Oil Ends Higher After Upbeat US Jobs Data

Oil futures jumped Thursday, as traders looked past a smaller-than-expected draw in U.S. oil inventories to focus on a pair of upbeat readings on U.S. employment levels.

Light, sweet crude for August delivery settled up $2.02, or 2.1%, to $98.67 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange doubled that gain, settling up $4.97, or 4.4%, to $118.59 a barrel.

Futures surged after giant Automatic Data Processing Inc. (ADP) said the U.S. private sector added 157,000 jobs last month, above the 95,000 that had been expected by economists polled by Dow Jones Newswires. That report was quickly followed by a reading from the Labor Department showing new claims for unemployment benefits fell last week for the first time in three weeks. The figure fell 14,000 to a seasonally adjusted 418,000. Economists had expected a drop of 3,000.

Crude market participants closely watch U.S. employment data, which correlate closely with demand for oil, gasoline and other refined products.

"Both domestically and globally ... the economies are in better shape than we're led to believe," said Jay Levine, president of Energy LLC, a Portland, Maine, brokerage and consultancy. "The oil market in general has been looking better."

 Jay Levine, president of Energy LLC,



Following the upbeat reports, several economists raised their forecasts for the change in June non-farm payrolls, due Friday from the Bureau of Labor Statistics.

Thursday's employment data sent Nymex crude rallying as high as $99.42 in intraday trading, the contract's highest level since June 15. Traders pared its gains, however, after the Department of Energy posted a smaller-than-expected decline in U.S. oil inventories last week.

The Department of Energy said oil inventories fell 900,000 barrels, less than the 2.4-million-barrel decline forecast by analysts surveyed by Dow Jones Newswires.

U.S. crude inventories have fallen for five straight weeks, a sign that demand remains strong from refiners. Inventories, however, are still above last year's levels amid the backdrop of a weak economic recovery.

The DOE said gasoline inventories last week fell 600,000 barrels. Distillate stocks, including heating oil and diesel, declined 200,000 barrels. Analysts had expected gasoline and distillate stockpiles to climb 900,000 and 200,000 barrels, respectively.

The report was delayed by a day due to the Independence Day holiday Monday.

Gains in Brent, the European benchmark, sharply outpaced the Nymex contract. Analysts attributed Brent's steep gains to several factors, including a decision by the European Central Bank to continue lending against Portuguese debt.

They also pointed to a technical explanation: a $2 "continuation gap" around $115 a barrel that the front-month contract skipped when July futures expired in mid-June. Technical traders quickly filled the gap by boosting the price of August futures when they approached $115 again, sending the front-month Brent contract surging.

"The market always goes back to fill those gaps," said Tom Bentz, director at BNP Paribas Commodity Futures. "Once the market punched through it, it exploded another dollar like nothing."

Refined product futures largely tracked the Brent contract. Front-month August reformulated gasoline blendstock, or RBOB, settled up 12.94 cents, or 4.3%, to $3.1270 a gallon. August heating oil settled up 13.87 cents, or 4.7%, to $3.1020 a gallon.

Mr. Obama; You Have Been Warned



Prince Turki al-Faisal

 Prince Turki al-Faisal, Saudi Arabia's former Ambassador to the U.S., is a warning or should I say "A threat"? to America:   Stop supporting Israel or else.

But really, it's not just Israel. The fact is that the prince and the ruling Saudi family really want the U.S. to stop supporting democracy and freedom altogether.

There will be disastrous consequences for U.S.-Saudi relations if the United States vetoes against U.N. recognition of a Palestinian state. It would mark a nadir in the decades-long relationship as well as irrevocably damage the Israeli-Palestinian peace process and America's reputation among Arab nations. The ideological distance between the Muslim world and the West in general would widen -- and opportunities for friendship and cooperation between the two could vanish.

With his comments, the prince is trying to focus the Obama administration and Americans on the "self-determination" of the Palestinians, rather than the "self-determination" of his own people, not to mention other freedom-seeking citizens in the Middle East and Africa. This is not the first time that Prince al-Faisal has blasted the United States for what he calls "favoritism" towards Israel's "occupation" of the land called Palestine. From the moment President Obama was elected, al-Faisal has spoken out against U.S. support of Israel. This time, he appears to have drafted an ultimatum.

Americans must recognize that this finger-pointing at Israel is just a distraction meant to earn sympathy for a new race of 20th-century people, called "Palestinians," who want a homeland. The prince never wants to talk about why Jordan, where many of these Arabs come from, and other Muslim countries are not willing to find a home for these Palestinians in the vast lands they occupy. No, a Palestinian state must be created from the biblical land of the Jews, thus squeezing the latter within borders that are indefensible.

Anti-Semitism continues to run rampant as a rallying ideology that has been fed to Muslims for 1,400 years. The prince, a spokesman for the Saudi family, Saudi citizens, and Muslims around the world, wants his society to remain a "Monarchy," governed by the Qu'ran, with the Western world led to "Sharia Law." Jews, a people whose Torah created the model for democracy, are now being threatened by this prince, who feels empowered to instigate an even wider breach in American-Israeli relations than already exists thanks to Obama's administration.

This is a prince who is defending the Islamic political and social ideology and who understands that Israel is the only stronghold for democracy in the Middle East. He cannot justify the economic, political, and social injustices in his society. So, as occurs with many Muslim leaders, Israel and Jews become the focal point. To delegitimize and eventually eliminate Israel is the universal goal of Muslims, leading to a continent of "true believers" and the spread of Islam in the Western world. This is part of the continuing attempt to shut down the voices of democracy and freedom.

Fortunately, more and more Americans are becoming aware of the lack of equality and freedom that Islam and the Qu'ran preach to its followers. But Americans are surely compromised by the need for Saudi support and stability (oil). Prince al-Faisal writes:

American leaders have long called Israel an "indispensable" ally, until the Obama administration. They will soon learn that there are other players in the region -- not least the Arab street -- who are as, if not more, "indispensable." The game of favoritism toward Israel has not proven wise for Washington, and soon it will be shown to be an even greater folly.

America, we are being warned...and how Obama responds to this will be critical. He might very well want to sell out Israel because of "oil power," the illusion of stability the Saudis bring to the area, and his own favoritism towards Islam. However, one thing the prince has gotten right is that Obama will not be able to cozy up too much to the Saudis until after the 2012 election. The royal family will support Obama's reelection, knowing that the Republicans will not be so "politically correct."

Meanwhile, let's take note that Israel is sitting on a huge deposit of oil and natural gas, $$$ with a warm water sea port $$$ -- probably another reason this prince is speaking out so candidly and openly. Oh, what the Arabs could do with more oil and gas resources...and think of how much less compromising Americans will need to be if the U.S. is able to shift some of its energy purchases to Israel.

The war is truly over the differences between two civilizations -- a democratic society versus one ruled by Sharia law -- but the battle is over Israel for now.

Is Saudi Arabia Running Out Of Oil?





Disappearing Saudi Oil

  

The electricity company of Saudi Arabia has set off alarms to warn that oil in this country could be depleted by 2030 if domestic consumption is left unchecked . According to a report of this company, it is estimated between 2.5 and 3.4 million barrels a day.



The report, published in the magazine Al Mashka of the company itself says that the increase in domestic consumption of oil is one of the main challenges facing the country, mainly because oil accounts for 80% of national income.

Abdel Salam al-Yamani, head of the Saudi Electricity Company also warned of the consequences for citizens to ignore the calls to save electricity and water, and has advised that they depend more on solar energy.

Saudi Arabia, the first country in the world oil exporter, currently produces 8.5 million barrels a day and the government subsidizes oil consumption to about 130,000 billion dollars annually.

On Wednesday the Organization of Petroleum Exporting Countries (OPEC) meets in Vienna to discuss a possible increase in oil production quota to compensate for the lack of Libyan oil and moderate and high prices of black gold. " 

Omran Abu Kraa (center)



It is expected that the ministerial conference tomorrow, Libya will be represented by Omran Abu Kraa, an envoy of the leader Muammar al-Gaddafi, even though Qatar, Kuwait and UAE, also members of OPEC, supporters of the rebel National Transitional Council (CNT).

Not so Venezuela, Ecuador and Iran, contrary to the current NATO intervention in support of opposition to Gadahfi.

Venezuelan Oil Minister Rafael Ramirez has rejected that OPEC may become paralyzed by this situation, but recognizes that the civil war in Libya affects "the oil market."

"We have to analyze the variation of the interruption of production in Libya," Ramirez said in a press  conference, nearly 1.4 million barrels per day of Libyan oil has stopped.

"OPEC has experience in conflict situations. In the 1980's had two members, Iraq and Iran, locked in a bloody war. But OPEC meetings sat at the table," said John van Schaik, oil analyst at the consulting firm of "Medley Global Advisors."

Now, "OPEC looks for a magic formula," said the expert, referring to the difficult decision to adjust the group's production quota to the very different market situation, shaken by the wave of instability in the Middle East, a region key to world oil supplies.

Crude futures declined Friday after three days of gains, dropping toward $100 a barrel on signs Saudi Arabia is raising oil output.

Light, sweet crude for July delivery recently traded $1.78, or 1.8%, lower at $100.15 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 50 cents lower at $119.07 a barrel.

Oil refiners in Asia said Friday that Saudi Arabia, the world's largest crude exporter, is offering more crude to buyers for July.

The action signals the kingdom is following through on its pledge to meet world oil demand despite a failure of the Organization of Petroleum Exporting Countries this week to approve a production increase.