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[As Robert Hirsch says, the problem is liquid fuels. --JAH]
Oil soars $2 a barrel
Dealers worry about strong global demand for diesel, and signals that OPEC can't rein in prices.
June 13, 2005
http://money.cnn.com/2005/06/13/markets/oil.reut/index.htm?cnn=yes
In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
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.
U.S. light crude for July delivery soared $2.08 to settle at $55.62 a barrel on the New York Mercantile Exchange, after a 1.4 percent slide Friday. London Brent futures, which fell more than $1 Friday, were $2.11 higher at $54.78 a barrel on the International Petroleum Exchange.
The strength tracked big gains in heating oil and gas oil futures as oil traders focused on surging world diesel consumption, which could leave consumers with tight distillate stockpiles ahead of the Northern Hemisphere winter.
Heating-oil futures, which are the benchmark for pricing distillates like diesel and jet fuel, jumped to a fresh two-month high, near $1.68 a gallon.
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.
Fresh data from Germany's oil-industry umbrella group showed Monday that German heating-oil sales were also up more than 50 percent in May compared with a year ago, while total oil products sales were up 13 percent.
"Diesel prices have been sustained by several factors, including strong global demand, extended refinery maintenance on upgrading units, and refinery disruptions in the Caribbean," Goldman Sachs said in a report.
Dealers have been concerned that refiners are ill-equipped to handle the strong growth in diesel demand while still upping production for gasoline during the summer driving season.
Opec hike
The Organization of Petroleum Exporting Countries signaled it was ready to hike its production ceiling by half a million barrels per day at its meeting Wednesday.
But the cartel acknowledged the move would likely not raise actual output because of a lack of spare production capacity and a shortage of refineries to run the crude.
"We are prepared to raise the ceiling," Saudi oil minister Ali al-Naimi said in Vienna ahead of the Wednesday meeting. "But where are the customers?
"You know and I know that what is driving the price is not supply. It's the lack of refining capacity worldwide."
OPEC is already pumping well above formal quotas, so any increase to the official quotas will merely legitimize current overproduction.
"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.
"We are worried about it, but we can't do anything," he said of the price. "Prices will remain high until 2006 or 2007, as there will be no excess capacity in the market until then."
The first tropical storm of the Atlantic hurricane season over the weekend left the offshore-oil industry mostly unscathed, with most oil companies saying they were resuming normal operations after brief production outages.
Gold is Approaching An Important Breakout
http://www.goldmoney.com/en/commentary.php#current
In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
Although the bear market rally in the US dollar persists, gold has nevertheless managed to climb higher against the dollar, closing Friday at a 5-week high. It closed in New York at $427.40, and is now back above its 200-day moving average.
However, much of Friday's strength occurred after London had closed for the week. In London gold ended the week at $423.35, more than $4 below the New York close. Given that London is far more important than New York (because prices in London more accurately reflect the demand for physical metal while New York is almost entirely a paper market), the technical picture for gold is not as strong as I would like it to be.
I like to see gold close the week at the same level in both markets, and in any case, I always put more weight on the London price. As it is, the late strength in New York may simply be a reflection of futures traders covering short positions, and not demand for physical metal.
Consequently, this coming week is likely to be important. Will London follow through on the upside? This question can be answered by the following chart.
This chart presents the price of gold in terms of German marks and euros. It is clearly a very bullish looking chart, but just as clearly, gold has not yet broken out from its base.
Gold closed Friday in London at Dm 683.04 (€349.23). This compares to Dm 689.31 (€352.44) achieved on the New York close. While this latter price was a record high for gold in terms of the euro (which is less than 5-years old), it was not of course a record high in terms of the mark. As we can see from the above chart, there was no breakout from the huge basing pattern being formed (the saucer formation on the chart).
To breakout from this pattern, gold needs to close above Dm 706.31, the price it reached on July 30, 1993. This price equals €361.13. We are almost at that level, but 'almost' is not enough. Gold needs to break above €361.13 to give a clear signal that it is in a new uptrend against the euro, and I expect this breakout will happen soon.
The foremost reason to expect a breakout is the untold ramifications of the French and Dutch votes rejecting the proposed European constitution. These are proving to be far-reaching. As I have recently written elsewhere:
As the problems with the dollar became increasingly obvious over the past few years, investors were faced with the question, if I sell my dollars, where do I put them? They chose to put their dollars in the euro and some of the other European currencies, all of which rose against the dollar.
However, that decision to buy the euro was a knee-jerk emotional reaction, not a logical one. There was no meaningful analysis of the euro, whether its current position or long-term potential. And the reality is that the euro is little better than the dollar.
There are of course some positives to the euro compared to the dollar. For example, Europe tends to have a higher savings rate than the US, and there is relatively little consumer debt being used to sustain excessive consumption, as is now occurring in the US. But at the end of the day, both the euro and the dollar suffer from the same flaw - they are managed by government bureaucrats and subject to the whims of politicians. They are both fiat currencies that can be created at will. Both currencies lack a rigid discipline, like that which used to be imposed on national currencies when countries followed the rules of the classical gold standard.
Consequently, the French and Dutch vote has finally caused investors to re-think their initial knee-jerk, emotional reaction to sell dollars and buy euros. It is now becoming increasingly clear to them that they don't want dollars or euros. So what do they do now?
Some national currencies may benefit from a flight from the dollar and the euro. The commodity-based countries like Canada and Australia may see their currencies strengthen against both the US dollar and the euro. And the Chinese yuan is surely going to rise against the dollar and the euro eventually. But these currencies cannot possibly handle all the hot-money looking for a safe home. So where will this money go?
The answer is clear to me - first and most importantly, it will go to gold. Then it will flow to a lesser extent to silver, other commodities and other forms of tangible assets.
The French and Dutch vote has caused a serious and massive rethinking of where one should place their liquidity. In other words, it raised the question of what money should one hold?
Some buying is now filtering back into the dollar, lifting it further in its bear market rally. Some money is going into the currency of resource-based countries. For example, the Australian dollar and to a lesser extent, the Canadian dollar, were relatively strong against the euro this past week.
However, a more important trend is emerging. Money is now fleeing all national currencies, seeking the safe haven offered by gold. It is this trend that will continue to carry gold higher in its on-going bull market, which is a bull market not only against the US dollar, but all fiat currencies.
___________________________________________
Published by GoldMoney
Copyright © 2005. All rights reserved.
Edited by James Turk, alert@goldmoney.com
Fears that new strain of bird flu will kill millions
By Geoffrey Lean, Environment Editor
12 June 2005
http://news.independent.co.uk/world/environment/story.jsp?story=646217
In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
International experts fear that bird flu is mutating into a strain that will cause a worldwide pandemic, killing many millions of people after the mass deaths of wild birds in China.
Unconfirmed reports say that more than 100 people have also died, suggesting that the virus may have evolved to pass from person to person, breaking the final barrier preventing a worldwide catastrophe.
The Chinese government, while denying the reports of human deaths, has adopted emergency measures in Xinjiang, its remote north-western province, and has sealed off affected areas with roadblocks and closed all nature reserves.
"We are worried," says Noureddin Mona, of the UN Food and Agriculture Organisation's representatives in Beijing. "We should be prepared for the worst."
Shigeru Omi, of the World Health Organisation's regional director for the western Pacific, says "the virus has become highly pathogenic to more and more species".
"It remains unstable, unpredictable, and very versatile.
"Anything can happen. Judging from the way the virus has behaved, it may have new and unpleasant surprises in store for us."
Experts have long believed that the virus is spread by wild birds, but until now they have been thought to be immune to its effects. Last month, however, more than 1,000 were found to have died from the flu at the Qinghai Lake Nature Reserve. A second outbreak, in Tacheng city - on the border with Kazakhstan, 1,000 miles east of the lake - infected more than 1,000 domestic geese, of which 460 died.
A Chinese-language website called Boxun News and an internet medical alert system called pro-MED report that 200 people have been infected, of whom 121 died. The two sites first alerted the world to the Sars outbreak in 2003 when the Chinese authorities denied it.
China similarly denies that any people have been infected. But the government admits to alerting its heath departments around the province to prevent the spread of the disease and to opening special departments in hospitals for "screening patients with fever".
[The so-called NWO with its power centralized in the US is being outflanked everywhere by China and the members of the BRIC (Brazil, Russia, India, China) alliance. Even Henry Kissinger has of late been kissing China's booty. We wonder how long before the US and its vassal states are compelled to respond and in what ways. Clearly the only major cards left for the NWO to play are military and technological.
We see now that oil and gas reserves are finite and scarce. It seems that the "other side" is doing a better job of securing them, especially since they have so many dollars to spend in the process and the US's "credit cards" are maxed out. - MCR]
India and China start cooperation in securing worldwide crude oil and natural gas resources - Russian state oil firm Rosneft to be shared by India and China
Balaji Reddy
Jun. 11, 2005
http://www.indiadaily.com/editorial/3103.asp In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. Something unprecedented is happening in Asia. The two most populated countries of the world have agreed to work together to secure and use crude oil and natural gas reserves. Indian and Chinese firms have expressed the most interest in buying shares of Russian state oil firm Rosneft, which should soon be partially privatized, Energy Minister Viktor Khristenko said June 10. Rosneft is the second-largest oil firm in Russia behind LUKoil in terms of output, with production of 1.45 million barrels per day. Energy is critical for both the countries to grow at a staggering rate. India and China [are] slowly planning to work together in securing the oil and gas reserves in the world.
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Oil soars $2 a barrel