Energy, Energy Service, Natural Gas &amp; Oil Sectors

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Top 700. Sep 12, 2001 3:26 PM

» Rande - Re: Re: Heard reports that some gas stations have immediately ra

In response to message posted by lcha:

Don't take it personally.

In Oklahoma, Mississippi and Michigan Tuesday, there were reports of gasoline prices as high as $5 a gallon. Missouri officials said such price hikes were illegal and wouldn't be allowed to stand.

A consumer in Los Angeles said prices at a local gasoline station rose five times in a six-hour period following the attacks to $3 from $1.29 a gallon.

.....Georgia Agriculture Commissioner Tommy Irvin deployed more than 100 inspectors to check out reports of price gouging at gasoline stations in the state, despite assurances that there wouldn't be any delays in petroleum deliveries.

He urged consumers not to hoard gasoline "that can cause temporary local shortages and unwarranted panic."

The American Automobile mirrored the sentiment, stating that "panic buying or pricing would be absolutely irresponsible."

Attorney General Jim Ryan filed a civil lawsuit Wednesday in Sangamon County Circuit Court against Iowa-based Casey's General Store alleging gasoline price gouging in several of its stations within Illinois.

Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, also condemned the gouging. "The oil supply is hugely adequate. There is no reason for any American to gouge another American. Anyone who is doing that is aiding and abetting the terrorists."

.....Assurances from the oil industry have poured in following the sudden price spikes in gasoline stations across the country.

ExxonMobil (XOM: news, chart, profile) has "supply available for retail customers and to meet contractual obligations," the oil giant said in a statement Wednesday, encouraging customers to "maintain their normal buying habits to avoid artificial runouts."

The company said it hasn't raised prices in the stations it owns and operates or to the independent dealers or distributors. ExxonMobil has also urged the independent stations "to act responsibly."

Sunoco (SUN: news, chart, profile) acknowledged that inventory fears sparked a supply strain in Ohio and Michigan, but "we want to assure the public that our refineries, pipelines and trucks are operating normally, and supply is adequate," the company said in a statement.

The American Petroleum Institute also said Wednesday that the oil and natural gas industry's greatest contribution will be "to ensure that supplies of fuel to American consumers continue uninterrupted." The agency, based in Washington D.C., assured the public that "every one of our companies is working hard to do just that."

On Tuesday, the API revealed that supplies of crude, gasoline and distillates rose during the week ended Sept. 7.

-- posted by Rande

Top 701. Sep 12, 2001 4:00 PM

» lcha - The sad truth

I have spent the past 3 days at the Society of Exploration Geophysicists Convention and Exposition in San Antonio. Every year I am amazed at the cutting edge technology hydrocarbon exploration utilizes in the neverending quest to keep our gas tanks filled and our homes powered. It is a marvelous spectacle.

That was Monday. Tuesday and today the spectacle lost its meaning. I walked the convention floor Tuesday in a numbed state as the events in New York and Washington sunk in. I felt sad and ill and, just numbed.

Today I am angry. Not at the terrorists. For them I have a hatred and venom that goes beyond anger. I am angry at ourselves.

From CA to TX to NY and everywhere in between we have made the decision over the years that we want cheap energy no matter what the cost, no matter what the price. By supporting Middle East oil dictatorships with our oil money, we have financially supported the terrorist themselves as they are funded by these dictatorships. Our oil money arms these thugs and gives them the financial means to carry out acts as we have just witnessed.

As these terrorist sponsoring countries have funded destruction over the years we have largely looked the other way, not wanting to disrupt the oil supply that we foolishly became so dependent on. They sell us oil and we give them cash. Part of that cash goes to fund terror. WE are funding terror. Saudi Arabia, Iraq, Iran, Lybia. All KNOWN sources of cash for terrorist. All selling oil to either us or other western countries.

These countries are DICTATORSHIPS! These countries fund terror! Have we sold our soul for cheap oil? Do we support dictatorships?

How many of you are willing to pay $5 for a gallon of gas if the result would be we did not import 1 drop of oil from the Middle East? We could help to cut off the life blood of these terror organizations; CASH

That is the question we must ask ourselves. If we are not willing to cut our dependence on their oil, we WILL pay the price.

-- posted by lcha

Top 702. Sep 12, 2001 10:08 PM

» JenL_2 - Re: The sad truth

In response to message posted by lcha:

Lcha - You've expressed similar comments before, but today the sad truth rings even clearer than before. I agree with you totally - we shouldn't be dependent on any country for our basic necessities of life if we have the ability and resources to produce them ourself. Although IMHO the path to peace in this world is though free trade and maintaining open communication betweem countries rather than isolationism......Jen

This post copied from the "Terrorist Attack" thread:

Author: mitelo
Date: September 12, 2001 5:44 PM
Subject: Re: Saudi ambassador said that OPEC will keep oil prices stable.

In response to message posted by ACousins:

Bin Laden and others use oil wealth from the West to try to destroy us. Go figure. We haven't done anything about it because of our love affair with our vehicles and the fear of the oil embargo. Kuwaiti Royalty gave us an "approvable" reason to invade an Arab country-but we dared not take away the bad guy's sovereignty. We were "had" then, and we are still held hostage by the oil producers.

This won't be over until we can tell OPEC to shove their oil up their camels or we take control, somehow.

Oil diplomacy is on a slippery slope that is slowly getting steeper. If we aren't pissed enough to do something now, we never will be.
---------
God, say this hasn't really happened.

-- posted by JenL_2

Top 703. Sep 16, 2001 6:51 AM

» lcha - Terrorism fight, energy use linked

Sept. 14, 2001, 11:36PM

Terrorism fight, energy use linked
By JIM BARLOW
Copyright 2001 Houston Chroncile

As the U.S. government gathers evidence about the perpetrators of terrorist attacks on our country, we will be forced to confront two failed policies.

The first, of course, is how to deal with terrorists in the world. The second is our energy policy -- or rather our lack of one. In order to do something about the first, we must confront the second. They are linked.

It appears we already have decided to change our policy on terrorism.

Tuesday night, President Bush said, "We will make no distinction between the terrorists who committed these acts and those who harbor them."

In the past, we've made such distinctions. For individual acts, we've used a legalistic approach of identifying the terrorist perpetrators, pressuring those who shelter them to give them up to our courts and convicting them.

What about the countries giving aid and support to terrorists? Well, we've tried to force them to change their ways with economic sanctions.

We know who they are. Every year, the U.S. State Department issues a list of such countries, and they contain the usual suspects: Afghanistan, Iran, Iraq, Sudan, Syria and Libya. According to the latest report, Iran is the most active sponsor of terrorism in the world.

Sanctions ineffective
Our economic sanctions generally mean only U.S. companies can't do business with them. Other countries can, and do. In cases where other countries have enforced them, specifically against Iraq and Libya, sanctions have had some effect.

As one oil executive, who asked not to be named, said Thursday: "If the sanctions had deterred terrorism, then the World Trade Center would still be standing."

Prior to the attacks on the United States, there had been quiet moves to remove sanctions on many of those countries. Even if they are not implicated in these incidents, the present political climate makes any lifting of sanctions a pipe dream.

But if we attack terrorists in the Middle East, it will set off a firestorm among huge numbers of people there who hate the United States for its support of Israel. Middle Eastern governments -- often corrupt and usually inept -- have long fed that hatred. It's been useful to them to have Israel and the United States as whipping boys to try to detract from their own failures.

Which leads us to our own energy policy.

Sure, we want those terrorists deterred. But we also want plenty of gasoline at reasonable prices to keep our sport utility vehicles on the road.

Last year we imported 58 percent of the oil we used. And 26 percent of that came from the Organization of the Petroleum Exporting Countries.

Saudi Arabian Oil Minister Ali al-Naimi said last week that his kingdom will cooperate with fellow OPEC producers to cover any oil supply shortage following the attacks on the United States.

It's doubtful that policy would hold up in the face of widespread U.S. military attacks on Arab countries.

More production needed
There is no way the United States cannot depend on imported oil, given our present consumption levels.

But if we produced more in the United States, we could better weather any cutoffs.

However, for reasons having more to do with partisan politics and emotion, we've unilaterally cut ourselves off from going after oil and natural gas where we know it exists.

Every one of those major areas in this country is now locked up. None of them alone would solve our energy shortfall. All of them together would.

Where are they? Well, the eastern Gulf of Mexico is rich in natural gas. Add to the list the oil and natural gas fields off the coasts of California, Oregon and Washington. Then there's offshore on the Atlantic coast. The upper offshore Atlantic area is full of natural gas. Look at what the Canadians are doing off their Nova Scotian coast. They are producing enough gas to supply much of New England. Then there's the Arctic National Wildlife Refuge. Just to the east in Canada, oil companies are making large discoveries.

And they are doing it without damage to the environment and wildlife.

Solving both these problems won't be easy. Worst case: A two- or three-year campaign against terrorism, a possible cutoff of Arab oil and a long-lasting recession. We as Americans have to decide if we're willing to make those kinds of tough choices.

-- posted by lcha

Top 704. Sep 17, 2001 1:49 PM

» lcha - Domestic/International

Domestic independent energy stocks held up very well relative to the International integrated's today. We should see this pattern continue as the international arena looks risky right now.

A big negative however is lower energy demand as our economy finally goes into an official recession. On the oil front, Middle East military activity might keep oil prices on a higher floor as a balance against lower oil demand.

I still feel domestic E&P companies will outperform the S&P 500 for several years.

As always, it's just my opinion. I could be wrong.

-- posted by lcha

NG & Oil Stocks Watch List

Top 705. Sep 17, 2001 2:31 PM

» JenL_2 - Re: Domestic/International

In response to message posted by lcha:

Lcha - thanks for your analysis...

Domestic independent energy stocks held up very well relative to the International integrated's today. We should see this pattern continue as the international arena looks risky right now. A big negative however is lower energy demand as our economy finally goes into an official recession. On the oil front, Middle East military activity might keep oil prices on a higher floor as a balance against lower oil demand. I still feel domestic E&P companies will outperform the S&P 500 for several years. As always, it's just my opinion. I could be wrong.

Time for an update:

Let's take a look at how the Energy Select SPYDRS fund (XLE) and the ishares Trust Dow Jones US Energy fund (IYE) are holding up:

<img src="http://chart.neural.com/servlet/GIFChart..." width=450 height=250>
XLE, IYE, S&P500, Nasdaq 1 YR Chart

How about the Major Oil Company (OIL) and Oil & Gas (ONG) indices:

<img src="http://chart.bigcharts.com/industry/bigc..." width=527 height=316>
OIL, ONG, S&P500 3 YR Chart

How about energy funds: Strong Energy Fund (SENGX), Vanguard Energy (VGENX), T Rowe Price New Era (PRNEX), Invesco Energy Inv (FSTEX), Fidelity Select Energy (FSENX)

<img src="http://pvcharts.quicken.com/bin/icenter...." width=470 height=250>
Energy Funds - Growth of 10K 1 YR Chart

.....Jen

-- posted by JenL_2

Top 706. Sep 17, 2001 4:14 PM

» lcha - Re: Re: Domestic/International

In response to message posted by JenL_2:

Thanks for the charts Jen. Glad to see I'm losing less than I could be, I guess.

-- posted by lcha

Top 707. Sep 17, 2001 7:48 PM

» JeffChristy - Gasoline demand

I wonder if the current airline problem might result in higher gasoline consumption? With 3 hour waits at the airport, more people might consider to drive rather than fly. AMTRAK usage is up as well.

-- posted by JeffChristy

Top 708. Sep 18, 2001 6:06 AM

» lcha - Re: Gasoline demand

In response to message posted by JeffChristy:

Decline in Air Travel May Lower
Prices
For Heating Oil, but Not Those at
Pump

By ALEXEI BARRIONUEVO
Staff Reporter of THE WALL STREET JOURNAL

A steep reduction in air travel probably will alleviate concerns about winter heating-oil supplies for Northeast consumers, but at the same time keep gasoline prices high in certain regions as more travelers turn to driving over flying.

The dwindling demand for jet fuel could save consumers from higher heating-oil prices this winter, energy experts said.

Jet-fuel prices on the Gulf Coast fell 1.6 cents a gallon to 76.5 cents after the six largest airlines said they would reduce capacity by 20%. Prices began slipping after last Tuesday's terrorist attacks led to an air-travel shutdown that left jet fuel piling up at Gulf Coast refineries. Prices have dropped five cents since Sept. 10.

Refiners have some flexibility to mix jet-fuel supplies into heating oil and diesel fuel, but less ability to turn jet fuel into gasoline. Refiners probably will reduce jet-fuel production by 250,000 barrels a day, or about 15%, and shift that production into heating oil and diesel fuel, said Mary Rose Brown, a spokeswoman for Valero Energy Corp., a San Antonio refiner.

After profit margins began dropping in June because of slack demand and cargoes of foreign gasoline arriving on U.S. shores, refiners cut back production, tightening inventories of heating oil.

Meanwhile, European prices for heating oil and diesel fuel are already on the rise. Higher-price Brent blend crude pushed gasoil prices up to about $265 a metric ton in the Netherlands' Rotterdam market on Friday, up from $237 before the attacks.

Philip K. Verleger, an economist with the Brattle Group in Cambridge, Mass., believes heating oil and diesel prices during the next few weeks will track the run-up in prices after Iraq's 1990 invasion of Kuwait as the military and military contractors search for immediate supplies of distillate and jet fuel. The decline in commercial jet-fuel consumption also could be mitigated by a boost in military use if a counterattack is launched.

Will more people turn to driving? Last week, some rental-car companies reportedly ran out of cars as stranded fliers used any available transportation to get back home. But with an economy slipping further into recession, analysts are skeptical.

"The jet-fuel loss won't easily be replaced by driving," said John Kilduff, an analyst at commodities-brokerage Fimat USA. "You aren't going to see a lot of people driving from New York to Chicago."

Added to that, gasoline demand is traditionally weaker in the fall and winter, when environmental requirements are less strict.

But if more consumers turn to the highways, strong demand could keep prices high in the Midwest and West, where refinery problems have crimped supply and caused prices to spike in recent weeks. Pump prices had started to drop in the Midwest, where an Illinois refinery fire blew up a month ago. This week, the national price of gasoline was essentially flat at $1.53 a gallon, while Midwest prices fell 1.6 cents a gallon to $1.63 and West Coast prices rose less than a penny to $1.66, their highest level since July 16.

Midwest consumers, in particular, could be saved from another price spike if the Organization of Petroleum Exporting Countries puts more oil on the market, said Larry Goldstein, president of Petroleum Industry Research Foundation in New York. Usually it takes a few weeks for retail prices to follow a decrease in wholesale prices.

Last week, OPEC members assured U.S. officials that they would act before prices got out of hand. That pressure increased during the weekend when Energy Secretary Spencer Abraham met with OPEC officials in Vienna, Austria, according to one official at the Department of Energy. Futures prices of crude oil on the New York Mercantile Exchange, which was closed most of last week, edged down 72 cents to $28.81 a barrel for the October contract on talk of more OPEC crude hitting the market soon.

-- posted by lcha