Wed Jul 26, 2006 8:23 pm Post subject: BOONE PICKENS PREDICTS OIL PRICE OF$80/BARREL
Sept. 11 (Bloomberg) -- Crude oil rose to a record close of $78.23 a barrel in New York on speculation that OPEC's agreement to increase production by 500,000 barrels a day will be insufficient to meet strengthening demand.
Oil price tops $80 a barrel
Globe and Mail Update
September 12, 2007 at 5:15 PM EDT
Oil prices topped $80 (U.S.) for the first time Wednesday on concern about falling inventories and as a production increase from OPEC failed to calm markets about supplies.
Light, sweet crude for October delivery rose as high as $80.18 on the New York Mercantile Exchange, the highest level since record-keeping began in 1983. The price slid slightly to close the day at $79.91, up $1.68.
The jump spells good news for Canadian oil producers and energy investors, though it may affect the prices consumers pay at the pumps. Some say prices may hit the $85-mark in the coming months after Wednesday's drop in inventories showed surprisingly robust U.S. demand.
"There's no sign of stopping," said Phil Flynn, an energy analyst at Alaron Trading in Chicago.
Get ready for $125 oil: PickensMr. Pickens' hedge fund lost over 20 per cent in the first three months of 2008 on a bet that oil prices would fall.
Mr. Pickens said his fund is now looking for oil and natural gas prices to rise.
"The position is long, not short," he told reporters. "I covered the short position - it was a mistake on my part."
Opec warns oil could reach $200
Opec, the oil producing cartel, has warned that the price of crude could keep rising to reach $200 a barrel.
Opec president Chakib Khelil blamed the falling value of the US dollar, which makes other assets, including oil, more attractive for foreign investors.
His comments came as oil prices hit a fresh high, just below $120 a barrel.
Prices were lifted by a strike at a UK refinery that disrupted North Sea production, and supply problems in Nigeria due to pipeline attacks.
BP shut down a key North Sea pipeline at the weekend after staff walked out of the Grangemouth refinery in Scotland in a two-day strike over pensions.
Providing a third of UK oil output, the closure of the Forties pipeline has raised fears about supply shortages.
US light crude hit a high of $119.93 a barrel before edging down to finish at $118.79.
In doing so, it passed the previous record mark of $119.90 a barrel achieved on Friday.
In London, Brent crude ended at $116.74 a barrel after earlier rising to a peak of $117.51 a barrel on Monday.
The BP-run pipeline from the Forties oil fields in the North Sea relies on steam and electricity from the Ineos refinery at Grangemouth.
Quote:FORTIES OIL PIPELINE
The Forties pipeline system (FPS) carries crude oil from the Forties oil fields in the North Sea
After making landfall at Cruden Bay the oil travels to the Kinneil terminal at Grangemouth
At Kinneil it is stabilised and gas processing takes place
The Kinneil terminal uses electricity and steam from the nearby Grangemouth refinery to operate
Grangemouth's closure has caused up to 70 platforms in the North Sea to either shut down or reduce production of oil, resulting in the loss of 700,000 barrels of oil a day.
Although BP has said it can re-open the pipeline within 24 hours of the strike's end on Tuesday, it will take weeks for the refinery to return to full capacity.
"It will affect supplies from the North Sea and that has a potentially significant impact," said David Moore, a commodity strategist with the Commonwealth Bank of Australia.
The trouble at Grangemouth is the latest spur to an already febrile oil market which has seen prices rise nearly 25% this year.
Regular attacks on oil facilities in Nigeria, the weak US dollar and general concerns about the ability of supply to meet global demand have underpinned the market this year.
Oil producers' body Opec has shown itself disinclined to raise quotas to curb rising prices.
The dollar's decline has also made dollar-denominated assets such as oil and other commodities relatively cheap for some investors.
"We have got a confluence of a number of events that have really disrupted crude oil supply and that's what's driving oil to a new record," said Victor Shum, from energy consultants Purvin and Gertz.
Story from BBC NEWS:
Published: 2008/04/28 21:10:29 GMT
© BBC MMVIII
Record oil prices are creating a $1-trillion (U.S.) gusher of revenues into the treasuries of OPEC, and the wealthy Arab states of the Persian Gulf region are using their petro-profits to transform their economies into global powerhouses.
The 13 members of the Organization of Petroleum Exporting Countries earned a record $674-billion (U.S.) in export revenues last year, with four Gulf states accounting for half that income, the U.S. Energy Information Administration (EIA) said Wednesday.
OPEC collectively accounts for more than a third of the world's oil production and the lion's share of the world's capacity to meet rising demand.
For 2008, the cartel will see its revenue jump 57 per cent to $1-trillion, based on a new forecast of an average price of $110 (U.S.) a barrel, the EIA said. That windfall is the equivalent of adding the entire production of India, the world's 12th-largest economy, to OPEC's coffers, and the EIA sees little decline in it for the following year. In fact, many analyst expect prices to be even higher than the government agency's forecast.
Despite weakening demand and growing U.S. inventories, crude prices continued to defy gravity Wednesday. On the New York Mercantile Exchange, they settled at a record $123.53 (U.S.) a barrel, then rose to $123.93 in after-hours trading.
Analysts at Goldman Sachs Group Inc. have said crude prices could spike to $150 (U.S.) a barrel this year, and $200 (U.S.) in 2009. The global tsunami of petro-dollars amounts to the "greatest transfer of wealth in the history of capitalism," Goldman analysts said in a report recently.
U.S. President George W. Bush is scheduled to visit Saudi Arabia next week and is expected, for the second time this year, to publicly ask the Saudis to pump more oil in order to ease the burden on a damaged U.S. economy. Few analysts expect the No. 1 producer to comply.
David Kirsch, an analyst with PFC Energy Group, said OPEC's market leaders - notably Saudi Arabia, Kuwait and the United Arab Emirates - are now maintaining high prices in order to finance their ambitious development plans.
"We used to speak about [price] hawks and doves in OPEC," Mr. Kirsch said. "Now, there are no doves."
Even within OPEC, the riches are unevenly distributed, especially based on the population that the revenues support. Kuwait's $55-billion (U.S.) in revenues last year amounted to $21,858 a person, while Iran's $57-billion generated only $875 per capita, the EIA said.
The Gulf countries are using their booming petro-wealth to reinvest in oil and gas, and to diversify into petroleum-based industries such as refining, chemicals and fertilizers.
But they are also financing less traditional investments, like the world's tallest office building in Dubai, a city powered by renewable energy in Abu Dhabi, and new tourist developments in Saudi Arabia.
And they are building massive overseas investment funds that are recycling the oil money into Western economies, notably Kuwait Investment Authority's purchase of a $3-billion (U.S.) stake in Citigroup Inc. and $2-billion share in Merrill Lynch & Co. Inc. And late last year, the Abu Dhabi Investment Authority invested $7.5-billion in Citigroup Inc.
That recycling of petro-dollars is widely seen as a benefit for the world economy, given the shift in financial power to commodity-rich countries and away from consumer nations. However, the OPEC countries face growing pressure to ensure their state-controlled funds play by accepted Western rules for governance and transparency.
"We're into uncharted territory with the kind of financial flows that are going into a small set of countries," said David Pumphrey, a senior fellow at the Center for Strategic and International Studies in Washington.
"We're seeing a rebalance of the world's players and they will be playing a different role in the future, so the established players are going to have to make space for them to participate."
While OPEC was reaping riches, the U.S. - the world's largest oil consumer - posted a $331-billion deficit in crude oil trade last year, roughly equivalent to the revenues posted by the four Gulf state exporters. And that shortfall will only grow with the sharp runup in prices this year.
Canada, which is the largest source of U.S. imported oil, is also benefiting from the stunning price increase, though the windfall is concentrated in producing regions in the West and on the East Coast.
The Dubai miracle
Globe and Mail Update
May 26, 2008 at 6:00 AM EDT
The view as the sun rises over Dubai from the 42nd floor of the Jumeirah Hotel makes it hard to believe that, less than four decades ago, only a poor fishing village sat beside the small salt water inlet known as Dubai "Creek."
Tower after futuristic tower rises from the desert sand. Workers atop the world's tallest structure seem no larger than ants as they push upward to the Burj Dubai's 800-metre goal. Beyond, rising out of the Arabian Sea stands the Burj Al Arab, the world's most costly hotel, and nearby lies an enormous, man-made palm-tree-shaped island with hundreds of multimillion-dollar villas and luxury hotels lining its fronds.
We travel to the meeting on streets teeming with the latest and most luxurious autos. Sheik Mohammed bin Rashid al-Maktoum, tribal leader of the House of al-Falasi and ruler of Dubai enters the ornate room. He is credited with transforming this city-state into the Middle East's key entrée-port, business hub and tourist destination. While quietly gracious in his greeting, his reputation for over-the-top projects, such as the world's only indoor ski hill, creates a larger-than-life presence. This is the man whose vision of a tax-free, hedonistic oasis in a region where secular religious and cultural freedoms are rare attracted billions of development dollars.
Continuous construction lines the two-hour drive from Dubai to Abu Dhabi, the capital of the seven member United Arab Emirates (UAE). It is also the wealthiest. The head of the Tourism Development Authority briefs us on a $100-billion sea-front tourism and foreign residential development. It will include a branch of France's Louvre museum and a Ferrari World theme park built around a 1,000-yacht marina, complete with a lock system to raise the water level so those on the yachts can get a good view of Grand Prix races. Several new golf courses are to be built, along with costly new natural gas powered desalination plants to water them.
Next, we meet the highly professional managers of the world's biggest Sovereign Wealth Fund, the $875-billion (U.S.) Abu Dhabi Investment Authority. ADIA recently made headlines by injecting $7.3-billion to help rescue Citigroup. Amazingly, at current oil prices, Abu Dhabi's production of 2.7 million barrels a day will see these funds replaced in just three weeks. While Abu Dhabi's population is 1.6 million, 80 per cent are foreign workers, leaving just over 300,000 citizens. This means ADIA's assets alone amount to $3-million a citizen - and that doesn't include the much larger value of 10 per cent of the world's proven oil reserves.
Crown Prince Sheik Mohammed bin Zayed al-Nahyan, deputy chairman of the Abu Dhabi Executive Council and Head of the Council for Economic Development, arrives for our meeting with few aides and little fanfare for the man who will inherit the position as ruler of the world's richest state.
A graduate of England's Sandhurst Royal Military Academy, he soon reveals a deep intellect and clear vision. As general of the Emirates armed forces, he emphasizes the importance of military support from the West for the UAE and the other Gulf Co-operation Council Countries: Oman, Saudi Arabia, Kuwait, Bahrain and Qatar. Together, these countries produce around 20 per cent of the world's oil, generating more than $2-billion a day at current prices. That works out to $730-billion a year. Meanwhile, the U.S. oil trade deficit is set to grow to around $600-billion.
The sovereign wealth funds of Abu Dhabi, Kuwait and Qatar already total $1.1-trillion, much of which is invested in ownership of American and European assets as part of the most massive and rapid transfer of wealth in the history of our world.
As the plane taxis to the runway, I open a book describing the history of the Emirates region, suitably titled From Rags to Riches. The author grew up at a time when his Bedouin tribe survived by subsistence fishing and dangerous pearl diving during the cooler winter months, followed by a perilous annual camel trek to a desert oasis for water and respite from the searing summer sun. Zayed, his boyhood best friend eventually became ruler of Abu Dhabi and founder of the UAE. Sheik Zayed mounted a tireless campaign to unite the seven Emirates after Britain announced its pending withdrawal from all territories east of Suez in January, 1968. When the UAE was proclaimed in December, 1971, this collection of Arab tribes was the poorest and the most backward country in the region.
As the plane lifts off, I look up from the book to the amazing metropolis below. Noting the author of the book, my seatmate says: "that's my cousin." His insights add even more to my understanding of how petro-dollars are dramatically transforming wealth and power in the world.
why not have some KONA coffee instead ? :wink:
(local ontario aspargus is selling at $1.49 - 1.99 a pound . the next three weeks we'll eat lots of aspargus , that's for sure !
my favourite way of eating aspargus :
aspargus - the fresher , the better - steamed with just a touch of honey , frehs potatoes in the jacket , LOTS OF BUTTER , freshly ground pepper and a thick slice of nicely smoked ham - i'm beginning to slobber )
and that energy prices were high.
We need more power and energy ?
Doing nothing will, although quite harshly, solve the problem.
Too many people sucking the earth dry of resources
Too bad the green lobby never mention this unpalatable truth
cap, Lincoln, UK
From Times Online June 22, 2008
Gordon Brown visits Saudi to plead for 'win-win' deal on oil
Sam Coates, Chief Political Correspondent of The Times, in Jeddah
Gordon Brown put his international economic reputation on the line today by flying to an emergency summit in the Middle East and clashing with the major oil producers over the best way to tackle soaring prices.
In a one-day, 6,000-mile round trip to Jeddah in Saudi Arabia, the Prime Minister told oil exporting countries that they had a responsibility to increase production to avoid "uncertainty and unpredictability for years ahead".
This put him at odds with the head of Opec, which represents 13 oil exporting countries. Chakib Khelil, the Algerian oil minister and Opec's current president, countered that demand for oil is dropping. "We believe that the market is in equilibrium. The price is disconnected from fundamentals. It is not a problem of supply," he said.
In an apparent snub to the Prime Minister's demand, Mr Khelil said he "didn't hear anything" to suggest Opec members other than Saudi Arabia were planning to increase supply. In a seven-hour visit to the emergency oil meeting organised by the Saudi King, Mr Brown insisted that the world is going through "the third great oil shock in as many decades" which is having a "severe impact" on standards of living around the globe.
The price of oil closed on Friday close to $140 a barrel and many analysts predict further increases.
Mr Brown said the solutions to the oil crisis lay in strengthening the global free market, ending "short term market distortions". He attacked subsidies offered by countries like China and India which are worth $200 billion a year and "hurt the poor".
He told delegates: "We need to do all this in a way that is not the old zero sum game where we hurt producers if we benefit consumers and vice versa, but a new win-win for both oil producers and consumers."
Mr Brown was careful to downplay suggestions of immediate benefits from the summit and refused to predict when oil prices might drop. The 200,000 barrels a day increase in oil production announced by Saudi Arabia ahead of the summit was offset by a drop in Nigerian production of 120,000 barrels following attacks by militants on Friday.
"Geopolitical factors mean you cannot predict the price of oil", cautioned Mr Brown who went on to claim that agreement had been reached that prices needed to come down.
"What we've got here ... is agreement that the oil price is too high," he said.
Oil-producing countries blame market speculators who predict oil prices in advance for driving up prices. But Mr Brown insisted that the lack of oil supply is a "real" problem given the needs of India and China over the next decade.
Mr Brown, the only foreign head of government at the conference, said the rest of the world was determined to reduce their dependence on oil. He said by 2050 the world needs 1,000 nuclear power stations, 700,000 new large wind turbines and a 600 per cent increase in solar, biomass and hydro-power. Britain alone will spend £100 billion to meet EU targets to generate 20 per cent of energy from renewable by 2020.
In what he described as a "New Deal" for oil producers, he offered the opportunity for the countries to use some of $3 trillion generated by oil revenues to invest in renewable energy projects worldwide.
Mr Brown revealed that Britain is currently in talks with the Abu Dhabi Investment authority and the Qatari government to explore investment opportunities in UK energy projects He is hoping that he will be able to persuade Middle East countries with vast sovereign wealth funds to put money in "non-oil energy" in order to ensure their future incomes remain stable should demand for oil decline as it did in the 1970s. This could mean countries like Saudi Arabia investing in a new generation of nuclear power plants.
Mr Brown also gave his strongest hint to date that he will be approve the Scira wind farm project off the British cost with £800 million investment by the Norwegian energy company StatoilHydro.
He called on oil-producing states to use the technical expertise of high energy-use countries like Britain to increase supply, remove bottlenecks from the system and develop environment-friendly carbon capture and storage technology. And it will mean western nations being open to investment from Opec states in the new "green" energy plants they will need to meet targets to reduce emissions of greenhouse gases like CO2.
Britain will examine incentives for greater production, doing more to exploit the 25 billion barrels of reserves in the North Sea, including smaller fields, he said.