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Energy producers in driving seat at Rome talks

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ROME: Consumer countries and international oil firms keen to gain greater access to the world’s energy resources are likely to walk away empty-handed from talks with producer nations in Rome.

Record high oil, which struck $117 a barrel on Friday, has helped to drive up the profits of oil majors, but it has also increased the spending power of national oil companies and made them ever more reluctant to grant access to their resources.

“The relative positions of international energy companies and national energy companies are changing — and not in our favour,” Paolo Scaroni, chief executive of Italian oil and gas company Eni said in a speech at the opening of the International Energy Forum (IEF).

OPEC member Venezuela, under President Hugo Chavez, has spearheaded a global trend towards resource-holders seeking to maximise their returns from their energy wealth.

International firms have found themselves faced with tougher terms and shut out of the best energy territory.

During the 1970s, the international oil companies controlled nearly three-quarters of global oil reserves and 80 percent of production, Scaroni said.

Now, they control 6 percent of oil and 20 percent of gas reserves, and 24 percent of oil and 35 percent of gas production, he said. National oil companies hold the rest.

Read moreEnergy producers in driving seat at Rome talks

Crude oil at new high just under $114; gas also at a record

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NEW YORK (AP) — Crude oil prices rose to within a penny of $114 a barrel Tuesday, setting a new record as concerns mounted about global supplies. U.S. retail gasoline and diesel prices also struck new highs.Traders honed in on a report by the International Energy Agency that said Russian oil production dropped this year for the first time in a decade. The report raised concerns about whether the key oil-producing nation will have enough supply to help feed growing global demand.

“In an emotionally driven market like we’ve got now, it just doesn’t take much in the way of a headline to prompt a psychological response,” said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill.

Read moreCrude oil at new high just under $114; gas also at a record

Inflation hits consumers worldwide

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(AXcess News) – Gas pumps in the United States tell the same story as rice prices in Thailand: Inflation is a global phenomenon this year.

Oil hit a record $112 per barrel this week, and a United Nations official warned of continued pressure on food prices, which by one index are up 45 percent in the past year.

The challenges are worst in developing nations, where raw materials account for a larger share of consumer spending. But another factor – the sagging value of the US dollar – means that imports cost more in America and other nations that peg their currencies to the dollar.

Still, regardless of this currency phenomenon, several broad forces are pushing prices up.

After years of strong global economic growth, prices of oil, grains, and some metals have spiked. Investors are adding fuel to that fire by buying up hard assets like commodities, which are viewed as a hedge against inflation.

More fundamentally, many nations have been relatively loose in the creation of money supply. For all the news about interest-rate cuts by the Federal Reserve, this trend goes well beyond US shores.

Read moreInflation hits consumers worldwide

OPEC blames ‘mismanaged’ U.S. economy for soaring oil prices

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OPEC, rebuffing calls from U.S. President George W. Bush to increase oil output, cited “mismanagement” of the American economy as a major factor driving prices up.Record prices are suddenly creating the sharpest tensions in years between the oil cartel and the United States, the world’s largest oil consumer. Two days after the president called for more oil on the global market, OPEC members, meeting in Vienna, Austria, chose to leave their production levels unchanged, declaring that the market has plenty of oil already.

The cartel’s president on Wednesday blamed financial speculators and American economic problems, which have helped lower the value of the dollar, for the high oil prices. After the meeting, oil prices settled above $104 a barrel, a record.

Bush, who had said this week it would be a mistake for the Organization of the Petroleum Exporting Countries not to raise production, was disappointed by the outcome of Wednesday’s meeting, according to the White House.

It is the second time this year that OPEC ignored public calls from the United States to boost supplies. In January, Bush traveled to Saudi Arabia and urged producers to open their taps. But the plea failed to sway OPEC. When the group met in February, it kept its production level unchanged.

Read moreOPEC blames ‘mismanaged’ U.S. economy for soaring oil prices

Rove: Iraq Redeployment Would Cause Oil Prices To Skyrocket To $200 A Barrel

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This morning on Fox News Sunday, former White House adviser Karl Rove claimed that redeployment from Iraq would cause oil prices to shoot to $200 a barrel:

If we were to give up Iraq with the third largest oil reserves in the world to the control of an Al Qaida regime or to the control of Iran, don’t you think $200 a barrel oil would have a cost to the American economy?

 

Occupying Iraq has hardly helped oil prices stay low. Last week, oil prices reached a record high of over $102 a barrel. On March 19, 2003 — the day the Iraq war commenced — oil was trading at $36 a barrel. A look at the rise in oil prices:

oilprices65.gif

None of this should have come as a surprise to the Bush administration; before the war, economists were widely predicting a prolonged presence in Iraq would lead to a rise in oil prices. As Nobel laureate Joseph Stiglitz recently noted in Vanity Fair, “The soaring price of oil is clearly related to the Iraq war. The issue is not whether to blame the war for this but simply how much to blame it.”

Rove is also out of step with the American people, a majority of whom believes that the Iraq war is tied to the current economic downturn. A recent AP poll found that 68 percent of Americans say that redeploying from Iraq would help the economy.

Digg It!

Transcript:

WALLACE: All right. But Obama has found a clever way to link the war in Iraq to our domestic problems with the economy here at home. Let’s watch.

(BEGIN VIDEO CLIP)

OBAMA: We are spending $12 billion per month. That is money that we could be spending here in the United States, rebuilding our infrastructure, building schools, sending kids to university.

(END VIDEO CLIP)

WALLACE: If he’s able to define Iraq in terms of where do you spend that $12 billion, on the battlefield over there or on infrastructure and social programs here, doesn’t Obama win?

ROVE: Well, Obama — it’s a good argument for Obama, but I’m wondering where it goes, because it really is a very neo-isolationist argument. It basically says, you know, We should not be involved in the world because of the consequences to the budget here at home.

Well, we were not involved in the world before 9/11, and look what happened. Look at the cost to the American economy after a terrorist attack on the homeland. We lost a million jobs in 90 days after 9/11.

If we were to give up Iraq with the third largest oil reserves in the world to the control of an Al Qaida regime or to the control of Iran, don’t you think $200 a barrel oil would have a cost to the American economy?

So you know, it’s a cute thing in a primary. I’m not certain over an 8-month general election that you can make the argument that we ought to take a look at every foreign policy commitment in the United States and measure it on the basis of the number of dollars that we’ve got there.

I happened to be in Los Angeles on Monday, and somebody had heard Obama say this to me, and they were Democrat, and at dinner they said,

I’m worried about that, because does that mean he’s going to be looking at our support, for example, for the state of Israel and looking at it in terms of what could we be doing at home with those dollars?

And it was a nice line, but I’m not certain how durable a line it necessarily is.

Source: thinkprogress.org