PAULSON: Oil Prices a Burden On Global Economy

US Treasury Secretary, in its upcoming trip to Middle East, is planning to promote foreign investment in oil production so that oil supply will boost. As part of his visit to Mid-east countries, Paulson is planning to tell the officials of Saudi Arabia and other oil-rich countries that the current soaring oil prices pose a significant burden on global economy.

"The key message that he will highlight is that record high oil prices are putting a significant burden on the global economy. They are also putting a significant burden on families and consumers, not just in the United States, but around the world," McCormick said in a briefing to preview Paulson's weekend trip.

McCormick said Paulson would be urging "all countries to open up their oil markets to investment that boosts yields, exploration and production." He said that message would not be aimed at any specific country but to all oil producing nations because a significant number of them are "walled off to private investment."

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Energy Market Updates

Oil prices, energy trading, alternative energy updates....


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The Organization of Petroleum Exporting Countries has no plans to hold an emergency meeting before a scheduled September gathering, they said.

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It is a new sunrise at the Reliance empire as the fuel to food conglomerate led by Mukesh Ambani moves into solar energy.

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There seems something surreal about the continuing rally in international prices of petroleum crude. In terms of fundamentals, stocks are ‘high’, supply quite ‘satisfactory’, and demand is actually ‘easing’. Yet crude oil prices keep going up and up and up. The sustained rally in oil quotes does call for a closer look at the role of speculation in hardening prices.
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The presumptive Republican nominee, John McCain, and Democratic hopeful Hillary Clinton have both called for a gas tax holiday this summer, eliminating the 18.4-cent-per-gallon tax during the time when Americans rekindle their passionate affair with the open road, from the end of May to Labour Day.
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BRITISH gas giant BG Group has made a $13 billion power play in the Australian market, launching an all-cash takeover bid for Origin Energy.
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Additional supplies would have to come from OPEC states because refineries in non-OPEC countries required enormous levels of investment to maintain current production, he wrote.

"In those countries much of the remaining oil in the ground in OPEC is run by National Oil Companies that have, by and large, been starved of investment capital by their own governments, for example Venezuela, Nigeria, Iran," Mr Sieminski wrote.

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Oil Price Trades at $109, OPEC Blames Dollars...

Oil price remained closely at $109 a barrel but would definitely continue leaping in the days to come as the demand for oil is still jumping, despite OPEC's announcements that the world oil market is well supplied. Who will to be blamed for the oil price increase?OPEC claimed it was the US dollar fault......Refiners and some oil traders are being hurt by this oil trend.




Jonathan Kornafel, a director for Asia at Hudson Capital Energy in Singapore, said that “Investment flows have been a factor in the volatility but I can't believe the new investment has taken us to $100 oil” further adding, “The fundamentals are what have gotten us here.”

According to Citigroup analysts Alan Heap and Alex Tonks, Global investments in commodities increased to $400 billion during the first three months of the year 2008. This was told in a note to clients.


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High oil prices can reflicate rampant speculations, US Senators say

More aggressive financial market regulationwas being pushed by two US senatos who's minding the Energy and Natural Resources Committee, as they claimed they could not estimate speculators' impacts on crude oil high prices. Democrats Senators Byron Dorgan and Maria Cantwell said the energy prices are having enormous consequences.

When Cantwell asked three energy analysts who testified if they predicted a year ago that oil prices would exceed $100/bbl, they all said they did not and declined to forecast where prices would be 6 months from now. "You're basically saying this is all over the map and you don't know what the price will be. If we're going to protect our economy, we need to close loopholes that keep this activity in the dark," she said.

Speaking with reporters outside the hearing, the senators separately said that they will try to increase regulatory authority and funding at the CFTC, Federal Trade Commission, and Securities and Exchange Commission as part of the three agencies' fiscal 2009 appropriations.

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Oil drops on Iraqi pipeline restoration

The price of oil has dropped to near US$105 per barrel after the pipeline in Iraq has been restored.
Last week, oil price has escalated due to the repair of the Iraqi pipeline which was allegedly attacked by some anti-government in Basra,Iraq. Due to the restoration, oil prices has been pulling back and the operation is at normal level now because the pipeline problem has been resloved.

Concerns about the U.S. economy also weighed on futures. The U.S. Commerce Department said Friday consumer spending edged up by just 0.1 percent last month, the poorest showing since September 2006. Energy investors worry that a cooling economy will use less fuel.

"In the coming weeks, barring any new supply side concerns, the weaker fundamentals in the U.S. market will likely pull back prices," Shum said. "The latest oil product demand data out of the U.S. show a soft market."

Analysts are split on oil's direction. Many think prices will rise to new records in coming months as the dollar resumes its decline. The U.S. Federal Reserve is expected to cut interest rates several more times this year, and lower interest rates tend to weaken the dollar. Many analysts say the weaker dollar has been largely responsible for oil's run to a record near US$112 a barrel earlier this month.

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Despite surprise rate cut, oil price still high in Asian morning trade

The price of oil, as oil spectators are expecting are suppose to go down due to the sudden Federal Rate cut. But in Asia, as recorded, oil price is still higher in morning trading. Will the oil price stay the same or will go lower after a day? Find out.

In morning trade, New York's main contract, light sweet crude for delivery in March, was four cents up at $89.25 a barrel.

The February contract, which expired Tuesday, had closed 72 cents lower at $89.85 in New York overnight.

Brent North Sea crude for March delivery was seven cents higher at $88.52 a barrel.

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Mexico Ports Closure may push oil price to $91/barrel

Oil price, is once again, nearing $91 per barrel. This price was due to the closure of Mexico oil terminals which was also due to the bad weather. Mexico is said to be the world's among top ten oil exporter. Its shipments have been repeatedly disrupted because of the bad weather condition. On the other hand, some said that the oil price hike maybe attributed to the OPEC's cancellation and dismissal of calls to raise output.


"I don't think there is a need to increase because the market is well supplied," Oil Minister Abdullah al-Attiyah told reporters on the sidelines of a conference in Abu Dhabi on Sunday.

U.S. President George W. Bush and Energy Secretary Sam Bodman have urged top exporter Saudi Arabia and OPEC to raise supply on two separate visits to the Kingdom last week.

The production group will meet on Feb. 1 in to discuss output. Several OPEC members have said there was no reason to raise output if oil inventories recover in the second quarter as winter ends and if the U.S. slips into a recession.

Ongoing geopolitical tensions between Iran and the U.S. over Tehran's nuclear program also supported oil prices. Iran received a fourth delivery of nuclear fuel from Russia on Sunday to power Tehran's first atomic power plant and it expects four more before the consignment is complete.


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Oil prices slightly slide after record high

The global market is still doubtful if the recent slowing of oil prices would continue or would bring another headache both to the consumers and oil investors. It is estimated that the slight falling of oil price might as well affect the global oil demand.

“Investors fear that a slowdown in the US could spread to the broader market and become a drag on the global economy, consequentially denting demand for energy.”

During the week, prices found limited support from hopes the US Federal Reserve would slash rates to boost the ailing American economy.

Despite heavy price falls, traders warned that there could be another run at $100 owing to persistent geopolitical concerns in crude producers Iran and Nigeria. Traders’ thoughts are now turning to a production meeting of the OPEC oil producers’ grouping in Vienna next month.

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Oil near $100 per barrel; will continue to rise

As expected, the new year will bring problems among oil consumers. The forecast had been said, and now, said forecast is about to happen. Oil is rising. Would OPEC has plan to counter it?



The higher prices have led to misery for motorists after average petrol prices soared past the £1-a-litre mark in November.

Oil prices rose by more than 50% last year, also driven higher by speculative buying - traders betting that the price would rise - and investors using oil as a hedge against the weakness of the dollar.

The price hikes have also hampered the Bank of England's efforts to keep a lid on inflation.

Next year costs should ease back as the world's economy slows, dampening demand. The Opec oil cartel, which decided against raising production levels in December, will also consider lifting output in February after stronger-than-expected winter demand.

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Oil demand forecast makes prices high

As it was being forecast, that the demand for oil in the coming year would grow faster,oil prices had likewise accelerated.

The security watchdog for the Organization for Economic Cooperation and Development, or OECD, said its upward revision was based on an expected increase in demand for ethane and other petrochemical feedstocks in the Middle East, notably Saudi Arabia.

The forecast assumed continuing robust oil demand growth in non-OECD countries, where subsidies protect people from the impact of high oil prices, and normal winter weather.

On Friday, light, sweet crude for January delivery rose 20 cents to $92.45 a barrel in electronic trading on the New York Mercantile Exchange by the afternoon in Europe.

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Oil Price slides below $88

Oil prices have been slightly falling from its previous unbearable price. This week oil price was even below $88 per barrel.


"The fall in the oil price appeared to be more of a continuation of the choppy trading pattern of recent days rather than the result of significant oil market news," said Amerex Investments analyst Richard Morley.

Better-than-expected U.S. employment data on Friday reduced the likelihood of an aggressive 50 basis point interest rate cut by the Federal Reserve on Tuesday, buoying the dollar, which has traded inversely with oil of late, traders said.

Instead markets are now pricing in a quarter-point cut, a factor that helped support the dollar near a one-month high against the yen on Monday. A weaker dollar makes most commodities cheaper to buy for non-dollar investors.

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From worst week ever, oil is above $89 a barrel

Oil prices are starting to decline, from the near $100 a barrel, now it reduces to 89 above per barrel. Would this trend continue? Find out.



But the decline from a record-high closing price of $98.18 on Nov. 23 will also go some way to calming concerns within the Organization of the Petroleum Exporting Countries over the effect of nearly $100 oil on the world economy and crude oil demand.

Ministers meeting in Abu Dhabi this week will weigh a modest boost in oil supplies, but the influential Saudi Oil Minister Ali al-Naimi has avoided any comment on likely policy, repeating only that the market is well supplied although prices are a concern.

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Oil prices again marching towards $100 a barrel

After a slight lower oil price midweek, oil price is again hovering towards $100 a barrel, as it is currently, especially on oil, reached a record of $99.29 per barrel.Were these due to lack of supplies of imported oil? Find out....





Crude prices reached a trading record of $99.29 a barrel on Wednesday, and are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

Heating oil prices are rising due to falling supplies at home and overseas, analysts said.

"The heating oil market, it's more of a global story," said Andrew Lebow, senior vice president of MF Global Inc. in New York. "Because of refinery problems in Europe, (supplies) are kind of tight."

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Weak dollar results to nearly $100 a barrel of oil

The still-weak-US dollar has definitely resulted to a nearly $100 per barrel of oil in the world market. Crude oil alone recorded a $98 a barrel but expected to soar much of the present price.




The market also expects refinery utilization to have increased by 0.40 percentage points from the week before to operate at 88.1 percent of their operable capacity.

Cameron Hanover analyst Peter Beutel said at this time of year crude oil stocks have increased in each of the last five years.


"Utilization has increased in four of the past six years. If we get another report with both higher, it will be a boost for the supply side as we get an early taste of this approaching winter," he said.

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Rising energy costs, declining dollar may cause trouble

Accelerating oil prices and deteriorating dollar are two mean component of trouble for consumers. For oil prices alone, consumers have to go with what are in the market. While, on falling dollar, this means that products will become more expensive, especially the imported ones? How would an individual afford to live with only a meager income?





The dollar is down for several reasons, but all reflect a more negative view of the United States relative to the rest of the global economy. Investors are selling greenbacks because of concern that inflation will rebound, uncertainty about the health of US banks, and a higher risk of recession – plus some longer-term rethinking about where to hold currency reserves.

What's going on with oil is partly the flip side of that same financial coin. Since oil is priced globally in dollars, it's typical for any big markdown in the dollar to be mirrored in a big markup in oil prices. For foreign buyers, that keeps the price of oil fairly stable. But US consumers take that adjustment on the chin.

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High fuel prices cause FedEx low profit

FedEx, one of the most in demand delivery companies cited high oil prices as the cause of its low revenue for the current quarter, since most of its deliveries were using vehicles, such as trucks and other by land vehicles to complete its services.

"I guess in this environment it wouldn't be a surprise," said Allan Meyers, a principal at AMBS Investment Counsel in Grand Rapids, Michigan, commenting on the lower FedEx forecast.

"You've got rising oil prices, and shipments, I'm sure, are going to be slowing down," he said. "It's just a gradual, continued slowdown in the U.S. economy."

Meyers co-manages the AHA Diversified Equity Fund and holds FedEx shares.

FedEx said it now expects a profit of $1.45 to $1.55 per share for its fiscal second quarter ending Nov. 30, down from its previous forecast of $1.60 to $1.75.

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Oil prices slightly slipped $3+

This sounds good news to all affected by the sudden oil price increase, because just recently, the oil price has slipped more than $3 dollars. Well, does it sounds like oil price stability in the next few days?



"One of the reasons that we've been strong on oil all year is concerns about Iran's nuclear program," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

Retail gasoline prices, meanwhile, rose further above $3 a gallon amid predictions prices will rise even more to catch up with oil's recent advance to near $100 a barrel. The national average price of a gallon of gas rose 0.4 cent overnight to $3.105, according to AAA and the Oil Price Information Service. Oil futures have jumped 42 percent since late August.

Light, sweet crude for December delivery settled at $91.17 a barrel, down $3.45 from Monday's settlement price of $94.62 per barrel, on the New York Mercantile Exchange. Tuesday's intraday high for light sweet crude oil was $94.10 per barrel.

Only last Thursday, crude prices traded as high as $98.62 - a record - and appeared on a relentless trek toward $100.

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OPEC on oil prices: don't blame us!

Mixed speculations and comments from energy concerned individuals are being heard in the world of oil markets. some claim that the soaring oil prices is the end result of the turmoil happened in some of the middle east countries. Some are blaming Bush administration for his continued vision against insurgency in the middle east....However, some are saying that the OPEC is the most responsible for it. Is it OPEC should be blamed?

"Our main [objective]," he adds, "is not to have any shortage of supply. This is our job. Back in 1997, the oil price dropped very dramatically in dollars. We never complained. It hurt us very bad. It hurt the industry. The industry also went into bankruptcy. We believed at the time it was market driven."

Speaking in his eighth-floor office with panoramic views of Doha's new skyscrapers and the Gulf waters beyond, Attiya said that the failure of industrialized countries to provide more refining capacity in the world had led to some shortages of usable fuel. But he was adamant that the Organization of the Oil Petroleum Exporting Countries, which will hold a major summit in Riyadh, Saudi Arabia, in mid-November, is not responsible for today's soaring prices.

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International Energy Agency: oil prices are getting worse

As the prices of oil are getting worser everyday in the world market, it escalates tensions and worries from the small and big consumers that would definitely triple the expenses of any business establishments. If the oil prices remain at peak, the most affected of which is the small investors said some economists.


This gloomy assessment comes from the International Energy Agency, the Paris-based organization representing the 26 rich, gas-guzzling member nations of the Organization for Economic Cooperation and Development (OECD). The agency is not known for alarmist warnings, and its World Energy Outlook is typically viewed by policy wonks as a solid indicator of global energy supplies. In a marked change from its traditionally bland, measured tones, the IEA's 2007 report says governments need to make urgent, bold decisions on energy policy, or risk massive environmental and energy-supply crises within two decades — crises and shortages that could spark serious global conflicts.

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Oil will increase at $100 on or before 2008

Oil is expectedly increasing before the year end or before the new year comes. Its expected price will be $100 a barrel. find out what contributes to this increasing oil prices.


"It is clear that the market has $100 a barrel in its sights and this 
landmark is set to be breached before year end," said Bank of 
Ireland analyst Paul Harris.
Traders are concerned about tight global energy supplies heading into the northern hemisphere winter.
Crude futures moved sharply higher on Wednesday after the US Department of Energy revealed that crude inventories had slumped by 3.9 million barrels in the week ending October 26.
The figures shocked the market because analysts' consensus forecast had been for a modest gain of 400 000 barrels.
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