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  • Oil companies continue to gouge

    NEW YORK - Crude-oil prices broke through $75 a barrel to hit a new record Friday, fueled by concerns about
    Iran's nuclear ambitions and tight U.S. gasoline supplies.
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    Prices at the pump also kept rising, with the average price of a gallon of unleaded regular gasoline at $2.855, up 3 cents from a day earlier and more than 60 cents higher than a year ago, according to AAA's daily fuel gauge report.

    Crude prices, which are more than 40 percent higher than a year ago, have risen 8.4 percent from Thursday's closing price — the biggest weeklong jump since the week ended June 17, 2005, when crude futures rose 9 percent.

    Analysts say oil prices are likely to climb even higher in the weeks ahead as worries grow about how international pressure on Iran,
    OPEC's No. 2 oil producer, will affect its crude output. Rebel disruptions of oil production in Nigeria, the fifth-biggest source of U.S. oil imports, also pose a risk to supply.

    "You put all these headlines together, you see the situation is getting charged up and getting out of control. That's why oil traders and speculators are having a field day — this is exactly the kind of environment that speculators want to operate in," said Oppenheimer & Co. oil analyst Fadel Gheit.

    Light, sweet crude for June delivery rose $1.48 to settle at a record $75.17 a barrel Friday on the New York Mercantile Exchange, after peaking at an all-time trading high of $75.35. The May contract, which expired Thursday, had settled at $71.95 on Thursday.

    Accounting for inflation, prices are still about 20 percent below the records reached about 25 years ago.

    Traders worry that U.S. gasoline supplies may not meet summer demand after seven straight weeks of drops in domestic gasoline stocks, which are now at their lowest level since November.

    "There are a lot of people that were disturbed with this week's energy numbers," said Alaron Trading Corp. analyst Phil Flynn, referring to the U.S. inventory figures. "There seems to be a lot of concern that the combination of the geopolitical issues, as well as refining issues, are enough reason not to abandon the long side of this market just yet."

    U.S. refineries are performing seasonal maintenance on a greater scale this year, given the destruction wrought by last fall's hurricanes that battered the Gulf Coast. Also, the transition from gasoline additive MTBE, found to be a groundwater pollutant, to ethanol is creating additional fears about an already tight gasoline market.

    Friday afternoon, U.S. Energy Secretary
    Samuel Bodman said phasing out MTBE could be complicated, and that there is no simple solution to lowering oil prices.

    At this point, there's no peak in sight.

    "Everyone's asking, 'What's the high? What's the high?' In a runaway bull market, you can't say. But the market will stop climbing when it finally starts to have an impact on the economy and on demand. I don't see it stopping till we reach that point," said BNP Paribas commodity futures analyst Tom Bentz.

    So far, demand hasn't been crimped significantly, encouraging traders to keep buying into the market.

    "Demand continues to be relatively strong. Supply remains tight. And the global economy seems to be doing OK. As they say, no harm, no foul," Gheit said, noting that not just oil companies, but also big financial institutions have been making billions of dollars on soaring energy prices.

    Brent crude on London's ICE Futures exchange rose $1.39 to settle at $74.57 a barrel Friday.

    Gasoline futures rose 2.32 cents to settle at $2.2380 a gallon, while heating oil rose 2.26 cents to settle at $2.0762 a gallon. Natural gas slipped 8.3 cents to settle at $7.981 per 1,000 cubic feet.

    The United States and Britain say if Iran does not comply with the Security Council's April 28 deadline to stop uranium enrichment, they will seek a resolution that would make the demand compulsory. Iran has consistently resisted calls to abandon its enrichment program.

    Oil exports account for half of Iran's
    GDP, so it's not in the country's own interest to halt supplies, Gheit said. However, if Iran is attacked, they might be left with no choice. "The only weapon they can use is oil," Gheit said.

    Meanwhile, in Nigeria, militants exploded a car bomb inside a military base late Wednesday, in their first major attack since February. This year, the group has cut more than 20 percent of Nigeria's daily oil exports of 2.5 million barrels.

    A spokesman for Shell Petroleum Development Co. in Nigeria on Friday said security concerns in the region were preventing the restart of up to a fifth of its oil output and the company was not in a hurry to start up production.

    On Saturday, energy ministers of the Organization of Petroleum Exporting Countries will meet in Qatar to discuss the latest developments in the oil market, said United Arab Emirates energy minister Mohammed Dhaen al-Hamili.

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    It's high time for Bush to step in and put a price cap on the oil. This record profit taking by the oil companies and their investors is getting out of hand.

  • #2
    It's high time for Bush to step in and put a price cap on the oil. This record profit taking by the oil companies and their investors is getting out of hand.
    You socialist...
    To sit down with these men and deal with them as the representatives of an enlightened and civilized people is to deride ones own dignity and to invite the disaster of their treachery - General Matthew Ridgway

    Comment


    • #3
      Originally posted by troung
      You socialist...
      It's not socialist to want to curb profiteering(especially when it is a strategic asset that the entire economy is hinged upon). Which is IMO exactly what's been going on since Bush was elected- pure profiteering.

      Comment


      • #4
        Originally posted by M21Sniper
        It's not socialist to want to curb profiteering(especially when it is a strategic asset that the entire economy is hinged upon). Which is IMO exactly what's been going on since Bush was elected- pure profiteering.
        Sorry, Snipe, but price caps usually have the opposite effect of intended. Bad Idea, right up there with a windfall profits tax.

        Deliberate government intervention in the market with the intention of altering prices is performing neurosurgery with a clawhammer and barbeque tongs.
        sigpicUSS North Dakota

        Comment


        • #5
          Originally posted by 2DREZQ
          Sorry, Snipe, but price caps usually have the opposite effect of intended. Bad Idea, right up there with a windfall profits tax.

          Deliberate government intervention in the market with the intention of altering prices is performing neurosurgery with a clawhammer and barbeque tongs.
          So it's OK for the gov''t to bail a big business out with my tax dollars, but if i want the gov't to tell a profiteering industry "Whoa there me pirate hardies, no need to stuff your pockets so fast", i have unrealistic expectations?

          Makes no sense to me.

          Comment


          • #6
            Originally posted by M21Sniper
            So it's OK for the gov''t to bail a big business out with my tax dollars, but if i want the gov't to tell a profiteering industry "Whoa there me pirate hardies, no need to stuff your pockets so fast", i have unrealistic expectations?

            Makes no sense to me.
            Nope, I don't like gov't bailouts either. They're usually a BAD idea.
            sigpicUSS North Dakota

            Comment


            • #7
              I'vre been griping about dubya's lack of initiative wrt oil prices for 3 years now. Imo it's the #1 abject failure of his administration.

              There are steps that can be taken without capping the price. A drawdown of the SPR would have a huge effect on the speculators who are the main cause of the high prices today. If he had done this 3 years ago, 10 million barrels would have done it. Now it would take probably 100 million to acheive the same effect.

              The problem is that oil is not really a freely traded commodity, the collusion that is regularly practiced out by OPEC and huge multinational oil companies insure that pure market forces will not ever take hold of crude prices.

              Open up ANWAR. Open up the Alberta Oil Sands. Increase exploration in the Gulf of Mexico and off the California coast. Source the remainder of any shortfall from Russia if we have to.

              Tell Nigeria, Venezuela, and the PG countries to take a flyer. Let Europe, India, and China fight it out for that oil.

              Break the back of OPEC and jail the CEO's of the major oil co's that are profiteering from the high prices.

              Bush has completely failed the country wrt energy policy.
              "We will go through our federal budget – page by page, line by line – eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way." -President Barack Obama 11/25/2008

              Comment


              • #8
                I agree 100% Highseas, i agree 100%.

                Comment


                • #9
                  "You put all these headlines together, you see the situation is getting charged up and getting out of control. That's why oil traders and speculators are having a field day — this is exactly the kind of environment that speculators want to operate in," said Oppenheimer & Co. oil analyst Fadel Gheit.
                  That is the problem... hyping up the price...

                  It's not socialist to want to curb profiteering(especially when it is a strategic asset that the entire economy is hinged upon). Which is IMO exactly what's been going on since Bush was elected- pure profiteering.
                  True...
                  Last edited by troung; 21 Apr 06,, 22:09.
                  To sit down with these men and deal with them as the representatives of an enlightened and civilized people is to deride ones own dignity and to invite the disaster of their treachery - General Matthew Ridgway

                  Comment


                  • #10
                    Originally posted by M21Sniper
                    So it's OK for the gov''t to bail a big business out with my tax dollars, but if i want the gov't to tell a profiteering industry "Whoa there me pirate hardies, no need to stuff your pockets so fast", i have unrealistic expectations?

                    Makes no sense to me.
                    You're right. It doesn't make any sense at all. Government shouldn't control the prices nor should it bail out failed businesses.

                    Price control decreases product availability and creates a shortage. Remember the gas line in the 70s? That was the product of price control. Government said you can't raise the prices due to low supply, so all the people who couldn't otherwise afford gas are now at the station trying to get theirs before it's all gone.

                    We had price control on electricity 6 years ago in California. Decades of environmental regulations detered utilities from building more generators. Population doubled. Demand probably increased 4 fold. We kept it in check by buying surplus power from other states where they have excess capacity. As this capacity were taken up by their own residents, there was less for us. Power company tried to raise prices to cover their cost for buying power on the spot market. Some socialist politicians came out and told people not to pay the utilities. People's behavior never changed because the price never changed. The result was a steady high demand and increasing everyday coupled with a deceasing supply. Power companies had to implement rolling blackouts to protect the power grid.
                    "Only Nixon can go to China." -- Old Vulcan proverb.

                    Comment


                    • #11
                      Originally posted by highsea
                      Open up ANWAR... Increase exploration in the Gulf of Mexico and off the California coast. Source the remainder of any shortfall from Russia if we have to.
                      Those are great ideas.
                      sigpicUSS North Dakota

                      Comment


                      • #12
                        Originally posted by gunnut
                        You're right. It doesn't make any sense at all. Government shouldn't control the prices nor should it bail out failed businesses
                        That sounds great until an entire industry collapses(as the entire airline industry would've after 911).

                        Comment


                        • #13
                          Originally posted by M21Sniper
                          That sounds great until an entire industry collapses(as the entire airline industry would've after 911).
                          Only the failed carriers will collapse. Southwest would have been the savior of the industry had the government not interfered.
                          "Only Nixon can go to China." -- Old Vulcan proverb.

                          Comment


                          • #14
                            Originally posted by gunnut
                            Only the failed carriers will collapse. Southwest would have been the savior of the industry had the government not interfered.
                            So then southwest would've had a monopoly(if it survived at all, which i doubt), which is at least as bad.

                            Comment


                            • #15
                              exxons profit margins are only like 9%

                              lets see, here we go

                              http://catallarchy.net/blog/archives...so-so-margins/

                              price caps are never the answer to high prices, a good start would be deregulation and and get rid of anti-refinery legislation whichs chokes the market form operating like it should.
                              Last edited by guppy; 22 Apr 06,, 01:28.
                              rock chalk

                              jay hawk

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