Better Fill up today

[frawin]

We are going to continue to experience a yo-yo market for the near term.

Crude Oil Falls on Concern Economic Slowdown to Temper Demand


March 27  -- Oil fell, paring its sixth weekly increase, as some traders considered recent gains excessive because of doubts the global economic slump is nearing an end.

U.S. crude stockpiles rose to the highest since July 1993 last week, indicating demand for fuel in the world's largest economy remains constrained. In Japan, the third-biggest crude consumer, retail sales fell a more-than-expected 5.8 percent in February, the Trade Ministry said today.

R20;ItR17;s too early to say we have a recovery, we need to see what the economy does in the next few months," said Gerrit Zambo, an oil trader at BayernLB in Munich. "We could easily see a correction below $50 again."

Crude oil for May delivery declined as much as 73 cents, or 1.3 percent, to $53.61 a barrel on the New York Mercantile Exchange. It was at $53.66 a barrel at 9:36 a.m. London time.

Oil futures have jumped 36 percent in five weeks through March 20. Crude is set for its sixth consecutive week of gains on signs of an economic recovery in the U.S., the world's biggest oil consumer, where new home sales increased last month and durable goods orders rose.

R20;There is a shift in perception in the market that things are settling down and we'll start to see a recovery," Russell Norton, head of commodities sales at Barclays Capital, said in an interview in Singapore today. "To confirm the rally in prices, we have to see inventories fall."

U.S. Inventories

U.S. oil supplies rose 3.3 million barrels to 356.6 million in the week ended March 20. It was the 22nd gain in 26 weeks and left stockpiles 13 percent higher than the five-year average for the period.

Crude oil stockpiles at Cushing, Oklahoma, where New York- traded West Texas Intermediate crude is delivered, fell 2.21 million barrels to 31.7 million last week.

Consumption of fuels rose 2.2 percent to 19.2 million barrels a day last week, the Energy Department report showed. Daily fuel demand averaged over the past four weeks was 19.1 million barrels, down 3.2 percent from a year earlier.

The Organization of Petroleum Exporting Countries will reduce crude-oil shipments by 3.3 percent in the month ending April 11, according to Oil Movements. Members will load 22.23 million barrels a day in the period, down from 23 million a day in the month ended March 14, the Halifax, England-based tanker tracker said in a report yesterday.

OPEC has agreed to production cuts of 4.2 million barrels a day since September after prices tumbled from record highs. The group decided against any further output constraints at a meeting in Vienna on March 15. OPEC will convene again there on May 28.

Brent crude oil for May settlement fell as much as 65 cents, or 1.2 percent, to $52.81 a barrel on LondonR17;s ICE Futures Europe exchange. It traded at $52.83 at 9:

[frawin]

Oil Rises as G-20 Plan Sparks Optimism for Fuel Demand Recovery



April 3 (Bloomberg) -- Oil rose, extending yesterday's 8.8 percent rally, after a Group of 20 Nations plan to foster economic recovery sowed optimism that fuel demand may pick up.

Crude surged the most in three weeks yesterday as the G-20 nations pledged more than $1 trillion in emergency aid to cushion the fallout from the global recession. The dollar pared earlier gains against the euro, bolstering the appeal of commodities used to hedge against inflation.

R20;ItR17;s the G-20 bounce translating into risk appetite, which pushed up equities, pushed up commodities," said Mike Wittner, head of oil market research at Societe Generale SA. "Until a couple of weeks ago economic data was unfailingly negative, and now it's a little more mixed that gives the optimists something to seize on."

Crude oil for May delivery advanced as much as $1.26, or 2.4 percent, to $53.90 a barrel on the New York Mercantile Exchange. It was at $52.91 a barrel at 10:32 a.m. London time, set for its seventh consecutive weekly increase.

Yesterday, the contract rose $4.25 to settle at $52.64 a barrel, the biggest increase since March 12.

The dollar was 0.2 percent weaker at $1.346 versus the euro at 10:11 a.m. London time, having earlier fallen as much as 0.6 percent. A weaker U.S. currency makes dollar-priced assets such as oil appear undervalued and a useful hedge against inflation.

[Carl Harrod]

I would like Frank to comment on this article : http://www.usgs.gov/newsroom/article.asp?ID=1911

It is getting harder to know what can be believed and what cannot.

[frawin]

Carl, ironically I had dinner in Bartlesville this week with a friend from Houston who is a big purchaser Marketer of oil in the Bakken play. This report that you have referred to is probably one of the more creditable and conservative reports that have been put out on the Bakken in the past 2 years. The mid point of the recoverable numbers that are being put out by most reliable sources is around 3.6 Billion barrels. That sounds like a lot and is a lot but at our recent peak usage in this country that is only 180 days supply. That is not a really good comparison as we couldn't get it all at once but that does give a perspective on America's massive appetite and waste of oil. One of the biggest problems with developing the Bakken is the harsh weather enviroment and currently above all is the lack of infrastructure to move the oil to the refining areas. The cost to build the pipellines to move the probably say 2 million/day peak production, will run into the Billions of dollars and take a long time. Two Million barrels a day would reduce our dependence on foreign oil by roughly 20 percent and that would really help our trade deficit. The other big stumbling block is the current powers in Washington are so anti-oil and they have put out so much rhetoric about taking tax breaks away from the oil industry, there will be some delays in building the infrastucture and drilling the wells to prove up and develop this production. America could be far less dependent on foreign oil if in the near term we released ANWR and the OCS areas for development, give the industry the Tax breaks for spending the 100s of billions of dollars that it will take . In the long term we need to continue to develop alternate renewable non-Petroleum energy sources for our needs. Natural gas is a good short-term alternative, again the largest non-reserve of ready available Natural Gas is the gas that has been reinjected over the years in the North Slope, again the infrastructure to move it to the lower 48 is not there. ConocoPhillips has been working on building the pipeline to move this gas but the cost to do so has gone up from 10 Billion to 20 Billion and now the cost is estimated at 30 billion plus, again the big hold up will be Washington and the Liberal-Left-Socialist in power that don't want the Oil companies to make money.

Carl after all of that rambling, I personally think the Bakken has lots of potential but it won't contribute greatly for some time.

[Diane Amberg]

Thanks to both of you. I find all that fascinating. I suspect it means gas would have to go back up to the $4.00 range?

[frawin]

Diane, do you mean Natural Gas or Gasoline. Hopefully we won't see $4.00 Gasoline for in the near future. I think high priced gasoline is what brought the World Economy to the brink of disaster. The Clinton trade agreements brought us high priced energy.

[Diane Amberg]

I meant gasoline.  I've  been told  nobody will  seriously continue looking for new sources or work on alternatives at today's prices.

[srkruzich]

I meant gasoline.  I've as been told  nobody will  seriously continue looking for new sources or work on alternatives at today's prices.

Well quite frankly even if they do this administration has plans to tax it so that any savings we might possibly realize will be taken away. So why bother. 
I think obama has plans on slapping a mileage tax on us on top of the gas tax. 

[sixdogsmom]

I think they should tax according to stereo speaker usage, the more decibels being used at slow speed, the higher the tax. I bet you couldn't guess what has been going on in our neighborhood! 

[srkruzich]

I think they should tax according to stereo speaker usage, the more decibels being used at slow speed, the higher the tax. I bet you couldn't guess what has been going on in our neighborhood! 

LOL i built a neat little tool to use on those.  It inverts the signal their speakers put out and feeds it back at them and silences the speakers.   

I have another little device that sends a phased signal out at a high wattage and it frys their radio when it recieves it through the antenna.