Oil Trades Above $102 After Falling Dollar Spurs Commodity Buys
Assessment: Commodities will continue to surge as the Fed cuts interest rates, deflates the US Dollar and oil producers (OPEC) limit oil production.
Crude Oil Rebounds as OPEC President Rules Out Production Boost
Crude oil recovered earlier losses as OPEC ministers excluded the possibility of an output increase at tomorrow's meeting in Vienna.
The Organization of Petroleum Exporting Countries will not alter its output ceiling tomorrow even after oil surged to a record $103.95 a barrel yesterday, according to OPEC President and Algerian Oil Minister Chakib Khelil. Iranian Oil Minister Gholamhossein Nozari said his country would support a decrease in production.
Crude oil for April delivery traded at $102.48, up 3 cents, in electronic trading on the New York Mercantile Exchange at 11:40 a.m. Earlier, the contract fell as much as 68 cents, or 0.7 percent, to $101.77.
Brent crude for April settlement was at $100.62 a barrel, up 14 cents, on London's ICE Futures Europe exchange at 11:42 a.m. in London. The contract rose 38 cents to close at $100.48 yesterday after reaching a record intraday price of $102.29 a barrel.
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Labels: commodities, inflation, oil shortages
Peak Oil: High Oil Prices Bring Energy Shortages
Peak Oil Hits the Third World
High Oil Prices Bring Energy ShortagesDouglas Low, the director of the Oil Depletion Analysis Centre in Britain, recently warned of a "crisis coming up" with real shortages of oil, noting that the world used 1.5 mbpd more crude than it produced in June. "It's not a very happy message," he says. "A lot of people want to slip it under the carpet."
Indeed. Like all the cheap oil cheerleaders who used this occasion to predict that oil was going back to $40 or (snort) $20.
I would like to refer those Pollyannas to a little-noticed opinion essay published two days ago by the CEO of Royal Dutch Shell, one of the world's largest oil companies. Jeroen van der Veer laid out his "Three Hard Truths About the World's Energy Crisis":
- The first hard truth is that demand is accelerating.
- The second hard truth is that the growth rate of supplies of "easy oil," conventional oil and natural gas that are relatively easy to extract, will struggle to keep up with demand.
- The third hard truth is that increased use of coal will cause higher carbon dioxide emissions possibly to levels we deem unacceptable.
I'm not sure what motivated Mr. van der Veer to make such a bold statement. Since his prime directive is to maximize shareholder value, he must feel that it's time to take a defensive position and get out in front of the peak oil story, now that the recent reports from the
IEA and the
National Petroleum Council have confirmed the basic message that supply is struggling to keep up with demand.
Read the full article.Labels: global recession, oil shortages, peak oil, water shortage
