What's The Ceiling For Paper WTI.

When on April 22, paper WTI reached almost $120/b, traders at NYMEX wondered when the $130 level would be reached. In a comment posted to a BusinessWeek.com opinion piece arguing there was no actual shortage of gasoline, "Ward" on April 17 wrote: "Impeach the oil cos. Then impeach their main apologist, GWB (George W. Bush)". Some oil-company stocks rose along with crude on April 21, with Hess closing up 7% at $112.56; ExxonMobil up 0.3% to $94.26; and Marathon Oil up 0.9% to $49.21. Joel Fingerman, of Chicago-based Oil Analytics, an energy consulting firm, said: "This (price spike) isn't an issue of supply and demand. This is about money flow. It could stop here or at $150/b".

In other words, traders are bidding up the price of paper WTI. It is the downside, in one sense, of the scramble by the Fed to rescue the financial markets in the wake of the sub-prime mortgage melt-down. Since October 2007, the Fed has been consistently cutting interest rates - most recently on March 18, and it was expected to do so again on April 28. Each time it does so, the value of the dollar falls against other currencies. Traders react by investing in other commodities as a hedge against the $'s fall, and dollar-denominated commodities become more expensive. Peter Beutel, head of the energy risk management firm Cameron Hanover, says: "As long as the Fed continues to cut rates, traders will keep selling the dollar, buying the euro, and buying commodities like oil".

How Iran, Libya, Syria, North Korea, Cuba & Sudan Are Affected By US Legal Actions: One by one, top US oil executives met privately over the past year with the Libyan ruler Mu'ammar al-Qadhafi - often in his trademark Bedouin tent - as they lined up contracts allowing them to tap into the country's oil reserves. But now, thanks to a law which threatens those deals, the new allies are working Capitol Hill. The US oil industry and the Libyan government, once a pariah in Washington, have hired high-profile lobbyists, button-holed lawmakers and enlisted help from the Bush administration, all in an effort to win an exemption from a law which Congress passed in January intended to ensure that victims of terrorist attacks are compensated.

The provision allows victims of state-sponsored terrorism to collect court judgments by seizing foreign assets in the US or money from those governments held by American companies doing business with them. If Libya loses a half-dozen court cases still pending, $3 bn to $6 bn could be at stake, according to lawyers' estimates. Ali Aujali, the Libyan ambassador to the US, on April 22 was quoted as saying: "Libya is the first country in history to come out and denounce weapons of mass destruction. We have worked very closely with the United States in recent years to fight terrorism. And now to be treated in this way, I feel like we are back to square one". But attorneys for victims of the terrorist attacks are eager to put pressure on Libya, which they argue has balked at fully paying some settlements and is still fighting over compensation in other cases.

Thomas Fortune Fay, who represents 37 American military personnel wounded in the 1986 bombing of a Berlin discotheque, was on April 22 quoted as saying: "This really is a test of wills - a test to see if the United States is willing to stand up for American soldiers and others killed and wounded in attacks or for the oil companies and their profits". Fay is said to have used the new law to file liens against 13 corporations in the US, including ExxonMobil and Occidental Petroleum, whose CEOs both visited Qadhafi in 2007.

Qadhafi, whom President Ronald Reagan once called the "Mad Dog of the Middle East", denounced terrorism and agreed to dismantle his nuclear weapons programmes in late 2003 - steps which led the Bush administration to lift sanctions against Libya and later remove it from a list of states which sponsor terrorism.

Two decades ago, though, Libya was linked to a half-dozen incidents in which Americans were killed, including the Pan Am 103 bombing over Lockerbie, Scotland, and the Berlin attack. In March, the Libyan government went on the offensive against the new law. It signed a $2.4m contract with the prominent Washington lobbying firm led by Bob Livingston, a former Republican congressman from Louisiana. Escorted by lobbyists from the company, Aujali has had a series of meetings with congressional leaders. Separately, David Goldwyn, head of an oil industry group, and the Libyan government said they had approached the White House, the State Department, the Energy Department and the Pentagon.

Top oil industry executives - from companies including ConocoPhillips, Hess, Occidental and Marathon Oil - have been making the rounds on Capitol Hill, focusing on members from refinery-rich Texas. ExxonMobil, Chevron and Dow Chemical are also said to support the effort. Representatives of the oil companies say victims of terrorism are entitled to appropriate compensation, but they object that the law threatens to disrupt commerce the US is trying to encourage. In a written statement, Chevron spokeswoman Margaret Cooper said: "The world is energy-interdependent, and stronger commercial relationships between the US and Libya would help the US achieve greater energy security".

The lobbying effort has had a result: A March letter to Congress signed by Defence Secretary Robert Gates, Secretary of State Condoleezza Rice, Energy Secretary Samuel Bodman and Commerce Secretary Carlos Gutierrez, urged lawmakers to agree to the waiver. The letter likened the asset-seizure provision to "a new form of economic sanctions" and said it would have "a chilling effect on potentially billions of dollars in investments by US companies in Libya's oil sector". It said the law put the US oil companies at a disadvantage in competing for access to Libya's 40 bn barrels of proven oil reserves.

The assets provision was added to a Defence Department authorisation bill at the request of Sen Frank Lautenberg, Democrat of New Jersey, who does not intend to back down. He says: "My law is critical to providing justice for American victims of terrorism". Lautenberg, who has been an advocate for Pan Am 103 victims, in part because so many came from New Jersey, adds: "Some of these victims have waited decades for closure and for state sponsors of terrorism to be held accountable".

The Bush administration has once before sought an exemption from the law, successfully insisting in January that Iraq be excluded because the law could result in the seizure of money intended for reconstruction. In addition to Libya, the measure applies to Iran, Syria, North Korea, Cuba and Sudan.