Mileage-minded Americans will have plenty of small cars from which to choose the next few years, but they’ll have “sticker shock” prices.
Automakers are raising prices to regain profits lost when sales of lucrative trucks and SUVs collapsed this year. They’ll camouflage some of the boosts with fancy, high-margin features such as navigation and leather seats. The idea: lure well-heeled, move-down buyers who want better mileage but won’t give up features.
The last time gasoline as a component of personal spending was as high was in September 1982, during an energy crisis triggered by the revolution in Iran, OPEC’s second-largest producer.
“Consumers are stressed,” said McGranahan. “Discretionary spending is down and they’re being crowded out with food and energy prices.”
We find ourselvs in an exposed situation, since we are neighbours with Russia, not a member of the EU and in alliance with the US. We will become even more in the spotlight, and must be prepared for the global conflict situaton which could arise, says Leiv Lunde, another co-author of the book to NRK.
I am getting increasingly frustrated by how little attention Americans are paying to this major crisis brewing in their backyard. So, I think maybe the mainstream news should start treating Cantarell the same way they do a hurricane. Maybe that would generate some attention!
After all, Cantarell’s decline has already cost us — 1.2 million barrels per day — the same amount we lost from Gustav.
There are problems in two other large oil fields, the Chicontepec Basin and Ku-MaloobZaap. These two fields make up 72% of Mexico’s non-Cantarell proven reserves. The fields differ significantly from Cantarell in terms of geology, potential productivity, distance from distribution systems, and technical requirements.
Today, cash-strapped Canadians take another Category Five fleecing as pump prices in the GTA fall by only 3.8 cents a litre to $1.259 for regular self-serve, when some analysts predicted a 7.9 cents-a-litre break, after gasoline futures fell yesterday with falling crude prices that wiped a whopping 450 points from Bay Street’s energy-sensitive TSX.
Chilean electric generators are not the only ones being hurt by the natural gas shortage in Argentina. The Argentine pipeline companies are also affected as the scarcity of natural gas has increased the near-term credit concerns of its two gas transportation companies: Transportadora de Gas del Norte S.A. (TGN) and Transportadora de Gas del Sur SA. (TGS).
Port Harcourt, Rivers State and its environs since Monday, September 1, had been experiencing fuel scarcity following strike embarked upon by tanker drivers.
A source close to the refinery disclosed to Business Day in Port Harcourt that the tanker drivers embarked on strike in protest of the persistent power outage in the refinery.
LUCKNOW: Angered with repeated power outages in their locality, residents of Telibagh blocked the Lucknow-Rae Bareli highway near the Sanjay Gandhi Post-graduate Institute of Medical Sciences (SGPGIMS), throwing traffic out of gear on Tuesday afternoon. It was not until the police intervened that the blockade was removed.
(Bloomberg) — China may raise retail electricity prices by 4.5 percent, the second increase this year, to help narrow losses at power producers and ease a nationwide shortage.
While I can understand Americans’ fears about fuel prices and availability, I have a harder time understanding why Iraqis — with their oases of crude oil reserves and untapped oilfields in the south and the north — have had to put up with high oil prices and severe shortages of gasoline, diesel and cooking gas.
After hearing Barack Obama’s speech from Denver on Thursday night, energy expert
Joe Shuster responds, “ If Obama thinks he will end US dependence on foreign oil in ten years, he better include nuclear in his energy plan, specifically fast neutron reactors.”
LONDON (AFP) – Oil prices fell on Wednesday as the US government decided to release crude stocks from its strategic reserve after Hurricane Gustav halted energy production in the Gulf of Mexico.
“The release of the oil will prevent any shortage and that will, of course, help calm the market,” said Victor Shum, an analyst with energy consultancy Purvin and Gertz.
… The United States announced late on Tuesday that it was releasing 250,000 barrels of oil from its strategic reserve to help cover lost production.
There was no oil production on Tuesday in the Gulf of Mexico region, where a quarter of US oil is normally produced, the US Department of the Interior said. Ninety-five percent of natural gas production was also offline.
So if investing is about acting on the best information you can get your hands on, where should you turn for oil intelligence? You might start by ignoring the investment banks.
Oil companies and OPEC seem to be a little more conservative and forthcoming, but then again they sure love $125 oil, so they’re not likely to come perfectly clean.
Tanker counters? See above.
How about your dog-eared economics textbook though? The one that says commodity prices inevitably move in cycles? Simply put, peak oil or not, the faster prices rise, the harder they’ll fall.
I was getting tired of repeating that crude oil should have never been at US$147 per barrel, and now that the mass-euphoria was gone (or was it mass-hysteria?) it wouldn’t be long before oil would fall through support at US$110, and after that US$100 would follow and not long thereafter we would see oil priced back in double digits – just like I have been saying for months now.
I do realise that for the most part of the past few months I, and my colleagues here at FNArena, have been a lone voice amidst a tsunami of reports about the new era for oil -essentially US$100-plus forever- intertwined with peak oil theories and other upbeat claims and predictions, none of which will stand the test of reality.
Take oil. Let’s say that, whatever the cause – peak oil, speculators or dysfunctional governments – the price of crude oil doubles in a short period of time. In this case, consumers must necessarily spend more at the pump and the energy component of the CPI rises. They must necessarily, however, spend less on other things and the “other things” component of the CPI falls. Category changes aside, these consumers spend the same amount of money.
The “average” cost of living doesn’t change. Prices simply do the job they are supposed to do – alerting consumers to shortages and advising conservation.
Want to know what the price of a barrel of oil will be in eight years?
Exactly $119.50 a barrel.
MOSCOW (Reuters) – Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz) said oil output at its Russian Sakhalin-1 project, shrinking after reaching a peak level, will decline less than expected this year and will continue falling in 2009.
Exxon raised its Sakhalin-1 output forecast to 9.2 million tonnes in 2008 (184,251 barrels per day) from the previously planned 7.9-8.2 million tonnes, a press officer from Exxon’s Moscow office said on Wednesday.
The new forecast represents a 17.9 percent decline from the peak production of 11.2 million tonnes reached in 2007.
On other boards I am reading, many are anticipating a huge jump in oil and gas prices next week. I do not know if that will happen, but I will offer the opinion that if it does not happen, or if it happens and prices quickly reverse lower, they will keep going a lot lower than most energy bulls think.
Short to intermediate term, it is highly likely that the slowing global economy will have far more effect on energy prices than peak oil.
Weakening economic indicators across Europe and North America might seem to have a dampening effect on demand for oil. But really, common sense refutes any such logic.
Because the economy is contracting, does that mean people will travel less? Or is it more likely that people will find themselves having to travel further to find scarcer jobs, and have to live in cheaper neighbourhoods far from their traditional centers of employment?
I think the second statement is closer to reality. And the chart above that predicts the continuing increase globally in fuel consumption tends to bear out this prophecy.
I think megaprojects analysis gives us the best insight on near-future oil supply levels. Some other observers prefer to to predict future supplies using the formulas of Dr. M. King Hubbert, which are based on original oil in place and decline rates. But Hubbert’s math was done before the current technologies for enhanced oil recovery were available. These new techniques and technologies change the timing of oil extraction over the life of a field resulting in more oil being produced more rapidly than could be done when Hubbert was writing. That puts Hubbert’s mathematical model into question, I believe, as a near term predictor of peak oil.
KUWAIT CITY (Xinhua)– A fire which broke out early Wednesday morning at Kuwait’s largest oil refinery, Kuwait National Petroleum Company (KNPC) said.
According to Kuwait news agency (KUNA) reported, citing the head of KNPC’s Public Relations Mohammad Al Ajmi, that the fire occurred during maintenance duty at one of the pipelines in Ahmadirefinery.
PRETORIA, South Africa (AP) — South Africa and Venezuela sealed a major oil deal Tuesday during a visit by Venezuela’s President Hugo Chavez, who touted it as an example of southern nations cooperating in a new strategic alliance.
As part of the agreement South Africa’s PetroSA would also gain access to Venezuela’s oil reserves.
“PetroSA should immediately go to Venezuela to start working with us to exploit our oil reserves,” he said.
In a paper published in a special geo-engineering edition of Philosophical Transactions of the Royal Society A, which is published online today, Prof Kevin Anderson and Dr Alice Bows say that by focusing on long-term emission targets, such as 50% by 2050, climate policy has essentially ignored the crucial importance of current emission trends and their impact on cumulative emissions.
They say that as a consequence, although countries should aim to reduce global emissions in line with a 2ºC target, adaptation policy must focus on climate change impacts associated with 4ºC or more.
GENEVA (AFP) – The United Nations Intergovernmental Panel on Climate Change (IPCC) said Tuesday it has re-elected chairman Rajendra Pachauri for a second term.
Pachauri has been head of the organisation since 2002 and oversaw its seminal assessment report in 2007 which gave graphic forecasts of the risks posed by global warming.
OTTAWA (Reuters) – A huge 19 square mile (55 square km) ice shelf in Canada’s northern Arctic broke away last month and the remaining shelves have shrunk at a “massive and disturbing” rate, the latest sign of accelerating climate change in the remote region, scientists said on Tuesday.
They said the Markham Ice Shelf, one of just five remaining ice shelves in the Canadian Arctic, split away from Ellesmere Island in early August. They also said two large chunks totaling 47 square miles had broken off the nearby Serson Ice Shelf, reducing it in size by 60 percent.
“The changes … were massive and disturbing,” said Warwick Vincent, director of the Centre for Northern Studies at Laval University in Quebec.
Mueller said the total amount of ice lost from the shelves along Ellesmere Island this summer totaled 83 square miles — more than three times the area of Manhattan island.
The figure is more than 10 times the amount of ice shelf cover that scientists estimated on July 30 would vanish from around the island this summer.