimaginable scale."