Source Of course, part of this is our own darn fault, since we insist upon driving gas hogs, and continue to depend upon petroleum for making so many of those plastic products we seem to find indispensable, from kitchen containers to furniture, to car panels, to carpeting ...

Each time I pull into a gas station, I get this nagging pain in my wallet, and I think the same thing: why does gas cost so much, and who is behind these price increases?

It would be easy to blame the current "unfriendlies" in the parts of the world where oil is produced, but picking one isn't as easy as it first looks, because we don't buy from just one or two sources.

And we have to buy so much!

Each day, the US imports, with slight variations, about 8,886,000 barrels. This is an annual total of some 3 billion, 260 million barrels of oil. That's a lot of oil!

As a matter of fact, almost all of that foreign oil comes from only 10 different countries, and some might be a little surprising. For example, the major source is Canada, which accounts for about 21 percent of our petroleum imports.

I guess we don't tend to think of Canada as "foreign" because it's so close, or some other such excuse, but the fact remains: Canada is our biggest single supplier, at almost 2 million barrels per day.

Not far behind, at 16 percent each, are Saudi Arabia and Mexico, with Venezuela coming next at 15.5 percent, sending us just under 1.4 million barrels per day.

Next come a few surprises, some because they don't supply us with as much as we expected, and some because we never considered them as sources at all!

Nigeria, only 6.7 percent, which sounds about right for a smaller country, when you think of it.

Iraq, at 5.9 percent, far less than we had thought, probably because the Near East gets all the publicity (usually bad).

The United Kingdom sells us 461,000 barrels a day (5 percent), and Norway, a little less, adds another 4.5 percent.

Angola and Algeria finish the list, each with about 3 percent, which is probably a lot, considering the size of the countries.

But when you look at the list, you wonder how prices can vary so much and so quickly when there are so many sources.

Surely just one or two suppliers can't affect the pump prices by as much as 25 percent in a couple of months.

Does this mean that all these suppliers are conspiring to jack up the prices? Not likely, as there are too many of them to come to an agreement. The prices fluctuate too rapidly for that.

Then why aren't the pump prices changing in step with crude oil prices?

Well, I guess if you could answer that one, you'd be the Alan Greenspan of the petroleum industry.

There are so many factors to be considered between the oil field and the gas pump that it's just plain confusing, but no matter what the reason, we still believe that gasoline prices are too high.

And there's one more aggravating factor. These aren't the same size as the 55-gallon barrels we are familiar with.

Oil barrels hold only 31.5 gallons, so that doesn't help the price, either.

Of course, part of this is our own darn fault, since we insist upon driving gas hogs, and continue to depend upon petroleum for making so many of those plastic products we seem to find indispensable, from kitchen containers, to trash bags, to paint, to furniture, to car panels, to carpeting, to clothing, and many, many more.

Petroleum plays a part in thousands of everyday products, things we can't seem to get along without.

It's part of the price we pay for choosing our high standard of living.

For the most part, we pay little attention to how many petroleum-derived products we depend upon -- and then we gripe about the high price, because gas is the obviously expensive item.

Can we use less? Sure we can, We just don't want to. Apparently, we'd rather complain, and blame someone else.

And while we're complaining, we're still undeniably part of the problem. We seem to pay too much attention to the immediate concern, and tend to ignore the larger problem -- especially if it's going to inconvenience us.

Maybe we should pay a little more attention to being part of the solution. All we seem to really care about is what's available at the gas pump -- and it always seems to be too expensive. Still, I'm keeping an eye on the future, because as of March 20, the experts are saying that there is now an oil glut; too much oil available, and they also say this should mean lower futures prices on crude oil.

For example, the price of crude has dropped from $37.10 to $29.88 a barrel in just one week. Since pump prices follow crude prices by three to four weeks, we should see cheaper gas in about a month.

I wish I could be more optimistic about this, but past experience has taught me one hard lesson.

When it comes to gasoline prices coming down, I don't hold my breath. And I suggest that you don't hold yours, either.

And, as for the ongoing gasoline price situation, try not to be too optimistic. If you are, you're going to be disappointed, because there are no quick and easy solutions -- not even with hydrogen-powered cars.

So here we are. We learned a little, but we haven't solved a thing. Good thing we've learned to grin and bear it -- and dig a little deeper, when it's our turn at the pump.

Well, there it is, and I respect your right to see it another way. If you don't agree, I only ask that you try not to blame me too much. We're all in the same leaky boat.

But if you still disagree, you may use this column to line the bottom of the bird cage.

And if that's not enough, there will be a ritual burning of my effigy at a date to be announced later. (Which means that it's again your turn not to hold your breath.)

Mike Morton writes each week for the Kansan.

<a href=news.ft.com>Total shutdown By Carola Hoyos, Energy Correspondent, in London Published: March 24 2003 21:44 | Last Updated: March 24 2003 23:20

Setbacks suffered by US and UK troops on Iraq's battlefield on Monday turned the optimistic mood of the oil markets round, pushing prices higher in London and New York.

Unrest ahead of the presidential election in Nigeria, which has halted 40 per cent of the oil production of the African nation, added to the concern.

But traders were most focused on the Middle East where the market had been betting on a short war with few casualties, causing prices to drop to four-month lows. But that mood was sharply different on Monday.

In London on Monday afternoon Brent crude was up $1.35 at $25.70 a barrel, while the US benchmark traded at $28.15 a barrel, up $1.24 on the day, but still significantly below last month's high of $39.99.

"I think Iraq is the issue on everyone's mind, although Nigeria has been lurking in the background," said Fadel Gheit, analyst at Fahnestock, the US-based securities firm.

Royal Dutch/Shell on Monday said violent unrest in Nigeria had forced it to halt 320,000 barrels per day of its production.

The news came after ChevronTexaco at the weekend closed its main export terminal and France's TotalFinaElf pulled out of an oil storage facility that came under attack. The loss in production from the crisis on Monday totalled 767,500 barrels a day, 40 per cent of the daily exports of Africa's largest oil producer.

For Shell and ChevronTexaco the loss of production has been damped by increased production from other fields and the fact that the Organisation of Petroleum Exporting Countries in the past few months has not prompted Nigeria to restrict its production levels. However, if the disruptions continued over several quarters, they would begin to cut into the companies' earnings, said Mr Gheit.

From a global perspective, the timing of Nigeria's troubles has mitigated their effect. Venezuela, another Opec member whose political strife recently affected its oil production, appears to have managed to restore much of that output more quickly than had expected.

Meanwhile, the approach of spring in the northern hemisphere has reduced demand for heating oil, while Saudi Arabia, the world's largest exporter of crude oil, has sent extra barrels to its main consumers.

Nevertheless, a total shutdown of Nigeria's exports and images of scores of burning oil wells in Iraq would almost certainly lead to a quick rally in prices, analysts said.

Violence closes key ChevronTexaco terminal

ChevronTexaco Corp. (NYSE: CVX) is closing its 340,000 barrel-per-day Escravos terminal in Nigeria near the oil city of Warri after the country's military ordered the area evacuated in the wake of escalating violence that reportedly left at least 10 soldiers and scores of civilians dead.

A ChevronTexaco contract worker was killed earlier in the week.

Impending shutdown of the Escravos terminal raised growing fears of world oil shortages even as some 1.8 million barrels-per-day of Middle Eastern production was scuttled because of the U.S.-led war on Iraq. Venezuela, the U.S.'s fourth-largest supplier and the world's fifth-largest exporter, has yet to return to full production after an oilworkers' strike earlier this year.

Saudi Arabia is the U.S.'s largest source of foreign crude, followed by Canada, Mexico, Venezuela and Nigeria. Venezuela and Nigeria are members of OPEC, whose other members are said by industry analysts to lack sufficient surplus capacity to offset production losses from those nations and the Middle East.

San Ramon-based ChevronTexaco, Nigeria's third-largest foreign-equity producer, also declared force majeure on exports from Escravos, notifying purchasers that it may not be able to deliver March and April shipments. Oil traders said as many as 14 shipments scheduled for March and April could be affected.

Royal Dutch/Shell Group, which accounts for more than half of Nigeria's 2-million-bpd production, also was likely to declare force majeure, according to international media reports and the state-owned Nigerian National Petroleum Corp.

The Escravos terminal, which serves the oil-rich Niger delta fields in southern Nigeria, ships more than 13 percent of the oil that accounts for 95 percent of export income in Africa's most populous nation. Oil exports are the foundation of Nigeria's economy. ChevronTexaco and Shell have reported losses of 266,000 bpd since escalating violence between Ijaw and Itsekiri tribal fighters resulted in the Nigerian army ordering the area evacuated. In addition to tribal animosities, both groups are seeking greater concessions from foreign oil companies against the backdrop of national elections next month in which President Olusegun Obasanjo is seeking a second term. Some observers have described the violence nationwide as the worst since the Biafran civil war of the 1960s.

The Nigerian and Venezuelan cutbacks haven't had a direct effect on the East Bay's five refineries, whose major crude sources are Alaska and California's Central Valley fields. But they have helped drive up worldwide crude prices, which have led to soaring retail prices in the United States and the Bay Area, which now has the nation's highest pump rates for gasoline and diesel.

www.voanews.com Melanie Sully Vienna 20 Mar 2003, 20:14 UTC

The Organization of the Petroleum Exporting Countries, OPEC, says it can make up any oil shortage caused by the Iraq war.

The general secretary of OPEC, Alvaro Silva Calderon, told reporters the cartel would offset any shortfall in oil production because of the war in Iraq. "The member countries have pledged to use spare capacity if it is necessary," he said. "It does not mean that we are eliminating the quota system. We are facing an emergency."

Mr. Silva Calderon said that, at the present time, there is enough oil on the market to meet world demand.

Saudi Arabia has said it will increase crude oil production to help stabilize world markets. Another plus is that oil production in Venezuela, which had been reduced because of a long strike, is beginning to return to normal.

But analysts say that if the war lasts for months, rather than weeks, shortages could occur.

US confident Opec can make up lost oil exports

By Carola Hoyos in London Published: March 20 2003 11:22 | Last Updated: March 20 2003 21:07

The US on Thursday sought to reassure the nervous oil market by expressing confidence that the Opec oil cartel could make up for the loss of Iraq's exports.

Spencer Abraham, the US energy secretary, said that the US was not tapping its emergency oil stockpile and that world supplies were "more than adequate to compensate for any disruption".

Just hours later Opec announced that it would permit its members to ignore their quotas and tap into their spare capacity.

The statement was seen as largely a public relations exercise as most Opec members are already producing above their quota and at their maximum capacity.

The US decision not to dip into the 600m barrels of stocks was in contrast to the last Gulf war. On the day airstrikes began in 1991, the US announced it would sell 33.75m barrels of its oil and sent the oil price tumbling more than $10 a barrel.

"You don't want to use it too early," said Joseph Stanislaw, president of Cambridge Energy Research Associates, pointing out that in 1991 the US decision to tap its inventories was delayed, coming five months after Iraq had invaded Kuwait.

So far the US and the 25 other members of the International Energy Agency, which co-ordinates international stock releases, believe the Opec oil cartel and in particular Saudi Arabia are able to make up for the interruption of Iraqi exports.

Claude Mandil, the IEA's executive director, said yesterday: "Producers are confident they can keep the market adequately supplied and we have been assured that they will make every effort to do so."

But movements in oil prices on Thursday highlighted the volatility that the war could cause when news surfaced that the Iraqi regime may have begun to sabotage their oil fields.

Donald Rumsfeld, US defence secretary, on Thursday said the Iraqi regime may have set fire to three or four oil wells in the south of the country. He said: "It is a crime for that regime to be destroying the riches of the Iraqi people."

The allegations, which were denied by Iraqi officials, initially pushed benchmark Brent oil prices up 75c to a high of $27.50 a barrel.

But prices reversed their gains as doubts over the veracity of the claims grew and traders continued to believe it would be a short war.

If that assumption is proved wrong, prices could yet surpass the $39.99 high the US benchmark hit last month, analysts said. Much will also depend on whether Thursday's allegations of the well fires indicated the beginning of a sustained scorched earth policy, in which case it could take years rather than months for Iraq's oil exports to return to the market after the end of the war.