January 2009 Archives

The title czar does not appear anywhere in United States Government and Supporting Positions, the so-called "Plum Book" (named for its plum-colored cover), which is published after every presidential election and lists all Federal positions appointed by the President.

Job seekers will find no job descriptions remotely like "Imperial Majesty, Emperor and Autocrat, Lord and Grand Duke," which were just a few of the title bestowed on the Russian czars.

It's not even 10 a.m. on a Thursday, and here's what has been announced so far today.

In a fast-receding global economy, a handful of oil and oil services companies have kicked off 2009 with the ominous but likely not surprising news that they are readying pink slips in anticipation of worker layoffs that will come very soon.

It's always tough to know if OPEC crude reductions are having an impact.

Certainly, looking at yet another fall in the price of crude today, it's hard to argue that it's occuring. Not only did light sweet crude for March delivery on the NYMEX decline $4.15/b, to $41.88, the March-April spread widened by more than 55 cts, a sign that inventories keep finding nooks and crannies at the Cushing, Oklahoma delivery point to be stored. Spreads in the Brent market also widened.

There is no reliable evidence, but tradition has it that when General Cornwallis surrendered at Yorktown the British band played the ballad, "The World Turned Upside Down."

There is no British band within earshot, but barely one week into his term, President Obama is continuing to turn upside down the world made by former President George W. Bush

A trend that has been ongoing for quite some time, and its impact, has been summed up quite succintctly by Paul Horsnell and his research team at Barclay's.

The calls have been coming fast and furious into Platts from members of the general media, responding to people's curiousity and growing anger. Why, they wonder, do they hear reports of crude prices plunging daily, but the price at the pump has only gone higher?

Some statistics that should make it simple:

It doesn't seem like that long ago we spent a lot of time here debating over what the all-time inflation-adjusted high for crude was, prior to its first-half run to $147/b.

Cap and trade has been the focus of all of the climate legislation given serious consideration by Congress, and will be at the heart of the major climate bills Congress is expected to consider this year. However, critics contend that despite politicians' traditional antipathy to taxes, Congress ultimately will impose a carbon tax rather than enact a cap-and-trade program.

"Cap and trade will fall flat on its face," in part, as a consequence of the Wall Street meltdown, said Charles Komanoff. "The last thing the public will want to see is a new trillion dollar market in some esoteric financial instruments that is going to be conducted behind closed doors with no transparency."

This news story is not really surprising, but still gives one pause anyway.

The bottom line is that the US government can open up all the drilling opportunities it wants, but the price of oil and the capital crunch may not necessarily bring a rush of bidders.

The spread between WTI and Brent is out of whack again. But given what's going on in the market, it doesn't seem quite that odd.

Traditionally, Brent is valued lower than WTI. That makes sense for many reasons: the US is a large net importer of crude, and prices in the US need to be high enough to attract imports. If WTI consistently runs at levels lower than Brent, and the price of much of the world's crude supply is based on Brent, imports will slow considerably. But as that happens, the price of Brent-related crudes in the rest of the world will be pushed down as their supply is diverted away from the US, and Brent should return to its normal place at a level below WTI.

Imagine the scene: Interior Secretary Dirk Kempthorne walks into his private bathroom at the department after taking office in 2006 and exclaims, "I can't do my business here," or perhaps the nation's business, for that matter.

But after spending $235,000 or so in taxpayer dollars for renovations, Kempthorne finally had a facility worthy of his title, including, according to The Washington Post, lavish tiles and floor-to-ceiling wainscot wood panels, a refrigerator and freezer (in a bathroom?), and monogrammed towels (bearing the Kempthorne family crest, perhaps).

Often overlooked in assessments of recovery from last year's Gulf of Mexico hurricanes, the largest chunk of spending is yet to come in the abandonment arena with an estimated $1.8 billion to $6 billion likely required to close down destroyed fields. And that estimate comes atop the estimated $15 billion worth of abandonment work still under way from storms in 2004 and 2005.

China claimed its latest engineering laurels this week, becoming only the second country in the world to have a working coal-to-oil program. Driven by a genuine and practical obsession with energy independence, China joined South Africa as the only two nations in the world with Coal to Liquids technology up, running and churning out transport fuels.