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Entrepreneurs lug cheap Mexican fuel across border

Posted by Charlie Kilo on July 13th, 2008

Better margins than drugs?

U.S. and Mexican entrepreneurs with an eye for a quick buck are buying subsidized fuel in bulk in Mexico and hauling it across the U.S. border to make big profits, officials say.

With a yawning gap between the cost of Mexico’s state-subsidized fuel and record U.S. pump prices, tanker truck owners and people doing business on the border are filling up tanks or plastic barrels with Mexican fuel and selling it in the United States.

Gasoline in Mexico is around a third cheaper than in the United States. For diesel, prices are more than double — well over $4 a gallon in U.S. border states compared to just over $2 in Mexican border cities.

“It is true tanker trucks are coming from the United States to fill up with supplies in Mexico,” Mario Osuna, the head of Mexico’s consumer watchdog agency Profeco in Baja California state where Tijuana is the capital, said on Thursday.

“There is no way of sanctioning foreigners who come to Tijuana and buy gasoline to sell in their country,” Osuna told Reuters. “Mexico does not have regulations relating to that.”

Border residents who have spotted the price anomaly are jumping on the export bandwagon, taking containers of fuel over the border in pickup trucks to sell.

“We cannot deny that this type of small-scale contraband is going on,” said Joaquin Avina, president of the Association of Gas Stations of Tijuana, Tecate and Rosarito.

At Last, Some Truth About Iraq and Afghanistan

Posted by patriot on June 25th, 2008

No, it’s not about oil! They hate us because we’re free, right? Or so I’ve been told…

After a sea of lies and a tsunami of propaganda, the ugly truth behind the Iraq and Afghanistan wars finally emerged into full view this week.

Four major western oil companies, Exxon, Mobil, Shell, BP and Total, are about to sign US-brokered no-bid contracts with the US-installed Baghdad regime to begin exploiting Iraq’s oil fields. Saddam Hussein had kicked these firms out three decades ago when he nationalized Iraq’s foreign-owned oil industry for the benefit of Iraq’s national development. The Baghdad regime is turning back the clock.

This agreement comes as talks are continuing between the Washington and its Baghdad client regime over future US basing rights in Iraq. After some face-saving Iraqi objections, it is expected that Baghdad will sign a compact with Washington giving US forces control of Iraq and its air space in a manner very similar to Great Britain’s colonial arrangement with Iraq.

Interestingly, the same oil companies that used to exploit Iraq when it was a British colony are now returning. As former US Federal Reserve Chairman Alan Greenspan recently admitted, the Iraq war was all about oil. VP Dick Cheney stated in 2003 that the invasion of Iraq was about oil, and for the sake of Israel.

Iran urges OPEC to move off the dollar

Posted by patriot on June 17th, 2008

Looks like we’re closer to “bomb, bomb, bomb Iran” (since Iraq was trying to move off the dollar before we invaded there):

Speaking at a ceremony to open the 29th ministerial meeting of the OPEC Fund for International Development (OFID), Iran’s President Mahmoud Ahmadinejad repeated his proposal made about six months ago in a rare summit of the Organization of Petroleum Exporting Countries’s heads of states.

“The fall in the value of US dollar is one of the pressing problems of the world today,” warned the Iranian president at the conference in Isfahan on Tuesday.

He further expressed concern over the adverse effect of the dollar depreciation on the international community, especially energy exporting countries through increasing the price of commodities like wheat, rice and oilseeds.

Ahmadinejad said he warned six months ago in the summit conference in Riyadh that there were many indications pointing to continued fall in the value of the greenback.

“And we see that this continues to happen and the resources and wealth of OPEC member countries have been hugely damaged.

“I again repeat my previous proposal; we should have a basket of different international hard currencies as the basis or the member countries should come up and produce a new hard currency for petroleum contracts,” he stressed.

“They get our oil and give us a worthless piece of paper,” Ahmadinejad said earlier after the close of the summit in the Saudi capital of Riyadh.

Pain at the Pump: It’s Time to Start Thinking About $7 a Gallon Gasoline

Posted by Charlie Kilo on June 12th, 2008

I’m getting burned out over speculative talk about gas prices, why they’re going up, and where they’re going to. I see several problems with this article:

U.S. consumers barely had time to get used to the idea of $4 a gallon gasoline before prognosticators started talking about $5 a gallon fuel.

And unfortunately for the U.S. economy, the worst is yet to come.

The average price of gasoline in the United States broke $4 a gallon for the first time Sunday, following a double-digit surge in oil prices last week. And despite an economy that appears to be in an increasingly fragile state, experts are already debating the potential for gasoline to hit $5 this summer.

But here’s what most economists aren’t saying yet: U.S. motorists could easily be looking at $7 a gallon gasoline within two years. And that could have a disastrous impact on the U.S. economy.

“The bottom line is that the effect on the economy is going to be a lot worse than anyone’s talking about right now,” said Money Morning Investment Director Keith Fitz-Gerald, a longtime energy bull who recently boosted his oil-price projection to $225 a barrel. “The bottom line is this: Until someone develops a truly [interchangeable] alternative for oil and gasoline - something that works the same, costs the same and is just as effective - Americans are just going to have to face the fact that over time they’re going to pay more.” 

First off, I don’t think society will bear anything above $6 a gallon of regular gas. Second, developing alternative gas replacement will take at least 30 more years. The only alternative we have (beyond looking for alternative means) is the drill in Americas plentiful oil reserves and release more supply into the market place. The question is: With record profits are oil companies even willing to drill in order to increase supply? With a limited supply and ever increasing demand oil profits will only continue to climb.

Saudi calls for talks with oil consumers

Posted by Charlie Kilo on June 9th, 2008

This is strange. The Saudis just told George Bush to go pound sand over oil prices. Now, only weeks later they want to talk?

Oil kingpin Saudi Arabia called on Monday for talks with consumer nations on soaring world prices and reiterated its readiness to meet any increase in demand. At a meeting chaired by King Abdullah, the Saudi cabinet restated its view that the leap in prices that saw New York’s benchmark contract hit a record 138.54 dollars on Friday was unjustified by fundamentals.

But it added that it had asked Oil Minister Ali al-Nuaimi to “convene a meeting soon of representatives of producer and consumer nations and firms operating in the production, export and trading of oil to discuss the jump in prices, its causes and how to deal with it objectively”.

“Saudi Arabia … has notified all oil companies with which it does business, as well as consumer nations, of its readiness to provide them with any additional quantities of oil they need,” added the cabinet statement carried by the official SPA news agency.

Oil’s Record Jump Defies Single Explanation

Posted by Charlie Kilo on June 9th, 2008

When the lid is finally blown off this thing its going to make Enron look like a local dime store robbery: 

Oil’s record jump to $139 a barrel at the end of last week defies any single explanation, although some leading analysts and producers predict the price could yet go higher.

Crude jumped $10.75 on Friday to $139.12, taking two-day gains to more than $16.

Some put the move down to comments by an Israeli minister about a possible attack on Iran, the world’s fourth-largest producer.

Others cited strong oil market fundamentals.

“There is a strong fundamental baseline to all of this,” said Kevin Norrish, oil analyst at Barclays Capital. “On top of that, Iran has come back onto people’s radar screens.”

Related: oil falls after record jump

Peak oil survivalist

Posted by Charlie Kilo on June 9th, 2008

Interesting CNN video on Peak Oil.


 

Dow falls on poor jobs report, oil at $133 per barrel

Posted by Charlie Kilo on June 6th, 2008

The Dow is taking a hit today due to bad news on several fronts:

Stocks plunged after the sharpest jump in the unemployment rate in more than 20 years and news that wholesale inventories ballooned. Oil jumped more than $6 a barrel.

The employment report showed that U.S. employers cut jobs for a fifth straight month. Nonfarm payrolls shed 49,000 jobs in May, better than the 58,000-decline expected. April was revise to show 8,000 more job losses than previously expected. The unemployment rate shot up to 5.5 percent from 5 percent in April, the biggest monthly jump since 1986.

“I’ve been trading these markets for 25 years; to see a jump like this is a little scary,” Jack Bouroudjian of Brewer Investment Group told CNBC. “But, these markets have already factored in that weakness.”

The market’s initial knee-jerk was a sharp sell-off but economists pointed out that the historically high jump in the unemployment rate was likely a statistical fluke.

Ethanol feels squeeze: Amid rising oil and food prices, biofuel industry losing its friends

Posted by Charlie Kilo on May 26th, 2008

Corny:

Not long ago, the fledgling ethanol industry was the darling of investors, farmers, the federal government and a lot of Americans who liked the idea of turning corn into fuel. 

But suddenly, it doesn’t have nearly as many friends. 

Rising worldwide food prices and shortages have spurred calls in Congress to roll back the federal requirement that increases the amount of ethanol and other biofuels blended with the nation’s gasoline supply. Critics say so much corn is being used for ethanol that there’s less available for people and animals to eat, raising prices of everything from tortillas to meat.

What’s more, investors who bought into the industry in good times aren’t seeing the returns they had hoped for as once-record profits began to fall.

China: supply and demand is driving up oil prices

Posted by Charlie Kilo on May 21st, 2008

Its simple supply and demand:

Soaring oil prices have not slowed China’s consumption of oil as statistics show that China’s apparent consumption of crude oil and refined oil products both hit record highs in the first quarter of the year.

According to statistics released Tuesday by the China Petroleum and Chemical Industry Association (CPCIA), China’s apparent consumption of oil products composed of gasoline, diesel and kerosene rose by 16.5 percent year on year to 52.73 million tonnes in the first three months, and crude oil, rose by 8 percent to 91.8 million tonnes.

The “apparent consumption” represents the sum of net imports and output and could be taken as an index for the real oil consumption excluding inventory.

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