Shell CEO says record oil not due to shortage »
Posted by: engineer 3 months, 1 week agoOil prices at a record high above $135 a barrel are rising due to market sentiment rather than a shortage of supply, Royal Dutch Shell's chief executive said on Thursday.
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engineer3 months, 1 week ago
"What we say and what we see is there are no physical shortages," Shell's Jeroen van der Veer told Reuters television. He runs the world's second-largest fully publicly traded oil firm by market value.
"There are no tankers waiting in the Middle East, there are no cars waiting at gasoline stations because they are out of stock. This has to do with psychology in the markets and you cannot forecast psychology".
His view that there are no shortages chimes with that of other oil producers, such as members of the Organization of the Petroleum Exporting Countries. Others, such as the U.S. government, say supply is tight.
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Beau78903 months, 1 week ago
So much for the idea that it has to do with an amazing rise in demand from China and India.
Interesting that van der Veer didn't mention what's causing the rise in the price of gasoline to outpace that of crude oil...
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mivan43 months, 1 week ago
What we need to do (read the entire post before negging) is ration oil products to all rich and poor. The rich now being affected will do something about it. Rationing would be done on a personal basis based on the ave consumer use. Doesn't matter how much money you have you only get the same amount as the next guy. Corporations are somewhat exempt, but if you are caught using company fuel for any private business mandatory Jail time for you. Just watch how fast the Rich who control this come up with a viable alternative! Gas used in rentals go against you and so does non business air, boat and bus travel with each travel supplier charging a customer a divided by fuel usage charge against the customers allocation. THIS is ONLY a rough draft a final draft would have to take some other items into account, YES I know this would hurt some businesses, but the net negative could be controlled through legislation
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mesodude3 months, 1 week ago
The moral of this story is that a lack of transparency in pricing will always be used to screw us the consumer. This is why people who insist that all we need to do is drill til the cows come home are either living in a fantasy world or working for the oil companies. If we allow Big Oil to drill more, they will come up with ever more creative reasons why they have to charge us extortionist prices. Don't trust oil shills.
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mark-stevens3 months, 1 week ago
The world is consuming 87 million barrels a day, the world is producing 85 million barrels a day!
All those SUV's... and now the chickens home come to roost
T Boone Pickens, an oil billionaire, says eveything we've been told is a lie.
T Boone is now investing into wind turbines. He is starting his own electric company. Enough power for 1.2 million homes to start.
85 million barrels a day... how many dinosaurs were there?
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texangelwings3 months, 1 week ago
Interesting, I guess that CEO of Shell should know what he is talking about!
I know one thing for sure, without good paying jobs, most people will be unable to afford to keep paying more money for gasoline and all derivatives of oil.
Thanks engineer!
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ML20073 months, 1 week ago
what is driving pricing right now is oil speculation on the commodities futures market. The Government needs to step in and control the commodities to make a level playing field and this will go away over night.
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engineer3 months, 1 week ago
The government will after January 2009 when the oil men are out
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ML20073 months, 1 week ago
No, Jimdoze. I said no such thing. What I would have the government do is regulate the trading, commodity, and financial markets like they did prior to deregulations in the 1980s under President Reagan. That means making a fair playing field by all. The current markets are now run by the large Corporate financial conglomerates and their hedge funds cutting out the competition of mom and pop who cannot compete with short money. As a Mom and Pop operator on the commodities exchange, I lost $10,000 in 3 days because of speculating activity from larger buyers. It is nothing more than a large shift of money from the poor to the wealthy. Because of speculation, these groups can drive the prices, and they do.
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JohnQPublicComment removed: User banned.
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donald513 months, 1 week ago
Jim, why are the Chinese paying less for gas than us - refutes your argument. What a fool to expand our control worldwide - haven't you neocons learned this hasn't worked in Iraq or even Afghanistan. Was the King of Saudi Arabia a liar to Dimya last week too?
What part of Dumya's deregulation and dropping of collateral requirements to back wall street buys don't you get?
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tiredofwhiners3 months, 1 week ago
Good analysis of corporate existence. Oil companies are supposed to make $$ when they can, and they do reinvest a lot of it back into exploration and development. The real money maker is state and federal taxes and they don't do anything or risk anything for it. Is it 8 cents per gallon that big oil makes? and much more (16 cents average?)for taxing entities. Of course the biggest money maker of all are the OPEC countries who make HUGE profits on their oil.
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donald513 months, 1 week ago
Not2, the big oil guys will make money even if we relied more on alternative means. The Repug Congress threw out all the Energy Anti-monopoly laws from after the Depression... to allow big oil to buy up their future competitors and futher control the energy market. At least two of the big oil companies run regular TV commercials of their ownership of alternative means as blantant proof (but look how little they invest in them).
It will take decades for America to overcome the damage done by the Repug Congress and Dumya!
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AnteUp3 months, 1 week ago
ML2007 ~
My usual economic guru, Paul Krugman, seemed to say that
speculators are NOT responsible all that much.
That still confuses me. I have heard that, because of the
unstable stock market, hedge funds were speculating more on
oil than they have in the past and that speculation was a huge factor in driving the price of oil up.
Hedge funds - like with hedge fund managers? That would be
the guys that Congress protects from paying taxes at the
rate that most of us do? 15% versus what we pay?
Sen. Schumer(D) and plenty of others has been very vocal
about protecting them from what? From doing their fair
share? Would you and I pay LESS if they had to participate
FAIRLY? You bet!
I am not economically astute - far from it.
I'd be interested to hear what others think.
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ML20073 months, 1 week ago
Anteup, Although I respect a lot what Krugman has to contribute to financial conversations, I would have to say that I disagree with him on pricing. The pricing fluctuates on the commodities market sometimes with a lot of volatility just like the stock market. The only difference is that in the commodities market, you actually own a product for a short period of time. If you invest in oil and don't sell the oil, they will deliver it to your house (or wherever). In the stock market, you own a piece of paper that has no asset value. Financial institutions are taking a beating right now in the deregulated credit industry. I think they are being allowed to re-coop their money via the commodities market hoping this will stabilize the economy. That is why there is so much volatility within the commodities exchange, especially oil. Because of the perception of the world about the ME problems and oil, it is much easier for the fund managers to drive the market. continued
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ML20073 months, 1 week ago
Volatility actually means there is a chance for making more money quicker. Since the financial institutions are desperate for quick cash, the temptation to play is too great, and since there is no one left to regulate and say that is a conflict of interest, they manage a way to play. This makes the market unstable and unsafe for the average participant and small investor. It also makes it unsafe and risky for large investors. Who pays for the big shift in the high risk for a quick fix? We, the ultimate consumer. The losses and profits made by the middle men are passed on down the line. Oil companies make a windfall during these times, but they also lose in poor times. Refineries also have to pass their expenses along, but are the most stable of the system except for one exception. That exception is the cost of up keep on the infrastructure. We have not upgraded our infrastructure in that industry in years. We fall 18% short of refining enough gas in the US.
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jimdoze3 months, 1 week ago
At some point, those owning contracts will sell them into the demand and take the edge off. Just as market psychology can inflate prices (i.e. over-value) beyond the supply/demand equilibrium point, so too can it do the reverse. Such was the situation when President Reagan dispatched GHW Bush to Saudi in the early 80s. The price of oil had gone so low that the domestic U.S. industry was in danger of total collapse.
Overall growth in world demand for oil HAS outstripped growth in supplies over the past decade. That is a simple fact that the markets are well aware of.
It will be interesting to see how the Petrobras discoveries off the coast of Brazil pan out. It could be another 5 years before the scope is known.
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jimdoze3 months, 1 week ago
I read it. I completely and thoroughly understand it.
There is a difference between long term supply and demand issues and short term shortages. There are no short term shortages, as he said. Oil tankers continue to move supply to whoever buys it. If you can't pony up $130/bbl, you don't buy it. Refiners continue to produce gasoline and other oil products.
He did not address the growth of long term demand versus the growth of supplies. That is, without a doubt, an issue that underlies the psychology of the oil markets.
By the way, what he said obviates the issue I have oft seen made on these pages... that U.S. presence in Iraq is cause for the high price of oil. My stand on that is just the reverse.
What's your point?
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Aidenag3 months, 1 week ago
It is time to move beyond oil, and this article is just another piece of proof of such need. from supply and demand issues, to environmental harm, to world stability, and the fact most oil comes from some of the biggest human rights abusers on earth. It's time for people to get over it, and find something new. As this article shows, oil has become so volatile that shortages aren't even needed to cause price spikes anymore, and this sort of thing is only going to get worse.
Personally im saving up for the 'Zap-X' car due out in 2010. Sure it costs a lot($60k estimate) but for 644 horse power, all wheel drive, 0-60 in 4.8sec, 350 mile range per 10min of charging, and a cost of only 1 cent per mile to power(thats right 1 CENT PER MILE), i just don't see how people can still be wanting a gas guzzler. Not when its cheaper to drive an electric, that has more HP, quicker acceleration, and with today's battery technology, able to go long distances, on short charge times.
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jimdoze3 months, 1 week ago
"It is time to move beyond oil"
Agreed.
"cost of only 1 cent per mile to power"
Only if you have suspended the first law of thermodynamics... or the car is a feather.
Keep in mind that the energy to supply you that recharge still comes primarily from hydrocarbons... whether coal or gas... and some oil generators... and, as it is "piped" to you through wires, it loses some of the efficiency of production obtained by large generators.
Industrial economies require industrial sources of energy. Solar and wind, while helpful, are generations from providing that industrial energy base. The only serious industrial alternative available now is nuclear fission power.
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Aidenag3 months, 1 week ago
It costs the consumer only 1 cent per mile to drive it.. It has nothing to do with thermodynamics.. And everything to do with the cost of electricity. That 1 cent figure is averaged from the national price of electricity. Might be a bit more in some area's or a bit less in others, but when looking at the national average cost of electricity as of a few months ago, that is what it breaks down to. The Zap-X requires 1 cent worth of electricity to travel 1 mile...
And yes i know most electricity comes from dirty fuel sources such as coal. But here in my region, 95% of our power comes from dams, and even then, i still opt for the solar/wind packages the power company offers so im getting 50% from those, and the other 50% from hydro.
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nostalgia3 months, 1 week ago
How much of increase in the price of gas has to do with the quality of the oil on the market?
I see figures on the total amount of oil being produced but some of it is not suitable for producing gas - "sour" crude high in sulfur
Right now the Iranians are storing the oil they produce in tankers floating in the Gulf
"Iran, OPEC's second-largest oil producer, is using 20 tankers to collect and store crude"
"The discount on the nation's high-sulphur crude versus Oman and Dubai petroleum has more than doubled since the start of the year to $3.45 a barrel as refiners processing Iranian oil lower their operating rates for plant maintenance. Some of Iran's heaviest and most sulphurous crude oils can only be processed by a limited number of refineries with specialized equipment."
So how much of the oil being pumped is suitable for producing gas?
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Global_Warmer3 months ago
I hope you know what you just said, because I can't understand a damn thing that you just typed. Perhaps you should finish the 5th grade and come back.
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tiredofwhiners3 months, 1 week ago
I see there's some argument about regulation of the commodity markets (oil). Some controls may be good but I worry about government control of anything in the free markets. The economic knowledge I see in our govt. is about third grade i.e. almost nil. I really don't see the U.S. regulating our commodities as being effective vs. the world forces driving oil up or down. And China and India DO have an impact on prices, no question about it. The supply may be OK now but the future is questionable.
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raats66623 months, 1 week ago
One other VERY IMPORTANT factor that no one seems to be mentioning is the value of the US$.
YES, there is the speculator who are having an effect and YES, there is the increase in demand from China and India.
But the SINGLE biggest issue is that since the Nixon Administration oil around the world has been traded in US$ EXCLUSIVELY. As the value of the dollar INCREASES the oil costs LESS (more bang for your buck) as the value of the dollar DECREASES oil costs MORE (LESS bang for your buck).
Although the price of a barrel of oil is now MORE then 400% HIGHER then it was when GWB took office nearly half of that is because of the value of the US$.
The Canadian$ is currently nearly equal to that of the US$ (.99-$1). Ten years ago it was roughly 75%. Today the Hong Kong$ is 7.80 to the US$. Ten years ago the difference was over 12 to 1. Today the Chinese Yen is 6.85 to the US$. Ten years ago it was over 11 to 1.
Until the US$ gets back on track NOTHING else is going to fix this.
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canadianrancher573 months, 1 week ago
ratts6662- Your comment is one that is dead on, although up here in Canada we are now paying over 5 dollars per US gallon for gas, with the big change we have seen with our currency in the last few years that should not be the price, there is quite a bit of gouging going on but we have also seen this in machinery prices as well.
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donald513 months, 1 week ago
I like all those gold commercials on TV now that tell you gold has appreciated 250% since Dumya took over. It really is an indicator of how Dumya has devalued the dollar and the well being of most Americans.
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Norma1563 months, 1 week ago
We need an energy policy that makes sense. More refineries. We haven't built one since the 70s. Off shore drilling. Some 85% of US reserves are unavailable to E&D companies. Clean coal technologies are available. Nuclear power. Instead, we get ethanol mandates which have driven up the price of food worldwide. The oil companies don't make these policies.
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donald513 months, 1 week ago
Under the former Repug Congress the oil companies did make the laws... for which we suffer now! Dumya and his vetos only further propigate the life of the former "Do Nothing" Congress, the House that only had to work 4 days a week under Hastert, the Senate where Ted Stevens wouldn't even ask the big oil CEOs to tell the truth!
Perhaps the Cheney energy meeting with Ken Lay for which the minutes are still classified has the roots of the vile repug plan.
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