Thursday, August 21, 2008

Oil's Biggest Weekly Gain Since June

Oil heads for biggest weekly gain since June

Crude oil is headed for its biggest weekly increase in more than two months after rising almost 5% yesterday as the dollar slumped, prompting investors to buy commodities.

Oil is poised for its first weekly gain in two weeks and its largest increase since June 6. Energy and metals futures climbed as the US currency fell the most against the euro in more than a month. An August 20 missile-shield agreement between the US and Poland has ''real anti-Russian potential,'' the Foreign Ministry said in Russia, the second-biggest oil producer.

''Gains were pretty broad based across the commodity space,'' said Gerard Burg, an energy and minerals economist with National Australia Bank. ''The US dollar fell which magnified the upward trend. It's a big move but we've seen this level of volatility and it's once again a symptom of how tight the market remains at this time.''

Crude oil for October delivery was at $US121.43 a barrel, down 25 cents, in afternoon trading on the New York Mercantile Exchange. Yesterday, the contract surged $US5.62, or 4.9%, to settle at $US121.18 a barrel, the biggest increase since June 6. Futures are down 18% from a record $US147.27 reached on July 11. Prices are up 75% from a year ago.
And as for commodities in general: Commodities head for biggest weekly jump in 33 years

Commodities headed for their biggest weekly gain in 33 years as oil traded near a three-week high and a weakening US dollar revived demand for raw materials as alternative assets.

The Reuters/Jefferies CRB Index of 19 commodities soared 3.7% to 405.92 in New York yesterday. A settlement at that level today would mark a 6.2% gain for the week, the most since July 1975.


Anaconda said...

There is no question the Dollar has a lot to do with the oil price.

And if the Dollar is slipping that's going to raise the price of oil.

But what about this novel concept: Invest in companies that grow and gain in productivity?

There are none. Hogwash.

Anaconda said...


Editorial note: This is an interpretation of the following cited work. It's designed as a frame work for the understanding hydrocarbon cycle.
Volcanic Contributions to the Global Carbon Cycle

In the introduction is the following quote:

"Since the pioneering work of Rubey (1951) which recognized that most volatiles present at the Earth's surface today must utimately have a volcanic origin, many attempts have been made to quantify the past and present day transfer rates of volatiles from the solid earth to the hydrophere and the atmosphere (Le Cloarec & Marty, 1993)." Page 1.

hydrocarbons are volatiles off the Earth's interior.

And when treated as such, hyrocarbons' place in the framework of Earth's volatile system becomes much more clear. The cited study is on carbon dioxide, but, here, in the foregoing analysis we will substitute hydrogarbons for carbon dioxide and supply evidence the substitution is warranted.

As such, this is an annotation to the cited work.

"Thus the flux of [hydrocarbons] from the solid Earth in the past would have fluctuated in direct proportion with volcanic activity."

And quote:

"Geologiscal [hydrocarbon] wmisions include both volcanic emissions (both passive, vocanoes in repose, and those related to eruptive activity) and non-volcanic -- direct emissions from the Earth's crust and lithophere."

Abiotic Oil theory has hydrocarbons transporting up from the mantle to the crust and traveling in the crust until at the surface or in repose in an oil trapping geological structure.

Another quote:

"Most autheors now agree that heat transfer occurs between the core and mantle, and this basal layer then becomes buoyant and rises to the surface due to thermal expansion. At the top of the mantle this material cools, before sinking into the mantle again. At the top of the mantle lies a rigid, brittle layer, the lithosphere, up to 120 Km thick broken into fragments - the tectonic plates that move relative to one another as a direct consequence of mantle convection. The configerations in which these plates meet results in three types of fundamentally different boundaries."

Mid ocean ridges

Subduction zones

Horizontal slip plates where plates slide past each other, creating a linear fault zone i.e., the San Andreas Fault.


"Volcanism is an intrinsic part of the plate tectonic cycle and occurs at any point where pressure/temperature conditions are such as to allow partial melting of mantle or lithospheric material. Volcanism occurs at both [mid ocean ridges and subduction zones.]"

Editorial note: The point of reciting long passages from the paper is encourage readers to link to the paper itself and include hydrocarbons in the mix when the author refers to "volatiles," after awhile it becomes suggestive that there is ample opportunities for hydrocarbons, a unique mineral, in that it's liquid and less dense than almost all other minerals, to continue rising into the lithosphere when other minerals sink back into the mantle.


"Volcanism also occurs at apparently random locations, sometimes at great distance from the plate margins."


Anaconda said...


Editorial note: This discussion is linked so readers can see discussion of Abiotic Oil on the internet.

Andrew's Geology Blog: Abiotic Oil and Barack Obama

Anaconda said...


The laws of fluid dynamics provide a mechanism for oil to tranport from the mantle to the crust.

This idea is demonstrated, here, Volcanoes may not be fed by magma "mushrooms".

"Gaseous emissions from volcanoes: source and compositional variations" is the title of the next section and lo and behold no mention of hydrocarbons at all.

This is a critical point -- the association of hydrocarbons with volcanic and tectonic plate activity, so pardon if this seems like overkill, but it must be demonstrated beyond question that hydrocarbons are associated with the above activity.

In Europe there are several sites where hydrocarbons have been associated with volcanic activity.

Natural emissions of methane from geothermal and volcanic sources.

And mud volcanoes on the slopes of Sicily Methane emission from the mud volcanoes of Sicily (Italy).

There are mud volcanoes In Eastern Azerbaijan emitting methane, too.

Historical observations of hydrocarbons have been made:

"Carbon combined with hydrogen, forming bitumen, is found in volcanic rocks..."

"The volcanic tufa in the vicinity of Clermont, in France, contains so much bitumen, that in warm days it oozes out, and forms streams of bitumen resembling pitch, which is more remarkable, as this tufa must have been erupted some thousand years."

"Bitumen has been observed oozing out of the lava of Etna. The moya ejected from the volcanoes in the Andes, in aqueous or muddy eruptions, contains so much bitumen or carbon, as to be inflammable. As bitumen exists in many volcanic rocks..."

-- Robert Bakewell, 1813

And here are other historical observations reported by George F. Becker of hydrocarbons in association with volcanic activity:

"On August 12, 1805, [Alexander von] Humboldt and Gay-Lussac witnessed a great eruption of Vesuvius; and at times they found the prevailing smell bituminous. Humboldt had noted in literature three cases in which a pleasant smell (Wohlgeruch) attended eruptions."

"In 1856 Ch. Sainte-Claire Deville found [hydrocarbons] on the flank of Etna near Aci Reale as gaseous emanations."

"Since Deville's first investigations hydrocarbons have been found at Vesuvius, Etna, Santorin, Terceira Island (in the Azores), and at Pelee..."

"Silvestri actually found bubble-like pockets in the lava of Etna containing solid paraffins and liquid oil."

"The association of lava and bitumen in that region is very close, and the basaltic tuffs, peperites, which in many cases form volcanic necks, are heavily impregnated with hydrocarbons."

-- Becker, 1909

Indonesia is loaded with volcanoes and oil fields.

There are New Zealand oil fields found in association with volcanoes as well.


Anaconda said...


One of the most dramatic and undisputed associations of oil and volcanic activity is the Travis volcanic mounds where oil is found in the volcanic tuff in the center of the mound within the fissures and cracks of the tuff.

"Isotope Systematics and Carbon Sources" is the next section of the "Carbon" paper.

All this has been disproven by J.F. Kenney. See Dismissal of Claims of a Biological Connection for Natural Petroleum.

"The validity of such assertions were tested, independently by Colombo, Gazzarini, and Gonfiantini in Italy and by Galimov in Russia. Both sets of workers established that the carbon isotope ratios cannot be used reliably to determine the origin of the carbon compound tested.

Colombo, Gazzarini, and Gonfiantini demonstrated conclusively, by a simple experiment the results of which admitted no ambiguity, that the carbon isotope ratios of methane change continuously along its transport path, becoming progressively lighter with distance traveled. Colombo et al. took a sample of natural gas and passed it through a column of crushed rock, chosen to resemble as closely as possible the terrestrial environment.27 Their results were definitive: The greater the distance of rock through which the sample of methane passes, the lighter becomes its carbon isotope ratio."


The reason for the result observed by Colombo et al. is straightforward: there is a slight preference for the heavier isotope of carbon to react chemically with the rock through which the gas passes. Therefore, the greater the transit distance through the rock, the lighter becomes the carbon isotope ratio, as the heavier is preferentially removed by chemical reaction along the transport path. This result is not surprising; contrarily, such is entirely consistent with the fundamental requirements of quantum mechanics and kinetic theory."

Thus as much as isotopic characteristics are cited in petroleum literature. This is a red herring and tells us nothing.

Helium seems to be present in increased quanities in convergent or subduction zones.

Helium is known to be associated with hydrocarbon presence, so where helium is in greater concentration oil is also likely to be found.

Also, helium has been named a mantle marker because it is rare in the crust, but more abundant in the mantle.

This confirms the theory that subduction zones have more contact with the mantle and participate in partial melting of the mantle.

A process that is theorized to produce Abiotic Oil.

This is a very intriguing notion because subduction zones in offshore areas have been barely explored and the one onshore site is in the Middle East where the Arabian Plate and the Eurasian Plate come together.

The Middle East is the most prolific oil producing area in the world. Should offshore subduction zone areas also produce oil in Middle East like proliferation, then certainly, large oil companies would be interested in exploration and production.

California, Oregon and Washington all have subduction areas.

Could these be the site of large oil deposits?

California has already been the site of successful offshore oil production, but Oregon and Washington have not been explored as yet.

High pressure oil deposits could be located on the flanks of the subduction fault lines in general and in association with latitudinal "zipper" fault points along the subduction zone.

Volcanic flank hydrocarbons are also being exploited at the present time.

Anaconda said...

Subduction zone off the West coast of the United States

The above link has outstanding undersea images of the subduction zone and also a diagram which illustrates the "zipper" latitudinal faults along the subduction zone.

Think big oil deposits, especially at the "zipper" joints in the fault line.

This is where horizontal "grinding" or lateral "grinding" is likely to take place generating large oil deposits.

Offshore exploration & production for oil & gas is a must for America's energy future.

This is an undersea image of the West coast where huge oil deposits may be located.