China's reserves spur policy debate

Speculation over China's plans for its $1 trillion in foreign reserves is rattling global currency markets, while fueling a lively debate back home over how Beijing should use its unprecedented wealth.

China's central bank, the People's Bank of China, refused comment Tuesday on rumors that Beijing is shifting its foreign reserve holdings away from U.S. Treasuries, speculation that helped push the dollar sharply lower in currency markets Monday.

Tarapore for increasing gold component in forex reserves

Underscoring the benefits of diversifying foreign exchange reserves and the uniqueness of gold component as part of the forex basket , SS Tarapore, former deputy governor, Reserve Bank of India and economist, has strongly advocated for increasing the proportion of gold in the country’s forex reserve. He was speaking at a conference on Foreign Exchange Management: The Way Forward, on Tuesday.

In the past, country’s forex reserves have jumped significantly but the gold holding in it has now dwindled to as low as 3.6%. “If the gold proportion of the RBI’s forex reserves were cautiously raised, to say 10% of total reserves, it would require an additional purchase of gold by the RBI of $10 to 11 billion,” he said.

The bond market's dirty secret

A whiff of scandal threatens the Treasury repurchase market.

Like greenbacks in a mattress, government bonds enjoy a reputation as a fail-safe investment. The integrity of the $4 trillion-plus U.S. Treasury market is essential, because it keeps investors, particularly big foreign players, pumping cash into the debt-laden federal coffers.

Treasury yields are the benchmarks for corporate debt, mortgages and car loans, so any disruption in the market could have a wide-ranging economic effect.

Matt Simmons on CERA report

Canadian Energy's "Exit Stage Right" Plan

Time to Save the Oil . . . Not the Whales

With prices approaching $1,500 per barrel, what would ever make investors like Charles Morgan want to sell their stake in the oil industry?

Well, Morgan had noticed that the price of recovering the oil was increasing every year, and foresaw even further rises in the cost of his operations.

Energy expert urges conservation

The days of dancing in oil around exploding derricks is over, and it’s past due time to think about conserving crude consumption, said Scott Waterman. Waterman, who works as the State Energy Programs Manager for Alaska Housing Finance Corporation, is looking to find ways to build more energy-efficient homes as he speaks around the state, taking on a number of education programs.
“I got interested in energy efficiency when I first looked into the overall energy picture, and what I found really disturbed me,” Waterman said.

Calderón to face complex panorama

Felipe Calderón will have his work cut out when he is sworn in this week as president of Mexico, a nation where more than half the 103 million inhabitants live in poverty

Report: OPEC has lived up to production cut pledge

On the news that stockpiles of crude oil and oil products were lower last week, oil prices were up significantly on Wednesday. West Texas Intermediate crude for January delivery gained 88 cents to $61.87 per barrel on the New York Mercantile Exchange. Meanwhile, in London, January contracts for Brent crude were $1.17 higher to $62.38 per barrel. Nymex December unleaded gasoline added 2.4 cents to $1.6506 per gallon, while December heating oil was up 4.2 cents to $1.7703 per gallon.

Saudi November Oil Output Seen Below 9M b/d - OPEC Delegate

Saudi Arabia's oil production in November will be below the average 9.08 million barrels a day that it pumped in October, a senior OPEC delegate said Wednesday, but it remains too early to gauge its output this month.

Angola decides to join OPEC

Angola has decided to join the Organization of Petroleum Exporting Countries (OPEC) as a full right member, a press release issued on Wednesday said.

The decision took into account the role that the country plays in the world's oil domain and in view of its current output of 1. 4 million barrels a day, said the release from the 9th ordinary session of the Cabinet Council, chaired by Angolan head of State, Jos Eduardo dos Santos.

The Peak Oil Crisis: The View from Capitol Hill

While up on Capitol Hill discussing the prospects for the peak oil message in the new Congress, I was brought up short by a question from a hill staffer. "Can’t you guys sharpen the time frame when oil production is going to peak?"

“Telling us that all sorts of bad things are going happen sometime in the next five or ten years really is not that useful. Here, in the Congress we constantly hear about so many crises about to befall us— Iraq, budget and trade deficits, global warming, avian flu, Medicare, social security, housing bubble, terrorism, and immigration, to name a few— that trying to put peak oil threat in its proper perspective is difficult.”

Crude Oil Inventories Decline

U.S. commercial crude oil inventories declined by 0.3 million barrels compared to the previous week. At 340.8 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories dropped by 0.6 million barrels last week, and are at the lower end of the average range.

STEVE BRACKS’ GREEN STUPIDITY AND ECONOMIC ILLITERACY

Victoria's Steve Bracks seems to have an insatiable appetite for green garbage as revealed by his ridiculous statement that "Victoria's ecological footprint is huge by international standards. If everyone in the world lived like Victorians, we would require four planets". What this idiot is saying is that the economic point of view on this matter is irrelevant and that natural resources are strictly limited and non-renewable. But as recently pointed out

Iraq's oil industry in grip of despair

The present state of Iraq's collapsing oil sector, its economic lifeline, is bleak and its future looks far worse, despairing officials say.

Another damaging oil attack this week, the prospect of British troops handing over the oil city of Basra and virtual civil war have all but crushed hope for Iraqi officials battling to keep exports flowing to world markets.

"One thing is sure. The worst is yet to come," an Iraqi oil industry source said by telephone from Baghdad.

Gold Price Set To Rise – National Bank

National Australia Bank has released its quarterly gold report for September. The analysts have forecast that the gold price will average at US$675/oz in 2007, a rise of 11% from the average established in the first nine months of this year of US$600/oz.

India worried by gas shortage

India is desperately looking for long-term gas supply contracts with gas-rich nations in Central Asia, Africa and the Middle East to meet the acute fuel shortage that has hit its power plants, which operate at half their capacity.

Report says oil, natural gas supplies blocked by rules

About 3 percent of oil deposits and 13 percent of natural gas pockets on 99 million acres of federal land can be developed without restrictions, according to a federal inventory released Tuesday.
The oil and gas industry, which is seeking more access to public lands, embraced the assessment, while environmental groups accused the Bureau of Land Management-led report of disregarding science and economics in favor of politics.

Ethanol boom perks corn price – and risk

The ethanol industry’s growing appetite for corn has pushed prices for the grain to their highest levels in a decade amid a surge that agricultural experts say could lead farmers next spring to plant their largest corn crop in 60 years.

Farmers who plant more corn in 2007, however, will be betting that the nation’s burgeoning ethanol industry won’t go bust and oil prices stay high, keeping up demand for corn for ethanol, said Chris Hurt, a Purdue University agricultural economist.

Ethanol mixed petrol to cost OMCs dear

Oil marketing companies (OMC) together would have to make investments of a few hundred crores of rupees to create the facilities that would enable them to blend ethanol in petrol.

The cost that is being incurred in setting up the machinery at a single depot is about Rs 1 crore, according to an Indian Oil Corporation (IOC) official.

Sales of alternative energy cars rise in Germany

Sales of cars using alternative energy such as hybrid, natural gas, liquid gas or ethanol have been steadily increasing this year, according to figures released recently.

With fuel prices at a record high, consumers are focusing on a vehicle's fuel consumption as one of the main buying factors, according to the Germany-based international motor vehicle manufacturers association VDIK.

Iran opposed to monopoly in nuclear technology: diplomat

Iranian Ambassador to Indonesia Behrouz Kamalvandi in Jakarta on Tuesday said Tehran will not accept a monopoly of nuclear technology by the West.

Kamalvandi made the remarks during a meeting of members of the Confederation of Association of South-East Asian Nation (ASEAN) Journalists (CAJ).

Pickens says U.S. must find alternative to oil

Alternative fuel sources are needed in the United States because the world has reached peak oil production, Texas oilman T. Boone Pickens told business leaders in Little Rock.

Pickens answered questions Monday about the future of the oil industry from former Alltel Corp. chief executive Joe Ford in front of a crowd of about 800 at the Little Rock Chamber of Commerce's 140th annual meeting at the Statehouse Convention Center.

Saudi ambassador: Israel key to end of Mideast turmoil

The prince was also asked whether Saudi Arabia had reached “peak oil,” meaning more than half the oil in the ground had already been removed, meaning production could only decrease.
“I am not an oil expert, but our oil experts have told me the answer is ‘no,’”

Dump the US dollar, buy gold and silver!

The recent sharp decline in the value of the US dollar should be a reminder to savers that even the greenback is not necessarily a safe place to leave investment capital these days. But do you really trust the euro or yen as an alternative? Perhaps the best solution is to buy the oldest money of all: gold and silver.

Bush says U.S. to stay in Iraq till mission complete

President George W. Bush brushed aside talk of civil war in Iraq on Tuesday and insisted the United States would not withdraw its forces before its mission of building a stable democracy there was complete.

Rejecting growing scepticism by allies and influential voices within the United States about his aim of spreading democratic change in the Middle East, Bush said he remained committed to that agenda.

‘Ireland sleep walking’ to oil crisis

FALLING energy supplies and the threat posed to Ireland by declining oil stocks should be top of the political agenda for the next general election, said NTR chief executive Jim Barry, whose company is a major player in the alternative energy sector.

Peak Oil at West Point

This post is a slightly annotated summary of a poster presentation (Army Energy Strategy for the End of Cheap Oil) at the 25th Army Science Conference, Orlando, Florida, November 27-30, 2006, by three scholars of the US Military Academy at West Point.

The authors are Colonel Kip P. Nygren, head of Department of Civil & Mechanical Engineering, Lit. Colonel Darrell D. Massie, assoc. professor in the same department, and Paul J. Kern, a retired four star general. Note that Kern was commanding general of US Army Material Command.

The outlook for oil

While we expect oil to remain above $50 a barrel in coming months, it is exceedingly unlikely that oil prices will double or triple through the end of next year as some analysts and “Peak Oil” theorists would have us believe.

Put simply, the world is awash with oil, and if prices do rise, crude supplies can and will increase and alternative energy sources become more viable.

ASPO to hold key oil conference in Cork

The Association for the Study of Peak Oil and Gas (ASPO) is to hold its sixth International Conference in UCC in Cork in September 2007. The conference will be sponsored by NTR.

ASPO is a global not-for-profit organisation which aims to raise awareness about the timing of the peak of the world's production of oil and gas.

What Would a Rational Energy Tax Policy Look Like?

Our national energy tax policy is misguided in at least three ways. First, a policy to promote energy independence through reduced oil imports is based on a fundamental misunderstanding of how energy markets function. A policy that attempts to establish energy independence by promoting domestic fossil fuel production is especially misguided. Second, our policy relies heavily on energy subsidies, most of which are socially wasteful, inefficient, and driven by political rather than energy considerations. Third, current energy taxes are deficient on a number of levels.

Russia tips the balance

Russia has set the agenda for the global transition to an entirely new model of international energy security designed to address intensifying concerns, especially those of the rising East.

Russia, possessing unequaled energy-based leverage, has taken the leadership among the world's producers and the rising powerhouse economies of the East to promote a vast worldwide

OPEC to Cut Output, Naimi Says

Ali Al-Naimi, minister of petroleum and mineral resources, said yesterday that the Organization of Petroleum Exporting Countries (OPEC) would cut oil output again to check rising fuel stocks in consumer nations and to restore stability in the global market.

Naimi said OPEC, at its meeting on Dec. 14, is all set to address the growing concerns of the energy exporting countries and will decide a future course of action. However, he said that oil prices were not a decisive factor every time.

Sharpest plunge for HK stocks since 9/11

A healthy land auction and pending futures settlement failed to deter the sharpest single-day plunge in the Hang Seng Index since September 12, 2001, a day after the deadly terrorist attacks in the United States.

The HSI dived 564.48 points Tuesday to close at 18,639.53 after sluggish sales at retail giant Wal-Mart Stores coupled with a weakening dollar hammered Wall Street Monday.

Struggling U.S. dollar triggers currency concerns

Renewed fears that the Chinese central bank may be poised to start liquidating its $1-trillion stash of U.S. dollars briefly drove the greenback to a 20-month low against the euro and a two-year low against the British pound in trading yesterday.

The euro surged to $1.3172 (U.S.) against the greenback and the pound to $1.9469, before losing ground by day's end. The loonie and the yen have also gained on the U.S. dollar in recent days.

Oil prices rise on suggestions of further OPEC cuts

Oil prices steadied Tuesday on a lack of fresh news a day after the Saudi oil minister hinted that OPEC could further reduce output.

Light, sweet crude for January delivery rose 10 cents to US$60.42 a barrel in midafternoon Asian electronic trading on the New York Mercantile Exchange. January Brent crude at London's ICE Futures exchange slipped 4 cents to US$60.40 a barrel.

Dollar plunge shakes stocks, bonds

The dollar plunged against major currencies on Friday, pulling the rug from under European stocks as the euro soared and sending investors scuttling into selected safe havens.

European stock indexes sank well over 1 percent on worries about exporters' future earnings, and concerns grew that the steady rises in global equities and general lack of volatility across financial markets might be hitting the skids.

Oil Rises Above $60 on Signs OPEC May Cut Output a Second Time

Crude oil in New York rose above $60 a barrel on signs OPEC may cut production for the second time in two months as peak U.S. winter demand approaches.

The Organization of Petroleum Exporting Countries may trim output next month if November's 1.2 million barrel-a-day cut fails to ``stabilize'' prices, London-based Al-Hayat reported yesterday, citing Saudi Arabia's Oil Minister Ali al-Naimi. Gold, copper and corn gained as a slide in the U.S. dollar made commodities cheaper for consumers outside the U.S.

Pickens: Expect $70 Per Barrel Oil in 2007

T. Boone Pickens on Monday said to expect oil averaging $70 per barrel in 2007, as producers in the Middle East cut back on an oversupply that has allowed lower prices in the latter half of the year.

Climate change could cause sex switch in crocs

Warming climate could cause a sex imbalance in crocodiles making it more difficult to find mates, according to a south African scientist.

Dr. Alison Leslie, a prefessor at South Africa’s University of Stellenbosch, said that crocodile gender is determined by embryo temperature during incubation and that higher temperatures could skew the sex ratio of populations.

Venezuelan Oil Stats War

Petroleos de Venezuela SA says the IEA is publishing erroneous Venezuela oil production figures.

Is the IEA so politicised that it might misrepresent numbers to add weight to the argument that the Chavez government is mismanaging their oil fields, thereby increasing international pressure against the regime? The IEA denies this. So does it seem more likely that Venezuela is giving false reports to the SEC?

Peak oil - the South will rise again

Science-fiction writers like to imagine how, after a limited nuclear war, disease pandemic or other catastrophe, North America would break up into half a dozen or so smaller nations. There would be French-speaking Quebec, Yankee New England, an eco-state in the Pacific Northwest, a Latino-dominated neo-Aztec kingdom in the Southwest and of course, a risen-again Confederacy in the Southeast.

These days, such scenarios are not just entertainment; they're contingency planning. Futurists are now concerned that an energy crisis brought on by the peaking of world oil could disrupt America's economy and politics enough to strain the U.S. social fabric beyond its breaking point.

Dollar Hits New Lows! Gold, China Surge! (by Martin Weiss)

While most U.S. investors stayed home Friday, foreign investors were running away from the dollar.

The greenback plunged to a 19-month low against the euro and a two-year low against the British pound.

The utter speed of its decline rattled Wall Street ... added new momentum to rising commodity prices ... and raised the specter of massive dollar selling by foreign central banks

Five Things You Need to Know: The Dollar Sleeps With the Fish, OPEC, Giant Oil Field for Make Benefit Glorious Nation of Kazakhstan, Buy Yourself Some

The dollar fell to its lowest level against the euro in 20 months, its lowest level against the yen in three months, and at one point reached a record low against the yuan this morning

The rise and rise of gold and oil

Recent consolidation of gold prices and sliding crude-oil prices will be short-lived. Politically motivated dollar depreciation, rising US inflation, and mining-industry consolidation are expected to push gold above US$800 per ounce in 2007. And despite gathering US economic weakness, intensifying global geopolitical instability, declining natural oil production and greater output discipline among major petroleum producers will send oil prices

Why We Need to Talk to Iran

Iran last week decided to play power broker. It invited Iraq's President to visit Tehran to discuss regional stability, and it sought to bring Syria into the process as well. This was not greeted with glee in Washington. But it should have been. One of America's top strategic interests is to get Iran to behave less like a revolutionary cauldron and more like a traditional nation-state. For the mullahs and their mad President to express a desire for a stable neighborhood is a good first step.

Rounding Up the Holiday Weekend

Shoppers started early and splurged on flat-panel TVs and computers over the long weekend, driving strong electronics sales in what was generally viewed as a solid start to the holiday season. But Wal-Mart’s weak sales raise doubts about whether the Christmas cheer will be widely shared.

Oil and Politics between Reality and Ambitions

In the past two weeks, the International Atomic Energy Agency (IAEA) Executive Director, Claude Mandil, stated that current oil prices, ranging between 55 and 60 dollars per barrel (d/b) are still high, and, at the same time, investments in oil industries are low and inadequate in meeting future demands.

Anyone familiar with economics would be able to tell that such statements by an official in charge of the organization, which reflect the point of view and interests of Western industrial nations, are incongruous; since a desire for higher investments would require higher prices. Otherwise, these funds would be invested in fields and sectors other than oil.

Hostage death raises stakes in Nigerian oil crisis

The death of a British hostage in Nigeria's oil-producing south in a shootout between kidnappers and troops raises the stakes for oil workers but is unlikely to change much for the industry, security experts said on Thursday.

The Briton, abducted from an offshore facility with six other foreigners early on Wednesday, was killed later in the day when the kidnappers with the hostages in their boats ran into a military patrol in the remote creeks of the Niger Delta.

Saudi suggests more Opec cuts

Ali Al Naimi, Saudi Arabia's Minister of Petroleum and Mineral Resources, has said that further cuts in oil output would be on the agenda at next month's Opec meeting, reported Arab News. Al Naimi said the impact of the recent 1.2m bpd cut on oil price stability would be studied. One major concern for oil exporters is the healthy stockpiles in countries such as the US, the world's biggest user.

India's Finance Minister Accuses OPEC of Rigging Oil Prices

India's Finance Minister, Palaniappan Chidambaram, said 1 percent of India's GDP was being "robbed" by speculative oil prices, indirectly accusing OPEC of rigging oil prices globally through its members cutbacks.

Addressing the India Economic Summit organised by the World Economic Forum and the Confederation of Indian Industry, Chidambaram accused oil producers of "exploiting" consumer countries like India.

King: Organizing for sustainability

"Sustainability" is the new green buzzword - the rallying cry of a groundswell of people across the globe concerned about the viability of our planet, both in the near future and for generations to come. In 1987 a report from the United Nations' World Commission on Environment and Development defined a sustainable society as one that "meets the needs of the present without compromising the ability of future generations to meet their own needs."
Richard Heinberg, one of the world's most renowned educators on Peak Oil (global oil depletion), is among a large group of scientists who believe that global oil production will peak by 2010, and that the natural gas supply is already in decline. This doesn't mean that there will be no more oil - at least, not for awhile - but that oil producers will be unable to produce it at the current pace, due to both availability and the cost to retrieve it. With a growing world population, and increasing global demand for energy and the lifestyle it supports, it's no surprise that sustainability is a word that so often punctuates conversation all over the world.

Dollar assets hard to diversify -China FX official

Countries holding large stockpiles of foreign exchange reserves face problems diversifying their holdings away from dollar-denominated assets because of the potential market reaction to any such move, a senior Chinese forex official said on Saturday.

Guan Tao, deputy director-general of the general affairs department of the State Administration of Foreign Exchange (SAFE), highlighted the potential pitfalls of such a move, without specifically referring to China or its plans for managing its reserves.

Analyst warns tight oil supplies will force new lifestyles

North America's dependence on oil will force higher prices and lifestyle changes in years to come, a leading Canadian energy analyst warned a Denver audience in a recent speech.

"Ultimately we will get to the point where (oil) supply is unable to meet demand in an economically feasible way. That's the break point -- something has to give," said Peter Tertzakian, chief energy economist for Calgary-based ARC Financial Corp.

Saudi warns on OPEC output cut

Saudi Oil Minister Ali al-Naimi said today OPEC would cut oil output again when it meets in December if recent supply curbs failed to balance the market. Oil prices were not a decisive factor, said the oil minister of the world's top oil exporter and OPEC's biggest producer.

The Organization of the Petroleum Exporting Countries decided in October to cut output by 1.2 million barrels per day (bpd) from November, its first formal curbs in over two years, to respond to a 25 per cent slump in oil prices.

An energy quagmire awaits president-elect

When Mexico's president-elect, Felipe Calderon, takes office Friday, he will inherit an energy-policy quandary.

Calderon, a conservative, needs to convince the Mexican public that the enormous profits reaped by Mexico's state-owned oil company, Petroleos Mexicanos, or Pemex, trickle down to the public.

Mexico's Pemex chief: Cantarell oil field output to drop 14 percent a year

The chief executive of Mexico state oil monopoly Petroleos Mexicanos, or Pemex, said Wednesday the company expects production at its Cantarell oil field to decline by an average of 14 percent a year between 2007 and 2015.

Speaking to members of the Senate Energy Committee, Luis Ramirez Corzo said the average annual decline is equivalent to about 150,000 barrels a day.

Peak Oil Passnotes: Where Is the Money?

Some people are calling this the most boring crude oil market for ten years. Since the decline in August and September the market has remained fixed solid. Stuck between $55 and $61. It is easy to see why, as we have gone over these problems many times.

Despite many instances of scaremongering, and many genuine problems, nothing has convinced the herd to move off from its current watering hole. Each news event fails to stir the loins of the market makers. Sure this is a good thing for small businesses, consumers and those who wish to plan fuel consumption long term. But they are not important in the oil market. What�s important is profits.

Corn rally seen biting into ethanol profits

The steep climb in corn prices headed even higher Friday, spelling harvest windfalls for farmers but higher costs for a growing consumer of corn kernels -- ethanol makers.
"Higher corn prices are negative for ethanol producers," said Raymond James analyst Pavel Molchanov, who rates the sector as his favorite among alternative energy companies.

Would Jesus get out of Iraq?

A clear majority of Americans are opposed to the war and almost all of them would be very happy if the US military began the process of leaving Iraq tomorrow, if not today. The rest of the world would breathe a great sigh of relief and their long-running love affair with the storybook place called "America" could begin to come back to life.

A State Department poll conducted in Iraq this past summer dealt with the population's attitude toward the American occupation. Apart from the Kurds — who assisted the US military before, during, and after the invasion and occupation, and don't think of themselves as Iraqis — most people favored an immediate withdrawal, ranging from 56% to 80% depending on the area.

The U.S. Dollar is the Week’s Biggest Turkey

While Americans were busy digesting their Thanksgiving feasts, the rest of the world was barfing up dollars. As a result of our massive trade deficits, foreigners certainly have their bellies full of them. This week’s action in the Forex markets indicates that they may have finally eaten their fill. Unfortunately, the bad taste will likely linger as the dollar’s rout has only just begun.

Ahmadinejad says Iran will be self-sufficient in nuclear fuel by next year

Iran will be self-sufficient in nuclear fuel in 2007, President Mahmoud Ahmadinejad said Monday, days after he admitted his country was far from producing enough fuel to power a nuclear reactor.

To reach the goal outlined by the president, Iran would need to dramatically accelerate its capacity for uranium enrichment, a process that the United Nations and the West are demanding Tehran suspend or face possible sanctions.

The Age Of Silver

"The short answer is that the results astounded me, as I think they will astound you. I must confess – it takes something very special to make me feel I have underestimated just how bullish silver really is. This study has had that effect on me".

Theodore Butler is a self-confessed "silver bug" and, to his fans, a silver guru. The study to which Butler refers is one he has conducted recently, and clearly has been moved by. Critics may scoff, but the reality there is a groundswell of belief that while there may be reasons to feel the gold price could see new highs, there is potential for the silver price to explode to levels never previously imagined.

Gold, Uranium, Base Metals and Oil Are Heading Much Higher

Michael Berry has been a portfolio manager for both Heartland Advisors and Kemper Scudder where he successfully managed small and mid cap value portfolios. Dr. Berry has specialized in the study of behavioral strategies for investing and has been published in a number of academic and practitioner journals. His definitive work on earnings surprise, with David Dreman, was published in 1995 in the Financial Analysts Journal.

High Energy Thursday: Is OPEC greedy or far-sighted?

The BBC is reporting that the Organization of the Petroleum Exporting Countries is likely to cut its production further after meetings next month. After reducing output over the past month, why is OPEC trying to raise prices even more?

Pemex CEO: Cantarell output drop principal challenge - Mexico

Mexican state oil company Pemex's principal challenge in coming years will be an expected average annual production drop of 150,000b/d from the Cantarell complex, according to company CEO Luis Ramírez Corzo.

Oil in Brazil and the world: analysis under diverse aspects.

Brazilian government must suspend, while the sector is reorganized, the rounds of licitations of areas promoted by ANP.

Oil in Brazil and the world: analysis under diverse aspects.

The engineers Sergio Xavier Ferolla and Paulo Metri had published the book "Not all our oil are ours", where they alert Brazilian society on what it is occurring in the sector of oil in Brazil and the world. In the specific case of Brazil, the analysis has covered, mainly, the years of 1995 until today. Some topics treated in the book are shown to follow.

Invest In Commodities – and Keep Your Shirt

Recently, at a party in New York, I mentioned that I had been talking to various groups in the United States and Europe about investment opportunities in commodities. Before I could get out one more word, a woman interrupted me. "Commodities!" she exclaimed, with the kind of incredulity in her voice that Manhattanites reserve for people moving to Los Angeles. "But my brother invested in pork bellies and lost his shirt. And he's an economist!"

THE NEXT ADDED 100 MILLION AMERICANS

Crossing our Agricultural Rubicon
In 49 B.C., Julius Caesar defied the Roman senate by crossing the Rubicon River to wage civil war against another Roman, Pompey the Great. By crossing the Rubicon, Caesar made a decision whereby he could not turn back.
Today, “Crossing the Rubicon” means no way to change, repair or undo your destiny. Yes, Caesar conquered Pompey, but the Roman senate, along with Brutus, stabbed Caesar to death.
If President Bush signs an amnesty or bill similar to S.B. 2611, he casts the dye; he crosses the Rubicon of America’s death knell. Bush ensures 100 million more people added to our country that explodes our nation to 400 million in the next 34 years on our way to a half billion. Once manifested, we will not be able to turn back.

A Look at Environmentalists’ Role in Global Warming

Robert Kates’ message was clear last Thursday at his presentation titled “Global Warming: Are Environmentalists Part of the Problem?” His message: Yes, environmentalists are part of the problem and they have opposed greater changes that are necessary to save the planet.
“I’m pretty much upset with our whole community of environmentalists,” Kates told a group of about 30 Downeast Audubon members and local residents at the Ellsworth Unitarian Universalist Church.
Kates said many environmentalists’ opposition to nuclear power, natural gas pipelines and the creation of new wind turbines are just some of the problems.

Happy Thanks Giving

Analyzing Oil Inventories On A Days Of Supply Basis

While oil inventories are often measured by looking at absolute levels, another way is to look at them on a days of supply basis, which accounts for current usage, or demand. Simply put, days of supply is calculated by taking current inventory levels and dividing by the product supplied (used as an estimate of demand) averaged over the most recent four-week period.

Ethanol Drives Up Food Commodity Prices, Datagro Says

Global ethanol production is driving up prices for food commodities, from feed stocks such as sugar, to meat, said Datagro, Brazil's biggest sugar-industry forecasting firm.

U.S. production, forecast to increase more than 70 percent by 2012, will use 37 percent of the country's current corn supply to meet output needs, up 15 percent from 2006, Datagro said. Land for soy oilseeds is increasingly being diverted to grow corn, reducing soy supply and driving up animal feed prices, according to the company. In China, competing demand for corn from the food and ethanol industries may lead the country to reduce exports and become a corn importer, Datagro said.

From Mad Max to Happy Feet, George Miller tells one never-ending story

As to the specifics, Miller won’t say much except that, like its predecessors, Mad Max 4 will unfold against a future devastated by oil wars and the depletion of natural resources — a future, Miller admits, that seems less of a fantasy now than it did back in 1979. In the meantime, he’s also managed to “download” onto paper three other screenplays that had been “banging around” in his head, which suggests that, with Happy Feet now behind him, one of contemporary cinema’s special visionaries may be poised to enter the most prolific period of his career. “It’s just a question of having a good rest now,” he says with a smile, “and then getting back to work.”

Japan Freezes $10 Billion Iran Loans on Nuclear Row

Japan, the world's second-largest oil importer after the U.S., halted its $10 billion financing of projects in Iran until the country complies with demands to halt its nuclear program, an official said.

``New projects, no thanks,'' Fumio Hoshi, senior executive director of state-owned Japan Bank for International Cooperation, told reporters today. Lending will cease until ``we have a good outcome from the negotiations between Iran, the Europeans and the U.S.''

OPEC to cut output again if prices decline-Kuwait

Kuwait's oil minister said on Wednesday that OPEC would cut its oil production again in December if prices deteriorate, and added that he felt a $55-$60 a barrel price range was satisfactory.

"If there is any deterioration in the prices, we are going to cut," Energy Minister Sheikh Ali al-Jarrah al-Sabah told reporters.

The Rising Dragon’s Environmental Disaster

Its nose-curling stench hits you even before you see the floating carpet of green algae and a dense matting of water hyacinth. Once a beauty spot praised by poets, Dianchi Lake, around Kunming, the capital of subtropical Yunnan province shows the cost to China of its frantic growth.

A primer on Caspian Oil

Oil & gas in the Caspian has a long history - indeed it is one of the earliest oil production regions in the world, with Baku a major oil center in the second half of the 19th century and beyond. What makes the situation today interesting is the simultaneuous appearence of three things: (i) new reserves discovered offshore, (ii) the fact that, with the break up of the Soviet Union, the oil is located in (new) countries that are keen to have foreign investment and are now one of the few oil provinces around the world that still welcome Western oil majors, and (iii) these countries have no direct access to the world markets.

Are Canadian tar sands the answer to our oil needs?

Forgive me if I call them tar sands, dear readers. I know that the marketing people want to call them “oil” sands, because it is better for the real estate values. After all, would you rather have oil on your land or tar? And what sounds better when you meet some new people down at the club and want to impress them: “Hello, I’m in the tar business” or, “Hello, I am an oilman”? I am sure that you can see the difference. One guy drills oil wells, and there is no question about it. The other guy might fix roofs for a living, or seal your driveway.

The Peak Oil Crisis: Picking the Peak

Last week Cambridge Energy Research Associates (CERA) who characterize themselves as "a leading advisor to international energy companies, governments, financial institutions, and technology providers," sent out a press release announcing that they had a new report on peak oil for sale. For some time now, CERA has been the leading debunker of the notion that world oil production might just peak in the near future, so their reports are always of interest.

Oil Rises Above $60 on Alaska, North Sea Supply Disruptions

Crude oil rose above $60 a barrel after the Trans-Alaska Pipeline System limited the amount of oil it will carry and a North Sea platform was shut because of a gas leak.

The Alaska restrictions were imposed after high winds disrupted loadings at the port of Valdez several times in the past week, according to Alyeska Pipeline Service Co. U.S. supplies of distillate fuel, a category that includes heating oil and diesel, and gasoline fell last week, according to a Bloomberg News survey before an Energy Department report tomorrow.

Corn for ethanol demand driving prices higher

An insatiable demand for corn for ethanol production combined with projected record exports is likely to drive U.S. corn stocks-to-use ratio down to 10 percent this season.

Platinum ETF Speculation Driving Prices Higher

Platinum rose as much 12% to a record $1,401.50/oz in London today, the biggest one-day gain since at least January 1987! The market is a buzz with speculation that the world’s first platinum Exchange Traded Fund (ETF) could be in the works.

However, Barclays Global Investors (BGI), the firm that launched the world's first silver ETF iShares Silver Trust [AMEX:SLV], told Resource Investor that it would not come from them.

Goldilocks and the Three Potential Bears

Over the past few months we have witnessed a relentless run in virtually every major stock market average. The reasons are vast as I listen to TV, read the paper and talk to fellow professional money managers. The most often mentioned is that the Fed will engineer a ‘soft landing,’ where we experience a slowdown in economic growth but not a hard landing with negative economic growth, otherwise known as a recession in these parts. Another is ‘performance anxiety’ for under-invested managers (they chase).

Five Things You Need to Know: FCX Acquires PD: Who Wins and Who Wins, In Horrible Misconception, China Continues to Seek to Emulate Detroit, OPEC to C

1. FCX Acquires PD: Who Wins and Who Wins

Freeport-McMoRan Copper & Gold (FCX) said last night that it would acquire Phelps Dodge (PD) for $25.9 billion in cash and stock to create the world's largest publicly traded copper company. The deal values PD at $126.46 a share, a significant premium above Friday's close of $95.02 on Friday. So, what's the bottom line? Who wins? And who wins more?

Peak oil and U.S. cities

The past year, consciousness surrounding Peak Oil has gained momentum as the topic has moved more and more into the mainstream, even though it still has a long ways to go.

The present dip in oil prices, partly seasonal in nature, is merely a short term blip on an ever increasing upward spiral. We are very fortunate that San Francisco’s city government has agreed to address Peak Oil at the juncture, instead of making the mistake of waiting.

Peak Oil: Even If The Optimists Are Right, Time Is Getting Tight

Peak oil proponents and skeptics agree that world production will eventually crest. Also, both sides of this debate accept that the decline curve will be gradual rather than sudden (with a little luck). Their common ground, although limited and easily obscured by emotional intensity, is slowly growing.

Aptly illustrating this blend of acrimony and agreement was a report issued last week by Cambridge Energy Research Associates (CERA) - Why the Peak Oil Theory Falls Down: Myths, Legends, and the Future of Oil Resources - and the rebuttal from the Association for the Study of Peak Oil & Gas (ASPO).

The Profitability of Urgency

So the Democrats finally took Congress, and Wall Street is enjoying a quick spike in select renewable energy stocks. Once again, investors are reacting in an irrational manner.

Why Being An Oil Bull Continues To Make Sense

When we last visited the oil patch, we found the arguments against higher oil prices lacking. It remains our view that demand for oil is rising at a faster pace than supplies of oil, and that the imbalance will be solved through the price mechanism. We don’t think the correction is even close to done. However, an article we found in Oil & Gas Journal titled CERA Study Challenges ‘Peak Oil’ Theory suggested it was time to update our analysis.

Does The Oil Drum threaten CERA's market share?

Cambridge Energy Research Associates (CERA) fired another missile at the peak oil movement last week by releasing a report attacking the notion of an imminent peak in world oil supplies and projecting an "undulating plateau" in oil production starting sometime after 2030. To rework a now shopworn phrase coined by the group's president, Daniel Yergin, this is not the first time CERA has attempted to undermine those concerned about a nearby peak, it's more like the fifth.

Energy output short of demand

Mexico, the No. 2 U.S. supplier of oil, is unable to produce enough to meet the demands of its customers, especially its neighbor to the north, because of outdated national economic policies that have hamstrung its oil and gas exploration and production, analysts say.
Mexican President-elect Felipe Calderon met with Canadian officials this month to discuss trade and explore further cooperation as Mexico's production capacity dives.

Last War for Oil? Inshallah!

Alon Ben-Meir is one of the most prominent experts on Middle East affairs in the United States. In an age of extremes and semi-informed comments, Prof. Ben-Meir’s remarks stand as oases of common sense and a great reminder to those still hopeful for peace in the Middle East. Last week, in an article titled “Last War for Oil?” Ben-Meir argued that oil was one of the most important reasons as to why the United States has waged two Gulf wars in the recent past. Also reproduced in the Journal of Turkish Weekly, the article maintained that it was now incumbent upon the newly elected Democratic U.S. Congress to work in tandem with the Bush administration to enact the necessary set of legislation to make the United States “energy-independent” and free from the “shackles of foreign oil.”

US rides weapons wave

War, instability and high oil prices have created a perfect storm of profit for the world's weapons manufacturers. This year, military analysts predict the biggest arms bonanza since 1993, which is saying something because in the aftermath of the first Gulf War the global industry reaped the benefits of a US$42 billion arms race.

U.S. Troops Could Soon Be Protecting Chinese Oil in Iraq

After the November 7 seismic shift in political power, a very important and robust debate over American involvement in Iraq will play out in the coming months. At both ends of Pennsylvania Avenue, Congress and the White House will each try to understand the lessons learned on Election Day.

The Amorality of the Stability Seekers: Bob Gates and the Iraq Study Group

Something larger is at works in Washington than a simple changing of the congressional guards. Republicans who had forgotten the primary tenets of republicanism were for two years feebly unwilling to pass legislation which the majority of the public eagerly endorsed. In the tug-of-war struggle between lobbyists and constituencies, they balked, chose the former, angered the latter, and for that will pay the price of losing the House and Senate. But representatives come and go every twenty-four months with midterm cycles. Domestically, changes are frequent and commonplace; they are to be expected, and even in losing graciously, to be welcomed.

The nuclear solution

Today, the United States imports oil at a rate of $400,000 a minute. It is estimated that by 2030, U.S. energy demands will increase by nearly two-thirds, and that by 2050, global energy demand will more than double. Americans must realize the necessity of finding a reliable energy supply in order to sustain economic growth and prosperity in the 21st century and to reduce the security, economic and political risks of our dependence on foreign oil.

Nigeria: OPEC to Cut Supply Output Over Falling Price

Organisation of Petroleum Exporting Countries (OPEC) is to cut production output to shore up dwindling prices of crude oil at the spot market.

To give effect to this plan, the organisation has scheduled an exra-ordinary ministerial conference for December 14 in Abuja, Nigeria.

Runaway Climate Change - A Frightening Lack Of Leadership

The scientific consensus, already clear and incontrovertible, is today moving towards the more alarmed end of the spectrum. Many scientists long known for their caution are now saying that warming has reached dire levels, generating feedback loops that will take us perilously close to a point of no return...The question is not whether climate change is happening, but whether, in the face of this emergency, we ourselves can change fast enough. Kofi Annan

Envisioning U.S. Talks With Iran and Syria

In Washington these days, an idea the White House once treated as anathema is suddenly gaining currency: to sit down and talk directly to Iran and Syria.

Tony Blair is recommending it. The Iraq Study Group headed by James Baker and Lee Hamilton may do so, too. With Iran intent on pursuing its nuclear program and with Egypt, Jordan and Saudi Arabia unable to stabilize the region, there may be no other choice.

Atmospheric Methane May Slow Global Warming

Scientists at UC Irvine have determined that levels of atmospheric methane – an influential greenhouse gas – have stayed nearly flat for the past seven years, which follows a rise that spanned at least two decades.

This finding indicates that methane may no longer be as large a global warming threat as previously thought, and it provides evidence that methane levels can be controlled. Scientists also found that pulses of increased methane were paralleled by increases of ethane, a gas known to be emitted during fires. This is further indication that methane is formed during biomass burning, and that large-scale fires can be a big source of atmospheric methane.

Falling Down

No, the title of today's post is not in reference to aerospace engineers, but rather, petroleum engineers and the theory of peak oil (yes, that was a long row to hoe, but this is going to be movie-themed week here - well, at least today and Thursday).

Peak Oil Update - November 2006: Production Forecasts and EIA Oil Production Numbers

New forecasts added:

• The shock model (Crude oil + NGL, 2004)
• The GBM model (Crude oil + NGL, 2006)
• Deffeyes (Crude oil + condensate, 2004)
• Jean Lahèrrere (All liquids, 2006)
• Forecasts from CERA (All liquids, 2006)

Rubin, Volcker Say Investors May Avoid Buying Dollars

Robert E. Rubin, Treasury secretary under President Bill Clinton, and former Federal Reserve Chairman Paul Volcker said foreign investors probably won't keep increasing dollar holdings, raising the risk of a slump in the currency.

Failure by the U.S. government to shrink its budget deficit may spook the central banks, hedge funds and others who have been buying Treasury notes, Rubin said. Volcker said the U.S. borrowing requirements raise the risk of a ``crisis'' in the dollar as soon as the next two and a half years.

Banks told to predict effects of a 40% crash in house prices

BANKS in the UK have been ordered by financial regulators to assess how they would cope in the event of house prices crashing by 40 per cent.

The instruction to include a housing slump scenario in their stress-testing models comes after the Financial Services Authority found that some banks were failing to include gloomy enough assumptions in their modelling.

Energy Descent Scenarios: Integrating Climate Change & Peak Oil

The following brief article was part of a joint presentation on peak oil and permaculture by Richard Heinberg and myself as part of our 2006 Australian speaking tour. This particular presentation was to advisors, planners and policy makers directly and indirectly involved in the review of the South Australian government’s Strategic Plan, a document that looks ahead 50 years; longer than any other public planning process in South Australia. Based on the response to this and other presentations I have been refining the four scenarios as a generally useful framework for understanding and action at many different levels from the personal to the national. The table characterising Energy Descent Scenarios shows the outline of my current thinking about these scenarios. I am planning to further develop and explain these scenarios.

Peak oil: the last skeptics

The energy world is busy discussing the most recent study provided by CERA, the energy consultancy headed by Daniel Yergin, the author of "the Prize", the acclaimed book (and TV series) on the history of oil. Titled Why the "Peak Oil" Theory Falls Down -- Myths, Legends, and the Future of Oil Resources, it claims to thoroughly debunk the theory of peak oil, that people like me and others have peddled in recent times.

Fall in global oil supply not expected before 2030

The world's oil supply won't begin to run out for at least another 24 years, contrary to some theories that suggest production has already peaked and supply is now in a terminal decline, a prominent U.S. energy consulting group says.

Cambridge Energy Research Associates estimates remaining global supply at 3.74 trillion barrels, compared with 1.2 trillion estimated by "peak oil" theorists. Peter Jackson, CERA's director of oil industry activity, doesn't dispute that oil will run out, but says the peak won't occur before 2030. He said the peak won't be followed by a sharp decline but by an "undulating plateau," in which production rises and falls for decades before entering permanent decline.

No platform in author's gloomy forecast of life without oil

When the applause died down, and guest lecturer James Howard Kunstler completed his talk Thursday night at Rutgers, a man had a question: Why don't you run for office?

Kunstler said he was content to be an author. What's more, he confessed, "I inhaled too recently."

Winter: A planet in a hurry to go the way of all flesh

My grandfather raised cattle, and every fall he'd haul several head to Omaha for slaughter. My grandmother raised chickens. The cluck hens that no longer laid eggs became Sunday dinner. My uncle would be dispatched to the chicken coop, where nearby stood a 2-foot-high tree stump with an ax stuck in the top.

Future without oil looks bleak

I worry about my grandchildren's world as our population grows, oil disappears and our climate changes.

When I was born, 2 billion people lived on earth; now there are 6.5 billion. We will add another billion in 13 years. So, if I live to 90, I will see the world's population almost quadruple.

It took all of time until 1850 to reach the first billion people. The second billion arrived 80 years later in 1930, the third billion arrived 30 years later in 1960 and the fourth billion in 1974. It took 12 years to add the most recent billion.

Environmental, energy communities agree on use of CO2

The environmental and energy communities tend to be on opposing sides, but they are finding common ground on the use of carbon dioxide (CO2) in enhanced oil recovery (EOR) projects.

Precarious finances? Get a safety net

If you're in debt, you need to cover yourself against a big rise in base rates. Jill Insley explains how

OPEC will ensure stable price: Algeria

Oil prices are stable for now but may fall when demand eases temporarily in the 2007 second quarter, and OPEC will take the decisions necessary to ensure price stability, Algeria’s energy and mines minister said.

‘We will take the decisions necessary to maintain the price at a very stable level,’ the minister, Chakib Khelil, said in brief remarks to Reuters.

EIA sees OPEC Q4 output cut at 800,000 bpd - Caruso

OPEC, which has pledged to cut its oil output by 1.2 million barrels per day (bpd), is expected to cut fourth-quarter production by only 800,000 bpd, the head of the U.S. Energy Information Administration (EIA) said on Saturday.

Oil bull run is intact despite rout as Opec mulls cutback

A more than $3 plunge in oil prices to their lowest levels for nearly two years has not ended a sustained bull run, but could jolt Opec into further defensive action.

A two-day fund-driven sell-off pushed US crude to a low of around $55 a barrel on Friday, its weakest since June 2005 and at the bottom of the price range Opec officials say the group needs to protect its revenues.

Naked Imperialism: An Interview with John Bellamy Foster

John Bellamy Foster's Naked Imperialism: The U.S. Pursuit of Global Dominance was published by Monthly Review Press in May 2006. It consists of essays written between September 2001 and September 2005, addressing the origins of today's undisguised imperialism, led by the United States. In addition to a running commentary on the developments over this period, the book presents a critique of this new phase of imperialism and some of its most common interpretations. MRZine recently talked with MR Editor Foster about the book.

Don't Iraq Iran

By virtually any measure, Iraq is a disaster. Tragically, those who bear responsibility for the ruin in Iraq not only fail to view it as such, they also appear headed down a similar path in Iran. Unless we change course, Iran is poised to become the next victim of a dangerously misguided U.S. foreign policy.

Iranian envoy cautions US against consequences of possible attack

Iran's new Ambassador to Kuwait Ali Jannati on Saturday cautioned the US against consequences of its possible attack on Iran.

Jannati made the remark in an interview with Kuwaiti newspaper of `Ar-Ra'i al-'Aam' (Public Opinion) in response to a question on possibility of any attack by the US or the Zionist regime on Iran.

"The US will not attack Iran. If it makes such a blunder, it will definitely be regretful.

The Coming Collapse in Housing

What Will Collapse Housing Prices?
The Grand Disconnect
89 Booming Cities
Where's The Unemployment From Housing?
Two Price-Break Triggers
The Fed to the Rescue?
Some Observations on The Big Easy

Will there be enough corn?

Ethanol boom poses environmental, economic challenges for Iowa

It's hard to believe, but with fuel processors ratcheting up demand, Iowa could one day find itself short of its signature product.

Committee finds ethanol plant will lower water table

As one of its last projects before disbanding today, the Webster County Groundwater Impact Committee surveyed well drillers who had done work within a 10-mile radius of Rogersville to get their observations regarding changes in ground-water levels during the past few years.

Global Warming or Sun Spots?

Publications across the nation have been bombarded these past few years with articles debating global warming. Are we to blame? Is it the sun’s fault? Is there really a hole in the ozone? Is our goose cooked?

Peak Oil Passnotes: Crack Gets High, Oil Gets Sexy Again

The oil market, and its subsidiary product markets, have been so asleep recently some weeks this commentator wants just wants to put up the `do not disturb` sign and tuck them up in bed with a mug of cocoa.

The market herd have been sitting about quietly wondering which way to take themselves now. But it shrugged off a Democrat trouncing of George W. Bush in the American mid-terms, it shrugged off more violence in Iraq, it shrugged of platform occupations and pipeline explosions in Nigeria. It did not even care about Britney’s divorce.

Alternative Energy, Part 2: The Perfect Storm

The overall energy supply and demand balance has fundamentally changed, Jeff Lipton, managing director of investment banking at Jefferies & Co., told the E-Commerce Times. "The demand picture is dramatically different, with countries like China and India now becoming significant consumers of energy and commodities -- and their growth is only going to continue."

Ethanol could leave us on empty

When dozens of new ethanol plants come online, will there be any corn left to eat? The Des Moines City Council ought to consider that question, in addition to possible environmental effects, in its review of the proposal for a new south-side ethanol plant. If too many cities jump on the ethanol bandwagon, a grain shortage could leave either tummies or gas tanks empty.

Where is a state or federal energy commission to advise on this unbridled industrial growth?

OPEC may consider more production cut

The head of OPEC affairs at Iran's Oil Ministry informed that if the recently agreed production cut did not affect the world's market, the production would be decreased even more.


"If the one million and two hundred thousand barrels reduction of oil production that is still observed today from the first of November does not make any effective change in the world market, then the production level shall be reduced even more," stated Javad Yarjani.

Russian deputy advocates 'gas OPEC' in former Soviet Union

Amid NATO warnings of a Russian-led 'gas OPEC,' Russia's largest natural gas interest group says it is trying to unite the former Soviet Union's gas producers.

An alliance of the gas associations of Kazakhstan, Turkmenistan, Azerbaijan and other ex-Soviet states would be 'an absolutely sensible business idea,' Valery Yazev, head of the Russian Gas Society, said Friday in remarks carried by Interfax.

Mexico must undo restrictions on foreign investment if it wants to increase oil output, the source of about one-third of government revenue, said Fran

When a Yucatan fisherman named Rudecindo Cantarell first noticed oil bubbling up into the waters of Campeche Sound in 1976, Russia was still Communist, Rocky won the Oscar for best picture and the notion of a political party other than the Institutional Revolutionary Party running Mexico unimaginable.

Thirty years on, the Cantarell field -- second in size to Saudi Arabia's Ghawar complex and source of 60 per cent of Mexico's total production -- has begun to decline.

Mexico Needs Foreign Money to Raise Oil Output, Gil Diaz Says

Mexico must undo restrictions on foreign investment if it wants to increase oil output, the source of about one-third of government revenue, said Francisco Gil Diaz, Mexico's finance minister.

The foreign investment, along with technology, is most urgently needed to help the country and Petroleos Mexicanos, the state oil monopoly, develop deep-water offshore fields as its largest and most easily tapped wells start running dry, Gil Diaz, 63, said in an interview at a meeting of the world's 20- largest economies in Melbourne.

Housing is Stabili... Oops, The Worldwide Conquest of Inflation, But Wait, There's More!, Speaking of Secular Deflation..., Crowds and WikiPower

1. Housing is Stabili... Oops

Home builder confidence in November spiked higher for the second consecutive month, surging two points to 33.

* Last month the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) exploded by one point from 30 to 31.
* This back-to-back explosion in the NAHB HMI prompted NAHB President David Pressly to note that "we look for sales to stabilize and gradually move up in the coming months.”

What could happen to cramer if another bubble bursts

Speculation on Chinese Reserve Diversification Just Keeps Building

An increasing number of people within China and in the wider world are suggesting that the People’s Bank of China (PBOC) will soon look to diversify its foreign exchange reserves, which at the equivalent of over $1 trillion now exceed those of any other central bank, away from the U.S. dollar. Such a move does indeed look like a very strong possibility at some point, and would likely have huge consequences for currency markets, as well as for the gold price.

I flagged this issue for Resource Investor readers months ago in this article, but now the idea seems to have really taken hold elsewhere.

US$1 trillion dilemma: What to do with it?

As official data flash up staggering US$1 trillion of foreign exchange reserves, China is debating whether the huge stockpile is a blessing or a burden and what to do with it.

The huge reserves are a reflection of China's economic achievements since reforms began in the 1980s, but observers worry that an excessive, fast-growing stash will endanger currency stability and liquidity.

Attempt to discredit theory falls short of making its case

Areport from the respected Cambridge Energy Re search Associates that seeks to debunk the so-called peak-oil theory has received much attention in energy circles but falls well short of making its case.

The peak-oil theory posits that the worldwide production of conventional oil is nearing the highest level it will ever attain, to be followed by a long decline. This will come as worldwide demand for oil is increasing, thus causing oil prices to rise significantly, with possible shortages occurring.

Slide ends for energy stocks

Share prices turn higher despite oil's continued downward trend. What's driving the turnaround?

Peak oil: the last skeptics

The energy world is busy discussing the most recent study provided by CERA, the energy consultancy headed by Daniel Yergin, the author of "the Prize", the acclaimed book (and TV series) on the history of oil. Titled Why the "Peak Oil" Theory Falls Down -- Myths, Legends, and the Future of Oil Resources, it claims to thoroughly debunk the theory of peak oil, that people like me and others have peddled in recent times.

Fed Whips Inflation Now, Minute-by-Minute, Say Again?, TICs Data... New and Improved, Angry Mob of Late-night Vigilante Comedians Vows to Relentlessly

1. Fed Whips Inflation Now

Consumer prices fell more than expected in October with underlying inflation slipping to its lowest gain since February.

* The consumer price index decreased by a seasonally adjusted 0.5 percent for a second consecutive month, the Labor Department said, below expectations for a decrease of 0.3 percent.
* Excluding food and energy, core consumer prices rose 0.1percent, after rising 0.2 percent in each of the prior three months.

Peak oil is simple

Cambridge Energy Research Associates (CERA) recently released a report called Why the "Peak Oil" Theory Falls Down -- Myths, Legends and the Future of Oil Resources. It's getting a lot of attention, and has produced much consternation in the peakoilosphere.

The definitive response, as usual, is on The Oil Drum.

Oil: Off the Deep End

A friend of mine sent me at least a dozen emails this year proclaiming “Peak oil! Peak oil!” The media was full of the same opinion; the story was POPULAR. Why? The evidence was not overwhelming; oil supplies weren’t dwindling; there were no gas lines. It was only that oil prices were at a record high.

After oil prices plummeted in late July, the emails dwindled too, and so did the news stories. Interesting how our perceptions are colored by the opinions around us, isn’t it?

Down Go Commodities, In Comes Recession

Commodity prices have shown unusual strength in recent years, and the robustness has not just been in the energy sector, but spread broadly. Industrial metals prices have skyrocketed. So have livestock and grains of late. Even precious metals have reached prices not seen since inflation was raging in the late 1970s.

Indian agencies on high alert over threat to oil reserves

India has put its security agencies and oil companies on high alert following an intelligence report that terrorists are planning an attack on Indian oil reserves.

Sources here said the alert from the Intelligence Bureau (IB) revolved round a threat originating from Pakistan. The intercept came as the foreign secretaries of India and Pakistan were winding up talks on Wednesday, but the information was not shared with the visiting Pakistani official.

Stern, Worm And The Special Committee On Sustainable Aquaculture

Two new reports - one by an economist looking at climate change and the other by fisheries scientists looking at declining biodiversity in the world's oceans - have both captured the world's attention predicting humanity threatening disaster by mid-century without an immediate change of human behavior. Neither report though confronts our present inability to make change of a needed scale fast enough to ensure a sustainable future.

Can intentional pollution solve global warming?

I’d like to see Al Gore’s face when he hears this: Some respected scientists say one good way to combat global warming is with more pollution.

At a U.N. conference on climate change in Kenya, Nobel laureate Paul J. Crutzen was among the scientists who said a layer of pollution deliberately spewed into the atmosphere could act as a "shade" from the sun’s rays and help cool the planet.

Iraq's Kurds press their claim on Kirkuk

The skyline in this northern Iraqi boomtown is a mosaic of half-built concrete retail centers, sparkling new hotels and giant earthmovers and cranes working overtime. The cafe-lined streets buzz late into the night.

While in much of Iraq, coalition troops never leave their secure bases without donning bullet-proof vests and helmets, the few U.S. troops stationed in Irbil travel through the city wearing camouflage baseball caps. Instead of staring resentfully, Kurdish motorists honk their horns and smile as the Americans drive by.

Natural-gas buildup sinks energy shares

Energy shares slumped Thursday after government data revealed a surprise buildup in U.S. natural-gas supplies, triggering worries that this winter's heating demand would not be enough to eat through sizable stockpiles and sending crude prices to a 17-month low.

Iran ready for 'final nuclear step'

PRESIDENT Mahmoud Ahmadinejad today said Iran was ready to take the "final step" in its nuclear programme, as he maintained his defiance in the face of possible UN sanctions against Tehran.

"The enemies of the Iranian people must know that the Iranian people have taken their decision and will resist until the end," the semi-official Mehr agency quoted him as saying in a speech in Baneh in Kurdestan province.

Does the Peak Oil "Myth" Just Fall Down? -- Our Response to CERA

With the release of Why the "Peak Oil" Theory Falls Down — Myths, Legends and the Future of Oil Resources by Peter M. Jackson, Cambridge Energy Research Associates (CERA) attempts to cast doubt on the credibility of those with imminent, empirically-based concerns about our future oil supply.

CERA's "Decision Brief" requires a response because since 1870, the health of the world's economies have hinged on a secure, dependable and growing flow of "conventional" oil. Their forecast, shown in Figure 1, predicts that the oil supply will continue to grow and sustain economic growth.

The Peak Oil Crisis: The Studies

Across the world governments are scrambling faster and faster preparing for the coming energy crisis. Delegations from China are everywhere making deals for a share of the soon-to-dwindle oil flow. Almost weekly there is a new announcement from Beijing regarding plans for more wind, solar and biofuels. Japan and Korea are looking for alternative sources of energy supply. Sweden is saying, flat out, that peak oil is coming and is making plans for a fossil fuel-less future.

The European Union is all over the map with plans for alternative fuels, new regulations on energy consumption, and efforts to guarantee an energy supply for the continent.

Oil crunch said to be overstated

In sharp contrast to popular doomsday scenarios in which an oil supply crash triggers a global economic crisis, a U.S. energy think tank says the world has just over three times the oil supply envisioned by pessimists.

Cambridge Energy Research Associates says in a report released Tuesday that so-called ''peak oil'' theories are not only wrong, they're threatening efforts to develop new sources of supply.

Peddling PetroProzac: CERA ignores 10 warning signposts of peak oil

At the end of World War II, the entire planet ran on ten million barrels a day, two-thirds of it produced in the U.S. Since 1950, global oil production has expanded eightfold, driving a similar expansion in economic activity. This era of exponential increase is now drawing to a close, even as the oil appetite of China, India and other developing countries grows apace.

Time is on Iran's side on nuclear issue, Iran's president says

Iran on Wednesday dismissed a U.N. report that inspectors found new traces of enriched uranium and plutonium at an Iranian nuclear waste facility, saying it has already explained the discovery.

Iran's hard-line president, Mahmoud Ahmadinejad, meanwhile, insisted the West will gradually back down in its standoff with Iran and eventually accept its nuclear program.

Incoherence stymies US's Iran policy

Next week, the International Atomic Energy Agency (IAEA) will once again address the issue of Iran's nuclear program and, in light of the growing impasse at the United Nations Security Council over a draft sanctions resolution on Iran, a new window of opportunity to relieve the council of this unwanted pressure and to tackle it at the atomic-watchdog agency has now emerged.

Global warming hot air?

A northern Alberta geologist has embarked on a crusade to stop what he says is the madness of the prevailing wisdom that human activity is heating the Earth.

"The truth has to start somewhere," said Bruno Wiskel in an interview with the Sun yesterday.

Wiskel, who teaches a University of Alberta faculty of extension course, says climate change is an eons-old force that has nothing to do with people.

Inversion, Inversion and More Inversions

I woke up this morning and felt...well...stupid.

I really hate to admit that, especially in a public forum. But, hey, that is what the market and my job is all about. Honesty.

Why do I feel stupid? Well, I have been underweight equities since SPX 1365 (not short, just cautious) and the economic fundamentals have played out exactly as I suspected. So I guess I am not really stupid--but Mr. Market is having his way with me.

FOMC Minutes, Dollar Doom Hyperbole, Give Government Chance to Solve Nation's Problems, When It's Raines We're Poorer, Plunk Factor

1. FOMC Minutes Pre-Release Party

At 2 p.m. today the Federal Reserve will release minutes from the October 24 Federal Reserve Open Market Committee meeting. You may recall that the Oct. 24 meeting was the third consecutive lone dissent from Richmond Fed President Jeffrey Lacker. The minutes of this meeting may show just what it is Mr. Lacker sees that the remainder of the FOMC does not.

Home Depot: Perverse Logic

Home Depot (HD) reported earnings yesterday. In short, it missed earnings, missed revenues and CEO Bob Nardelli, a cheerleader if ever there was one, makes statements so bearish it would make Boo blush. What does the stock do? It rallies two bucks. Here, in a nutshell, is the perverse logic that drove the stock higher...

Beware: No rate cut until 2008

Economists think it's looking more and more likely that the Federal Reserve will hold interest rates steady for quite a while, maybe through all of next year.

So investors hoping for a rate cut in 2007 may need to kiss that wish goodbye.
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ECONOMY FED FOCUS

"I think the Fed being on hold through 2007 is an entirely plausible scenario," said Chris Probyn, chief economist with State Street Global Advisors.

Near a Housing Botttom?

One of the reasons I have been so skeptical about the staying power of the most recent rally has been the disconnect between stock prices and the macro environment. The rally appears to be based on several false premises: A soft landing, a bottom in real estate, a mid-cycle slow down that resumes almost as soon as it starts.

Indeed, if the bulk of the housing recession is behind us, then this would go down in post-war history as one of the shallowest housing corrections on record.

U.S. housing slump deepens, spreads

First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too.

Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse.

Hot or Not?

Thousands of brokers gather in New Orleans to assess the cooling real estate market, make some cautious price predictions—and commiserate.

Consumer Spending Is Holding Up? You Do the Math: Caroline Baum

For two months now, the commentary following the retail-sales report has been that apart from gasoline-station sales, which are depressed because of falling fuel prices, consumer spending is holding up well.

How can that be? Retail sales fell 0.2 percent in October after a revised 0.8 percent decline in September. Sales at gasoline stations fell 6 percent and 11.1 percent, respectively.

``If consumers are using the savings from the sharp fall in gasoline prices to purchase other items, overall sales should not be declining,'' says Joe Carson, director of economic research at AllianceBernstein LP in New York. ``How are you going to get any nominal GDP when retail sales are falling?''

Of China, Strategic Petroleum Reserves, and "them again"

Dear Me! There has been a considerable stir in the TOD house, since CERA have just come out with a report restating their position that there is no Peak Oil Problem. For a mere $1,000 you may discover (perhaps) what is new since the last time they said this. Now we have commented about problems with the CERA position on a number of occasions (try one, two, three , four and five for a start). But since it is better to do a little checking first, it may take a little time to go through and see exactly what is different this time around, if anything.

PPI (Plummeting Price Index), The Fed Agenda, Hey, Labor Costs, Japan Growth Surges, Can We All Now Finally Admit That We Have a Serious Problem?

PPI (Plummeting Price Index)

The Producer Price Index for Finished Goods fell a seasonally adjusted 1.6 percent in October, according to the Department of Labor, equaling the largest monthly decline on record. Expectations had been for a decline of 0.5%.

* The PPI excluding food and energy, also known as the "core rate," fell 0.9 percent, the largest decline since 1993.
* Just last month core PPI rose 0.6%, the largest monthly increase since January 2005.
* As we noted at the time in Five Things, however, that was due almost exclusively to a one-time surge in passenger cars and light trucks.

U.S. housing slump deepens, spreads

First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too.

Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse.

“I don't think we've seen the bottom yet, and I don't see anything that says it's going to get significantly better in 2007,” said Bob Nardelli, Home Depot's chairman and chief executive officer.

This Weeks SchNEWS - Goin' Under - A Drop Of Strewth In An Ocean Of Bullsh*&

Last weekend was the International Day of Action Against Climate Change, coinciding with the start of the latest UN Climate Talks in Nairobi from 6th-17th November. The buzzword at this summit is ‘adaptation’ – i.e. we’ve left it too late to stop climate change, so how do we adjust our markets to survive and prosper from the now inevitable changes? Also being discussed is what to do when the Kyoto agreement lapses (and the world ends, according to Mayan prophecy) in 2012.

Congressional peak oil caucus responds to CERA study

Congressmen Roscoe G. Bartlett (R-MD) and Tom Udall (D-NM), cofounders and cochairmen of the Congressional Peak Oil Caucus, said that a new report released today by Cambridge Energy Research Associates (CERA), Why the Peak Oil Theory Falls Down: Myths, Legends, and the Future of Oil Resources, confirms the urgency for the United States government to adopt a crash program to mitigate the devastating consequences of peak oil.

Plug-In Hybrid: Building Block to Sustainabilty

Dr. Andy Frank has been talking about plug-in hybrids for more than two decade, much of it into a "vacuum", in his words. As a professor of engineering at UC Davis, Frank and his students have built many working, full-scale versions over the last decade, proving that the concept isn't just theory, it works in the real world.

World oil supply still plentiful -U.S. think tank

World oil production will not begin to fall for at least another 24 years, contrary to doomsday theories that supply is already in terminal decline, a prominent U.S. energy consulting group said on Tuesday.

Cambridge Energy Research Associates said in a report that the world has some 3.74 trillion barrels of oil left -- enough to last 122 years at current consumption rates and triple the amount estimated by "peak oil" theorists.

Historian says peak oil production is still a quarter-century away

Far from being a nearly exhausted resource, the world's oil reserves are three times bigger than what some popular estimates state, and peak global oil production is still about a quarter-century away, according to a new study by Pulitzer Prize-winning oil historian Daniel Yergin.

Post-election compromise, or a tin ear in Detroit?

Since the late 1980s, in the aftermath of the 1985 oil price crash, Detroit and Congress have seemed joined at the hip in a mutual suicide pact. Detroit promises to pound out larger and faster vehicles, and key members of Congress swear they will sideline any effort to tighten fuel efficiency standards.

Will Mexico be ready when oil runs dry?

When a Yucatan fisherman named Rudecindo Cantarell first noticed oil bubbling up into the waters of Campeche Sound in 1976, Russia was still Communist, Rocky won the Oscar for best picture and the notion of a political party other than the Institutional Revolutionary Party running Mexico unimaginable.

Thirty years on, the Cantarell field -- second in size to Saudi Arabia's Ghawar complex and source of 60 per cent of Mexico's total production -- has begun to decline.

Peak Opportunity! Earth Liberation and the Oil Endgame

By now, all radical environmentalists—if not all humans—should be aware of the fatal ecological effects of civilization's unsustainable energy binge. Yet many of us have been slow to grasp the true gravity of what our rapid depletion of non-renewable fossil fuels portends.

Fueling up with natural gas

There are already two million people around the world that use them, but only 130,000 of them are here in the U.S. We're talking about natural gas powered vehicles. Now the push is on to get drivers here in Connecticut pumped up about using them.

Russia Denies Plans to Create Gas OPEC and Blackmail Consumers

Russia is not planning to set up a gas cartel like OPEC in order to blackmail consumers of Russian fuels, a source in the Kremlin has said on Tuesday, Nov. 14.

“Russia is actively implementing the thesis of energy security which it initiated and made one of the main theses within the G8,” the source told Interfax news agency.

Saudi to stick with Opec cuts for rest of year

Saudi Arabia will enforce its Opec oil cut in full until the end of the year, but will ship more to some refiners in its main Asian market next month, sources said.

That suggests the US and Europe may bear the brunt of Riyadh's cut as part of a 1.2 million barrels per day (bpd) Opec reduction that began Nov 1.

'Saudi Arabia is already cutting by its full amount and will continue to do so in November and December,' said a Gulf source familiar with the kingdom's oil policy.

Iran says nuclear fuel program nearly complete

President Mahmoud Ahmadinejad boasted today that Iran will soon have mastered the production of nuclear fuel, but he added the country was far from producing enough fuel to power its Russian-built reactor.

Iran has been locked in a standoff with the West over its nuclear program. The United States and its European allies have been seeking a U.N. Security Council resolution imposing sanctions on Tehran for refusing to suspend uranium enrichment.

Iran will talk if Bush 'corrects behaviour': Ahmadinejad

Iran's President Mahmoud Ahmadinejad said Tuesday that his government would talk to the United States if it "corrects its behaviour."

His comments come the day after British Prime Minister Tony Blair advocated seeking Tehran's help in ending the violence in Iraq.

Global Oil Output Won't Peak for 25 Years, Yergin's Group Says

Global oil production will increase for at least the next 25 years as new drilling and refining techniques make it possible to tap heretofore untouchable reserves, according to Cambridge Energy Research Associates, the consulting firm run by Daniel Yergin.

The world probably has 3.7 trillion barrels of oil left, more than twice the estimates of geologists and analysts such as Matthew Simmons, of the investment bank Simmons & Co., who argue global output is close to a peak, said Peter Jackson, director of oil-industry research for the Cambridge, Massachusetts, firm.

U.S. chicken prices too high? blame ethanol

There is a new fox in the chicken house and its name is ethanol.

Production of this biofuel from corn has exploded, sending corn prices to a 10-year high this month. This has increased costs for U.S. chicken producers, who need the grain for feed, and will likely increase what consumers pay for chicken in stores.

Global warming could lead to extinction spike

SCIENTISTS studying the effects of Cyclone Larry have warned that biodiversity levels in tropical north Queensland could drop significantly if governments fail to address global warming.

Professor Steve Turton, director of the James Cook University-CSIRO Tropical Landscapes Joint Venture, said today that global warming would increase cyclone intensity, which will in turn affect animal and plant rehabilitation in areas of devastation.

Energy Independence - Kunstler

The day after the impressive Democratic election victory, Senate Majority Leader-to-Be Harry Reid declared that a top priority for the new congress would be policy leading to "energy independence" for America. The time of jubilee will certainly come, but not in the way Harry Reid thinks it will -- nor in the way the rest of the country imagines this idea.

Why We (Really) May Have Entered an Oil Production Plateau

We know that some countries (around 56) have seen their production peaked (also called type III depletion). The remaining group consists of 17 countries that have the potential to grow or maintain their current production (the type II group). I propose to apply the HL technique only on the total production from the the type III group and try to assess the future production decline coming from that group. My observations are the following:

Peak-oil, Fact or Fraud? Climbing Mt. Hubbert

This post is written for those who hold the view, understandably, that peak-oil may be a hoax. I sometimes forget that skepticism of corporate power distorted by bubble-vision makes the study of peak-oil seem like the quest of a knave.

But if it’s not a ruse, the ramifications are vast. And it’s my contention that most people view technology, energy, and its related solutions with an irrational, often theocratic belief. I want to skip the numbers, if possible, and simply suggest that the issue called peak-oil deserves serious reflection.

Tight oil will shake up lifestyles, expert warns

North America's dependence on oil will force higher prices and lifestyle changes in years to come, a leading Canadian energy analyst warned a Denver audience in a recent speech.

"Ultimately we will get to the point where (oil) supply is unable to meet demand in an economically feasible way. That's the break point - something has to give," said Peter Tertzakian, chief energy economist for Calgary-based ARC Financial Corp.