World Oil Prices to Increase Further

April 26, 2008
By Benjamin Train

This year, oil is king.

Below, I have posted two stories that the BBC have posted this weekend that show where we are headed.

How high can the price of oil go? $125 to $200 per barrel are the target numbers that speculators have cited. What will the result of high oil prices have on the World economies have? A major shift in the supply and delivery method of all products, food, travel, and World economies. I also believe, that you are only seeing the beginning.

All the above was my personal opinion. My opinion should have no bearing on your investments.


Oil firms in Nigeria cut output
http://news.bbc.co.uk/2/hi/africa/7368436.stm

Industrial action and attacks from militants have forced the two biggest oil companies in Nigeria to cut their production.

Exxon Mobil and Royal Dutch Shell are both reducing output, which is helping to keep oil prices near record highs.

Militant groups in the Niger Delta have blown up a section of a Shell pipeline, in the fourth such attack in the last seven days.

And workers at an Exxon Mobil plant began a strike over pay and conditions.

The company said production was affected, but would not say by how much.

Volatile markets

But as Nigeria is the world's eighth largest oil exporter, it is certain to worry the volatile global oil markets.


The BBC's correspondent in Lagos, Alex Last, says that strikes in the country rarely last very long, but that attacks on the pipelines which criss-cross the forests and creeks of the delta are almost impossible to stop.

A faction loyal to the imprisoned militant leader, Henry Okah, has said it is responsible for the latest attacks.

The group is keen to gain attention, as Mr Okah is being tried in secret for treason and gun-running.

The Movement for the Emancipation of the Niger Delta promised further violence.

"Our candid advice to the oil majors is that they should not waste their time repairing any lines, as we will continue to sabotage them", the militants said in a statement.

Demand is high for Nigeria's oil, which is easily refined.

But production is now running about 25% short of the official capacity of 2.5 million barrels a day.

Exxon Mobil said it was operating at "partial production" following the industrial action, while Shell said it may not be able to meet its target of shipping 169,000 barrels a day from the country over the next few weeks, after the militants' attacks.

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Major oil pipeline to close down
http://news.bbc.co.uk/2/hi/uk_news/scotland/tayside_and_central/7368318.stm


A pipeline which delivers 30% of the UK's daily oil output will be shut down overnight, it has been announced.

BP's Forties pipeline will be completely shut by 0600 BST on Sunday as, a strike by workers at the Grangemouth oil refinery begins.

The pipeline, which brings in 700,000 barrels of oil a day from the North Sea, is powered from Grangemouth.

Meanwhile, on the eve of the strike, UK ministers again urged the public not to panic buy fuel.

Workers at Grangemouth, Scotland's only refinery, will walk out for 48 hours after talks broke down following a pensions dispute with operator Ineos.

A BP spokeswoman said: "We've been advised by Ineos that they can continue to provide steam and power right up until the strike begins, which means that we expect that the pipeline will be shut down overnight.

"It will be completely shut down by 0600 on Sunday."

Meanwhile, UK Business Secretary John Hutton said people changing their buying habits were causing shortages.

He told the BBC's Today programme: "My message is that if people stick to their normal pattern of purchasing fuel there shouldn't be any trouble.

"If there are temporary shortages, we can get those forecourts supplied as quickly as possible and that's what the fuel companies are determined to do."

Production at Grangemouth ceased on Friday afternoon ahead of the strike of up to 1,200 workers.

Drivers on whether a possible fuel shortage is likely to affect them. Meanwhile Unite, the union representing refinery workers, said talks with management about safety provision during the walkout were ongoing.

Grangemouth powers the BP Kinneil processing plant, which receives about 725,000 barrels of crude oil and 80 million cubic metres of gas a day from the Forties pipeline, in the North Sea.

More than 70 platforms in the North Sea could be forced to stop production and industry body Oil and Gas UK said closing the pipeline could cost an estimated £50m a day in lost production - with the Treasury taking half that hit.

Scotland's First Minister Alex Salmond earlier said BP was releasing stocks from Grangemouth diesel which should help ease supply problems.

He added that substantial fuel cargoes, from ports including Rotterdam and Gothenburg, were "more than enough" to supply Scotland for next week.