Oil Rises; OPEC at Odds Over Output

[magellan]

SINGAPORE (Reuters) - Oil prices edged higher on Tuesday, building on tentative gains as OPEC members appeared at odds over whether to boost production now that prices have eased below the cartel's $55-a-barrel threshold.

Saudi Arabia told customers in Asia that it would boost supplies next month, attempting to keep a lid on still high prices.

U.S. light crude traded up 18 cents to $53.89 a barrel, building on Monday's 39-cent rise that ended a week-long losing streak.

snip...

"We could be at the end of the correction phase," said Keiichi Sano, assistant manager of Sumitomo Corp.'s commodities business unit in Tokyo. "In this market, everyone wants to buy the dips."
http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8152743&pageNumber=0

There are several "dips" in DC, going cheap....

[radfringe]

1. supply is small part of the situation

but what is causing the rapid rise in oil is the market manipulation

my partner asked me "why isn't there any investigation into this? It's ridiculous for gas to go up so high so fast."

my answer: bush* buddies are running Congress so at best there might be some lip service about an investigation, but it won't go any where

[Wright Patman]

4. I've been making that point

for several weeks. One good thing for the oil companies about GOP dominance of all branches of government is that there will never again be any talk of "windfall profits" taxes. I'll bet the younger generation now being gouged at the pump is not even aware of the term.

Profits, by definition of God's Own Party, are "godly" and the more you reap, the holier thou art.

The other thing they always say is that the "environmentalists" will not allow them to build any more refineries in this country. That's bunk. There are extremely economically distressed and depressed areas all over this country which would love to host new refineries.

You should have seen the number of counties in Texas a few years back literally bidding with state officials for them to locate new state prisons in their backyards. There are even counties in West Texas clamoring to become hosts of low-level radioactive waste. It's incredible. Anything for money. They'd sell their souls if there were a market for them.

[hadrons]

2. how long can the Saudis keep this farce up ...

"oh, we could increase production, but we can't agree ..."

Guys, it looks like you can't

[Frederik]

3. Or don't want to

could be either one.

"Exxon Mobil's profits rose to $25.33bn from $21.51bn last year, on revenues up 17% to $298bn.

Along with the world's other biggest oil producers, Exxon Mobil benefited from the giddy rise in crude oil prices last year.

The Texas-based company exceeded market expectations with its performance, which also broke records for the fourth quarter of 2004.

It made an $8.4bn quarterly profit - its highest ever - on revenues of $83.3bn."

Royal Dutch Shell:

· Record 2004 net income of $18.5 billion

· Strong downstream profits and asset utilisation

· Record $33 billion cash from operations and divestments

· 3.8 million barrels of oil equivalent (boe) per day production, at high end of indicated range

· At least $10 billion cash to shareholders from dividends in 2005 subject to exchange rates

[ixion]

5. under 55 is a dip?

hmmmm... let's see... it was around $30 dollars a barrel when the chimpinator stole office, and now it's almost double that, and it's called a dip? :crazy: :banghead:

[plasticsundance]

6. The market keeps testing new thresholds

Then continues to go up. Last July, after the July fourth holiday, business pundits on CNBC and other financial channels were claiming that within a couple of months the prices would recede to $34 a barrel. We all know now how un-prescient that turned out to be.

The drive toward higher oil prices began during the downfall of the stock market at the beginning of the Bush reign. Many investors saw the speculative and hedging of the futures market a smarter investment than buying securities straight up.

Therefore, although I agree that the speculative market manipulates the price of oil to some degree, the real issues of supply and demand are real and quite ominously foreboding.

China's demands are really quite dramatic exponentially, even as recently as 2001 to present. That is why I found this little caveat from the above article rather interesting:

Saudi Arabia told customers in Asia that it would boost supplies next month, attempting to keep a lid on still high prices.

Emphasis mine. Just last week the business pundits were trying to calm the oil market by stating that demand was slowing China. However, the caveat I quoted from the article appears to show otherwise. I believe it is obvious that at least Saudi Arabia is trying to assuage the Asians, in particular in response to China's hot growth in demand.

In addition, the Bush Administration and Greenspan do not necessarily see the quick rise in oil prices as conducive to their agenda, as corrupt as that may be. The spike in oil prices will place an untimely inflationary pressure on the economy, and force them to make decisions they'd rather would not want to decide at this particular time.