Tuesday, May 20, 2008



“One of the biggest challenges our country faces is our addiction to oil.”[N] Oil is up by almost 30 per cent this year alone. That's not the fault of greedy energy companies, or that other current favorite, unscrupulous speculators. It is a simple fact of economic life in a world economy that is, in effect, experiencing a new industrial revolution among half its population.[T2] ________________________
GOOD MORNING FLINT! BY Terry Bankert 5/21/08
You are invited to join me at Face Book http://www.facebook.com/people/Terry_Bankert/645845362 ___________________________
Full article at http://goodmorningflint.blogspot.com/
Flint Talk http://flinttalk.com/viewtopic.php?p=28887#28887 _________________________
BLOGGING FOR MICHIGAN http://bloggingformichigan.com/
Great information from caring people in Michigan USA

REFLECTIONS;Watching our economic decline reminds me of watching the decline of a parent. You don’t notice many of the little adjustments made then one day the end is at hand. I feel the same way about our middle class. Possibly its going away. We do not notice the little adjustment but one day the end is near, gas is $10 a gallon, food cost quadrupled, we cannot afford houses, our kids cannot afford an education, the rich are richer and the poor are poorer and the poor are now a larger group because we are in it. Its happening ....unless we act united as a country with strong leadership.,kiss your life style good bye. Will you be able to explain to your grandchildren why you did nothing to protest what is happening, today. Count me in for the battle how about you.? [trb]

HAPPY BIRTHDAY TO YOU, HAPP..... Saudi Arabia celebrates 75 years of its national oil company in era of record energy prices[i] Saudi Arabia on Tuesday marked the 75th anniversary of its national oil company, once a joint operation with the Americans, but gave no sign of acquiescing to a U.S. request to increase its oil output.[I]

OIL TO HIT $150 BARREL Oil today rose to a new high of $129 a barrel and prices are set to hit $150 this year as concern grew over Opec’s consistent refusal to lift supplies to counter growing demand. [t] Boone Pickens, a hedge fund manager, said today that oil will reach $150 a barrel in 2008, echoing a forecast released by Goldman Sachs last week that predicted prices will hit $141 in the second half of the year. [t]

SO SWEET BUT GOES DOWN SO BITTER In New York, the price of light sweet crude for June delivery touched $129.31 per barrel before falling back to $128.95. In London, Brent crude also reached a new record at $127.49. [t]Credit Suisse increased its forecast for US crude in 2008 from $91 a barrel to $120 while Societe Generale also raised its expectations for 2008 by $14 a barrel to $115. [t]

A MONOPOLY WILL NOT RAISE PRODUCTION, NOW YOU CAN’T AFFORD TO DRIVE? It emerged yesterday that Opec, the 13 country cartel that produces 40 per cent of the world’s oil, would not increase production prior to a meeting in September despite rising demand for fuel, especially from crisis hit regions such as China. [t] Last week, Saudi Arabia, a key member of Opec, pledged to increase oil production by 300,000 barrels a day following a plea to raise supply by US President, George W. Bush.[t] Oil prices are heading to almost $140 a barrel in the next eight years, according to futures contracts on the New York Mercantile Exchange, on concern that growth in supply may fail to keep pace with rising demand. [b]

$200 A BARREL, YOU WILL WALK TO WORK OR RIDE A HORSE. Arjun N. Murti remembers the pain of the oil shocks of the 1970s. But he is bracing for something far worse now: He foresees a “super spike” — a price surge that will soon drive crude oil to $200 a barrel.[N]

THE FREE MARKET SUPPLY AND DEMAND MODELS DO NOT WORK WITH AN UNREGULATED MONOPOLY. It is a staple of all political debate in the US now that the American dependence on oil has led to staggeringly bad policy for decades towards the big oil producers. It has forced the US into bed with some unsavoury characters and has been the constant factor behind repeated and often baleful US interventions in the Middle East. [T2]

BUSH WENT BEGGING, ENDED UP JUST____IN THE WIND. In economic terms, there's a not very polite term for what the President was doing which describes the futility and discomfort of performing a certain bodily function into a countervailing breeze. [t2]

THE FINGER IS A POLITICAL GESTURE But Mr Bush - an oilman after oil - knows this, too. His efforts were more of a political gesture than a meaningful policy initiative. [t2] In political terms, inexorably rising oil prices are starting to generate something approaching panic in America. The Republicans, already battered by the weak economy and the seemingly intractable Iraq war, are ripe targets for yet more opprobrium for failing to rein-in oil companies as they heartlessly exploit the poor Americans who find themselves unable to drive their five-litre engined cars very far this summer. [t2]

THEY JUST CANNOT BE TOO RICH...... Saudi Arabia announced yesterday that current oil production was enough to meet market requirements and that producing countries could increase capacity if there were "actual additional" energy needs[i]Al-Naimi briefed the ministers at the meeting on the "kingdom's view that the currently produced quantities meet all needs of the market and that the production capacity can meet any real additional energy needs," the statement said, according to the official press agency.[I]

WE SET THE PRICES WE GET THE PROFIT However, Chakib Khelil, president of Opec, said he did not expect output to be increased, adding that "current prices are not based on supply and demand." Oil prices have surged by more than a quarter since the start of 2008, when they struck $100 a barrel for the first time. [t]

INFLATION ...HOW UGLY CAN IT GET.... Rising oil prices and the subsequent rise in household energy bills have contributed to rising inflation which is currently 3 per cent, above the Government's 2 per cent target, and are set to increase further. [t] In the US, concern about inflation escalated when it emerged that producer prices, excluding food and fuel, rose at the fastest rate in 17 years, sending the Dow Jones industrial average plunging by 180.7 points to 12,847.5. [t]

SHORT TERM WE NEED NEW OIL SOURCE, LONG TERM WE NEED NEW ALTERNATIVE SOURCES OF ENERGY, OR INVADE THE OIL PRODUCING COUNTRIES, OR BOTH, WHAT DO YOU SUGGEST? Oil giants such as Exxon Mobil Corp., Royal Dutch Shell Plc, BP Plc, Chevron Corp., Total SA and ConocoPhillips will spend a record $98.7 billion this year on exploration and production, more than quadruple the amount eight years ago. The supplies they tap from non-OPEC countries will only meet about 20 percent of world demand growth over the next four years. [B] The struggle to find oil coincides with a boom in demand from places like China and the Middle East, where it will rise 4.9 percent this year, making up for a drop in demand from North America and Europe, the International Energy Agency said in a report May 13. It cut its forecast for global demand for a fourth month. [B] Mr. Murti, who has a bit of a green streak, is not bothered much by the prospect of even higher oil prices, figuring it might finally prompt America to become more energy efficient.[n]

ECONOMIST MAKE LAWYERS LOOK GOOD Mr. Murti falls into the camp of oil analysts who believe that supply is likely to remain tight because of geopolitical factors. These analysts predict higher prices because production is declining in non-OPEC countries like Britain, Norway and Mexico. The analysts who predict lower prices say there are supplies of oil that the bullish analysts are missing. “This year will be a year in which supply will be put into the market by stealth by OPEC and by countries we call black-hole countries,” said Edward L. Morse, chief energy economist at Lehman Brothers. China is one example, he said. [N] But while oil and gas prices have been rising for a while now, Americans have only just begun to reduce gasoline consumption, so their efforts to conserve have not dragged down oil prices. [N] “The fact that the U.S. gasoline demand can be down and that the U.S. gasoline consumer is no longer driving world oil prices is a monumental event,” Mr. Murti says. He spends most of his time talking to money managers and analysts, many of whom keep asking him if oil prices will stay high if speculators abandon the market, and says he applauds investors for driving up oil prices, since that will spur investment in alternative sources of energy. [N] High prices, he says, “send a message to consumers that you should try your best to buy fuel-efficient cars or otherwise conserve on energy.” Washington should create tax incentives to encourage people to buy hybrid cars and develop more nuclear energy, he said. [N] Of course, if lawmakers heed his advice, oil analysts like him might one day be a thing of the past. That’s fine with Mr. Murti. [N]

WE WILL SHRINK EVERY DAY "Another day, another record crude oil price. It's like that movie "Groundhog Day," in which the same thing keeps happening over and over again to Bill Murray. [I] "Doesn't it seem like every day we wake up lately the news is blasting about record energy prices and a weaker dollar? So where will it end, and how high can prices go? [I] "... I think the answers are that crude can and will go much higher and that this summer could be an extremely painful reality check for U.S. consumers, myself included." [I] Kerr says his "near-term target" for oil is $140.[I] Core producer prices rose a higher-than-expected 0.4 per cent in April, or 3 per cent compared to last year, the fastest rise since 1991. [t]


Posted here by Terry Bankert ...
(If you like this article please forward to your friends, if not just keep it to yourself.)

Family Mediation and Divorce Practice. http://attorneybankert.com/
Join my political party of preference, http://www.michigandems.com/join.html
Join me in creating a new voice in The Michigan Democratic Party, become a Precinct Delegate. You are invited to join me at Face Book http://www.facebook.com/people/Terry_Bankert/645845362 54507

—where did this stuff come from—
[t] Times online http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3970458.ece [b] Bloomberg http://www.bloomberg.com/apps/news?pid=20601087&sid=a79UU6p.il.s&refer=home
[H] International Herald Tribune http://www.iht.com/articles/ap/2008/05/20/africa/ME-GEN-Saudi-Oil.php
[w] The Wall Street Journal http://www.marketwatch.com/news/story/crude-record-one-oil-bull/story.aspx?guid=%7B4E33DCBA-5DA9-43B6-8C52-8A6FE7D273B8%7D&dist=msr_21
[a] Arab News http://www.arabnews.com/?page=1&section=0&article=110055&d=20&m=5&y=2008&pix=kingdom.jpg&category=Kingdom [t2] Times OnLine http://business.timesonline.co.uk/tol/business/columnists/article3964339.ece
[TRB] Comments of Terry Bankert to include CAP headlines http://attorneybankert.com/
[N] The New York Times http://www.nytimes.com/2008/05/21/business/21oil.html?hp

Sphere: Related Content

No comments: