Gasoline under $3 for first time since February

WASHINGTON (Reuters) - The average U.S. retail gasoline price dropped 23.7 cents over the last week to fall below $3 a gallon for the first time since mid February and is at the lowest level in almost a year, the Energy Department said on Monday. Read more

Gas prices near $6 a gallon in parts of Florida

Gasoline prices rose to nearly $5.50 a gallon in parts of Florida on Friday when rumors of a fuel shortage spread across the state.

Motorists in Tallahassee were lined up to pay $5.49 per gallon.

A fuel panic swept Gainesville on Thursday, where long gas lines spilled over onto a busy thoroughfare, tempers flared and the police were called, said Randy Bly, a spokesman for AAA Auto Club South.

A fight broke out in a line at a Gainesville station and prices in Southwest Florida began creeping up.

The run on gas was prompted by Hurricane Ike and the closing of several large refineries along the Texas-Louisiana coast.

But Agriculture and Consumers Services Commissioner Charlie Bronson responded quickly.

“There is no fuel shortage in Florida,” Bronson said. “There’s hundreds of millions of gallons available.”

Bronson promised to act quickly to any price gougers.

He said he would subpoena the records of any gas station suspected of price gouging. Violators face a $10,000 fine per violation, up to $25,000 a day. He said retailers can’t raise prices arbitrarily just because they anticipate higher prices in the future.

But, according to Department of Agriculture and Consumer Services spokesman Terry McElroy it doesn’t necessarily mean retailers are gouging customers when prices rise wildly.

If wholesale prices justify the increases, there’s not much regulators can do, he said.
Marsha Kut, travel Manager for Lee County AAA, predicted a 20- to 30-cent increase at Lee County pumps.

She said the hike should be short term, lasting a few days to a week.

“We have enough oil,” she said.

Ike’s relentless march across the Gulf of Mexico has had little effect on crude oil future contracts. They even dropped below $100 a gallon at one point Friday before settling at $102.50.

Randy Bly, a spokesman for AAA Auto Club South, said rising prices at the pump seem counterintuitive. He said the increase is related to refinery capacity.

“Our office has been flooded with calls,” Bly said “This was consumer-driven, it was like a run on the bank. There really is no shortage, we are well supplied. There could be some spot outages. We anticipate a price increase of 20 cents to 30 cents a gallon in the next few days.”

Gasoline contracts for October delivery spiked more than 8 percent - 2.08 cents per gallon - on Friday.

“The nightmare scenario is unfolding before our eyes,” said Jim Rouiller, senior energy meteorologist with Planalytics Inc. in Wayne, Pa.

Ike’s storm surge will “completely inundate all the refineries and chemical plants that line Galveston Bay from Texas City all the way to Baytown. It’s a storm surge that this part of Texas hasn’t experienced in a lifetime.”

The American Automobile Association reported that the statewide average price for a gallon of unleaded gas in Florida today is $3.69, a penny higher than the national average. Average prices peaked nationally at $4.13 a gallon for regular unleaded on July 1 and have been falling steadily ever since.

Southwest Florida prices averaged $3.673 per gallon Friday.

Some Central Florida retailers are limiting fuel sales, and one convenience store chain with a store in Bonita Springs is asking customers to limit gasoline purchases to 10 gallons.

Melissa Anderson of The Pantry said her company didn’t have supply problems but was being proactive.

“It is voluntary, just to make sure that during this period of time that people are acting responsibly. We did the same thing during Hurricane Katrina,” Anderson said.

The Pantry’s store in Bonita Springs operates as Kangaroo Express on West Terry Street.

In south Lee, drivers have seen prices for regular unleaded hovering between $3.65 and $3.75 this week and on Friday, not much changed.

A Shell station on Old U.S. 41 had regular unleaded for $3.67.

“This is among the cheapest I’ve seen,” said Tony Greene, 24, of Cape Coral.
Across East Terry Street, at the Hess station gas was two cents higher.

In Lehigh Acres Alton Mccall, 18, was pumping gas into his Cadillac at Murphy’s near Wal-Mart. He said he’s worried about increased prices, but he also needs to get around.

“For now, I’ll just hope and pray,” Mccall said.

In Cape Coral Mack Farmer, 50, was skeptical.

“They’re saying gas prices going to jump,” he said. “They’re saying they’re shutting down oil refineries and drilling. If the oil companies can find a way to make more money, they will.”

News-Press | Friday, September 12, 2008

Gas prices fall for 24th day, AAA says

Retail gasoline prices have fallen for the 24th straight day, a AAA survey of gas station sales showed.

The national average price for a gallon of regular gas are down more than 7 percent from the record high of $4.114 on July 16, CNNMoney.com reported Sunday.

Even with gas prices falling, Friday’s national average price is more than $1 higher than it was a year ago.

In Alaska, the state with the highest prices, drivers pay an average of $4.63 a gallon, the AAA study found. Oklahoma and Missouri have the lowest gas prices, at $3.58 a gallon.

Diesel, meanwhile, is up nearly 55 percent from last year’s levels. The national average price for diesel fuel fell Sunday to $4.557 a gallon.

The AAA study is based on data from credit card swipes at 85,000 U.S. fuel stations.

UPI | Sunday, August 10, 2008

Exxon posts record $11.68 billion profit

World’s largest publicly traded oil firm makes $1,485.55 a second in the quarter, but misses forecasts.

NEW YORK (CNNMoney.com) — Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter.

That profit works out to $1,485.55 a second.

That barely beat the previous corporate record of $11.66 billion, also set by Exxon in the fourth quarter of 2007.

“The fundamentals of our business remain strong,” Henry Hubble, Exxon’s vice president of investor relations, said on a conference call. “We continue to capture the benefit of strong industry conditions.”

But Exxon (XOM, Fortune 500) profit fell short of Wall Street estimates.

Analysts predicted the company, the world’s largest publicly traded oil firm, would make $12.1 billion in profit on $144.4 billion in revenue, according to Thomson Reuters.

Exxon shares fell about 3% on the New York Stock Exchange.

Excluding money set aside for a recent damage award related to the Valdez tanker spill back in 1989, Exxon made $11.97 billion in the quarter.
Pricey oil cuts both ways

Exxon was both helped and hurt by high oil prices.

As an oil producer, the company makes a lot of money when crude prices rise. Exxon made $10 billion from selling oil in the latest quarter, up nearly 70%.

But as a refiner, it must also buy crude oil to turn into gasoline. Exxon actually buys more crude than it sells.

Profits from its refining business totaled $1.6 billion in the quarter, less than half of what they were last year.

“Record crude oil and natural gas realizations were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs,” read a statement attributed to Rex Tillerson, Exxon’s chief executive.

While oil prices in the quarter were nearly twice as high as the same time last year, gasoline prices only rose about 30%.

That’s one reason why the stock of major oil companies - such as Exxon, Chevron (CVX, Fortune 500), Royal Dutch Shell (RDSA) and BP (BP) - that both produce and refine crude has been relatively flat over the last year, despite the runup in oil prices.

Meanwhile, shares of companies that mostly produce oil, like Anadarko and Apache, have soared in the last year, while shares in refiners like Valero and Sunoco have tumbled.
Where the money goes

Exxon spent $7 billion in the second quarter finding and producing more new oil, up 38% from last year. Still, oil and natural gas production from the company fell 8%. Even excluding special events such as a labor strike in Nigeria and seizure of fields in Venezuela, production slipped 3%.

The production declines shouldn’t be seen as an indicator the world is running out of oil, said Fadel Gheit, a senior energy analyst at Oppenheimer.

Rather, as the price of oil rises, the amount of oil Exxon or any international oil firm is allowed to pump from many oil-rich countries decreases, said Gheit.

“We didn’t expect production to be down as much as reported,” he said. “But that doesn’t mean [worldwide] production is down, just that Exxon’s share is decreasing.”

The company returned $10.1 billion to shareholders in the form of dividends and stock buybacks, 12% more than last year.

On an earnings-per-share basis, Exxon made $2.22. That was still lower than analysts had expected, but 24% higher than last year, a gain Exxon attributed to its aggressive stock buyback plan.

The big international oil companies have been criticized for plowing much of their profits back into stock buybacks and other programs to benefit shareholders, as opposed to exploring for more oil which could bring down the price of crude for everyone.

“While oil companies are earning record profits and gas prices are soaring, the largest oil companies have invested more resources in stock buybacks than U.S. production,” said Congressional Democrats in a press release shortly after Exxon announced its earnings.

Other critics charge the oil companies with deliberately restricting production in an attempt to keep prices high.

The industry says it’s investing as much as it can in finding new oil, but is having a hard time given the shortage of workers and equipment in the sector.

Recent efforts by countries such as Russia, Venezuela and Kazakhstan to gain greater control of their own domestic oil resources have also hampered the ability of international oil companies to increase production.

In addition to making hefty profits, Exxon also had a hefty tax bill. Worldwide, the company paid $10.5 billion in income taxes in the second quarter, $9.5 billion in sales taxes, and over $12 billion in what it called “other taxes.”
Political backlash

With Americans paying nearly $4 a gallon for gas, oil company earnings have been political fodder of late.

Congressional Democrats said they are having a conference later in the day to call for an end to tax breaks for big oil firms.

Several bills have been introduced in Congress to enact a “windfall” profits tax on these earnings, or at the very least eliminate manufacturing tax exemption oil companies now enjoy. Presumptive Democratic presidential nominee Barack Obama wants to tax oil companies at a special rate every time crude goes over $80 a barrel.

Most plans would either use this newfound tax money to fund investments in renewable energy, or give it to low income Americans struggling with high energy prices.

But so far those efforts have been blocked - mainly by Republicans - who say raising taxes on oil companies will only discourage investments in finding new oil and raise the price of crude.

Defenders of oil company profits also point out that their profit margin, at around 8%, is slightly below average for S&P 500 companies, and far below the 20%-plus margins seen at companies such as Microsoft or Pfizer.

CNN Money | Steve Hargreaves | Thursday,  July 31, 2008

Shell reports 33% rise in profit

Royal Dutch Shell, Europe’s largest oil company, reported a 33 percent increase in second-quarter profit Thursday, helped by a higher oil price even as production declined.

Like smaller rival BP earlier this week, Shell profited from an oil price that almost doubled in the second quarter from the year earlier but a 13 percent drop from a record on July 11 raised some concern among investors about whether oil companies can keep up the pace of earnings growth.

BP said earlier a higher oil price started to affect consumer demand for its gasoline, which declined as much as 10 percent in the United States and Europe.

Shell’s profit rose to $11.56 billion from $8.67 billion in the same period last year. BP reported a 28 percent increase in profit earlier this week and Italian oil company Eni said Thursday profit in the second quarter rose 52 percent, citing a higher oil price.

Shell’s shares have fallen 12.5 percent this year. That compares with a 14.7 percent drop of BP’s stock and a 9.9 percent decline for Exxon Mobil, the world’s biggest energy company.

Oil companies are under pressure to find new reserves as their traditional fields age and they face increasing competition from state-run oil companies in Russia and the Middle East. Shell is also looking to make up for production lost in recent incidents in Nigeria, where militants attacked an offshore production vessel in June, and in Russia, where it had to sell its share in the Sakhalin Island oil and natural gas project to state-controlled energy company OAO Gazprom last year.

Oil and gas production fell to 3,126 thousand barrels of oil equivalent per day from 3,178 thousand barrels.

Shell chief executive Jeroen van der Veer pledged to continue investing to fuel growth. “Shell is making substantial, targeted investments to grow the company for shareholders and help ensure that energy markets remain well supplied,” van der Veer said in a statement Thursday.

The company agreed two weeks ago to spend about $5.9 billion to buy Canada’s Duvernay Oil Corporation to increase its gas production from tough rock formations and is in talks with Iraq about some service contracts.

IHT |  Julia Werdigier | Thursday,  July 31, 2008

Oil’s 2-week nosedive shows up at the pump

Oil prices sank to their lowest point in weeks Friday as investors questioned whether crude has cooled enough to reflect a serious deterioration in demand. Prices at the pump eased to nearly $4 a gallon, and AAA said a gallon of gas could cost as much as 25 cents less by Labor Day.

Light, sweet crude for September delivery fell $2.23 to settle at $123.26 a barrel in on the New York Mercantile Exchange. Earlier the contract dropped as far as $122.50, its lowest point since June 5.

In the latest sign that Americans continue to struggle with soaring energy prices, filling station operators hungry for business ratcheted down the average price for a gallon of regular by 2 cents, according to auto club AAA, the Oil Price Information Service and Wright Express.

AAA spokesman Geoff Sundstrom said such a large decline indicates a deteriorating demand by the world’s thirstiest oil consumer. Retail prices have fallen about a dime per gallon in just the past week.

“People say typically prices shoot up like a rocket, fall like a feather. But this time … it looks like it’s different,” Sundstrom said. “The retail sector is interested in bringing these prices down as fast as they can to stimulate business in their convenience stores.”

A gallon of gas now sells for $4.006, the first time it has been that low in nearly seven weeks. Diesel dropped nearly a penny and a half to $4.774 a gallon.

Sundstrom said prices at the pump should slip below the $4 mark over the weekend and could drop by at least another 25 cents by Labor Day, if oil stays on its downward path.

“We’re seeing a historic change in driving habits,” he said, although he added that “we still have a long way to go before we get back to the comfort zone, if you will, for the consumer.”

Oil traders managed to post a gain of $1.05 a barrel Thursday, but analysts say the market’s momentum points to further declines.

The magnitude of the past two weeks’ sell-off is stark. Crude has fallen in seven of the last nine sessions, and is was down more than 16 percent from its peak above $147 a barrel earlier this month. Still, prices remain about 65 percent higher than they were this time last year.

“There’s just nothing sufficiently bullish coming into the market right now to sustain a rally,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. “We’re just seeing a new theme in which demand has become a very important part of the equation.”

Threats to supply, which traders have fretted over for months, remain.

The abduction of five crew members from a Swedish boat in Nigeria’s oil-producing Niger delta region highlighted the risks of operating in the African nation, a major supplier to the U.S. Earlier in the week, Nigerian militants threatened to blow up pipelines in the region within a month.

Investors are also watching for any signs in increased tension between Iran and the West.

Although supply concerns have taken a back seat to demand over the past two weeks, analysts note that prices could rebound, on even a temporary cut to supply.

“There is a palpable sense of exhaustion amongst traders after the steep sell-off of the past two weeks, and many think we are in for a period of stabilization,” said Addison Armstrong, director of market research at Tradition Energy. “This notion is being supported by renewed concerns about events in Nigeria and the Middle East.”

In other Nymex trading, heating oil futures fell 2.18 cents to $3.5453 a gallon while gasoline futures lost 2.54 cents to $3.034 a gallon. Natural gas prices sank 15.3 cents to $9.17 per 1,000 cubic feet.

In London, September Brent crude fell $2.01 to $124.43 a barrel on the ICE Futures exchange.

AP | ADAM SCHRECK | Friday, July 25, 2008

Is Dubya an Agent of the New World Order?

“Out of these troubled times, our…objective can emerge–’a New World Order.’” - George Bush, Sr., Dubya’s Daddy

When you mention the word “conspiracy” to explain a situation, most people tune you right out. They think you’re a whack-oh. Yet, the U.S. Congress, as dumb as it is, subscribes to the proposition that there is such a thing. After the Civil War, it passed a law, the Sherman Anti-Trust Act, to make it a crime for two or more individuals to agree to fix the price of goods in restraint of trade. Every day in America, in both the state and federal courts, a defendant faces charges dealing with the “crime of conspiracy.” Conspiracy is as American as apple pie. Therefore, I submit that the evidence is compelling that there is an ongoing conspiracy, hatched by the New World Order, to reduce the U.S. to a vassal state. Which leads me to this question: Is Dubya, President George W. Bush, Jr., one of its covert agents?

The last seven and one half years has been an absolute disaster for the American Republic. Under Dubya’s reign, we have suffered with lethal wars of choice in both Iraq and Afghanistan, resulting in huge casualty numbers; a failing economy with a loss of hundreds of thousands of middle class jobs, a sharp decline in the value of stocks and of the dollar, too; Katrina and massive flooding in the Heartland of America, prompted in part by Global Warming and defective levees; and a foreclosure rate in the housing market that mirrors the worst days of the Great Depression.

As I write, banks are going under, monthly. About 150 may be in serious trouble. And “The Fed” is held in the lowest possible esteem, thanks mostly to Alan Greenspan’s gross ineptness when he was its Czar. (1) The two wars will cost taxpayers a staggering $3.5 trillion, which will be added to our present national debt of $9.5 trillion. Meanwhile, gasoline is selling at an average $4.10 a gallon, with no end in sight as to increases. In fact, if Dubya takes us into a war with Iran, you may be paying $10 for a gallon of gas! It is fair to say that Dubya, and his predatory gang, have inflicted more damage on our country than any foreign enemy could inflict.

On another front, the current U.S. Congress has the lowest approval ratings in the history of polling by Rasmussen Reports. It scores at just nine percent. (2) The voters polled think less of their elected politicos in Washington, D.C., than they do of the dreadful Dubya himself. The Globalists Wise Guys on Wall Street, mostly unregulated, have played a huge part, too, in this unfolding tragedy. Think Bear Stearn’s bailout and Enron! (3) Then, there are the “speculators” in the commodity markets, who have been given a green light to drive up both oil and food prices. (4)

Whose side is Dubya on? Is he working for the American people or for someone else? Who has profited from his demented policies? The answer has to be: “Not the vast majority of the American people!” Dubya does a good job of posing in front of the American flag, but what flag does this cowboy really serve?

How did the U.S., which stood as a mighty colossus astride the globe after the end WWII, fall into such a miserable state in 2008? Was it by accident? FDR said: “In politics, nothing happens by accident. If it happened, you can bet it was ‘planned’ that way.”

A few decades ago, I stumbled onto a book, “The Anglo-American Establishment,” written by a scholarly author and history professor from Georgetown U., the late Carroll Quigley. In his treatise, he documented with extensive footnotes, the existence of a secret cabal, in 1891, centered around the grasping British imperialist, Cecil Rhodes. The cabal’s objective was the creation of a “New World Order.” At p. 33 of his book, Mr. Quigley restates from Rhodes’ first “Last Will and Testament,” signed in 1877, some of the purposes of his emerging secret society. It called for “the extension of British rule throughout the world…and the ultimate recovery of the United States of America as an integral part of a British Empire.” How does that last part grab you?

Recently, another book, “Conspirators’ Hierarchy: The Story of the Committee of 300,” ended up in my library. Its author is Dr. John Coleman, a former MI6 operative. Coleman’s book isn’t in the same literary league with Quigley’s brilliant effort, but it does bring the sinister connivings of the Rhodes’ cabal up into the present time, but without the detailed documentation and learned interpretation that Professor Quigley’s was so famous for.

Cutting to the chase, here’s the bottom line: Under the guise of international trade treaties, the U.S., Mexico and Canada will be merged into one system–a Super State. It will be controlled by the Wire Pullers–the cunning heirs of the Rhodes’ cabal. The American Republic, forged by our Founding Fathers, will exist only on paper!

In his 1992 book, Dr. Coleman charged, on p. 36, that the global elite planned to “deindustrialize America…to accelerate the collapse of first the steel industry, and then the auto and housing industries…resulting in a postindustrial, zero-growth society.” (5) What a prophet! He went on to allege that the elitists will create “one crisis after another” in order to more easily brainwash and manipulate the populace. (Doesn’t 9/11fit into that prescription?) (6) Dr. Coleman further speculated that “we are being brainwashed [by the corporate controlled media and by other scientific-based methods] “to give up the Constitution itself…and to permit the President to break U.S. law with impunity, [so he can] invade a foreign country.” Was the attack on Iraq Neocon inspired? Was the media their accomplices? “We are being brainwashed,” Dr. Coleman added, “to accept…every lawless act carried out by our government.”

As an aside on the pitiful status of the media, pundit Nicholas von Hoffman sent out the following broadside. Commenting on the recent death of Tim Russert and his funeral–Russert was a Buffalo-born, ex-coat holder for Sen. Patrick J. Moynihan)–he wrote: “The mourning ceremonies for Russert offered a window on Washington, where the crosshatching of journalism, politics, and commerce is so fine that the boundaries are inscrutable.” (TAC, July 14, 2008).

Getting back to Dubya. He said of the U.S. Constitution: “It’s just a Goddamned piece of paper.” While he has been in the White House, our ancient rights have been shredded from the gutting of Habeas Corpus to the rescinding of important parts of the Fourth Amendment with the passage of the new FISA law. The U.S.A. Patriot Act and the Military Commissions Act, among other laws, have granted Dubya, and his predecessors, mostly unchecked power to suppress, at will, any dissent in this nation. (7)

As to the abysmal state of our Civil Liberties, I strongly recommend Naomi Wolf’s book, “The End of America: Letter of Warning to a Young Patriot,” and Jim Marrs’ riveting tome, “The Rise of the Fourth Reich.” Both of these scribes envision “a Police State America” that should make every thoughtful citizen shudder with fear for themselves and for their children. Marrs writes: “In Fascist Italy and Nazi German, the state gained control of the corporations. In modern America, corporations have gained control over the state…Today, anyone who criticizes foreign policy…or even questions national policies, opens himself up to charges of being unpatriotic… (8) The philosophies of Fascism are alive and active in modern America.”

I’m convinced that there is an ongoing conspiracy to destroy the American Republic. The evidence for it is growing more abundant every day. Open your eyes and see it for yourselves. And, I also submit that Dubya, if he isn’t a covert agent for the New World Order, sure as heck acts like one. Only a probe of his conduct by a Special Prosecutor can establish the truth.

Dr. Coleman’s remedy to this predicament is this: “The only way we can fight back is by exposing the conspirators and their multiplicity of front organizations…Only a crash program will stop the rot which is consuming our nation.”

As America collapses, Dubya plans to go golfing with his daddy, on July 21, 2008, at Kennebunkport, Maine. I say, begin saving our Republic now by impeaching Dubya. (8)

Notes:

1. “Greenspan’s Bubbles” by William A. Fleckenstein, with Frederick Sheehan.
2. Rasmussen Report, July 8, 2008.
3. “The Trillion Dollar Meltdown” by Charles R. Morris.
4. “Stop the Oil Speculators” by Ralph Nader, 05/27/08.
5. http://www.economyincrisis.org/ and
http://legacy.usw.org/usw/program/content/839.php and
http://www.citizen.org/trade/nafta/
6. “The Terror Conspiracy: Deception, 9/11 and the Loss of Liberty” by Jim Marrs.
7. “Dissent: Voices of Conscience” by Col. (Ret.) Ann Wright and Susan Dixon and
“Protesting Power” by Professor Francis A. Boyle and
“The Complex: How the Military Invades our Everyday Lives” by Nick Turse.
8. http://www.afterdowningstreet.org/ and
http://www.youtube.com/watch?v=fwiSyIbeYjI and
http://www.youtube.com/watch?v=YdWdKIIM3sE

©2008, William Hughes, All Rights Reserved.

William Hughes’ videos can be found at: http://www.youtube.com/profile?user=liamh2. His conspiracy book of fiction, “Andrew Jackson vs. New World Order,” is available on Amazon. Email Contact: liamhughes@comcast.net.

The People’s Voice | William Hughes | Tuesday, July 15, 2008

Gas prices climb to record $4.10

NEW YORK (Reuters) - Gasoline is costing U.S. drivers a record $4.10 per gallon on average, but pump prices may be at a peak and could start to come down, an industry analyst said on Sunday.

That optimism is linked to a pledge by Saudi Arabia to pump more oil in response to consumer countries’ requests, according to Trilby Lundberg, editor of the nationwide Lundberg survey of about 7,000 gas stations.

“I suspect that oil prices have peaked and will flip further because of this news and the physical addition of more oil on the market in July,” Lundberg said. “This gives a strong chance that pump prices are peaking now, or may already have done so.”

A barrel of oil has doubled in price over the past year, stoking inflation, triggering protests from Asia to Europe, and compounding the financial pain of U.S. consumers already grappling with a sagging housing market, job uncertainty and soaring food costs.

Top officials, policy makers and oil company executives met on Sunday in Jeddah, Saudi Arabia, for emergency talks on how to bring prices down.

“Crude oil prices may spike at any moment from existing trouble in areas including Nigeria, or from some unforeseen hit to global supply,” Lundberg said. “This may sound optimistic, (but) it seems likely at this moment as the meeting in Jeddah, Saudi Arabia is being concluded, that oil prices may have peaked and may drift down.”

One common reason cited for the rise of oil prices is soaring demand from developing economies such as India and China, whose emerging middle classes are gobbling up more oil.

Lundberg said it was unclear whether other countries with fuel subsidies would follow China’s lead and cut them in efforts to cap demand.

Demand in the United States has fallen about 1 percent year-to-date, though it is closer to 2 percent lower in recent weeks, Lundberg said.

Prices at the pump vary across the country. The luckiest drivers live in Tulsa, Oklahoma, where the city average was $3.76 per gallon, the nation’s lowest. At the other end, Los Angeles and Fresno, California, were tied for the nation’s most expensive gasoline, with the city averages reaching $4.59 per gallon of regular grade gasoline.

On June 20, U.S. crude closed at $134.71 per barrel, up from $68.19 a year ago.

Reuters | Martinne Geller | Sunday, June 22, 2008

Oil hits a high; some in U.S. see $4 gas by spring

Gasoline prices, which for months lagged the big run-up in the price of oil, are suddenly rising quickly, with some experts fearing they could hit $4 a gallon by spring. Diesel is hitting new records daily and oil closed at an all-time high on Tuesday of $100.88 a barrel.

The increases could not come at a worse time for the economy. With growth slowing, high energy prices that were once easily absorbed by consumers are now more likely to act as a drag on household budgets, leaving people with less money to spend elsewhere. These costs could exacerbate the nation’s economic woes, piling a fresh energy shock on top of the turmoil in credit and housing.

“The effect of high oil prices today could be the difference between having a recession and not having a recession,” said Kenneth Rogoff, a Harvard University economist.

The depth of the nation’s economic problems became clearer Tuesday with the release of figures showing that prices at the producer level rose 1 percent in January, driven in large measure by energy costs. Compared with a year ago, prices were up 7.4 percent, the worst producer price inflation in the United States since 1981.

Other new figures showed that home prices around the country are falling at an accelerating pace, suggesting no end is in sight for the housing meltdown. As of Tuesday, regular gasoline was selling at a nationwide average of $3.14 a gallon, according to AAA, the automobile club, up from $2.35 a year ago. The price has jumped 19 cents a gallon in two weeks. Energy specialists predict that as demand picks up further this spring and summer, retail prices will surpass the high of $3.23 a gallon set last Memorial Day weekend.

On Tuesday, diesel prices rose to a record $3.60 a gallon, compared with $2.62 a gallon last year.

For a decade, rising oil prices had failed to dent global economic growth. In the United States, consumers absorbed the higher costs thanks to easy credit and rising prosperity, while in developing countries, government subsidies helped ease the pain. The rise in energy prices was a result of growing demand around the world.

The price of oil has quadrupled in six years, and Tuesday’s close was not far below the inflation-adjusted all-time high set in April 1980, after the Iranian revolution. That record, $39.50 a barrel, equals $103.76 in today’s money.

As oil prices spiked last fall, low wintertime gasoline demand helped keep prices in check. But now, experts say, the price of oil is finally showing up at the pump.

For Americans like Phyllis Berry, a 31-year-old General Motors factory worker in Cleveland, gasoline costs are starting to hurt.

“I used to fill it up pretty regularly, but now I drive it until the tank is almost empty, looking for the cheapest place to buy gas,” said Berry, who drives a beat-up Chevrolet Caravan. She said that she used to take her four children to the movies four or five times a month. But with the cost of gas, tickets, popcorn and soda adding up to $70, they now go only once a month.Still, things are not quite as bad as during the 1970s and 1980s oil shocks. In the early 1980s, at the height of the last energy crisis, energy accounted for more than 8 percent of household spending. As prices fell and the economy became less energy intensive, energy costs fell under 4 percent of household spending in the early 1990s.

With the run-up in prices in recent years, economists say energy’s share of disposable income is slowly creeping up again. Last December, that figure reached 6.1 percent, the highest level since 1985. The increase of two percentage points — amounting to $200 billion — is a huge sum, a little less than half what Americans spend each year on new cars and automobile parts.

“You’re adding an oil shock on top of a crunch on credit and a housing collapse,” said Nigel Gault, an economist at Global Insight. “Even the U.S. economy cannot withstand all of that at the same time.”

American consumers have responded belatedly by cutting back on their energy use. Oil demand in the United States grew by just 0.4 percent in 2007 and is expected to be flat in 2008.

But global oil demand, the relentless driver behind higher prices, is still expected to increase by 1.4 million barrels a day this year, analysts estimate. That growth, from China and the Middle East, may help keep prices up, whatever happens to the American economy.

According to the Energy Department’s latest forecast, gasoline prices should peak near $3.40 a gallon this spring. That figure would match the inflation-adjusted record price for gasoline that was reached in early 1981.

But many outside analysts consider the government’s forecast conservative, foreseeing a sharper spike as refiners come out of the seasonal maintenance period and start producing summer-grade gasoline in March and April.

“We’ve gone this high without the normal summer dynamics,” said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service. “That’s when I think we will have the big jump — of 50 cents to 75 cents a gallon.”

Kloza said he expects gasoline to peak around $3.50 to $3.75 a gallon nationwide. Geoff Sundstrom, AAA’s spokesman, echoed that view and added that $4-a-gallon gasoline is possible this summer. “We’ve gone from a worrying situation for gasoline to one that is quite alarming,” Sundstrom said.

Oil prices are unlikely to drop any time soon, analysts said. Barclays Capital recently raised its long-term prediction, saying prices could reach $137 a barrel in 2015, up from a previous target of $93 a barrel.

“The remorseless move up in long-run prices has not yet fully played out,” Barclays analysts said in a note to investors.

While demand keeps growing, producers are struggling to catch up. They are not replacing the oil they are pumping out of the ground fast enough because of various restrictions on access to fields, as well as rising costs. Meanwhile, demand from China, India and the Middle East is expected to push oil consumption up by more than 1 million barrels a day, each year, for the next decade.

“An oil crisis is coming in the next 10 years,” John Hess, the chairman of Hess Corporation, said at a recent conference in Houston hosted by Cambridge Energy Research Associates. “It’s not a matter of demand. It’s not a matter of supplies. It’s both.”

International Herald Tribune | Jad Mouawad | Wednesday, February 27, 2008

Exxon Mobil delivers record profit

NEW YORK: By any measure, Exxon Mobil’s performance last year was a blowout.Thanks to surging oil prices, the company beat its own record for the highest profit ever recorded by a U.S. company, with net income rising 3 percent to $40.6 billion last year. The company’s sales - over $404 billion - exceeded the gross domestic product of all but the 24 richest countries in the world.

Exxon also had its most profitable quarter ever. It said Friday that net income rose 14 percent to $11.7 billion, or $2.13 a share, in the fourth quarter. In addition, the company managed to beat analysts’ expectations of $1.95 a share, after missing targets in the past two quarters.

Like most oil companies, Exxon has benefited from a near-doubling of oil prices, from a low of around $50 a barrel in early 2007 to almost $100 by the end of the year - the single biggest jump in oil prices in any one year.

With growth at all of its units, from oil production to its refining and chemicals business, Exxon squeezed the most out of these gains.
“Exxon sets the gold standard for the industry,” said Fadel Gheit, a longtime oil analyst at Oppenheimer in New York.

Oil companies have all been reporting record profits in recent days. Chevron, the second-largest U.S. oil company, said Friday that its profit rose 9 percent to $18.7 billion last year.

But the higher profits in the industry mask a more contrasted reality.

Faced with the resurging power of national oil companies, like PetroChina, Petróleo Brasileiro of Brazil, or Gazprom of Russia - Western majors are having a hard time increasing their production and renewing reserves.

As oil prices increase, countries like Russia and Venezuela have tightened the screws on foreign investors, limiting access to energy resources or demanding a bigger share of the revenue. At the same time, many of the traditional production regions, like the North Sea or Alaska, are slowly drying up. The industry is also being pressured by rising costs and shortages of workers, rigs and engineering capacity.

Western majors, once dominant in the global energy business, now control only about 6 percent of the world’s oil reserves. Last year, PetroChina overtook Exxon as the world’s largest publicly traded oil company. Saudi Aramco, which is wholly owned by the Saudi government, pumps four times more oil than Exxon. It owns about 25 percent of the world’s proven oil reserves.

Recently, a quarrel over a world-class discovery in Kazakhstan was resolved after an international consortium, which included Exxon, agreed to allow the Kazakh national oil company to double its stake in a multibillion-dollar venture. The agreement finally brought an end to a dispute that jeopardized the future of Kashagan, a large oil field in the Caspian Sea with an estimated 13 billion barrels of recoverable hydrocarbon reserves.

Tim Cejka, the president of Exxon’s exploration business, acknowledged that access was getting tougher around the world. But he said that the industry had been through similar periods of more restricted access in the past.

“Access comes in cycles,” Cejka said at an energy conference last month. “And I have got to admit, it’s tough right now.”

Global oil supplies were nearly flat last year, growing a mere 100,000 barrels a day to 85.5 million barrels on average, according to the International Energy Agency. Growth in Russia and the Middle East was offset by declines in the United States and the North Sea.

Oil demand last year grew by a million barrels to 85.8 million barrels.

Meanwhile, the Organization of Petroleum Exporting Countries, which met Friday in Vienna, decided to leave its production levels unchanged, resisting pressure from developing nations to pump more oil into the global economy.

OPEC is scheduled to meet again next month, and the cartel signaled it would be ready to cut production then to make up for a seasonal slowdown in demand in the second quarter. OPEC’s actions mean the cartel is determined to keep prices from falling below $80 a barrel, according to energy experts.

International Herald Tribune | | February 1, 2008

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