G.U.N. Oil Report

With a 3-day weekend ahead, it seems that the news media has taken off a day early. Today’s wire feeds are about 50% slower than yesterday in content, with a lot of reprinting of the same articles.

The U.S. Senate Committee on Energy and Natural Resources is ready to dig their fingers into a new pie next week as they hold a hearing to look into various oil shale development proposals. This hearing will be held on-site in the Western Slope regions of Colorado and Utah. “I don’t see that oil shale today is a panacea to the energy crisis we have in America,” says Sen. Ken Salazar (D-Colo) who will be joining Committee Chair Pete Domenici, R-N.M., and Orrin Hatch, R-Utah in Grand Junction, Colorado. ¹ “We have more recoverable oil in Wyoming, Utah and Colorado than there is in the Middle East, and this field hearing will help us learn how to tap into this resource as quickly and responsibly as possible,” says Dave Tabet, energy and minerals program manager for the Utah Geological Survey. ²

Patent No. 7,048,051 covers an invention by Ronald E. McQueen of Park City that is titled “Recovery of products from oil shale” has been assigned to Gen Syn Fuels of Kalispell, Mont. Already the preferential treatment and monopolization starts. ³

Internationally, Janek Parkman, CEO of Viru Chemical Group, says that “several new shale oil factories are likely to appear in Estonia in the next decade.” The Estonias oil industry is finding very high demands for liquid fuel to power the growing industrial expansion. They also currently import Natural Gas from Russia, but oil production creates Natural Gas as a byproduct, which could be used to partially meet the demand for the gas. ⁴ The Caspian pipeline between Azerbaijan and Turkey transported its first cargo of oil worth US$4 billion. This 1,768km pipeline will pump about 300,000 barrels of oil this year, and is expected to grow to 1 million barrels daily. BP has a 30.1% stake in the project, which had started construction 10 years ago. 5

OpEd writer Raymond J. Learsy says that “Oil is Not Scarce — The Oil Industry Continues to Play Us For Fools.” He says that “most people have been bamboozled by the oil industry led by its flacks, by compliant analysts, by peak oil spinmeisters, a snoozing press, and the heavy artillery brought to bear by the Organization of Petroleum Exporting Countries.” I tend to agree with him as I don’t believe in Peak Oil, but I also don’t believe that we’re seeing an oil price crisis. Considering the high costs of the Federal Reserve’s madness in inflating the money supply non-stop, oil is not significantly more expensive versus my income compared to 10 years ago. While I miss the days of paying US$1.50 per gallon at the pump, I was also earning half my income at that point. Learsey also covers many available sources of petroleum that are currently not tapped to peak efficiency. ⁶

Natural Gas Intelligence is reporting that ” Energy Lenders Like U.S. Market Best.” Dan Condley, managing director in Banc of America Securities’ natural resources group, says that in the next few weeks Banc of America will announce another $400 million raised for a private energy firm. ⁷

Next week, the Organization of Petroleum Exporting Countries (OPEC) will be meeting in Venezuela in what should be a test of President Hugo Chavez’ ability to influence the policy of the oil cartel. Chavez is pro-nationalization of Venezuela’s resources, which can bring with in great inefficiencies and unprofitability from a market sector that was one of Venezuela’s greatest export profit bases. Venezuela’s reserves are pegged at about 80 billion barrels of oil, but the country believes it has 235 billion barrels. If this can be proven, it would put Venezuela ahead of the current world leader in reserves, Saudi Arabia. ⁸

The results of the Federal Trade Commission’s investigation into possible “price gouging” post-Katrina are in, they’re saying that there was no evidence of price gouging during the natural disaster. The FTC performed examinations on 30 refiners, 23 wholesalers and 24 single-location fuel retailers and released their 222-page report this week that found “no instances of illegal market manipulation.” Sen. Barbara Boxer (D-Calif) said in a statement that this is “business as usual from the FTC.” ⁹

Crude oil prices on the NYMEX fell ahead of the 3 day weeked. The NYMEX closes early and Friday and will be closed on Monday in observance of Memorial Day. Natural Gas prices were steady on the same market exchange. ¹⁰ AAA expects prices to remain high even with the dip, citing a forecasted aggressive hurricane season ahead along with a Federal Energy Information Administration report that forecasts high gas prices. ¹¹

Discuss this article at the oil report forum.