Archive for the ‘fuel’ Category

Oil drops near 6 percent on slumping demand

November 3, 2008

Oil fell nearly 6 percent on Monday as further indicators of falling demand linked to a potential recession offset OPEC plans to reign in output.

U.S. crude settled down $3.90 at $63.91 a barrel, after October saw the steepest monthly price decline ever for oil as global demand slowed. London Brent crude dropped $4.84 to settle at $60.48 a barrel.

By Edward McAllister, Reuters

Oil hit a record $147.27 a barrel in mid-July but has since more than halved as poor economic data added to pressure from weak demand reports in the United States and other key consumer nations.

Oil rigs extract petroleum in Culver City, Los Angeles, April ... 
Oil rigs extract petroleum in Culver City, Los Angeles, April 2008. World oil prices slipped on Monday as traders took profits after a pre-weekend rally, and tracked concerns about the impact of a global recession on energy demand, analysts said.(AFP/Getty Images/File/David McNew)

“The most devastating blow for crude oil today is data showing that U.S. manufacturing activity in October fell to the lowest level in 26 years, which means more worries for oil demand,” said Phil Flynn, an analyst at Alaron Trading, in Chicago.

“Manufacturing used to be a great forward indicator for oil demand, but if the manufacturing sector is down, it will be a struggle to keep oil demand up,” he added.

U.S. factory activity — a barometer for future oil demand — contracted sharply in October, falling to its lowest in 26 years as the financial crisis racked the world’s largest economy.

The Institute for Supply Management said its index of national factory activity fell to 38.9 in October from 43.5 in September. A reading below 40 is exceptionally weak.

BP (BP.L) Chief Executive Tony Hayward estimated U.S. demand has dropped 2 million barrels per day on the year over the last four weeks.

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As Fuel Prices Fall, Will Push For Alternatives Lose Steam?

October 20, 2008

By Steven Mufson
Washington Post Staff Writer
Monday, October 20, 2008; Page A01

Just four months ago, a conference here on electric cars drew four times as many people as expected. District fire marshals ordered some of the crowd to leave, and the atmosphere was more like that of a rock concert than an energy conference. A brief film depicted an electric car owner driving off with a beautiful woman to the strains of “The Power of Love” while her original companion struggles to pay for gasoline. The audience cheered.

One discordant note in the series of enthusiastic speeches came from Bill Reinert, one of the Toyota Prius designers. He cautioned that designing and ramping up production of a new car takes five years.

Venezuela's President Hugo Chavez (R) speaks during a visit ...
Venezuela’s President Hugo Chavez (R) speaks during a visit to a gas pipeline project in Cumana, 400 km east of Caracas. Chavez will urge fellow members of the OPEC oil cartel to implement a cut in production, with a goal setting a price floor of no less than 80 dollars a barrel, the Venezuelan leader told AFP Sunday.(AFP/Thomas Coex)

“If oil goes down to $60 or $70 a barrel and gasoline gets back to $2.50 a gallon, and that very possibly could happen,” he said, “will that demand stay the same or will we shift back up?”

It didn’t take five years to hit those numbers. One type of oil shock has given way to another. Even more swiftly than the price of oil rose, it has tumbled to the range that seemed far-fetched when Reinert spoke and oil was more than $130 a barrel. Now that drop threatens a wide variety of game-changing plans to find alternatives to oil or ways to drastically reduce U.S. consumption.

“Declining oil prices can give us an artificial and temporary sense that reducing oil consumption and energy consumption is an issue we can put off,” said Greg Kats, a managing director of Good Energies, a multibillion-dollar venture capital firm that invests in global clean energy.

The credit crisis is compounding that threat by making it more difficult to finance capital-intensive projects, whether they are new auto assembly lines or solar panels or wind turbines. General Motors has been touting the Chevy Volt as the first mass-marketed, plug-in hybrid vehicle. GM, which has been holding merger talks with Chrysler, believes the project will help justify federal financing. It hopes to deliver the car by the end of 2010.
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An oil rig in a file photo. (File/Reuters) ...

Oil Prices Slip Below $70 a Barrel

October 17, 2008
Oil prices dropped below $70 a barrel for the first time in 14 months Thursday, prompting the OPEC cartel to call for an emergency meeting next week to establish some stability in prices that have plummeted recently after rising for months.

Above: Photo from Getty Image’ David McNew

Oil prices have tumbled by nearly $40 a barrel in just three weeks as indications grow that demand for energy will slow along with weakening economies around the world. As recently as July, oil was trading at a record of $145 a barrel.

The decline in oil prices could provide a form of stimulus to the economy as consumers pay less to fill up their tanks. If oil prices stay at current levels, consumers would have $250 billion more, over a year, to save or spend elsewhere, according to Lawrence Goldstein, an energy economist. Some analysts expect oil prices to keep declining, perhaps to as low as $50 a barrel in coming months.

A ship passes an oil refinery off the coast of Singapore October ...
ship passes an oil refinery off the coast of Singapore October 17, 2008.(Vivek Prakash/Reuters)

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Iran Now Sees ‘World Without America’ as Attainable

October 14, 2008

By Clifford May and Jay Carafano
The Washington Times

Which world leader is on record musing about “a world without America” – a goal he calls “attainable”? Iranian President Mahmoud Ahmadinejad.
President Mahmoud Ahmadinejad of Iran, right, watches President Bush address the 63rd session of the United Nations General Assembly at UN headquarters, Tuesday Sept. 23, 2008. Seated with him is his UN Ambassador Mohammad Khazaee, left, and Foreign Minister Manouchehr Mottaki. Associated Press.

Above: President Mahmoud Ahmadinejad of Iran, right, watches President Bush address the 63rd session of the United Nations General Assembly at UN headquarters, Tuesday Sept. 23, 2008. Seated with him is his UN Ambassador Mohammad Khazaee, left, and Foreign Minister Manouchehr Mottaki. Associated Press.


Until recently, it was possible to believe that whatever Mr. Ahmadinejad’s intentions, Iran was a long way from acquiring the capabilities it needs to achieve its goals. But a blue-ribbon commission has reported to Congress on what appears to be an Iranian drive to obtain the means to carry out an EMP (electro-magnetic pulse) attack.

An EMP attack is produced by launching a ballistic missile with a nuclear weapon attached — and detonating it high above the Earth. This produces a massive pulse of ionized particles that could damage or even wipe out many electrical and information systems. Such an attack would disrupt telecommunications, banking and finance, fuel and energy, food and water supplies, emergency and government services and much more, threatening millions of lives.

We’ve seen a blacked-out South Texas in the wake of Hurricane Ike. We’ve seen New Orleans after Katrina. Now imagine that scenario over most of the continental United States. There would be a “world without America” – at least as we know it.

No one disputes that Iran is developing a robust long-range missile force. Few question that Mr. Ahmadinejad’s regime is working on nuclear weapons development. Less well-known is that Iran has conducted missile tests from sea-based platforms, detonating warheads at the high-point of the missile trajectory, rather at the aim point over the target. These facts have now been documented in official government reports.

Connect the dots, and you find the picture of a workable research program for developing a covert means to deliver an EMP attack against the United States.

A short-range ballistic missile could be carried on one of the thousands of commercial freighters sailing under “flags of convenience” that sail around U.S. waters every day. Without ever piquing the interest of the Navy, the Coast Guard, or the Customs and Border Protection, that ship could sail within range and deliver its payload over American territory. Even a modest warhead placed at the right spot over the East Coast could take down 75 percent of the electrical grid.

The genius of such a covert attack is that it doesn’t come with an obvious “return address.” The ship might be registered in Liberia. The crew might be Lebanese. The ship might disappear into the night – or be scuttled quietly.

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Truckers Strike for Lower Gas Prices

April 1, 2008

DENVER ( – Independent truckers across the nation said they planned to strike Tuesday to protest rising fuel costs.

The strike could could result in certain products or goods not making it to their destinations on time.
Anything hauled by independent truckers – those who own their own trucks and pay for their own fuel – could be affected.

The average trucker is paying at least $4.00 per gallon for diesel fuel, so one who travels all over the country spends about $3,000 a week on fuel.

There are 350,000 independent drivers in the US. Approximately 3,000 of them are based in Colorado. But there’s no way to tell how many of them will strike.

Congress grills oil execs on high prices

April 1, 2008
By H. JOSEF HEBERT, Associated Press Writer

WASHINGTON – Don’t blame us, oil industry chiefs told a skeptical Congress. Top executives of the country’s five biggest oil companies said Tuesday they know record fuel prices are hurting people, but they argued it’s not their fault and said their huge profits are in line with other industries.

A pump attendant fills up a car at a gas station in Kuala Lumpur ... 

Appearing before a House committee, the executives were pressed to explain why they should continue to get billions of dollars in tax breaks when they made $123 billion last year and motorists are paying record gasoline prices at the pump.

“On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil,” Rep. Edward Markey, D-Mass., said, aiming his remarks at the five executives sitting shoulder-to-shoulder in a congressional hearing room.

“Our earnings, although high in absolute terms, need to be viewed in the context of the scale and cyclical, long-term nature of our industry as well as the huge investment requirements,” said J.S. Simon, senior vice president of Exxon Mobil Corp., which made a record $40 billion last year.

“We depend on high earnings during the up cycle to sustain … investment over the long-term, including the down cycles,” he continued.

The up cycle has been going on too long, suggested Rep. Emanuel Cleaver, D-Mo. “The anger level is rising significantly.”

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Zimbabwe’s Ruling Party Created Economic “Disaster,” Now Considers Defeat

April 1, 2008

President Mugabe of Zimbabwe was hailed then for his policies of racial reconciliation and development that brought education and health to millions denied those services under colonial rule. Zimbabwe’s economy thrived on exports of food, minerals and tobacco.The unraveling began when Mugabe ordered the often-violent seizures of white-owned commercial farms, ostensibly to return them to the landless black majority. Instead, Mugabe replaced a white elite with a black one, giving the farms to relatives, friends and cronies who allowed cultivated fields to be taken over by weeds.

Today, a third of the population depends on imported food handouts. Another third has fled the country as economic and political refugees and 80 percent is jobless. Life expectancy has fallen from 60 to 35 years and shortages of food, medicine, water, electricity and fuel are chronic.

Today the ruling party may be facing ouster by the voters, if the election is honest….

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Iraq Insurgency Runs on Stolen Oil Profits

March 16, 2008

By Richard A. Oppel
The New York Times
March 16, 2008

 BAIJI, Iraq — The Baiji refinery, with its distillation towers rising against the Hamrin Mountains, may be the most important industrial site in the Sunni Arab-dominated regions of Iraq. On a good day, 500 tanker trucks will leave the refinery filled with fuel with a street value of $10 million.

Employees work at Najaf's new oil refinery plant, 160 km ...
Employees work at Najaf’s new oil refinery plant, 160 km (100 miles) south of Baghdad, March 15, 2008. The new plant produces 10,000 barrels of oil per day.
REUTERS/Ali Abu Shish (IRAQ)
The sea of oil under Iraq is supposed to rebuild the nation, then make it prosper. But at least one-third, and possibly much more, of the fuel from Iraq’s largest refinery here is diverted to the black market, according to American military officials. Tankers are hijacked, drivers are bribed, papers are forged and meters are manipulated — and some of the earnings go to insurgents who are still killing more than 100 Iraqis a week.

“It’s the money pit of the insurgency,” said Capt. Joe Da Silva, who commands several platoons stationed at the refinery.

Five years after the war in Iraq began….

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Bush Warns Against “Overcorrecting” Economy

March 15, 2008

WASHINGTON – President Bush on Saturday said the government must guard against going too far in trying to fix the troubled economy, cautioning that “one of the worst things you can do is overcorrect.” Democrats said Bush was relying on inaction to solve the problem.

President Bush gestures while speaking about the economy during ...
President Bush gestures while speaking about the economy during an address before The Economic Club of New York, Friday, March 14, 2008, in New York.(AP Photo/Charles Dharapak)

Bush, in his weekly radio address, said the recently passed program of tax rebates for families and businesses should begin to lift the economy in the second quarter of the year and have an even stronger impact in the third quarter. But he urged caution about doing more, particularly about the crisis in the housing market where prices are tumbling and home foreclosures have soared to an all-time high.

“If we were to pursue some of the sweeping government solutions that we hear about in Washington, we would make a complicated problem even worse — and end up hurting far more homeowners than we help,” the president said.

The economy has surpassed the Iraq war as the No. 1 concern among voters in this presidential election year amid big job losses, soaring fuel costs, a credit crisis and turmoil on Wall Street.

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Gas prices jump, oil hits $110

March 12, 2008
By JOHN WILEN, AP Business Writer 

NEW YORK – Gasoline and oil prices extended their record-setting streaks Wednesday, with gas at the pump reaching a new high of nearly $3.25 and crude surpassing $110 for the first time.

Investors shrugged off an Energy Department report that crude oil and gasoline supplies jumped last week.

Pumps draw petroleum from oil wells in California. Oil prices ...
Pumps draw petroleum from oil wells in California. Oil prices struck a record high of 109.20 dollars per barrel after the dollar hit a fresh all-time low against the euro.

The national average price of a gallon of regular gas rose by 1.9 cents overnight to $3.246 a gallon, a new record, according to AAA and the Oil Price Information Service. Pump prices are following crude’s recent surge, and could rise as high as $3.75 a gallon this spring, analysts say.

Light, sweet crude for April delivery rose $1.17 to settle at $109.92 a barrel on the New York Mercantile Exchange after earlier rising to a new trading record of $110.20.

The dollar weakened throughout the day Wednesday, setting a number of new low marks against the euro and attracting new buyers to the oil market. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak. Many analysts believe the dollar’s decline is the reason crude futures have surged to new records in 11 of the past 12 sessions, despite the fact that crude supplies have risen 10.2 percent since early January.

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