Oil prices are being driven higher by a general dip in US petrol supplies, as Ed Crooks wrote yesterday. This is one of those counter-intuitive abnormalities that makes energy fun or frustrating, depending on your disposition. But it’s true, even though you may be hesitant to believe Abdalla Salem El-Badri, Opec’s secretary-general, because he has reason to want to downplay any blame attributable to the cartel, which has recently restricted its oil output to push prices up. See the AP story here. Instead, believe US refiners who are privately admitting to having trouble performing their regular scheduled maintenance on time, and for that matter on budget.

What is interesting is the reason: The general lack of parts and labour in a market of high demand that is making it more difficult to do everything from drilling new wells to retooling refineries. Now if only someone would come up with a better explanation than ‘psychology’ as to why refining less crude into petrol should drive crude prices up, rather than down. If you do, please do send us a comment…

Chevron, the US’s second largest energy group, is close to admitting it should have known kickbacks were being paid to Saddam Hussein, during Iraq’s oil-for-food programme with the United Nations, Claudio Gatti of Il Sole 24 Ore, the Italian newspaper, reports. For an English version, picked up by the New York Times, go here. Chevron will pay $25m-30m in fines, about how much it earned in half a day’s work last year. But if the settlement with US attorneys goes ahead, it sets a precedent for other major oil companies, almost all of which, were accused in a report by Paul Volcker, former chairman of the Federal Reserves, of having bought Iraqi oil through middlemen who paid kickbacks on their behalf.

Petrol pump prices in the US have hit a record average of $3.07, up 20c from two weeks earlier and 4c higher than the previous record reached in Aug 2006, the Associated Press reports, quoting analyst Trilby Lundberg. That may still be cheap compared to the $7.18 an average gallon of UK petrol cost last week, but it is again getting US politicians worked up about greedy price-gouging oil companies, with a Senate bill in the works. The real cause of the jump is of course far more complicated, with low inventories and refinery shutdowns the main culprits. But as prices on the futures markets fall, so analysts say will costs at the pump. What will likely remain unchanged is that a bottle of spring water available at the kiosk of most US petrol stations will still cost substantially more than the petrol that quenches the thirst of the cars parked at the pump. And on many days the water bottle is the one that also comes with the better proft margin.

Where the oil and gas industry ventures, controversy follows. The Helena (Montana) Independent Record reports from Billings that the rush to drill in Wyoming, Utah, Colorado, New Mexico and Montana is pushing hunters and their game off federal land. The Environmental Working Group and the National Wildlife Federation found that drilling has doubled in the past decade and is destroying crucial habitat for species including pronghorn antelope, mule deer, elk and sage grouse. The fact that hunter and game appear to be ganging up on drillers may seem ironic, but it is also an example of one of the biggest hurdles to US energy policy: Nimby - Not in My Back Yard. Whether it is a famous liberal Senator blocking windmills off Cape Cod or Malibu celebrities grumbling about a new Liquefied Natural Gas Receiving terminal potentially spoiling their surfing, Nimby is everywhere. Why else was ethanol the cornerstone of George W. Bush’s most recent State of the Union address? It’s not much more environmentally friendly than petrol, it’s hardly cost effective and in terms of sheer scale, close to unachievable. But it does come with one crucial element - farm belt votes.

Peter Sutherland, BP’s feisty chairman, has had a strained relationship with John Browne, the company’s chief executive who quit yesterday. Yet he called Lord Browne’s hasty departure - caused by the fact that Lord Browne lied to a judge - a "tragedy" and said his immediate resignation was prompted by the chief executive’s "sense of honour." Though, certainly a "shabby end to a brilliant career," as my colleague Ed Crooks writes, "tragedy" was perhaps an unfortunate word for Mr Sutherland to use. Just weeks ago, at BP’s AGM, one shareholder stood to chastise Mr Sutherland and BP for often calling the company’s Texas City refinery explosion, in which 15 people died, an incident instead of a tragedy. Loren Steffy, of the Houston Chronicle, picked up on the theme, writing in his blog: "A tragedy? No, that would have been more than two years ago in Texas City. Where was Browne’s sense of honour then?"

Repsol is still the company to hold the unfortunate distinction of having paid the most generous price for a recent Gulf of Mexico asset, with its 2005 deal to buy BP’s Shenzi field. Tom Ellacott, analyst for Wood Mackenzie, who crunched the numbers for today’s Eni deal, came up with an implied long-term oil price of $42 a barrel, less than half of the price Repsol assumed, according to Wood Mackenzie. In fact, Mr Ellacott said Eni’s generosity was in line with recent deals and understandable given the amount of current interest in assets located in Gulf of Mexico. In contrast to Venezuela, where Mr Chavez is riding rough-shot over his foreign investors, the US is one of the dwindling number of places oil companies can be reasonably sure they won’t get strong-armed for a substantially bigger slice of profits and control by the government. Not even the UK can make that kind of boast.

The US Gulf of Mexico appears in significant demand. Following on from this morning’s news of new leases, Eni this morning paid a macho price of $4.757bn for Dominion Resources’s assets there. Read the FT story here. Citigroup in a note this morning valued the assets at only $3.9bn. Analysts at Wood Mackenzie, the Edinburgh-based industry consultanting firm, are still crunching their numbers, but hint their valuation for the Gulf of Mexico fields Eni is buying had also been significantly lower. In terms of implied oil price, the one to beat is Repsol’s acquisition of BP’s Shenzi field. The Spanish energy group last July assumed a whopping $97 oil price to make it work, barring significant new reserve discoveries. Eni’s disappointing production results are not as desperate as Repsol’s problems, but it will be interesting to see what the numbers reveal later today. Judging from the field’s names: Devil’s Tower, Goldfinger, Spiderman, Q and Thunderhawk among others Eni’s Dominion deal is quite a macho affair.

As the summer draws nearer it’s not just school children who are rejoicing. The Houston Chronicle reports that today Washington plans to announce a new round of oil and gas leases in the Gulf of Mexico, and off the shores of Virginia and Alaska. Oil companies produce more than 1.6m barrels of oil a day and 4,000bn cubic feet of natural gas a year from federal waters. The government hopes to increase that by offering new plots, which had previously been off limits, over the next five years in order to stem the country’s growing dependence on foreign supplies. But summer also brings with it the threat of hurricanes and this season is expected to be fiercer than the last. Having learned its bitter lesson during hurricanes Dennis, Katrina and Rita in the past three years, the industry is bracing itself by trying to find better ways to secure its rigs, some of which are worth upwards of $1bn, the Chronicle also reports.

A little more digging has revealed that Hugo Chavez, Venezuela’s populist president, does not have the world’s international oil companies quite as cornered as he professes…at least not yet. This Dow Jones story gets it about right: Chevron, BP, Total, Statoil and even ExxonMobil, have all signed an agreement to renegotiate their Orinoco heavy oil contracts with PDVSA, Venezuela’s national oil company, and ConocoPhillips is likely to do so before the May 1 deadline. But what do these signatures actually mean? This is where things get a little fuzzy. On May 1, despite the flags, military and pomp, the main change will be the logo of the oil workers’ uniforms. Instead of Sincor, Total’s venture, the tags will read PDVSA. But whether Chavez will be able to extract the 60 per cent controlling stake he wants, and how he will compensate the partners, will be hacked out in tense negotiations over the next few months. Chavez may generally have gotten what he wants until now, but the oil companies have at least one trump card: they have the know-how to run the fields.

The World National Oil Companies Congress has been a relatively diplomatic affair so far, save for one very frank paper, submitted by Helmut Langanger, executive vp of exploration and production for OMV. Mr Langanger said what international oil company executives rarely admit: "IOCs will more and more change from operator to a service provider with pre-agreed reimbursement figures hereby substantially diminishing rates of return. Reduced profitability will lead to IOCs not delivering on major performance indicators, such as annual production growth, 100 per cent reserve replacement rates and moderate finding and development costs. " In fact Mr Langanger has no soothing words for investors in OMV or any other IOC. Perhaps that is why he submitted a paper and then nonetheless ended up sending a rather charming deputy who gave a far more humorous, less pessimistic point of view at the panel discussion.