Better Fill up today

[frawin]

Oil Prices to Ease in Next Two Years as Output Gains, IEA Says



July 16 (Bloomberg) -- Oil prices will ease over the next two years as producers pump more crude, International Energy Agency Executive Director Nobuo Tanaka said.

``There are new production projects which will improve the situation in 2009 and 2010, but after that the situation will get tighter again,'' Tanaka said yesterday at a conference in Algiers.

While a falling dollar and speculation are helping to push prices up, oil's main drivers remain the accelerating demand in emerging markets and declining spare capacity in producing nations, he said.

``Demand is growing in emerging economies and spare production capacity is low; that is why prices are very high,'' Tanaka said, calling on producing countries to boost investment to tap ``a lot of unexplored oil potential.''

[DanCookson]

So...how much lower does everybody think the markets are goin to go?

Appears the general mood of the stock market is going to be a bear market for some time to come.  With oil high, and our financial market in basically ruins it is going to take some time to bottom out and get it turned the other way.  Just my thought, but it is funny when our fledgling airline companies and automobile companies are in better shape than our banks!!!!  Government bailout, here we come!

[frawin]

Crude oil is trading  $0.70 to $.80 down in overnite access and Natural Gas down $0.06. It will be interesting to see what the EIA/API Crude Oil Inventory reports shows today. If there is a lower inventory overall that may push the market up more.
Frank

[frawin]

Crude oil is trading at $133.40 for August contracts, down $5.34 and natural gas is trading down for August at $11.24, down $0.237. Below is the weekly Petroleum Inventory report which is overall encouraging that consumption is going down.

Summary of Weekly Petroleum Data for the Week Ending July 11, 2008

U.S. crude oil refinery inputs averaged nearly 15.5 million barrels per day
during the week ending July 11, down 21 thousand barrels per day from the
previous week's average. Refineries operated at 89.5 percent of their operable
capacity last week. Gasoline production rose last week, averaging about 9.1
million barrels per day. Distillate fuel production increased last week,
averaging 4.7 million barrels per day.

U.S. crude oil imports averaged nearly 10.8 million barrels per day last week,
up 1.2 million barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged nearly 10.2 million barrels per day, 235
thousand barrels per day above the same four-week period last year. Total motor
gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged 1.0 million barrels per day. Distillate fuel
imports averaged 150 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 3.0 million barrels from the previous week. At
296.9 million barrels, U.S. crude oil inventories are near the lower boundary of
the average range for this time of year. Total motor gasoline inventories
increased by 2.4 million barrels last week, and are in the upper half of the
average range. Both finished gasoline inventories and gasoline blending
components inventories increased last week. Distillate fuel inventories
increased by 3.2 million barrels, and are in the upper half of the average range
for this time of year. Propane/propylene inventories increased by 1.0 million
barrels last week but remain below the lower limit of the average range. Total
commercial petroleum inventories increased by 7.5 million barrels last week, and
are near the bottom of the average range for this time of year.

Total products supplied over the last four-week period has averaged nearly 20.3
million barrels per day, down by 2.0 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged 9.3 million
barrels per day, down by 2.1 percent from the same period last year. Distillate
fuel demand has averaged about 4.2 million barrels per day over the last four
weeks, up by 2.5 percent from the same period last year. Jet fuel demand is 0.5
percent lower over the last four weeks compared to the same four-week period
last year.percent from the same period last year. Jet fuel demand is 2.2 percent
lower over the last four weeks compared to the same four-week period last year.

The tables that follow display the latest U.S. Petroleum Balance Sheet and the
most recent 4 weeks of Weekly Petroleum Status Report data. 

Table 1.  U.S. Petroleum Balance Sheet, 4 Weeks Ending 07/11/2008
                                                                     Cumulative
                                    Four Week Averages             Daily Averages
Petroleum Supply                          Ending            %          192 Days      %
(Thousand Barrels per Day)           07/11/08  07/11/07    Change     2008    2007    Chg
------------------------------------------------------------------------------------
Crude Oil Supply
Domestic Production (1)                  5,086     5,132      -0.9   5,118   5,184    -1.3
Net Imports (Incl SPR) (2)              10,162     9,911       2.5   9,789   9,984    -2.0
   Gross Imports (Excl SPR)             10,189     9,954       2.4   9,811  10,013    -2.0
   SPR Imports                               0         0       --        0       0     --
   Exports                                  27        43     -37.2      22      29   -24.1
SPR Stocks W/D or Added                    -48         0       --      -48      -9     --
Other Stocks W/D or Added                  145        51       --      -26    -195     --
Product Supplied and Losses                  0         0       --        0       0     --
Unaccounted-for Crude Oil (3)               61       298       --       62      61     --

Crude Oil Input to Refineries           15,407    15,392       0.1  14,895  15,025    -0.9

Other Supply
Natural Gas Liquids Prod. (4)            2,203     2,381      -7.5   2,226   2,356    -5.5
Other Liquids New Supply                   399       -13    3169.2     379     -55   789.1
Crude Oil Product Supplied                   0         0       0.0       0       0     0.0
Processing Gain                          1,024     1,023       0.1     988     983     0.5
Net Product Imports (5)                  1,836     2,267     -19.0   1,561   2,219   -29.7
   Gross Product Imports (5)             3,255     3,610      -9.8   3,219   3,552    -9.4
   Product Exports (5)                   1,419     1,343       5.7   1,658   1,333    24.4
Prod Stocks W/D or Added (6)(7)           -571      -347       --      -14     178     --

Total Prod Supplied for Domestic Use    20,297    20,703      -2.0  20,035  20,706    -3.2

Products Supplied
Finished Motor Gasoline (4)              9,346     9,550      -2.1   9,096   9,232    -1.5
Kerosene-Type Jet Fuel                   1,654     1,662      -0.5   1,578   1,623    -2.8
Distillate Fuel Oil                      4,181     4,079       2.5   4,160   4,248    -2.1
Residual Fuel Oil                          554       706     -21.5     622     768   -19.0
Propane/Propylene                          922       962      -4.2   1,210   1,271    -4.8
Other Oils (                           3,640     3,744      -2.8   3,369   3,564    -5.5

Total Products Supplied                 20,297    20,703      -2.0  20,035  20,706    -3.2

Total Net Imports                       11,998    12,178      -1.5  11,350  12,203    -7.0

[DanCookson]

Appears from the numbers that demand is slacking which is good.

Nationwide Diesel fuel surcharge, which is the amount of money added to every freight shipment in the United States that is carried by a Common Carrier, ie...Roadway Express, Yellow Transportation, Old Dominion, Conway...etc. gets changed every Wednesday and is based on the national average of Diesel fuel.

Fuel Surcharge is currently 38.5%.  That means that if my base cost for freight is 200 dollars, then the carrier charges me 277 dollars.

Why is this important?  80% of all consumer goods are moved in this country by freight trucks and that surcharge is passed directly on to the consumer!!!!   

[frawin]

Dan, alot of the crude oil I handle is trucked and nearly all of the cotracts I do on it have Fuel Surcharge provisions, most of them  are based on the transporters Monthly average cost for Diesel , we agree on a base month and cost for the agreed month, then every month they give me their average Diesel  cost and the Transportation goes up or down based on the percentage increase or decrease of the given month verses the average for the agreed base month. This sure beats negotiating new rates every month. So far I have never had a month when the rates went down.

Appears from the numbers that demand is slacking which is good.

Nationwide Diesel fuel surcharge, which is the amount of money added to every freight shipment in the United States that is carried by a Common Carrier, ie...Roadway Express, Yellow Transportation, Old Dominion, Conway...etc. gets changed every Wednesday and is based on the national average of Diesel fuel.

Fuel Surcharge is currently 38.5%.  That means that if my base cost for freight is 200 dollars, then the carrier charges me 277 dollars.

Why is this important?  80% of all consumer goods are moved in this country by freight trucks and that surcharge is passed directly on to the consumer!!!!   

[frawin]

A bit of trivia for those that keep complaining about the oil comapnies earnings. The US OIl Industry has been going thru consolidation for several years, this consolidation was necessary to be able to have the huge resources and capital to take on the risk of the Multi-Billions of dollars of projects that the offshore and foreign Exploration and production, and Transportation required. As individual Companies they could not do the projects of higher risks and costs. ChevronTexaco is made up of, SOCAL, Gulf OIl, Texaco, Skelly, Pennzoil,Warren Petroleum, CalTex, Unocal and probably others I have missed. The point being when you look at their earnings you are looking at the earnings and asset base of 9 or more major oil companies. I wish people would look at the risk, and what the companies spend as well as their earnings. The American OIl companies have absolutely no control over world oil prices and haven't had for years. Our wasteful consumption has given The Muslim world control over our destiny, instead of standing around making rash and totally false statements regarding the US oil industry, we need to reduce consumption, do more research,  reduce our massive trade deficits which are caused by our trade imbalances with China, India and many other countries. We need to bring the jobs and the goods back to America, make the dollar worth something rather than have it be one of the lowest valued and lowest respected curriencies on Earth.

[DanCookson]

Just filled up container for mower gas.....$21.22


Reminds me of an old saying my first boss used to use when dealing with setting prices in our construction business.

"You can shear a sheep a hundred times, but you can only skin him once!!"

That being said, I feel skinned!!! 

New ad in paper***Wanted--Solar powered lawn mower***

[frawin]

Dan, we could go back to the old push reel type mowers that didn't use any gas. Do they even make them anymore?

[Catwoman]

Yup...HSN...roughly $100 a pop.