Grummer

Russia's Gazprom predicts $250 oil in 2009
By Tom Bergin

DEAUVILLE, France, June 10 (Reuters) - Russia's Gazprom, the supplier of a quarter of Europe's natural gas, expects the price of crude oil to almost double within 18 months and to take gas prices higher with it.

"We think it will reach $250 a barrel in the foreseeable future," Chief Executive Alexei Miller told reporters at a presentation in France, adding high demand rather than speculation was the primary factor for high hydrocarbon prices.

A spokesman said the company, which is also one of Russia's largest crude producers, expected the price to hit the $250/barrel level sometime in 2009.

Gazprom exports gas to Europe at prices linked to oil products. Miller said the current gas price was $410 per 1,000 cubic metres and Alexander Medvedev, Miller's deputy, said prices were likely to rise to reflect the higher cost of crude.

Analysts said that using the $250/barrel forecast and the conversion factors cited by Medvedev at the presentation, one would arrive at a gas price of $1,500 per 1,000 cubic metres.

"It's crazy ... maybe they know something we don't," said one analyst, who bemoaned the lack of analysis to back up the forecast.

"Usually one give a lot of analysis to back up that kind of forecast," he said.

The comments came as the oil price sat at around $134 a barrel, a few dollars short of last week's record level.

State-controlled Gazprom plans to double oil production by 2020. This goal could be reached sooner through the acquisition of a stake in TNK-BP, Russia's third-largest oil producer, and industry sources said Gazprom was interested.

Medvedev said Gazprom will only consider investing in TNK-BP after its shareholders have settled a dispute over control of the company.

TNK-BP is half owned by oil major BP and half owned a group of Russian billionaires who have criticised management at the company.

DIVERSIFICATION IS USELESS

Miller criticised European efforts to reduce reliance on Russia, which analysts expect to provide a third of EU gas in the years ahead, and slammed attempts to limit Gazprom's ability to buy gas distribution assets in the bloc.

Miller said it was Gazprom's strategy to be vertically integrated with operations from the well-head to the consumer in Europe and other continents.

Some European politicians have expressed concern about Gazprom buying up downstream assets in the EU saying the Kremlin could use these assets to exert political influence in the future but Medvedev said the investments were commercial.

"Why should we invest money to create the possibility to shut off the gas supply?" he said at the presentation in the resort town of Deauville in northern France.

Miller said attempts to improve security of EU energy supplies by diversifying energy suppliers would be counterproductive and Medvedev added that Russia could also follow the principle of diversification, potentially steering supplies away from Europe.
"If you diversify suppliers, it will not solve the problem," Medvedev said.

Gazprom, already the world's largest gas producer with a stock market value of over $330 billion, expects to triple in size to become a $1 trillion company within seven to 10 years, Miller said.

It will be investing heavily to achieve this, with total investments estimated at $30 billion for 2008 and set to rise in the years after that, company officials said.

Earlier, Miller told Le Figaro newspaper that by 2020, Gazprom sees about half of its gas production coming from new fields in arctic seas, Yamal peninsula in Western Siberia and the Far East.

Miller said Gazprom did "not exclude" making major acquisitions in France but organic growth was the priority for now. (Writing by Andrew Callus; Additional reporting by Astrid Wendlandt in Paris; Editing by Louise Ireland)


That is not good at all and it will impact our way of life and financially survival. Read this one too.

Think oil prices hurt now? Just wait
Nick Carey

DALLAS, Texas (Reuters) - Sky-high oil prices are causing pain at the pump, but bills for air conditioning this summer and heating next winter -- combined with rising food costs -- promise to squeeze U.S. consumers even more.

With gas at $4.00 a gallon, households already have less to spend on a new grill at Home Depot; a vacation at Walt Disney's Disney World; a new TV from Best Buy Co; or a new "hog" from Harley-Davidson Co.

And there are no signs things will get better soon for the consumer, long the driving force of U.S. economic growth.

"For the areas of the economy that rely on heating oil, high fuel prices are going to be another blow to the consumer this winter," said Jack Kyser, chief economist at the LA County Economic Development Corp.

"The hotter states will feel the pinch during the summer months but in the mid-America states where you get hot summers and cold winters, it's going to be very uncomfortable," he said.

"This is going to eat into the disposable income of American consumers -- supposing they have any left."

Oil prices, now $130 a barrel, have risen six-fold since 2002. On Wednesday, heating oil reached a record high above $3.90 a gallon and the price is expected to stay high.

Heating oil, which cost $3.29 a gallon in January, will likely cost $3.83 in December, according to the government's Energy Information Administration.

Those costs come at a time of rising food prices, forcing people to spend more on basics as wages fail to keep up. The effects on the economy could be profound.

"The American consumer will continue to pay for fuel, food and heat," said University of Maryland economist Peter Morici.

"But they will give everything else up," he said. "That's going to make it harder to sell the average consumer a television, a suit, or even a meal at a restaurant."

HARD TIMES

This could become an especially depressing reality in July and August, when back-to-school shopping starts, and in November, when holiday shopping gets under way.

Without strong sales during both of those shopping seasons, retailers including Wal-Mart, Target, J.C. Penney and Sears could post bleak results for the last two quarters of 2008 and the first quarter of 2009.

For many years, the consumer has been the engine of U.S. growth, accounting for around 70 percent of the economy.

But much recent spending has been done on credit, leaving Americans with a negative savings rate.

Now that consumers have been hit by the double-whammy of a weak economy and higher costs, the question is how much damage the engine has sustained and how long it will take to fix it.

Peter Schiff, president of money manager Euro Pacific Capital, warns that after years of profligate spending, the "chickens are finally coming home to roost".

"Our whole phony standard of living is imploding," he said. "We have borrowed and spent ourselves into oblivion."

"It's amazing that people can't figure out that America is broke."

WINTER OF DISCONTENT

Diane Swonk, chief economist of Mesirow Financial, says one of her biggest concerns for the short term is that the Bush administration's tax rebates, which were designed to stimulate the economy, will be used by consumers to fill their tanks and use air conditioning as usual rather than cutting back.

Many retailers, like Wal-Mart and Sears and supermarkets Kroger and Supervalu, have offered customers incentives to spend their rebate checks with them.

President George W. Bush signed into law a $152 billion fiscal stimulus package earlier this year to provide tax rebates to 130 million Americans. Some $107 billion of the total was allocated for households.

"The tax rebate is going to be a double-edged sword for consumers," Swonk said. "When the heating bills start coming in the fall things will not look so good."

"That should contribute to a contraction in consumer spending in the fourth quarter," she added.

Swonk said that among the industries that will continue to feel the pinch is the auto industry, a major employer.

That likely means that Thursday's announcement by Ford Motor Co that it was abandoning its long-touted goal of returning to profitability by 2009 will be followed by more bad news from Detroit.

With Ford and General Motors shares getting a battering on Thursday, investors were asking if the long-term prognosis of the Detroit automakers was becoming even bleaker.

"The economic circumstances are not good for Ford and they are not good for any of the automakers really; this isn't anything that is a Ford exclusive," said Erich Merkle, director of forecasting for consulting firm IRN Inc.

Edward Leamer, head of the UCLA Anderson Forecast Center, said that thanks to the combination of high spending in recent years and rocketing fuel costs, the consumer-engine of U.S. economic growth is close to failing.

"The global markets are telling us we are not as wealthy as we think we are and that we have spent beyond our means," he said. But Leamer said while the engine may be broken, the U.S. economic model is not: it just needs a new engine.

Thanks to the "rosy spot" of exports helped by a weak dollar, plus strength in commodities like coal and grains, the UCLA Anderson Forecast Center predicts the U.S. economy will suffer only a mild recession this year.

But without that retail engine of growth, "our long-term prospect is for sluggish U.S. economic growth," Leamer said.

"Unfortunately, there is nothing on the horizon in the U.S. economy that will take over from the consumer."

__________________
Some people will tell you that slow is good - and it may be, on some days - but I am here to tell you that fast is better. I've always believed this, in spite of the trouble it's caused me. Being shot out of a cannon will always be better than being squeezed out of a tube. That is why God made fast motorcycles.
Hunter S Thompson

Deafness

__________________
This advertising will not be shown in this way to registered members.
Register your free account today and become a member on AllDeaf.com

Foxrac

For me, I don't believe until see in 2009, I hopefully oil price won't shot up like crazy, it has been hurt many Americans so enough.

If $250 per barrel then gas price will going be $6 per gal.

__________________

jazzy

$6 per gal? I think it would be more likely to hit over 8 bucks per gal. Sad.

__________________

NorCal20

they kill our pockets.




damn.

__________________

Phil.4:13- "I can do all things through Christ who strengthens me"

Im playin' softball and cruisin' on my longboard...

TFWFalcon

They predict 250 dollars per barrel. My answer is nope. Actual they really want hit 250 dollars per barrel that reason is big time greedy. We will wait see what will happen to between Iran and Israeli. Go figure.

__________________

Foxrac

Yup, I don't believe this crap until wait and see in 2009.

__________________

jazzy

News mentioned few weeks ago, we will hit 200 buck per barrel soon . I won't be surprise once $250 will come upon us soon.

__________________

Liebling:-)))

I am afraid, yes it´s true...

__________________

horselover61

Just wait and see. Then buy a horse wagon. Time to go back to the old days. Dang take forever to get point A to point B.

__________________
Check out my city!!


http://furbyland.myminicity.com/

sequoias

High gas prices=A light rail station near you.

horselover61

There is no rail station here cuz it is country.

__________________
Check out my city!!


http://furbyland.myminicity.com/

Texan Guy

I pray to God that it's just a stupid propaganda.

And, Liebling, how did you know it's true, huh?

__________________

Texan Guy

That's right, I grew up in the country with the small town, and time to ride the horses? heh

__________________

Maria

Well, IF this problem should rise in 2009 - people better prepare to stock the food up, change their watts of bulbs ( low watts ) in the house, use restaurants' restrooms or gas station restrooms to wash up yourself, use bicycle instead of car, take bus, put a little money away to save in every week/or month, and everything you'd think of like in pioneer days. Prepare to stock up your food this year while you can afford....by the time when you couldn't afford in 2009, you'll have everything ready for you that you were prepared in 2008 this year. Be wise like a snake.

Tousi

To add to this, Del Taco has the best napkins; I have a wad of them for each back pocket!

Maria

Hahaha Good! Lol

dead money

Del Taco is just too awesome for words, period.

__________________

mike matusow...or god for short.

JClarke

damn these days - prices are outrageous and what norcal20 just said, it is hurting our wallets enough!!! -Some people had to sell their homes, WTF!? I wish I would just yell at the oil companies to STOP scamming us!

__________________

Maria

I was wondering if, people who live on their Social Security income will increase due to high costs of living ? Or will it lead to become obsolete since America is going to be broke ....that's if, it hurts America's economy in 2009 and thereafter ?

Tousi

Hang on Maria while I go buy you a crystal ball....

DeafPenPal

I suggest people come up with free energy idea that will solve your daily problem. To me, car can run on magnet power engine, car can run on air from air compressor, car can run on water for gas, car can run on batteries, and car can run on solar power system. In addition, house appliances can get free power from the resource we may have. Anything can be possible. Just don't use pollution product or food shortage product. I ban on corn for oil.

__________________
Deaf Pen Pal Social Network
Click here to help me build DPP City! Thanks!
http://united-deaf.myminicity.com/
Please click here to visit my awesome HA Design for BTE
Please Check my Albums for cool design and/or photo! http://www.alldeaf.com/members/deafpenpal-albums.html
Anyone can use my avatar graphic in the avatar folder under Albums. http://www.alldeaf.com/members/deafp...ms-avatar.html

Tousi

Please tell us which of those ideas you use NOW?

Sasha64

DAng just saw the news petrol gone up again with 6 c a litre since last week that a huge jump and then heard usa barrel is now $145 I'm like yikess it almost half way there to the 250 dollars point.

Looked like we are heading to the same Depression year of the 1930s? ack ack that gonna be kinda scary looking at it that way at least we are more prepared for it in a way. Who knows eh!!

__________________
if one door closes then another one will open so dont give up hope in whatever u set ur mind on.

RedFox

Magnet: You mean magnetic levitation like maglev trains? Those involve electromagnets that require energy unless you use permanent magnets like in the Inductrack system. They'd all need additional energy for horizontal motion.

Air: The air compressor would need energy to compress the air.

Water: The water would need energy to be split up into hydrogen and oxygen.

Batteries: Those need energy to be charged up.

The clean way of using those is to use renewable energy sources.

The are working on using plants we can't eat, including those that don't need to be grown on good farmland, and parts of edible plants we don't eat, like the stalks of corn plants.

Maria

Hahaha Tousiii ! That's more like a challenge to me.

Oh, yeah - don't forget to take a gun w/ you in case if there are looters or what have they w/ these wacko people out there. *beware of D/deaf ADers*

Liebling:-)))

It's not just US but affect Europe as well... We were being informed and preparing this year for next year...

I know what I am saying because I use heating oil for heaters and hot water in my house, some of my friends use gas for heaters/hot water.. EU Government urged Russia to reduce the oil/gas prices for years since between 2002/2003, that's why I'm not surprise after read those article.

Check this example:

Oil price increases since 2003 - Wikipedia, the free encyclopedia

It's your decision to ignore or refuse to accept that "warning" information.

__________________

Texan Guy

Well, we, Americans, mostly get the oil from Canada. And I don't think we gets any oil from Russia, nor middle eastern at this time.

The OPECs are the greedy organization, they just wants to make more money, that's all.

__________________

Foxrac

Using oil for heat is ridiculously expensive, I prefer to use natural gas or electric for heat, I'm using heat via AC, I think it use via electric.

__________________

Foxrac

Yup, Canada isn't member of OPEC, you know that? Canada is just use world market compete against OPEC or something like that.

I wish that Canada wouldn't follow price that how OPEC set it.

Liebling, there's no warning signal in USA When gas price start up, it got more unstable after 2005, it wasn't our fault.

It's not new, it had been happened in 1979-1986, when oil barrel was over $100 in inflation of 2007 dollar and cause gas price to hit after $1 in 1979.

__________________

wochoo

SADFACE

is all i gotta say.