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Tuesday, February 22, 2011

Egypt, Iran, Oil Moratorium, Winter, Economic Chaos

All this could be avoided by US Drilling.

Hey folks,

As we sit on our, uh, hands, things are adding up World Wide. They are coming together and WE are left paying the Price. According to Benzigna - A Tale of Crudes: Anybody Got A Big Rig? By Dian L. Chu Economic Forecasts & Opinions February 20, 2011 5:00 PM

On Wednesday, Feb. 16 Israel said Iran is sending two warships into the Suez Canal on way to Syria, and that the action is considered a “provocation.” Due to the long history of bad blood between Israel and Iran, this very possible scenario was enough to even send the bear-infested NYMEX crude oil futures volume surging midday.

West Texas Intermediate (WTI) on Nymex rose to just below $85, while Brent crude on the ICE futures exchange spiked $2.17 higher to $103.81 a barrel—a 29-month high-- widening the WTI-Brent spread to a new record near $19.

High Middle East Tension

Then on Friday, Feb. 18, AFP reported that permission has been granted for Iranian warships to transit the Suez Canal into the Mediterranean. Canal officials say it would be the first time Iranian warships have made the passage since the 1979 Islamic revolution, while Israel has labeled the Iranian action as "hostile' and said Israel was closely monitoring the situation.

As the worst Israel-Iran conflict scenario failed to materialize, at the close Friday Feb. 18, Brent crude oil for April settled at $102.79 while WTI for April delivery rose to $89.71, narrowing the spread to $13.11.

Now along with this tension that is building, uncertainty is rising, We are feeling it. We are paying for it. WE are losing this. According to Daily Finance - High Heating Oil Prices Continue to Drain Wallets in the Northeast U.S. - DailyFinance:
"Bitter cold and repeated heavy snowstorms helped make winter in the Northeastern U.S. particularly brutal this year. Adding to the chills were soaring prices for heating oil that are likely to be the highest on record.

By the time the six-month-long winter heating season is over, the average homeowner in the Northeast will have laid out $2,431 for fuel to fire boilers and furnaces, Reuters reported, citing data from the U.S. Energy Information Administration, which provides forecasts of energy costs.

The amount is about $200 more than the Energy Department predicted in October -- and almost $500 more than the average just a year ago.

Temperatures were indeed colder than average in December and January, but that's not the source of the high price for heating oil. '[R]ising oil prices, not colder weather, have been the primary cause of the increase in forecasts of average winter season heating expenditures for households heating with oil,' the EIA said in its statement.

The price of heating oil rose to $90 a barrel this month, up from $78 in October, Reuters noted. That rise pushed the average retail price for residential heating oil to $3.59 a gallon this week, up 73 cents from a year earlier, the EIA said"
Then you have the other trend that we are following closely. I told you about China buying Chesapeake Energy, Now we learn that India, yes, India, Essar Energy to provide $1b bank guarantee
MUMBAI: Essar Energy will provide a bank guarantee of $1 billion to close the offer it made to acquire Shell's Stanlow refinery in the UK, according to a person who is part of ongoing negotiations with banks. This bank guarantee would be over and above the $350 million that Essar Energy agreed to offer for the assets of Stanlow refinery.

"The company (Essar) will finalise the bankers who will furnish the guarantee in the next three to four months," said the person who requested anonymity as the transaction is still underway.

Typically, the purchase price of a functional refinery consists of the asset cost plus an amount for working capital which includes inventory. The value of the inventory, in the case of a refinery, is determined at the close of the deal to reflect the latest price of crude.

On February 18, Essar Energy made the offer to buy Shell's 272,000 barrel-a-day refinery and the associated local marketing businesses for a total expected consideration of about $1.3 billion. Essar Energy's deal value of $1.13 billion includes $780 million for the inventory with the UK refinery. Shell agreed in principle to the offer made by Essar Energy and has granted exclusivity to the offer until April 1, 2011.
So China will control a third of Chesapeake Energy, India is buying up a Shell Refinery that produces 272,000 barrels a day. Grandma in upstate NY can no longer afford to heat her Home. Gas prices continue to rise. People on Fixed Incomes, the Poor and Elderly hardest hit. We? What are WE doing here in this country? Reducing our Energy Production. Dreaming the Green Dream. Obama said that Oil is the Energy of the Past. OK. What do we switch to? There is NOTHING.

The answer is CLEAR. California went to the line, before the Left Loons got involved. They saw the way out. But they let Politics get in the way of Progress. How do we alleviate concerns of Mid East Instability? How do we guarantee the Creation of TENS OF THOUSANDS of new and REAL US Jobs? How do we INCREASE revenue into our Local, State, and Federal Governments? How do we alleviate the pressure and hardship one has in attempting to PAY to Heat their Homes? Reduce the Price at the Pump? How do we INCREASE American Safety and Security? There is one answer to all this. Dill. Drill HERE. Drill NOW.

In a Year and a half, we could be well on our way to stability in our energy Costs, A safer and more secure Energy Policy. A Better Economic Outlook, and just plain Sanity. Lift the pointless and useless Moratorium. Remove Pointless and purely Political, oppressive Regulations and Controls. Let the Energy Companies do their thing. All the President and Congress need to do is get the Hell out of the Way, and let Americans DO way Americans do best. And YES! It really is, just that simple.
Peter

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