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Wednesday, July 23, 2008

Charts on Gold, the Dollar, Oil -- and News You Can Use

I"m traveling today, but I'll be back in the office tomorrow. In the meantime, here is some news you might find interesting ...


SemGroup Loses Bets on Oil

The collapse this week of SemGroup LP, a little known private oil-marketing firm, may have played a role in crude oil's 14% drop over the past 10 days. The Tulsa, Okla., company filed for Chapter 11 bankruptcy protection Tuesday, citing among other financial woes a loss of at least $2.4 billion in crude-oil futures. Changes in its hedging strategies coincided with big moves in oil recently.

US utilities say grid will be able to handle rechargeable cars

Automakers, such as General Motors Corp. and Toyota Motor Corp., are planning to bring rechargeable vehicles to the market as early as 2010. But speakers at the Plug-In 2008 conference say it will take much longer for them to arrive in mass numbers, due in part to a current lack of large-battery manufacturing capacity. Auto and battery companies still are working on the lithium-ion battery technology needed for the cars, and on how to link the battery packs to the vehicles.

A Difficult Road Awaits For Energy Conservation

Conserving our way out of this crunch won't be so easy. Here are five key reasons why.

The Coming Plunge to $80 Oil

XX Sean’s note – I don’t agree with this guy -- his view is that oil is a bubble -- but it’s good to read different points of view. The author makes a case using very select facts. If he was to include total worldwide demand forecasts and supply forcasts including the cost of extraction, he might come to a different conclusion. For starters, here are three points to keep in mind …

  1. The US used to be in the driver’s seat when it came to demand growth. Now, China, India and other emerging markets are driving demand growth.
  1. New, big oil fields are tough to find and expensive to pump.
  1. Global depletion rate of between 4% to 6% (and that’s best-case scenario) per year on current wells. We have to find massive reserves continually just to keep up.

I believe we could see a sharp correction in oil, but it will be short-term only. By the way, have you seen the latest on Mexico? …

Pemex Oil Production Falls 11% in June on Aging Field

Petroleos Mexicanos, the state-owned energy company, said oil output fell 11 percent in June from a year earlier as new wells failed to keep pace with a four-year decline in the aging Cantarell field, the nation's largest.

Production dropped to 2.839 million barrels a day in June from 3.206 million a year earlier, the Mexico City-based company, known as Pemex, said today on its Web site.

At Cantarell, where a drop in pressure is making it more difficult and costly to extract oil, the company pumped 1.017 million barrels a day, down 35 percent from a year earlier and the fastest rate of decline in 12 years, Pemex said. The company is pumping 33 percent more from the Ku-Maloob-Zaap field to make up for the decline at Cantarell.

Arctic Region May Hold 90 Billion Barrels of Oil, Geological Survey Says

The Arctic may hold 90 billion barrels of oil, more than all the known reserves of Nigeria, Kazakhstan and Mexico combined, and enough to supply U.S. demand for 12 years, the U.S. Geological Survey said.


Fannie Mae Unsold $5 Billion Homes Shows Why Shares Bring Investing Peril Fannie Mae, the largest U.S. mortgage finance company, couldn't find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. in Flint, Michigan. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000.

XX Sean’s note – read this Fannie Mae story and tell me the housing crisis is anywhere near over.


Gold Falls in N.Y. as Dropping Energy Costs Reduce Inflation-Hedge Demand

Gold fell the most in six weeks as slumping energy costs and a stronger dollar cut demand for the metal as a hedge against inflation. Silver also declined.


When Jellyfish Attack

The bad news, according to experts, is that there's more of that gummy pain on the way. Overfishing and other destructive human activity have prompted the prolific multiplication of jellyfish by decimating their natural predators: tuna, sharks and turtles. That, and the fact that global warming has raised the water temperature of the Mediterranean by a degree, have produced an explosion of the jellyfish population and a prolonged presence of the creatures in waters where humans like to flounder.

Researcher says Gulf dead zone bigger than ever

"It's definitely the worst we've seen in the last five years," said Steve DiMarco, a Texas A&M University professor of oceanography who for 16 years has studied the Gulf of Mexico dead zone, so named because the oxygen-depleted water can kill marine life.

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