Crisis Energética Foros

Recently, Mark LeVine did a pioneering piece for Tomdispatch on the nature of
the chaos in Iraq, including what he termed "sponsored chaos." The two
piggybacked Tomgrams below remind us that the present visible chaos in the
region may be nothing compared to the chaos to come -- and that on all sides
there are parties (and not just American ones) ready to "sponsor" a distinctly
chaotic future.

Iraq, as we all know, sits on vast oil reserves that, for complex reasons, have
turned out to be difficult indeed to get out of the ground and to market.
Despite the fact that the Bush administration is, by prior experience, an energy
administration with a geo-energy view of how our planet works, our media spent
much prewar time ignoring the issue of Iraqi oil and the clear desire of
administration hardliners to plant further American military bases in the heart
of the energy lands of our Earth. Oil, as a subject, was largely left to the
business pages, when dealt with at all during those prewar (and then postwar and
then, again, war) months.

Anyway, that was then, this is now. As Marshall Auerback and Brandon Sprague
both indicate, we should brace ourselves for future oil "wars" of unexpected
kinds. Auerback, an international portfolio strategist, considers one of Bob
Woodward's recent revelations -- that the Saudis had promised the Bush
administration a positive pre-election oil surprise -- and suggests that
Woodward's information, undoubtedly gathered many months ago, is at best out of
date. The surprise, it turns out, may be all on the Bush administration.

Brandon Sprague, a freelance journalist and former student of mine, points to an
unreported level of planning underway in Baghdad and Washington when it comes to
oil -- what the Bush administration in the prewar months referred to as Iraq's
"patrimony" -- that could rouse Iraqis to the sort of uprising as yet
unimagined. Whether or not Iraq was initially an oil war, Americans, Iraqis, and
others in the Middle East could soon enough find themselves in a genuine set of
oil wars with chaos to spare. Tom


No "October Surprise" Courtesy of the Saudis
By Marshall Auerback

"When we first got here, we tried making friends. We did everything we could to
make friends with these people. Then I started evacuating my friends [who had been killed or injured], and it wasn't cool anymore." - US Marine Jeremy
Heidrick in Iraq, St. Louis Post-Dispatch, 19 April 2004

Worried about $40 per barrel oil? You needn't be, if Bob Woodward is anyone to
go by. According to Woodward, Saudi Arabia's ambassador to the United States,
Prince Bandar bin Sultan, promised President Bush the Saudis would cut oil
prices before November to ensure the U.S. economy is strong on Election Day. In
an interview with CBS's 60 Minutes about his new book Plan of Attack on the Bush
administration's preparations for the Iraq war, Woodward, a senior editor at the
Washington Post, said Prince Bandar pledged that the Saudis would try to
fine-tune oil prices to prime the U.S. economy for the election -- a move they
understood would favor Bush's reelection.

It sounds wonderful, but if such a pledge was ever given, Saudi actions in the
past year suggest that it has been revoked, largely in response to the growing
geopolitical morass that is developing in the Middle East. In the aftermath of
Gulf War II, it was felt that mobilization against Iraq would give the United
States a renewed opportunity to expand its power and influence in the region --
this time potentially to use its new Persian Gulf bases to establish even more
bases in the ancient territories between the Tigris and Euphrates rivers in
Iraq, while remaking a hitherto backward region into a bastion of Anglo-American
liberal-democracy. More importantly, many of the neo-cons who now dominate
Administration thinking felt that the oil fields seized as a by-product of this
invasion would give the United States a de facto seat in OPEC, and control over
a huge cash-generating asset required to fund its massive domestic and overseas
debt build-up. At the same time, it was also hoped that President Bush would use
his expanded leverage to press for a comprehensive settlement of the
Palestinian-Israeli conflict.

All of these blithe assumptions look questionable today, to say the least --
none more so than the assumptions about oil.

After the end of the Iraq invasion, the oil price fell sharply to $26 (WTI),
although little of this can be ascribed to the Saudis, who have been producing
at roughly the same capacity of between 8.5 and 9.4mmbd of crude oil, natural
gas, and gas liquids for the past ten years, according to figures collated by
independent oil analysts, Groppe, Long & Littell (GLL). These price forecasts,
made by a number of prominent Wall Street banks such as Citicorp, were based on
two assumptions: precautionary inventories built prior to the Middle East
hostilities would be liquidated and, under the U.S. occupation, Iraqi oil would
flow soon and copiously. In turn, that Iraqi oil would at least pay for the
occupation and reconstruction of Iraq -- so believed neoconservative planners in
Washington and in the new Coalition Provisional Authority set up by the Bush
administration in Baghdad.

Since the U.S. occupation of Iraq began, the pipelines north of Haditha have
been the targets of repeated sabotage. The result, according to GLL, is a
shortage of natural gas and the inability to use all of the capacity of Iraq's
refineries. Consequently, the country is still producing well below its current
estimated capacity of 2.5mmbd of crude oil production. Equally problematic from
the Americans' perspective is the increasingly unaccommodating policy stance of
the Saudis, who had hitherto been relied upon to offset looming oil shortages.
As it now stands, the Israel-Palestine conflict has no direct impact on Middle
Eastern oil supplies. However, it has led to a movement of solidarity among
Middle Eastern states against the Bush administration's perceived one-sided
support of Israel and in addition has led the Saudis, fearing their "special
relationship" with America to be under threat, to play the oil card in a manner
highly inimical to American economic interests.

It is not as if the Bush Administration wasn't warned: Before his visit to
Bush's ranch near Crawford, Texas, Crown Prince Abdullah (through his
interpreter) told the press that allowing the Israeli-Palestinian conflict "to
spiral out of control will have grave consequences for the United States and its
interests." On June 10th last year, the Saudi oil minister, sent letters to the
companies negotiating contracts for participation in the natural gas industry of
the Kingdom. Subsequent to those letters, the following has occurred:

*July, 2003 - The Saudi government announces gas agreements with Shell
(Anglo-Dutch) and Total (French)

*August - State visit to Moscow by Crown Prince 'Abd' Allah-al-Saud

*September - OPEC ministers adopt Saudi Arabia's proposals to reduce production
quotas, despite of expectations in advance of the meeting that the status quo
would be maintained.

*January, 2004 - Saudi Arabia announces gas agreements with Lukoil (Russian),
Sinopec (Chinese), Agip (Italian), and Repsol (Spanish)

*February - OPEC Ministers adopt another Saudi proposal to reduce production
quotas.

Note the complete exclusion of U.S. energy companies in all prominent new Saudi
energy ventures; this is hardly consistent with an ostensible pledge to flood
the market with oil around October to guarantee the election of a President
viewed to be fundamentally hostile to Islamic interests by the vast majority of
OPEC nations. It is equally salient that the officially stated OPEC price range
of $22-$28 per barrel has largely been ignored by virtually all OPEC members
(judging from the extent to which they are producing above agreed quota numbers)
- not only because higher prices can be sustained in spite of this widespread
"cheating" on quotas, but also because of growing opposition among its members
to American policies in the Middle East.

The new, largely unarticulated high oil price strategy should be viewed in the
context of Saudi promises to invest billions in the development of the Russian
energy industry, and suggestions of an emerging Russo-Saudi oil alliance. Last
December, the Russian government announced that its policy for production is to
stay under 9.0mmbd for the next five years. Five years is also the term of the
oil and gas co-operation agreement signed with Saudi Arabia on September 2,
2003, at the end of the state visit by Crown Prince Abdullah.

The significance of this alliance for the oil market lies in the fact that, in
1998, the value of Russian oil exports was a mere $16bn. In 2003, their value
was over $63bn -- second only to the $80bn worth of exports by Saudi Arabia.
This increasing cohesion of Russian and Saudi energy policies is occurring
against a backdrop in which the oil supply/demand balance is tighter than usual
and long-term depletion rates are much higher than is generally recognized.
Although Saudi Aramco (the state oil company) has historically done what is
required to offset declines in existing oil fields and maintain an estimated
capacity of approximately 10mmbd through new projects, the higher production
required to generate a sharp fall in oil prices cannot be achieved without more
personnel and investment, according to both GLL and Houston-based oil analyst
Matt Simmons of Simmons & Co, who has recently undertaken an extensive study of
the Saudi oil fields.

In fact, given that most OPEC members are already producing close to full
capacity (and well in excess of official quota figures), without significant new
discoveries in Russia, the effects of more rapid depletion dynamics will
manifest themselves much earlier than currently envisaged by the market. From a
peak of 11.06mmbd in 1988, Russia's actual crude oil production in 2003 had
fallen to a little less than 8.0mmbd, according to GLL. Much of the new
technology introduced to develop Russia's energy fields will only accelerate
rates of depletion in existing fields, leaving remote areas of Siberia as the
key variable in determining whether the Putin administration can achieve its
publicly stated goal of 9.0mmbd production, let alone get anywhere near the
peaks sustained during the late 1980s.

Given that the Saudis and the Russians are two of the world's largest oil
suppliers, the effects of their de facto alliance cannot be overestimated. In
early 2003, Saudi Arabia facilitated the invasion of Iraq by temporarily
increasing oil production, but all actions subsequent to a June 10th Saudi
decision to end negotiations with U.S. companies on the development of the Saudi
natural gas fields have been consistent with a broader Saudi reassessment of its
respective relations with both the U.S. and Russia.

In 2002, the OPEC oil ministers met 4 times. In 2003, they met 7 times. Thus far
in 2004, they have already met twice. The significance of the increased
frequency of these meetings over the past 18 months (at least in contrast to the
comparative paucity of meetings from the early 1990s through 2002) is that it
has allowed OPEC member states to better minimize the risks of overproduction
relative to quota allowances. The monitoring of overproduction can be more
accurately calibrated with more frequent meetings, note Groppe, Long, & Littell.
In fact, GLL argues that OPEC has in effect moved closer to the old model of the
Texas Railroad Commission, which still sets monthly allowances for production in
Texas. As GLL notes: "The genius of the monthly meetings of the Railroad
Commission is that the commissioners did not have to depend on their ability to
forecast accurately. Any mistakes made - and some were - could be corrected at
the next meeting."

The goal here appears clear: limit overproduction and keep oil prices high, not
flood the market with cheap oil. And with the Saudis clearly not playing ball on
oil, one can only surmise that their hitherto almost reflexive move to recycle
petrodollar surpluses back into the dollar has likely dissipated as well,
removing an important marginal bid in the bond market, at a time when
inflationary pressures are intensifying and 10-year bond yields have headed
north of 5%. The broader economic and geopolitical implications are enormous:
the House of Saud, which has cultivated a special relationship with successive
U.S. administrations since the days of FDR, seems to have effectively decided
that politically and economically distancing itself from at least the present
American government provides a much better means of ensuring its long-term
survival.

All of this implies an increasingly precarious backdrop for U.S. financial
assets and the dollar, the rallies in which do not fully reflect today's
deteriorating geopolitical and economic variables. Consumers have reached debt
saturation with short-term rates at 1%. What happens as rates rise and the oil
price explodes? A further price spike in energy could well exacerbate a growing
inflationary psychology now predominant in the credit markets, which in turn
could undermine the Fed's recent efforts to "talk down" yields on long-term
interest rates.

An oil shock potentially endangering U.S. national security and economic
interests is the last thing a debt-saturated America, embarking on expensive
overseas ventures, needs right now. Yet that appears to be where we are headed
today, the consequences of which are not yet fully reflected in the markets.

Marshall Auerback is an international portfolio strategist for David W. Tice &
Associates, a US money management firm with approximately $1 billion in assets.
His weekly "International Perspective" can be seen at PrudentBear.com

Copyright C2004 Marshall Auerback

........................................

The Real Oil War in Iraq
By Brandon Sprague

The present fighting, dying, and general chaos in Iraq has been severe enough to
send official Washington into something of a panic. It could prove, however, to
be but a modest introduction to the potential disaster in store if the
neoconservative economic planners of the Coalition Provisional Authority (CPA)
act, as they have indicated they might, to cut Iraqi oil and cooking gas
subsidies after the installation of a government of "limited sovereignty" on
July 1. The issue has not even been raised in the American media, and yet
planning for it in Baghdad and Washington has, evidently, proceeded apace as
part of the "privatization" of Iraq's economy. For anyone with some knowledge of
the present Iraqi situation, this might seem, on the face of it, an act of
inconceivable folly, but given the CPA's track record on economic and other
issues so far, it must be taken as a serious possibility.

For the last 13 or so years, Iraqis have had their gasoline for free, or almost
free, which may come to a surprise to Americans who are now paying record-high
prices to fill up their tanks. In Baghdad, the cost of a gallon of gas averages
just eight cents, approximately 28 times less than the average cost in my
hometown of San Francisco. The absurdly huge price difference prompted
Congressman Doug Ose (R-Sacramento) to jokingly suggest Californians skip
visiting their local filling stations and get their gas shipped directly from
Iraq.

Unfortunately, the joke is on us. For the last year, American taxpayers have
been footing the bill -- as much as $1 billion and counting -- to underwrite a
subsidy system created by Iraqi dictator Saddam Hussein, who (despite what many
in the administration still insist) did not spend every available dinar on
secret weapons of mass destruction programs or on his ever-expanding system of
opulent palaces and monuments. After the UN imposed comprehensive sanctions
against Iraq in 1990, Hussein poured state funds into subsidies on basic goods
to keep the Iraqi people from rising up against his oppressive and weakening
regime. Coalition officials have for months stated that government subsidies
must be "phased out as a matter of economic necessity." But for Iraqis, who now
view access to cheap fuel as a birthright, the subsidy is a small consolation
for having lived under a brutal dictatorship and now a protracted occupation.

Many of the ethnic and religious tensions -- among Kurds in the north, Shia
Arabs in the South and Sunni Arabs in between -- have traditionally revolved
around the control of major oilfields. But there is one thing all Iraqis can
agree on -- the country's oil belongs to Iraqis. Last August, when shortages
drove up gas prices in Basra, the until-then peaceful Shia population took to
the streets in a violent, deadly, weeklong protest against Coalition troops.
Removing the subsidy for good would certainly incite far worse.

This has already led to disagreements between CPA planners and the Iraqis in its
hand-picked Governing Council over when and how to remove the subsidy. Merek
Belka, Poland's two-time finance minister and a big advocate of shock therapy in
his own country, was appointed economic director of the CPA by Paul Bremer
himself. In September, he said that subsidy elimination was "much more important
than privatization" because "liberalizing" prices was the first step towards a
free market. But that same month Iraqi Oil Minister Ibrahim al-Uloum told the
Houston Chronicle that it was not proper to discuss raising oil prices when his
workers at the ministry "don't have clean drinking water."

This tension will only intensify when the Americans nominally hand over power to
Iraqis two months from now. The new Iraqi leadership, whether it is pro-American
or not, will have enough sense to know that removing the costly subsidy would
quite literally be political suicide and could indeed lead to a bloody revolt
against any U.S.-appointed transitional government. At the same time, the new
leaders might not have a choice. The nation already owes $120 billion in foreign
debt and while oil production is now hovering near pre-war levels and is
bringing in much needed revenue, it will take decades for Iraq to undo the
devastation of three wars and 12 years of crippling economic sanctions.

The deciding factor in what could be a decidedly unbalanced subsidy debate is
likely to be in Washington D.C. at the headquarters of the International
Monetary Fund (IMF), which says it will provide $4.25 billion in loans once a
representative government has been put in place on June 30, but only under the
sort of onerous privatization conditions for which the IMF has now become famous
or infamous depending on your point of view. Iraq, of course, desperately needs
the money and the Governing Council thus far has done everything in its power to
meet the preconditions for an IMF loan. The loan itself would depend in part on
the ability of any new "government" to demonstrate to the IMF that its economic
programs are strong and aimed at moving the country toward what's termed "open
market reform." But a quick look at the IMF's record in politically fragile
countries shows its advice sometimes does more harm than good, especially when
it comes to pushing for politically sensitive budget cuts such as subsidies.

In 2003, the IMF urged Haiti to eliminate its petroleum subsidies and to allow
the price of gas to be determined by market forces. Because the IMF promised a
$50 million loan as a reward, the small, coup-prone country obliged. The price
of gasoline and cooking fuel promptly soared 130 %, causing nationwide strikes
and violent protests against the government of Bertrand Aristide in which a
student was killed.

Similarly, riots threatened to interfere with President Bush's trip to Nigeria
last July after the oil-rich West African country dropped its gasoline subsidy
in an attempt to woo the IMF back into a lending relationship with it.
Indonesia? The same pattern occurred there in 1998: Fuel prices surged 71 %
after subsidies were cut at the behest of the IMF, triggering street riots,
which left two dead.

There is no indication that the Fund would approach Iraq differently, even
though it is already a war zone. In Iraq: Microeconomic Assessment, IMF experts
wrote that "the reduction of domestic oil price subsidies would be highly
desirable to eliminate their distortionary effect."

There are certainly manifold problems with the present system. The country's
broken down refineries only produce about half of the supply of oil and cooking
gas that Iraq needs. The lines at gasoline stations remain unusually long,
something which Coalition officials attribute to the huge influx of cars into
Iraq. Smuggling of siphoned off Iraqi oil to neighboring countries, where
gasoline is ten times more expensive, is rife; while gas station owners often
dilute the gas they sell with water in order to stretch supplies and raise
profit levels on such an inexpensive commodity, which results in many sputtering
engines on the streets of Baghdad.

The way in which, on taking over from Saddam, the CPA has supplied the fuel --
and funded the subsidy -- has been fraught with controversy. In December, the
Pentagon cancelled a Halliburton contract to buy and ship gas products into Iraq
from Kuwait because the company had allegedly overcharged the government by $67
million.

To this journalist's untrained eye, the immense cost of the subsidy is either
missing from or hidden in Iraq's IMF-compliant budget for 2004, although the
food and agricultural subsidies are clearly marked as government expenses.

That is a bad sign for two reasons. As an extra-budgetary expense, the subsidy
tab will continue to be picked up by the Americans and, even without
Halliburton, importing fuel to keep up with Iraqi demand is a huge cost -
upwards of $90 million a month. In addition, if such costs are not even included
in the budget, perhaps that is a signal that the subsidy is scheduled to be
phased out earlier rather than later -- and that the CPA will be capable of
doing so by fiat even after a new "sovereign" government is installed in July.

When I was in Iraq last summer, I met a Baghdad restaurant owner named Riath
Abdul Razak Hassen. Lines at gas stations then, as now, were as long as tempers
were short. American soldiers guarding the stations had been fired at. Although
gas was cheap it was in remarkably short supply. A colleague and I were talking
with Hassen about Iraq's vast reserves of oil and, upon finding out we were
Americans, he promptly said, "Bilafia," or "bon appetite," since he believed
that our country was about to help itself to his oil fields.

"May the oil give you good digestion," he was essentially saying, as if he had
tossed all 100 billion barrels that Iraq is supposed to have in reserves into a
fine vinaigrette salad and served them to us. Of course he spoke ironically. He
had just been telling us that he would have to shutter his restaurant because he
couldn't afford to run the fuel generator needed to bring electricity to the
establishment. Iraqis consider it as a national right to have inexpensive
gasoline and cooking gas. Take that away from them and the Iraqi occupation
would most definitely become a war about oil.

Brandon Sprague, a freelance journalist and recent graduate of the Graduate
School of Journalism at the University of California, spent part of last summer
reporting for Salon.com and other places from Baghdad.

Copyright C2004 Brandon Sprague

.....................


Financing problems deal another blow to Iraq oil


Fri Apr 30, 2004 08:24 AM ET
By Khaled Yacoub Oweis
http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5000965

BAGHDAD, April 30 (Reuters) - Iraq has lost the only short-term option to
finance oil projects by scrapping a $1.4 billion borrowing plan, raising more
doubt about its ability to sustain output, industry insiders said on Friday.

The occupied country has quietly rejected the debt offer from a U.S.-led banking
consortium, which involved mortgaging oil exports, as consensus is lacking on
how to invite foreign companies and political instability discourages
investment.

"It was a good borrowing plan, based on technical needs and lacking the
political interference we usually experience in Iraq," a well-connected Western
oil executive told Reuters.

"They basically had no other option. Foreign investors will not come and invest
in oil field development until there is an energy law they could rely on," he
added.

Iraq needs to finance dozens of projects designed to help double production to
five million barrels per day in the next five years. The plans include setting
up a national oil company to run the sector as a new government works out how to
invite foreign investment without compromising national ownership.

Iraq's oil revenue is under U.S. control and will remain so until a
"representative" government is in place as stipulated by a U.N. resolution last
year. Most of the oil revenue in the 2004 budget was spent on paying government
salaries so far.

The oil sector has been facing production problems since the 1990 crippling
economic embargo. Postwar looting and sabotage compounded the problem.

Private engineers say problems abound, including more wells becoming unusable
from lack of maintenance and power to inject water. Crude oil pumping capacity
is also weak.

The postwar oil ministry has unveiled a number of projects, including pipelines
and new wells, but none has been implemented due to the absence of financing.

The tenders helped convince international companies to set up operations in
Iraq. They now say lack of project funding and worsening security is making Iraq
unattractive.

"Our frustration is growing. Oil officials are telling us to wait for a new
government to see how these projects will be financed," said one oil services
executive.

"The decision we have to make now is whether to pull out from Iraq, after
opening here and waiting for a year for nothing," he added.

It remains unclear why the borrowing plan was scrapped after it won support from
key politicians, including Ahmad Chalabi, who heads the Governing Council's
finance committee

Although the consortium included a U.S. government agency, U.S. oil officials in
Baghdad opposed the deal, saying it was too costly.

The plan's supporters said nationalist sentiment against selling state assets
and lack of direct U.S. funding left Iraq with little choice except borrowing.

Council member Naseer al-Chaderji said the ministry had not put the borrowing
plan to the full council and he was not aware of plans to do so.

The ministry's funding is separate from U.S. oil projects in Iraq. Most of the
$2 billion the United States spent so far was for repairing oil infrastructure
and importing oil products -- contracts that mostly went to Texas-based
Halliburton (HAL.N: Quote, Profile, Research) .


...............

Speculators Bet on Oil at $50 a Barrel by Summer
Fri Apr 30, 2004 02:23 PM ET
http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=5004379

NEW YORK (Reuters) - Speculators banking on crude oil prices going much higher
than already lofty levels now, perhaps hitting $50 a barrel by summer, are
raising the ante, bets in the crude oil options market showed on Friday.
Those speculators, playing on the potential of oil supply being disrupted with
violence in the Middle East on the rise, have bought crude oil options with
strike prices of $40 and $50 on the June to October contracts, data from the
NYMEX Web site show.

Call options are popular among oil traders because it doesn't take much money to
buy them and the rewards could be very handsome.

"At the current call premium, what does it cost these speculators to get the
deal on the board, $140 per contract? You could take up a collection in the
office," said Tim Evans, senior energy analyst at IFR Energy Services in New
York.

"This is playing the crude oil lottery by buying, say a $140 ticket on the
off-chance that prices push through those levels. But you'd need a truly
significant supply disruption on the order of, say Iraq supplies evaporating,"
Evans noted.

"Or another nationwide strike in Venezuela as an alternate cause. They're still
looking for an August referendum on (President Hugo) Chavez so if you're looking
at September crude options it might serve to hedge both of those possibilities,"
he added.

While some speculators think prices will hit the roof due to geopolitical
events, many are also placing bets that prices will drop below current levels,
which are near the 13-year high settlement of $38.18 hit on March 17, the same
data show.

The reason for betting prices will go down, say analysts, is that crude oil
supplies are on the rise, making it safer for oil traders to buy call options
with strike prices at or below $38.

Crude oil prices hit an all-time high of $41.15 on Oct. 10, 1990, two months
after Iraq invaded Kuwait and amid the buildup to the first Gulf War.

The open interest on options on the June contract with a strike price of $40 is
a hefty 10,196, that for $50 number only 467. The options expire on May 17.

The open interest for July and August for $40 call options were at 2,662 and
3,399, respectively, while those for $50, at 51 and 949, respectively. Those
options expire on June 17 and July 15.

Interestingly, the options opened for September for those prices have shot up,
with the $40 strike price showing an open interest of 7,947 and for $50 at
7,941. The September options expire on Aug. 17.

For October, $40 call options decline to 2,919 and $50 to just 388, with options
expiring on September 16.

Bets that prices will stay at or below current levels are also sizable.

June call options at $38 and $38.50 are 4,477 and 1,489, respectively. In the
same month, open interest for $33 options are at a relatively high 8,098.

Open interest for options at those prices for July, August, September and
October range from a few hundreds to a few thousands.

..............
BP Don't See Their Future In Iraq

30.04.2004 9:01
http://www.neftegaz.ru/english/lenta/show.php?id=48033

BP's CEO John Browne announced that his company has no future in Iraq,
informing that it will barely participate in Iraq recovery.

John Browne indicated he had given up on Iraq because of serious deprivation of
the political and security situation in the country.

Yet only 18 months ago he was extremely enthusiastic about prospects, lobbying
in Washington and London to ensure American rivals did not cut him out of the
action.
"We need a government, we need laws, and we need decisions. We have not got any
of that yet. A whole range of steps need to be taken," said the BP boss as he
unveiled new record profits this week.

The pessimistic view about the future in Iraq was expressed hours after Lord
Browne had met the prime minister at the launch of a new climate change
organization.
"We have let it be known that the thing we would like to make sure, if Iraq
changes regime, is that there should be a level playing field," Lord Browne had
said.

03-05-2004 CADENA SER / Eladio Meizoso

El precio de los carburantes está más caro que nunca, por mucho que su expresión en euros no nos haga conscientes del precio que se paga. En lo que va de año las gasolinas han subido 8 centimos. Las petroleras avisan que a partir de junio las cosas pueden ser peor.

En la última semana las gasolinas han subido algo más de un céntimo el litro; el gasóleo casi un céntimo. La gasolina sin plomo cuesta de media 87,6 céntimos el litro, 146 pesetas, algo nunca visto en nuestro país. Tampoco los 94,6 céntimos, 157 pesetas, de media, para la gasolina super.

Se trata de precios medios que se quedan cortos para la mayoría de gasolineras de mayor consumo, sobre todo en las comunidades que aplican el impuesto autonómico, Madrid y Galicia.

En lo que va de año las gasolinas han subido 8 céntimos. El gasóleo ha elevado su precio en cuatro céntimos; está a 73,7, 123 pesetas el litro, lejos aún de sus máximos históricos.

Pero, según el director general de la patronal petrolera española, la tensión en los precios aún puede aumentar. Las reservas de gasolina están bajas, y la OPEP produce lo justo para atender la demanda, no para recuperar las existencias, de ahí que no acabe de llegar el alivio a los precios.

Speculators Bet on Oil at $50 a Barrel by Summer

Fri Apr 30, 2004 02:23 PM ET

http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=5004379

NEW YORK (Reuters) - Speculators banking on crude oil prices going much higher than already lofty levels now, perhaps hitting $50 a barrel by summer, are raising the ante, bets in the crude oil options market showed on Friday.


Those speculators, playing on the potential of oil supply being disrupted with violence in the Middle East on the rise, have bought crude oil options with strike prices of $40 and $50 on the June to October contracts, data from the
NYMEX Web site show.

SAUDI ATTACK SPARKS HUGE FUEL RISE FEARS

Jun 1 2004

EXCLUSIVE

By Bob Roberts And Gary Jones


TERRORISTS plotting to devastate the global economy by sabotaging vital oil supplies had the fuel-hungry West on red alert last night.

The concerns come amid warnings that another attack on Saudi Arabia, the world's major oil supplier, is imminent. Otro ataque inminente

Petrol is set to rise 20 per cent to 92p a litre following the weekend slaughter of 22 people in al-Khobar if, as expected, oil prices rise from $40 to $50 a barrel. Lo que supone de 1,38 euros por litro de gasolina en el RU.. de nuevo aviso de la subida del crudo a 50$ el barril

Chancellor Gordon Brown was urged yesterday to scrap plans for a 2p rise in fuel duty, planned for September, to ease pressure on motorists and transport operators.

But experts believe prices could spiral out of control if terrorists interrupt oil supplies leading to fears of a world energy crisis, global slump, tumbling house prices and a collapse in consumer confidence. Shon tiene razón..otro dato, es que este periódico tiene una importante circulación en el RU y es cercana a los Laboristas. Lo que dice aquí es alarmante de verdad

Justin Urquhart Stewart, of Seven Investment Management, has "no doubt" that fuel prices could hit $100 a barrel, equal to about £8 a gallon of petrol. He said yesterday: "Terrorists have found the weak spot in the lifeline of Western capitalist states. Primer analista hablando de 100 $ por barril

"Just a few more events in Saudi could cause very significant problems. A ver que va a pasar??

"It would take remarkably little to cause a destabilisation here in the UK, let alone on a global level. We're not just talking about the impact on oil prices, but investment and job creation. It's a nasty-looking recipe." Alarmante lo que dice aquí

A surge in the price of oil will renew fears of a world energy crisis not seen since the dark days of the early 70s.

State oil giant Saudi Aramco has vowed to keep its crude supplies flowing smoothly in a bid to stop prices soaring out of control.

But that will not be enough to head off today's expected surge which will hammer drivers in the pocket. Head of economics at the accountancy firm Numerica Maurice Fitzpatrick said a 20 per cent rise in the price of a barrel of oil was "widely predicted".

Urging Mr Brown to scrap his planned 2p duty rise, he said: "The extra revenue will bring in an extra £5billion to the Treasury, so the Chancellor could actually cut fuel duty by an extra 8p."

CBI Chief Economic Adviser Ian McCafferty also called for the rise to be dumped. He said: "The outlook remains vulnerable to rising oil prices and potential financial market instability."

Liberal Democrat Norman Lamb, who is on the Commons Treasury Committee, said the Government must respond to the crisis. He said: "It would be entirely wrong for it to profiteer from this surge in prices.

"The Chancellor has to be ready to delay or drop the fuel duty increase. If prices are going up, it is wrong to impose it."

But the Treasury urged caution and said the signs emerging before an OPEC meeting of oil-producing countries on Thursday were "positive". A senior spokesman said: "All this speculation about fuel duty is just that - speculation. We are focused upon the price of oil. Ministerio de Economía Británico dice que todo es especulación.. pronto lo veremos

"It's too high. That's why the Chancellor is working with oil-producers to boost production." La hora de la verdad.. a ver si pueden incrementar la producción.. problema es que .para el año que viene ¿que pasará?

Mr Brown will hold crisis talks with Opec leaders before Thursday's crucial summit. habla de crisis.. después de decir que todo es especulación!!

He will make clear that Britain believes the price of oil is already too high.

And he will urge Opec to increase production to ease pressure on petrol prices at the pump. A ver si puede.. o es posible!!

Crude oil prices have already risen by about 25 per cent this year, reaching levels not seen since the early 1980s. Higher than expected demand in China and India has added to the pressure, with speculators cashing in by hoarding supplies.

The al-Khobar massacre was the second major attack on the Saudi Arabian oil industry in less than a month.

Yesterday Britain's ambassador to Saudi predicted that another terrorist incident in the kingdom was "probable".

Declaring that the country was "facing a serious and chronic threat", Sherard Cowper-Coles said: "There is an active terrorist campaign here - and Westerners are the targets."

The Foreign Office in London has advised against all but essential travel to Saudi and urged visitors to take great care.

Its website warned: "We continue to believe that terrorists remain determined to carry out further attacks in Saudi Arabia, and that these may be in final stages of preparation.

"The threat includes, but is not limited to, residential compounds and diplomatic and other official premises."

Yesterday Prince Turki al-Faisal, Saudi ambassador to London, said everything possible was being done to defeat terrorists out to hold the Western world over a barrel.

Five of six cells known to be active in Saudi Arabia had been dismantled in the last year, he told the BBC.

But he added: "These things can take decades. It took you two decades to get over terrorism in Britain. These people are willing to kill themselves to achieve their purposes. It's practically impossible to prevent them totally from taking action."

THE CRUDE TRUTH

EVERY motorist knows the price of fuel has shot up in the past couple of weeks. But we ain't seen nothing yet.

The most conservative forecast in the wake of the terrorist attack in Saudi Arabia is that the cost of a barrel of oil will leap by 20 per cent.

The 80p-per-litre barrier has been smashed and we are fast heading for 90p.

That will hit the economy hard as well as millions of individuals. The price of a lot more than fuel will rocket, as it did during the oil crisis 30 years ago.

Chancellor Gordon Brown may have to curb fuel duty again to steer us through this difficult time.

But we have to be prepared to face the consequences of higher oil prices.

Quote by PPP: Una pildorita, en El Inconformista Digital.

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