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Shell Oil president: To cut price, produce more gasoline in U.S.
John Roberts, CNN
… John Hofmeister, president of Shell Oil Co., the U.S. division of Royal Dutch Shell, addressed rising gasoline prices during an interview Wednesday with John Roberts on CNN’s “American Morning.”
ROBERTS: What do you say to people who are in this budget crunch of trying to fill up the family car?
HOFMEISTER: I say we need more gas to be produced in this country. I’ve been saying that for three years, ever since I took this position [as president of Shell].
… ROBERTS: The president is advocating more drilling on U.S. territory. Isn’t it true that globally we’re starting to reach a peak in production and that within maybe a decade or two oil production will begin to decrease?
HOFMEISTER: Well, I think there is some argument [that] with convenient, easy oil we will peak sometime in the next decade. I think Shell sees that coming, but in terms of total oil supply to the world, we’re a long way from reaching peak oil because it doesn’t take into account unconventional oil.
… ROBERTS: Where is the top of all this? How high can the price of a barrel of oil go? How high will the cost of a gallon of gasoline go?
HOFMEISTER: I heard somebody say the other day it’s as long as a piece of string. We don’t know.
ROBERTS: The president of OPEC said $200 a barrel.
HOFMEISTER: Yeah, well, there are some countries out there subsidizing the cost of their energy to their consumers and industries to compete with America — or against America — because they think America won’t solve the problem.
ROBERTS: You’re saying you have no idea where the top is.
HOFMEISTER: We don’t know. But we should produce more oil in this country.
(30 April 2008)
PR strategy: No matter what the question, answer with the point that you want to get across. Another example, in President Bush’s 50-minute press conference yesterday, “Bush touted drilling the Alaskan National Wildlife Refuge six times, including a few times in response to unrelated questions.” (Steve Benen.),
Both Hofmeister and Bush seem more focussed on obtaining an immediate advantage from the situation rather than developing a viable long-term strategy. -BA
Qatar: Oil to hit $200 a barrel despite rising supply
David Robertson, UK Times
Qatar, the resources-rich nation, has added its voice to warnings that the price of oil will hit $200 a barrel despite record levels of production among Gulf countries last month.
Qatar’s energy minister, Abdullah bin Hamad al-Attiyah’s comments echoed those of Opec’s president, Chakib Khelil, who said on Monday that economic factors could drive oil to $200.
The oil price reached nearly $120 at the start of the week and analysts are concerned that an influx of investment money from speculators could push it higher. The price eased to $115 today but is still up more than 20 per cent this year.
Prices have increased despite falling demand in the US and increased supply in the Gulf.
(30 April 2008)
Gold isn’t buying as much oil as it used to
John Kingston, The Barrel, Platts
A talking head on television this weekend was discussing the worldwide price of rice, and noted that its relationship to gold had changed little. Over the past several months, she said, the amount of rice that an ounce of gold would buy had not changed significantly.
This, of course, led The Barrel to check what had happened to the relationship between gold and oil these last few months. The numbers are sobering.
We compared the price of the Handy & Harman daily gold fix to the Platts’ daily assessment of WTI. The question: how many barrels of WTI would an ounce of gold buy?
We started with last September, when the number was about 9 barrels per ounce. Beginning in January, the number soared, as the price of gold climbed and oil fell. By February 6, the number of barrels of oil that you could fetch with an ounce of gold had risen to 10.35.
The change since then has been remarkable, and it strongly undercuts the idea that the rise in the price of oil is simply a financial phenomenon. If gold is the ultimate storehouse of value and the currency of last resort, a commodity that is being driven primarily by currency factors should not be strengthening against that currency.
(28 April 2008)
Recommended by EB contributor “driller.”
ND Study: 167 Billion Barrels of Oil in Bakken
AFX News via RigZone
The Bakken shale formation in North Dakota holds up to 167 billion barrels of oil but only about 1 percent of it can be recovered using current technology, a new study says.
The study released Monday said current technology could lead to the recovery of about 2.1 billion barrels in North Dakota’s portion of the formation, where oil-producing rock is sandwiched between layers of shale about 10,000 feet under the ground. The estimate of recoverable oil included in the study by the state Department of Mineral Resources was similar to that of a federal study released earlier this month.
(28 April 2008)
