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Pertamina Tells Customers to Ration Gas
Associated Press, Forbes
Indonesian Vice President Yusuf Kalla on Monday called for people to use less fuel amid nationwide shortages sparked by soaring international oil prices and rising domestic consumption.
Queues and shortages have been reported at gas stations around the country in recent days because state-owned oil company Pertamina has struggled to pay the higher oil costs, which last week rose to $60 a barrel, to maintain the country’s reserves. It has also reduced distribution to preserve its stocks.
“Don’t waste fuel on unnecessary things,” Kalla told reporters in Jakarta.
Indonesia is Asia’s only OPEC member, but has been forced to begin importing fuel last year after a decade of declining investment in oil production. In Kupang, a large town in Nusa Tengara Timor province in the far east of the province, public minivans stopped running because of gas stations were closed, Detik.com online news portal reported. …
It is also committed to a policy of subsiding fuel to make it affordable to the poor. High oil prices risk blowing the country’s budget because the government must absorb the costs rather than pass them on to the public. “We hope the price drops, so it does not affect our subsidies,” said Kalla.
In March, the government removed some of the subsidies, leading to price hikes of around 30 percent. The move was praised by international lenders, but sparked protests across the country. …
(4 July 2005)
Expect oil production slump – Iranian expert
Staff, PIN (Iran)
TEHRAN (PIN) — Inattention to limitations facing downstream oil industry is among the most important factors keeping global oil prices high.
Director of OPEC and major oil producing countries research group at the Institute for International Energy Studies told Petroenergy Information Network that due to refining limitations that cause gasoline shortage in summer and shortage of fuel in winter, effective measures must be taken to solve downstream oil industry problems.
Mohammad Khatibi Tabatabaii added that under the current circumstances increasing OPEC output by 500,000 barrels per day cannot control prices.
The official stated that some experts predicted that the world will hit its peak oil production in the 21st century and current estimates show that the world is really producing as much crude as it can.
“Therefore, as put by some experts, we must expect an oil production slump during 2005-2010 due to worn-out reservoirs and lower output,” he said. …
(4 July 2005)
Launch Of World Oil Data Delayed Again on Quality Issues
Ryan Sturgill, Rigzone/Dow Jones Commodities News Select via Comtex
The public launch of global oil data intended to boost crude market transparency has been delayed again, the International Energy Forum said Wednesday.
The leaders of the Group of Eight industrialized nations hoped the Joint Oil Database Initiative, coordinated by the Riyadh-based IEF, would contribute to a cut in oil price volatility.
The data is supposed to provide a monthly snapshot of oil inventories, supply and demand from 93 countries. A decision on publishing the data will be taken within the next three months, the IEF said. …
(30 June 2005)
The Sunset of Oil
Fred Johns, SomethingCoolNews
The Scenario: The world has effectively run out of oil – the cheap, easy to produce kind that is. The price of oil has risen so high that the average family can no longer afford to fill their cars up with gas. Our roads lay empty. The machines that produce our goods run on oil that is too expensive to buy, so the products we are all used to buying – from packaged food to clothes to video games – are no longer being seriously manufactured and those that do exist cost a small fortune. Our nation is in virtual shock, attempting to adjust to this new lifestyle. The economy comes to a halt and millions lose their jobs. Rumours abound that our allies are preparing to go to war to get more of the black stuff that has ground our way of life to a halt.
The Likelihood: “The important thing to note, is that nobody, (with a few fringe exceptions), claim Peak Oil won’t happen,” PeakOil.com administrator Aaron Dunlap says. “We argue about when it will happen.” …
“It can be easy to dismiss some crackpot Internet conspiracy theories. But when noted geologists like Colin Campbell, investment bankers like Matt Simmons and oil insiders like T. Boone Pickens take this seriously… I’m all ears. Dr. Richard Smalley, Director of Rice University’s Nano Technology Lab and winner of the Nobel Prize in chemistry for discovering nanotubes & buckey balls, thinks Peak Oil is very real. Lee Raymond of Exxon thinks it’s real. So does the US Department of Energy. Representative Bartlett thinks so too.” After hearing from sources like that, Dunlap came to his own educated opinion. “Peak oil is headed this way, and not a soul on Earth can hide from it.”
It’s enough to make certain people want to pack up their belongings and move up into the mountains. Dunlap has some advice for them too: “My advice is to practice first. You are not Grizzly Adams and this is not Little House on the Prairie.” As the end of this oil age approaches, he suggests you might want to think practically and pack light: “Bring a gun and a shovel… you’ll need both.”
(4 July 2005)
Better than average introduction to peak oil, worth reading if only for the words of wisdom from the administrator of Peakoil.com
Tapping Gushers Beneath The Gushers
Otis Port, Businessweek
Many people think of oil deposits as vast underground lakes, and oil wells as big straws that suck up the liquid gold. Eventually, the lake is drained, so the oil company packs up its gear and moves on. If this were really how things worked, the dwindling size of recent oil and natural gas discoveries would be alarming — feeding gloomy predictions that crude oil production is approaching its peak.
In fact, when major oil outfits abandon wells, they usually leave a lot behind. …
Now, many engineers are reassessing the riches that may lie hidden under such wells — including the 400,000 U.S. wells that produce, on average, just 2.2 barrels a day. These still account for almost 15% of domestic U.S. oil production, or 7% of total U.S. consumption. Using new, enhanced recovery techniques, the output of some low-flow wells can be increased dramatically. It’s even possible to revive old wells that aren’t producing a drop.
(6? July 2005 – BW site says 11 July!)
Fuel duty increase delayed again
Staff, BBS (UK)
Fuel duty is due to rise at least in line with inflation every year but Gordon Brown used his Budget in March to defer the rise. Now the Treasury says it will review whether to raise the tax in the autumn pre-Budget report.
The tax was frozen last year because of “volatility in the oil market”. Oil prices have since risen further. Fuel duties have now been frozen since October 2003. …
(5 July 2005)
This is of course effectively an oil consumption subsidy.
Higher taxes sap Russian oil exports to Europe
E.Gismatullin & G.Reynolds, Globe & Mail (Canada)
Russian oil exports to Europe fell in June and average daily oil output rose at the slowest annual pace of this year as higher taxes discouraged investment in fields.
Exports from Russia, the world’s second-biggest oil supplier, to countries outside the Commonwealth of Independent States fell to 4.22 million barrels a day in June, down 8.5 per cent from May. Russia raised crude oil output 1.8 per cent to 9.43 million barrels a day, or 38.58 million tons in June, from 9.26 million barrels a day in June last year, according to data from Moscow-based consultant OOO Petromarket. …
(4 July 2005)
Theres no reason to disbelieve that Russian oil production fell in June, but that taxes are therefore to blame is pure pro-oil corporation spin. See Interactive Investor for more on Russian oil production.
Politics and Economics
Japan considering up to 1 trln yen aid to Russia in pipeline bid
Japan is considering extending up to 1 trln yen in aid to Russia to help finance a pipeline from Siberian oil fields if Moscow gives Tokyo preference over Beijing in the project, the Tokyo Shimbun reported. The bulk of the sum being considered — between 900 bln yen and 1 trln yen — would be in the form of low-interest loans and trade insurance, the newspaper said.
It would be one of Japan’s biggest amounts of aid to the overseas oil sector, the regional daily said, adding Japan was motivated by energy security. …
No immediate comment on the reports of Japan’s possible aid was available from the foreign ministry.
(4 July 2005)
Heating bills likely to double
Susan Morse, Seacoast Online (US)
Residents can expect to pay twice as much to heat their homes this year over last, and that’s if they lock in the fixed price now being offered by their oil companies.
It’s hard to think of heating costs in summer heat, yet soaring oil prices – an estimated $60 a barrel – have people digging deeper into their pockets to prepay for oil before the cost goes higher.
The price of a gallon of oil on Friday was $1.99, compared to an estimated $1.40 a gallon a year ago. …
(4 July 2005)
A Manufactured CPI, Other Perils and Gold
David DesLauriers, ResourceInvestor
It seems especially clear to gold bulls and contrarians that the global economy is close to a tipping point. Good times don’t last forever, trees don’t grow to heaven, and history has borne out that at some point the excesses of every prolonged economic growth cycle have to be purged.
There is mounting evidence that something is about to break with a deadly cocktail of potential disasters conspiring against the sort of Goldilocks economic growth we’ve enjoyed. To name a few: Peak Oil, the housing bubble, overloaded and tapped out US consumers deep in debt, a very shaky European economic situation/idea, the reality that at some point China may stumble, the possibility of a repeat of 9/11, and P/E ratios and investor complacency levels that are still way too high. …
One interesting viewpoint which has been highlighted again recently is that the Consumers Price Index conveniently does not reflect the rate of inflation we are all experiencing.
As a consumer, the fact that prices are going up on everything is undeniable yet according to the official numbers, US Core CPI is up only 2.2% over the last year. Jim Puplava, President of broker-dealer Puplava Securities and operator of the popular website Financialsense.com, and Bill Gross of the mammoth PIMCO bond funds have both been outspoken on this issue, and the government ‘con job’ being perpetrated on all and sundry.
(5 July 2005)
Good to see others calling a spade a spade, following in Jim Papluva’s footsteps.
Energetic Disagreements on Oil
June Kim, Businesssweek
‘Four experts weigh in on where heated prices are headed. They agree on OPEC’s lack of market influence — but little else’
Conventional wisdom holds that oil prices, like anything else, are controlled by supply and demand, and international economic growth is fueling better-than-expected demand (see BW, 7/11/05, “Is There Plenty of Oil?”).
Yet oil industry insiders seem to disagree on whether imbalances exist and availability projections. The picture is clouded since reliable data on supply and demand, especially in certain foreign markets, can be difficult to come by.
BusinessWeek Online’s June Kim spoke with several experts to see if they can define current market conditions and what may happen in the months and years ahead. Following are edited excerpts of their answers to key questions about oil. …
(5 July 2005)