Today, what a day from the following articles you can see oil (which will be the majority of the post for today) is still undecided on what it will do. Down 15 bucks over the last few days and then back up almost two bucks. The first two articles out line what is happening in the commodity markets. The last three are about oil and the world wide effects it can and will have. The time of cheap oil is over, and soon (if it has not already happened) peak oil will take effect.
I have topic for tommorrow but after that some time this week i will a blog on Peak oil and how it might effect you.

Crude oil back above $130 a barrel

Oil prices rose back above $130 a barrel Monday on concerns that the threat of new sanctions against Iran over its nuclear program may escalate tensions in the oil-rich Middle East.
A slightly weaker dollar and concerns about a storm in the Gulf of Mexico also contributed to higher prices.
By midday in Europe, light, sweet crude for August delivery was up $1.73 to $130.61 a barrel in electronic trading on the New York Mercantile Exchange.
Last week, Nymex crude fell more than $18 from a trading record of $147.27 hit on July 11. The contract settled at $128.88 on Friday, down 41 cents.
In London, September Brent crude rose $1.67 to $131.86 a barrel by midday on the ICE Futures exchange.
Talks on Saturday ended with Iran stonewalling Washington and five other world powers on their call to freeze uranium enrichment. In response, the six gave Iran two weeks to respond to their demand, setting the stage for a new round of U.N. sanctions.
The U.S. sent Undersecretary of State William Burns to the talks in hopes the first-time American presence would encourage Tehran into making concessions. But the talks' lack of progress may lead to "further isolation" for Iran, State Department spokesman Sean McCormack said Saturday.
Iran state radio on Sunday quoted President Mahmoud Ahmadinejad as saying the talks were "a step ahead."
"The talks didn't resolve the problem of Iran's nuclear program, and that has been a factor in prices ticking higher today," said David Moore, a commodity strategist with Commonwealth Bank of Australia in Sydney. "Part of the reason prices had fallen recently was on the expectation a deal could be made there."
The U.S. dollar fell slightly against the euro and the Japanese yen on Monday, another cause for investors to buy oil futures.
The euro rose to $1.5884 from the $1.5843 it bought in New York late Friday, while the dollar fell to 106.59 Japanese yen from 106.89 yen on Friday.
Buying oil and other commodities gives investors a hedge against inflation and a weakening dollar. When the dollar gains ground, however, it usually helps push down oil prices.
Prices also rose Monday on concerns that Tropical Storm Dolly may disrupt oil operations in the Gulf of Mexico, Moore said.
The storm drenched Mexico's Yucatan Peninsula and was expected to reach the Gulf of Mexico Monday afternoon packing sustained winds near 50 mph.
"Over the next 12 to 18 months we expect prices to fall on demand side adjustments to the high prices," Moore said. "But there are certainly chances for short-term spikes with issues such as Iran or storms."
In other Nymex trade, heating oil futures rose 4.17 cents to $3.7332 a gallon while gasoline prices rose 3.71 cents to $3.2080 a gallon. Natural gas futures rose 16.7 cents to $10.737 per 1,000 cubic feet.
http://wtop.com/?nid=111&sid=577994


Platinum falls to 5-month low on slowing economy
July 18, 2008 - 5:21pm
By STEVENSON JACOBS AP Business Writer
NEW YORK (AP) - Platinum prices fell to a five-month low Friday as a sagging U.S. economy and a push to build smaller cars prompt automakers to buy less of the metal used in catalytic converters.
Other commodities traded mostly lower, with crude oil falling slightly and gold, silver, soybeans and corn futures also falling.
Platinum has dropped 11 percent in the last month, weighed down amid a U.S. economic slowdown and rocketing energy costs that have led to a sharp drop in new auto sales. In addition, an effort to build smaller, more energy efficient cars means less of the metal is being used per unit. Catalytic converters contain small amounts of platinum, palladium and rhodium.
"We're seeing demand destruction across the board in the auto sector and that has really impacted the platinum situation," said Jon Nadler, analyst with Kitco Bullion Dealers Montreal.
Platinum for October delivery fell $45.10 to settle at $1,855.30 an ounce on the New York Mercantile Exchange after earlier dipping to $1,845.10, the lowest price for a most actively traded contract since Feb. 7.
Other precious metals also traded lower Friday. Gold for August delivery fell $12.70 to settle at $958 an ounce on the Nymex, while silver for September delivery lost 53.5 cents to settle at $18.20 an ounce. September copper, meanwhile, fell 4.6 cents to settle at $3.669 a pound.
Platinum has fallen despite a lingering energy shortage in South Africa, the world's No 1 platinum producer, that has slowed mining operations and raised concerns of a supply shortage.
Similar drops in gold, silver, copper and other materials in recent days have some people questioning whether the commodities bubble of the past year may about to burst. But analysts caution that this week's correction in crude prices and other commodities could quickly change course if investors decide to shift funds back into futures, which have outperformed equities this year.
Oil prices fell slightly Friday, capping a week of unusual volatility that saw crude give back more than $15 a barrel.
Light, sweet crude for August delivery fell 41 cents to settle at $128.88 a barrel on the New York Mercantile Exchange.
Other energy futures traded mixed. August gasoline futures rose 0.76 cent to settle at $3.1709 a gallon, while August heating oil dropped 5.23 cents to settle at $3.6915 a gallon.
In agriculture futures, corn kept falling Friday as more favorable weather in the Midwest boosted optimism that crops will rebound from severe flooding last month.
Corn for December delivery fell 21.5 cents to settle at $6.285 a bushel on the Chicago Board of Trade.
November soybeans lost 50 cents to settle at $14.48 a bushel on the CBOT, while September wheat fell 5.5 cents to settle at $8.04 a bushel.

http://wtop.com/?nid=111&sid=589604

Africa's oil boom shifts balance of power

David Blair, Diplomatic Ediotr
Last Updated: 11:22PM BST 17/07/2008
In the coming decades, Africa's oilfields may begin to rival the strategic significance of the Middle East's reserves. As new discoveries elsewhere steadily diminish, the global balance of oil wealth shifts towards Africa with every passing year.
In the coming decades, Africa's oilfields may begin to rival the strategic significance of the Middle East's reserves. As new discoveries elsewhere steadily diminish, the global balance of oil wealth shifts towards Africa with every passing year.
Already, America buys more oil from Angola and Nigeria than it does from Saudi Arabia. Angola, the newest member of Opec, has overtaken Nigeria to become Africa's biggest producer, turning out almost two million barrels a day.
In the next three years, Angola will probably raise its daily output to match Kuwait's 2.6 million barrels.
By 2015, America will buy one quarter of all its oil from Africa, compared with about 15 per cent from Saudi Arabia, and the continent will become the superpower's largest single supplier, with the sole exception of Canada. Two reasons lie behind this crucial change in the global pattern of oil production.
First, Africa possesses a large proportion of the world's untapped reserves, mainly in offshore fields.
For decades, oil companies steered clear of Africa and conducted relatively little exploration. While new fields were discovered in the Middle East, the Gulf of Mexico, Alaska and South America, Africa was neglected.
Hence Africa now accounts for a high proportion of discoveries. Of the eight billion barrels of new reserves found in 2001, seven billion were in Africa.
While this figure was unusually high, at least one third of all global oil discoveries since 2000 have taken place in Africa, mainly in the Gulf of Guinea along the coastlines of Angola, Nigeria, Congo-Brazzaville, Gabon and Equatorial Guinea.
Thanks to high oil prices, it makes economic sense to develop these new fields and conduct further exploration. Angola's proven reserves now exceed 11  billion barrels. But there could be two or three times as much oil still lying undiscovered along the country's vast Atlantic coastline. The central goal of America's energy policy is to diversify suppliers.
At present, Washington is happy to reduce its dependence on the Middle East by importing steadily more oil from Africa.
Yet by malign chance, the west African coastline is one of the world's most unstable regions. Nigeria, torn by internal strife and waging an undeclared guerrilla war in the oilfields of the Niger Delta, is already losing at least 25 per cent of its production to sabotage by local militants.
Angola emerged from more than three decades of civil war in 2002.
President Jose Eduardo dos Santos leads a notionally Marxist government busily engaged in stealing and squandering the oil revenues. Angola's cabinet, steeped in corruption, is filled with Marxist millionaires. Mr dos Santos himself is believed to rank among Africa's richest men.
Experience suggests that oil bonanzas inflict nothing but harm on African countries. A tiny elite seizes the chance to enrich itself – and virtually nothing trickles down to the poor.
Meanwhile, oil revenues distort the entire economy, discouraging genuine entrepreneurs and undermining every state institution. Civil war becomes more likely because the incentive to take over the country and steal its resources is all the greater.
In the end, few will benefit from Africa's oil boom. The lives of millions of ordinary Africans will either stay the same or grow worse.
Meanwhile, the world will become increasingly dependent on another deeply unstable, troubled region.

http://www.telegraph.co.uk/news/worldnews/africaandindianocean/angola/2306459/Africa's-oil-boom-shifts-balance-of-power.html

Oil price shock means China is at risk of blowing up
By Ambrose Evans-PritchardLast Updated: 12:33am BST 07/07/2008The great oil shock of 2008 is bad enough for us. It poses a mortal threat to the whole economic strategy of emerging Asia.The manufacturing revolution of China and her satellites has been built on cheap transport over the past decade. At a stroke, the trade model looks obsolete.No surprise that Shanghai's bourse is down 56pc since October, one of the world's most spectacular bear markets in half a century.Asia's intra-trade model is a Ricardian network where goods are shipped in a criss-cross pattern to exploit comparative advantage. Profit margins are wafer-thin.Products are sent to China for final assembly, then shipped again to Western markets. The snag is obvious. The cost of a 40ft container from Shanghai to Rotterdam has risen threefold since the price of oil exploded."The monumental energy price increases will be a 'game-changer' for Asia," said Stephen Jen, currency chief at Morgan Stanley. The region's trade model is about to be "stress-tested".Energy subsidies have disguised the damage. China has held down electricity prices, though global coal costs have tripled since early 2007. Loss-making industries are being propped up. This merely delays trouble.More on energy"The true impact of the shock will only be revealed over time, as subsidies are gradually rolled back," he said. Last week, China raised internal rail freight rates by 17pc.BP 's Statistical Review says China's use of energy per unit of gross domestic product is three times that of the US, five times Japan's, and eight times Britain's.China's factories "were not built with current energy levels in mind", said Mr Jen. The outcome will be "non-linear". My translation: China is at risk of blowing up.Any low-tech product shipped in bulk - furniture, say, or shoes - is facing the ever-rising tariff of high freight costs. The Asian outsourcing game is over, says CIBC World Markets. "It's not just about labour costs any more: distance costs money," says chief economist Jeff Rubin.Xinhua says that 2,331 shoe factories in Guangdong have shut down this year, half the total.North Carolina's furniture industry is coming back from the dead as companies shut plant in China. "We're getting hit with increases up and down the system. It's changing the whole equation of where we produce," said Craftsmaster Furniture.China is being crunched by the triple effects of commodity costs, 20pc wage inflation, and sagging import demand in the US, Canada, Britain, Spain, Italy, and France.More on economicsCritics warn that Beijing has repeated the errors of Tokyo in the 1980s by over-investing in marginal plant. A Communist Party banking system has let rip with cheap credit - steeply negative real interest rates - to buy political time for the regime.Whether or not this is fair, it is clear that Beijing's mercantilist policy of holding down the yuan to boost exports share has now hit the buffers.Foreign reserves have reached $1.8 trillion, playing havoc with the money supply. Declared inflation is just 7.7pc, but that does not begin to capture the scale of repressed prices, from fuel to fertilisers. "There is a lot more bottled-up inflation in this economy than meets they eye," says Stephen Green, from Standard Chartered.Inflation merely steals growth from the future. It defers monetary tightening until matters get out of hand, which is where we are now. Vietnam has already blown up at 30pc. India is on the cusp at 11pc, so is Indonesia (11pc), the Philippines (11pc), Thailand (9pc) - leaving aside the double-digit Gulf.Of course, oil prices may fall again. They plunged to $50 a barrel in early 2007 after the Saudis raised production. The scissor effect of slowing global growth and extra crude later this year from Brazil, Azerbaijan, Africa, and the Gulf of Mexico may chill the super-boom.The US Commodities Futures Trading Commission is on an "emergency" footing, under orders from the Democrats on Capitol Hill to smash speculators. If it is really true that investment funds have run amok, we will soon find out.I suspect that the energy markets have fallen prey to their own version of the "shadow banking system" that so astonished regulators when the credit bubble burst.I also suspect that Hank Paulson and his EU colleagues have a surprise up their sleeve for the late-cycle über-bulls. Those who claim that derivatives (crude futures) cannot drive spot prices have overlooked a key point. The Saudis and others use the IPE Brent Weighted Average of futures contracts as their pricing mechanism. Futures now set the spot price.But even if oil comes down for a year or two, the mid-term outlook of the International Energy Agency warns that crude markets will be tighter than ever by 2012. Call it Peak Oil, or just Peak Non-Cooperation by the dictatorships that control most of the world's remaining 5 or 6 trillion barrels (Mankind has used one trillion so far).Come what may, globalisation has passed its high-water mark. The pendulum will now swing back from China to America. The mercantilists will have to reinvent themselves.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/07/ccview107.xml

Middle East war threat rattles oil markets
Last Updated: 1:10am BST 03/07/2008

It is unclear how energy problem will be resolved, and talk of an attack on Iran does not help, reports Ambrose Evans-Pritchard
A supply crunch and mounting fears of an Israeli air strike on Iran propelled oil to $143 a barrel at one stage yesterday, prompting warnings from the International Monetary Fund (IMF) of a severe economic crisis in poorer regions.

Iran's Azadegan oil field
"Some countries are at a tipping point," said Dominique Strauss-Kahn, the IMF's managing-director."If food prices rise further and oil prices stay the same, some governments will no longer be able to feed their people."
The energy markets have been seriously rattled by comments from a top Pentagon official warning that Israel may launch raids on Iran's Natanz nuclear facilities to pre-empt its acquisition of Russian air-defence missiles.The source told ABC News that Israel would not wait until the Ahmadinejad regime had accumulated enough enriched plutonium to make a bomb. "The red line is not when they get to that point, but before they get to that point," he said.
Iran has threatened to close the Straits of Hormuz if attacked, cutting off a quarter of the world's oil supply. Such a move could drive oil to $200 or higher, bringing the global economy to its knees.
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The International Energy Agency yesterday slashed its forecast for oil demand growth by over 3m barrels per day (bpd) by 2012 as economic growth slows and consumers take drastic steps to cut fuel use, but said the oil market would remain "tight" because of supply shortfalls.
"Over 3.5m bpd of new production is needed each year just to hold steady," it said. China's imports will rise from 4m to 5.7m bpd within four years.
"With oil prices hitting $140 we are clearly in the third oil shock. Truck drivers are going on strike. Airlines are closing down," said Nobuo Tanaka, the IEA's director.
Lower demand may help ease strains in the crude markets - lifting spare capacity to 4m bpd - but will merely defer a deeper crisis caused by lack of investment.
The Kashagan oil field in Kazakhstan is unlikely to produce much before 2013, while Russia has hobbled its oil sector with a costly tithe. Its output will fall below 10m bpd a year by next year. Matters would be worse without biofuels, which will reach 1.9 bpd in four years and make up almost half the growth in non-OPEC supply growth.
Even so, Sheik Ahmed Yamani, Saudi Arabia's former energy tsar, said the oil spike feels very different from the 1970s when there was a lack of supply.
"Now it is because of problems with the price-setting system in the futures market. Traders buy and sell depending on rumours, not supply and demand. So much money is flowing into the market, it's almost like gambling," he told Japan's Nikkei Net. This is the "OPEC View".
The big western oil companies, however, blame the demand in Asia, the Mid-East, and Latin America - and the refusal of the petro-states to open up to western know-how. The IEA said it was facile to blame speculators.
"All producers are working virtually flat out and there is no sign of any abnormal stockbuild giving a strong indication that current prices are justified," it said.
Hedge fund managers questioned this on Capitol Hill last month, saying the price would fall to $60 overnight if there was a clampdown on trading. It is a fine line between speculation and the activities of pension funds buying long-term futures, but there can be little doubt that financial flows have begun to distort the market.
Spain's industry minister, Miguel Sebastian, told the World Petroleum Congress that investors were using 850,000 bpd, enough to upset the wafer-thin balance.
The US Congress passed a bill last week authorising - or pushing - the Commodity Futures Trading Commission to take "emergency" action to halt the alleged abuses. This has not been done for nearly 30 years.
The most likely option is to tighten margins on futures trading, which was used in 1980. It is unclear whether this would work today.
Paul Horsnell, commodity chief at Barclays Capital, says speculators are now net "short". If so, higher margins would force them to cover positions, pushing prices even higher.
Oil prices fell back in late trading, with Brent up $2.54 to $142.37 in London, and sweet crude in New York $1.93 higher at $141.93.
http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=A1YourView&xml=/money/2008/07/02/ccoil102.xml