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Economy Title: Crude breaches $119 in frantic trading:::Obama Domestic Drilling Moratorium expires in 6 years, 10 months Published: February 21 2011 08:31 | Last updated: February 24 2011 13:34 Thursday 12.40 GMT. Oil’s grip on global investors gets ever tighter, crushing risk appetite with another sharp move higher. Brent crude breached $119 a barrel during a period of frantic trading around 0745 GMT as industrial needs were hedged and traders exploited momentum. Worries that reduced supplies from Libya may be replicated in other regional producers facing potential political turmoil has seen the world’s oil benchmark jump nearly $17 this week. Brent is now trading at $114.95, up 3.3 per cent, as fear delivers extreme volatility to dealing desks. The scramble to secure output is shown by a steepening “backwardation” futures curve, where contracts for immediate delivery command higher prices than more distant ones. The spike in crude increases costs for companies and consumers and threatens to dislocate the global economic recovery, pessimists reason. Inflation expectations are rising sharply, with US five-year Treasury “breakeven” rates, or the spread between inflation-linked and straight notes, is at 2.2 per cent, the highest since July 2008. Stocks and commodities, which have had a good run over recent months are thus suffering as traders take profits. The FTSE All World equity index is down 0.4 per cent, its fourth consecutive session of declines that leaves the gauge off 2.6 per cent from Friday’s two-and-a half year peak. US stock futures are pointing to a 0.5 per cent decline when Wall Street opens – though this is well off lows, reflecting the paring of oil’s sharp early advance. European bourses are under the cosh, with the FTSE Eurofirst 300 down 0.7 per cent. The alternative energy sector is one of the few gainers as investors reason that the second oil spike in the space of three years may encourage a switch to less volatile, and less politically and environmentally costly, sources of energy. The Istanbul stock exchange is down 3.4 per cent on worries regional instability may spread. The cost of insuring Turkish and Israeli sovereign debt against default rose earlier to 7- and 19-month highs, respectively. Perceived havens such as the yen and Swiss franc are seeing inflows, as traders put a higher premium on risk aversion than any classic understanding of forex fundamentals: both Japan and Switzerland need to import all their oil, so higher prices hurts their terms of trade and would normally hurt their currencies. Gold sits less than $20 shy of December’s record high of $1,431 an ounce, boosted by a geopolitical, and fear-of-inflation, premium. Written by Raven Clabough As predicted, the Obama administration rescinded its promise to allow domestic offshore oil drilling yesterday. The Competitive Enterprise Institute reports that the Interior Department has placed an official moratorium on offshore drilling in the Pacific and Atlantic Oceans, as well as in the Gulf for the next seven years at minimum. What’s the excuse? The BP oil spill, of course. The New York Times reports, “Ken Salazar said that a moratorium on drilling would be in force in those areas for at least seven years, until stronger safety and environmental standards were in place.” Salazar explains, “As a result of the Deepwater Horizon oil spill, we learned a number of lessons, most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime.” Ironically, many critics assert that it was federal regulations that led to the oil spill in the first place. Art Robinson, Oregon’s GOP congressional candidate during the 2010 midterm elections, stated, “Government regulations caused the BP oil spill. There are so many regulations on the energy industry, that that’s why people have to go and drill three miles down on the ocean to find oil.” Similarly, former Alaska Governor Sarah Palin remarked that it was government kowtowing to environmentalists that brought about the Gulf oil disaster that forced oil drillers to drill in deep water as opposed to shallow water. In response to the moratorium, the Director of the Competitive Enterprise Institute’s Center of Energy and Development, Myron Bell, issued the following statement: President Obama is dishonestly pursuing policies that are the opposite of what he promised and that are against America’s economic interests and opposed by a strong majority of Americans. The United States is the only country in the world with potential major offshore oil resources that is not actively exploiting them. The Obama administration has decided that it is better for Cuba to bring in China, Russia, and Venezuela to drill a few miles off the Florida Keys than to allow American companies to drill in American waters. While creating green energy jobs requires taxpayer subsidies and government mandates, producing more oil in federal offshore areas would create hundreds of thousands of high-paying jobs while producing hundreds of billions of dollars to the federal treasury in royalty and auction payments. While Byron’s assessment is correct, perhaps we must contend with the plaguing truth that job creation is not a top priority for the Obama administration. After all, this White House has been a leading proponent of green jobs even while the implementation of green jobs hurts rather than helps the economy, and the best example of this can be seen in Spain. According to Gabriel Calzada, a Spanish professor, “We found that the jobs that we are creating, since you are taking the resources from other parts of the economy, this is ... destroying jobs in other parts of the country. For every job that you are creating, 2.2 jobs are lost.” Yet the Obama administration continues to push for the creation of green jobs. Likewise, jobs appeared to be the least of President Obama’s concerns when he issued a drilling moratorium following the BP oil spill, even after a panel of 15 experts explicitly stated that a moratorium would do more damage to the economy. Eight of the 15 experts addressed a letter to the Interior Department indicating, “A blanket moratorium is not the answer. It will not measurably reduce the risk further and it will have a lasting impact on the nation’s economy which may be greater than the oil spill.” Furthermore, if the health of the environment was the inspiration behind the drilling moratoriums, why did the Obama administration transfer $2 billion in American tax dollars to help fund the Brazilian oil company Petrobras so that the company can continue to drill in nearly 3,000 meters of water, nearly twice the depth of American oil companies? It may be a mere coincidence that Petrobras is heavily supported by Obama's associate George Soros, who also invested millions into the Brazilian oil company. What’s worse is that the $2 billion American investment into Petrobras coincided with a deepwater drilling moratorium immediately following the BP oil spill, which virtually meant that the Obama administration was eliminating all of Petrobras’ competition. Meanwhile, the moratorium was costing rig workers $330 million per month in lost wages. Likewise, the cap-and-trade legislation so heavily endorsed by the Obama administration has been criticized as a jobs killer. According to the Energy Information Administration and the Congressional Budget Office, the overall effect of the cap-and-trade bill would likely slow future job growth. Under the most optimistic scenario, the EIA predicts that future job growth would be reduced by 388,000 to 2.3 million 20 years from now. So let’s drop the guise that the federal government’s leading interest is to create jobs. Once again, the decisions made by this administration are about greater control and limiting American exceptionalism. It appears the Obama administration may help George Soros realize his dream of the total collapse of the American dollar and the placement of China as the new global leader. 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#1. To: war (#0)
Better stock up on your KY there fella', unless you like your gerbils dry.
Libyan Oil production halted. Note not a word on that. And Libya produces 1.6 MMBD. Not a word on that, unless the number is lowballed to 1.2 and it's 'really not that much'. Except that oil is no longer fungible. And there's only maybe 5 Giants that can produce 1.6 MMBD. $3.40 the gal. US Avg by Mon. $4 by Memorial Day. Or the US does an imitation of a 3.4 L V6 with Karo syrup hitting the carburetor. 8D
USbp Ecocide. Corporations are killing the planet. Until Corporations die. Stillborn baby dolphins litter AL/MS coastline. And still the first Cat 5+ awaits.
Can you imagine what we'd be doing to Iran now if they pulled a Qaddafi? Zionists Wailing!!!! 8D LMFAO
And wait til the great US democracy sends your boys/girls to 'save' the KINGDOM of Saudi Arabia. Won't that be ironic? ;}
Drilling in the USA would do nothing to change the price of oil since it is influenced on a global scale - the oil from Libya for example is not even meant for American consumers. The only way drilling in America for oil would offset price of oil is under govt price controls linked to domestic consumption. Oil futures are based on guesses of - well - the future. It's gambling. Because now the buyer and seller have to decide if they think the future in the Middle East will be so chaotic it will affect supply (reduction of supply it is the bet). That's what finance capitalism has become - gambling with other peoples lives and money. Drill suckers, drill.......
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
WORSE Note the price differential of WTI/Brent/Dubai Oil is $103 in Tulsa. Oil is $115+ off Louisiana Where do you think LA oil is going that is drilled deepwater?
You're dealing with the simple minded. These morons bought into the mentality that the complexities of global oil demand can be vexed by sloganeering, e.g. "Drill baby drill..." As if our few million barrel a day increase that can last for only a few years is going to make a difference.
Kind of funny that Khaddaffi's problems are good for the Texans who run America's oil business..... Is this not capitalism rewarding bad behavior of Khaddaffi killing his own people by increasing the price of crude and thus the wealth of Khaddaffi's regime?
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
I live on the Atlantic coastline, lots of porpoises here. I never saw a dead baby wash up, never saw a report of it in the local leftwing fishwrap either. Not even drowned polar bears are coming ashore around here.
You know I was wondering about this simple mindedness. I don't think the Democrats have politicians - maybe its a culture thing within their movement - where they have a politician that can speak to the simple minded in America - and there seems to be a lot of them. Clinton, being from Arkansas new how to speak to the rubes at a level they could understand. But the Democrats - thinking the model to go for is intellectualism - keep misunderstanding the nature of the American heartland. Keep it simple, stupid by Clinton as a campaign slogan now makes sense to me.
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
So 'lots of' is your science now? And you think that the USbpEcocide affected the Atlantic Coast? Or are you talking about another ecocide? Like in Chesapeake Bay? ;}
And now walruses are extinct in the Gulf of Mexico. Thanx BigOil. 8D
Is this not capitalism rewarding bad behavior of Khaddaffi killing his own people by increasing the price of crude and thus the wealth of Khaddaffi's regime? Have to dis agree here. Gws. $3.40 gas in Texas will go down as well as a live rattlesnake. ;}
And a btw on the USSA's Double Standards: "But all of BP’s assets were nationalized by the Libyan government in 1971, [3] and the company’s operations in the country ceased to exist." The dif between Libya and Cuba is what?
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