Posted on Jul 5th, 2007
Phil Davis submits: Nigerian rebels kidnapped 5 RDS.A workers from an island rig, sending oil to $74 in Europe.
U.S. crude futures are up at $72 again despite inventories holding a 9-year high, which does not included the 19M barrels (or more) that are parked in tankers sitting in the Gulf of Mexico. We have oil inventories today where they will use a 500,000 barrel draw down as an excuse to break the 5% rule for the week, despite the fact that 500,000 barrels represents .00357 of the U.S.’s weekly consumption of 140M barrels.
Soku is an island in the coastal area of Nigeria where Shell (RDS.A) has several rigs and a gathering plant that generate over $14M a day in revenues, yet they cannot afford to hire adequate security to stop MOTORBOATS from assaulting the island! This is a joke, people – it is a massive con being perpetrated on you by the oil companies.
Meanwhile, Valero Energy (VLO) shut its 300Kbd Flint Hills refinery, so even if the Nigerians shipped the oil here, we couldn’t refine it. Refineries are operating at about 90% of capacity – that’s 3% below last year’s post-hurricane levels taking 600,000 barrels of refined product off the market PER DAY.
Meanwhile we are deluged with stories telling us that U.S. demand is up, yet somehow we get by with 4.2Mb per week LESS gasoline and distillates than we had last year. Gasoline stocks are in fact, off just 5% from the 5-year high, just 10M barrels off record July levels:
Something just doesn’t add up, but that will not change unless we do something to break the cycle that rewards the energy industry for NOT producing product. As I’ve said in the past: If your oil company makes 20% more money when you have a refinery fire, do you invest in fire extinguishers or matches?
Perhaps if we start pointing this out to politicians in the EU, they can do something over there because it’s pretty clear who pulls the strings on this side of the Atlantic.
According to Dave Lindorff:
If Congress and the White House were serious about combating price rigging and coordinated production slowdowns, they would be changing the anti-trust laws so that the objective existence of anti-competitive pricing and production alone would be illegal, not just deliberate conspiring to fix prices. A simple step would be just to make all the competitive information regarding production and pricing of oil and oil products, all the way from wellhead to pump, public. After all, if the oil companies all know everything about each other’s internal pricing and production, there’s no justification for keeping that information from the public. Instead we have the opposite situation, of course: secret meetings by our oil-industry-subsidized vice president and executives of the oil industry, where real collusive decisions were made.
http://energy.seekingalpha.com/article/40188
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What a load of old bollocks! As someone who spent years working for the oil industry, including Nigeria, I find the comments about Shell incredible. Don’t readers know that Shell (and other IOCs) are operating in a forein country with its own laws and rules. Your readers should know that IOCs and/or those who service them are not allowed to hold weapons and/or use military vehicles to mobilize their own security? Your theories, in general, are daft and I gave one example of the reasons. Get real!