Oil prices soar as Iran resumes nuclear enrichment

[bemildred]

At this point it seems safe to say that Chavez and Ahm-an-idjit are playing from the same script.

SYDNEY, Feb 6 (Reuters) - Oil prices surged on Monday after Iran resumed uranium enrichment and ended United Nations checks of its nuclear sites in response to being reported to the Security Council over concerns it is building nuclear weapons.

---

"Our enemies cannot do a damn thing. We do not need you at all. But you are in need of the Iranian nation," Ahmadinejad told a crowd in Tehran on Sunday.

WORSE THAN HITLER

Adding to geopolitical uncertainty, Venezuelan President Hugo Chavez told a rally of supporters on Saturday that U.S. President George W. Bush was worse than Hitler and vowed to buy more arms to defend his nation as diplomatic relations deteriorated after a week of tit-for-tat diplomatic expulsions.

Chavez warned he could shut Venezuelan oil refineries in the United States and sell oil for the U.S. market elsewhere if Washington cuts off ties, although U.S. officials have made no suggestion they plan to break relations.

Reuters

[Strelnikov_]

1. America Will Fall Harder If Oil Prices Rise Again

http://www.nytimes.com/financialtimes/business/FT20060202_21730_52992.html?_r=2&oref=slogin&oref=slogin

The continued strong growth contrasts sharply with the economic weakness that occurred after almost every previous significant rise in the oil price. How do we explain this remarkable difference? And what are the implications for the likely response to a future rise in oil prices?

The key to the economy's strength in 2004 and 2005 was that household saving declined dramatically while the price of oil rose. Household saving fell from 2.5 per cent of after-tax income in the third quarter of 2003 to a remarkable minus 1.8 per cent two years later. This 4.3 per cent shift of after-tax income was equal to a rise in consumer spending equal to 3 per cent of GDP. In dollar terms, saving fell from a $205bn annual rate in the third quarter of 2003 to dissaving at a rate of $159bn two years later. This shift of $364bn in the annual rate of saving far outstripped the fall in income caused by the higher cost of oil. This fall in saving allowed households to raise consumption spending on non-oil goods and services while paying for the higher cost of imported oil.

. . .

The powerful effect of mortgage refinancing on consumer spending was a very happy coincidence for the American economy at a time when oil prices were depressing consumers' real incomes. If oil prices were to rise again in 2006 or 2007, the adverse effect on consumers' real incomes would not be offset by increased mortgage refinancing. Mortgage refinancing has now peaked and is declining. The Federal Reserve is raising interest rates again to counter the inflationary pressures that remain from the rise in energy costs. And individuals no longer have the large amounts of household equity against which to borrow.

A rise in the oil price could happen again at any time. There is little spare capacity in global oil production and oil demand is rising rapidly in China and other Asian countries. A shock that reduced the production or shipping of oil could drive its price sharply higher. Speculative forces could compound this problem. The US was lucky after 2003 to escape the contractionary effect of an oil price rise even without an explicit change in monetary or fiscal policy. It would not be so lucky if a big oil price increase happened again now.

[ZombieGak]

27. we PAID to get into this mess

I've seen studies that show even prior to Bush's invasion of Iraq... the US was spending some 40 BILLION meddling in the Persian Gulf. If my math is correct... back in 1999 that was a $1 per gallon of oil/gasoline.

$40 Billion a year could have bought a lot of energy independence.

[rodeodance]

2. bummer. this is all we need!

NOT>

[lovuian]

3. Get ready people Oil & Gas are going up up

up!!!

[Roland99]

14. A new Hummer dealership just opened up here in town

I can't believe they razed a building and built this extravagant new dealership to sell these monstrosities. I hope they lose their asses.

[cliss]

4. Ahmadinejad knows it.

Chavez know it. These individuals are holding 4 aces.

The U.S. has 2 joker's, and 4 2's.

At this point, no matter what the U.S. does, whether it is to refer Iran to the U.N. council, or pressure the rest of Europe to stick together, or pressure China and India to not buy that oil, it will not change a thing.

Iran will still be sitting on all that oil. The U.S. desperately needs it. Unfortunately for Washington, Iran appears to be fairly stable politically. No matter that CondaLiar Rice says that the "world is united against Iran", Iran is not without friends.

Iraq has now allied itself with Iran. The Iraqis have vowed that if the U.S. attacks Iran, they will take action. They don't have an unlimited aount of time to act. The sands of the hourglass are running out.

[Theduckno2]

6. Who would have thought the Iranians were good at Texas Hold-em!

Their foolish position/statement on Israel not withstanding.

Could it be that Russia and China went along with the Security Council referral to give Bushco the opportunity to save face? I just wish I knew how far Bush is willing to take this and if given his low approval ratings he would attack Iran in an attempt regain public support.

Just what I need on my mind before I turn in!

[0007]

11. Wouldn't six deuces trump four aces? If the jokers are only good

with Aces, Straights and Flushes, we are definitely screwed.

But you are right in that Venezuela ships us around 16% of our oil use and together with Iran, we are hold a losing hand.

Get ready for real high gas prices!

[cliss]

25. Well, I'm not much of a card player...

but no cards are needed in the US-Iran stalemate. You're right: we are holding a losing hand.

[David__77]

5. Iran and Venezuela are simply asserting sovereignty.

This is a basic matter. They are examples of independence for the third world.

[leesa]

29. Thank you David. It is indeed what they are doing and what they have a

right to do.

[PhilipShore]

7. ABC News/Reuters: Oil soars $1 as Iran resumes nuclear enrichment

ABC News/Reuters
Oil soars $1 as Iran resumes nuclear enrichment
February 06, 2006

http://abcnews.go.com/Business/wireStory?id=1583943

SYDNEY (Reuters) - Oil prices surged on Monday after Iran resumed uranium enrichment and ended United Nations checks of its nuclear sites in response to being reported to the Security Council over concerns it is building nuclear weapons.

Despite past assurances from Tehran that it will not use oil as a political weapon, dealers fear that deteriorating relations and intensified rhetoric on both sides could lead to a disruption in supplies from the world's fourth-largest exporter.

U.S. light crude <CLc1> jumped as much as $1.25 a barrel in early trade and was last trading up $1 cents, or 1.5 percent, at $66.37. London Brent <LCOc1> crude gained 86 cents to

[lakeguy]

8. just wait until israel attacks! $100 oil here we come! brought to you

by bushco and his oil pals.

[radfringe]

10. don't have to wait for Israel

oil companies jump on any flimsy excuse to raise the prices

Butterfly sneezes in East Underwearistan - sends Oil Prices up to $110 a barrel

[megatherium]

18. that trick is only possible if there is a genuine shortage.

A recent Onion headline: Consumers complain as prices rise on a non-renewable resource that is being depleted.

[rustydad]

35. Shortage

A shortage can be geological or weather caused OR it can be political as in the 70s shortages. All the major producers like SA, Iran, and Venezuela can now act as swing producers. If Iran cut production by half to 2.5 millon barrals a day the price would soar to likely over $100. Their income would fall but not be 1/2. At $100+ the US economy would crack, there is no more cash left to squeeze out of collateral home savings. The Iranians know all this. They invented the game of chess. They are playing bush et al for the fools that they are. Bob

[ZombieGak]

39. victims of our own ideology

The problem here is not Iraq per se... but that we'd be done in by our own radical belief that markets can solve all problems.

In the case of the oil markets which are prone to panic, we see the downside of relying on this model. It is INSANE to rely on a market that can QUADRUPLE prices because of a 4-5% shortfall in supply. The organized oil producers know the buyers are not organized and will bid up the prices beyond all reason.

[dweller]

9. "was last trading up $1 cents"

ahh, yes. This is what i trust ABC for, above all, its clarity.

dp

[truthisfreedom]

12. well, at least the Iranians aren't planning on wasting oil on electric

power plants. nuke all the way!

sad, huh? couldn't they just build wind generators?

[EVDebs]

13. Oil runs out in about 25 yrs...

www.oilendgame.com

what will everyone do then ? Put the guns away and start acting rationally.

[reprobate]

15. Actually it won't 'run out' at once, just get more and more expensive.

As the fields get further into their reserves, it becomes more expensive to recover what's left there. Instead of just pumping, they require extraordinary action like pumping water down to force the oil out. The lower they get the more extraordinary the recovery costs.

This will mean that oil will not 'end' all at once, but get more and more expensive, breaking the average American cosumer for things like not just gas for their cars, but food due to the fertilizers required to grow food which is made from petroleum, and all the drugs and chemicals made from it.

The economy will decline in direct proportion to the cost of oil, until it finally peters out like the dying gasp of a human body. It won't be a quick 'bullet to the brain' death, but a slow bleeding out of our reserve cash from an open artery.

[megatherium]

19. "extraordinary action" like pumping water into the oil fields...

which has been done for many years in Saudi Arabia in the Ghawar oil field (the largest on Earth). But you're right, oil will never run out. My fear in fact is that we will just switch over to coal gassification (or tar sands and oil shale), and keep driving our cars while our climate goes past the tipping point.

[reprobate]

20. Yep. Once more we agree. But America does NOT plan for the future.

[EVDebs]

30. Sure they do, just plans that are 30 yrs old and 'tweaked' a bit

Read about the 14 Permanent Bases, which is why the Quakers are being spied upon domestically for having the guts to speak about this lie of Bush's (When Iraqis stand up, we'll stand down)

http://www.fcnl.org/iraq/bases.htm

Then go rent Three Days of the Condor and ask yourself if the NYTimes printed the story...

Here's the story, thirty years too late, but with Saudi Arabia...Today the plans were simply switched to Iraq and its oilfields and voila !

http://www.mtholyoke.edu/acad/intrel/energy/1973.htm

How old are you fellers anyhow ? Your collective memories aren't too good so I'll bet no more than twenty.

[reprobate]

31. My memory is as good as a 65 year old can be child.

[EVDebs]

38. Then admit there are plans, BAD PLANS you should be aware of

by now, bad OLD PLANS. Also, admit that Bush has omnipotent powers, hence no Dem dare ask 'Exactly what CAN'T Bush do in his war on terror ?' There are no limits. There are no limits.

Also, gifts to Bush (via threats from Iran) play into the aura of omnipotence

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=326123&mesg_id=329209

[reprobate]

42. Omnipotent? Bush is a fool and it's we who'll pay for his foolishness.

But you were joking right?

Jokularity, jokularity. As Father Mulcahy often said.

[Tight_rope]

17. LMBAO...Maybe that's what all the fight is for...

[Strelnikov_]

26. No. We Will Start Fighting Over Switchgrass Pastures n/t

[sarcasmo]

34. The oil flats in Alberta debunk this theory.

[Tight_rope]

16. Let's see....we have pissed off Iran and currently working on Venezuela.

How fucking stupid can this mis-administration get. I'm really starting to believe that they not only want to start a world war but also a world crisis. Fucking idiots :spank:

[amandabeech]

21. Undoubtedly, Chavez will be able to sell his light and medium crude

elsewhere. Of course, the owners of Citgo stations in the U.S. will be pissed because Citgo is the U.S. marketing arm of the Venezuelan state oil company.

However, Chavez will have more difficulty selling his heavy and bitumen products elsewhere. My understanding is that Citgo has special refineries here in the U.S. which can process these grades, and that there is little spare capacity anywhere in the world right now in refineries set up for heavy grades.

Nonetheless, the loss of just a few hundred thousand gallons a day, out of the 21,000,000 or so that we use each day, coupled with the panic factor, would undoubtedly send our gasoline, diesel and heating fuel prices through the roof.

[bemildred]

22. Good points.

I expect he's relying on a number of factors, China can take some of the heavy stuff, and would be willing to invest if a reliable supply was to be had. Plus, he's in fat city right now, so if your were considering changes, this would be the time. But it would be a considerable adjustment, all the same, and the USA is closer, and I think his problem is more with the US Government, which treats him in an asinine way, than with the USA as such.

[amandabeech]

23. Perhaps Chavez will hold off drastic action until the 2006 or 2008

elections to see if a more reasonable administration results.

One problem that Chavez would face if the U.S. decided to play hardball and anger the Chinese, is that the U.S. could blockade the Panama Canal and the area around any Pacific Ocean pipeline. Admittedly, these would be desperate actions, but it is conceivable that we might face desperate times if we don't move quickly to cut back on our oil addiction.

[twaddler01]

24. Chavez is right about one thing

* is worse than Hitler.......so it seems

[ZombieGak]

28. then you don't know much about history

It's SO easy to carelessly toss allegations around. Obviously Bush is dangerous and is willing to kill possibly 100k Iraqi civilians just to depose Saddam. But on the continuum of mass murderers.... Bush is a light weight.

[daleo]

32. Hitler is dead, Bush is still alive

I think Sophocles said "Judge no man's life until it is over".

Bush could still start a nuclear war that could kill a billion or more.

[bemildred]

33. Herodotus attributes it to Solon.

Talking to Croesus.
But it's a popular sentiment.

[daleo]

40. I thought maybe it was in Oedipus Rex, too

It's an oldie, but a goodie.

[bemildred]

41. Could well be. I've only read Aristophanes of the dramatists.

It sounds like a sort of ancient chestnut, like Washington and the Cherry tree, etc. I did recently read Herodotus (the Penguin translation, which I can recommend), which is why I'm annoying you about it.

[daleo]

44. Not annoying me at all

I appreciate a nice interchange about the classics, although I am far from an expert. My wife minored in history, so I have a few of these works lying about the house.

Speaking of Aristophanes, I saw a production of Lysistrata about the time of the Iraq invasion, which was very timely of course. It is a pity that real life couldn't have worked out so well.

[ZombieGak]

37. he could..... but.......

Yes Bush COULD turn out to be another Hitler. But any such accusation at this point sheds more heat than light. To date he's just another of a long series of tin-pot imperialist aggressors. Any rush to dub him another Hitler says more about the accuser than Bush. I also think it minimizes the death and devastation of WWII.

[rustydad]

36. Armeggedon

Bush has the power to destroy all life on the planet. He is as mentally unstable as Hitler ever was. The only thing that may prevent nuclear holocaust are the bush handlers. Due you trust Condi with the fate of the world? Bob

[raccoon]

43. Considering how well she did as National Security Adviser

on 9/11....