International Monetary Fund Told to Sell Gold

An esteemed group of eminent persons, including former Fed Chairman Alan Greenspan and current President of the European Central Bank Claude Trichet, has recommended that the International Monetary Fund (IMF) sell up to 400 tonnes of gold as means to finance ongoing costs.

In a report submitted to the IMF Executive Board today, a Committee of Eminent Persons concluded that the IMF's current income model, which relies heavily on the interest it earns from loans to member nations, is “no longer appropriate.”

Five Things You Need to Know: As Most Expected, GDP Unexpectedly Strong, FOMC: The Drama That Wasn't, Irrational Echo?, But What If?, Subprime Lending

Is anyone still looking for a rate cut sometime over the next six months? Because it turns out the economy grew at a robust 3.5% pace in the fourth quarter of last year and just about anyway you slice the GDP report the Fed looks to be on hold.

Federal Open Market Committee statement

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Recent indicators have suggested somewhat firmer economic growth, and some tentative signs of stabilization have appeared in the housing market. Overall, the economy seems likely to expand at a moderate pace over coming quarters.

Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time. However, the high level of resource utilization has the potential to sustain inflation pressures.

The Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.

Give me a child until...

The modern school system was forged in the US in the era of coal-powered industrialisation, and refined through the era of oil. Whether you consider the process 'conspiratorial' or inevitable and organic (really there's no clear distinction) the outcome was the same – a schooling system which produces dumbed-down boredom-tolerant industrial workers, and technical-problem-solving professionals who have difficulty thinking holistically or questioning the greater purpose of their efforts. That's you, me and most people of affluent nations, many of us now recovering. This schooling system was more or less 'necessary' for a bold new age of growth and industrialism. But an era of global contraction will demand relocalisation and decentralisation, and with it better educated people with less institutionalised characters. Without even considering the cruelty or loss of human potential of the current forced schooling system, it's obviously dysfunctional for our times. Richard Embleton's essay below makes the strong case for viewing the school system as a form of forced indoctrination. I've made a few notes following it about existing alternative models.

Mirror, mirror on the wall, how can oil plan at all?

Every morning as he brushes his teeth, a European oil company chief is reminded of the big question: is his business more like a tube of toothpaste or a glass of water?

If the latter, his job is to make money by being efficient, to keep the tap flowing, the water clean and the glass adequately replenished.

Oil to pass $US100 - some time

Commodities guru Jim Rogers, who predicted the start of the big rally in 1999, said the recent slide in crude oil is a "correction" before prices resume their march towards $US100 ($127) a barrel.

"I'm just not smart enough to know how far down it will go and how long it will stay, but I do know that within the context of the bull market, oil will go over $US100," Mr Rogers said in a Tokyo interview.

Energy Awareness: Time For an Oil Change

It's difficult to make sense of the fact that, with so much cogent information at our disposal, we continue to ignore all these messages. With enough circumspection the reason for our prolonged ignorance becomes more self evident. We're getting mixed messages, some from those who are well-intentioned but nevertheless incorrect, and some from those knights of industry who want infinite demand (despite finite supplies) whatever the cost.

PetroChina CFO sees crude output flat or slightly higher this year

PetroChina Co. (PTR), China's largest oil company by capacity, expects its crude oil output to be flat or up slightly in 2007, the company's chief financial officer said Wednesday.
Speaking at an investor conference in Shanghai, Wang Guoliang also said the company's natural gas output will maintain double-digit growth this year.
"Even 1% growth would be difficult," he said, in regards to crude oil output, as the company is already producing at high levels.

Oil Dips Below $58 a Barrel in Asia

Oil prices dipped in Asian trading Thursday as market participants took profits after crude gained more than $1 a barrel in the previous session.

Light, sweet crude for March delivery fell 27 cents to $57.87 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore.

Little to show for U.S. billions spent on Iraq reconstruction

As American military commanders struggle with deteriorating security in Iraq, there are growing indications that the $21 billion U.S. reconstruction effort is at risk, including a new report that casts doubt on Iraq's ability to maintain the reconstruction projects that have been completed.

The government of Iraq has been unable to boost the production of oil or electricity despite U.S. aid and many critical U.S.-funded projects remain unfinished, according to the latest quarterly report by Stuart W. Bowen, the U.S. special inspector general for Iraqi reconstruction. Some of the work done under U.S. supervision has been so shoddy that it will saddle the Iraqi government with additional maintenance headaches, he said.

The Peak Oil Crisis: The Age of the Electric Car

It is time for some good news. In recent weeks there has been a spate of announcements about plans to develop electric cars and much better batteries to power them. Although few new models will be ready for sale in a couple of years, by the end of 2007 there should be many technology-proving prototypes driving around. This in turn should give us better insight into how soon electric vehicle technologies might become available and whether there will be limitations such as prohibitively high cost, inadequate performance, or shortages of specialized raw materials that might prevent their widespread adoption.

IRAN NUCLEAR: AHMADINEJAD SAYS HE HAS TO MAKE ATOMIC ANNOUNCEMENTS

While Iran's supreme leader Ali Khamenei has the duty to decide the country's general political guidelines, it is the president who has to announce nuclear policies, Iranian president Mahmoud Ahmadinejad said on Wednesday, also stressing that "good news" on the atomic programme were upcoming. "The general policy of the country is established by the supreme leader and the government has to implement it," Ahmadinejad was quoted as saying by Iranian state television. "The president of the republic, as the head of the executive branch, announces Iran's position on the nuclear sector."

The Iranian president said he would announce the good news on progress made in the nuclear sector at upcoming celebrations marking the anniversary of the 1979 Iranian revolution during which 'nuclear celebrations' will be held.

A Shift in Momentum ( Oil Inventory Report )

At some point during the Super Bowl this coming Sunday, it is likely that television analysts will talk about a shift in momentum from one team to the other. Whether it is the result of one key play or just a collection of several important plays, analysts will talk about how the shift in momentum might be just enough to push one team to victory. At the time, however, no one will be sure how long the momentum shift will last. A similar uncertainty currently exists in markets for oil and gasoline, the single most important petroleum product in the U.S. market. With the near-month crude oil futures price rising from a level close to $50 per barrel recently to nearly $57 per barrel yesterday, retail gasoline prices have seemingly bottomed, with the national average price on January 29 unchanged from its January 22 level. The end of the declining trend in gasoline prices over prior weeks is generating expectations among some analysts that momentum has shifted towards rising prices. But whether any such shift persists into the spring and beyond, or lasts only a few weeks, is still an open question.

GROWING RISKS TO BALTIC SEA SAFETY FROM RUSSIAN ENERGY PROJECTS

The Russian government’s latest ideas about energy transit through the Baltic Sea are adding to the already considerable risks involved in these projects. Moscow is launching its new ideas apparently without consulting the countries affected or the European Union and is ignoring the Council of Baltic Sea countries, which is authorized to examine environmental and navigational safety in the region.

Gold and silver rally on fund buying, weakening dollar

Fund buying and a softer U.S. dollar enabled gold and silver futures to rally Wednesday.

April gold settled up $7.70 at $657.90 a troy ounce on the New York Mercantile Exchange. March silver rose 19.5 cents to $13.57, the highest level in six weeks.

Powershares Cleantech Portfolio: Capitalize on the Clean Energy Trend

Since President Bush’s State of the Union Address, the headlines have been numerous and divided on the viability of “Energy Independence”. Most focus on denouncing ethanol as being impracticable citing studies that ethanol produces 70% of the energy of an equal volume of gas or it takes as much energy to produce as it gives off.

Low oil prices endanger alternative energy growth

With global oil costs bottoming out at the mid-$50s-per-barrel level last week, the soaring prices of the past two years are no longer guaranteeing profits to all participants in the worldwide rush for black gold. Not only are current oil production initiatives less profitable, but some alternative energy projects may now be scrapped.

Tuesday's temporary price pop was primarily motivated by the Arctic cold wave that consumed the Northeast and Midwest, which are the primary users of heating oil and natural gas. This reversed the previous downward plunge due to an unseasonably warm winter in those areas.

A down side to Bush's ethanol push

Federal scientists want to tighten smog standards, a step that would allow tens of millions of Americans to breathe easier. The plan also would run head-on into President Bush's hopes of weaning Americans from gasoline by using more smog-producing ethanol.

Environmental Protection Agency scientists on Wednesday will say that tougher standards "would provide greater health protection for sensitive groups, including asthmatic children and other people with lung disease, healthy children and older adults -- especially those active outdoors, and outdoor workers."

Global Cool to reverse global warming

A huge worldwide campaign to reverse the effects of global warming was launched yesterday amid massive support from NME magazine, MySpace and a plethora of stars.

Inflation still a major global risk: ECB's Trichet

Inflation is still a major global risk and central banks around the world must remain "very, very alert" on price risks, European Central Bank President Jean-Claude Trichet said on Saturday.

"We make an assumption that central banks around the world are doing their jobs. It's true that we are credible in this domain," Trichet told a panel discussion at the World Economic Forum meeting in Davos.

Falling Yen sparks carry trade alert

The yen hit a four-year low against the US dollar on Monday, intensifying fears that the rising level of currency-based "carry trades" by hedge fund investors could jolt markets if these positions were suddenly unwound.

The Japanese currency's sharp fall also prompted European finance ministers to voice concern about its weakness.

Bush the Gasoholic

The President seems to be making a habit of trailing around after environmentalists in his State of the Union speech. Four years ago it was hydrogen and the "Freedom Car." Last year we were "addicted to oil." This year it's gasohol and the hope that we can farm our way to energy utopia.

None of this ever gets us anywhere. When the President mentioned the hydrogen car four years ago, environmentalists roundly denounced him. "The FreedomCAR is really about Bush's freedom to do nothing about cars today," complained Ashok Gupta, of the Natural Resources Defense Council. "President Bush is merely playing a shell game," echoed Patricia Monahan, of the Union of Concerned Scientists.

Dollar flat as market awaits rate decision

The dollar traded little changed against other major currencies Tuesday, after a report showed U.S. consumer confidence improved this month and as traders awaited an interest-rate announcement from the Federal Reserve.

The Federal Open Market Committee, the Fed's policy-setting panel, started its two-day interest-rate meeting, and is widely expected to leave overnight borrowing costs unchanged at 5.25% on Wednesday. Traders will be closely watching the accompanying statement for clues on future rate moves.

Bush's Last Surge for the Oil

Since our invasion in 2003, the US has encouraged Iraq to come up with an oil law that would turn the state-owned oil system over to foreign oil companies. Such a law would allow Production Sharing Agreements, called PSAs to be signed with Exxon, Chevron, BP and Shell to capture and control all the oil production from new fields and reap a large share of the profits for the next 15 to 30 years.

China Sees Declining Oil Reserves Last Year While Natural Gas Soars

China's proven crude reserves dropped 12.33% last year to 2.19 billion tonnes from a year earlier while natural gas reserves surged more than 50% to 2.27 trillion cubic metres, far higher than the 1.15% average increase of world reserves, the National Development and Reform Commission (NDRC) said.

China is the only country that posts significant dip in crude reserve while Kazakhstan in Central Asia and the African country Angola recorded soaring increase of almost 50%, according to the NDRC report.

Nigeria: Militancy: Defining the Niger Delta struggle

SEVERAL factors have informed the necessity to take the discourse of the conflict in the Niger-Delta to the public domain. Of course, there have been several attempts to sensitise the government and people of Nigeria to the policies and industrial activities which portend to disconnect the territory and peoples of the Niger- Delta from the human family. We shall find together in the following weeks that this is no exaggeration; members of our movement are gratified by the resolve of the Editorial Board of the Vanguard to provide space for the publication of the articulated grievances and aspirations behind the Niger-Delta Struggle.

Ethanol: Don't put all eggs in one basket

The rapid growth of ethanol as an alternate source of fuel for America, reducing our dependence on imported oil, seems like the magic bullet to satisfy much of our growing thirst for fuel energy in a responsible way.

However, like many quick fixes, we need to not put all our eggs in this one basket.

There are opportunities - and risks - in the diversion of corn from use as a primary livestock feed to a fuel source. One is - and will continue to be - the temptation to divert more and more of the annual golden harvest to fuel production.

13% of Americans not heard of global warming

Thirteen percent of Americans have never heard of global warming even though their country is the world's top source of greenhouse gases, a 46-country survey showed on Monday.
The report, by ACNielsen of more than 25,000 Internet users, showed that 57 percent of people around the world considered global warming a "very serious problem" and a further 34 percent rated it a "serious problem."

"It has taken extreme and life-threatening weather patterns to finally drive the message home that global warming is happening and is here to stay unless a concerted, global effort is made to reverse it," said Patrick Dodd, the president of ACNielsen Europe.

Oil prices rises on OPEC cuts, natural gas up 10 percent on cold weather

Oil prices rose more than $2 to above $56 a barrel Tuesday on OPEC production cut concerns, while natural gas soared more than 10 percent on expectations of more Arctic weather in the Midwest.
The Wall Street Journal reported Tuesday that Saudi Arabia has told its customers it will cut supply by a further 158,000 barrels a day, effective Feb. 1. “After these cuts, our oil production will have declined by about 1 million barrels a day since last summer,” a senior official said, according to the newspaper.

Oil jumps 5 pct on fund buying, OPEC, U.S. cold

Oil jumped over 5 percent on Tuesday as big money funds poured fresh cash into the market amid OPEC cuts and cold U.S. weather that could tighten supplies.

U.S. light crude settled up $2.96 at $56.96, reversing a $1.41 drop on Monday. London Brent crude gained $2.71 to settle at $56.39.

The surge was fueled by a rush of buying by funds ahead of a fresh OPEC output cut.

The Energy Report for Tuesday, January 30, 2007

Bulls on ice! Oil prices slipped as the market came to grips with the fact that the weather was indeed cold. But how cold was it? I guess it was cold enough to chill the bulls out of their positions as they moved to take profit. But what really moved the bulls was the icy stance on the price of oil from Saudi Arabia.

The Saudis were saying that they were happy with the price of oil and that $50.00 a barrel was good for consuming countries and good for them as well. And why wouldn't the Saudis be happy with $50.00 a barrel oil? For them the world is a beautiful place, kind of like Saudi-world. At $50.00 OPEC would give us a perfect world in which the all economies could flourish but the world of alternative fuels would not.

Mexican Cantarell Oil Field in Decline: Prelude to a Larger Crash?

Mexico's Oil Output Cools
Slowing of Major Field May Pressure Prices,U.S. Import Diversity

Daily output at Mexico's biggest oil field tumbled by half a million barrels last year, according to figures released Friday by the Mexican government. The ongoing decline at the Cantarell field could pressure prices on the global oil market, complicate U.S. efforts to diversify its oil imports away from the Middle East, and threaten Mexico's financial stability.

The virtual collapse at Cantarell -- the world's second-biggest oil field in terms of output at the start of last year -- is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell's daily output fell to 1.5 million barrels in December compared to 1.99 million barrels in January, according to figures from the Mexican Energy Ministry.

Special Edition Best of Five Things: Five Things You Need to Know About the Dollar

Despite reaching levels that are technically oversold, and despite Treasury Secretary John Snow's reaffirmation Wednesday that the U.S. maintains a strong dollar policy, the greenback just can't catch a break. What's going on? What is a dollar? Why do we care whether it goes up or down in value? Isn't the dollar I'm holding today the same as it was yesterday? Why can't the Fed just print more dollars?

Europeans hooked on Russian gas face tough choices in search for substitutes

Europe wants to break its decades-old dependence on increasingly unreliable Russian natural gas supplies amid fears that Moscow is using its vast energy resources as a foreign policy tool. But there's no easy way out.

The alternatives are seeking other energy partners in North Africa and the Middle East, reviving nuclear power and investing heavily in renewable energy like biomass and wind power. All bring financial or political challenges that European Union governments may find hard to overcome.

Vietnam Leader Urges State Oil Company to Halt Slump in Output

Vietnam Oil & Gas Group, known as PetroVietnam, should move urgently to open new fields and halt a drop in output from Southeast Asia's third-biggest oil producer, Prime Minister Nguyen Tan Dung said.

Vietnamese crude oil production totaled 17.3 million tons last year, or about 355,000 barrels a day, down 8 percent from output of 18.8 million tons, or about 386,000 barrels a day in 2005, according to figures provided by PetroVietnam. The decline marked the second consecutive drop in production after a near- tripling of output within a decade.

Here's What to Do About Iraq, Mr. President

With his approval ratings at an all-time low and proposals in both houses of Congress expressing disapproval of his new strategy on Iraq, U.S. President George W. Bush has gone on the attack. New Secretary of Defense Robert Gates has recently asserted that Congressional criticism of the President "emboldens the enemy." Bush himself stated on Friday, Jan. 26 that he is the "decision-maker on Iraq", but that his critics "have an obligation and a serious responsibility, therefore, to put out their own plan as to what would work." As a long-time critic of the President's plans and actions, the author therefore submits the following modest plan for the President's consideration.

Iran’s New Energy Picture

Iran’s nuclear ambitions and activities, until now regarded as circumspect and suspicious, if not illegal and forbidden, have recently been given a new twist, and found support as a sanguine necessity. The case against the Islamic Republic’s nuclear program – culminating in the UN Security Council sanction Resolution 1737 of December 2006 – has been based on three allegations: (a) Iran’s years-long concealment of its clandestine nuclear activities from the International Atomic Energy Agency; (b) the disregard of a previous Council demand to halt its fuel cycle uranium enrichment; and (c) an implicit assertion that a nation endowed with the world’s third-largest proven oil and second-largest natural gas reserves could hardly need nuclear power. Taking issue with Washington’s persistent claim that Iran’s nuclear program is geared towards nuclear weapons development, some energy analysts now seem to support Tehran’s claim that its program is for electric power generation. Arguing that Iran’s depleting oil reservoirs, the government’s long neglect of proper well maintenance, growing domestic demand for fuel products, inadequacy of domestic investment, and lack of access to foreign credit and technology have resulted in a petroleum crisis under which oil exports – as the lifeblood of the Iranian economy – are likely to vanish in less than a decade. Such a prospect, it is suggested makes the country’s need for nuclear power “genuine,” and Tehran’s defense of its current program as a peaceful energy pursuit is not a “weapons deception.”1

Expert View: Don't expect America to walk the talk on fuel

When it comes to market turbulence, there's war, there's revolution... and then there's George Bush. As the President stumbled through his State of the Union address , the oil price staged its biggest one-day rise in a long time. Madness - Mr Bush's "new" energy strategy crumbles under the most basic cross-examination. A non-event - one more in a succession of the US's broken energy promises.

Tuesday's speech was trumpeted as the "greening" of Mr Bush. For the first time ever, the President finally accepted global warming. I guess cycling in his shorts in early January had brought home reality even to him. But he made only two concrete proposals - both of which are dubious.

Price of oil on the slippery slope

ONLY five months ago crude oil prices nudged $US80 a barrel amid predictions by informed observers - not apocalyptic ravers - that the commodity would reach the $US100 level.
Since then, oil has tumbled 30 per cent and the contango on futures pricing has disappeared, which means investors aren't punting on a quick recovery.
What has shifted sentiment in such a short time? After all, the global economy still ticks over nicely and the Middle East remains a time bomb - literally and figuratively - ready to explode.

Housing Fetish - Kunstler

Martha Stewart was not an accident of history. She came along in the late 20th century as a kind of spirit guide to a society whose bad choices and misinvestments had led to the wholesale destruction of any place in America that people called home. And by this I mean the towns, neighborhoods, and city districts of our land, not just the individual dwellings.

By the 1980s, America had been converted, with monstrous efficiency, into what I have called a geography of nowhere, a panorama of identical highway strips, malls, big box warehouses, fried food out-parcels, and free parking wastelands — all serving the endless new subdivision pods of single family houses. The ultimate result was a landscape full of places no longer worth caring about.

Recent Trends & Year Ahead for Oil Market

The story of oil prices last year was all too familiar and well documented — a strong and sustained run up in oil prices, due to unforeseen demand in China and India, and a risk premium associated with global tensions (as high as $10 per barrel), followed by a drop. Continued growth in oil demand in China, India and the US and supply shocks combined to raise oil prices to a new record. US light crude (WTI) smashed through its previous year peak of $70.86 to rise to $78.40 per barrel on July 14. Since then, oil prices have been on a downward path, reaching below the $50 a barrel level for the first time in over 19 months in mid-January.

Oil down on OPEC export rise, Saudi envoy comments

Oil fell more than a dollar to $54 a barrel on Monday after Saudi Arabia's ambassador to the United States said current prices were good for consumers and producers and other OPEC members showed signs of hiking supplies for March.

U.S. crude last traded $1.39 lower at $54.03 a barrel after trading down to $53.75, while London Brent crude dropped $1.54 a barrel to $53.75.

Khamenei urges Iran and Russia to set up OPEC-style cartel for natural gas

Iran and Russia could create an export group like the Organization for Petroleum Exporting Countries, based on their command of the world's largest reserves of natural gas, the Iranian supreme leader, Ayatollah Ali Khamenei, was quoted Monday as saying.

The idea of forming a group of producers to control prices of natural gas has been raised before, but officials in gas-producing nations, including Russia, have played down its prospects, partly because the gas market is dominated by long- term contracts.

Hungry for oil

Dwindling oil stocks could cause the UK to be vulnerable to food shortages for the first time since the second world war.

Ethanol: The Obvious Is Obviously Wrong?

President Bush calls for ethanol production to top 35 billion gallons per year by 2017. Add that to the obvious.

How many times in your trading analysis has that light bulb come on, illuminating a factoid that seemed utterly indisputable? You reach a conclusion to pursue the "obvious" and were ultimately proven incorrect in your assumption.

Krugman gets to the heart of the (ethanol) matter

Paul Krugman is generally on target, so it's not surprising that when he turns his gaze to ethanol, he nails it.

He points out that despite considerable pre-release hype, the administration's SOTU "energy plan" consists of little more than a reliance on ethanol. After reciting the by-now-numbingly-familiar drawbacks of corn ethanol, he writes:

Energy Briefs - Peak Oil Review

• Canada's conservative government, faced with a strong public demand for action on climate change, is scrambling to rebuild environmental programs that it dismantled last year. Canada won't follow the Bush administration's lead in setting hard targets for reducing oil consumption, but will instead impose tougher emissions standards.
• Venezuelan President Chavez told Washington to "go to hell" after it questioned his plan to seek special powers to legislate by decree.
• China National Petroleum Corp. has lowered its 2007 domestic crude oil output goal by 5% compared with last year. This new projection suggests that imports will be increased to make up for any domestic shortfall.
• China's 10.7 percent GDP growth for 2006, released Thursday, surprised many observers. This was the fastest annual rise in more than a decade and ahead of official forecasts.
• The head of Russia's Audit Chamber said that France's Total has committed "significant" environmental violations at an Arctic oil and gas development site. Foreign-controlled energy projects have come under increasing pressure from the Kremlin in recent months as it pursues a drive to secure majority state control in major oil and gas fields.
• Russia is interested in attracting Indian capital into the Sakhalin-3 oil project off Russia's far eastern coast. The east Siberian field of Vankor, located in the north of Krasnoyarsk, is another project in which Russia may seek Indian involvement.
• High corn prices are wreaking havoc on Mexico's inflation rate and forcing shoppers to pay more for eggs, milk and tortillas. America's thirst for corn-based ethanol is being felt around the globe, delivering fatter profits for grain farmers but higher costs for livestock producers, food processors and consumers.
• Belarus will demand Russia pay rent for the pipeline land it uses to pump oil and gas to Europe. The former Soviet state tried to impose a retaliatory levy on Russian oil passing through its territory three weeks ago but relented after Russia halted crude supplies.
• Iraqi oil officials have yet to finish the controversial draft hydrocarbons law. Submission of the draft to the Iraqi cabinet for
review is likely to be delayed. Officials declined to comment on areas where disagreements continue in the long-awaited draft law.
• Ford lost $5.8 billion in the fourth quarter amid slumping sales and huge restructuring costs. Losses for the year of $12.7 billion are the largest in its 103-year history.
• Spain's Repsol and Royal Dutch Shell expect to sign a preliminary deal with Iran in coming days for a $4.3 billion liquefied natural gas (LNG) plant and port terminal. Such a deal would be a blow to Washington, which in addition to barring US investment in Iran, has been increasing pressure on non-US companies to refrain from investing there.
• Tehran plans to begin work next month on an underground uranium enrichment facility as part of a plan to create a network of tens of thousands of machines turning out material that could be used to make nuclear arms, U.N. officials said Friday. "If Iran takes this step, it is going to confront universal international opposition," warned U.S. Undersecretary of State Burns.
• Exxon Mobil's chief executive Rex Tiller son said he sees the world's energy consumption rising 50 pct until 2030 to the equivalent of 350 million b/d, from today's 230 million b/d.
• South Texas natural gas wells are losing productivity, and rising costs of materials and labor are driving up operating costs. The average well productivity of the fields studied fell by 25% during 2000-05. The 2005 average operating expense was 98¢/Mcf equivalent vs. 59¢/Mcf in 2000.
• Carnegie Mellon University researchers have devised a new process that can improve the efficiency of ethanol production and reduce the operating costs of corn-based bio-ethanol plants by more than 60 percent. "This new design reduces the manufacturing cost for producing ethanol by 11 percent, from $1.61 a gallon to $1.43 a gallon."

Climate change, world trade and Mideast in spotlight at Davos

Climate change, the Doha Round trade negotiations under the World Trade Organization (WTO) and the conflicts in the Middle East dominated discussions at the annual meeting of the World Economic Forum.

The Doha Round talks, which were held on the sidelines of the forum, stole the show.

Trade ministers from some 30 WTO members met in a Davos hotel on Saturday in a bid to relaunch the stalled Doha Round. The informal gathering produced positive atmosphere, prompting hopes for a breakthrough in a few months' time.

The Politics of Cheap Oil

Oil prices may be falling, but hold off the cheering. Yes, cheaper oil leads to cheaper gasoline, and that's good for America. At least, that's the common wisdom, particularly among the neoconservatives. But there is plenty of downside to cheaper oil and those deleterious effects rarely get discussed.

First, a quick review. Oil prices recently fell below $50 per barrel, a drop of about 30 percent since crude hit $77 last July. And this price drop may persist. The Bahrain Tribune reported on January 22 that Iran and Kuwait are now planning their budgets based on $40 crude. Adding momentum to the price drop is the apparent inability of OPEC members to follow through on sustained production cuts. Cheating on production quotas has long been a problem in OPEC and that cheating, it appears, continues.

Fourth-Quarter Economic Figures Don't Add Up: Caroline Baum

The new year started with some old data that suggested the five-year U.S. economic expansion wasn't ready for the retirement home just yet.

Holiday sales were decent, only because of deep discounting on the part of retailers. Weekly jobless claims fell to their lowest level in almost a year in mid-January. Manufacturing output rose in December for the first time in four months, but it wasn't enough to prevent a quarterly decline.

How about a real energy policy?

If there is one thing you can say about one-way, extreme markets, it is this: they often reverse. John Maynard Keynes noted "trees don't grow to the sky," and that's pretty much true, depending on where you figure the sky starts.

In any case, oil topped out around the middle of last year, and at this point crude prices are stabilizing after a tumble. It would be easy to cite all of the markets that would never reverse that did, but why waste the time? We know that every market tops out eventually, though investor psychology never wants to admit such a possibility when in the grip of hysteria.

Why life after oil will be better

EXPERTS are predicting that in as little as 12 months' time our global supplies of oil will start to diminish. Demand will exceed supply, prices will rise, and suddenly all of the things we take for granted like commuting from Swansea to Cardiff, buying roses in February and holidaying abroad will be out of the question.

Having achieved a global economy which is dependent on mass production and the mobility of its work force, the change could render us back to a relative dark age where people live and work in small, self-sufficient communities.

Preparing for Peak Oil

A Madison resident recently dropped off a report to the mayor and county executive's offices, warning of a looming energy crisis.

Recent publicity about the document is helping spark a conversation among environmentalists here.

Jan Sweet put the report together. He calls himself part of the Downtown Isthmus Group.

Sweet wants either mayor Dave Cieslewicz or county executive Kathleen Falk to form a peak oil task force. His suggestions include everything from having the city stock up on gasoline and penalizing people who drive cars on the isthmus, to planting fruit trees all over the city in case of possible food shortages.

Natural gas use heats to a record level in January

By the end of the month, Questar Gas customers throughout the state will have burned a record amount of natural gas keeping January's winter chill out of their homes.
The company says it delivered the highest daily volume in its 77-year history on Jan. 15, when it piped 911,00 decÂatherms of natural gas to its customers' homes - a figure that far eclipsed the previous 24-hour volume of 818,000 decÂatherms set in December 2005.
A decatherm represents roughly the heat content in 1,000 cubic feet of natural gas.

Mexico's Oil Output Cools

Daily output at Mexico's biggest oil field tumbled by half a million barrels last year, according to figures released Friday by the Mexican government. The ongoing decline at the Cantarell field could pressure prices on the global oil market, complicate U.S. efforts to diversify its oil imports away from the Middle East, and threaten Mexico's financial stability.

The virtual collapse at Cantarell -- the world's second-biggest oil field in terms of output at the start of last year -- is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell's daily output ...

Is oil-rich Mexico spending too much?

The country saves little of its petroleum riches and spends lavishly on vanity projects. Analysts fear a day of reckoning as crude output falls.

THE ENERGY REPORT

Can OPEC get its groove back? Stella did it. OPEC is doing it and with a bit of attitude! But can they follow it up with the barrels.

Oil has been getting all pumped up lately on expectations that winter will arrive and the thought that OPEC would follow through on production cuts. Attitude seems to be the new OPEC mantra. And leading that charge is the new OPEC president.

Ethanol isn't the answer to energy problem

Is there anything more depressing than yet another promise of energy independence in yet another State of the Union address?

By my count, 24 of the 34 State of the Union addresses since the oil embargo of 1973 have proposed solutions to our energy problem.

The result? In 1973 we imported 34.8 percent of our oil. Today we import 60.3 percent.

Swine Producers in Canada and U.S. Equally Concerned About Increased Ethanol Production

The Chair of Manitoba Pork Council says swine producers on the two sides of the Canada U.S. border share a common concern over rapidly rising feed prices resulting from expanded ethanol production.

Yesterday a delegation of Manitoba pork producers completed a three week trade mission which took them to South Dakota, Minnesota and Iowa to participate in trade shows and to meet and discuss issues with their counterparts in those three states.

Green energy: Lots of choice, lots of risk

Has Al Gore got you worried about global warming, but you also think there might be a way to make some money from the soaring interest in environmental issues?

Maybe it's time to look at investing in some individual companies that are on the leading edge of the green energy revolution.

Academic predicts rising oil prices will prompt a local food renaissance

A renaissance in local food for local communities is coming and the UK will need a huge increase in the agricultural workforce to deliver it.

Speaking at the Soil Association Conference in Cardiff, on 26 January, American author Richard Heinberg said the peak oil theory where production plateaus and prices sky rocket could force dramatic changes on UK and world farming.

Roscoe Bartlett: Man on a Mission

Exclusive interview with Rep. Roscoe Bartlett, the Republican Congressman leading the charge to raise Peak Oil awareness on Capitol Hill.

Peak Oil Passnotes: Oil at $35? It's Being Said

The oil market has been shaken recently. The break down to $49.90 intraday two weeks ago was a new step after eighteen months of a $55 floor price. And on the way, what has become of the notion of ‘peak oil’? One guy I know who has been relatively at ease with the idea, who supports the idea, found himself questioning it recently. It was a surprise.

The general perception was that we would get oil prices inching ever upwards, an erroneous perception of course. But people really bought in to that idea. Predictions were made that $50 oil or $60 oil would make markets collapse. And not just by odd men on the internet with a healthy imagination. Even here on Resource Investor this columnist thought $80 crude was a shoe-in in 2006. Sure, we got to $78.40, but still.

Peak Oil, Peak Nonsense

It's been less than a year since the world was nearly as awash in writings about "peak oil" as it is in crude oil itself. The psychology of the moment was so twisted that, for example, the op-ed page of the New York Times ran a 2,850-word piece titled "The End of Oil" (March 2006). It argued, among other things, that while the world's crude supplies may be more than half gone, not enough was being said about peak oil.

Durango scientist to debunk ‘myths’

Climate change is real, although the consequences aren't as dire as predicted. And the fear of oil production peaking and then plummeting is a figment of the imagination, according to a retired scientist.

Analysis: Americans say Iraq War over oil

Most Americans think President Bush invaded Iraq at least partly because of its oil -- a war more than half rate him as "poor" in handling and nearly all say has affected the price of gas at the pump.

The UPI/Zogby International interactive poll of 6,909 U.S. adults Jan. 16-18 found 32.7 percent considered Iraq's oil supply a "major factor" and 23.7 percent "not a factor" in the decision to invade the country. Another 40.7 percent were split somewhere in between while 2.9 percent were "not sure."

Goldman and iShares To Launch Natural Gas ETF

Goldman Sachs (GS) has filed papers with the SEC for the right to launch a new ETF tied to the price of natural gas. The new iShares Goldman Sachs Commodity Natural Gas Indexed Trust will track the performance of a fully collateralized investment in natural gas futures, as traded on the New York Mercantile Exchange [NYMEX: NG]. Like most commodity index funds, the fund will be tied to the value of a rolling futures account, with one NG contract replace the next from month-to-month.

US answer to global warming: smoke and giant space mirrors

The US government wants the world's scientists to develop technology to block sunlight as a last-ditch way to halt global warming, the Guardian has learned. It says research into techniques such as giant mirrors in space or reflective dust pumped into the atmosphere would be "important insurance" against rising emissions, and has lobbied for such a strategy to be recommended by a major UN report on climate change, the first part of which will be published on Friday.

A deeper bet on ethanol

There won’t be any free rides if the United States tries to reduce its dependence on foreign energy sources, especially Middle East oil. Every alternative to oil and gasoline has its advantages and drawbacks. Ethanol, too, has many disadvantages – though you’d never know it from the love affair with ethanol that runs all the way from small towns in Indiana to President Bush’s State of the Union address.

Opinion: Raising taxes on energy firms would short-circuit U.S. security

M uch of the early focus on the 2008 presidential campaign has focused on the political posturing and clash of personalities among U.S. Sens. John McCain, Hillary Clinton, and Barack Obama, along with former New York City Mayor Rudy Giuliani. But there are serious issues, especially involving energy, that will determine who will follow George W. Bush as president.

China’s Raging Bull

Are speculators out to subvert the Chinese state? Absolutely.

The current bull market in China shares looks like a lot like any other bull market: frenzied trading volumes, fresh record highs on a regular basis, cheerleading banks upgrading their "price targets".

But there is also a very special rationale involved in the run on China assets. This is not just a bull market this is a fight that could be called “China versus the Speculators.”

Iran and U.S.: between the logic of sanctions and the logic of war

"The Middle East isn't a region to be dominated by Iran. The Gulf isn't a body of water to be controlled by Iran. That's why we've seen the United States station two carrier battle groups in the region," Nicholas Burns, U.S. undersecretary of state for political affairs, said in an address to the Dubai-based Gulf Research Center, an influential think-tank, when commenting on the decision of President George W. Bush to send a second U.S. aircraft carrier strike group to the Persian Gulf.

Oil Rises as Cold Boosts U.S. Demand, OPEC Readies Supply Cut

Crude oil rose to the highest in more than two weeks as colder weather over much of the U.S. increased heating-fuel demand and OPEC prepared to cut supplies.

Heating use in the Northeast, the nation's biggest heating- oil consuming region, will be 6 percent above normal through Feb. 2, said Weather Derivatives, a forecaster in Belton, Missouri. The Organization of Petroleum Exporting Countries, producer of about 40 percent of the world's oil, last month agreed to cut output by 500,000 barrels a day starting Feb. 1.

OPEC Sells the Dollar

The nations of the Organization of Petroleum Exporting Countries are selling U.S. Treasuries at the quickest pace in more than three years, according to U.S. Treasury Department data. Concerned analysts predict a dollar sell-off coupled with rising interest rates.

In the three months ending in November 2006, oil-exporting nations including Indonesia, Saudi Arabia and Venezuela sold 9.4 percent of their U.S. government debt—a significant amount, considering these countries own more than $100 billion worth.

Over the past few years, oil producers have become very important dollar supporters, rivaling the United Kingdom, and even China and Japan.

Global food supply near the breaking point

The world is now eating more food than farmers grow, pushing global grain stocks to their lowest level in 30 years.

Rising population, water shortages, climate change, and the growing costs of fossil fuel-based fertilisers point to a calamitous shortfall in the world's grain supplies in the near future, according to Canada's National Farmers Union (NFU).

Abdullah Says Malaysia Has Shifted Reserves Away From Dollar

Malaysian Prime Minister Abdullah Ahmad Badawi said his country has shifted some of its $82 billion of currency reserves away from the dollar and that potential foreign-exchange volatility may hurt exporters.

``We're concerned for the reason that the high percentage of our international trade is in U.S. dollars,'' said Abdullah today in an interview in Davos, Switzerland at the annual meeting of the World Economic Forum. When asked whether Malaysia will cut its dollar holdings, he said: ``We have already done. We'll continue to watch the situation.''

End of the Road for Hydrogen

With climate change on everyone’s mind and rumours of an energy crisis, what could be better than a car which doesn’t run on fossil fuels and has no emissions except water? BMW’s new Hydrogen 7 fits the bill. This is the V-12 BMW 7 modified to run on hydrogen. It has a petrol tank as well; it also runs on petrol, which is handy if you are far from the UK’s only hydrogen filling station – one of only six in the world. Of course, if hydrogen catches on there will be filling stations all over the country, won’t there?

$1000 Gold Price Isn’t Far Off

Today being Australia Day we thought there is probably no better subject to look at than Gold. Seeing as Gold is one half of the nation’s official colours, it is even more apt. As for the other half, the Green, well we can’t say that we have seen all that much green around. Brown on the other hand is in abundant supply. Although we are not sure that Gold and Brown match. We’ll leave that one to the style gurus.

Severe Withdrawal Symptoms Ahead

Mexico is as addicted to oil as heroin addicts are to their next fix: the country depends on oil for a large proportion of its energy needs, consumes it at an unsustainable rate and goes into debt to obtain it. Unless it changes its behaviour or finds a therapy that works, the prognosis is that it will experience a serious crisis.

Bubble alarm sparks sell-off

China's benchmark stock indexes fell 4 percent Thursday after comments from "Commodities King" Jim Rogers that a bubble was forming in the domestic market.

Rogers appeared for 30 minutes during prime time on China Central Television, a mouthpiece of the central government, in what market observers saw as a sign Beijing was seeking to cool the overheating market by airing a shrewd investor's professional opinions.

Gold Stock Earnings to Shine in 2007

As gold stocks were declining last fall I began to put my “shopping list” together for 2007. My strategy was to focus on production. It was pointed out by Steve Saville, at TSI, that producing companies tend to lead the pure exploration companies after significant market corrections. Producing companies are also less likely to be raising equity capital, which dilutes shareholders and pressures their stock.

Bush Oil Reserve May Support Prices as Asia Also Buys

George W. Bush's decision to double the emergency oil stockpile in the U.S. may help to stem a six- month slide in prices as China, India and South Korea also add to demand by bolstering their defenses against shortages.

Oil gained the most since September 2005 yesterday after the U.S. Energy Department said it will boost the Strategic Petroleum Reserve to 1.5 billion barrels over 20 years. China, where imports rose 15 percent last year, began to fill its reserve in October. India also plans to double its inventories.

OPEC shows signs of crude oil production cuts

Crude oil prices were a bit lower on Thursday. Traders worried that demand could grow at the same time that the Organization of Petroleum Exporting Countries seem to be living up to promised production cuts. ConocoPhillips reported on Wednesday that it had been ordered to cut production at its operations in Libya and Venezuela, indicting that OPEC member nations are beginning to comply with already-announced cuts.

Israel tries to cut off Tehran from world markets

Israel is launching a campaign to isolate Iran economically and to soften up world opinion for the option of a military strike aimed at crippling or delaying Tehran's uranium enrichment programme.

Pressure will be applied to major US pension funds to stop investment in about 70 companies that trade directly with Iran, and to international banks that trade with its oil sector, cutting off the country's access to hard currency. The aim is to isolate Tehran from the world markets in a campaign similar to that against South Africa at the height of apartheid.

Crude Oil, Natural Gas Fall on Signs U.S. Supplies Are Adequate

Crude oil and natural gas slid on signs U.S. heating-fuel stockpiles are adequate, blunting the impact of the colder weather that is forecast for the next two weeks.

Natural gas prices plunged today after a government report showed that U.S. supplies last week were 21 percent higher than the five-year average for the period. Some users switch between natural gas and fuels refined from oil based on cost. Below- normal temperatures will cover the eastern half of the U.S. from Jan. 31 to Feb. 8, the National Weather Service said today.

Iran attack would cause market chaos

THE DOLLAR, sovereign bond yields, stock markets and industrial raw materials would plunge while oil, the euro and gold prices would benefit if America or Israel attacks Iran in coming months, according to a detailed analysis by a leading investment bank.

Crude oil prices could reach $80 (£40, E61) a barrel while possible Iranian attacks on other supplies from the Gulf would “quickly revive talk of $100 a barrel”, the report says.

China's economy grows fastest in 11 years

China's full-year growth for 2006, released Thursday, surprised on the upside, with gross domestic product expanding by 10.7 per cent, the fastest annual rise in more than a decade and ahead of official forecasts.

However, the government's satisfaction at their management of the fourth consecutive year of double-digit growth was tempered by a surge in inflation to 2.8 per cent in December, compared to the whole-year rise of 1.5 per cent.

Weekly Natural Gas Storage

This report tracks U.S. natural gas inventories held in underground storage facilities. The weekly stocks generally are the volumes of working gas as of the report date. Changes in reported stock levels reflect all events affecting working gas in storage, including injections, withdrawals, and reclassifications between base and working gas.

Gulf states seen shifting away from U.S. assets

Oil-rich Gulf Arab estates are seen shifting their assets away from the United States, and Qatar is keen on customer states including Asia and Europe as destination, the country's financial regulator says.

Middle Eastern countries have been scaling back its once near full reliance on U.S. assets in recent years to minimize risks and enhance returns as they diversify the massive windfall from oil and gas revenues.

Coin shortage could turn pennies to nickels

A potential shortage of coins in the United States could mean all those pennies in your piggy bank could be worth five times their current value soon, says an economist at the Federal Reserve Bank of Chicago.

Sharply rising prices of metals such as copper and nickel have meant the face value of pennies and nickels are worth less than the material that they are made of, increasing the risk that speculators could melt the coins and sell them for a profit.

Barclays files for natural gas, energy ETFs

Barclays Global Investors has filed registration statements with the Securities and Exchange Commission for a pair of new exchange-traded funds, iShares GS Commodity Energy Indexed Trust and iShares GS Commodity Natural Gas Indexed Trust. The ETFs would track indexes from Goldman Sachs and would invest in commodity futures contracts, the unit of British bank Barclays Plc

Climate change cannot be tackled by G8 members alone, says Merkel

As she opened the WEF in Davos, the German Chancellor called on all countries to take responsibility for cutting greenhouse gases

Angela Merkel burnished her green credentials by calling on all countries to join a binding post-Kyoto settlement on cutting greenhouse gases as she opened the World Economic Forum in Davos yesterday.

Put the brakes on anti-car drive

Let's hope Mayor Dave Cieslewicz and Dane County Executive Kathleen Falk summon the good sense to take the report they have received from the Peak Oil Task Force and file it under "T."

For twaddle.

The Peak Oil Task Force is part of a national network of groups obsessed with the catastrophe they believe will befall the Earth after oil production passes its peak and hits the skids.

One Planet Agriculture – preparing for a post-peak oil food and farming future

The Soil Association is the UK’s leading campaigning and certification organisation for organic food and farming. This recent interview with Soil Association director, Patrick Holden, talks about the potential impacts of peak oil, the role of organic food

Kuwait May Abandon Dollar Peg to Protect its Economy

Kuwait, the third-largest Arab oil producer, may abandon the dinar's peg against the dollar in favor of a basket of currencies to help minimize economic harm after the dollar declined.

``We might go to a basket for an interim period,'' Bader al- Humaidhi, Kuwait's finance minister, told reporters today at the World Economic Forum in Davos, Switzerland. ``The dollar fell a lot against the euro last year, but if we'd been linked to a basket we wouldn't have suffered'' as much.

Hong Kong Dollar Drop Was `Stage-Managed,' Says UBS

The Hong Kong dollar's drop to the lowest since 1991 was ``stage-managed'' to deter speculators from betting the city's 23-year-old link to the U.S. dollar will end, said Jonathan Anderson, UBS AG's chief Asia economist.

China's central bank has allowed faster gains in the yuan since Jan. 11, when it rose beyond 7.80 against the U.S. dollar, the central exchange rate in the city's currency system. The Hong Kong dollar fell to 7.8122 on Jan. 19, the lowest in 15 years, dousing speculation it will come under appreciation pressure. The Hong Kong Monetary Authority today it said hadn't sold its currency.

Petrodollars Will Test Asia's Dollar Fixation: Andy Mukherjee

A glance at stock values suggests that lower energy prices are an unalloyed blessing for Asia. That may not be true.

Morgan Stanley Capital International's emerging-market equity index for Asia has risen 22 percent since oil began its descent in early August last year.

China Plans to Shift Use of Foreign Exchange Reserves

China, the world's biggest consumer of coal and metals, will use its foreign exchange reserves to buy ``strategic'' resources, Vice Premier Zeng Peiyan said.

The government will increase the nation's purchases of resources for strategic stockpiling when there are ``plentiful'' reserves, Zeng said in a speech carried on the Ministry of Land and Resources Web site today.

Blanchard Lauds IMF Central Bank Gold Lending Accounting Change as Industry Landmark

After months of inquiries and a
hotly debated, in-depth position paper by its economic research unit,
Blanchard and Company has learned that the International Monetary Fund has
adopted a landmark accounting change to the way Central Banks account for
their gold loans, giving this sector of the commodities market more
transparency than it has ever had, the precious metals market leader
announced today.

Summary of Weekly Petroleum Data for the Week Ending January 19, 2007

U.S. crude oil refinery inputs averaged 14.9 million barrels per day during the
week ending January 19, down 205,000 barrels per day from the previous week's
average. Refineries operated at 87.4 percent of their operable capacity last
week. Gasoline production was relatively flat compared to the previous week,
averaging 9.1 million barrels per day, while distillate fuel production
decreased, averaging over 3.9 million barrels per day.

Bodman: DOE to start purchasing strategic petroleum reserve oil in spring

To boost the size of the nation's emergency oil stockpile, the U.S. Energy Department is planning to begin purchasing crude oil this Spring at a rate of about 100,000 barrels per day, U.S. Energy Secretary Samuel Bodman told reporters Tuesday.
The acquisition is part of a new plan to double the capacity of the Strategic Petroleum Reserve to 1.5 billion barrels by 2027.
President George W. Bush will outline the proposal later Tuesday in his annual State of the Union address before Congress.

Oil output slumps to six-year low

Crude oil production at state oil monopoly Petróleos Mexicanos, or Pemex, fell 6 percent to 2.98 million barrels a day in December from 3.16 million barrels daily in November, the company reported Monday

Bush calls for 20% reduction in gas consumption

President Bush will propose a dramatic increase in renewable fuels that would help cut U.S. gasoline consumption by 20% within 10 years in his State of the Union speech, the White House said Tuesday.

Bush will propose that production of ethanol and other alternative fuels be expanded to 35 billion gallons a year by 2017, more than five times the previous goal.

Raymond J. Learsy: Taking a Page From John D. Rockefeller- Foreclosing America's Energy Security (Agenda Part VIII)

Our energy neck is in a tightening noose. Between 75 percent and 90 percent of the world's oil and gas reserves are held by national oil companies that are partially or fully controlled by their governments. As such, the distribution and marketing of oil has become so highly politicized as to cripple the power of market forces to assure access and security of supply.

Gold rallies to 7-week high on fund buying

Gold jumped more than 2 percent to a seven-week high on Tuesday as a sharp decline in the dollar and firmer oil prices triggered speculative fund buying, dealers said.

Other precious metals tracked gold higher, with spot palladium hitting a 4-1/2-month peak, platinum rising to a seven-week high and silver reaching its highest level in more than a month.

Israel is ready to blitz Iran

President Ahmadinejad is so unpredictable he even scares the fanatical mullahs who run Iran, writes Trevor Kavanagh.

They are trying to rein him in, so far without luck.

Now the UN has woken up to the threat from a nuclear state run by a man who threatens to wipe out Israel.

They claim they can keep Iran in line without military action. But experts say Iran will have the technology for weapons-grade uranium within a year.

In Israel, that means action by August . . . in case the Iranians are ahead of schedule.

Are Saudis waging an oil-price war on Iran?

Oil traders and others believe that the Saudi decision to let the price of oil tumble has more to do with Iran than economics.

Their belief has been reinforced in recent days as the Saudi oil minister has steadfastly refused calls for a special meeting of OPEC and announced that the nation is going to increase its production, which will send the price down even farther.

Will Our Petro-Dependency Destroy Our Democracy?

Iraqis may revolt when they hear about new laws privatizing their oil. But what about us? There are few signs that Congress will do anything to resist the unhealthy influence our oil dependency has on our politics.

Are we in Iraq to bring freedom to the Iraqi people, as Bush says, or are we in Iraq to preserve the "easy motoring" freedom of American consumers by staking our claim to Iraq's oil?

Money, Not Geopolitics, Drives Russian Energy Policy

Ever since Russia briefly interrupted natural gas deliveries to Ukraine on New Year’s Day 2006, Moscow has been harshly criticized in the West for allegedly using energy as a tool to blackmail its neighbors. The recent spat between Russia and Belarus over Moscow’s price hike on oil and gas deliveries to Minsk once again prompted charges from Western politicians and pundits that Russia is not a reliable source of energy. But where many Westerners perceive Russia as a regional bully, the Kremlin argues that former Soviet republics are not entitled to cheap Russian energy simply because Russia’s major export pipelines cross their territory.

Iran Bars 38 IAEA Nuclear Inspectors

Iran has barred 38 nuclear inspectors on a United Nations list from entering the country, the foreign minister said Monday in what appeared to be retaliation for the U.N. sanctions imposed last month.

The rejected officials are on a list of potential inspectors drawn up by the International Atomic Energy Agency to visit and monitor Iran's nuclear facilities.

Jim Rogers and Eric Sprott: Commodity Bull Run Not Over

Almost all commodities began 2007 on a downdraft, with the price of oil perhaps taking the hardest hit so far. Nickel and natural gas may be the most notable exceptions, while uranium has also remained strong. But the broader correction has been “so quick and violent,” says Sprott Asset Management, “that it has led many to believe that the commodity bull market that began in 2001 is now coming to an end.”

However, Eric Sprott considers this downtrend a short-term blip in what will continue to be a long-term bull market with several years to go.

Life On The Plateau

The following is the opening chapter of Energy In 2007, produced by Credit Suisse’s Global Equity Research, Oil & Gas, with the theme of “Plateau”. The chapter explains why this theme has been chosen.

We think the next phase of the energy cycle will resemble a Plateau, after the Upcycle of 2003-05 and the Resolution of 2006. During this Plateau period, which could last until the end of the decade, oil prices will need to stay high in order to keep demand growth under control and in order to encourage new sources of non-OPEC hydrocarbon supply. Access to Resources (the title of our Energy in 2005 report) is not getting any easier for non-OPEC, at least not for traditional black oil resources. One consequence of this is an increasing share of investment going into nonconventional hydrocarbons: everything from oil sands to biofuels. These hydrocarbon sources all share a common characteristic – a higher break-even oil price than their conventional counterparts.

The Geopolitical Consequences of Peak Oil

ASPO USA 2006 presentation by author of 'Resource Wars' and 'Blood and Oil'

OPEC cuts tipping oil market back into balance

Holding its nerve in the face of a 14 percent plunge in the oil price, OPEC has all but ruled out an emergency meeting and further production cuts before it next gathers in March.

Signs are the supplier of over a third of the world's oil has already done enough, having agreed to cut a total of 1.7 million barrels per day (bpd) from its output in two stages.

Mexico's December crude output falls 6 percent to 2.98 million barrels daily

Crude oil production at Mexican state oil monopoly Petroleos Mexicanos, or Pemex, fell 6 percent to 2.98 million barrels a day in December from 3.16 million barrels daily in November, the company reported Monday.

Pemex, one of the top foreign suppliers of crude to the U.S., said exports fell to 1.53 million barrels daily from 1.79 million barrels a day in November. The company said it was forced to postpone some shipments until January because poor weather conditions forced the closure of oil loading ports.

Daniel Howes: Prices we pay for gas drive behavior

W e Americans can have the collective attention span of 4-year-olds -- we want what we want when we want it and complain loudly when we don't get it.

So last spring and summer, when gas prices were going through the roof and Big Oil was basically synonymous with Terrorism Inc., politicians-cum-nannies fell all over themselves trying to soothe the whining because we're entitled to cheap gas, right? (Even if we aren't.)

Energy briefs

• During a meeting of US oil executives and Canadian oilsands producers last year, the Americans urged the Canadians to massively step up oilsands production to five million barrels of oil per day in a relatively short period of time.
• According to the American Petroleum Institute, US demand for petroleum dipped for the second year in a row, by roughly 1 percent to 20.6 million barrels per day, down from 20.8 million in 2005.
• Nancy Pelosi, the new House speaker, vowed to make energy independence and climate change legislation the next focus of Democrats’ congressional agenda. Ms Pelosi said she would create a new select committee to focus attention on energy independence and global warming.
• Chairmen of the House and Senate agriculture committees say the next farm package is going to be driven largely by energy issues for the first time, thanks to fears about energy security and greenhouse gases.
• The International Monetary Fund has revised down its 2007 estimate for global oil prices to $52 a barrel from a September forecast of $75.50.
• A typical commercial corn-ethanol plant costs about $100 million, by one estimate, while a cellulosic plant is expected to cost about twice that. Investors worry a crash in gasoline prices could undercut the market for these expensive projects. And despite the push for 85-percent ethanol blends, few gasoline stations supply it today.
• Iran’s President Ahmadinejad appears to be under pressure from Ayatollah Ali Khamenei to end his involvement in its nuclear program, a sign that his political capital is declining.
• A spokesman for Imperial Oil, a major proponent of the proposed $7.5 billion Mackenzie Valley natural gas line in Canada, said that regulatory delays mean the project can’t be completed by 2010.
• Saudi Arabia will have spare production capacity of three million barrels per day on February 1, according to Oil Minister Naimi. He added that Riyadh plans to increase its crude oil production capacity nearly 40 percent by 2009 and double its refining size over the next five years.
• Venezuela intensified its nationalization fight with foreign companies last Monday, vowing to impose a takeover of oil majors’ operations and grab all of a US utility’s stake in the country’s largest private power company.
• Kazakhstan's oil and gas condensate production in 2007 will be 65 million metric tons, or 1.3 million b/d, the same as in 2006. Production is to increase in 2008, however, when Chevron’s expansion of the Tengiz oil field raises its production from 300,000 b/d to 500,000 b/d.
• Venezuela plans to leave existing natural gas contracts in foreign hands despite last week's "nationalization" of the oil and power sectors. Unlike private oil operations, which were granted by a pre-Chavez government in the 1990s, Chavez's own government opened the natural gas industry to private investment in 1999.
• Russia wants to find routes to Europe that avoid the disputed Druzhba pipeline through Belarus. Shipping oil by tanker across the Baltic is one option under consideration.

Stock & Commodity Markets Elliott Wave update - Play It Again, Sam !

So, what's next? NOW we are finally getting to where I can become comfortable looking for the market to complete my count. I may have started to sound like a broken record, saying, “I still didn't see confirmation of a top and that I needed another new high”. But it's the market's that's been playing this same old sideways tune.

Sentiment indicators have tried to provide sell signals intraday but we haven't closed into those levels. Indicators are diverged, but this recent rally has kept them from triggering sell signals. With that said, the good news is that if I do get the signals any time soon, I can finally be comfortable labeling a chart complete, knowing it's correct.

Oil supply outside OPEC set to disappoint - IEA

Oil producers outside OPEC will pump less oil than expected this year, the International Energy Agency said on Thursday, increasing the burden on OPEC just as the exporter group is trimming supply.

In its latest monthly report, the adviser to 26 industrialised countries forecast oil supply from non-OPEC will rise by 1.4 million barrels per day in 2007, less than the 1.7 million bpd expected last month.

"Mexico, Norway and Canada are the main reasons for the lower forecast," said Lawrence Eagles, head of the IEA's Oil Industry and Markets Division. "The net effect is to increase demand for OPEC oil in 2007."

OPEC Dumps Treasuries at Fastest Pace Since 2003 on Oil Slide

OPEC nations are unloading Treasuries at the fastest pace in more than three years as crude oil prices tumble, sending bond yields higher.

Exporters including Indonesia, Saudi Arabia and Venezuela, sold 9.4 percent, or $10.1 billion, of their U.S. government debt securities in the three months ended in November, according to Treasury Department data. Members of the Organization of Petroleum Exporting Countries last sold Treasuries for three straight months in June 2003.

Energy Independence

BOTH CONGRESS and the Bush administration seem certain to return to energy policy this year. The subject is likely to be featured in President Bush's State of the Union address; a variety of energy bills have been proposed in Congress; and this year's reauthorization of the farm program may repackage agricultural handouts as ethanol-promoting energy policy. But there is a danger in the way political leaders are framing this issue. "Energy independence" is more elusive and less rewarding than is commonly perceived. It should not be allowed to take precedence over attempts to curb global warming.

'Bush will attack if Iran gets nuclear arms'

President George Bush will order an attack on Iran if it becomes clear to him that Iran is set to acquire nuclear weapons capabilities while he is still in office, Richard Perle told the Herzliya Conference yesterday. Perle is close to the Bush administration, particularly to Vice President Richard Cheney.

The leading neoconservative and fellow at the American Enterprise Institute addressed the session on Iran's nuclear program. He said that the present policy of attempting to impose sanctions on Iran will not cause it to abandon its nuclear aspirations, and unless stopped the country will become a nuclear power.

Many Contracts; but Is There Enough Natural Gas?

In 2005, world gas production has been 2763 bcm(billion cubic meters). The proved reserves of natural gas are 179.83 tcm (trillion cubic meters) according to BP Statistical Review. With 2005 consumption amounts, the natural gas reserves are enough for the next 65 years.

Join us as we watch the crisis unfolding

Happy New Year! It's time for an oil update. The groups that report 2006 oil production numbers explain that their estimates are subject to later revision. However, we need to know the implications right now. With that warning, away we go.

From April 2005 onward, crude oil prices have been above $50 per barrel. For several months during 2006, oil prices rose above $70. At those price levels, virtually all producers pumped every possible barrel. With that kind of cash flow, any well operator who suspected one morning that his Blakenship #7 well did not produce its usual share last night will have Halliburton out there in the afternoon trying to fix it.

Are we at peak oil?

This is a chart of crude oil + condensate. NGPL, refinery gains, etc. are not included!

Yuan needs revaluing - prominent Chinese economist

China's policy of allowing the yuan to gain a modest 3-5 percent a year is not sustainable as the cost of preventing a faster rise will crush the central bank, a Chinese economist said.

Zhong Wei, a professor at Beijing Normal University and an editor of a magazine run by the State Administration of Foreign Exchange, told a weekend forum in Beijing that China needed another revaluation to build up a properly functioning exchange rate system.

Nation to explore, expand use of forex reserves

Chinese Premier Wen Jiabao said that China would steadily push forward the foreign exchange rates reform and actively explore and expand the use of its US$1.06-trillion foreign exchange reserves.

China would strengthen operation and management of foreign exchange reserves and facilitate the balance of international payment, said Wen at the two-day Third National Financial Work Conference.

The ethanol debacle

Hating so-called “fossil fuels”, coal, oil, and natural gas, with a passion, the environmentalists have perpetrated every deception possible and, among them, is the notion that Americans can avoid destroying the Earth if they just fill up the tanks of their automobiles with ethanol.

As I have pointed out in the past, the world is not running out of oil and, here in the United States, we have enough reserves of coal to provide electricity and other needs for centuries to come. So who has the new Democrat majority in Congress declared persona non grata? The oil industry. Their proposed “answer” to our transportation energy needs is ethanol.

Truth Is Speaking….

Deep crimson stains mottle the pages of humanity’s history. Untold numbers of souls who were skewered, decapitated, eviscerated, or obliterated in anonymity scream out for recognition as one peruses humankind’s memoirs. While our historical manuscript is also generously dappled by the milk of human kindness, much of our narrative is dominated by tales of man’s savage cruelty to man.

The next big oil-price push

With the 30% fall in the price of oil to US$50 a barrel comes the inevitable global ideological free for all over the causes, impacts and general significance of the decline. The scale of the decline pretty much puts peak oil theorists out of commission, especially since the real price of oil in constant dollars is now lower than it was through much of the 1980s--hardly what you would expect in a world allegedly heading into an oil supply crisis.

The crystal ball outlook for 2007 Stephen Way – Global Manager

Have you ever noticed you can sit two extremely smart, competent and successful financial wizards in the same room and ask them the same questions, while getting completely different answers?

One will be right and the other will be wrong. It has to be that way.

Well, take it from me, the one that is right is not necessarily the smart one, they just got luckier that time.

Investing: 'Over $100' oil forecast following a correction

Oil will resume its march toward $100 a barrel and beyond after a "correction," according to Jim Rogers, who predicted the start of the commodities rally in 1999.

"I'm just not smart enough to know how far down it will go and how long it will stay, but I do know that within the context of the bull market, oil will go over $100," he said Wednesday. "It will go over $150. Whether that is in 2009 or 2013, I don't have a clue, but I know it's going to happen."

Cold Weather Sparks Buying Spree For Crude, Heating Oil, Natural Gas

U.S. crude oil futures rebounded more than a dollar on Friday in flurries of short-covering ahead of the weekend.

Supporting crude's quick bounce from Thursday's more than 3% fall were heating oil and natural gas futures, which rallied amid colder weather in key heating fuel markets.

NYMEX February crude settled $1.51, or 3%, higher at $51.99 a barrel. It traded between $50.12 and $52.05, holding above $49.90, the 20-month low hit on Thursday.

How Congress Can Stop the Iran Attack or be Complicit in Nuclear War Crimes

President Bush is invoking his "commander in chief" authority to escalate the war in Iraq, and he will likely also invoke it to launch an aerial attack against Iran. Congress has long ago abdicated and delegated to the President its constitutional responsibility to initiate wars. Yet Congress still has one surefire way to influence events: it has the constitutional authority to make the "nuclear option" against Iran illegal. In so doing, it would stop the relentless drive to war against Iran dead in its tracks.

Notwithstanding Joe Biden's threat of a "constitutional confrontation" if Bush attacks Iran without Congressional authorization, the fact is that such an attack would be perfectly legal: the War Powers Act gives the US President legal authority to wage war against any country for 60 days. It would also be legal for Bush to order nuclear strikes against Iran: under NSC-30 of 1948, "the decision as to the employment of atomic weapons in the event of war is to be made by the Chief Executive". Neither Congressional "resolutions" nor votes to withold funding will have any effect on preventing such events.

«Babylon-2»: On US-Israeli Plans For a Nuclear War

The thunderous salvos of fireworks in celebration of the New 2007 Year have quieted down, and the lengthy Christmas vacations are finally over. On these festive days, heads of all states must have been wishing their peoples peace and prosperity, health and happiness. All of them were probably sincere in saying this. For who, being in power and absolutely sane, would wish to invite disaster?

It depends on the way you look at it, though. The intentions voiced by top US and Israeli executives in December 2006 - January 2007 can hardly be referred to as good. Because intensive preparations for a nuclear missile war cannot be described as a blessing for either their own nations or any other peoples. However, it is the US and Israel that appear to be preparing such a «gift» for the world in the new 2007 year.

Alberta Oil Sands and nuclear power surge: outrageous proposals

The Alberta oil sands have been proclaimed as the greatest greenhouse gas producer in Canada. Now there are two outrageous proposals to quintuple the supply of oil for US greed and consumption and to address the climate change issue by using nuclear power to fuel the oil sands production.

US gold speculators raise net longs by 19%

Speculators in US gold futures raised their net long position by 19 per cent in the week to January 16 as prices touched an eight-day high, trade data released on Friday showed.

Just a week prior to that, noncommercial players in US gold - basically speculators - had trimmed net longs by 32 per cent, the Commodity Futures Trading Commission said in its weekly Commitment of Traders report.

Draft Law Keeps Central Control Over Oil in Iraq

After months of tense bargaining, a cabinet-level committee has produced a draft law governing Iraq's vast oil fields that would distribute all revenues through the federal government and grant Baghdad wide powers in exploration, development and awarding major international contracts.

The draft, described Friday by several members of the committee, could still change and must be approved by the Iraqi cabinet and Parliament before it becomes law. Negotiations have veered off track in the past, and members of the political and sectarian groups with interest in the law could still object as they read it more closely.

Pemex predicts production drop

The progressive decline in Mexico´s capacity to produce oil is rapidly becoming more worrisome than the slump in global crude prices

According to estimates by the state oil company, Pemex, petroleum exports will decline dramatically during the Calderón administration

Crude Price Punctures $50 Support on High U.S. Inventories

Crude ticked below $50 a barrel yesterday, a 20-month low, on a DOE report that U.S. inventories rose beyond expectations. It recovered to $50.48 by the end of the session, a 3.4% drop. Crude inventories increased by 6.8 million barrels last week, dramatically beyond consensus estimates of 325,000 and the largest weekly gain since October 2002. Saudi Arabia just nixed a proposed third production cut to stem the 17% drop in the oil price since the beginning of the year. In a striking juxtaposition, the Saudis -- who dismissed the oil price freefall as a "short-term aberration" -- announced plans to increase production capacity nearly 40% by 2009 and double refining size over the next five years concurrently with the International Energy Agency's report lowering its world oil demand growth forecast for 2007. Global demand did rise 0.9% in 2006 on growth in the Chinese and Middle Eastern markets, but that was down from 3.9% in 2004 and 1.5% in 2005. The IEA's report also noted that oil consumption in the 30 OECD countries fell 0.6% last year, the first such drop in over 20 years. The drop suggests that businesses and consumers in the developed world finally began to curb consumption in response to precipitous oil prices; the tipping point appears to have been last July, when crude hit $78. Commodities guru Jim Rogers sees crude recovering and eventually reaching $100 on surging Asian demand and the lack of any significant oil finds in the past 30 years.

Plunging oil has investors asking: How low can it go?

Crude oil plunged below $50 (U.S.) a barrel yesterday, driving energy stocks lower and raising doubts that it will find a floor any time soon.

"If you said 45 bucks three months ago, they'd burn you as a heretic," said Andrew Martyn, a vice-president and portfolio manager at Davis-Rea in Toronto.

The price of crude slipped as low as $49.90 a barrel for February delivery -- after soaring to a record $78.40 (U.S.) a barrel just last summer -- before closing down $1.76 at $50.48 in New York.

Oil Service Stocks vs. Big Oil Stocks

T. Boone Pickens knows oil better than most people out there, definitely better than me. However, his calling into CNBC seemed like a desperate attempt to influence oil prices.

I’m not a big fan of large oil companies as most of them have little or no organic production growth and they are completely at the mercy of oil prices, but I am getting interested in oil service stocks for several reasons:

Oil service stocks are not as sensitive to oil prices as long as prices stay about $30+, oil companies will be making holes in the ground at a nice pace.

Soybeans trading higher in mid-January

While the corn market was definitely the newsmaker, the soybean market also shared the limelight.

Soybeans closed on the Chicago Board of Trade on Jan. 12 with March at $7.16 1/2; May at $7.31 1/2; July at $7.43; September at $7.50, November at $7.63 1/2, and November 2008 at $7.57/bushel.

Compared with the contracts in late December 2006, prices were up 17-23 cents/bushel.

According to the Chicago Board of Trade website, higher prices in corn supported moderate gains in soybeans following the release of the final 2006 crop production report.

Energy shares sizzle as natural gas rallies

Investors poured back into the energy sector Friday as natural gas prices rallied on the strength of cold weather forecasts for much of the U.S.

Share prices were further supported by oil-services giant Schlumberger Ltd.'s strong fourth-quarter showing, allaying concern that a build up in North American natural-gas supplies would erode the sector's bottom line.

OPEC lowers 2007 oil-demand growth forecast

The Organisation of Petroleum Exporting Countries lowered its 2007 oil-demand growth forecast and reduced its 2006 oil-demand growth estimate, saying warm weather continues to dampen demand for oil.

In its monthly report, OPEC said it now expects 2007 oil demand to grow at an annual rate of 1.5 pct or 1.25 mln bpd, representing a slight downward revision of 70,000 bpd from the last monthly report.

Working Gas in Underground Storage

This report tracks U.S. natural gas inventories held in underground storage facilities. The weekly stocks generally are the volumes of working gas as of the report date. Changes in reported stock levels reflect all events affecting working gas in storage, including injections, withdrawals, and reclassifications between base and working gas.

Production Means Investment

Here's a New Year's challenge for you: Name the top three oil-producing countries in the world.

If you're like most investors, you probably know that the world's largest oil producer is Saudi Arabia. In 2005, Saudi Arabia churned out more than 11 million barrels of oil per day, roughly 13.5 percent of the world's total supply.

And you may have guessed the world's second-largest producer: the Russian Federation. In 2005, Russia chipped in about 9.5 million barrels per day, a bit more than 12 percent of the total global production.

What Happened to the Oil Boom?

What goes up must come down
It is amazing how short our memories can be. Just last summer, crude oil was trading at $77 a barrel. In five short months, the price has fallen more than 30%, and it now sits near two-year lows. Being heavily invested in the oil patch, I decided it was time to dig into the market fundamentals to find out if the oil boom is really over, or if the current weakness has created some blue-light specials in the oil patch.

PICKENS PLAYS CHICKEN WITH BULLISH OIL BET

If legendary oil trader T. Boone Pickens is so convinced oil will shoot up again, he may have to hog-tie Vladimir Putin to corral the Russian leader's petro-cash machine.

Pickens raised eyebrows yesterday when he said that collapsing crude prices would jump abruptly higher to $70 a barrel, which could earn him perhaps $1 billion overnight.

Assessing The Clean Energy ETF

Brett Steenbarger submits: Back in November, I took a look at the the clean energy ETF from PowerShares that tracks the WilderHill Clean Energy Portfolio (PBW). The fund holds positions in a variety of firms that are involved in alternative energy plays, from solar to fuel cell to wind.

The return of geo-politics

This is supposed to be the age of globalisation when the productive forces of global capitalism are let loose to generate unprecedented wealth for all. Under this meta-logic politics was supposed to be superseded by economics, nation-states by markets. But there are signs that big-picture politics is back in the driver’s seat, that real problems are emerging on the international scene, and that over the next few decades we are in for a very interesting time indeed.

During the Cold War it was generally believed that world affairs were dominated by political relations between the major powers, generally known as geo-politics. This geo-politics reached its apogee with the nuclear stand-off between the two great powers of east and west, Russia and America.

Iran says military attack impossible but ready for threat

A top Iranian nuclear official said yesterday that he believed the Western military attack on Iran's nuclear facilities was "highly improbable", but his country was ready to face the threat, the local ISNA news agency reported.
"We believe bombing our nuclear facilities is highly improbable, however, we have already adopted necessary precautious measures for this (threat)," Mohammad Saeedi, deputy chief of Iran's Atomic Energy Organization, was quoted as saying.

Crude Oil: A Long Term Forecast

After holding in the $60s for many months, crude oil has dropped precipitously in the past few weeks, and is now in the vicinity of $50 a barrel. A number of reasons have been given for the sharp fall in price, all of them more or less linked.

Energy demand remains huge and growing

With the manufacturing and housing outlooks softening, analysts may have to lower energy demand expectations this year,” suggests senior analyst Phil Flynn at Alaron Trading in Chicago. But, he notes, demand’s apparent inelasticity to higher prices is confounding economists and total energy demand still will be huge. In fact, U.S. supply usually must meet demand of 99.5 quadrillion British thermal units annually. Total world consumption of marketed energy is about 425 quadrillion British thermal units.

Oil supply outside OPEC set to disappoint - IEA

Oil producers outside OPEC will pump less oil than expected this year, the International Energy Agency said on Thursday, increasing the burden on OPEC just as the exporter group is trimming supply.

In its latest monthly report, the adviser to 26 industrialised countries forecast oil supply from non-OPEC will rise by 1.4 million barrels per day in 2007, less than the 1.7 million bpd expected last month.

China's Q1 2007 crude oil demand unchanged at 7.12 mln bpd - IEA

The International Energy Agency (IEA) said that it is leaving its first quarter 2007 supply and demand forecasts for China unchanged from last month at 3.7 mln and 7.12 mln barrels per day (bpd).

In its monthly oil market report, the Paris-based organization said full-year 2007 supply and demand projections are also unchanged over last month at 3.7 and 7.35 mln bpd.

Crude Oil and Gasoline Inventories Gain

U.S. commercial crude oil inventories jumped by 6.8 million barrels compared to the previous week. At 321.5 million barrels, U.S. crude oil inventories are above the upper end of the average range for this time of year. Total motor gasoline inventories rose by 3.5 million barrels last week, and are at the upper end of the average range. Distillate fuel inventories increased by 0.9 million barrels, and remain above the upper end of the average range for this time of year.

The following is the un-edited press release from the Energy Information Administration.

The Peak Oil Crisis: Congressional Hearings - Round #2

The first congressional hearings on peak oil were held in December 2005 when a subcommittee of the House Energy and Commerce Committee had a half-day session devoted to the topic. At the hearing several luminaries of the peak oil community testified that indeed the world was about to start running short of cheap, easy to find oil and that indeed there would be serious consequences for the industrialized world. This view was countered by the man from Cambridge Energy Research who testified that to the contrary, world oil production could continue to grow for decades, never really would “peak,” and this was a problem for future generations. Happy motoring everyone!

South Africa: End of Oil's Run?

THE price of crude hit a 19-month low last week, continuing a downward slide that has already slashed the price of a barrel of oil more than 12% in the first two weeks of the new year.

The immediate cause of the price slump was the resumption of Russia's oil supplies to central Europe -- the closure of this key pipeline three days earlier had cut supplies to the region 10%, so it was to be expected that, all else being equal, global prices would ease when the taps were reopened. This has also been an unusually warm winter in the US, which allowed inventories in the world's biggest oil-consuming economy to rise and released pressure on the supply side on the other side of the Atlantic.

IEA Cuts 2007 Oil Demand Forecast on Mild Weather