Gas shortage at Costco Gas stations here in California

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US Senate blocks bill targeting oil firm subsidies

© AFP/Getty Images/File David Paul Morris

AFP

WASHINGTON (AFP) - The US Senate defeated a bill taking aim at some $2 billion in annual subsidies to some of the world's largest and most profitable oil companies amid deep voter anger at high gasoline prices.

Lawmakers voted 52-48 to end debate on the measure, falling short of the 60 required and effectively killing a proposal that the White House's Democratic allies had portrayed as a belt-tightening step in cash-strapped Washington.

Democrats planned to revive the proposal -- which would have affected oil giants BP America, Chevron, ConocoPhillips, ExxonMobil and Shell -- as part of broader spending-cut talks ahead of a vote on raising the US debt ceiling.

Exxon CEO Estimates Oil Should Cost $60-70 Per Barrel (Video)

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Obama announces new oil drilling

Editor's Note:  Problem, Reaction, Solution.  The best way to get people to allow the criminal oil companies to start drilling in the Gulf again, without any significant safety improvements, is to hit them where it hurts.

Obama has previously vowed to cut US oil imports
© AFP/File Mira Oberman

AFP

WASHINGTON (AFP) - President Barack Obama, under pressure over high gasoline prices, Saturday committed to annual oil and gas lease sales in Alaska's National Petroleum Reserve and to speeding up production in other areas.

In his weekly radio and Internet address, the US leader admitted that one of the biggest burdens for US consumers in recent months had been the high price of gasoline -- which is more than four dollars a gallon in some areas.

"These spikes in gas prices are often temporary, and while there are no quick fixes to the problem, there are a few steps we should take that make good sense," Obama said.

The president vowed to increase safe and responsible oil production from US resources, at the same time as enhancing safety and environmental standards.

$6 Gas? Could Happen if Dollar Keeps Getting Weaker

CNBC

A dollar plumbing three-year lows is hitting Americans squarely in the gas tank, and one economist thinks it could drive prices as high as $6 a gallon or more by summertime under the right conditions.

With the greenback coming under increased pressure from Federal Reserve policies and investor appetite for more risk, there seems little direction but up for commodity prices, in particular energy and metals.

Weakness in the US currency feeds upward pressure on commodities, which are priced in dollars and thus come at a discount on the foreign markets.

One result has been a surge higher in gasoline prices to nearly $4 a gallon before the summer driving season even starts, a trend that economists say will be aggravated as demand increases and the summer storm season threatens to disrupt oil supplies.

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Saudis Slash Oil Output; Say Market Oversupplied

OPEC Countries/Wikimedia image

CNBC/Reuters

Saudi Arabia's oil minister said on Sunday the kingdom had slashed output by 800,000 barrels per day in March due to oversupply, sending the strongest signal yet that OPEC will not act to quell soaring prices.

Consumers have urged the exporters' group to pump more crude to put a cap on oil, which surged to more than $127 a barrel this month, its highest level in 2 1/2 years amid unrest in North Africa and the Middle East.

Oil Ministers from Kuwait and the United Arab Emirates echoed Saudi Arabia's Ali al-Naimi's concerns about oversupply and said rocketing crude prices were out of the hands of OPEC, which next meets in June.

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Energy, food costs push up US consumer spending

Groceries Wikimedia Commons

AFP

WASHINGTON (AFP) - US consumer spending rose in February, outpacing income growth, as Americans faced higher costs for energy and food, official data showed Monday.

Consumer spending rose 0.7 percent from January, more than double the 0.3 percent increase in January, the Commerce Department reported.

It was the strongest increase since October and topped forecasts for a 0.5 percent rise.

"The problem isn't that consumers aren't spending, they are," RDQ Economics analysts told clients. "But spending gains are being soaked up in higher prices for food and energy."

Oil price shock; you ain't seen nothing yet

Wiki Commons

Jeremy Warner
Telegraph

The most common cause of a spiking oil price is supply shock. We may be seeing just such a phenonenon right now with the effective shut down of Libyan oil. But sometimes it’s excessive demand that does the damage.

Forget the present turbulence, which may or may not be temporary. You don’t have to look far into the future, perhaps as little as a year to 18 months, to see that a major demand challenge is looming which even assuming no further disruption to existing production, will challenge the present supply base to breaking point.

As it is, it’s fair to assume the world is closer to full capacity than producers care to admit. Rewind to the last oil price shock in the summer of 2008, and Saudi Arabia, pumping out oil at the rate of around 9.5 million barrels a day, was having to draw on inventories to meet demand. It’s therefore reasonable to assume that 9.5 million bpd then represented maximum capacity.

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Gas supplies at five-year low for early January

National Grid reports that gas supplies have fallen dramatically after coldest December since 1890

Andy Rain/EPA

Tim Webb
Guardian

The amount of gas kept in storage in the UK is at its lowest level in five years for so early in the winter, according to National Grid.

Last month, was the coldest December since 1890, and the UK's gas storage facilities, which are among the smallest in Europe, are already more than half empty as they cope with record demand. Domestic supplies of gas have also been exported to the continent via the Interconnector under-sea pipeline, because prices are higher there than in the UK.

As of Friday, the UK had enough gas in storage to meet in total about five and a half days' consumption, given average winter temperatures, although storage facilities can release only a fraction of this each day. These facilities – mostly old gas fields such as Centrica's Rough reservoir off the coast of Yorkshire – have in the past run down gradually during the winter and restocked over the spring and summer. But analysts said that suppliers have withdrawn stocks much earlier this year, with almost two months of the winter left to run.

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Oil Hits 2-Year High After Supplies Drop More Than Forecast

Mark Shenk
Bloomberg

Crude oil rose to the highest level in more than two years after government reports showed that U.S. suppliesdropped and the country’s economy grew more than previously estimated in the third quarter.

Stockpiles fell 5.33 million barrels to 340.7 million last week, the Energy Department said. A 3.4 million-barrel decline was forecast, according to the median of 14 responses in a Bloomberg News survey. The Commerce Department said gross domestic product expanded 2.6 percent in the third quarter, up from a previous estimate of 2.5 percent.

“Today’s crude numbers were very bullish,” said Andre Julian, chief financial officer and senior market strategist at OpVest Wealth Management in Irvine, California. “The GDP numbers point to extended growth in the U.S. Previously, we were seeing economic and demand growth in China and emerging markets, now it’s spreading here.”

Crude oil for February delivery rose 66 cents, or 0.7 percent, to $90.48 a barrel on the New York Mercantile Exchange, the highest settlement since Oct. 3, 2008. Prices have climbed 14 percent this year.

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