Stop Oil Speculation Now!

Sunday, July 20, 2008 7:25 PM By: Dick Morris & Eileen McGann Article Font Size

For once, it is the Democrats who have the right idea ... we can only hope that the Republicans come along. Senators Chuck Schumer and Harry Reid are pushing legislation to restore the controls over the oil future's market speculation that existed before brokerage houses like Goldman Sachs and Morgan Stanley set up a commodities exchange in London to evade restrictions imposed by the Federal Commodities Trading Corporation. The FCTC had allowed those in the oil biz to buy and sell oil futures - essentially bets on how the price will change - but restricted investment by speculators. After the brokerage houses went offshore so as to be able to indulge their passion for a quick buck, the total traded in oil futures soared from $13 billion in 2003 to $260 billion now. It is this tail that is wagging the dog in pushing up the price of oil and gas at the pump. The FCTC regulations remained in effect all through the Reagan and Bush years. Indeed, they were only repealed after they had been obviated by the off shore move so as not to disadvantage domestic commodities exchanges. We realized that oil is too valuable a strategic and economic commodity to permit its price to be determined by gamblers betting on the future price. So the FCTC let those in the industry, like oil companies and airlines, invest in oil futures but stopped outsiders from doing so. The Democrats are pushing legislation to restore the status quo ante and stop the brokerage firms from playing the oil futures game. Their bill would apply the restrictions on oil futures’ purchases to domestic American companies even if they trade off shore. If there is any doubt that it is speculation, not the supply and demand for oil, that is driving up the price, look at this week’s history of oil prices. After Bush announced that he was rescinding his father’s executive order and permitting off shore drilling and after OPEC announced a weakening of oil demand, the futures market price dropped $15 per barrel. No new oil gushed through the system. The speculators just switched their bets from up to down. With the Democratic bill, they will just have to double their bets on horse racing and leave oil futures alone! Some Republicans are reflexively opposing the Democratic proposal, citing the sanctity of free markets. But even Reagan didn’t want to allow unbridled gambling in oil futures. There is nothing wrong with letting the free market in oil determine the price of the product. And there is a lot right with letting it do so. But it is insane to let gamblers magnify the effect of anticipated changes in supply and demand, that may not materialize, by buying and selling oil futures. Oil is just too important strategically and economically to allow that kind of speculation. Ultimately, the answer to high gas prices is to do everything. We should drill for oil offshore and in Alaska. We should extract it from shale. We need more nuclear power. We have got to expand wind, geothermal, and solar energy. We need more coal, particularly if we can capture and bury the carbon emissions. We need flex fuel cars. We need more ethanol - from domestic production and from imports. We need methanol, which is just like ethanol but comes from inedible parts of the plant. We need everything. But to those who doubt the efficacy of off shore drilling, just look at how the mere threat to move in that direction sent oil prices crashing. We need more of same. © 2008 Dick Morris & Eileen McGann

WASHINGTON —  President Bush will lift an executive ban on offshore oil drilling, although new oil exploration on the Outer Continental Shelf will remain off limits until Congress also takes action.

The president will make a Rose Garden statement on Monday, where he is expected to announce his lifting of the ban.

Watch President Bush speak Live at 1:30 p.m. ET on FOX News Channel.

White House press secretary Dana Perino says Bush is acting now in hopes of spurring Congress to act. So far, lawmakers have shown no interest in doing so.

Bush and a growing number of lawmakers have been calling for broader options in dealing with rising energy costs, including $4 per gallon gasoline.

The Outer Continental Shelf has been a particularly hot debate, with the Bush administration saying new drilling technology would make U.S. shores safe from environmental disaster while helping to drive down prices with greater supplies.

Democrats say energy companies already have plenty of space to look for oil and have stalled on investing in more oil production while reaping record profits.

Citgo gas is from South America, from a Dictator who hates Americans. Don't buy from CITGO). 

Companies that DO NOT import Middle Eastern oil: 
 
Sunoco...............0 barrels 

Conoco..............0 barrels 
Sinclair...............0 barrels 
BP/Phillips..........0 barrels 
Hess...................0 barrels 
ARC0..................0 barrels 
If you go to Sunoco.com, you will get a list of the station locations near you. 

All of this information is available from the Department of Energy and each is required to state where they get their oil and how much they are importing. 
 
To have an impact, we need to reach literally millions of gas buyers.  It's really simple to do.






Tips on Buying Gas....I don't know what you guys are paying for gasoline.... but here in California we are paying up to $3.75 to $4 ..10 per gallon. My line of work is in petroleum for about 31 years now, so here are some tricks to get more of your money's worth  for every gallon:

Here at the Kinder Morgan Pipeline where I work in San Jose, CA, we deliver about 4 million gallons in a 24-hour period thru the pipeline. One day is diesel, the next day is jet fuel and gasoline, regular and premium grades. We have 34 storage tanks here with a total capacity of 16,800,000 gallons.

Only buy or fill up your car or truck in the early morning when the ground temperature is still cold. Remember that all service stations have their storage tanks buried below ground. The colder the ground the more dense the gasoline, when it gets warmer gasoline expands, so buying in the afternoon or in the evening....your gallon is not exactly a gallon. In the petroleum business, the specific gravity and the temperature of the gasoline, diesel and jet fuel, ethanol and other petroleum products plays an important role.
A 1-degree rise in temperature is a big deal for this business. But the service stations do not have temperature compensation at the pumps. 

When you're filling up do not squeeze the trigger of the nozzle to a fast mode. If you look you will see that the trigger has 3 stages: low, middle, and high. You should be pumping on low mode, thereby minimizing the vapors that are created while you are pumping. All hoses at the pump have a vapor return. If you are pumping on the fast rate, some of the liquid that goes to your tank becomes vapor. Those vapors are being sucked up  and back into the underground storage tank so you're getting less worth for your money.

Why are retail gasoline prices so high? EIA analysis of the petroleum market points to the cost of crude oil as the main contributor to the record high gasoline prices that we are now experiencing.   The cost of crude oil now accounts for about 73% of the gasoline pump price. World crude oil prices are at record highs due mainly to high worldwide oil demand relative to supply. Other contributing factors include political events and conflicts in some major oil producing regions, as well as other factors. Besides that, gasoline prices in the United States typically increase during the spring and summer due to seasonal increase in demand and the additional cost of producing summer-grade “reformulated” gasoline required to meet air quality standards in many urban areas. Learn More: Gasoline prices are often the main topic of This Week In Petroleum. The February 27 edition discusses how crude oil prices are affecting gasoline prices. The May 7 edition discusses spring and the summer-grade gasoline. For EIA's latest gasoline price forecast, please see our Short-Term Energy Outlook. Last updated: June 12, 2008

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Question: Can I tell which country the gasoline at my local station comes from? The Energy Information Administration does not collect data on the source of gasoline sold at retail outlets. Several factors make it difficult to say where gasoline at a local station originated: At a local station, a company may sell gasoline that was not produced by its own refineries. Gasoline from different refineries, owned by different companies, is often combined for shipment by pipeline.  Many companies may purchase gasoline at the same bulk terminal. The source of the crude oil used at a company's refinery varies daily. Most refiners use a mix of crude oils from domestic and foreign sources based on the oils’ cost and availability. Learn More: EIA’s Primer on Gasoline Sources and Markets Last reviewed: April 17, 2008

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Question: How many retail gasoline stations are there in the U.S.? There are approximately 167,000 retail gasoline outlets in the United States. Learn More: Statistics on U.S. gas stations: “Fuels and Fueling: A Market Correction” Last updated: April 15, 2008

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Question: How many gallons of gasoline does one barrel of oil make? One barrel (42 gallons) of crude oil, when refined, yields approximately 19.6 gallons of finished motor gasoline. The remainder of the barrel yields distillate fuel oil, residual fuel oil, jet fuel, and other products. Learn More: Products made from oil Last reviewed: April 17, 2008

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Question: How much tax do we pay on a gallon of gasoline? The Federal gasoline tax is 18.4 cents per gallon and the average State tax is 21.4 cents per gallon. Learn More: State-by-State gasoline taxes Last reviewed: June 25, 2008 Back to Top   Question: Where can I find inflation-adjusted gasoline prices? EIA graphs and spreadsheets showing inflation-adjusted gasoline prices are at: http://www.eia.doe.gov/emeu/steo/pub/fsheets/real_prices.html Last reviewed: June 25, 2008 Back to Top   Question: What are the products and uses of petroleum? The most common products from petroleum are energy products: gasoline, heating oil, and diesel fuel. Other petroleum products are: ink, crayons, bubble gum, dishwashing liquids, deodorant, eyeglasses, records, tires, ammonia, and heart valves. A barrel of oil yields these refined products (percent of barrel): 47% gasoline for use in automobiles 23% heating oil and diesel fuel 18% other products, which includes petrochemical feedstock—products derived from petroleum principally for the manufacturing  of chemicals, synthetic rubber and plastics 10% jet fuel 4% propane 3% asphalt (Percentages equal more than 100 because of an approximately 5% processing gain from refining.) Learn More: Products made from oil Last reviewed: April 17, 2008

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Question: How much gasoline does the United States consume per year? In 2007, the United States consumed over 142 billion gallons of gasoline. Learn More: Annual petroleum consumption data Last reviewed: June 12, 2008

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Oil's Rapid Rise Stirs Talk of $200 a Barrel This Year

Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year.

Oil at that price would wreak deeper havoc on the world's airlines and automobile industries.

In the U.S., $200 crude would push the price of gasoline to well over $6 a gallon, causing commuters to alter their driving habits more sharply than they have already, while putting extreme strains on large sectors of the U.S. economy. In Europe, it would stir more political unrest and increase the clamor to cut the continent's stiff petrol taxes. In Asia, governments would be under pressure to cut fuel subsidies and risk a popular backlash.

U.S. benchmark crude prices leapt 3.6% last week, closing before the Independence Day holiday at a record $145.29 a barrel. Roughly halfway through the year, oil prices have soared 50% since Jan. 1 and have doubled since the same time last year. (See related article.)

Few oil watchers are now ready to bet that oil will hit $200 a barrel by New Year's Eve. But nearly all are wary of predicting how and when oil's upward stampede will be reversed.

What makes the market so unpredictable, analysts say, is that prices are being pushed by such a wide array of factors, while no single force has emerged with the power to throw them in reverse.

"Crude is going up," said Dave Pursell, an oil analyst at Tudor Pickering in Houston, "because there is nothing strong enough yet to push it down."

In Washington, deepening fears that oil prices will shoot still higher have stoked talk in Congress and within the Bush administration of using one of the last remaining cudgels to try to reverse the price rise: a sharp and sustained release of oil from the U.S. Strategic Petroleum Reserve.

Those discussions remain preliminary, though, while most senior administration officials remain opposed to such a move, because the oil stored in salt mines is meant for release in genuine supply emergencies.

The list of forces shoving prices upward is long: a weak dollar driving hot money into commodities; jitters over a possible military conflict with Iran; soaring costs and chronic project delays in the world's oil patch; concerns over scarce supplies and long-term production declines; and continued robust demand growth in much of the developing world.

Oil ministers and top petroleum executives have added to the alarm. Paolo Scaroni, head of Italy's biggest oil-and-gas company, Eni SpA, told an Italian newspaper last week that he could see prices hitting $200 a barrel this year.Chakib Khelil, president of the Organization of Petroleum Exporting Countries, predicts that crude could go as high as $170 a barrel this summer.

Oil's seemingly unstoppable rise has also scared off some of the very financial players that would otherwise temper the market. Oil producers who would normally lock in high prices by hedging on the futures market have now backed off, assuming that prices will continue to rise.

That has fueled the upward momentum as financial players continue to bid up oil on the futures market, said Larry Goldstein, an economist at the Energy Policy Research Foundation. "The problem is that the natural hedgers, the producers themselves, are shying away, while the buyers get bolder," Mr. Goldstein said.

Geopolitics, particularly the fear of a potential Israeli or U.S. attack against Iran, have also re-emerged as a significant factor in the market. Some investment houses were saying last week that it was more likely than not that a war with Iran would break out this fall.

With so many forces arguing for higher prices, the big question is: What would spook the market enough to cause prices to fall?

So far, falling gasoline use in the U.S. has done nothing to put a damper on prices, largely because growing demand elsewhere in the world has managed to keep global supplies tight.

"The reality of it is, swings in U.S. consumption just don't matter that much anymore," said Jeffrey Rubin, chief economist at CIBC World Markets, who is predicting that oil will average $200 a barrel in 2010.

The one shift in demand that would have a serious price impact would be any sign of diminished thirst for fuel in China. Speculation has run high for months that Chinese demand may have surged artificially in advance of the Beijing Olympics as the country turned to oil over coal for power generation to ease pollution. It is also unclear whether China stockpiled gasoline and diesel to avoid any shortages.

"But if consumption roars on even after the Olympics, then the upside pressure on prices will remain pretty strong," said Stephen Brown, an energy economist at the Federal Reserve Bank of Dallas.

Another force that could shove prices down in a hurry would be signs of a significant buildup in oil inventories in the U.S. But even with oil use down in the U.S., crude stockpiles remain unusually low. The U.S. now has just over 19 days of total commercial supplies, compared with 23 days worth at the same time last year.

Alarmed over the economic impact of soaring oil prices, Saudi Arabia tried last month to hammer the market back down by boosting its monthly output and promising a dramatic long-range increase in its production capacity. But neither announcement by the world's largest oil producer had any perceptible affect, further underscoring how weak the market's traditional levers now are.

Some advocates are clamoring for the Bush administration to take a more dramatic step and release millions of barrels from the U.S. strategic reserves, which contain around 706 million barrels. The House of Representatives is weighing legislation to force a release from the reserves, while support for such a move also appears to be building in the Senate.

The administration strongly opposes using the reserve for market interventions.

A release of two million barrels a day for long as a month, analysts say, could make a sharp impact on prices, in part because the barrels would be sold at auction, thus allowing buyers to set the oil's value. The U.S. consumes a little more than 20 million barrels a day.

"We have exhausted all other short-term policy options," said Mr. Goldstein, a veteran of the Washington energy establishment who is among those pushing aggressively for a significant release from the reserves. He argues that the U.S. Energy Department should step in to tamp down oil prices and thus prevent further damage to the U.S. economy.

But others worry that even that step could backfire. For one, sky-high prices have made refiners all the more reluctant to build up oil stocks.

"And even if you release 20 or 30 million barrels, people are still going to be worried about Iran or something else," said Michael Lynch, a Massachusetts-based oil analyst who is among the many who believe that oil prices are already far too high.

From the Bureau of Petroleum Inspection

Posted July 03, 2008

Department inspectors conducted 269,966 petroleum inspections at 9,173 retail and wholesale petroleum facilities throughout Florida during the 2006-2007 fiscal year. Inspections included calibrating tests, proper installations and maintenance of measuring devices and attached equipment, price gouging investigations, testing for water and debris, verification of backup electricity generation equipment and wiring, and labeling of petroleum dispensers at both wholesale and retail facilities. As a result of these inspections 3,187 pumps were taken out of service because of improper calibration and 30,318 correction notices were issued for poorly maintained pumps. The Department handled 4,446 petroleum-related consumer complaints as a result of posting the 1-800-HELP FLA consumer hotline decal on petroleum dispensers and investigated 78 price gouging complaints. Complaints have concentrated on fuel quality, meter accuracy and price. The field staff is charged with responding to these complaints within 24-48 hours. The Department continues to use numerous fraud investigation techniques including the deployment of undercover vehicles to further ensure that consumers receive fair measure from petroleum pumps. The unmarked vehicles have a specially designed and calibrated gasoline tank that enables a trained inspector to determine a pump's calibration without a service station operator's knowledge. The undercover vehicles have confirmed that most petroleum pumps are accurate and consumers are receiving fair measure. Really now, that's reassuring!

WEATHERFORD, Texas  —  A man was sentenced to more than 4,000 years in prison Wednesday for sexually assaulting three teenage girls over two years.

A day after finding James Kevin Pope guilty, jurors sentenced him to 40 life prison terms — one for each sex assault conviction — and 20 years for each of the three sexual performance of a child convictions.

At the request of prosecutors, state District Judge Graham Quisenberry ordered Pope to serve the sentences consecutively, adding up to 4,060 years. He will be eligible for parole in the year 3209, according to the Parker County District Attorney's Office.

"We believe it was a just result," prosecutor Robert DuBoise said, adding that he was "overwhelmed" with the judge's decision to stack the sentences.

Pope, 43, abused the girls for nearly two years. It came to authorities' attention earlier this year after Pope made several inappropriate comments to a friend, who notified Child Protective Services.

During the trial, the teens testified about the abuse, and their sexually explicit photographs were shown as evidence.

"If it was as traumatic as they indicate, they would be able to give you (specific dates and times of the incidents). Simply because it's shocking doesn't make it true," Alley said.

During the sentencing phase of the trial, a U.S. Secret Service agent testified that while examining Pope's home computer, he found more than 200 images of child porn.

Later Wednesday, some jurors said the case was difficult because of the subject matter.

"We were careful not to make any mistakes in viewing and evaluating the evidence," said juror Dale Lewis.

Comments by Saudi Arabia's oil minister suggesting his country had no immediate plans to boost production also lifted prices.

Expectations that the European Central Bank will raise interest rates later Thursday could further weaken the U.S. dollar and drive oil prices even higher, as investors turn to commodities as a hedge against a falling greenback, traders said.

By midday in Europe, light, sweet crude for August delivery rose $2.28 to a record $145.85 a barrel in electronic trading on the New York Mercantile Exchange.

On Wednesday, the contract set a new closing record for floor trade at $143.57 -- a full $2.60 above the previous close.

The latest spike means a barrel of crude has gone up by more than 50% since the end of last year, when oil was going for $96 a barrel.

In London, Brent crude futures rose to a trading record of $146.69 a barrel on the ICE Futures exchange before retreating to $146.07, up $1.81.

"Even though the rise of European interest rates has been priced into oil, an official announcement by the ECB will still add momentum to oil prices," said Victor Shum, an analyst with Purvin & Gertz in Singapore.

The push above $145 a barrel was seen as a last technical barrier to prices hitting $150, in what analyst Olivier Jakob of Petromatrix in Switzerland called "the Morgan Stanley self fulfilling prophecy."

In early June, a prediction by Morgan Stanley analyst Ole Slorer that oil prices could reach $150 by the July 4 weekend caused the Nymex contract to jump nearly $11 in a single day.

Speaking Thursday in Madrid, Saudi Arabia's oil minister, Ali Naimi, left the door open for increased output, but said the kingdom's oil customers were satisfied and that no production growth was planned for now.

The Energy Department's Energy Information Administration said Wednesday crude oil supplies fell by 2 million barrels last week, or about 800,000 barrels more than analysts surveyed by the energy research firm Platts had predicted.

However, the report offered a mixed picture of energy use by the world's thirstiest oil consumer. Gasoline supplies unexpectedly grew by a considerable amount, and demand continued to slide -- suggesting record fuel prices are prompting a shift in American driving habits.

Ongoing rhetoric about possible attacks on Iran, the world's fourth-largest oil producer and OPEC's second-largest exporter, also left the market jittery.

Traders are worried Tehran could try to halt shipments and seize control of the strategically important Strait of Hormuz if attacked by Israel or the United States. About 40% of the world's tanker traffic passes through the Middle Eastern choke-point.

Iran's foreign minister did not rule the possibility that Iran could try to restrict oil traffic in the strait if the country was attacked.

"In Iran we must defend our national security, our country and our revolutionary system and we will continue to do so," Foreign Minister Manouchehr Mottaki said in an interview with The Associated Press in New York.

Mottaki said he does not believe Israel or the United States will attack, however, calling the prospect of another war in the Middle East "craziness."

A senior U.S. military commander vowed to ensure that the strait remains open.

"We will not allow Iran to close it," said Vice Adm. Kevin Cosgriff, commander of the 5th Fleet based in Bahrain, after talks with naval commanders of Persian Gulf countries in the United Arab Emirates.

The saber-rattling has left energy traders on edge as they try to ascertain the likelihood of a Middle East flare-up and the effect it could have on the world's already tight supply of oil.

In other Nymex trading, heating oil futures added 5.15 cents to $4.1230 a gallon (3.8 liters), while gasoline futures rose 2.56 cents to $3.5750 a gallon. Natural gas futures gained 13.7 cents to $13.526 per 1,000 cubic feet.

Saudi Arabia's King Abdullah told oil consumers Tuesday that they should get used to high prices and not blame the country for the spike in the price of crude, the Agence France-Presse news agency reported.

"Consumer countries have to adapt to the prices and the mechanisms of the market," the king said in an interview published Tuesday in Kuwaiti daily Al-Siyassah.

Abdullah's comments came as the price of oil jumped past $143 a barrel for the first time.

The king contends that speculators are to blame for the rising costs, a claim that has been denied by the International Energy Agency, AFP reported.

"Often it is a case of political expediency to find a scapegoat for higher prices rather than undertake serious analysis or perhaps confront difficult decisions," the IEA told AFP.