Three underlying reasons...
Warmongering by the Americans and the British in the Middle East, almost complete shutdown of some nigerian oilfields, and the month of May when the American 'driving season' starts. US 'gasoline' stocks are low.
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Worth remembering that a barrel of crude produces a fixed amount of any one type of fuel, and refinery capacity is also fixed. The US has what they call the "summer driving season", which tends to drive up petrol prices and starts about now, just as kerosene/heating oil prices will rise in October time.
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Thanks for all the enlightening, though depressing, facts & views. As usual, I will continue to cough up & grumble. Now where did I put those razor blades...
Just joking, have you ever tried to take a Mach 3 blade apart?
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Wearily "sigh"
We had this discussion a few months back..
www.honestjohn.co.uk/forum/post/index.htm?t=34402&...f
with many of the same comments. The more pig ignorant stated it was a conspiracy, bullying etc...
Someone suggested they bought a book on basic economics. That imo is overkill. All you need to know is:
world demand for oil is increasing
despite literally $billions spent last year on exploration, no new LARGE oilfields were found.
It will get worse until prices means we have a recession and we get demand destruction and the price falls and exploration slows down.. and then it will get MUCH worse..
madf
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On the plus side, I'm reliably informed that it's steak for lunch.
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This morning's radio news reports crude oil at $69/barrel and offered two reasons:
1) The US is believed to be making plans for a possible strike against Iran, driving up the value of oil on the futures market.
2) The US summer season, with more people driving on holiday, starts in May, so US refineries are buying more crude to stock up on gasoline.
Its seasonal - remember we had much the same effect last October as demand for heating oil rose facing into the winter?
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Yep - that explains why it's increased from about $60 to $69.
It doesn't explain how it got to $60 from around $25 though does it?
There's always some current event that the media can use to pin the tail on the donkey. War in Iraq, attacks on Saudi/Nigerian infrastructure, hurricanes in the GoM, etc etc.
The truth is, oil is up because the supply demand balance is very close. Nothing more, nothing less. There's variance from current events, but not so much as to cause the high prices that have become the norm.
Is that high price range because we can't pump any more oil than the 83-85m Bbl per day we currently average is or is it because supply is simply lagging behind recent increases in demand?
Time will tell.
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Supply issue
tinyurl.com/b34qd
madf
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Be careful of your sources madf, that article was based on rumour mongering by Petroluem Intelligence Weekly.
Kuwaiti oil production is not officially in decline:
"The report contained some right information but not the whole picture," Energy Minister Sheikh Ahmad Fahd al-Sabah told reporters before leaving for Vienna to attend an OPEC meeting.
"The information is related to only 31 reservoirs we are currently working on. It does not include reserves in another 74 reservoirs which are not developed," Sheikh Ahmad said.
The minister told a press conference late Monday that Kuwait had discovered new reserves estimated at 10-13 billion barrels of light crude in northern Kuwait.
Source (Scroll to comment 256):
peakoildebunked.blogspot.com/
The supply side problem will be an issue one day, but it is still unproven, although IEA statistics are certainly looking like we may have reached a plateau in production. But that doesn't mean that production cannot go up again, just that it hasn't yet. Maybe... ;)
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>Oilburner
What the above Minister says is typical Opec. Oil reserves figures from Opec are neither clear or transparent. They can and are often exaggerated. Output cannot.
I agree world output may rise... or fall.:-) The IEA (see prior thread - link above) has an abysmal shockingly bad record on price forecasting. According to its forecast from just some 14 months ago , oil should be under $40 and heading down..
I can forecast like that or better using a pin....
madf
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