Better Fill up today

[Diane Amberg]

Thanks Frank. I can't believe gas has gotten as low as it has. I found some for $1.78. I keep expecting a big bounce back.

[frawin]

Diane, OPEC would like to see a BIG bounce back as well, but I think they know the economy worldwide is very fragile and low/lower energy prices would help hopefully stave off a full blown recession or worse.

[frawin]

Jan-09 Crude settled at $54.35 up $4.57 on the day, Dec-08 Natural Gas settled at $6.888, up $0.408 on the day.   

[Wilma]

Frank, do you think this is the beginnning of high gas prices again?

[frawin]

Well Wilma, I hope not and I don't think we are going back to $150.00 oil in the near term. OPEC keeps putting out rhetoric that they are going to cut exports and that they want $90.00 oil as a floor. I think OPEC and the largest world producer that is Non-OPEC, Russia, are well aware of how delicate the world economy is and how close we are to a Worldwide recession or worse the "D" word and if that happens they know their oil exports will go way down.  I would like to see $50.00 to $75.00 oil for awhile and let the world economy have a breather and get back on its feet. My main concern is that if oil gets to cheap we will start driving more, burning more gas and diesel, and we will back off of all of the plans to find alternate, renewable energy souces and back off of developing our own oil and gas reserves, stop a lot of the needed infrastructure  that needs to be built and go right back where we were when this mess started. Domestic drilling is really being curtailed due to the much lower price and the fact that drilling, work over and other expenses have not come down as fast and as much as the oil and Natural gas prices have, the end result is that our own us domestic production is dropping as well. Wilma I apologize if  this was a long answer to what seemed like a simple question.

[Wilma]

Frank, I really wanted your opinion because I have been thinking along the same way.  I just didn't know how to say it.  I will admit that I have been thinking that I could do a little more running around with the price of gas down.  But, I don't know where I would go now.  I have found out that I don't have to go to town every week.  We buy enough that we can by-pass the grocery store and there isn't much else that I need.

[frawin]

Jan-09 Crude is trading at $52.575, down$1.925, Jan-08 Natural Gas is trading at $6.73, down $0.097.

[frawin]

Crude Oil Falls, Paring Rally, on Concern Fuel Demand Will Drop

Nov. 25 (Bloomberg) -- Crude oil fell in New York, paring yesterday's 9 percent gain, on concern the rally will prove unsustainable as fuel demand declines.

A U.S. government report tomorrow will probably show that stockpiles of crude increased for a ninth week, according to a Bloomberg survey. Fuel demand in the world's largest economy fell 5.2 percent in the first 10 months of this year, the biggest drop since 1981, the American Petroleum Institute said last week. Oil climbed more than $4 a barrel yesterday, following European and U.S. equities higher.

"Prices are falling back after last night's rally, reflecting weaker equities and expectations for further builds in crude inventories tomorrow," said Christopher Bellew, a senior broker at Bache Commodities Ltd. "Nonetheless, the market seems to have found a floor round about $50."

Crude oil for January delivery fell as much as $2.40, or 4.4 percent, to $52.10 a barrel on the New York Mercantile Exchange. It was at $52.48 a barrel at 11:21 a.m. London time.

Futures have dropped 64 percent since reaching a record $147.27 a barrel on July 11. Yesterday, the contract increased 9.2 percent to settle at $54.50 a barrel, the biggest one-day gain since Nov. 4, after the government guaranteed $306 billion in Citigroup assets.

Copper and nickel and other commodities fell today after BHP Billiton Ltd., the world's largest mining company, scrapped its $66 billion offer for Rio Tinto Group, citing the turmoil in global markets.

'Serious Downturn'

"It shows how serious a downturn we're in," said Robert Montefusco, a broker at Sucden (U.K.) Ltd. in London. "Money is tight, and as prices are depressed the risk-reward in oil and metals isn't there right now."

Copper for three-month delivery dropped as much as 2.9 percent to $3,640 a metric ton on the London Metal Exchange on rising inventories amid the global recession. Gold for immediate delivery was down 0.5 percent to $817.17 an ounce.

Oil ministers from the 13-nation Organization of Petroleum Exporting Countries are scheduled to meet on Nov. 29 in Cairo. Slowing global demand growth has left a 1 million barrel-a-day oversupply that needs to be removed by the year-end, Venezuela's oil minister, Rafael Ramirez, said on Nov. 23.

The group is due to hold another summit on Dec. 17 in Algeria.

Russia may coordinate oil production cuts with OPEC as the world's second-largest crude exporter reels from falling energy prices. The country can't rule out cutting output together with OPEC, Energy Minister Sergei Shmatko said at a conference in New Delhi today.

Brent Crude

Brent crude oil for January settlement fell as much as $2.22, or 4.1 percent, to $51.71 a barrel on London's ICE Futures Europe exchange. It was at $51.93 a barrel at 11:06 a.m. London time. The contract yesterday increased $4.74, or 9.6 percent, to settle at $53.93 a barrel.

U.S. supplies of distillate fuel, a category that includes heating oil and diesel, fell for a second week because of cold weather along the East Coast, a Bloomberg News survey of analysts showed.

Distillate stockpiles dropped 1 million barrels last week from 126.9 million barrels the week before, according to the median of nine analyst estimates before an Energy Department report this week.

Crude-oil supplies may have risen 1.1 million barrels from 313.5 million barrels the week before.

Gasoline inventories probably increased 500,000 barrels from 198.6 million barrels the week before, according to the survey. Refineries probably operated at 85.2 percent of capacity, up 0.3 percentage point from the week before, the survey showed.

Crude-oil supplies may have risen 1.1 million barrels from 313.5 million barrels the week before.

[frawin]

Jan-09 Crude settled at $50.77 down $3.73 on the day, Jan-08 Natural Gas settled at $6.386, down $0.441 on the day.   
Inventories appear to be in  good shape for the Holiday driving season.
MYRNA AND I WISH EVERYONE A SAFE AND HAPPY THANKSGIVING
Frank

[frawin]

Jan-09 Crude settled at $54.44 up $3.67 on the day, Jan-08 Natural Gas settled at $6.878, up $0.492 on the day.