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12.11.2000 12:53

Why There Is Fuel Crisis (Opinion)

Africa News Service

Iyobosa Uwugiaren

Novenber 10, 2000

Lagos (The News, November 10, 2000) - Honourable West Idahosa, the chairman of

the House Committee on Petroleum Products, recently spoke with Iyobosa Uwugiaren

on the findings of his committee on petroleum products.

Q: Nigerians are currently experiencing economic hardship as a result of fuel

scarcity. What did your committee find out during its oversight function in the

petroleum ministry?

A: Some time ago, the House of Representatives mandated us to carry out a

detailed study of why there is consistent fuel scarcity in the country. By far,

the biggest cause of fuel scarcity, from what we found out is that our pipelines

have been vandalised and to that extent, it is very difficult to pump petroleum

products through the pipelines. The pipelines are the most efficient method of

distributing these products.

With this, the Nigerian National Petroleum Corporation (NNPC), had to resort to

distributing petroleum products through tankers from one point to another.

One consequence of this is that it takes about 10 tankers 30 days to take what

can be pumped through pipelines. Secondly, the tanker drivers most time divert

these products and in most cases adulterate the products. Above all, the tanker

drivers have various unions. And whenever there is a slight disagreement they go

on strike. For example, from our investigations, the latest fuel scarcity was

caused by the riots in Lagos State. About 40 tankers were reportedly burnt.

Consequently, the tanker drivers resolved that until the Federal Government paid

for those tankers, they would not lift fuel from depots.

During the period of negotiation, it was practically impossible to lift

petroleum products anywhere.

Whereas as at the time they went on strike, there was about 60 million litres of

PMS at the Apapa depot. So, there is no way, you will have the product in Lagos,

if the tankers are not moving it to other parts of the country, there is no way

fuel will be available, given the fact that pipelines have been vandalised and

have been practically abandoned by the government.

Q: What did your committee find out to be responsible for this vandalisation?

A: We found out two major reasons for this vandalisation. The first reason is

profit. Those that are determined to profit from vandalisation by extracting

illegal products don't care about the economic consequences of it, in terms of

the economic cost to the government and the social consequences.

The second reason is sabotage by those who have reason to begrudge one part of

the country or the other, because they couldn't continue to reap where they

didn't sow. Both reasons remain valid till today and still persist. We have said

in our report which would be debated in the House that the first reason, talking

about profiteering, will require massive contributions of actions. It should

include, firstly, a complete review of the statutory laws regulating the

sabotage of petroleum products and the imposition of stiffer punishment. Two, it

will involve very careful panelled security network, involving the NNPC, the

security agencies, and careful monitoring of surveillance system that will

protect these facilities. Regarding sabotage, we have said that the House of

Representatives and other agencies should step up their campaign of

enlightenment about the consequences of the action of saboteurs; to remind them

about the deaths that have occurred as a result of sabotage; to remind them the

injuries inflicted on their neighbours, and to remind them of the fact that

there is practically no result from their action.

Q: Don't you also believe that part of the reason for sabotage is the abject

poverty in the oil producing communities?

A: If you know the way pipelines are vandalised, poor people cannot do it. The

science and high technology involved in the vandalisation is beyond the thinking

of the poor people in the Niger-Delta. Their involvement is to take advantage of

the vandalised spots to scoop these products so that they too can earn a living.

But the question I asked myself is: In those days when vandalisation had not

become common practice, were the poor people of the Niger- Delta not living? Be

that as it may, we in the House of Representatives are in the forefront of not

only passing the Niger-Delta Development Commission (NDDC) bill but for full

implementation of the project.

Because, that is the only way to give hope to the oppressed people of the

Niger-Delta, we are happy to say that, that is being realised. My committee has


[Endret 12.11.00 12:53 av hawk]

Per ulv
12.11.2000 14:07

Sunday November 12, 7:49 am Eastern Time
OPEC Set to Reject Consumer Calls for Yet More Oil
By Tom Ashby

VIENNA (Reuters) - OPEC exporters Sunday prepared to reject consumer calls for the extra crude supplies that would help ease stubbornly high world oil prices.

Ministers said the Organization of the Petroleum Exporting Countries will decide against topping up production quotas that already have been raised four times this year.

They were expected to meet in the hotel suite of OPEC President Ali Rodriguez Sunday afternoon. Rodriguez said there would probably be no formal session until Monday as a mark of respect following the Austrian ski train tragedy Saturday.

Oil, at $32 for benchmark Brent, remains well above the group's $22-$28 a barrel target range, but OPEC is more worried about a post-winter price slide than the impact of high energy costs on inflation.

``I think market fundamentals do not dictate another increase this year,'' said Iranian Oil Minister Bijan Zanganeh.

``In my opinion we do not need to raise production,'' said Qatari Oil Minister Abdullah al-Attiyah. ``There are adequate supplies in the market, inventories are building.''

OPEC is convinced that the 3.7 million barrels daily, 16 percent, added to production quotas this year is enough to rebuild lean petroleum stockpiles and bring prices below $28.

Consumer nations fear otherwise.

Asia-Pacific Economic Cooperation nations, meeting in Brunei Sunday, called on OPEC to make available additional supply.

``APEC ministers agreed that volatile oil prices are not in the best interests of either consumers or producers and called for an increase in supply to meet current demand,'' said Australian Foreign Minister Alexander Downer.

OPEC, though, appears to have reached the end of the cycle which has reinstated most of the supply curbs put in place when prices crashed below $10 in 1998.

Its last increase, 500,000 bpd, came at the start of November triggered by an automatic mechanism designed by OPEC to keep prices in the range $22-$28 a barrel.


Unless prices fall quickly, the rules of the device should mean another increment before the end of the month.

While still committed to their $22-$28 target, most in OPEC would prefer to suspend further automatic increases -- partly because capacity constraints mean most have nothing extra to offer.

Saudi Arabian Oil Minister Ali al-Naimi said the full impact of this year's production increases had yet to be felt in the oil markets.

``It takes time to assess what has been done. I believe the oil is in the market,'' he said. ``It took us 18 months to recover from the price collapse. We've had less than a year of the output increases.''

He declined to commit OPEC to triggering more oil with the price stability mechanism.

But he played down the concerns of some in the group that stock builds now under way would lead to a price crash next spring when world demand dips.

``There is no need to panic over a price collapse. Prices are moderating,'' he said. ``We need to get over the swings and stabilize prices, then our objective is to get it into the OPEC range.''

OPEC's leading producer, Saudi Arabia will be key to any shift in policy.

Algeria's Oil Minister Chakib Khelil has said he wants another meeting in January to discuss the possibility of an output cut for the second quarter. He has support from Iran.

OPEC also will try to resolve the thorny issue of who should succeed Rilwanu Lukman as the group's chief administrator. No clear favorite has emerged among the candidates from Saudi Arabia, Iran, Iraq and Libya. Selection requires unanimous support from 11 members.

Saa faar vi se hvem som faar rett. De som tror paa kraftig fall i oljeprisen eller vi som tror paa fortsatt hoy pris..

12.11.2000 17:32


Som vist over, er det forvewntet et gap mellom suply og demand i 2Q 2001. Jeg tror dette gapet blir mindre da OPEC har signalisert kutt i produksjon, og de siste spådommer om demand 2Q sitat:

Global demand is seen rising by at least 2 million barrels per day in the fourth quarter of 2000 and the first quarter of 2001, to an average 77.9 million barrels per day during the northern hemisphere's winter period.

her er et gjennomsnitt 4Q-00 2Q-01 Demand justert opp fra 77 til 77,9 , når de først har begynt å oppjustere vet vi hvilken vei dette går. legg merke til slutten av 2001, da demand krysser suply. Say no more.

ref. sitat: http://dailynews.yahoo.com/h/ap/20001109/bs/iea_oil_output_1.html

[Endret 12.11.00 17:34 av hawk]
12.11.2000 18:09


Standard Deviation0.
Correlation Coefficient0.950.950.950.950.950.95

Updated Thursday, November 09, 2000

Her er noen tall fra Financial forcast center

Ref: http://neatideas.com/oil.htm

[Endret 12.11.00 18:09 av hawk]
[Endret 12.11.00 18:10 av hawk]
[Endret 12.11.00 18:11 av hawk]
[Endret 12.11.00 18:11 av hawk]
12.11.2000 23:10

Interessant innlegg fra Algeries oljeminister, hvor han blant annet sier at OPEC nærmer seg hva de max kan produsere.
Han sier blant annet at OPEC kun kan produsere 1,94 Mill fat mer.
13.11.2000 16:49

Kina skal bygge opp lager på 12 millioner tonn olje innen 2010.! (bloomberg news)

Med flere land (Korea, USA, +, +) som nå ser seg tjent med å bygge opp store lagre av olje, vil man ha et vedvarende etterspørsel. Jeg tror mange land nå ser for seg at oljeprisene kommer til å stige betraktlig om 2-3 år. Å kjøpe "billig" olje nå kan vise seg å være god økonomi hvis oljeprisen om 2-3 år er på $40-50. De fleste som ønsker å bygge opp lagre vil søke å gjøre dette vår prisene er lave, dvs i 2Q. Hvis alle tenker slik kan det hende at prisene ikke synker nevneverdig. Noe å ta med i betraktning?
13.11.2000 16:54

DNO berre lekkert det.

13.11.2000 18:49

"Alle" spår oljepriser inn i himmelen p.t. Er det bare meg som synes dette strir mot fornuften. Det som nå fortoner seg så logisk for absolutt alle, hvorfor var det så vanskelig å se for 1-2 år siden med en oljepris på 10USD fatet ? Forbruket og veksten i forbruket var like kjent da. Allikevel spådde "alle" at prisen ville forbli lav de neste 10 år. Med lav oljepris er det mange faktorer som driver forbruket opp, tilsvarende med høyt forbruk. Jeg tror ikke man kan forlenge veksten i forbruket som om prisen fremdeles var 10USD fatet. Veksten vil avta, nye og gamle energikilder vil overta endel av oljeforbruket. Akkurat nå har man en gryende krise i aksjemarkedene, spesielt i ASIA, delvis p.g.a. høy oljepris. Fortsetter dette kan oljeprisen fort falle 10-15 USD fatet. Skjer det, kan utslagene på OSE bli virkelig store.

pelaris = mot strømmen når det gjelder oljepris.
13.11.2000 19:30


Energikonsumet skal prinsipielt følge en eksponentialfungsjon ikke en linær kurve.
Oljeindustrien har under tidligere priser på 10 USD stoppet all felt utvikling.
USA sin oljeproduksjon sank drastisk under siste lave oljepris periode, det lønte seg ikke å investere i ny produksjon.
Utvikling av fremtidige brønner krever normalt over 15 USD/fat.
Den "høye" oljepris du ser nå er resultat av en lav oljepris på 10-12 USD/fat over en lenger periode.
Går det som du sier, da går vi mot en oljekrise av gigantiske dimensjoner som brutalt vil overgå det du ser i dag.
Prisen vil neppe falle under 20 USD sansynligvis vil den bli værende på ca 25-30 USD.
Det er en billig pris, dersom de avgiftskåte politikerne tar å fjerner de horibelt høye skattene.
Forøvrig trenger Saudiarabia ca 25USD/fat for å hale i land et et statsbudgett som går i balanse.
Vi får ikke se slike lave oljepriser på lenge dersom nye ikke revolusjonerende tekniske løsninger gjør produksjon billigere.

14.11.2000 21:21

Energy News

11/14 14:55
Natural Gas, Heating Oil Rise as Cold Weather Boosts Demand

By Mark Shenk

New York, Nov. 14 (Bloomberg) -- Natural gas rose to a
record, and heating oil reached a one-month high, as an early
spell of cold weather moved across the northern U.S. from the
Great Plains and boosted demand for heating fuel.

Overnight temperatures fell below freezing in Chicago, in the
heart of the nation's biggest market for gas heat. The wintry
weather is moving toward the East Coast, the biggest heating oil
market, increasing concern about tight supplies of both fuels. Gas
prices have soared by one-third since late October.

``Natural gas is in vertical ascent,'' said Kyle Cooper, an
analyst at Salomon Smith Barney Inc. in Houston. ``It now appears
that the weather pattern will remain intact through the month in
all of the Midwest, which will lead to a steep increase in

Natural gas for December delivery rose as much as 30.2 cents,
or 5.3 percent, to $6 per million British thermal units on the New
York Mercantile Exchange, the highest price in 10 years of
trading. The contract eclipsed the previous record of $5.78 set on
Oct. 12.

Gas prices have more than doubled this year as increased use
of the fuel in manufacturing and electricity generation helped
keep inventories low. U.S. supplies are 8.6 percent lower than a
year ago, according to a report last week from the American Gas

Homeowners in Illinois may pay 50 percent more for gas heat
this winter than last because of higher prices for the fuel and
increased consumption because of colder weather than last winter,
a utility spokesman said.

``Our typical customer should expect what they pay for gas to
rise from $400 during the October-to-March heating season last
year to $600 or more,'' said Mark Knox, a spokesman for Nicor Inc.
in Naperville, Illinois, the state's biggest natural gas utility,
with 1.9 million customers.

Heating Oil

Heating oil, a competing fuel, has risen along with natural
gas on forecasts that the cold spell will spread to the Northeast.
Prices are up 53 percent this year.

``The cold weather will be slower getting to the Northeast,
but by the end of the weekend or early next week, temperatures
will be 4 to 8 degrees below normal,'' said Joel Burgio, a
meteorologist at Weather Services Corp. in Lexington,
Massachusetts. That ``will be a dramatic change because we haven't
had any cold weather yet.''

Heating oil for December delivery rose as much as 4.07 cents,
or 4 percent, to $1.057 a gallon on the Nymex, the highest price
since Oct. 13.

U.S. inventories of distillate fuels, which include heating
oil and diesel, are 15 percent lower than a year ago, the American
Petroleum Institute said last week. Stockpiles of heating oil
alone are about 32 percent lower.

The API was scheduled to report after trading ends today on
inventory changes last week.

Crude Oil

Heating oil pulled crude oil futures higher. The December oil
contract rose as much as 51 cents, or 1.5 percent, to $34.98 a
barrel on the Nymex. Prices have risen 39 percent in the past

U.S. crude oil inventories as of Nov. 3 were 9.6 percent
lower than a year earlier, at 281.70 million barrels, the API
said. Increased output from the Organization of Petroleum
Exporting Countries and the release of oil from U.S. government
reserves have failed to bolster domestic supplies.

Heating demand will be 48 percent higher than normal in the
north-central U.S. during the next seven days, according to
Weather Derivatives. The region -- which includes Illinois,
Indiana, Michigan, Ohio and Wisconsin -- accounts for about 30
percent of U.S. residential gas consumption, according to the
Energy Department.

Natural gas is used to heat more than 56 million U.S. homes,
or about 55 percent of the total, according to the American Gas
Association. Seven out of every 10 new homes are heated using
natural gas.

``The Midwest will be getting progressively colder over the
next three to five days, dropping to 10 to 15 degrees below normal
this weekend,'' Burgio said.

Heating Demand

Demand for heat will be 46 percent above normal during the
coming week in the Northeast, where, according to the government,
36 percent of homes use heating oil.

Unseasonably cold weather extended south to Texas and
Oklahoma. South-central states will have heating demand twice the
normal level during the next seven days, according to Weather

There were 2.75 trillion cubic feet of gas in storage in the
U.S. as of Nov. 3, down from 3.01 trillion a year earlier and
below the five-year average of 2.92 trillion, the AGA reported
last week.

The cold weather means little gas will be available to store
for the winter, when even colder weather sends demand to peak
levels, analysts said.

15.11.2000 19:49


FWN: Ipe Oil: Brent Firmer on Cold Weather, Distillate Stock Drop

Ipe Oil: Brent Firmer on Cold Weather, Distillate Stock Drop

Nov. 15-MAR--

By Bruce McMahon, BridgeNews
London--Nov. 15--IPE December Brent crude futures strengthened
considerably Wednesday on colder weather and a slight drop in heating oil
stocks reported last night by the American Petroleum Institute (API),
brokers said. At 1220 GMT, IPE Dec Brent crude futures, which expire later
today, were at U.S. $33.55 per barrel, up 86c, while front-month gas oil
was at $312.00, up $10.25.
Meanwhile, at 1215 GMT, NYMEX Dec WTI traded at $35.33 per barrel on
Access, up 46c.
* * *
--"People tended to ignore the crude and gasoline builds in the APIs
and concentrated on the distillate drop," said one broker. "Also, there's
been some fund activity this morning which has helped push up Brent ahead
of the expiry."
--NYMEX energy futures rose slightly in overnight Access trade as
American Petroleum Institute data showed a larger-than-expected gain of
2.515 million barrels in U.S. crude stocks last week, but also a
surprising drop of 55,000 barrels in distillates, which include heating
oil and diesel fuel. The drop overshadowed an unexpected gain of 3.419
million barrels in gasoline.
Distillate stocks were expected to have gained 1.3 to 1.7 million
barrels due to lower demand compared with the previous week's levels.
However, demand for distillate fuels, as implied by the API data, actually
rose last week while
domestic output fell, absorbing higher imports. (Story .1898)
--U.S. Energy Secretary Bill Richardson said Tuesday that he still
believes there is inadequate supply of crude oil in world markets and that
prices remain too high. However, in an interview on CNBC, he said the U.S.
had not expected OPEC to raise output at its meeting Monday and cautioned
against interfering in the market. (Story .23522)
--Meanwhile, Saudi Arabia Oil Minister Ali Naimi said the kingdom will
take unilateral action to supply world markets if necessary, reiterating
that OPEC's biggest producer has no intention of creating a crude
shortage. If crude prices remain above $30 per barrel in January, when
OPEC next meets, the group's choices may be limited due to capacity
constraints, Kuwait Oil Minister Sheikh Saud Nasser al-Sabbah said. (Story
--For other oil news stories, see story .1911.

--IPE Dec Brent crude futures expire today.
--IPE Dec gas oil futures expire Dec. 12, Dec options Dec. 5.
--NYMEX Dec crude futures expire Nov. 17, Dec options expire Tuesday.
--NYMEX Dec products futures expire Nov. 30, Dec options expire Nov.

PRICES (at 1220 GMT):
Last High Low Change
IPE Dec gas oil $312.00 $313.00 $306.00 up $10.25
IPE Dec Brent $33.55 $33.75 $32.80 up 86c
NYMEX Dec WTI $35.33 $35.37 $34.55 up 46c End

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