Oil price increases of 2004 and 2005

Oil price in 2003-2005 Average US retail price of regular unleaded gasoline Oil prices from 1860-1999 in 1999 dollars. Source: [1]

The price of standard crude oil on NYMEX was under $25/barrel in September 2003. By August 11, 2005, the price had been above $60/barrel for over a week and a half. A record price of $70.85 per barrel was reached on August 29, 2005.[2] While oil prices are considerably higher than a year ago, they are still roughly 25$ from exceeding the inflation-adjusted "peak of the 1980 shock, when prices were over $90 a barrel in today’s prices" [3].

In the United States gasoline prices reached an all time high during the first week of September 2005 in the aftermath of Hurricane Katrina. The average retail price was nearly $3.04 per gallon. The previous high was $2.38 per gallon in March 1981, which would be $3.03 per gallon after adjusted for inflation.[4][5]

Demand

High demand is led by the U.S. market, the source of an increasing percentage of the world's demand for petroleum. The U.S. economy currently accounts for one-quarter of all demand. New demand is also coming from emerging industry in third world nations, including India and especially China which is developing a western-style car culture and whose manufacturing bases have grown very rapidly in recent years.

Sources of the world-consumption-increase in 2004 compared to 2003 (total increase of 3.4%), according to U.S. Department of Energy Energy Information Administration estimates: [6]

  • China: 38.9%
  • US: 19.4%
  • Asia outside Japan and China: 13.8%
  • Canada: 4%
  • UK: 3.5%
  • combined other non-OECD: 21%

Note: the total percentage exceeds 100 because the overall demand from all other countries decreased during the same period..

Supply


There are a number of reasons why oil traders feel that oil supplies might be reduced. One of the most important is growing turbulence in the Middle East, the world's largest oil producing region. The war in Iraq, Iran's nuclear program, and questions about Saudi Arabia's internal stability all could in the future lead to a dramatic fall in the supply of oil. Outside the Middle East other oil producers have worried investors such as the strikes political problems in Venezuela and potential instability in West Africa.

In late August, 2005, Hurricane Katrina crippled the supply-flow from off-shore rigs in the Gulf Coast, the largest source of oil for the domestic U.S. market. Short-term shutdowns because of power outages knocked out two major on-shore pipelines, and at least 10% of the nation's refining capacity was not operating in the wake of the storm. Gas prices in the region, normally 70 cents below the national average, were at $3.12 on August 30.[7]

World supply (specification) came in at 83 million barrels a day during 2004 in department of energy EIA calculations ([8]). This rate of increase is faster than that of any other date in the past. Despite this there is increasing discussion of peak oil and the possibility that the future may see a reduced supply of oil. Even if oil supplies themselves are not reduced, some experts feel the easily accessible sources of light sweet crude are almost exhausted and in the future the world will depend on more expensive sources of oil.

The short term price of oil is partially controlled by the OPEC cartel and the oligopoly of major oil companies. One other important cause is the United States dollar's slump against the Euro. Since oil is traded in dollars, the price must increase for OPEC to maintain buying power in Europe.

Causes

Some people and news agencies argue that labor strikes, hurricane threats to oil platforms, fires and terrorist threats at refineries, and other general problems are responsible for the higher gas prices. Critics argue that these problems periodically push price higher, but that they are not fundamental or long term enough to cause the large jump in gas price. A more fundamental problem that some believe is causing the price to rise is the probability of peak oil already or soon to be reached. Not only is there a limited amount of fossil fuels which have been burnt as fuel, but however much remains will be used faster by a growing industrialized world population and what remains will be more dificult to get since the easiest wells have been tapped and the remaining sources will be fought over in resource wars.

Others believe that the price of oil is almost entirely speculative, and that the increase in price is due to oil speculation extending into the long term. These people argue that speculators foresee increasing demand, decreasing supply, or both, leading to a long term increase in the price of oil. If these speculators are wrong, current prices may actually be a price bubble, and the price could thus collapse. A July 14, 2005 Morgan Stanley report[9] suggests that opinions of the oil market could burst just like a bubble if indications of declining Asian demand continue.

Still others suggest that the main issue is a lack of energy efficiency in industry. These analysts believe the problem would be solved by increasing the efficiency of factories, homes and transportation and easing the demand crunch by using less energy and more renewable energy.

Spring & Summer 2005 increase

Overnight gas price hike shown at a Chicago area bp station (background). The Shell station (foreground) has not yet posted the 12 cent price hike.

After retreating for several months during the winter of 2004/2005, prices rose to new highs in March 2005. The price of light, sweet crude oil on NYMEX has been above $50/barrel since March 5, 2005. On March 16, 2005, the price surpassed the October 2004 high of $55.17 to close at $56.46. In April 2005 the price began to fall, reaching $53.32 on April 9. It then reversed course and headed to an all time high of $58.28, driven mainly by lingering concerns of a prolonged weak dollar. In June 2005 crude oil prices surged to record highs eventually breaking the psychological barrier of $60.

Saudi Arabian King Fahd's death on August 1, 2005, meant a new regime that may be less amicable to U.S. influence. During mid-August, with a string of refinery snags (fires/other deterrents to oil refining), shrinking gasoline inventories, and a growing thirst for oil by American consumers, New York Mercantile Exchange traded crude oil futures surged past the $66 mark and briefly touched $67/barrel. Over the course of three weeks leading up to August 10, crude oil prices had risen by 13%.

While the street price of gasoline usually corresponds to the price of crude oil, refinery capacity can become the governing factor, particularly during periods of high demand. In addition, there are different grades of oil and each refinery is typically configured to process a narrow range of grades. As a result, shortage of a particular grade of oil can keep street prices high, even when overall supply exceeds demand.

Winter 2006 increase

On January 17, sweet crude oil for February delivery rose by $2.38 (3.7%) to $66.30 a barrel. This was the highest increase since early October 2005. Observers believe that violence in Nigeria, and Iran's friction with the West are responsible for this price increase. Continued concerns about Iran raised the price to $68.38 on January 31.[10]

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Hurricane Katrina

Gas price hike shown at a Shell station.

Hurricane Katrina had a major impact on oil and gas prices, especially within the United States. The Gulf Coast is home to a major portion of America's refining capacity. The port of Louisiana is one of its most important inlet for oil imports, and the gulf itself is a major oil producer. Port Fourchon has also suffered long term damage. Louisiana Offshore Oil Port has not. [11]

Gas prices soared after the closing down of the major pipelines connecting the gas of the Louisiana region to the entire East Coast. In Stockbridge, Georgia, regular gas prices came to $5.87 at a BP station. Shortages were feared or experienced in several states including Tennessee [12], Alabama [13], and South Carolina. [14] Many of these were blamed on panic buying. Airports began to report shortages in aviation fuel on 2 September.[15] A shortage could lead to a decrease in food production.[16] Higher prices for heating oil and natural gas were expected as the winter heating season set in.[17]

On 5:10 p.m. EDT, on 31 August, President Bush announced the Energy Department was approving loans from the Strategic Petroleum Reserve and that EPA announced nationwide waver on fuel blends. Bush stated, "This storm has disrupted the ability to make gasoline and deliver gasoline," and "This is going to be a difficult road."[18] Many people have observed however that stores of crude oil do little to address inadequate refinery and distribution capacity.

In order to stabilize world energy supplies, the International Energy Agency offered to sell two million barrels of crude oil and other refined products from national supplies. These supplies would begin entering the US markets within two weeks of 2 September. [19] [20] The press release from the IEA states, "... the implications for the oil market are global."[21]

Effects

There is controversy regarding the potential effects of oil-price shocks. Some see these increases in the price of oil leading to a recession comparable to those that followed the 1973 and 1979 energy crises or a potentially worse situation such as a global oil crash. Most economists see this as unlikely, partly because all developed countries have high fuel taxes that decrease as oil prices increase and can be eliminated in the event of a dramatic price spike. Nevertheless, that loss of revenue would put a strain on government balance sheets. The American Strategic Petroleum Reserve could on its own supply current U.S. demand for about a month in the event of an emergency, unless it is also destroyed in the emergency. This could well be the case if a major storm were to hit the gulf, where the reserve is located. While total consumption has increased [22], the western economies are less reliant on oil than they were twenty-five years ago, due to substantial growths in productivity. In the United States, for instance, each $1000 dollars in GDP required 2.4 barrels of oil in 1973 when adjusted for inflation this number had fallen to 1.15 by 2001. But oil's historically high ratio of Energy Returned on Energy Invested continues a significant decline. Despite the rapid increase in the price of oil, neither the stock markets nor the growth of the global economy have been noticeably affected. Inflation has increased. In the United States, the Consumer Price Index rose by 0.6% compared to 0.2% for September. This was driven by a 4.2% increase in energy costs. As a result during this period the Federal Reserve has rapidly been increasing interest rates to curb inflation.

Economists say that the substitution effect will spur demand for alternate energy sources, such as coal or liquified natural gas. For example, China and India are currently heavily investing in natural gas facilities. Nigeria is working on burning natural gas to produce electricity instead of simply flaring the gas. Outside the US, more than 50% of oil is consumed for stationary, non-transportation purposes such as electricity production where it is relatively easy to substitute natural gas for oil.

The increased price of oil also makes previously impractical sources of oil attractive to businesses. The most prominent example of this are the massive reserves of the Canadian tar sands. They are a far less cost efficient source of oil than crude, but at 60 dollars a barrel, the tar have recently become very attractive to businesses. Recent months have seen billions of dollars invested in the oil sands.

The increased price of oil might also encourage greater fuel efficiency. Recent years have seen a move towards more fuel-thirsty sport utility vehicles in the United States and Canada, and this may be stopped by the high price of gas. The September 2005 sales data for all the vehicles vendor indicated SUV sales dropped while small cars sales increased compared with 2004 sales. There is also an ever increasing market for hybrid vehicles since they are more fuel efficient; since the 1973 energy crisis, the front-wheel drive passenger car has replaced rear-wheel drive as the preferred layout for energy efficient cars. There is an increasing demand of crossover sport utilities which are more fuel efficient - especially for those based on passenger car platforms.

USA Stock markets

Three-year performance of the oil industry... ...and one-month performance.

The increase in oil prices over two years was mirrored by an increase in stock values in the energy sector. The value of the stock in companies such as Apache[23] and Conoco-Phillips [24] rose sharply during this period. These prices increased more rapidly toward the end of August, particularly after Hurricane Katrina. [25]

Wal-Mart shares continued their decrease in value that began with the increase in the oil prices. Over two years, stock in Wal-Mart dropped in value by 25% from $60 per share to under $45 per share. [26] Earlier in August, Wal-Mart announced that higher than expected oil prices cut into the corporation's profits for the 2nd quarter of 2005. Since oil prices after the end of the 2nd quarter continued to rise, 3rd quarter profits from Wal-Mart are expected to be small. Because Wal-Mart's distribution system relies on the customer to drive to a large discount big-box store, increases in the price of fuel might discourage some customers from making the trip as often. Wal-Mart, like all retailers, will also face higher shipping costs to get goods from the factory to the stores. This will likely cause inflationary pressures.

Asia Pacific Region (excludes Australasia)

The Pacific rim had been experiencing this crisis on an ongoing basis prior to Hurricane Katrina.

  • In the Philippines, the oil crisis caused its public to call for immediate government assistance. [27] New sources of energy were sought to deal with the crisis.[28]
  • A senior minister of Singapore expressed concern at the oil crisis in Indonesia.[29]
  • The Indonesian president had instituted subsidies to control the price of gasoline.[30]


Sub-Saharan Africa

High oil prices are hurting many countries in Africa, including Zimbabwe, Eritrea and Tanzania. High oil prices have created an oil supply instability, per barrel price instability or both. In some cases this has led to fuel rationing being enacted.

  • Many countries in Sub-Saharan Africa lack the foreign exchange reserves (ie, Dollars) to purchase enough oil products at the ever increasingly higher prices. These nations must resort to limiting imports or rationing their existing supplies.

Latin America & Caribbean

Venezuela's president, Hugo Chávez, came under increasing scrutiny as he began selling oil at lower-than-market prices to island nations in the Caribbean. [31]

  • At the same time, Cuba has experienced electricity shortages.

Gulf States & Eurasian Arab-Islamic Regions

Iran came under increasing pressure from the European Union in regard to their program to build nuclear power plants.[32]


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Iran came under increasing pressure from the European Union in regard to their program to build nuclear power plants.[32]. The leak created considerable amount of protest from the gay community and other liberal groups. [31]. Bush made a deal: the Salvation Army would support Bush's push on faith based initiatives if Bush made sure that the Salvation Army would be exempt from local and state legislations that prevent discrimination based on sexual orientation. Venezuela's president, Hugo Chávez, came under increasing scrutiny as he began selling oil at lower-than-market prices to island nations in the Caribbean. According to that document, the Salvation Army and President George W. In some cases this has led to fuel rationing being enacted. In July 2001, The Washington Post published a Salvation Army internal memo.

High oil prices have created an oil supply instability, per barrel price instability or both. The Salvation Army opposes this policy and has threatened to close its soup kitchens and shelters across New York. High oil prices are hurting many countries in Africa, including Zimbabwe, Eritrea and Tanzania. The State of New York has proposed legislation that requires businesses to offer health benefits to same-sex partners of employees.
. Other issues in the lawsuit by 19 current and former employees are still under consideration by the trial court. The Pacific rim had been experiencing this crisis on an ongoing basis prior to Hurricane Katrina. In a recent case, the New York Federal Court ruled that organization could use religious criteria in its hiring; that ruling is being appealed by the New York Civil Liberties Union.

This will likely cause inflationary pressures. The Army's position is that because it is a church, Section VII of the US Civil Rights Act of 1964 explicitly guarantees its rights to discriminate in hiring. Wal-Mart, like all retailers, will also face higher shipping costs to get goods from the factory to the stores. Despite the tax breaks it receives as a registered charity, and its government funding (about 11 percent of total revenues, in the form of grants and payments for services), it has a stated policy of "discrimination" against applicants and employees whose faith or sexual orientation are not acceptable to The Salvation Army. Because Wal-Mart's distribution system relies on the customer to drive to a large discount big-box store, increases in the price of fuel might discourage some customers from making the trip as often. The Salvation Army in the USA has come under attack for what some people see as discrimination in hiring and for its requirements on how employees should behave. Since oil prices after the end of the 2nd quarter continued to rise, 3rd quarter profits from Wal-Mart are expected to be small. Essentials.

[26] Earlier in August, Wal-Mart announced that higher than expected oil prices cut into the corporation's profits for the 2nd quarter of 2005. Calling a generation to dynamic faith, radical lifestyle, adventurous mission and a fight for justice.. Over two years, stock in Wal-Mart dropped in value by 25% from $60 per share to under $45 per share. Mission Statement. Wal-Mart shares continued their decrease in value that began with the increase in the oil prices. ALOVE Image
. [25]. Its purpose is to free the youth of the church and their communities to express themselves, and their faith in their own way.

These prices increased more rapidly toward the end of August, particularly after Hurricane Katrina. In the new millennium, The Salvation Army in the United Kingdom created a sub-brand of itself for the youth, called Alove, The Salvation Army for a new generation. The value of the stock in companies such as Apache[23] and Conoco-Phillips [24] rose sharply during this period. Adventure Corps serves boys in 1st through 8th grade. The increase in oil prices over two years was mirrored by an increase in stock values in the energy sector. In the United States these internal youth groups for girls are known as Girl Guards (older) and Sunbeams (younger). There is an increasing demand of crossover sport utilities which are more fuel efficient - especially for those based on passenger car platforms. Some territories have Salvation Army Guards and Legions Association (SAGALA).

There is also an ever increasing market for hybrid vehicles since they are more fuel efficient; since the 1973 energy crisis, the front-wheel drive passenger car has replaced rear-wheel drive as the preferred layout for energy efficient cars. The Salvation Army has a number of youth groups associated with it, mainly its Sunday schools and Scout and Guide pack. The September 2005 sales data for all the vehicles vendor indicated SUV sales dropped while small cars sales increased compared with 2004 sales. dollars. Recent years have seen a move towards more fuel-thirsty sport utility vehicles in the United States and Canada, and this may be stopped by the high price of gas. Most of the donated coins are worth several hundred U.S. The increased price of oil might also encourage greater fuel efficiency. This started in 1982, in Crystal Lake, Illinois, a suburb of Chicago.

Recent months have seen billions of dollars invested in the oil sands. A tradition has developed in the U.S., where, in some places, gold coins are anonymously inserted into the kettles that the bell ringers collect donations in. They are a far less cost efficient source of oil than crude, but at 60 dollars a barrel, the tar have recently become very attractive to businesses. This campaign is conducted also across North America every year, and generates several million dollars. The most prominent example of this are the massive reserves of the Canadian tar sands. In many countries The Salvation Army is most recognized during the Christmas season with its volunteers who stand outside of businesses and play/sing Christmas carols, or ring bells to inspire passersby to give donations of cash and checks to the kettles. The increased price of oil also makes previously impractical sources of oil attractive to businesses. The ARC's are located all over the world, are work and Bible based and are usually long term residential facilities.

Outside the US, more than 50% of oil is consumed for stationary, non-transportation purposes such as electricity production where it is relatively easy to substitute natural gas for oil. Thrift stores provide the revenue to run the Adult Rehabilitation Centers known as ARC's. Nigeria is working on burning natural gas to produce electricity instead of simply flaring the gas. The Salvation Army has a history of free rehabilitation from alcohol and drug abuse. For example, China and India are currently heavily investing in natural gas facilities. The Salvation Army is well-known for its network of Thrift stores, which raise money for its charitable and religious activities by selling donated used goods such as clothing, housewares, etc. Economists say that the substitution effect will spur demand for alternate energy sources, such as coal or liquified natural gas. One soldier kept a blog of Hurricane Katrina relief, discussing the spiritual impetus behind the work.

As a result during this period the Federal Reserve has rapidly been increasing interest rates to curb inflation. Trained volunteers, employees, officers, and soliders perform the disaster relief work of the Salvation Army. This was driven by a 4.2% increase in energy costs. Most recently they have helped the victims of the 2005 Kashmir earthquake. In the United States, the Consumer Price Index rose by 0.6% compared to 0.2% for September. Later in 2005 they responded to hurricanes Katrina and Rita. Inflation has increased. In August of 2005 they supplied drinking water to poor people affected by the heat wave in the US.

Despite the rapid increase in the price of oil, neither the stock markets nor the growth of the global economy have been noticeably affected. The Sallies were prominent among relief organizations after Hurricane Hugo and Hurricane Andrew and other such natural disasters in the US. But oil's historically high ratio of Energy Returned on Energy Invested continues a significant decline. Since then they have helped rebuild homes and construct new boats for people to recover their livelihood. In the United States, for instance, each $1000 dollars in GDP required 2.4 barrels of oil in 1973 when adjusted for inflation this number had fallen to 1.15 by 2001. After the Indian Ocean tsunami in 2004, they arrived immediately at some of the worst disaster sites to help retrieve and bury the dead. While total consumption has increased [22], the western economies are less reliant on oil than they were twenty-five years ago, due to substantial growths in productivity. They have worked to alleviate suffering and help people rebuild their lives.

This could well be the case if a major storm were to hit the gulf, where the reserve is located. The Salvation Army is one of the largest non-governmental relief agencies and is usually among the first to arrive with help after natural or man-made disasters. demand for about a month in the event of an emergency, unless it is also destroyed in the emergency. The Salvationists' nationwide appeals for financial and material donations yielded tremendous support, enabling the Army to provide assistance to many thousands of affected individuals. The American Strategic Petroleum Reserve could on its own supply current U.S. The Salvation Army's first major forays into Disaster Relief resulted from the tragedies of the Galveston Hurricane of 1900 and the San Francisco earthquake of 1906. Nevertheless, that loss of revenue would put a strain on government balance sheets. Some members of The Salvation Army are keen to re-emphasise their role as a Christian church.

Most economists see this as unlikely, partly because all developed countries have high fuel taxes that decrease as oil prices increase and can be eliminated in the event of a dramatic price spike. It is now seen externally to be mainly a social services charity and/or thrift shop. Some see these increases in the price of oil leading to a recession comparable to those that followed the 1973 and 1979 energy crises or a potentially worse situation such as a global oil crash. Often classified within the taxonomy of Christian denominations as a Methodist faith community, The Salvation Army has always seen itself primarily as a Christian church, but this has been eroded in the public's perceptions over the years. There is controversy regarding the potential effects of oil-price shocks. Doctrines:. the implications for the oil market are global."[21]. Mottos:.

[19] [20] The press release from the IEA states, ".. Mission statement:. These supplies would begin entering the US markets within two weeks of 2 September. Strawberry Field closed in 2005. In order to stabilize world energy supplies, the International Energy Agency offered to sell two million barrels of crude oil and other refined products from national supplies. The Beatles song "Strawberry Fields Forever" was inspired by the Salvation Army's Strawberry Field Childrens' home in Liverpool, England. Bush stated, "This storm has disrupted the ability to make gasoline and deliver gasoline," and "This is going to be a difficult road."[18] Many people have observed however that stores of crude oil do little to address inadequate refinery and distribution capacity. The song Silver Bells, first sung by Bob Hope and Marilyn Maxwell in the movie The Lemon Drop Kid, was inspired by the imagery of Salvation Army bellringers standing outside department stores every Christmas season.

EDT, on 31 August, President Bush announced the Energy Department was approving loans from the Strategic Petroleum Reserve and that EPA announced nationwide waver on fuel blends. Current bands like New Zealand's Moped and The Lads, England's Electralyte, Australia's Soteria, and America's TransMission, carry on this Salvation Army tradition. On 5:10 p.m. Another popular band is The Insyderz, an American ska-core group in the 1990s and early 2000s. Airports began to report shortages in aviation fuel on 2 September.[15] A shortage could lead to a decrease in food production.[16] Higher prices for heating oil and natural gas were expected as the winter heating season set in.[17]. The Army's Joy Strings were a hit pop group in the 1960s and early 1970s in the UK and beyond, reaching the charts and being featured on national television. [14] Many of these were blamed on panic buying. The Army tradition in music is to use popular idiom of the day to reach people for Jesus.

Shortages were feared or experienced in several states including Tennessee [12], Alabama [13], and South Carolina. Depending on the size, sometimes Salvation Army corps (churches) have brass bands that enhance Sunday services by accompanying the congregation in the singing of hymns and/or during "Praise and Worship" times set aside during the service. In Stockbridge, Georgia, regular gas prices came to $5.87 at a BP station. Philip Smith, principal trumpet of the New York Philharmonic, who still plays and records with the Army's New York Staff Band). Gas prices soared after the closing down of the major pipelines connecting the gas of the Louisiana region to the entire East Coast. Some professional brass players and contesting brass band personnel have come up through The Salvation Army, and in some cases continue to maintain links (e.g. [11]. The standard of playing is high and the Army operates bands at the international level, such as the International Staff Band, which are the equal of professional ensembles, though they do not participate in the brass band contest scene.

Louisiana Offshore Oil Port has not. The Premier Songster Brigade in the Salvation Army is the International Staff Songsters (ISS). Port Fourchon has also suffered long term damage. The Salvation Army also has choirs, these are known as Songster Brigades, and these normally comprise of the traditional SATB (Soprano, Alto Tenor and Bass) singers. The port of Louisiana is one of its most important inlet for oil imports, and the gulf itself is a major oil producer. Across the world, the brass band has been an integral part of the Army’s ministry, and an immediately recognizable symbol to Salvationists and non-Salvationists alike. The Gulf Coast is home to a major portion of America's refining capacity. Their musical groups, usually a brass band or smaller collection of brass instruments, are seen in public at Army campaigns, as well as at other festivals, parades and at Christmas.

Hurricane Katrina had a major impact on oil and gas prices, especially within the United States. The tradition of having musicians available continued, and eventually grew into the creation of true bands. Continued concerns about Iran raised the price to $68.38 on January 31.[10]. A family of musicians, named the Frys, began working with the Army as their "bodyguards" and played music to distract the crowds. Observers believe that violence in Nigeria, and Iran's friction with the West are responsible for this price increase. As the popularity of the organization grew and Salvationists worked their way through the streets of London attempting to convert individuals, they were sometimes confronted with unruly crowds. This was the highest increase since early October 2005. Additionally, there are millions of volunteers.

On January 17, sweet crude oil for February delivery rose by $2.38 (3.7%) to $66.30 a barrel. According to the 2006 Salvation Army Year Book, in the United States there are 85,148 Senior Soldiers and 28,377 Junior Soldiers, 17,396 Adherents and around 60,000 employees. As a result, shortage of a particular grade of oil can keep street prices high, even when overall supply exceeds demand. See: High Council of The Salvation Army. In addition, there are different grades of oil and each refinery is typically configured to process a narrow range of grades. He will take office on April 1, 2006. While the street price of gasoline usually corresponds to the price of crude oil, refinery capacity can become the governing factor, particularly during periods of high demand. On January 28, 2006 the High Council elected Shaw Clifton as the next General.

Over the course of three weeks leading up to August 10, crude oil prices had risen by 13%. Larsson will be retiring in 2006. During mid-August, with a string of refinery snags (fires/other deterrents to oil refining), shrinking gasoline inventories, and a growing thirst for oil by American consumers, New York Mercantile Exchange traded crude oil futures surged past the $66 mark and briefly touched $67/barrel. It is led by General John Larsson, who has held this position since 2002. influence. Its membership includes more than 17,000 active and more than 8700 retired officers , around 100,000 other employees and more than 4.5 million volunteers. Saudi Arabian King Fahd's death on August 1, 2005, meant a new regime that may be less amicable to U.S. In addition to community centers and disaster relief, the organization does ongoing work in refugee camps, especially among displaced people in Africa.

In June 2005 crude oil prices surged to record highs eventually breaking the psychological barrier of $60. After the United Nations, the Salvation Army is the world's largest provider of social aid, with expenditures of $2.6 billion in 2004, helping more than 30 million people. It then reversed course and headed to an all time high of $58.28, driven mainly by lingering concerns of a prolonged weak dollar. Each of these Territories is led by a Territorial Commander who receives orders from the Salvation Army's International Headquarters in London. In April 2005 the price began to fall, reaching $53.32 on April 9. For example, Japan is one territory, the United States is divided into four Territories: Eastern, Southern, Central, and Western while Germany & Lithuania together are one territory. On March 16, 2005, the price surpassed the October 2004 high of $55.17 to close at $56.46. Likewise, each Division has a Divisional Headquarters (DHQ).

The price of light, sweet crude oil on NYMEX has been above $50/barrel since March 5, 2005. Each Territory has an administrative hub known as Territorial Headquarters (THQ). After retreating for several months during the winter of 2004/2005, prices rose to new highs in March 2005. For administrative purposes, the organization divides itself geographically into Territories, which are then sub-divided into Divisions. These analysts believe the problem would be solved by increasing the efficiency of factories, homes and transportation and easing the demand crunch by using less energy and more renewable energy. The Salvation Army operates in 111 countries and provides services in 175 different languages. Still others suggest that the main issue is a lack of energy efficiency in industry. The Salvation Army believes, as stated in their first doctrinal statement, that only these scriptures, "constitute the Divine rule of Christian faith and practice.".

A July 14, 2005 Morgan Stanley report[9] suggests that opinions of the oil market could burst just like a bubble if indications of declining Asian demand continue. This mandate is based on the Army's interpretation of the Scriptures of the Old and New Testament. If these speculators are wrong, current prices may actually be a price bubble, and the price could thus collapse. The mission of The Salvation Army is to win the world for Jesus. These people argue that speculators foresee increasing demand, decreasing supply, or both, leading to a long term increase in the price of oil. Opponents, grouped under the name of the Skeleton Army, disrupted Salvation Army meetings and gatherings, the usual tactics being the throwing of rocks, rats, and tar, and physically assaulting members of The Salvation Army. Others believe that the price of oil is almost entirely speculative, and that the increase in price is due to oil speculation extending into the long term. As The Salvation Army grew rapidly in the late 1800s, it generated opposition in England.

Not only is there a limited amount of fossil fuels which have been burnt as fuel, but however much remains will be used faster by a growing industrialized world population and what remains will be more dificult to get since the easiest wells have been tapped and the remaining sources will be fought over in resource wars. Any member of the public is welcome to attend their church services. A more fundamental problem that some believe is causing the price to rise is the probability of peak oil already or soon to be reached. Soldiers only wear these to attend worship services, not in every day life. Critics argue that these problems periodically push price higher, but that they are not fundamental or long term enough to cause the large jump in gas price. Its soldiers wear a uniform tailored to the country they work in; they can be white, grey, navy, fawn and are even styled like a sari in some areas. Some people and news agencies argue that labor strikes, hurricane threats to oil platforms, fires and terrorist threats at refineries, and other general problems are responsible for the higher gas prices. Among the other long-established beliefs of The Salvation Army are that its members should completely refrain from drinking alcohol (teetotalism), smoking, taking illegal drugs and gambling.

Since oil is traded in dollars, the price must increase for OPEC to maintain buying power in Europe. They felt that much of what passed for Christianity in their day was primarily an observance of outward ritual. One other important cause is the United States dollar's slump against the Euro. William and his wife Catherine Booth believed in the teachings of Apostle Paul, that salvation came solely from the grace of God personally received by faith. The short term price of oil is partially controlled by the OPEC cartel and the oligopoly of major oil companies. As a result of Booth's pragmatic approach to ministry, they decided not to include the use of sacraments (mainly baptism and Holy Communion) in the Army's form of worship, believing that many Christians had come to rely on the outward signs of spiritual grace rather than on grace itself. Even if oil supplies themselves are not reduced, some experts feel the easily accessible sources of light sweet crude are almost exhausted and in the future the world will depend on more expensive sources of oil. The Salvation Army's main converts were at first alcoholics, drug addicts, prostitutes and other "undesirables" of society with whom the Church refused to have any association.

Despite this there is increasing discussion of peak oil and the possibility that the future may see a reduced supply of oil. On March 10, 1880, Commissioner George Scott Railton and seven young women landed in the USA and began operations. This rate of increase is faster than that of any other date in the past. In 1878, the name was changed to The Salvation Army and a quasi-military outlook was adopted. World supply (specification) came in at 83 million barrels a day during 2004 in department of energy EIA calculations ([8]). After starting the work outside the East End, the name changed to The Christian Mission. Gas prices in the region, normally 70 cents below the national average, were at $3.12 on August 30.[7]. It then changed its name to East London Christian Mission.

Short-term shutdowns because of power outages knocked out two major on-shore pipelines, and at least 10% of the nation's refining capacity was not operating in the wake of the storm. The Salvation Army was founded by William and Catherine Booth in London in 1865 as an Evangelical movement called the Christian Revival Association. market. . In late August, 2005, Hurricane Katrina crippled the supply-flow from off-shore rigs in the Gulf Coast, the largest source of oil for the domestic U.S. The Army's headquarters are located in London and there are thousands of branches around the world. Outside the Middle East other oil producers have worried investors such as the strikes political problems in Venezuela and potential instability in West Africa. It is structured as a hiearchical organization, with a large number of staff and volunteers.

The war in Iraq, Iran's nuclear program, and questions about Saudi Arabia's internal stability all could in the future lead to a dramatic fall in the supply of oil. It is sometimes affectionately referred to as the "Sally Ann" in Canada, "Sally Army" in the UK and New Zealand, and the "Salvos" in Australia. One of the most important is growing turbulence in the Middle East, the world's largest oil producing region. The Salvation Army is a Protestant evangelical Christian denomination and, more famously, a charity and social services organization, with international headquarters at 101 Queen Victoria Street, London.
There are a number of reasons why oil traders feel that oil supplies might be reduced. Social Action: Giving a voice to the voiceless.
. Note: the total percentage exceeds 100 because the overall demand from all other countries decreased during the same period.. Mission: Going into the world to find Jesus and point him out.
.

Department of Energy Energy Information Administration estimates: [6]. Discipleship: Getting into Jesus and his community.
. Sources of the world-consumption-increase in 2004 compared to 2003 (total increase of 3.4%), according to U.S. Worship: Giving our lives and world back to God.
. New demand is also coming from emerging industry in third world nations, including India and especially China which is developing a western-style car culture and whose manufacturing bases have grown very rapidly in recent years. We Believe in the immortality of the soul; in the resurrection of the body; in the general judgment at the end of the world; in the eternal happiness of the righteous; and in the endless punishment of the wicked. economy currently accounts for one-quarter of all demand. (1 Thessalonians 5:23).

The U.S. We Believe that it is the privilege of all believers to be wholly sanctified, and that their whole spirit and soul and body may be preserved blameless unto the coming of our Lord Jesus Christ. market, the source of an increasing percentage of the world's demand for petroleum. We Believe that continuance in a state of salvation depends upon continued obedient faith in Christ. High demand is led by the U.S. We Believe that we are justified by grace through faith in our Lord Jesus Christ and that he that believes has the witness in himself. . We Believe that repentance towards God, faith in our Lord Jesus Christ, and regeneration (being born again) by the Holy Spirit are necessary to salvation.

The previous high was $2.38 per gallon in March 1981, which would be $3.03 per gallon after adjusted for inflation.[4][5]. We Believe that the Lord Jesus Christ has, by his suffering and death, made an atonement for the whole world so that whosoever will may be saved. The average retail price was nearly $3.04 per gallon. We Believe that our first parents were created in a state of innocence, but by their disobedience they lost their purity and happiness, and that in consequence of their fall all men have become sinners, totally depraved, and as such are justly exposed to the wrath of God. In the United States gasoline prices reached an all time high during the first week of September 2005 in the aftermath of Hurricane Katrina. We Believe that in the person of Jesus Christ the divine and human natures are united, so that he is truly and properly God and truly and properly man. A record price of $70.85 per barrel was reached on August 29, 2005.[2] While oil prices are considerably higher than a year ago, they are still roughly 25$ from exceeding the inflation-adjusted "peak of the 1980 shock, when prices were over $90 a barrel in today’s prices" [3]. We Believe that there are three persons in the Godhead - the Father, the Son and the Holy Ghost - undivided in essence and co-equal in power and glory.

By August 11, 2005, the price had been above $60/barrel for over a week and a half. We Believe that there is only one God who is infinitely Perfect - the Creator, Preserver and Governor of all things - and who is the only proper object of religious worship. The price of standard crude oil on NYMEX was under $25/barrel in September 2003. We Believe that the Scriptures of the Old and New Testaments were given by inspiration of God; and that only they constitute the divine rule of Christian faith and practice. At the same time, Cuba has experienced electricity shortages. These nations must resort to limiting imports or rationing their existing supplies.

Many countries in Sub-Saharan Africa lack the foreign exchange reserves (ie, Dollars) to purchase enough oil products at the ever increasingly higher prices. The Indonesian president had instituted subsidies to control the price of gasoline.[30]. A senior minister of Singapore expressed concern at the oil crisis in Indonesia.[29]. [27] New sources of energy were sought to deal with the crisis.[28].

In the Philippines, the oil crisis caused its public to call for immediate government assistance. combined other non-OECD: 21%. UK: 3.5%. Canada: 4%.

Asia outside Japan and China: 13.8%. US: 19.4%. China: 38.9%.

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