Oil price soars on the back of natural disaster

Oil price soars on the back of natural disaster

Raise the price of gasoline up to $500.00 a gallon and get it over with. There is no need of spefications.Be done with it. It will come down some how or other when alternative fuel is discovered.

High prices here to stay...
:eek:
Experts Say High Prices of Oil Are Here to Stay
22 May 2008 - The continuing rise of oil prices on the world market is affecting everything from transportation to agriculture and manufacturing.

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Demand for oil is being primarily driven by expanding economies in China, India and other developing countries where fuel is needed for factories and transport. At the same time, a growing middle class in those nations is increasing the demand for automobiles, which, in turn, use more fuel. But a study released this week by Rice University’s Baker Institute for Public Policy in Houston shows that demand is also increasing in the United States, which already accounts for a third of the transportation fuel used worldwide and imports more than half of the petroleum it consumes.

One of the authors of the study, Kenneth Medlock, speaking to VOA, says talk of US energy independence is unrealistic, given the current level of demand. “We have to rely on imports because the oil that is available at lower cost is not domestic. Trying to move to a world in which we import absolutely no oil in a very short amount of time is going to cause the price of fuel to rise dramatically and that is certainly not the outcome that people want," he said.

The study on US Energy Policy and Transportation co-authored by Medlock and his colleague Amy Myers Jaffe calls for efforts to curb demand as well as increases in energy production, not just from oil, but from other sources, including wind, solar and biofuels. Medlock disputes the idea that the world is running out of oil, but he says the increasing cost of producing oil will make alternative energy more attractive in the years to come. “We’ll get there eventually because without a doubt oil is a finite resource and we will eventually get to a point where we choose not to consume it, but that will not necessarily be because we run out, but because the incremental barrel is going to be increasingly expensive to produce and other things will just look better," he said.

More [url:
http://www.voanews.com/english/2008-05-22-voa65.cfm[/url]

Shhh, don’t tell the speculators that...
:mad:
Direct hurricane hit could push oil to $150
Fri., May. 30, 2008 - 'There’s a lot of areas of infrastructure that can be disrupted'

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Meteorologists are predicting a busy hurricane season this year, and any direct hit on the Gulf of Mexico’s extensive oil and gas infrastructure could easily send already sky-high oil prices rocketing past $150 a barrel. But predicting whether, much less where a big storm will strike, is tricky business. Energy markets haven’t priced in a potential catastrophe, and won’t factor in a hurricane until a storm actually forms. The 2005 hurricane season was one of the most destructive in history. It sent oil prices soaring into the then-unfathomable $60s. Natural gas futures rose above $14 per 1,000 cubic feet, prices that haven’t been seen since.

But oil trades at double that amount today, and a turbulent summer in the Gulf could easily send prices well beyond the record $135 per barrel it reached last week. “If we get anything that disrupts Gulf production in a meaningful way ... I think it could easily push prices to the $150 level," said Brad Samples, an analyst at Summit Energy Services Inc. in Louisville, Ky. The Gulf is home to hundreds of oil and gas drilling platforms and pipelines which are typically shut down when a storm approaches. Hurricanes can damage platforms or scatter pipelines, and that can take months to repair.

Storms also disrupt tanker traffic and the Gulf Coast ports that receive the vast majority of the nation’s petroleum imports. The huge refineries that dot the coast grind to a halt when a hurricane approaches land, driving the price of gasoline and other petroleum products upward. “There’s a lot of areas of infrastructure that can be disrupted," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. The National Oceanic and Atmospheric Administration says the 2008 Atlantic hurricane season, which begins June 1, could be slightly busier than average, with a good chance of six to nine hurricanes forming. Two to five of those storms could be major, NOAA said.

More [url:
http://www.msnbc.msn.com/id/24895379/[/url]

Maybe they’ll start an oil purchasers cartel and run it like Wal-mart...
:cool:
Industrial nations vow to fight high oil
June 8, 2008: Energy ministers from 11 countries say they’ll increase efficiency and invest in new technologies.

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The world’s top industrialized nations and leading oil consumers pledged Sunday to fight skyrocketing energy prices by increasing efficiency and accelerating investment in new technologies, while urging producers to expand production. Energy ministers from the Group of Eight countries, joined by China, India and South Korea, voiced concerns over record oil prices and said both producers and consumers would benefit from greater market stability.

Ministers, meeting in the northern Japanese city of Aomori, focused Sunday on how they could diversify their energy sources to both control rising demand for oil and rein in emissions of greenhouse gases blamed for global warming. “We simply must increase the level and breadth of investment all around the world," said U.S. Energy Secretary Samuel Bodman. “That means promoting aggressive investment in renewable energy and other alternative energies technologies, as well as the development of tradition hydrocarbon resources."

The 11 nations, which account for 65% of the world’s energy consumption, grappled with oil prices that have hit record highs. Prices made a massive 8 percent gain Friday to $138.54 on the New York Mercantile Exchange. The G-8 countries - the United States, Russia, Japan, Germany, France, Italy, Canada and Britain - laid out ways of cutting their dependence on oil in a statement.

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See also:

Oil Traders Face New Regulation
June 9, 2008, Under pressure from Congress—and runaway oil prices—U.S. regulators are moving to exert far greater oversight

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The dramatic surge in oil prices—including a $16-per-barrel jump in just two days last week—has left Washington regulators scrambling to exert new oversight on futures trading in oil and other commodities. The U.S. regulatory agency’s abrupt shift toward more rigorous oversight in the past two weeks also represents a stark example of how the pinch from high gasoline prices has changed the political landscape and made energy traders prime suspects in congressional inquiries.

As recently as May 20, the U.S. commodities regulator, the Commodity Futures Trading Commission (CFTC), insisted at a Senate hearing that speculation was not causing the rapid spike in energy prices. The CFTC’s chief economist, Jeffrey Harris, testified that the agency found that speculation and manipulation are not causing energy prices to surge. He said that instead prices are being driven “by powerful economic fundamental forces and the laws of supply and demand." Nine days later, after further pressure from Congress, the agency announced steps aimed at more oversight of energy futures trading.

Among the measures (BusinessWeek.com, 5/30/08):

• A new information-sharing agreement with Britain’s commodities regulator, the Financial Services Authority (FSA), to gather information on large positions of the benchmark West Texas Intermediate (WTI) contract.

• A proposal to consider reclassifying investment banks such as Goldman Sachs (GS) and Morgan Stanley (MS) as speculators, which would subject them to trading limits from which they’re currently exempt.

• An investigation of the crude oil trading market dating to December, 2007. On May 30, The Wall Street Journal (NWS) reported that the CFTC has also expanded an investigation into allegations of short-term manipulation of crude oil prices through a price-reporting system overseen by Platts, the energy data unit of The McGraw-Hill Companies (MHP), which also owns BusinessWeek. The CFTC won’t confirm such a probe, and Platts has declined to comment.

[url=http://www.businessweek.com/bwdaily/dnflash/content/jun2008/db2008068_580706.htm:
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But they are the ones bidding up the price of a barrel of oil...
:rolleyes:
Don’t blame the oil 'speculators'
June 27, 2008: A campaign in Congress to punish traders for record oil prices reveals a fundamental misunderstanding of how futures markets work.

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“Make no mistake about it," U.S. Rep. Bart Stupak, D-Mich., said Monday while chairing a meeting of the House Energy and Commerce subcommittee on Oversight and Investigations. “Excessive speculation in commodity markets is having a devastating effect at the gas pump that is rippling through our entire economy."

Here’s a suggestion: The next time a Congressional committee wants to hold a hearing on how “speculators” are driving up oil prices, each committee member should first be required to demonstrate - preferably in their opening remarks - a basic understanding of the mechanics of futures trading. Even better, they should be required to explain in detail how it is that investors who never take delivery of a single barrel of crude - and thus never remove a drop of oil from the open market - are causing record high oil prices.

If there were such a requirement, I guarantee we’d never again see a circus like the one Stupak presided over Monday. “Do I think [Washington politicans:
understand the role of futures markets - how they facilitate price discovery and the transference of risk?" asks former U.S. Commodities Futures Trade Commission chief economist Gerald Gay. “No, they’re clueless - at least most of them."

[url=http://money.cnn.com/2008/06/27/news/economy/birger_oil_speculation.fortune/index.htm?section=money_mostpopular]Bad public policy[/url]