Millionday Roundtable 8/28/13
[millionday] so it looks like the news is picking up on some stories about iraq and we know why after the india meeting and the set of oil going on
[marketralley] Great News
[millionday] have to understand where the oil came from before for india and where iraq is on the board now it may seem like a long time but huge changes have taken place in one generation
[millionday] that is huge normally things turn around in the oil industry but not like it has — futures must be hard to even think about —- lol let me get some news on the subject and brb
Read More Link On Right
[millionday] ok here we go this is about what fresh and i were saying — this is the issue that now is about iraq and why we are seeing this on our news and they are headed in the direction so fast now that we see
[millionday] Last week’s four-day State visit by Iraq’s Prime Minister Nouri Kamil al-Maliki did not attract the attention it deserved. But the importance of his visit cannot be understated.
After all, Iraq has now emerged as India’s second largest supplier of crude oil after Saudi Arabia. Also, unlike other commodities whose global prices have fallen significantly in recent months – be it gold, industrial metals, coal, potash, grains or coffee – crude has exhibited no signs of bearishness.
[millionday] Since April 18, when it touched a nine-month-low of $97.18, the average cost of crude imported by Indian refiners has risen to cross $109 a barrel.
Taking into account the substantial currency depreciation over this period, the effective increase in rupee terms works out to over 36 per cent. The ongoing geo-political tensions in Syria and civil unrest in Egypt make any respite on the crude front unlikely in the near term.
[millionday] note — meaning when the value of the rupee goes down and the price goes up it equaled 36 % rise —
[millionday] note — i am bring you this so you can see what the big deal was with maliki visit to india and its results
[millionday] very important
[millionday] All this reinforces the need for India to diversify its sources of crude oil imports. To an extent, it has succeeded in doing so. In 2001-02, the country’s top four suppliers were Saudi Arabia, Kuwait, Nigeria and Iran.
Today, the No. 2 and 3 slots have been taken over by Iraq and Venezuela, with Kuwait pushed to fourth position. While western financial sanctions have reduced oil imports from Iran by about 40 per cent, the vacuum has been more than filled by Iraq and Venezuela
[millionday] An enabling factor has been the setting up of modern Indian refineries that can process a variety of crudes, including inferior quality, high-sulphur ‘sour’ oil from origins such as Venezuela. This is in contrast to the older refineries in Europe or the US, which are equipped to handle only the light, less waxy ‘sweet’ crudes that sell at a premium.
[millionday] While seeking out new suppliers especially from Latin America and Africa as a hedge against geo-political risk must be a continuous effort, India also needs to be more proactive in exploring bilateral trade and alternative payment mechanisms.
Iraq, for instance, has a huge infrastructure rebuilding requirement resulting from the 2003 US invasion and the internal strife that followed. There is no reason why payments for Iraqi oil cannot be tied with contracts for execution of engineering, procurement and construction projects for Indian companies.
[millionday] note — see that — they need work done and they need oil — remember that most oil is bought by usd and then the iraqi gov sells the usd to cbi for dinar
[millionday] The fact that the visiting Iraqi side showed interest in such cooperation, including turnkey railway projects and sourcing of power equipment from India, indicates the potential here. Likewise, there is no dearth of things – rice, oilmeals, tea, pharma and engineering goods – that India can supply to oil exporting countries (including Iran) on barter. Our foreign policy must be tailored to promote these goals.
[millionday] see this is huge in gains for both sides and also will diversify their reserves as well — it will add rupee and also india will benefit by helping themselves with the gain in what they are paying and add to what they can create through their refineries and therefore raise the value of their currency — the rupee
[millionday] make sense ? huge for all and also effective for the dinar they save and gain — smile
[marketralley] Milli… Does the dinar need to be international for this?
[millionday] i would say to minimize the gain for india and the loss for iraq — it would be a good idea smile and it will be taken to the market so it will have to be at a rate that keeps them from being wiped out imo
[ANYdaynow] millionday…hi, do you feel more optimistic today than even last few days?
[millionday] ANYdaynow i am like everyone else trying to keep my cool and watch what is actual — smile
[mdglow] refinery assessment is biased ! for sure some the largest refineries in the U.S. process all types of oil ,from high sulphur to light crude us process is second to none.but who cares about that lol please raise to value of the dinar!!
[millionday] mdglow i understand but what most dont know — the USof A is under sanctions still after all these years and we cant just sell oil to anyone we want to
[millionday] i believe — have not looked but i believe it is still just mexico and one other country
[Smokey Mtn. Dinar] millionday How are WE under sanctions? I didn’t know we were.
[millionday] i will look it up but it is from years ago and we have not been able to sell oil for many years to anyone we like a little milly tidbit smile
[Smokey Mtn. Dinar] Doesn’t our oil they are pumping up in Alaska, go to Japan?
[millionday] i will look it up hun and see which country it is other then mexico — it has also been in the news lately that the US of A is thinking of working to change that and meet whatever it is we need to do — i will look it up and bring it tonight smile
[Smokey Mtn. Dinar] OK thanks
[mydinar100] millionday what country and whose military put sanctions on us. Why oh why would we agree to such?
[millionday] ok brb — let me find what i had on it lol hold that thought
[millionday] Federal lawmakers should overturn the ban on exporting crude oil produced in the United States. As recently as half a decade ago, oil companies had no interest in exporting U.S. crude oil, but that has changed. Oil production has grown more in the United States over the past five years than anywhere else in the world, even as domestic oil consumption has declined.
With these changes has come a widening gap among the types of oil that U.S. fields produce, the types that U.S. refiners need, the products that U.S. consumers want, and the infrastructure in place to transport the oil
[millionday] Allowing companies to export U.S. crude oil as the market dictates would help solve this mismatch. Under federal law, however, it is illegal for companies to export crude oil in all but a few circumstances.
[millionday] Over the past year, the Department of Commerce granted licenses to several oil companies to export a small amount of U.S. crude oil. But these opaque, ad hoc exceptions are insufficient.
Removing all proscriptions on crude oil exports, except in extraordinary circumstances, will strengthen the U.S. economy and promote the efficient development of the country’s energy sector
[millionday] When Congress in the 1970s made it illegal to export domestically produced crude oil without a license, the goal of the legislation was to conserve domestic oil reserves and discourage foreign imports. In reality, the export ban did not help accomplish either of these objectives.
It has now become more of a hindrance than a help. The opaqueness of the export approval process discourages would-be exporters from applying for licenses. Companies see a lack of legal clarity and fear inconsistent regulation. They are hesitant to incur negative publicity on Capitol Hill when they doubt they will be granted approval.
[millionday] Two important elements of the U.S. oil export equation have changed in the past few years. First, exporting U.S. crude oil has become economically attractive to the energy industry.
Crude oil exports have grown from next to nothing in 2007 to around one hundred thousand barrels per day in March 2013, all of which went to Canada. Second, the United States has become one of the world’s largest gross exporters of refined oil products, such as gasoline and diesel.
Unlike crude oil, which is unprocessed, oil that has been refined can be exported freely under U.S. law. Roughly three million barrels per day of refined oil products were exported in December 2012, a major increase from prior decades. Until 2011, the United States had not been a consistent net exporter of oil products since 1949.
[millionday] note — see shocking tidbit most do not know — and has a lot to do with what is going on in our investment there is more
[millionday] Restrictions on crude oil exports are already beginning to undermine the efficiency of the U.S. oil economy. Much of the country’s rapidly growing production of light crude oil, including lease condensates (i.e., ultra-light oil), comes from either areas where refiners are not interested in or able to process it, given that many U.S. refineries are configured to run lower-quality crude oil, or in parts of the country with inadequate transportation infrastructure.
[millionday] With few viable domestic buyers, producers are forced to choose between leaving oil in the ground and pumping it at depressed prices. These artificially low prices slow additional U.S. crude oil production.
New refineries and pipelines currently under construction will help remedy some of these market distortions over time, but a simpler, more cost-effective solution would include allowing U.S. crude to be exported. Doing so will not raise gasoline prices.
Prices at the pump will continue to be determined by the global market, regardless of whether the United States exports crude oil. Were the ban overturned today, crude exports would immediately rise by several billion dollars a year, according to industry executives, likely surpassing five hundred thousand barrels per day by 2017.
[millionday] The primary laws prohibiting crude exports are the Mineral Leasing Act of 1920, the Energy Policy and Conservation Act of 1975, and the Export Administration Act of 1979.
The so-called short supply controls in the Export Administration Regulations (EAR) of the Bureau of Industry and Security (BIS), an agency of the Department of Commerce, spell out these restrictions.
[millionday] A few obscure types of crude oil automatically qualify for export licenses under EAR. These types include crude oil produced in Alaska’s Cook Inlet or exported to Canada, as long as it is consumed there; and small amounts of heavy (or viscous) crude oil produced in California.
Other niche cases do not require licenses. Crude oil transported via the Trans-Alaska Pipeline System or produced overseas and stored in the U.S. Strategic Petroleum Reserve may be exported.
[millionday] note — remember when the reserves here were emptied
[millionday] so the reason we believe that the reserves were emptied was to fill them with imported from iraq under the deal signed that is supposed to be at 32$ a barrel 00
[millionday] make sense so far ?
[millionday] ok so that is how this is connected — brb with more on it
[millionday] Some U.S. crude oil can be exported with a presidential finding. This includes crude oil of U.S. origin transported on federal right-of-way pipelines, crude oil produced from the outer continental shelf, and crude oil produced from naval petroleum reserves that were once set apart for use by the military but that are now almost entirely commercialized.
[millionday] note — this is why they wanted Obama to sign to allow a while back —
[mydinar100] millionday my information says that we have more oil in reserve then at any time since the early 1900s.
[millionday] In nearly all other cases, U.S. crude oil can only be exported if the BIS finds that proposed exports are “consistent with the national interest and the purposes of the Energy Policy and Conservation Act.” The agency has the right to accept or reject applications for an export license according to its own unarticulated definition of the “national interest.” [
The only specific case the EAR mentions as meeting these strict criteria is when the exported crude is exchanged for more or better refined oil imports, under a contract that can be terminated if U.S. oil supplies are “interrupted or seriously threatened,” and could not have “reasonably [been] marketed” in the United States.
[millionday] note — see that — so if the oil is better — hmmm
[millionday] A better approach would be to allow companies to freely export oil as the market dictates, eliminating the requirement that companies obtain a license for each crude oil export transaction. The only exception to this policy should be when the president determines there is a national emergency.
To make this change, Congress should repeal EAR’s short-supply controls that apply to crude oil exports.
[millionday] so they are talking about this now — a repeal and let me say — in any business decision that is made — there is a cost and benefit analysis so that is being done in fact i have it but we have talked enough about this smile
[millionday] interesting fact in the middle of all this dont you think? kind of an aaahhhhaaa so that is why the huge plan and many think the oil is the issue and the US of A has alot to do with it ect
[myblifeguard] millionday ..Ithink the INdia deal is born out the fact that the US is becoming more energy independent due to fracking….whole ME know this..
[myblifeguard] Iraq is hedging its bets.. JMO
[tiger_ag] so if im understanding this correctly, the govt does not allow for the exportation of oil, but congress is trying to repel that legislation so we can empty out our reserves and fill them with higher quality crude from iraq at 32 per barrel?
[millionday] i agree
[myblifeguard] millionday w/o major economic reforms…Iraq will become Syrian and Egypt….they know this I am sure..
[myblifeguard] millionday ..also….Politicians don’t change because they see the light…..they change when they feel the heat!!!!! (even Iraqi politicians)
[millionday] exactly — there is huge losses that will occur in many back door agreements — so we are in a great spot and what i would call “on the shirt tail” of much bigger things smile
[millionday] love to talk about all this stuff — i must be a nerd lol
[myblifeguard] OK…that is my 2 cents worth….Hope I don’t get “change” LOL
[millionday] Iraqi Prime Minister Nouri al-Maliki says the Syrian war has awakened dormant Sunni-Shiite tensions. Series of bombs ripped through Baghdad on Wednesday morning. At least 30 people were killed and 170 injured, according to a ministry of interior official. Attackers coordinated at least 14 car bombs, two roadside bombs, and one suicide bomb between the early morning and 11:00 am.
[belabun] yes 233 that I know of this a.m., probably more by now.
[millionday] right huge point belabun — the thing is this with that we should see exactly that with the kurds so they can be independent as we know their is unrest and historical at that as long as time they have fighting
[millionday] so that is why beyond a pay off and success here — seeing this peace agreement — will make religious leaders across the world sit up and take notice it is huge from bc
[millionday] so the kurds and agriculture — is a smart move and we will see this as we check back in future times as a where are they now moment