Cyclone Gonu Oman Oil Facilities

ArabianBusiness.com - June 8th

Gonu peaked as a maximum-force Category Five hurricane on Tuesday and faded to a Category One hurricane on Wednesday. Apart from the 32 dead, at least 30 people were missing, Omani news agency said.

Further north to Oman's east coast, the United Arab Emirates' port of Fujairah, one of the world's largest ship refuelling centres, said 11 sailors were rescued after their boat sank in regional Omani waters on Wednesday.

Port Director Moussa Murad said there were 10 sailors missing from the same boat. The rescued sailors were nine Indians, a Sudanese and one Eritrean. The port reopened on Thursday after it closed on Wednesday.

Three people were killed in southern Iran on Thursday while people within 300 metres (yards) of the coast in Hormozgan province had been evacuated, Iran state television said.

State media said roads and houses in Iran's southeastern province of Sistan-Baluchestan had been damaged and many coastal areas were cut off by flooding.

Oman's only 650,000 barrel per day oil terminal Minal al Fahal resumed operations after a three-day closure. Oman carried out tests on pipelines in the terminal before it resumed operations.

Petroleum Development Oman said on Thursday that operations and facilities had escaped damage.

PDO, a majority state-owned firm, produces most of Oman's crude. PDO expects its output to decline by around 20,000 bpd this year to between 560,000 and 570,000.

The storm had raised fears of a disruption to exports from the Middle East, which pumps over a quarter of the world's oil, pushing prices to around $71 a barrel on Thursday.

The main liquefied natural gas terminal at Sur, which was badly hit, was not operating either, a shipper said. Sur terminal handles 10 million tonnes per year of such gas.

Sohar refinery and port reopened and these facilities were working as well as before the storm, the company said.

Oman Monthly Oil Production Cyclone Gonu

Latest Update 11am Gulf Time Sunday

Oman produces 720,000 barrels per day of crude oil and exports approximately 650,000 bpd of that. Its production is declining at approximately 5% annually.

Oman Oil Production Gonu

Latest Update 11am Gulf time Sunday
Yearly Oil Production from Oman



updates on Cyclone Gonu

more oil production information

Gonu Misses Rigs Updated Image 10am Muscat

Latest update 11am Gulf time Sunday

By Eduard Gismatullin
June 7 (Bloomberg)

Crude oil traded below $66 a barrel in New York as Tropical Cyclone Gonu missed oil rigs and fields in the Middle East, causing only some disruption to shipping.

Gonu battered southern Iran early today after hitting the eastern coast of Oman yesterday, closing all its seaports and oil- export terminals two days ago and causing the country to suspended oil and gas exports. Ships continued to pass through the Strait of Hormuz, a waterway between Iran and Oman at the mouth of the Persian Gulf, the Associated Press reported.

``We think that bulls will find it difficult to make much of a case centering around the fading Persian Gulf cyclone,'' Edward Meir, an analyst at Man Financial in Darien, Connecticut, wrote in a report. Gonu ``did not hit any key oil installations.''

Crude oil for July delivery was down 1 cent at $65.95 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 9:08 a.m. in London.

Gonu's center was 88 kilometers (55 miles) south of the town of Jask on the southern coast of Iran at 3:30 a.m. Omani time today, according to the latest U.S. Navy Joint Typhoon Warning Center advisory. Gonu's winds fell to 83 kilometers per hour as the storm moved north-northwest across the Gulf of Oman at 13 kilometers per hour.

Prices rose yesterday following reports that Turkish troops chased Kurdish guerrillas into northern Iraq. Government officials from Turkey and the U.S. denied any attack occurred.

Iraq has the world's third-biggest proved oil reserves, according to BP Plc. Turkey has threatened to launch a military operation unless U.S.-led coalition forces in Iraq eradicate the threat posed by the Kurdistan Workers' Party. The Turkish military has deployed tens of thousands of troops near the border to stop members of the group from entering Turkey.

``Neither do we think the Turkish incursions will morph into a wider conflagration,'' Meir wrote. The Turkish parliament ``will have to sanction any sustained military operation.''

In London, Brent crude oil for July settlement fell 13 cents to $70.89 a barrel on the ICE Futures Exchange at 9:10 a.m. in London.

Cyclone Gonu Misses Rigs

Latest Update 11 am Gulf Time Sunday

By Eduard Gismatullin
June 7 (Bloomberg)

Crude oil traded below $66 a barrel in New York as Tropical Cyclone Gonu missed oil rigs and fields in the Middle East, causing only some disruption to shipping.

Gonu battered southern Iran early today after hitting the eastern coast of Oman yesterday, closing all its seaports and oil- export terminals two days ago and causing the country to suspended oil and gas exports. Ships continued to pass through the Strait of Hormuz, a waterway between Iran and Oman at the mouth of the Persian Gulf, the Associated Press reported.

``We think that bulls will find it difficult to make much of a case centering around the fading Persian Gulf cyclone,'' Edward Meir, an analyst at Man Financial in Darien, Connecticut, wrote in a report. Gonu ``did not hit any key oil installations.''

Crude oil for July delivery was down 1 cent at $65.95 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 9:08 a.m. in London.

Gonu's center was 88 kilometers (55 miles) south of the town of Jask on the southern coast of Iran at 3:30 a.m. Omani time today, according to the latest U.S. Navy Joint Typhoon Warning Center advisory. Gonu's winds fell to 83 kilometers per hour as the storm moved north-northwest across the Gulf of Oman at 13 kilometers per hour.

Prices rose yesterday following reports that Turkish troops chased Kurdish guerrillas into northern Iraq. Government officials from Turkey and the U.S. denied any attack occurred.

Iraq has the world's third-biggest proved oil reserves, according to BP Plc. Turkey has threatened to launch a military operation unless U.S.-led coalition forces in Iraq eradicate the threat posed by the Kurdistan Workers' Party. The Turkish military has deployed tens of thousands of troops near the border to stop members of the group from entering Turkey.

``Neither do we think the Turkish incursions will morph into a wider conflagration,'' Meir wrote. The Turkish parliament ``will have to sanction any sustained military operation.''

In London, Brent crude oil for July settlement fell 13 cents to $70.89 a barrel on the ICE Futures Exchange at 9:10 a.m. in London.

Best Gonu Photo Oman Muscat Cyclone

Best Gonu Photo Oman Muscat Cyclone
Latest Update 11 am Gulf time Sunday





Click Here for link to high resolution version

Latest update on Gonu

Cyclone Gonu Batters Southern Iran

Latest Update 10 am Gulf time Friday

By Ryan Flinn and Aaron Sheldrick
June 7 (Bloomberg)

2am EST
7am GMT
10am Dubai
10am Muscat
9:30am Iran

Cyclone Gonu, the worst to hit the Arabian Peninsula in more than 60 years, battered southern Iran, prompting authorities to close schools and universities, cancel some flights and evacuate thousands of people from coastal areas.

The Health Ministry put hospitals on alert in southern Hormuzgan and Sistan-Baluchistan provinces late yesterday as the storm approached, the state-run Islamic Republic News Agency reported. The cyclone's outer winds knocked out electricity power lines in the port cities of Konarak and Chabahar, as people took refuge in shopping malls, IRNA said.

Gonu's center was 88 kilometers (55 miles) south of the town of Jask on the southern coast of Iran at 3:30 a.m. today, according to the latest U.S. Navy Joint Typhoon Warning Center advisory. Gonu's winds fell to 83 kilometers per hour as the storm moved north-northwest across the Gulf of Oman at 13 kilometers per hour.

The storm hit the east coast of Oman yesterday, where the Sultanate declared a state of emergency, ordering people to take shelter and shutting schools and offices until June 10. There were no immediate reports of casualties in either country.

Ships continued to pass through the Strait of Hormuz, a waterway between Iran and Oman at the mouth of the Persian Gulf, Associated Press reported, citing Suresh Nair of the Gulf Agency Co. shipping firm. At least a quarter of the world's oil supplies passes through the strait.

Oil Platforms

Gonu probably won't threaten Iran's oil platforms in the Persian Gulf because they are far from the forecasted path of the cyclone, AP cited Bahram Narimanian, a spokesman for Iran's Offshore Oil Company, as saying yesterday.

In the southeastern coastal city of Chabahar, 4,000 university students were evacuated to higher ground yesterday, IRNA reported.

The Islamic Republic of Iran Air Lines yesterday canceled all flights from Konarak for 48 hours, IRNA added.

Oman closed all its seaports and oil-export terminals two days ago as the government suspended oil and gas exports, shipping executives and oil traders said. They said they didn't know how long exports would remain suspended.

Oman sits on the southeast coast of the Arabian Peninsula and produces about 700,000 barrels of crude a day. It borders Yemen, Saudi Arabia and the United Arab Emirates.

Suspending Operations

Fujairah port in the United Arab Emirates suspended all offshore bunkering operations, including fuel oil and gasoil, and the movement of utility boats two days ago because of the storm. The port is one of world's three largest for fuel oil bunkering, along with Rotterdam and Singapore.

Saudi Aramco, the world's biggest state-controlled oil company, said yesterday it doesn't expect Gonu to hurt production or exports from Saudi Arabia's eastern province.

Crude oil for July delivery on the New York Mercantile Exchange traded at $66.00 a barrel at 8:33 a.m. Singapore time today. It rose 35 cents to $65.96 a barrel yesterday.

Gonu, which means a bag made of palm leaves in the language of the Maldives, is the most powerful storm to hit the Arabian Peninsula since records began in 1945, AP reported.

Earlier this week, it was a Category 5 storm, the strongest on the Saffir-Simpson scale, as it churned across the northern Arabian Sea.

Iran Adding Attack Boats in Persian Gulf

By Tony Capaccio
June 6 (Bloomberg)

Iran is increasing its fleet of small attack boats capable of challenging warships and disrupting oil traffic in the Strait of Hormuz, the sea route for two-fifths of the world's daily supply of crude oil, the U.S. Navy says.

Iran's Revolutionary Guard Corps already has more than 1,000 of the speedboats ``and continues to add boats armed with anti- ship cruise missiles,'' said Robert Althage, spokesman for the U.S. Office of Naval Intelligence.

``Iran still states that the Iranian Revolutionary Guard Corps will employ swarming tactics in a conflict,'' Althage said in an e-mail. Naval intelligence, in its latest report on threats, said an attack against U.S. forces and commercial tankers ``could include over 100 boats in coordinated groups of 20 to 30 approaching simultaneously from multiple axes.''

The U.S. has two carrier groups in the Persian Gulf. The commander of these forces, Vice Admiral Kevin Cosgriff, said the attack boats have``a significant military capability.'' His fear is that Iran's central leadership might not have enough control over this Revolutionary Guard force to ensure against unauthorized attacks.

``I'm fairly comfortable that the regular Iranian navy and air force has a pretty good command-and-control system -- the key word is`control,''' he said. ``I don't have the same sense with the Revolutionary Guard.''

``Is there a rigorous, disciplined chain of command where people pay attention?'' Cosgriff said. ``In some instances, the answer would be yes. In other instances I've had some concern that people may be prone to miscalculation.''

``Somebody who gets fired up based on firebrand rhetoric is what I am speaking about,'' he said.

Mines, Torpedoes, Missiles

The boats -- up to 70 feet long and capable of speeds up to 57 miles per hour -- are armed with torpedoes and rocket- propelled grenades as well as cruise missiles and also are used to lay mines. The U.S. estimates Iran has 5,000 sea mines.

Cosgriff and other U.S. naval officers say they can defend against this threat. Still, attacks on tankers and a few sunken ships could disrupt traffic through the chokepoint of the world's most important oil transit route.

Iran launched a much smaller fleet of these attack boats against U.S. ships and U.S.-flagged tankers in the Persian Gulf in late 1987 through mid-1988 after the Reagan administration sided with Iraq in its war with the Islamic Republic.

The ships were able to lay mines, attack ships and disrupt oil traffic. They damaged at least one tanker traveling under the U.S. flag as well as the frigate USS Samuel Roberts.

Cosgriff said the U.S. now has four minesweepers deployed to the Gulf and the British Navy has two. The coalition ``routinely'' practices minesweeping and ``we are actually quite good at it,'' he said.

Defense Against 'Swarming'

Cosgriff, in a telephone interview yesterday from the United Arab Emirates, said the U.S. Navy has ``devised various tactics and other ways of coping with'' the swarming tactics of the small attack boats.

In addition, ``there are some limitations'' to launching an attack by these boats, he said. ``You just don't get 1,000 or 500 or even 20 of anything under way and tightly orchestrated over a large body of water to create a specific effect at a specific time and specific place. They have their own challenges.''

Officers of the aircraft carrier USS Stennis in the Persian Gulf offered similar assurances in onboard interviews June 1.

``We spend a lot of time making sure we have eyes out for that sort of thing,'' said Commander Chris Rentfrow, director of the Stennis's self-defense nerve center.

Cheney's Warning

The Stennis arrived in the Gulf 12 days after Vice President Dick Cheney spoke on the warship, highlighting the capability of the two carrier groups to protect sea lanes and send a warning that the U.S. won't tolerate Iran developing a nuclear capability.

The Stennis was joined by the Nimitz and the Marine Corps's Bonhomme Richard amphibious assault group in sailing through the Strait of Hormuz to conduct joint training exercises -- nine ships with 17,000 personnel in the largest daylight transit since 2003.

The maneuvers mark the second time in two months that two of the Navy's 11 aircraft carriers are in the Gulf for joint exercises. The Stennis exercised in March with the USS Dwight D. Eisenhower. Before that, the last time more than one carrier deployed in the Gulf was March 2003 for the Iraq invasion.

The current exercise will continue through tomorrow.

Raytheon System

The centerpiece of the Stennis's defenses is a Raytheon Co. Shipboard Shelf-Defense System installed last year that synthesizes data from the carrier's radar and anti-submarine sonar as well as Aegis air defense information gathered by the flattop's escort vessels into a single picture displayed on consoles.

Stennis operators can track up to 200 vessels or aircraft simultaneously, Rentfrow said in an interview. Two large digital maps showed the carrier was in the middle of the northern Persian Gulf about 37 miles from Busher, Iran. There was no significant Iranian naval or
air presence.

The system can ``absolutely'' deal with Iran's small boats, Rentfrow said. ``We practice a lot with these ships in terms of how to defend the zone around the carrier,'' he said.

One method is an old-fashioned .50 caliber machine gun on the vessel's stern, manned by a gunner in a grimy red t-shirt peering through binoculars into a hot, hazy Gulf horizon.

Senior officers of the Stennis, in interviews June 1 and May 31 onboard the ship, said the strike groups aren't exercising specifically to counter Iran but were practicing generic tactics to counter submarines, aircraft
and missile attacks.

This week the Stennis and Bonhomme Richard groups also planned an exercise practicing earthquake relief.

Stennis Strike Group Commander Rear Admiral Kevin Quinn, in response to a question, said the deployment of the two carrier groups isn't intended to send a message to Iran. ``I don't see it that way, but I'm the tactical guy,'' he said. ``My focus has been on exercising maritime skills'' and providing air support for ground troops in Iraq.

Cyclone Gonu Pummels Oman

By Aaron Sheldrick and Ryan Flinn
June 6 (Bloomberg)

Cyclone Gonu pummeled the northeast coast of Oman, where authorities ordered people to take shelter. The storm's winds weakened to 147 kilometers per hour (91miles per hour) as Gonu's eye skirted the coast southeast of Muscat.

The center of the cyclone, the worst to hit the Arabian Peninsula in more than 60 years, was 183 kilometers southeast of Muscat at 4 a.m. Oman time today, according to the latest advisory on the Web site of the U.S. Navy Joint Typhoon Warning Center. The storm is moving northwest at 15 kilometers per hour.

The Sultanate's civil defenses were mobilized, according to the Ministry of Information, as the country's meteorological agency warned waves as high as 12 meters (39 feet) would hit coastlines. The government declared a state of emergency, ordered people to take shelter and shut schools and offices till June 10. There were no immediate reports of injuries or damage. Gonu's eye is forecast to be close to Muscat by about 4 p.m. today before heading for the Strait of Hormuz and making landfall in southern Iran by June 8 or 9, according to U.S. Navy forecasters.

By the time it reaches the Omani capital, the storm's winds are expected to slow to 120 kilometers per hour, with gusts to 184 kilometers per hour.

Gonu is the most powerful storm to hit the Arabian Peninsula since records began in 1945, the British Broadcasting Corp. said. Earlier this week, it was a Category Five storm, the strongest on the five-step Saffir-Simpson scale, as it churned across the northern Arabian sea.

The government closed all ports and oil export terminals from 2 p.m. yesterday. The country produces about 700,000 barrels of crude oil a day.

Crude oil for July delivery rose as much as 28 cents, or 0.4 percent, to $65.89 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $65.82 at 10:26 a.m. Singapore time.

The rise was attributed to refinery maintenance in the U.S. which may limit increases in gasoline supplies.

Almost a quarter of the world's oil flows through the Strait of Hormuz, a waterway between Iran and Oman at the mouth of the Persian Gulf.

Latest update

Gonu Cyclone Oman - 2pm Muscat update 2

Gonu Cyclone Hurricane Oman Muscat Dubai Iran
Wednesday, June 6th

6am EST
11am GMT
2pm Dubai
2pm Muscat

Latest update

Gonu is a CAT 1 hurricane/cyclone located on the eastern tip of Oman, heading NW at 9mph up Oman’s northeast coast. It should hit the Iran’s southern coast within 24 hours. Check Dr. Jeff Masters’ Wunderblog for updated information and reports from the ground in the comments section.

http://www.wunderground.com/blog/JeffMasters/comment.html?entrynum=690&tstamp=200706

Weather Underground has best satellite imagery and graphics
http://www.wunderground.com/blog/JeffMasters/comment.html?entrynum=690&tstamp=200706

Also try
www.accuweather.com

www.weather.com

Oman Cyclone Gonu Muscat 2pm Gulf Time

Gonu Cyclone Hurricane Oman Muscat Dubai Iran

GO HERE FOR LATEST UPDATE 10am Muscat Friday



Wednesday, June 6th
6am EST
2pm Dubai
2pm Muscat

Gonu is a CAT 1 hurricane/cyclone located on the eastern tip of Oman, heading NW at 10mph up the Oman’s northeast coast. It should hit the Iran’s southern coast within 24 hours.

www.accuweather.com

www.weather.com

Oman Cyclone Gonu 9AM Gulf Time

Latest Update

June 5 (Bloomberg)

Crude oil was little changed near a two- week high in New York after risingyesterday on risks to supplies from the Middle East and Nigeria.

Tropical Cyclone Gonu is heading northwest at 15 kilometers per hour on a path U.S. Navy forecasters expect will take it across the Gulf of Oman, an important shipping lane for oil supplies from the Gulf. Brent crude oil climbed as high as $70.63 a barrel yesterday on the risk to tankers operating in the Gulf and the threat of further strikes in Nigeria, Africa's biggest producer.

``The impact of the cyclone is lifting Brent and the New York price is responding to it,'' said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. ``If the Nigerian situation amounts to any real disruption, further increasing the present disruptions, then it will affect Brent more.''

The contract rose $1.13, or 1.7 percent, to $66.21 yesterday, the highest close since May 21. Futures touched $66.48, the highest intraday price since April 30.

Gonu, earlier given the maximum rating of a Category Five storm on the Saffir-SimpsonHurricane Scale, weakened slightly into a Category Four storm with winds of 249 kilometers per hour (155 miles per hour) toward the Gulf of Oman, the Navy said.

OPEC oil output edges higher in May

June 1st, 2007
(Reuters)

OPEC boosted crude oil output in May as higher supply from members including Algeria and the United Arab Emirates countered a drop in Nigeria, a Reuters survey showed on Friday.

Ten OPEC members bound by output targets, all except Iraq and Angola, pumped 26.76 mbpd, up 110,000 bpd from April, according to the survey of oil companies, traders, OPEC officials and analysts.

The survey suggests OPEC's adherence to agreed supply curbs eased in May as global oil prices rallied. Brent crude is trading at around $68 a barrel, close to a high for 2007 near $72 reached last week.

"OPEC is shipping more barrels out and prices are holding up fine," said Paul Tossetti, director of market analysis at Washington-based PFC Energy.

The Organization of the Petroleum Exporting Countries, source of more than a third of the world's oil, agreed last year to lower production by 1.2 million bpd from November 1 and by a further 500,000 bpd from February 1 to prop up prices.

May supply from the 10 countries was 880,000 bpd less than in October, according to Reuters estimates, or about 52 percent of the total production cut pledged.

Frontline Profit Falls 26 Percent

by Alaric Nightingale

Frontline Ltd., the world's biggest oil-tanker company by carrying capacity, said first-quarter profit fell 26 percent after ship-hire rates dropped because of OPEC production cuts and the warmest winter on record.

Net income declined to $158.8 million, or $2.12 a share, from a restated $214 million, or $2.86 a share, a year earlier, Hamilton, Bermuda-based Frontline said today in a statement to the Oslo Stock Exchange. That beat the $100.3 million median estimate of 10 analysts surveyed by Bloomberg.

``Underlying trading looks a bit better than we expected,'' said Robin Byde, an analyst for HSBC Securities in London who has an ``underweight'' recommendation on the shares. Earnings ``look like a small positive,'' he said in an interview.

December to February was the warmest winter period on record, according to the U.S. National Oceanic and Atmospheric Administration, lowering refinery demand for crude oil. Tanker bookings also were curbed by the 1 million-barrel-a-day output cut that members of the Organization of Petroleum Exporting Countries started implementing in the fourth quarter of 2006.

Shares of Frontline climbed 0.5 Norwegian kroner, or 0.2 percent, to close at 255 kroner in Oslo, valuing the company at 19 billion kroner ($3.2 billion). They have climbed 37 percent this year. The profit included a $39.8 million gain from the sale of shares in Sea Production Ltd., a company that converts aging tankers into storage-and-production ships. Stripping out that gain, profit still beat analysts' estimates by $18.7 million.

Frontline deferred a gain of $155 million from the sale of shares of another company, Sea Lift Ltd., which will convert tankers to transport oil rigs, rig parts, bridges and other ships. Sales fell 25 percent to $362 million.

The profit decline was Frontline's first in three quarters. It reported a 0.6 percent increase in earnings in the fourth quarter after selling two vessels for gains of $73.2 million.

Frontline declared a cash dividend for the quarter of $1.50 a share. The payout is ``slightly disappointing,'' said Arne Roenning, an analyst for Fondsfinans AS in Oslo.

Earnings from Frontline's very large crude carriers, or VLCCs, slumped 31 percent to $50,200 a day while those from its 1 million-barrel carriers declined 29 percent to $34,900 a day. Break-even levels are $29,500 and $22,000 a day respectively.

Declines in freight rates are being exacerbated by a surge in shipbuilding, led by China and South Korea. Vessels equivalent to 34 percent of the world's existing tanker fleet are under construction, Frontline, led by Norwegian billionaire John Fredriksen, said today. The expansion ``gives some reason for concern,'' it said in the statement.

Employment of the global supertanker fleet may decline this year to 93 percent, from 96 percent last year, according to London-based shipbroker Galbraith's Ltd.

OPEC cut production by 1 million barrels a day by February as part of its commitment to trim excess supplies. OPEC is pumping enough crude to satisfy world consumption and has no need to review quotas before its September meeting, group president Mohamed al-Hamli said May 15.

Forecasters Predict Five Major Hurricanes

By Courtney Dentch (Bloomberg)

Colorado State University forecasters said five major hurricanes will form this season, and there's a 74 percent chance a storm will make landfall in the U.S.

The forecast released today reiterates the team's April prediction for above-average tropical activity during the Atlantic season, which officially starts tomorrow. Ten storms and six hurricanes have formed, on average, during the June-November season over the last 50 years.

Five major hurricanes, with winds of at least 111 mph (179 kilometers per hour), will grow out of the 17 total storms expected to form, researchers Philip Klotzbach and William Gray said in their outlook. Nine of the storms will become hurricanes, with winds of at least 74 mph, they said.

``We expect an above-average hurricane season with El Nino-Southern Oscillation conditions on the cool side, which will help increase the likelihood of major storm activity in the Atlantic,'' Klotzbach said in a statement.

Cooling Pacific Ocean temperatures, part of La Nina conditions, are expected to drive storm formation, while warm Atlantic waters will provide fuel. La Nina is the opposite of El Nino, when Pacific temperatures rise above historical averages, and both conditions can affect weather patterns around the globe.

The Colorado State report echoes other predictions for a more active tropical season this year, after outlooks overestimated last year's near-normal activity. Experts forecast an average of 16 storms and four major hurricanes.

One system, Andrea, formed off the southeastern U.S. coast about three weeks before the official start of the season, although it didn't strike land.

The forecast comes as a Mason-Dixon poll found that 53 percent of residents along the U.S. Gulf and East coasts don't feel vulnerable to a hurricane or related flooding, and 88 percent haven't taken steps to reinforce their homes. The survey included 1,100 adults from May 10 to 15, and was commissioned by the National Hurricane Survival Initiative.

``Nearly two years after Hurricane Katrina shocked and horrified the nation, far too many residents are still unprepared for storms,'' said Bill Proenza, director of the Miami-based National Hurricane Center. ``Last year's below-normal hurricane season may have resulted in coastal residents being lulled into a false sense of complacency.''

Last year was the first time since 2001 and the 11th time since 1945 that no hurricane made landfall in the U.S. Three tropical storms did come ashore, causing at least five deaths and $500 million in damage, according to the center.

It was expected to be an active season, although less active than 2005, when 28 storms formed, including Hurricanes Katrina, Rita and Wilma. A late El Nino weather pattern in the Pacific Ocean, where equatorial waters warmed patterns of air circulation, and dryness in the tropical Atlantic atmosphere curtailed storm formation.

U.S. Growth Weakest in Over 4 Years

U.S. Economic Growth Weakest in Over 4 Years
By Jeremy W. Peters
May 31st, 2007
NYT

The government cut in half its estimate of economic growth in the first quarter, reporting the slowest rate of expansion since the end of 2002.

Before today’s numbers were released by the Commerce Department, it was clear the economy was downshifting from the rapid 5.6 percent expansion of the first quarter last year. But the new data reinforced how significant the slowdown has been.

Growth advanced just 0.6 percent, compared with an initial estimate of 1.3 percent. IThe chief reasons for the revisions were adjustments to the estimates of imports and business inventories. Imports, which subtract from the gross domestic product, were stronger than the government first thought. At the same time, businesses cut production and accumulated smaller inventory stockpiles.

Despite the adjustments to the growth figures, inflation in the first quarter was essentially unrevised. Prices excluding food and energy, a measure preferred by the Federal Reserve, advanced by 2.2 percent in the first quarter, still above what the central bank has said it considers acceptable.

But there were some revisions to the numbers that economists said they found to be encouraging. Consumer spending, the staple of economic growth for the last decade, was revised higher. It advanced 4.4 percent in the first quarter, compared with an initial estimate of 3.8 percent. And the drag from the collapse in residential real estate was slightly less than the government first reported.

Most economists agree that the first quarter was probably a low point for the last several years, and they expect the economy has regained some strength in the second quarter. Although consumer spending has probably slowed since the first quarter and the correction in the housing market is continuing, economists expect demand from overseas — given an added lift because of a weaker dollar — to help businesses in the United States.

“We know that the world economy is growing,” said Ken Mayland of ClearView Economics. “It doesn’t seem realistic that our exports will be dead in the water. And in the context of an even cheaper dollar, they’re even more competitive now.”

A new report today found that some American businesses are indeed seeing faster growth. The National Association of Purchasing Management said that its measure of manufacturing activity in the Chicago area rose far above the level economists expected in May. Its barometer rose to 61.7 from 52.9 in April. Readings above 50 indicate growth.

Another significant factor that will determine how much the economy grows during the rest of the year is the labor market. And today there were signs that it has so far avoided hitting the skid that many economists have predicted. The Labor Department said today that the four-week moving average of Americans filing state unemployment claims for the first time fell to 304,500, the lowest level in more than a year. Initial jobless claims dropped by 4,000, to 310,000, in the week ended May 26. Tomorrow, the Labor Department will report job growth and unemployment statistics for May, shedding more light on the health of the labor market.

The housing market, meanwhile, continued to weather its slowdown. In a separate report today, the Commerce Department said that construction spending rose 0.1 percent in April after a 0.6 percent gain in March. At the same time, spending on residential construction fell again.

The Coal Trap

May 30, 2007
Editorial
The Coal Trap
NYT

There is a rule for judging solutions to the twin problems of energy dependence and global warming: A policy designed to solve one problem should not make the other worse. But that is a likely outcome of the many “energy independence” bills circulating in Congress that aim to build a whole new generation of coal-to-liquid plants to convert coal into automotive fuel.

These bills have already acquired an enthusiastic constituency and will be offered as amendments to what is now a relatively simple and sound energy bill designed to increase the fuel efficiency of cars and light trucks, encourage the production of biofuels and provide research and development money for the capture and storage of carbon dioxide emissions from power plants.

There are, of course, ways to make this bill better. Senator Jeff Bingaman will offer a useful amendment to require utilities to generate a percentage of their electricity from renewable sources like wind. But there are also ways to make the bill a lot worse. One of them is to require the expenditure of billions of dollars in loans, tax incentives and price guarantees to lock in a technology that could end up doing more harm than good.

Coal is far and away America’s most abundant fuel. It provides more than half the country’s electricity. And there is no doubt that it could substitute for foreign oil, although how much and at what price is not clear. In addition, the technology to convert coal into liquid fuels is well established. But it is also true that between the production process and burning it in cars, coal-to-liquid fuel produces more than twice the greenhouse gas emissions as gasoline and nearly twice the emissions of ordinary diesel. These are terrible ratios.

Congressional and industry proponents of coal-to-liquid plants argue that the same technologies that may someday capture and store emissions from coal-fired plants will also be available to coal-to-liquid plants. But that deals with only half of the problem. According to the Environmental Protection Agency, coal-based automobile fuel would still be marginally dirtier than ordinary gasoline and only marginally cleaner than conventional diesel.

What this means is that the country would be investing billions to produce fuels that, from a global warming perspective, leave us at best treading water. That is unacceptable at a time when mainstream scientists are warning that greenhouse gases must be cut by 60 percent or better over the next half-century to avert the worst consequences of global warming.

Researchers at M.I.T. estimate that it will cost $70 billion to build enough coal-to-liquid plants to replace 10 percent of American gasoline consumption. A similar investment in biofuels like cellulosic or sugar-based ethanol — which could yield substantial reductions in greenhouse gases — would seem a lot smarter.

Given the dimensions of our energy problems, new ideas must be explored. But it makes little sense to shackle the country now to a coal-based technology of such uncertain promise.

Russian Exports

Russian exports from IEA OMR May 2007 - page 25

Chavez Threatens Second TV Shutdown

Chavez Threatens Second TV Shutdown as Protests Mount
By Guillermo Parra-Bernal and Alex Kennedy
May 29 (Bloomberg)

Chavez said he had ``no fear'' of criticism he might face for closing Globovision, a 24-hour news channel that he accused of trying to instigate his assassination. The threat follows the May 27 shutdown of Radio Caracas Television, Venezuela's most- watched TV network.

Venezuelan President Hugo Chavez threatened to shut down the country's last opposition television station as students took to the streets for a third day, protesting what they say is a crackdown on free speech.

``They're trying to light the streets on fire and justify violence,'' Chavez said in a speech to supporters televised from Vargas state. ``I call on the people in the slums to be alert to defend the revolution.''

The three days of disorder in Caracas and other major cities marks the longest stretch of anti-Chavez demonstrations since March 2004, when opposition-led protests demanding a recall referendum left nine dead. Clashes across Venezuela between the police and marchers injured at least 40 yesterday, Globovision reported.

The yield on the 2019 government bond, known as TICC, jumped 4 basis points to 4.86 percent, the highest since March 26, according to Econoinvest Casa de Bolsa CA prices. The price dropped 0.4 to 103.50 cents on the dollar at 5 p.m. New York time.

The cost of buying protection on $10 million of Venezuela's bonds for five years had its biggest jump since Jan. 9, surging 17 percent to $198,000, according Credit Market Analysis. Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on the ability of countries or companies to repay debt. An increase in price suggests deterioration in credit quality.

University students gathered in eastern Caracas while Chavez supporters rallied downtown to support the government's refusal to renew the license of RCTV, as the country's oldest broadcaster was known.

Communications and Information Minister William Lara added pressure on non-state television outlets yesterday, asking for an attorney-general's probe of Globovision Tele CA and Time Warner Inc.'s Cable Network News for allegedly inciting violence. Globovision, founded in 1994, is owned by an investor group called Corporacion GV Inversiones CA.

RCTV, which had a national distribution, and Globovision, available only in Caracas and Carabobo state, were the only prominent stations critical of the government. xxx Coup xxx In an interview yesterday, Globovision General Manager Alberto Federico Ravell called the accusations ``ridiculous.''

``Chavez has just gone too far this time,'' Ruben Briceno, 22, a Central University of Venezuela student majoring in social work, said in an interview. ``First it was the shutdown of Radio Caracas. What will come next?''

Chavez said today the students are being manipulated by people he didn't cite. National Assembly Vice President Roberto Hernandez said the protests are organized by opposition parties seeking to overthrow Chavez.

``They will not succeed in weakening this government,'' Hernandez told reporters in Caracas Interior and Justice Minister Pedro Carreno said state intelligence and police services were prepared to quell any effort to destabilize the county.

In the days leading up to the RCTV shutdown, Chavez said the company's executives had used the network to help incite a coup that ousted him from office for two days in 2002. While RCTV covered his ouster without interruption, it failed to report his government's return to power and ran cartoon shows.

During the coup and strike, the four biggest private stations -- RCTV, Venevision, Televen and Globovision -- ran commercials calling for Chavez to resign, said Daniel Hellinger a professor of political science at Webster University in St. Louis and author of several books about Chavez. ``They say I'm a tyrant,'' Chavez said today. ``Who accuses me? Serpents.''

Globovision television station showed students putting up barricades on the streets of El Junquito, a town about 20 kilometers (12 miles) east of Caracas. Another group blocked traffic for a time on the Prados del Este highway in Caracas, creating logjams, it said.

Groups of RCTV supporters held a demonstration in front of the Organization of American States' local offices. The police deployed 4,000 officers to protect the surroundings of the OAS offices.

RCTV's shutdown, coupled with the probes of CNN and Globovision, will intensify international scrutiny of free speech in Venezuela, Miguel Henrique Otero, editor-president of Caracas-based El Nacional, the nation's second-most read newspaper, said in an interview yesterday.

``Press relations with governments with authoritarian inclinations are always difficult,'' said Paul Knox, chair of school of journalism at Ryerson University in Toronto. ``At this point, it's fair to say that the Chavez government has an authoritarian inclination.''

Saudi sees no need for raising production

Saudi Arabia sees no need for raising crude oil production
05.28.07
RIYADH (Thomson Financial)

The surge in oil prices is being driven by political factors and there is no need for additional crude supplies, Saudi Arabia's assistant oil minister said on Monday.

'What brings prices up is politics, what brings them down is politics,' Prince Abdul Aziz bin Salman bin Abdul Aziz told Agence France-Presse, referring to tensions in major crude producers Nigeria, Iraq, Iran and Venezuela.

'We have a well-supplied market,' he said on the sidelines of a European-Gulf forum today. 'We have always said, and OPEC has always committed itself to keep the market well-supplied and balanced. Never has this market been more balanced with crude than today,' said Prince Abdul Aziz, who is assistant oil minister for petroleum affairs.

He said that while there was no need for additional crude supplies, there is a problem with refining capacity. He was referring to what Saudi officials say is a need to invest in expanding refining capacity in consumer countries.

OPEC kingpin Saudi Arabia was sticking to its output quota of 8.5 mbpd, he said.