more oil news
Jun. 13th, 2005 04:58 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
chelidonOil soars $2 a barrel -- Dealers worry about strong global demand for diesel, and signals that OPEC can't rein in prices
NEW YORK (Reuters) - Crude oil surged 4 percent Monday as dealers worried that rising global demand for diesel would outpace refiners' ability to produce the fuel, and OPEC ministers signaled the cartel is powerless to rein in runaway prices with an output hike.
Two of the key points are this:
U.S. diesel demand over the past four weeks has run more than 6 percent higher than last year, according to the most recent government data, as the trucking industry moves Chinese imports to market from the West Coast.
and this:
"The market accepts that OPEC is producing almost at capacity, and there is very little it can actually do to bring down prices," Rob Laughlin at Man Financial in London said.
Iranian oil minister Bijan Zanganeh said OPEC was helpless as it was producing very close to full capacity.
As diesel and aviation fuel prices continue to rise, the real cost to consumers of imports will rise, since transportation will become more and more expensive. One problem there is that the U.S. and indeed, most of the western world, has very little native manufacturing capability left -- much of heavy industry and manufacturing has moved offshore. So as foreign import costs rise, it's not as simple as switching to domestic products. First we'll have to build the factories in the first place. And that has its own issues -- one of the reasons New England is so comparatively clean and unpolluted these days is, besides low population density, the fact that most of the mills, some of which generated quite a bit of pollution, closed down earlier this century.
Demand for oil keeps rising, here and in the third world, and we're now seeing concrete proof of what the "radical doom-sayers" have been saying for a while now, which is that nobody, anywhere -- not OPEC, not Venezuela, nobody, has enough excess capacity left to meet demand. There's very little new oil out there to be found, so we are almost certainly seeing the beginning of the end of cheap oil, and all that entails for the world economy and the way of life to which we've become accustomed. The only real question is how fast it will become an actual crisis, and how bad it will get.
NEW YORK (Reuters) - Crude oil surged 4 percent Monday as dealers worried that rising global demand for diesel would outpace refiners' ability to produce the fuel, and OPEC ministers signaled the cartel is powerless to rein in runaway prices with an output hike.
Two of the key points are this:
U.S. diesel demand over the past four weeks has run more than 6 percent higher than last year, according to the most recent government data, as the trucking industry moves Chinese imports to market from the West Coast.
and this:
"The market accepts that OPEC is producing almost at capacity, and there is very little it can actually do to bring down prices," Rob Laughlin at Man Financial in London said.
Iranian oil minister Bijan Zanganeh said OPEC was helpless as it was producing very close to full capacity.
As diesel and aviation fuel prices continue to rise, the real cost to consumers of imports will rise, since transportation will become more and more expensive. One problem there is that the U.S. and indeed, most of the western world, has very little native manufacturing capability left -- much of heavy industry and manufacturing has moved offshore. So as foreign import costs rise, it's not as simple as switching to domestic products. First we'll have to build the factories in the first place. And that has its own issues -- one of the reasons New England is so comparatively clean and unpolluted these days is, besides low population density, the fact that most of the mills, some of which generated quite a bit of pollution, closed down earlier this century.
Demand for oil keeps rising, here and in the third world, and we're now seeing concrete proof of what the "radical doom-sayers" have been saying for a while now, which is that nobody, anywhere -- not OPEC, not Venezuela, nobody, has enough excess capacity left to meet demand. There's very little new oil out there to be found, so we are almost certainly seeing the beginning of the end of cheap oil, and all that entails for the world economy and the way of life to which we've become accustomed. The only real question is how fast it will become an actual crisis, and how bad it will get.
