Prices & supplies - May 17
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UK BERR projects oil at $70 in 2020
Jim Fitzpatrick, Hansard
UK Department of Business, Enterprise and Regulatory Reform (BERR) says that oil will be at $65 in 2010, $68 in 2015 and $70 in 2020.
Norman Baker: To ask the Secretary of State for Transport pursuant to the answer of 4 March 2008, Official Report, columns 2263-4W, on oil: prices, whether she plans to revise her projections for the future price of oil in (a) 2010, (b) 2015 and (c) 2020. 
Jim Fitzpatrick [holding answer 9 May 2008]: The Department for Transport uses oil price projections from the Department for Business, Enterprise and Regulatory Reform (BERR) in its transport modelling. On 2 May 2008, BERR published revised oil price assumptions to (a) $65; (b) $68; and (c) $70 for the years requested. These are in 2007 prices and refer to their central scenario.
We are in the process of using these updated projections to make new road traffic and congestion forecasts. The new oil price projections will also be incorporated into the latest versions of Department guidance and software used in developing business cases for funding by promoters.
(12 May 2008)
Some see oil bubble; others see trouble
John W. Schoen, MSNBC
Many expect prices to head lower, but suppliers have little margin
The recent trajectory of oil prices - a fairly steady increase followed by a much more vertical rise - has a familiar look to it. Remember those charts of tech stocks and housing prices? It's hard not to wonder: Are oil prices forming the next big “bubble?"
Those who see a bubble forming say you need look no further than the recent run-up in the cost of a barrel of crude to the current level of about $124.
... Overheated speculation, the most common cause of any investment bubble, has taken hold in oil trading pits, according to bubble theorists. Fearful that a cutoff in supplies could send prices skyrocketing, oil traders and their customers (hedge funds and industrial oil consumers) are willing to pay high prices to lock in supply at a predictable price. As long as those traders and industrial users think supplies are at risk, that “premium” is likely to remain.
The fears of a supply cutoff aren't without merit.
(15 May 2008)
MSNBC Senior Producer John W. Schoen has written previously on peak oil.
Oil Refiners See Profits Sink as Consumption Falls
Jad Mouawad, New York Times
While drivers are facing sticker shock at the pump these days, here is a bigger shock: high prices are putting a strain on oil refiners.
After last year’s stellar profits, American refiners are going through a traumatic period. In a time of record gasoline prices, some of them actually lost money in the first quarter, and for virtually all refiners, profits are down sharply.
Experts say the refiners are caught in a double bind. The price of their raw material, oil, is rising because of strong global demand. At the same time, consumption of gasoline in the United States is falling as a result of slower economic growth and consumer efforts to conserve.
However much the companies would like to raise gasoline prices enough to pass along the full increases in oil, analysts say they have been unable to do it. Oil prices doubled in the past year, while wholesale gasoline prices rose a mere 39 percent.
(14 May 2008)
Keep stockpiling oil
Editorial, Los Angeles Times
Congress voted to stop filling the strategic reserve. But the U.S. could be in for trouble if it stops now.
Legislation to halt deposits to the Strategic Petroleum Reserve may be the most popular initiative from Congress this year. But it's a bad economic bet, bad for national security and gives the American public the false impression that lawmakers are actually doing something about skyrocketing gasoline prices. President Bush should veto the bill -- even though Congress passed legislation by huge margins Tuesday and could actually override his veto.
It may seem logical for the government to try to decrease demand for oil and thus prices by not buying roughly 70,000 barrels a day to deposit in the strategic reserve. In fact, according to the Department of Energy, the amount being stockpiled amounts to just 0.1% of global daily oil consumption. The net effect at U.S. gas pumps of temporarily halting reserve purchases would be close to nil.
(14 May 2008)
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