"CRUDE" oil, an absolute must see program !!!

As clint Eastwood said leaving two dead guys in the dirt " worms gotta eat"

 

Oil Slump Forces Rich Arab Countries to Run Deficits

Jan. 14 (Bloomberg) -- Tumbling oil prices are forcing many of the richest Persian Gulf states to record budget deficits and limit a critical source of foreign investment for poorer Arab countries.

Central bank governors and finance ministers from the 22- member Arab League gathered in Kuwait City today for a week of meetings on the global financial crisis and Gulf efforts to create a single currency. The conference opened with a minute of silence for the more than 900 Palestinians killed in a 2 1/2-week Israeli offensive in the Gaza Strip.

Crude is now selling at below the budget break-even point for seven of the Arab world’s 10 top oil producers and Saudi Arabia, the world’s biggest exporter, is forecasting its first deficit in at least seven years. Poorer Arab states are facing a fall in foreign investment with Egypt expecting inflows to almost halve this year, according to EFG-Hermes Holding SAE, the largest Arab investment bank by market value.

“We have to find ways to limit the impact which could hurt the Arab economy and make sure economic growth in Arab countries continues at appropriate levels,” Kuwaiti Finance Minister Mustafa Jassim al-Shimali said, referring to the global crisis. “We are not immune to its negative effects.”

Heads of state, including Saudi King Abdullah and Egyptian President Hosni Mubarak, will attend the main sessions of the Arab Economic Summit on Jan. 19-20 and will hold talks on the Israel’s military incursion, the state-owned Kuwait News Agency reported. A meeting of foreign ministers is also scheduled for Jan. 16 to discuss the conflict.

Recession Impact

Oil prices have fallen almost 75 percent from their July high, as the global economy sank into recession, straining budgets of crude exporters. Most will probably tap into their oil savings to maintain spending and avoid recession.

Saudi Arabia said it will post a 65 billion riyal ($17 billion) deficit this year; Oman said it will record a budget shortfall of 810 million rials ($2.1 billion); while Dubai, the second-largest of the seven emirates that make up the United Arab Emirates, forecasts a shortfall of 4.2 billion dirhams ($1.1 billion).

“If governments cut back on spending they might make the economic slowdown worse,” said Giyas Gokkent, chief economist at the National Bank of Abu Dhabi PJSC, the U.A.E.’s second- biggest bank by assets. “Policy must be counter-cyclical.”

Saudi Contraction Seen

EFG-Hermes is forecasting that the Saudi economy will shrink by 0.9 percent this year while Kuwait will contract by 1.2 percent. Growth will remain positive in Qatar, Bahrain and Oman and the U.A.E. economy will stagnate.

Saudi Arabia posted a record budget surplus of 590 billion riyals ($157 billion) last year as oil rose to a record $147.27 a barrel in July. That was about the same size as Egypt’s gross domestic product.

“Rising oil prices were the catalyst for exceptionally strong growth over the past six years and falling prices will bring a slowdown in 2009,” Simon Williams, a Dubai-based economist for HSBC Holdings Plc, said by e-mail. “The Gulf can manage the deceleration, but the slowdown is going to be felt across the region and in all sectors of the economy.”

In Arab countries that have depended on their rich Gulf neighbors for investment, the impact may be felt the hardest.

FDI Declines

Foreign direct investment in Egypt is projected to fall to $7 billion this year from $13.2 billion in 2008, EFG-Hermes said in a Nov. 13 report. About 20 percent of the investment came from the Gulf. The 8.6 billion dollars in remittances that were sent home by Egyptians working abroad last year are expected to shrink by 10 percent in the fiscal year starting in June, EFG-Hermes said. Half of that money comes from the Gulf.

The bank expects Jordan’s economic growth to slow to 4.7 percent this year from an estimated 5.7 percent in 2008, in part because of lower remittances and foreign investment from the Gulf.

To help boost regional trade, Gulf Arab leaders on Dec. 30 approved an agreement to create a Gulf central bank and single currency. The accord must now be endorsed by the national governments of Saudi Arabia, Kuwait, Bahrain, the U.A.E. and Qatar. Oman has pulled out of the proposal.
++

Poor a-rabs will only be able to buy 5 Aston Martins this year instead of 10.

 

Dam interesting stuff there R.I.P.
I wonder what the slowdown is doing to the decommissioning plan for the US nuclear plants

 

Boston, he is not dead it is RHP....

I am sure the Arab "royal families" will only suffer in token ways, but the Arabic masses who may feel the effect of reduced pensions/handouts/whatever necessary for their sustenance may start to get a bit more "politically revolting"..... and "bin-launcher" may have less to support his objectives....

 

I am alive and cynical, you cant kill me off that easy.

Did you know in UAE with all the guest workers (slaves to you and me) there are 2.8 men to every one woman? I have a business idea coming on.

 

no comment

 

can only imagine what the penalty is for that in an arab country
if they cut off your head for blasphemy what would they cut off for running a brothel

Ild have sworn that was R.I.P
had a ring to it

 

Even if he did not pay, and ***** the pro - stone her to death for having it with a married man - was such a case there last week or so.....

 

http://www.ft.com/cms/f2b40164-cfea...c/google_p4p/apac_au_indepth/oil/seg_id=03394 - - After that diversion - back on topic....?

 

http://www.financialsense.com/fsu/editorials/2009/0115.html more on oil trading...

 

The Great Oil Hoax

...this came across my desk just recently in the form of one of those financial newsletters seeking subscriptions. I edited and abreviated it slightly, but for the most part this fellow got it right...BE PREPARED.

THE GREAT OIL HOAX​

Discover the biggest lie of the last 30 years...
…and what George Bush was told behind closed doors​

Those Saudi Arabians, you've gotta love 'em. First, 15 out of 19 hijackers on Sept. 11 were Saudis, but Saudi Arabia had NOTHING to do with it, or so we're told. Besides they love us, don’t they?

Now Saudi Arabia is about to drop another bombshell on us, and this one will make Sept. 11 look like small potatoes. I never thought I'd say anything could make Sept. 11 look like small potatoes. But this does, at least when it comes to the economy. Sept. 11 shut the markets down for a few days. When the next crisis hits, you'll wish the markets would shut down so you wouldn't have to watch the carnage.

What Bush learned behind closed doors.​

If some well-informed experts are right, Saudi Arabia's oil reserves are a fraction of what they've been telling us. Why does it matter? Because everyone has believed for decades that Saudi Arabia's oil supply is virtually unlimited. That's what the Saudis have said over and over again for more than 30 years.

If an oil shortage threatens to cause a recession or a market crash, we can count on the Saudis to come through…so people think.?? But in a private briefing, one of America's top oil experts told President George Bush exactly what I'm telling you. (Brian’s note: Doesn’t this really explain our attempt to gain some control over the world’s second largest know reserves…IRAQ ??)

In fact, this same man was a consultant to the secretive task force that drew up Vice President Dick Cheney's energy plan in 2001.(Brian’s note: Another reason Cheney fought SO HARD to keep this meeting a SECRET!!)

In other words, the guy is a heavy hitter who knows the energy business. He warned Bush that the Saudis don't have anything near the oil reserves they claim. They already pump less oil than most "experts" think, and here's the real kicker...
Saudi oil production is about to drop sharply. And it will keep going down for good.
Other experts have analyzed the numbers and come to the same conclusions. If the charges are true — and I believe they are — we could be facing...

Oil at $150 per barrel and gasoline at $6 a gallon or more​

The oil is running out. It's as simple as that. But that's not what you hear from so-called experts. If you ask government officials, our intelligence agencies and even powerful Wall Street financiers, they tell you the opposite. They say the Saudis could quickly double their oil production from the current level if they wanted to. And given a few years, they think the Saudis could produce four times as much oil as they do now. This is like the Iraqi WMDs all over again. The intelligence agencies and the conventional "experts" are dead wrong. The oil isn't there.

Saudi Secrets and Funny Math ​

The cupboard is bare and nobody knows it. Americans used to run Aramco, the huge oil company that manages the Saudi fields. But in 1979, the Saudis booted us out and took over.

And then a funny thing happened… The Saudis started keeping everything a secret. No one knows for sure how much oil they've got in the ground, or how much they produce each year, or how much they could produce if they wanted to push it to the max. It's all secret.

Experts try to figure out how much oil the Saudis sell by monitoring tanker traffic in and out of the world's ports. That's how little we know for sure. But wait, it gets worse!

After the Saudis took over, an even funnier thing happened...Their figures for proven reserves kept going up and up and up — even though they didn't find any major new oil fields! In 1979, the Saudis adjusted proven reserves upward by 50 billion barrels. Then eight years after that, their proven reserves magically grew by another 100 billion barrels. Their estimated reserves increased by 150% in nine years — to a total of 260 billion barrels. And they didn't find a single major new oil field!

And here's the funniest thing of all...For the last 18 years, they've claimed they own 260 billion barrels of proven oil in the ground. The figure never goes down, even though they pumped out 46 billion barrels during that period. Let me see...260 minus 46 equals 260. Saudi math!

Based on these bogus figures, the Saudis claim they can produce as much oil as the world wants for the next 50 years. As recently as 2004, they claimed their reserve estimates are
actually conservative That's why most of the world's governments and intelligence services believe the Saudis could pump 20 million barrels of oil a day if they wanted to. Trouble is, we've got no proof except their say-so.

If it were true, we wouldn't have a thing to worry about. But it's not. Before Aramco's American owners were shown the door in 1979, they told Congress that Saudi Arabia had proven reserves of 110 billion barrels. There have been no major new discoveries, so 110 billion barrels was probably just about right. And since then, about half of that has been used up.

So why do the Saudis insist everything is just fine and they have 260 billion barrels of reserves? One reason is they wanted to discourage non-OPEC nations from looking for more oil or switching to alternatives. It was a devious plan, and it worked perfectly. But that wasn't the only reason the Saudis lied about their reserves. They did it because everyone does it! Everyone in OPEC, that is.

The Biggest Lie of All: OPEC's Imaginary Oil​

In the 1980s, OPEC's claim of total reserves magically leaped from 353 to 643 billion barrels without a single major discovery. Industry experts call it the quota war. You see, OPEC had to limit how much oil each member could sell, because prices were too low.

The quotas were based on...each member's oil reserves! That's right: The amount of oil OPEC would let a member pump depended on how much that member had in the ground. So it paid for OPEC members to claim the biggest reserves they could. And that's what they did.

The Saudis alone jacked up their estimate by about 100 billion. Kuwait added 50% to its reserves in one year, 1985. Venezuela doubled its reserves in 1987. Iraq and Iran doubled their estimates, too. What's more, OPEC members did like the Saudis and kept their reserve estimates the same year after year, as if no oil were being pumped out and sold.
Everyone claimed to have a bottomless well.

Now, if you're like me, you prefer to base your financial decisions on the real world, not on a fantasy. Let's look at how much oil there really is...
In the 1970s, when Western managers were still in charge, they believed for a time that Saudi output could reach 20 million barrels a day. But by the time the Americans lost control in 1979, they figured the peak would be 12 million.

They also predicted that peak production would last only 15–20 years. Lets see 1979 plus 20 is 1999. We're past the peak, if these men were right. But we already know they were too optimistic. The truth is that Saudi production never got to 12 million.

"In all probability, output peaked in 1981 at an unsustainable level of about10.5 million barrels per day," according to Matthew R. Simmons, a leading oil industry authority”.

And yet the lies go on...In 2004, Saudi officials claimed they boosted production to 9.5 million barrels per day and maintained that level for five months. It's almost sure they were lying. The International Energy Agency is the group that keeps an eye on these things for the developed, oil-importing countries. The IEA could find no sign the Saudis were selling more oil. As far as anyone can tell, they pump only around 5 million barrels a day, and that's all they've pumped for years.

It's déjà vu all over again. In spite of being lied to at least once, the IEA, the U.S. Department of Energy and other forecasters believe the Saudi claims. ALL their projections of our energy future ALWAYS assume the Saudis could produce 15–20 million barrels a day. The lies have worked. Not only do Western politicians believe them, but so do many oil industry experts and investors with huge amounts of money at stake. They've been had. We’ve all been had.

We went through three recessions from 1973–1983. Care for a repeat? Our whole economy is at risk. Your investments are at risk. Your retirement plans are at risk.

America has been so prosperous the last couple of decades, a lot of people forget what the energy crisis of the '70s was like. Let me remind you: The price of a barrel of oil shot up 400%. Long lines formed at gas stations practically overnight. Folks had to pay four times as much for a gallon of gas, and there came a week when one out of every five gas stations in the United States had no gas to sell at any price.

The U.S. had three major recessions within 10 years after the first oil crisis in 1973. And those recessions were deep, with double-digit unemployment, double-digit interest rates and double-digit inflation:
Think 10–12% unemployment.
Think 15–18% mortgage rates.
Got the picture? That was the '70s. Not fun. My take is that a similar crisis will rock the nation before we solve our problem with clean coal, liquefied natural gas, oil from tar sands, high-mileage cars and safe nuclear plants.

How oil could go beyond $150 in 24 hours​

If you want to bury your head in the sand and pretend Saudi Arabia has plenty of oil, be my guest. But XXX Investments is for investors who want to face reality and be prepared. Every shred of evidence points to no Saudi buffer for world oil markets. And that's a real problem because oil consumption soared from 52 million barrels a day to 82 million in the last 19 years, and it's expected to grow to 120 million in the next 20...

If the oil can be found, very doubtful, high-priced oil is here to stay

There are three ways oil could race past $150 a barrel: It may get there gradually...or on a faster pace of a year or two...or overnight, literally within 24 hours. Pick any one of the three. No matter how you look at it, it's a sure thing the days of cheap oil are over. We're never going to see $30 oil again, and we may never even see $50 oil. Soon oil in the $100s may very well return to stay.

"You never really run out of oil," says a Houston energy consultant named Henry Groppe. But many years ago we ran out of $2 a barrel oil, then we ran out of $25 oil, and now we're running out of $40 oil…"(and for now we’ve settled at $60)

That's for sure. And that means you need to readjust your holdings....The disaster could hit very fast. There could be a deep, sharp reduction in Saudi oil production literally any day. It's guesswork, but energy expert Matthew Simmons says,
"It will take energy forecasters and policymakers by total surprise. Not a single serious energy plan devised in the past three decades has envisioned such a scenario."

He's told interviewers that Saudi output could drop 30–40% from the already low level of just 5 million barrels. Simmons doesn't claim to know for sure, but I believe he's right.

In the big oil crisis of 1973, oil went to $100 in current dollars. Back then, the problem was just political. Angered by U.S. support for Israel, the Arab oil producers cut our supply. After things calmed down, there was plenty of oil.

This time the problem is real and there's no quick fix. There's a sword hanging over our heads, and most people don't even know. Just consider this...

Three quick disasters could send oil over $150 in 24 hours​

1) Monster Storms
2) War & Revolution at the chokepoints
3) Terrorism

…and meantime the Saudi reservoir quantity is this fictional buffer

 

Matthew Simmons, has been on about this for years... Follow his reports, if anyone knows he does as he is the only one doing due diligence and really digging around to ascertain the facts...

He has also critiqued US capacity, and it is appalling... Most of the refineries are well past usable life, are prone to breakdowns and failures due to their rusted out- need a huge overhaul (Mostly replacement) as are the pipes and tank farms... Most of your electric grid is stuffed and cannot cope so how are electric cars going to fare when recharging time happens? - - I have not seen but some have expressed the view that roads and bridges are in a poor state of repair and it is no use saying natural gas as there is no infrastructure to transport of retail it...

Your basic infrastructure is falling apart... so you are exposed to any event that may cause slight disruption... with no money to fix it and no time to correct the basic issues that confront you.... WAKE UP...

You do not need monster storms, just a couple of refineries to be put out of action or some ports closed due to a strike, almost anything is a potential disaster for USA now...

 

So how do we make money from this? Sounds like a pension style investment, if it works out then great, if it doesnt it wouldnt be a disaster.

So do you invest in outflung oilfields in Kazakhstan or, mainstream oil companies or invest in alternative fuels?

Of course the guy doesnt say what the Dollar Index will be by the time hits $150, if the dollars devalued as expected due to the massive over printing of funds and sale of bonds, a large part of the 150 price will be inflation/devaluation. If oil is at $150, what will corn/soya/copper be at?

A great read but the bigger picture is bigger. As they say.

 

I would hazard a guess at present (at the time of writing) exchange rates as anything else is impossible to predict... Think of the 600 trillion in toxic debt that is floating around the USA, - that is 2 to 3 times the total global assets - - How in the name of all things is that going to be written off? - - Then there is all the other overblown valuations and stuff... - - - - - Just carry as much actual bullion as you can hold and secure, (not stored anywhere else as it WILL be stolen), then set yourself up with solar power, on a farm hidden from wandering raiders seeking food... (preferably some tropical island in a region that lacks any infrastructure... Look after the locals and hopefully they will look after you...???

Some writers are suggesting major social / law & order type upheavals, as and when the poor realise that they will have nothing, become very angry and try to take it out on those who seem "better off" because they planned and prepared... I have no insight into the NY corporate world but the major bankers are making artificial profits and screwing every other opportunity at recovery by anyone seeking to invest in making something useful...

A major correction upwards in the price of energy, (if one can get it)

A major shortfalls in foods (no energy for farm tools/tractors and delivery trucks - or very expensive),

A Global and Local failure in trade, (currencies fail and fuel unavailable)

The oceans are nearly totally fished out,

A shortage of potable (drinking) water,

A very limited availability of water for irrigation, (Needs energy to clean and reticulate)

A diminished law & order (fuel for transport and power for communications)

A failure in telephony, TV, Internet etc. due to power outages and equipment failures

No food in shops, looting, rioting and so on - Just look at recent calamities to see what the masses did when in fear for the future...

Look after yourself, be very discrete, arrange your life to be as totally self sufficient as you can, carry spares for PV panels, wind generators, regulators to control battery charging, think of permanent flowing small streams that could deliver micro-hydro-electric power... Set yourself up with a good "permaculture" garden and grow your own fruit and vegetables, meat and pond fish etc... Goats are good mowers and pruners - producing fleece, meat & milk, - chickens for eggs and meat... That will take several years to set up...

View http://www.boatdesign.net/forums/op...on-liveaboard-cruising-yachties-26558-53.html for an economics perspective

 

Mas,-- as Mr Brown said when he was asked where is all the money going to come from by a news reporter when I was in Uk last June . He said with a smile "only governments can do this"

It does'nt matter,- money is only money if the governments say it is.

The Us can easily, without any damage what so ever put a zero at the end of its bank book, you and I cant do that but Governments can.

It balances the books , a new generation comes along ,diversifies and forgets things, move on.

It Has to be written off what else can we do --sell the moon.

200 trillion is impossible, as you say its 3 times the worlds assets so how could it be so.

I would feel safer in travelling these times in Cash than some chunk of metal that can be made worthless if the government says so.

If they are going to steal then it will be on devaluation of gold, and other precious metals.

However face value of a note cant be altered just its value and what government wants that.