Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
US controls price of crude oil
Peoples Daily Online
Who is controlling the price of crude oil? The British Petroleum Company (BP), OPEC and Russia are all under suspicion, but there is really only one entity controlling the market.
Within one month, the futures contracts of both West Texas Intermediate (WTI) and Brent dropped by more than US$10 and the October contract for WTI decreased 17.5 percent between August 8 and September 11.
In fact, the news did not impact the market much. Besides a couple of news items from BP, there was a ‘new discovery’ at an oil field in the Gulf of Mexico in the US. The Iranian issue remains unresolved and the hurricane season has not yet passed. However, the price of crude oil has fallen substantially. Who is manipulating it? ..
With midterm elections approaching, the Bush administration will be wary of making any unpopular decisions. High oil prices would undoubtedly cause the public to complain, an unfavourable situation at election time.
For these reasons, the US government has intentionally curbed the price of oil since May. At the outset, the US stopped increasing its strategic oil inventory. After the price of oil climbed in July, the US released 7.5 million barrels from their inventory within a week. After the price growth mid-July, the US government claimed that, if necessary, it would eventually release its strategic oil inventory to decrease the price of oil. ..
(18 Sept 2006)
Contributor William Tamblyn writes: The method by which the U.S. is said in this article to be controlling prices is one that cannot last for long. So if the article is right about the method, I think the motive must be a relatively short term one. Of all the reasons that are mentioned in the article for why the U.S. wants to see lower oil prices, only one (that makes any sense to me) is relatively short term, the election. Bargaining with Iran might be considered relatively short term if it made any sense, but to me it does not.
Brazil, Bolivia to address energy crisis
Alan Clendenning, Associated Press via Yahoo!News
SAO PAULO, Brazil – Brazilian President Luiz Inacio Lula da Silva insisted Thursday he’s taking a tough line in a major energy dispute with Bolivia, and said he’ll meet with Bolivian leader Evo Morales to try solve the crisis after Brazil’s Oct. 1 presidential elections.
Silva used a televised interview to fend off allegations by his main political rival that ideological friendship with Morales has led him to soft-pedal Brazil’s national interests.
He said the two leaders would meet at an unspecified date after the election “to find a solution for the issue” that has strained relations between the neighboring nations just as Silva enters the home stretch of his re-election bid amid rising political heat.
Bolivia last week shocked Brazil when it announced it would take all the money Brazil’s state-owned oil company gets from its two Bolivian refineries – which process 90 percent of the Andean nation’s fuel for domestic consumption – and give back whatever is justified.
It quickly backed away from that plan under intense Brazilian pressure.
(21 Sep 2006)
Fears grow over Russia undermining EU energy strategy
Mark Beunderman, EU Observer
Italy has sounded the alarm over Russia’s recent energy deal with Algeria, amid fears that the Kremlin is undermining the EU’s strategy of seeking less energy dependency on Moscow.
Russia’s state-owned energy firms Gazprom and Lukoil in August announced they would clinch a co-operation deal with Algeria’s state energy firm Sonatrach, in a move which directly challenges EU plans to boost gas imports from Algeria in order to decrease dependency on Russian supplies.
…The commission together with Mr Solana made clear in a paper published in June that the EU should seek less energy dependency on Moscow – which supplies around a quarter of Europe’s gas and oil – following a dramatic Russian gas supply cut in January.
Algeria was earmarked in the paper as one alternative supplier to Russia, with one EU official saying at the time “If we manage to double gas imports from Algeria from 10 percent now to 20 percent in the future, the amount would be comparable to that of Russia.”
But the Kremlin has now taken its own stake in Algerian energy production, and is also tightening its grip in another region which Brussels sees as a key alternative to Russian supplies – the South Caucasus and central Asia.
(22 Sep 2006)