December 2008 Archives

There are New Year best wishes -- then there is wishful thinking.

As the air falls out of crude oil prices and 2009 gets forecast by many economists as one of deep recession, you can almost hear the fingers-crossed, wishful thinking from Brazil's Petrobras in their electronic holiday greeting card sent round the world -- as if their PR crew had been goaded into keeping things upbeat. "Happy new era, with good news," said Petrobras's English-language subject line.

So what did our readers think was a bigger deal? The price going up? Or the price coming down?

Nobody takes more grief than ExxonMobil. It's been that way since John D. Rockefeller's day. Exxon's headquarters formerly had been at 1251 Avenue of the Americas in New York, next door to where Platts was located for the first 14 years of my career here. Long after the company had moved the headquarters to Texas, protestors would show up, usually driven by the Exxon Valdez, but not exclusively. The funny thing of course was that while the company still had some offices there, the leaders of Exxon were thousands of miles away, in Irving, Texas. The protestors were mostly venting their rage at ghosts.

When it comes to acronyms - from "A": ADAM/BAE (air defense airspace management/brigade aviation element) and AFDIGS (Air Force digital graphics system); to Zed: ZULU (time zone indicator for universal time) - the US military to hard to top.

However, give the United Nations Framework Convention on Climate Change - UNFCCC, if you please - honorary mention for its own alphabet soup.

New York--The attorneys general of all 50 states, joined by US Senator Charles Schumer, have called for an investigation into what Schumer called "unconscionable" recent increases in gasoline prices.

"Recent information from the American Automobile Association shows that the oil companies are up to their old ways," Schumer said at a press conference, surrounded by the 50 AG's, their spouses, their mothers, and several of their economic advisors, who were able to get out of school early. "There seems little doubt that we need to launch a new investigation into why this profiteering has resumed."

Here's one for US Department of Energy Secretary Samuel Bodman: Take it from the Chinese and buy low when stocking your Strategic Petroleum Reserve.

Platts runs a conference every year called (unofficially) the "Bottom of the Barrel", which covers the very unglamorous world of residual and bunker fuel.

Resid is known as the bottom of the barrel because it is, in fact, the leftover thick, viscous sludge left over at the bottom of a refinery's distillation tower once the lighter fractions are boiled off.

OPEC ministers met November 29 and most agreed that members need to cut production at its next OPEC meeting on December 17. With demand steeply lower and global inventories higher, the $64,000 question is just how much should they cut?

According to Philip Verleger, it's got to be a big cut.

The "Drill, baby, drill" crowd appears poised for a reality check that should shake them beyond the results of November's elections, if recent comments from oil sector honchos are any indication. Those executives in essence are saying you can scream "Drill, baby, drill" all you like, but any response remains dependent on the people who actually do the drilling. And they are more interested in real world economics than political rhetoric.

Once again, we want your views on what are the top 10 oil stories of 2008.

I think everyone can agree that this year was quite a year. It seems almost premature to put out the list on December 4. Who knows what might happen in a mere 4 weeks until 2009 arrives?

During the Cold War era, PBS producer Hedrick Smith, then a New York Times reporter in Moscow, wrote a book called The Russians. In it he described the chronic scarcity of everyday goods in that country in the Soviet era, and the long waiting lines when items became available. Frequently, Smith said, when Russian citizens saw a line forming, they queued up--often before they even knew what was on sale--just in case the item turned out to be something they needed.

Senator James Inhofe, Republican-Oklahoma, who famously called global warming a hoax perpetrated by left-wing environmentalists, took a swing at the Environmental Protection Agency for improper use of agency funds and potential violation of law -- and whiffed.

Inhofe questioned the preparation and release by the agency of information related to the agency's consideration of a request by the State of California for a waiver allowing the state to regulate carbon dioxide emissions from motor vehicles. The request was made by William Reilly, EPA administrator under President George H.W. Bush from 1989 to 1992.

Here are a set of numbers: 8.0, 6.6, 5.3, 4.3, 3, 2.1.

Although US East Coast traders can not look out and see Russia from their windows, many see Russian gasoil imports on the horizon.

New York Harbor No.2 oil spot prices tumbled more that 10 cents/gal during the Monday trading day on a combination of weaker futures prices, mild weather and imports from Russia.