Sunday Energy Roundup

Sunday Energy Roundup

#1: The National Bank of Scotland says the U.S. could face gasoline shortages this summer.

http://tinyurl.com/fhsz6

Likely U.S. consumer reaction: How can I run out of gas? My 12-mile-per gallon Chevy Tahoe has a 26-gallon tank! (Check out these subversive Chevy Tahoe ads, by the way)

My analysis: It’s too early to predict a U.S. gasoline shortage or no. Hurricanes and the damage they potentially cause are the wild card.

#2: The Sunday Telegraph in the UK has a story about how the US and the UK are holding secret meetings to bomb Iran back to the stone age.

http://tinyurl.com/erk8f

Likely U.S. consumer reaction: Don’t bother me, American Idol is on!

My analysis: Such an attack would only make sense if you’re a member of the far-right wing in Israel or an end-times apocalyptic kook. Sadly, both are over-represented in the White House.

The funny thing is that Iran supplies a lot of natural gas to Europe. For a European nation, this would be a case of cutting off your nose to spite your face.

#3: “major global oil exporters saw their oil revenues rise from less than $300 billion in 2002 to almost $700 billion in 2005. That resulted in a quadrupling of their current account surplus (which includes financial transactions as well as trade in goods and services) to about $400 billion. In turn, the external accounts of the United States and other oil-importing countries have deteriorated, intensifying global economic imbalances and dampening growth in energy-importing countries.”

http://tinyurl.com/rmk3c

Likely U.S. consumer reaction: Damn those A-rabs! Now, get out of the way of my Chevy Tahoe!

My analysis: Look at it from a commodity bull point of view. The Middle Eastern oil sheiks are taking some of that surplus money and spending it on gold. Gold and gold jewelry sales in Dubai are up 20% year over year. Imports of raw gold into Dubai only rose 4% in tonnage terms, however – still plenty of room for growth in a country where developers are building 300 man-made islands in the shape of a map of the world as an enclave for the filthy rich. Middle Eastern gold demand helps drive our gold positions higher. That’s pretty much win-win, unless you have children and don’t want to see the world go to heck in a handcart.

#4: Wall Street Journal says Peak Oil is a Shattered Myth

http://tinyurl.com/ppam2

The RigZone tries to keep this at arm’s length by quoting the Wall Street Journal. Apparently, Canada’s oil sands and Venezuela’s oil sands will save us.

Likely U.S. Consumer Reaction: Phew!

My analysis: If anyone really believes oil sands will solve our energy problems, they are either lying to themselves or have undergone a frontal lobotomy. That doesn’t mean the oil sands won’t make some investors rich – especially with bucketloads of government money being thrown at it (Ottawa subsidizes the petroleum sector to the tune of $1.4 billion a year, and allow energy companies to write off 100% of capital expenditures for an oil sands asset in the year it is spent, rather than over the lifetime of the asset) . But it won’t solve the long-term (and worsening) problem.

By the way, did you see that Venezuela's oil minister said Wednesday that Exxon Mobil Corp., the world's second-largest integrated oil company, was no longer welcome in Venezuela, one of the world’s most oil-rich nations? Somebody better send Chavez a fruit basket to kiss and make up.

Check out my new gold and energy blog at MoneyAndMarkets.com