Energy Briefs Tuesday Morning
Oil prices rose to $109.60 in premarket trading on Tuesday morning. Last week's dip to $100 has been completely forgotten. Societe Generale said it was reaffirming its estimate of $107.50 for the average price in the second quarter. Oil rose on Monday despite a rising dollar and confounded those who claim all the gains in oil prices are caused by a falling dollar.
Qatar's minister of state energy told reporters that OPEC is doing its best to stabilize prices that are being led higher by speculation and political events in producing and consuming nations. "The Organization of Petroleum Exporting Countries is trying to act responsively" he said without commenting specifically. OPEC's oil minister said on Sunday there would be no production meeting until September.
Iran is still pounding the table about pricing oil in something other than dollars. Iranian President Mahmoud Ahmadinejad urged OPEC members to establish a joint bank and a joint currency for trading oil. Iran and Venezuela have tried many times to get OPEC to drop the U.S. dollar as the global currency for oil trading. I seriously doubt it will ever happen although both countries have said they would begin selling oil in Euros on their own.
OPEC feel's one of the major problems in rising gasoline prices is the individual government's take at the pump. The Gulf Times ran an article pointing out that the UK, France and Italy pocket more than 50% of the price of a liter of gasoline as taxes. UK collects 55% tax, France and Italy are 53%. Germany 49%, Japan 38%, Canada 30% and the U.S. averages 26%. Using gasoline prices from around the world OPEC calculated that individual governments were collecting $460 billion in annual taxes while OPEC only received $410 billion for its exported oil in 2007. Gasoline prices in UK, France and Italy average about $8 per gallon after you convert liters to gallons and the local currency to dollars.
In London Mayor Ken Livingstone is trying to raise the congestion tax to $50 per day. In New York City Mayor Bloomberg is trying to launch larger congestion fees through higher tolls and add an $8 fee to drive below 60th street during daytime hours on weekdays.
U.S. gasoline prices rose to nearly $3.32 per gallon on Monday and another new record. This prompted several analysts to renew their projections for $4 gasoline in May.
Petrobras said it would spend $15 billion on overseas projects in order to more than double its production to 4.5 mbpd by 2015. The Petrobras president said they were going to speed up the acquisition of overseas refineries and exploration as well as construct new plants at home. Petrobras completed the purchase this month of an 87% interest in a Japanese refiner.