Gold Dips Below $1700 for a 2%+ Hit
USO Puts in a Double Top
Hard to type 5 oil when there is massive debasement going on globally…but there may be a trade here.
Comments »Can Silver See a Super Spike ?
Lots of people keep talking about a physical silver shortage. some expect prices to jump the the moon.
Comments »Australia’s Whitehaven Coal Turns Itself Into the Largest Coal Mining Company Down Under
North Dakota oil production heating up
Comments »While most of the country is still mired in a troubled economy, North Dakota is riding an unprecedented boom that has jobs looking for people, rather than the other way around.
“And largely that’s driven by the oil play in what we call the Bakkan Formation,” Lynn Helms, Director of North Dakota Dept. of Natural Resources explains.
“We’re estimating now about 18,000 square miles of western North Dakota, another 6,000 square miles in Montana, Saskatchewan and Manitoba that is mature oil-source rock. It can be drilled up almost (like) an oil-producing factory. We did not drill a single dry hole in the last year-and-a-half,” she said.
Options market bets huge on $150 oil
Comments »The prospect of oil topping $150 a barrel within a year has become the biggest bet in the options market as the U.S. and Europe work to limit Iran’s crude sales.
The number of outstanding calls to buy oil at $150 next December has jumped 29 percent since a Nov. 8 United Nations inspectors’ report on the Persian Gulf country’s nuclear program, to more than any other option on the New York Mercantile Exchange. The contracts equate to about 38 million barrels of oil, or 43 percent of daily global demand, based on data from the U.S. Energy Department.
“People are taking a long shot and buying cheap insurance,” Fred Rigolini, vice president of Paramount Options Inc. in New York, who has traded crude options for 23 years, said in a telephone interview on Dec. 5. “They’ll probably play this through the spring.”
The price of the $150 calls has risen 9.2 percent to $1.30 since the day before the UN report was published, outpacing the 5.2 percent gain in oil futures. Crude will surpass $250 a barrel if nations threaten to ban purchases from Iran, the Tehran-based Shargh newspaper cited Ramin Mehmanparast, an Iranian foreign ministry spokesman, as saying Dec. 4. Iran is OPEC’s second-biggest producer.
Open interest, the number of contracts not closed or delivered, in options to buy crude at $150 next December increased 11 percent on Nov. 22 alone as the U.S., U.K. and Canada imposed new sanctions on Iran’s financial system, including measures that may make it more difficult for buyers to pay for Iranian crude.
T. Boone Pickens hates on oil
Finally, fucking thank you.
Comments »Boone Pickens, on CNBC, recently said oil was over supplied currently. This world renowned expert expects a downward movement in oil prices in the near to medium term. The Libyan oil is coming back online more quickly than early estimates indicated. In Nov. Libya was already providing 600,000 bopd to world markets. Libya’s National Oil Corporation said it expects to provide 800,000 bopd of light sweet crude to world markets by year end. OPEC officials estimate that Libyan output will return to pre-conflict levels by mid-2012. The 300,000 bopd that will be available at the world level once the 150,000 bopd Seaway pipeline (to Cushing, Okla. from the Texas coast) is reversed in the spring of 2012 should act to lower overall oil prices too. The extra oil that the Saudi’s have provided to replace the Libyan oil may not disappear.
With the extra continuing expenses the Saudi government recently incurred in compromising with the Saudi rioters, the Saudi government will be loathe to curb their production. They are using the extra income to pay for the increased benefits they acceded to. Other OPEC economies that are hurting will likely over produce too. Admittedly there is talk of an EU ban on Iranian oil for political reasons. To me this seems unlikely as the EU is moving steadily into recession. Higher oil prices due to a self imposed ban on Iran exports would only exacerbate the recession(s). All this means that the price of oil is likely to go down in the near term.
The secular growth in energy demand due to emerging markets growing energy demands is still in place longer term; but shorter to medium term we may see a move downward, especially if the EU Summit disappoints investors. Such a disappointment would presage a deeper EU recession(s). I’m sure most people can remember the commodities crash as the recent US recession took hold. The EU mediated commodities crash should be smaller. Futures trading rule changes have prevented many futures from becoming as over bought as they were before the US recession. Plus the EU is not quite as much of an oil glutton as the US, so the decrease in EU demand for oil will be smaller than that seen in the US. Still an EU decrease in demand is coming.
In the shorter term, the EU credit crisis events may provide more dramatic moves either way. However, medium term the EU recession should move commodities prices downward. It is less clear whether this down move will include gold, but just about everything else should come under significant pressure. Even EU food consumption may lessen. The EU recession(s) will also have trickle down effects on its major suppliers such as the US, China, and Japan (and on its minor suppliers too).
Cyber Attacks Could Wreck Global Oil Supply
Hackers are bombarding the world’s computer controlled energy sector, conducting industrial espionage and threatening potential global havoc through oil supply disruption.
Oil company executives warned that attacks were becoming more frequent and more carefully planned.
“If anybody gets into the area where you can control opening and closing of valves, or release valves, you can imagine what happens,” said Ludolf Luehmann, an IT manager at Shell Europe’s biggest company .
“It will cost lives and it will cost production, it will cost money, cause fires and cause loss of containment, environmental damage – huge, huge damage,” he told the World Petroleum Congress in Doha.
Computers control nearly all the world’s energy production and distribution in systems that are increasingly vulnerable to cyber attacks that could put cutting-edge fuel production technology in rival company hands.
“We see an increasing number of attacks on our IT systems and information and there are various motivations behind it – criminal and commercial,” said Luehmann. “We see an increasing number of attacks with clear commercial interests, focusing on research and development, to gain the competitive advantage.”
He said the Stuxnet computer worm discovered in 2010, the first found that was specifically designed to subvert industrial systems, changed the world of international oil companies because it was the first visible attack to have a significant impact on process control.
But the determination and stamina shown by hackers when they attack industrial systems and companies has now stepped up a gear, and there has been a surge in multi-pronged attacks to break into specific operation systems within producers, he said.
“Cyber crime is a huge issue. It’s not restricted to one company or another it’s really broad and it is ongoing,” said Dennis Painchaud, director of International Government Relations at Canada’s Nexen Inc. “It is a very significant risk to our business.”
“It’s something that we have to stay on top of every day. It is a risk that is only going to grow and is probably one of the preeminent risks that we face today and will continue to face for some time.”
Luehmann said hackers were increasingly staging attack over long periods, silently collecting information over weeks or months before attacking specific targets within company operations with the information they have collected over a long period.
“It’s a new dimension of attacks that we see in Shell,” he said.
NOT IN CONTROL
In October, security software maker Symantec Corp said it had found a mysterious virus that contained code similar to Stuxnet, called Duqu, which experts say appears designed to gather data to make it easier to launch future cyber attacks.
Other businesses can shut down their information technology (IT) systems to regularly install rapidly breached software security patches and update vulnerable operating systems.
But energy companies cannot keep taking down plants to patch up security holes.
“Oil needs to keep on flowing,” said Riemer Brouwer, head of IT security at Abu Dhabi Company for Onshore Oil Operations (ADCO).
“We have a very strategic position in the global oil and gas market,” he added. “If they could bring down one of the big players in the oil and gas market you can imagine what this will do for the oil price – it would blow the market.”
Hackers could finance their operations by using options markets to bet on the price movements caused by disruptions, Brouwer said.
“So far we haven’t had any major incidents,” he said. “But are we really in control? The answer has to be ‘no’.”
Oil prices usually rise whenever tensions escalate over Iran’s disputed nuclear program – itself thought to be the principal target of the Stuxnet worm and which has already identified Duqu infections – due to concern that oil production or exports from the Middle East could be affected by any conflict.
But the threat of a coordinated attack on energy installations across the world is also real, experts say, and unlike a blockade of the Gulf can be launched from anywhere, with no U.S. military might in sight and little chance of finding the perpetrator.
“We know that the Straits of Hormuz are of strategic importance to the world,” said Stephan Klein of business application software developer SAP.
“What about the approximately 80 million barrels that are processed through IT systems?,” said Klein, SAP vice president of oil and gas operations in the Middle East and North Africa.
Attacks like Stuxnet are so complex that very few organizations in the world are able to set them up, said Gordon Muehl, chief security officer at Germany’s SAP said, but it was still too simple to attack industries over the internet.
Only a few years ago hacking was confined to skilled computer programmers, but thanks to online video tutorials, breaking into corporate operating systems is now a free for all.
“Everyone can hack today,” Shell’s Luehmann said. “The number of potential hackers is not a few very skilled people — it’s everyone.”
Comments »FLASH: Crack Spreads Are Getting Hammered Again
-9% to $13.73.
Comments »Crude oil higher…um…because
Comments »NEW YORK (AP) — Oil is back above $101 per barrel after earlier losing ground when a government report showed an unexpected increase in supplies. Weakening demand for gasoline and other petroleum products was the cause.
Benchmark West Texas Intermediate on Wednesday fell 3 cents to $101.24 per barrel in New York. Brent crude, which is used to price foreign oil that’s imported by U.S. refineries, gave up 63 cents to $109.88 in London.
Prices dropped after the Energy Information Administration reported that oil supplies increased unexpectedly last week by 1.3 million barrels. Gasoline supplies jumped more than expected, adding 5.1 million barrels for the week ended Dec. 2. Supplies are growing because of weak demand for oil-based fuels in the U.S.
Government figures show that gasoline demand in the U.S. is on track this year to be at the lowest level since 2003.
Oil has been hovering around $100 per barrel for more than a week. Investors are watching Europe’s struggles to contain a banking crisis that threatens to pull the region into recession. Widespread spending cuts are expected to reduce energy demand within Europe and among major manufacturing countries like China that export goods to the eurozone.
European leaders are working on ways to boost fiscal discipline and reduce debts. But credit ratings agencies have questioned if they’re doing enough.
At the pump, gasoline prices rose more than a penny to $3.286 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 12.1 cents cheaper than it was a month ago, but it’s still 32.8 cents higher than the same time last year.
In other energy trading, heating oil gave up 1.8 cents to $3.004 per gallon and gasoline futures lost 4.12 cents to $2.6042 per gallon. Natural gas dropped by 6.1 cents $3.427 per 1,000 cubic feet.
Energy Inventories Build Unusually Higher Than Expected and More Than Normally Seen During This Period
Oil inventories see a build of 1.3 million barrels
Gasoline inventories build 5x expectations with 5.2 million barrels in storage
Distalites see a build of 2.5 million barrels
Comments »Birinyi Group: Inflation to Drive Gold Even Higher
Crude Oil Pares Gains Over Worries the EU Summit Will Not Solve the Crisis
***BREAKING: CRACK SPREADS ARE ENJOYING UPSIDE EXPLOSION***
+7% to $15.10
Comments »Wheat and Corn Prices Continue to Fall Hitting Two Month Lows
Speculation that China will be ordering less has prices down along with expectations the USDA may raise grain inventory estimates.
Comments »Crack Spreads Edge Higher
+2.8% to $14.55
Comments »Taking Steps to Go Green: OPEC Concerned Over Climate Change
Three Cheers for Motorists: U.S. Awash in Gasoline
Prices have been moving down recently and now gasoline is expected to be a major export.
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