Daily Archives: May 12, 2011

Sheila McNulty

(From l to r) Rex Tillerson, Chairman and CEO of ExxonMobil; John Watson, Chairman and CEO of Chevron; James Mulva, Chairman and CEO of ConocoPhillips; Marvin Odum, President of Shell Oil Company; and Lamar McKay, President and Chairman of BP AmericaThere is no doubt it is hard to feel sorry for Big Oil. It pulls in  billions of dollars in profits whenever oil prices go up, and yet higher oil prices result in higher petrol prices for the public.

So whenever these companies are doing well, the public is doing worse. And that, inevitably, leads to talk about punitive taxes (or at least a loss of tax breaks) for the oil industry.

That time has come once again. A few weeks ago, the world’s biggest oil companies reported massive profits just as petrol moved up and beyond, in some cases, $4 a gallon. That is a big deal in the US, where people often commute long distances to work, particularly in sprawling cities like Houston, Chicago, Los Angelos, and other highly populated areas. And it is particularly important now when the economy has not fully recovered, unemployment remains high and the public at large is still having economic difficulties.

Kiran Stacey

A fisherman sails on the Ice Fjord of Ilulissat, Greenland Wikileaks has an impeccable sense of timing. As Hilary Clinton meets counterparts from Arctic nations in Greenland to talk about oil, the whistle blowing website publishes a raft of cables showing just how much international tension the country’s natural resources have provoked.

The cables make for fascinating reading, and tell a tale of US perceptions of Russian paranoia and aggression in the territory. They claim:

Kiran Stacey

The warnings may finally be coming true. Four months after the OECD warned that the soaring oil price could damage the economic recovery in developed nations (since when Brent has advanced another 19 per cent), the IEA has noticed that global oil demand has begun to flatline.

In its March Oil Market Report, it notes the first month of near-zero growth since the summer of 2009, which was just as the recovery was getting under way.

Part of the decline in demand is because of the Japanese refinery capacity which was knocked out by the earthquake and tsunami.

The justification for Wednesday’s commodity rout is still that RBOB futures fell (or crashed) after the EIA reported larger than expected US stockbuilds in gasoline. The more than 8 per cent move, in the usually much more stable contract, saw the CME lift margins for speculators by 21.4 per cent for Thursday.

But is the RBOB situation really all that simple?

Yes, it is true that RBOB cracks — the difference between the price of gasoline and oil, which determines how much of an incentive there is for refineries to process crude — were looking more than toppish.

FT Energy Source

- France to ban fracking of fossil fuels – FT

- Cheap gas leads power industry to rethink options – Argus

- Panel urges Germany to close nuclear plants by 2021 – NY Times

- RWE profit rises but wary of nuclear taxes – WSJ

- BP refuses to accept liability for drill-ban losses – The Telegraph

- US House approves bill to speed up offshore drilling permits – WSJ

- Senators sek more fuels from coal, biomass, algae – Argus

- Oil industry brands US tax proposals as political ploy – FT

- Round up the usual CEOs – NY Times Green blog

- US floods set to force up price of petrol – FT

- UK faces energy bill spike – The Telegraph

- Offshore wind can shed subsidy in 10-15 years: report – Reuters

- Low carbon quest looks to market – FT

- Brazil government to force Petrobras to cut prices – WSJ

- Cameron ‘must intervene in carbon row’ – The Guardian

- MPs talk tough over SSE mis-selling – FT

- Ofgem blamed for a lack of trust in the ‘big six’ – The Times

- Woodside names ExxonMobil veteran as CEO – WSJ

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