OIL TROUBLE

From Michael Hyatt's Bug Watch Forum) http://www.michaelhyatt.com

12/31/99 - Turkey resets clocks to 1980 on oil pipelines

1/1/00 - Columbia 350,000 b/d blown up by saboteurs - fixed

1/2/00 - Columbia 350,000 b/d blown up again - status now unknown

1/2/00 - Motiva's 220,000 b/d Norco, La oil refiner down due to "unexplianed power outage" -220,000bbd

1/3/00 - Nigerian Oil plant down - locals causing problems.

1/3/00 - Shell oil in Singapoer reduces oil output 20%. No explanation.-100,000bbd

1/4/00 - Coastal Eagle Point NJ Oil refinery down. Internal loss of generating power? -140,000bbd

1/4/00 - Coastal Corpus Christi oil refinery, FCC problem. - 103,000bbd

1/4/00 - Equilon's Wood River, Ill oil refiner down due to "unspecified crude unit problem" -210,000bbd

1/5/00 - PDVSA & Hess is diverting a cargo of oil back to Europe, was headed to US.

1/7/00 - Motiva's Delaware oil refinery down due to fire. -110,000bbd

1/14/00 - BP Amoco, Yorktown, down due to mechanical failure. - 62,000bbd

ALSO

I read it on reuters ( under "oil" ) Columbias main pipeline has been blown up twice. The first time on jan 1, they just fixed it and one day latter it was blown up again. Reuters mentioned it carried about 350,000 barrels a day.. . .pipeline sabotage. . .No word in any recent newspostings of SEV, altho, as you probably know, SEV's CEO is none other than the illustrious Dr.Schlessinger, former CIA head, Dept. of Energy head. . .SEV would certainly be possible beneficiary of any such sabotage. . .Curious bedfellows, to say the least. Where did you get your original news anyhow? TIA, TheBox.

ALSO

The pipeline in Chechnya???

-- Andy (2000EOD@prodigy.net), January 16, 2000

Answers

ONE MORE TIME" OIL IS GOING TO $80.00 A BARREL" Not right away 30 DAYS from now. You have a few more days to prepare.

-- JC (jc@yahoo.com), January 16, 2000.

Andy,

Put up a post, utilizing a thorough search of all the sources that went into the reports on Hyatt's forum, of the first two weeks in January of 1999, 1998, or 1997, and compare the oil problems therein to your original post, and your original post MIGHT not be completely worthless.

-- John H Krempasky (johnk@dmv.com), January 16, 2000.

John,

Your reply is completely worthless, though

-- (-@-.-), January 16, 2000.

I agree with john. I know I am in the minority, but it is irresponsible to draw conclusions from data in isolation-it is high school logic that one nust look at historical data to get a true picture of any snapshot in time.

-- futureshock (gray@matter.com), January 16, 2000.

Ok JC & John, Andy presented the info. You prove him wrong since you are so confident that he is. Looks like he put some thought and work into the information presented. Seems like you would be willing to do no less.

-- Ctrl Guy (Out_of_town@in_the_wood.net), January 16, 2000.

If I handed you a crystal ball you still would'nt believe me. Everyone is being tight lipped and being in the oil business there is very few straight shooters. Oil is going to keep going up regardless of what you or I think. Somedays you will see sharp pullbacks only to be followed by large increases.

-- JC (jc@yahoo.com), January 16, 2000.

Sorry JC! That should have been addressed to John & futureshock.

-- Ctrl Guy (out_of_town@in_the_woods.net), January 16, 2000.

Don't worry about John, he has a perpetual hair up his ass.

-- Andy (2000EOD@prodigy.net), January 16, 2000.

control guy:

Isn't the burden of proof on the prosecution? I am just saying that simply stringing a set of "facts" together says absolutely nothing. If it is all a conspiracy and the government and big oil are out to get us, then so be it-Why y'all so afraid of death?? Methinks the good 'ol us of a is not going to let oil go much higher than it is.

-- futureshock (gray@matter.com), January 16, 2000.

futureshock,

You seem like a sensibe person unlike John so I shall address your points,

I agree with you - my intention is that folks add to this list with any information {inside?] they have, any hunches, any geo-political ideas [i.e. Chechnya, Saudi, Iraq etc.], shipping/supply/JIT/chip problems etc. etc.

It is perfectly obvious that the industry is being extremely tight- lipped about production in general - this is a no-brainer to everybody except perhaps our resident brainiac John. manipulation of the Oil markets is right up there with that of Gold. Oil is the reason for our last war - John...

I'm sure RC can add more to this list, as can Downstreamer [sorry I haven't been over to your forum latley BTW, I've lost the link - can anyone supply it? Thanks}.

JC can you give us any specifics on why you believe in this 30 day timeframe - it seems very precise.

Oh and John, don't rick your back trying to remove said hair, for another will surely replace it.

-- Andy (2000EOD@prodigy.net), January 16, 2000.

Here is a link to an Inteview with DON WOLANCHUK from March of 1999 where he predicts that Oil will begin to rise and keep on rising and rising until we are all driving electric vehicles! He also, has gold pegged at rising to over $800.00 an ounce, along with other commodites headed higher. Don Wolanchuk has a reputation as one of the Worlds most accurate market timers. For more Info go to his WEBSITE or the following ARTICLE at Individual Investor Online.

Zguy

-- zguy (oilandgold@limitup.com), January 16, 2000.

Hey Zguy, you're having fun with those links aren't ya! good job :o)

-- Andy (2000EOD@prodigy.net), January 16, 2000.

Downstreamer's forum:

http://pub3.ezboard.com/fdownstreamventurespetroleummarkets

-- mushroom (mushroom_at_bs_too_long@yahoo.com), January 16, 2000.

Thanks mushroom!

-- Andy (2000EOD@prodigy.net), January 16, 2000.

I am a naturally suspicious person, and I do not trust a heckava lot that I cannot see; that is why I have been lurking here for two weeks- One of the main complaints we all have is the lack of responsible reporting from the mainstream media-If we want a cohesive counter- movement we have to be just as responsible with our reporting-links are a start, but many of the posters here love to jump to conclusions- which is bad reporting and bad science-Yes, markets are manipulated, yes the truth is hidden, and yes innocent people die because of tptb- BUT life goes on-we need to take care of our own-hug a child, smile at a stranger, commit random acts of kindness-the true revolution starts from within and love is always the answer-this does not mean I look the other way-I get it-but I find it unhelpful to drag out "expert" after "expert" on subjects like gold, oil, chemtrails, and not have a vigorous debate or links to others with opposite opinions-every expert is wrong at least some of the time-It would be a pleasure to see vigorous debate rather than seeing everything in black and white_that is why I use "gray" in my handle-Living in the gray is what gives me the most incisive look at the world.

-- futureshock (gray@matter.com), January 16, 2000.

Folks,

I THINK the main point here is that REGARDLESS of the relationship to past situations (more or less of the glitches) we are NOT working in the same matrix we were working in in the past.

As the matrix changes the relative values of the outages and glitches changes. When the systems were fairly robust and fairly stable, we were able to absorb the glitches. While I am NOT convinced that there are serious problems there, I am ALSO NOT convinced that there are NO SIGNIFICANT problems there. The jury is still out. Save the flames to keep warm if the jury returns the "wrong" verdict.

chuck

-- Chuck, a night driver (rienzoo@en.com), January 16, 2000.

PS You can always flame in a month or two.

Remember, revenge is a dish best served cold. And I might add that flames are best delivered later than earlier. They have a better impact if delivered with thought rather than pure emotion.

C

-- Chuck, a night driver (rienzoo@en.com), January 16, 2000.

We will now see how accurate God's cycles are as I understand them. Oil will drop this week and continue to drop or move sideways for the next five months. Stock pick: short GENZ now. It will downtrend for the next 3 weeks.

-- Just John (John@theBaptist.net), January 16, 2000.

Very well said Chuck. Thank you for the post Andy. =)

-- Dee (T1Colt556@aol.com), January 16, 2000.

Andy:

good post. Thanks!

Krempansky:

You amaze me with your arrogance!

READ ANDY'S TITLE. He's asking for your input--so you wax rhetoric about his apparent inability to post the true situation, while refusing to do so yourself!

I swear my 2yr old has more sense than you!

-- (Kurt.Borzel@gems8.gov.bc.ca), January 16, 2000.

I agree with John Krepansky. There have been too many Y2K predictions that went nowhere. Is this an unusual level of oil refinery failures? How can we know if there are no previous figures to compare it with?

The same thing was being said about nuke plants until someone went back over the previous couple of years of figures only to find that we were presently below the usual number of problems.

One of the difficulties of predicting y2k effects was that there were few, if any, reliable metrics by which to judge the number or severity of computer glitches. The y2k experience has certainly produced more information, and will make more, but in itself that will be skewed by the fact that y2k was an anticipated event, with lots of media coverage, and converged on a specific date, unlike the regular parade of 'normal' glitch levels. Consequently it may actually be more difficult in the future to accurately cope with any similar problems- and they will come, assuredly- because we lack a baseline measurement.

SO anecdotal evidence is interesting, but not conclusive. Before I panic over gas supplies I will need a lot more information than a list of glitches on Hyatt's forum.

-- Forrest Covington (theforrest@mindspring.com), January 16, 2000.

Andy,

Reviewing your initial list of problems, let me make a few comments:

That Columbian Pipeline has been blown up every few days for about 3 years. Ditto on Nigerian unrest, its not unusual. There did seem to be a spate of early Jan refinery problems but most seem to be back up. Notice the lack of problems since the 4th. I'd say 2 more problems over the next 12 days is fairly routine. The mega refineries in Venezuela and St Croix ship to the best economics. Its not at all unusual for a gasoline cargo to get diverted from one point to another. The Delaware refinery does seem to have a big problem, and will be down longer than early expectations, but fires can do this.

Unless the NYMEX continues to rally like a scalded rat, and new refinery and/or at least a few oil production problems unfold, I'd say its time to put these embedded/y2k concerns to bed.

Lets watch the Brent on the IPE tomorrow. It lagged the NYMEX rally all last week so it should be playing catch up if oil fundamentals are really tightening up.

-- Downstreamer (downstream@bigfoot.com), January 17, 2000.

Forest - come on guy! You have heard reams and reams of information from the likes of RC and DD1stLight. From Harry Schultz, Mr. 85% himself, who I can assure you has *contacts*... From Wolanchuk - THE top market timer of all time. All predicting a massive rise in Oil this year... now based on y2k or not I don't totally know for sure but certainly y2k was a major factor for a lot of these folks - yet they all came to the same conclusion... What else do you want? - I personally have posted a lot more info from other sources as well as the ones above. then you have the war in Chechnya, and the info. I posted yesterday about the Arab states and Israel - and who's in bed with Israel now??? OPEC is now solid. No dissenters, they are sticking it to Uncle Sam!

The fact is that the price is rising. That should give you, uh, ***a clue*** >>> ??? No?

I'm aslo approaching this from a cuurency viewpoint, there is currently a financial war going on between the dollar and euro - with I believe Arabian loyalty now heading towards euroland...someone is turning the screws somewhere with this oil action...

This from FOA tonight...

======================================================================

--------Secondly, is there evidence that dollar flight to the euro is taking place now? -------

foa, I think it's more like the Euro is becoming more useful a tool than the dollar. Read the Barons article this week. If indeed, the assets are drifting towards the Euro as a rising US rate is indicating, then a flight could occur. However, I doubt they want a stampede now. A slow drift would be much better.

------Afterall, oil is in fact now making its run upwards, yes? ----------

foa: Looks like fits and starts to me. But the trend is there. Truly, someone is turning the valves to adjust the dollar oil price.

======================================================================

More later...

-- Andy (2000EOD@prodigy.net), January 17, 2000.

Thanks Downstreamer,

Can you add to the list, does this pretty much sum things up so far or are there any other specific incidents you know about?

On embeddeds - I'm no expert, I'm an Operations IT guy and know only BAL [Assembler] - so I'm listening and reading - some folks say embedded problems may take time to surface, so I'm personally waiting and watching.

As far as disclosure - I've said many times that oil companies simply *will not* disclose anything adverse {much like banks, airlines, whoever] unless they have to for legal/safety/sueing reasons. That's why I truly believe that any incidents that make it to the media feeds may be only [you guess] 10-30% of what is occurring.

As i said i'd like to document known problems - I'll let other detectives like yourself who know the business inside out tell us if these "incidents" are normal or not.

One thing.

We were told before rollover that there were production stockpiles in many cases. That there would be no production shortfalls.

Now suddenly we hear that there is a 4% shortfall.

Well some say 1973 was a 4% shortfall!...!!! That shortfall, caused by OPEC, caused a major recession.

So now we have a 4% shortfall [and IMHO if they admit to 4% you can bet it will be higher!] coupled with much anecdotal evidence that there are ***REAL*** problems behind the scenes.

Heres some info from the esteemed Dick Moody on the price action...

======================================================================

Are you a fire and brimstone Oil Fundamentalist?

If you are then say it with me now...

"Say Haaalllaaylloooooooyaaahhhhhh, brother and sisters in greasy grime of the sinful and wicked black-gold/Texas Tea persuasion."

"Do ya see the light yet? Well we're gonna give it to ya, whether you want it or not...and you'll have the chance to give back as we pass the collection plate around in jus' a little bit So make sure you have those options (calls and puts) ready and get ready to repent. Say Halleloooyah, Amen"

Now that I have you wondering what I meant by fundamentals of oil... let me say that it really wasn't the above...but it sounded good didn't it? I wanted to comment on the latest run up in Crude oil pricing but from a "Fundamentalist" as opposed to a Technicians perspective (Say hallelooyah :-)

One thing that has amazed me about the current run up is how the big boys hung on to their positions over a 3 day holiday weekend. Usually, the boys will square their positions ahead of a holiday and go home with no chips on the table except for hedged positions by producers. So it seems to me that these big boys got some balls to the wall in their thinking here. They really have gotten bold. They don't get that way unless they know something is up. Something is up indeed. What is it? Well, it's not OPEC! That's a for certain.

Downstreamer and Gordon both, you both know the old adage buy the rumor sell the fact. Well, its been well known since long before rollover that OPEC was not going to change its position about oil production curbs. There has been real solidarity there. The market has already ridden OPEC's actions for the price move it can bring. OPEC's solidarity took the market to $25.00 and that is about as much as it can ummph it. OPEC could change that equation on the notion of further cutbacks than current levels or in the face of rising demand that is higher than was expected. In other wordsfurther OPEC aspects must include a further change in numbers from the current status quo to affect market pricing. So if it is not OPEC just agreeing to continue then what is it? An upcoming war? (one rumor has that as a notion)

I see it as technical disruptions of supplies. Now how could that be? Well, remember we're in warm weather across much if not most of the country. Record warm temps are being set across much of the midwest. These warm temps mean refineries should not be experiencing problems in January. The only real problems seen in January in years past has been related to severe cold weather which can play havoc on oil refineries. We don't have severe weather affecting refineries this yearso what's the problem? The problem is sudden, unexpected "glitches" fires, mechanical problems, etc

I suspect its like some of those Y2K fellows have been saying all along those embedded chips will take some time for their problems to show up. Now, what really leads me to think this, besides talking with a couple of other brokersincluding one who has oil clients. Take a look at the following from a wire story on Friday about pricing

===============================================

Gulf Coast gasoline is moving up with the NYMEX, but also because of very strong buying from at least two refineries. Those companies have chased prompt unleaded gasoline to where it is only discounted by 2.25cts gal off the NYMEX. With NYMEX unleaded up 1.68cts gal to 72.95cts gal at midmorning, the cash price was at 70.75cts gal.

==============================================

Okay, so what's going on here, huh? Frankly, it looks to me like these refineries couldn't make enough gas to meet their already agreed to contracts with wholesalers, so now these guys have to scramble to come up with real product. Well what happened to their big reserves they'd set back for Y2K??? I mean everybody in the biz stashed some inventory for Y2K, right?

Apparently these 2 refineries (and I've heard there's others too) have had some really serious production problems. Enough problems that now they can't meet even the lesser demands of this off season. Their situation is desperate enough that they're paying about any price to grab product so they can meet the contracts. NOW FOLKS, this is an act of some modicum of desperation, IMHO.

According to this, these boys gave up most of their profit margin to buy on the open market, just to make those contracts. This tells me these guys have some serious problems and its showing. We've been hearing of rumors in the market that a lot of Gulf Coast refineries are having some significant problems.

NOW match this to the possibility that certain other facilities in Venezuela, Nigeria, Mexico, Saudi Arabia, Kuwait, Iran, Iraq, UAE, North Sea, etc ect. are also having enough problems to slice just a bit off each countries production. [this is what I've been saying all along - Andy]

Gee, now there could amount to some serious concernbut it might really help an OPEC member think about making up for it by jawboning the price of oil up by simply talking about holding the line. They obviously don't want to announce problems because that would affect their companies' stock price valuationswhich is as if not more important than the price of Crude oil. So it is a real game of cat and mouse.

Frankly, I figure the problems are small to moderate and rather irritating and peskily interfering with production intermittently.

Nowif it were just refineries though, that would not life up crude. After all, if refineries are having problemsless demand for crude oil, right? And folks, remember, we've supposedly got a glut of crude supply built up for Y2K, right?

So therefore with an overhang of crude and refineries being unable to use more Means less demand for crude right? Also factor in the unusually warm springlike weather over most of the nation record warm temps again much of the week across the midwestand long range forecasters saying it should continue for another 10 dayswell that too should be bearish news for oil. I mean those elements are soooo bearish and the only positive aspect is old news about OPEC hanging on to production quotas for another 6 months??? Oh and of course persistent production problems at refineries. (not to mention refineries overseas anouncing cutbacks as demand rises) plus one oil refer announces permanent shut down?? Hmmm. Something just doesn't quite add up, now does it?

Well, I mentioned that among some of my old contacts is one broker who has a couple of oil clients one of whom is telling him there are some serious problems out there. The other does not know much...seems to be kinda out of the loop...is more in tune with nature and the golf course and local pubs than the markets, after all that guy's primarily a hedger. The other guy who says there are some serious problems indicates most are related to Y2K in refining but he's heard of some pipeline and well problems too. If I'm gathering it right, it's so far been just a lot of nuisance stuff that in enough minor quantities have had some spillover impacts affecting production. I don't know this for a fact, but that's some of the heavy duty rumoring going on. I'm sure some of its true because even if its just smoke remember, where there's smoke there's fire. Except in the case of stinkbombs.

Could it be that Y2K is really alive and a threat? Nahhhh it couldn't be. Or could it?

One thing is for sure Oil is poised for a wild ride again this year. Buckle up and have your tickets ready to show your conductor, the train will be pulling out of the station shortly.

"say Hallelooyahh"

-- Andy (2000EOD@prodigy.net), January 17, 2000.

After Y2k, how can anyone be sure of anything? Black and white cease to exist. No more cause and effect. As Chuck says, we live in a different Matrix now. The old rules don't apply - look at the NASDAQ.

-- Michael (m@m.m), January 17, 2000.

Yesssss...Along those lines Michael...

Interesting theory I spotted on Kitco - Hmmmmmmmm...

Date: Sun Jan 16 2000 14:14

themine - "If "they" move oil prices to the upside it will be to blame OPEC for the financial crisis. They will say that it was oil prices what spoiled the party and not credit expansion. Just as it happened in the 1970s."

Well TPTB didn't use y2k did they???

-- Andy (2000EOD@prodigy.net), January 17, 2000.

Andy,

I asked you in another thread how many US refineries were having problems in the second week of 2000. You have answered here.

5 US refinery problems in the first week 1 US refinery problem in the second week

Is this is sign of mounting problems or the unproveable conspiracy of silence theory? I give you the benefit of the doubt that all these problems even were Y2K related.

Shuggy.

-- Shuggy (shimei123@yahoo.co.uk), January 17, 2000.

Shuggy,

Read the title of the thread, uh,

"tip of the iceberg"...

The idea is that, as I've explained to futureshoick, folks can add to the list as they see fit.

-- Andy (2000EOD@prodigy.net), January 17, 2000.

BTW Shug,

wots the big deal with US refineries, my beef is with the ME refineries and those in the back of beyond... those are the suckers that are gonna have proportionately more problems than those in the USA IMHO...

-- Andy (2000EOD@prodigy.net), January 17, 2000.

Andy are you long crude?

You forgot

Shell Forcados and Bonny Light force majeure's shortly after the rollover. I think the Forcs was FM'd until the end of Jan. They said it ws due to pressure problems in the pipe. Also, I hear that the small EC Motiva refinery is really having probs and will be dwn for a while. Just a rumor, but I have heard that they're not back up yet after two restart attempts.

If Dick Mills was right this will be one hell of a summer.

-- Gordon (g_gecko_69@hotmail.com), January 17, 2000.

Andy,

I am just going by R.C.'s extrapolation for US refineries last month. If they are doing better than expected then why not other countries?

Shuggy.

-- Shuggy (shimei123@yahoo.co.uk), January 17, 2000.

Andy,

Let me just say that something is rallying these crude and products markets like they haven't been sparked in a long time. I honestly don't know if delayed y2k screw ups are a factor. I don't think so but I don't know.

It could be something like Gordo's past theory about Saddam gearing up for something big and taking an oil market position in advance. It could be all of Greenspan's liquidity schloshing around looking for values better than equities. It could be good old fashioned fund buying.

There's intricate things to look for if refineries are gonna be having prolonged y2k glitches. The spot market Gulf Coast Gasoline did firm relative the NYMEX the first week of the year but has since backed off. The NYMEX 'cracks' would widen. They aren't much. Heat cracks firmed Fri but it seemed mostly weather related. This thing seems to be mostly NYMEX crude driven- something that wouldn't suggest refining disruptions.

And I don't agree with your assessment that the 4% shortfall is something new. IEA stats have been calling for a 2-4 million barrel a day drawdown (or shortfall) for the 4th and 1st quarter for months now. Supply usually exceeds demand in this winter time frame in oil markets. What is unexpected is it looks like we're getting it in spite of a warm winter. Something is going on but we're gonna hafta wait and see.........and it won't be from that chain jerker JC.

-- Downstreamer (downstream@bigfoot.com), January 17, 2000.

Thanks Downstreamer,

My, you have changed your tune :o) And that's not a flame. I think we all now acknowledge that the game is afoot, no?

======================================================================

Yorktown Refinery Update ---------------------------------------------------------------------- ---------- 2000-01-17 16:06:59 EST ***BP-AMOCO YORKTOWN TERMINAL STILL HAVING RACK PROBLEMS Virginia based jobbers tell OPIS that BP Amoco's Yorktown terminal still has suspended distillate rack sales due to a "mechanical problem." Jobbers tell OPIS that they were sent a fax on Friday informing them that pulling distillate out of the terminal was suspended until further notice. Meanwhile, jobbers say they were still able to pull gasoline from the terminal. Meanwhile, New York Harbor spot sources say Motiva was hoping for a successful restart over the weekend of their 160,000 b/d crude unit at the Delaware City refinery. The unit, which was hit by a fire two weeks ago, had one failed restart attempt last weekend fueling speculation that the damage was more severe than Motiva initially estimated. A successful restart this weekend would most likely have the unit running at normal rates by mid-week.

- Mark Mahoney - mmahoney@opisnet.com

-- Andy (2000EOD@prodigy.net), January 17, 2000.