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I filled up today and just about cried when I got the total.
If this keeps up I am going to have to get rid of the car......the last of my
independence...........I am scared. (I paid 3.17 in Independence)
stuff keeps going up, but my social security just hangs there.
Thank God I have what I do.......they stopped making us go to the Poor Farm.
Wonder where they went to.?? Just a thought.
A news account today said it might get to $4 per gallon by summer time.
Ouch!!!
I know this hovering around $3 per gallon has affected my trips.
I used to go watch the wrestlers and the scholars bowl and forensics teams.
I can't afford it now. I have to pick and choose and only go to some of them.
America is going to have to learn to conserve energy someday. We have 4.62% of the world population and we consume 25% of the world oil production. Politicians are always advocating that we need to drill for more oil or we need cheaper energy, noone wants to say we need to conserve. In the middle of all of the energy shortage we build the Hummer that gets 6 miles per gallon in town and 7 miles per gallon on the highway and even worse we give a tax break for buying it. We need to tax people for 8 and 10 cylinder engines, on 6 cylinder engines we don't tax and on 4 cylinder engines and Hybrids we need to give tax breaks. We would consume less and also do less enviromental damage. If we don't change our energy consumption and waste in this country we are going to face major shortages in the future.
Frank Winn
Nah, let's just invade Canada and snatch all their oil. They've got lots. ;D ;D ;D
We are already getting all of the Canadian oil that the infrastucture will allow.
Frank
I filled up today for $3.09 and that was 10% ethanol, so we don't get as good a mileage.
Diane, I have never put any gasoline, that contained Ethanol in my vehicles. I have had others tell me that it didn't get as good mileage. $3.09 sounds like a good price for your area, in this area, Bartlesville, Oklahoma I paid $2.94 yesterday, I did see some $3.09 gas in Tulsa Wednesday. I assumed given all of the extra transportation involved in the oil to get to refineries in your area that you would be paying considerably more. Also the enviromental costs are higher for refining in your area.
Frank Winn
Environmental concerns are exactly why we have ethanol here, not by choice. We have to go way out in the country, almost to Lancaster Pa. before we see "real'' gas. We are having trouble now finding fuel for our little engines because ethanol isn't good for them. $3.09 was the best price anywhere today. Actually, taxes here add more to our costs than transportation does. New Jersey is always cheaper than we are but unless we are going anyway, it's too far to go just for gas.
http://autos.msn.com/everyday/GasStations
The above is an interesting web-site, regarding gas prices anywhere in the U.S.A. Ours cheapest is $3.34, I think, in our area.
The Denver metro area has had the ethanol requirement since 1988.
We even have an 85 octane gas which I dont seem to see anywhere else.
At the same time, that law passed, the Denver metro area was and still is, required to have emissions inspections to see if an auto is contributing to pollution.
It began as annual and is a huge pain. Some time after the law passed, new cars were exempt for the first four years. After that it has been reduced from annually to every other year. Still a pain.
Fact is, most new cars have rather good pollution equipment that seem to last as long as the car does outweighing the need for such a bureacratic program. Our last car that did not pass was a 1988 model. After, a mechanic worked on it, it passed. We would not have been allowed to drive it had it not finally passed.
The requirement for ethanol and emission inspections was because Denver metro failed the federal pollution minimums.
Now that Denver metro has recovered (more or less), there has been consideration to dropping both programs. Environmentalists, however, have interceded to the point the state is considering making ethanol a requirement statewide.
Additionally, the emission inspection business has become so big that deleting it would eliminate a major business along with a good number of employees.
Reading about all this, and seeing how much your gasoline costs out in Kansas, all I can say is "Thank God" for my hybrid Toyota. I am currently averaging 57.4 mpg on my 54 mile commute each day.... and on Hwy trips, I am averaging 45 mpg. (As you can see, it gets better with in-town driving, it uses the electricity more than)
Crude oil closed up $5.00 at $104.52 and was up $3.00/Barrel clear out to 2015. The inventories came out today and we are importing 760,000 more barrels per day than we were a year ago this same time. The market trend points to the possibility of much higher gasoline prices ahead. Natural Gas also took a $0.39 jump for the day.
Frank Winn
Gas went up again today and diesel is as high as it has ever been. Hope mom & dad can get back to Kansas without having to sell the 5th wheel to buy diesel. ???
Kjell, crude is trading pretty flat this A.M, but it will go higher. Eventually the higher price will bring it back down but there will be a lot of damage to the economy by the time it does. I have been in the Crude and transportation businness for almost 40 years and I have seen the US energy usage increase every one of those years. The US has 4.6% of the world population and uses almost 25% of the world oil production. The biggest reason that Oil has gone up so much in the past few years is that we have created an industrial revolution in China and the Chinese people are all wanting what we have, which includes automobiles and that takes energy. China is now the second largest user of crude oil in the world. When we think we are getting all of these cheap clothes and appliances from China we need to think again we are paying more for those goods than we think, the additional cost is in energy costs, lost jobs for our people and in lower quality. I get so aggravated at hearing our politicians say we need to find more oil, why don't someone say we need to conserve. If we cut our energy consumption 2% a year we would be reducing our imports by 400,000 barrels per day . When I first started with Phillips almost 40 years ago the posted price for the best grade of crude oil was $2.67/barrel. The only way this Nation will conserve is through forced conservation, and no politician wants to take that on. I think I saw where you were from Norway, I spent time on Norwegian Oil Tankers and the officers and crews were first class. The Norwegians were the only tanker operators that let their officers take their wives on the ships for entire voyages. Well so much for that, the looming energy crisis is the biggest threat to our economy and our American way of life.
Frank Winn
Crude oil broke the $106.00/barrel technical barrier this A.M.
The price at the pump is a heart stopper, and a back pocket breaker!!
Diesel here at Aransas Pass is 359.9 a gallon. Fred said last evening he figures it will take $400.00 for us to get from here to Elk City State Park. And park we will have to do, for a while at least.
My heart goes out to the families that must drive to work and to participate in their young families lives. Our activities have been curtailed this winter - so Frankie, we are trying to do our part on conserving ( because $$$$ wise we have to ) LOL
Crude oil is trading at a new all-time high of $107.00/barrel this morning, and there is quite a bit of long activity which indicates even higher prices to come. Better keep your tanks full for now.
Frank
Crude oil broke another technical barrier and a new intraday high of $108.00/Barrel today. Appears to be lots of long contracts indicating it is going higher.
Frank
We just got home form Wichita... and in Augusta gas was $3.11 a gallon
TripCo is 3.18 a gallon.
P&J's is 3.19 a gallon.
We had 1.4 of a tank when we pulled into Augusta on the way home tonight and it cost us well over $50.00 to fill up.
Highway robbery it is! >:(
If nothing else, it is teaching my grandson, 17, the need for conserving. He is learning to plan his day so as to not waste fuel needlessly. No doubt his needs are different than ours but he is concerned. When he returned home this evening, the first thing he was talking about was the price of fuel here, CA and Scotland.
Okay, so explain something to this simple country girl. Which political or administrative dept for the oil & gas industry puts out those news blips about oil hitting $xxxx per barrel? I bought unleaded fuel for $2.95 one night last week, yes - last week. On the way to work the next morning, one of those "little blips" was repeated by "Dan Dillon" on KFDI during the 7 a.m. news & sure nuff by the time I got to work, unleaded had jumped from $2.95 at the station I had bought it from the night before to $3.19. I just suppose they got a "new load" of fuel in after I had bought my fuel!!!!!! I fully realize that your lively hood has came from the oil industry for 40 years & I don't begrudge you your good fortunes. But the way the gas prices are handled in these times smells just a little bit in my observations. My grandma always told me, if it smells like a skunk, has stripes like a skunk, it probably is a skunk. I'll agree that America needs to learn to conserve & I do my part anyway I can. But if I'm gonna get robbed, I'd atleast like to see the face of the skunk robbing me.
Isn't that the truth!!!!!!!!!!!!!!!!!
The Oil, Gas, coal, Gasoline, Fuel oil etc., wheat, pork,beef, soybeans, all grains and commodities are bought and sold daily on the NYMEX New York and Chicago Mercantile exchanges, and other exchanges around the world, they are bought and sold by industry and individuals that need the commodity or a locked in price or contract volume for a cerrtain time period or to hedge the cost side or sales of their business. You can buy or sell for years into the future. The trading is open market trading just like the Stock, bond and all other financial and commodity markets. Free market priced by supply and demand. The sooner America realizes that oil is not an infinte supply and that the world population and demand is growing at a rapid pace the sooner we will start conserving.Neither the United States or anyone enity in the United States has any control over the price of oil, we are the biggest user not the biggest producer. We produce a small amount of what we use and we have to compete with the rest of the world for the additional volume. Opec and Non-Opec producers and the large Users, mainly China, India , Japan and Western Europe set the price, "supply and demand sets the price, no skunks.
Frank Winn
:-X still stinks
What I am beginning to really notice is the rise in price at the grocery! A certain can of beans that hubby adores has risen from 46 cents to 62 cents in the past year. Coffee has gone to over ten dollars for three pounds! Sunflower seed has nearly doubled in price! Where will it all end?
Unfortunately energy affects the price of everything in this country, the cost to produce, the cost to process and the cost to deliver to the final destination.
Frank Winn
We should all follow Joanna's example and plant a big garden this year. Dig it by hand, save on fuel. Hoe it by hand, save on fuel. Use an old push lawn mower, save on fuel. And when we do all these things by hand we won't have time to get in the car and use gas to go somewhere. Save on fuel. Don't bet on me doing it this way.
Wilma, your suggestion would surely work cause by the time you get all that done "by hand" you'll be too tired to get in the car and go anywhere. ;D
50-60 + years ago nearly all of the gardens in Howard were plowed by Horses and the people did work them by hand. Willis Roberts had a gray team and he plowed nearly every garden in town. The only gas involved then came from the horses they didn't burn it they produced it.
Frank
True, Frank. My folks always had their garden plowed by a team of horses. Believe George Bailey did the plowing. We worked it with my grandfather's old push plow and hoes. Always had a huge garden and enjoyed every minute of it. (Playing hide n seek in the corn rows was great fun unless Dad caught us or the chiggers.)
We had one mare (while our kids were growing up) that was so embarrassing. With almost every step the gas would pass. Wish we could bottle that. Maybe a change in diet would have helped her. She was a very well-mannered lady so it must have not hurt her too much.
hahahahaha that is what made her a lovely lady, Granny, She got rid of the bad stuff and kept only the good. !!!!
We just returned from running some errands and topped off the diesel tank --- the price at one of the stations is $3.79.9
That is sticker shock for sure!!! We have a station not too far from us on our way home, and the price there was $3.64.90 so we pulled in and topped it off.
We plan to go to Old Mexico tomorrow so that will empty the old billfold. sighhhhhhhhhhhhhhhhhhhhhh. :'( :'(
Guess I need to my garden the old fashion way, don't have any horses so I will have to hitch Steve up to the plow. Maybe he can get that done while I go to my manufacturing job here in downtown Piedmont. ;) ;) ;)
I accompanied Marvin to Wichita yesterday. When we left Howard gas was 3.24 - got to Tripco and it was 3.18 - Kesslers was 3.17 - Augusta and Wichita were 3.09. Quite a difference
Yesterday, El Dorado at QT was $3.08. Today it was $3.18-ish.
Colorado web site today:
Prices for regular gas on the west side of the Continental Divide range from 3.29 to 3.43.
Prices on the east side range from 2.89 to 2.99.
We just returned from a trip "south of the border". Left here yesterday and stayed the night on the US side and then this morning we went across. There were armed security guards as soon as we were across the bridge that divides the two countries. Armed guards in uniform all the way to the first block as you enter the country. We do not drive across - we always walk - and the security has really been beefed up. When we filled our truck tank ( as I posted earlier ) diesel was $3.64.9 and today when we came back across into the US it was $3.89.9 . We didn't need any more fuel, but when we got home, Fred went to Popeye's and purchased some spicy chicken and brought home for supper, the price here at the same station where he filled up on Tuesday was $379.9 --- so of course he filled up and the owner said he was just getting ready to go change the price to $3.86.9 and said he had a fax stating it was going up some more. This is pure nonsense !!!! Is there no end of this?
We are happy we get good mileage, but diesel is a by-product of gasoline, and is 50 cents higher per gallon. What is wrong with this picture?
We returned from Kansas City yesterday; North Kansas City was $3.05. Wow what a bargain dad! We bought in Bartlesville last week for $2.99. Can't figure why it is so high here in Elk and Montgomery county?
I know that Penny does NOT have a high mark-up on gas at P&J's - she has to pay a premium to get the gas delivered to Howard.
It's kind of like Jim and the newspapers.
The Wichita Eagle charges him more for the papers than the do the Severy delivery people.
Which means the newspapers are cheaper in Severy than in Howard.
Missouri and Oklahoma are always MUCH cheaper than Kansas on gas prices. At least $0.10 is what I've seen. I thought it was b/c Oklahoma has more oil wells? But I think it may just be cheaper tax?
It could get worse, and it just might.
Overseas folks buy gasoline at the pump in liters.
As of March 3, 2008, price calculated per equivalent gallon. These governments tax gas to help pay for socialism.
Belgium 8.22
France 7.91
Germany 8.13
Italy 7.99
Netherlands 8.85
United Kingdom 7.51
A couple years ago gasoline in Venezuela was 12 cents per gallon.
Crude Oil traded to new highs over night and topped at just under $114.00/Barrel, it has all of the indications to go higher.
Frank
As gasoline prices hit 75 cents a gallon in the seventies, I was rooting for $1 a gallon because I thought that would spur the market into development of a cheaper alternative.
As $1 came and went, I began thinking $5 and then $10 per gallon before there would be any really serious effort to develop a cheaper alternative automobile power source.
Looking at European gasoline prices, though, indicates this is not realistic. While there have been some efforts with electric, hydrogen and hybrid powered cars, those alternatives are still more expensive than what is available.
The only really serious alternative effort made by Europeans has been to go to smaller more fuel-efficient cars.
So, maybe one day it will take $20 per gallon before....
Waldo, the Europeans have never been as wasteful energy consuming nation as we have. No other country compares to the US when it comes to energy consumption on a per capita basis, on a per mile basis, on a vehicle basis. The tragedy is the damage that will be done to the US Economy and the World before we wake up and take the necessary steps to change.
Frank
I heard something on national television this morning about the federal government maybe lifting the federal gasoline tax for the summer months. Do you think this will happen? They also said the federal tax is 18 cents. Not much help, is it?
I think they may lift it but that is like putting a bandaid on a shotgun wound. Kind of like the Government Checks they are going to mail out to "Boost The Economy", it will do little for our economy and some for the Chinese.
Frank
I agree, there isn't much that can be purchased that is produced in the U.S. We knew that some day it would come to this. You cannot keep exporting jobs and then expect to sell the product back to those that were layed off from those exported jobs. Same as you cannot expect a guy earning minimum wage to buy a car that was produced with $30.00 per hour labor. We are having a wake up call, hope it comes out okay without too many folks etting hurt.
This is all designed to gain votes.
McCain has suggested the 18 cents federal gasoline tax be temporarily lifted. Perhaps, they should be increasing it. The state should increase it also. If we keep willfully filling up, the governments should be getting a bigger share.
He has also suggested the standard federal income tax exemption be raised to $7,000 from the 2008 3,500.
You can bet a democrat would be willing to one up McCain by suggesting even larger amounts.
In response to the stimulus checks, I won't turn it down but it really is a rather stupid idea.
You are on the right track, it is bigger than that. Neither America, the American Oil Companies, or The Government has any control over the world price of oil. If we want everything cheaper and accept that we can have it by letting the Chinese, India and all of the other so-called developing countries manufacture everything then we have to suffer the consequences for turning those countries into higher energy consuming nations. Cheaper items at Walmart translates into higher energy costs.
Frank
Thought someone might find this of interest.
Crude Oil Rises to Record Above $114 a Barrel as Dollar Plunges
By Grant Smith
April 16 (Bloomberg) -- Oil rose to a record above $114 a barrel in New York for a second day as the dollar plunged to an all-time low against the euro.
The appeal of oil and other commodities as hedging instruments grew as the dollar sank as low as $1.5752 versus the euro. Oil is also gaining on demand from China, the world's second-biggest crude consumer, where the economy grew 10.6 percent in the first quarter, government statistics showed today.
``In the short run this rally hasn't come to an end,'' said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. ``We still see crude as a safe haven as supply is having problems keeping up with the pace of demand.''
Crude oil for May delivery rose as much as 62 cents, or 0.5 percent, to $114.41 a barrel, the highest since futures began trading on the New York Mercantile Exchange in 1983.
Brent crude for June settlement also advanced to a record climbing 85 cents, or 0.8 percent, to $112.16 on London's ICE Futures Europe exchange.
We paid $3.74.9 just a little while ago per gallon of gasoline, the least expensive in Escondido!
This rising cost of fuel has really got my family saving on things. We do most, if not all of our grocery shopping here in Howard. I don't know what we would do if we didn't have the grocery store and Cookson's. We have, even before, tried to get all that would could in town. But now more than ever it is important to buy locally. By the time I load up the van with the 3 girls, go to a grocery store either in Independence or Eureka, I haven't saved that much money or time. What really worries me more about the price of fuel is that we farm, and this summer putting up hay could be a very costly project. But we have to have it so we will do it, but Jeff used to custum hay, now I am not sure if he will even take any on. He just won't make any money at it. So, what money we save before summer will go towards putting up the hay!!
I think people really need to look at buy locally more. You don't realize that you will actually save money, especially by the time you fill up to go somewhere!!!
Angie, I agree with you 100%, and the price is going higher, in fact crude traded at new highs overnite although it has traded off some this A.M.
Frank
Oil Rises to Record on Unexpected Drop in Supplies, Weak Dollar
By Alexander Kwiatkowski
April 17 (Bloomberg) -- Oil rose to a record after the U.S. Energy Department reported an unexpected decline in the country's crude and gasoline inventories and the dollar traded at an all- time low against the euro, boosting investment in commodities.
Oil climbed to $115.54 a barrel in New York, the highest since futures began trading in 1983. Crude supplies dropped 2.36 million barrels to 313.7 million in the week ended April 11, the department said yesterday. Gasoline stockpiles fell for a fifth week and refineries ran at the lowest rate since October 2005.
``People were expecting an increase in crude stocks and gasoline is going down,'' said Ehsan Ul-Haq, head of research at JBC Energy in Vienna. ``If gasoline stocks start dropping before the summer driving season it could mean trouble for the U.S.''
Crude oil for May delivery gained as much as 61 cents in after-hours electronic trading on the New York Mercantile Exchange and traded at $115.26 a barrel at 10:47 a.m. London time. Yesterday, futures gained $1.14, or 1 percent, to settle at $114.93 a barrel, a record close. Crude has risen to records for the past three days.
Brent crude for June settlement advanced as much as 72 cents to a record $113.38 a barrel on London's ICE Futures Europe exchange. It was at $113.11 at 10:48 a.m. local time. The contract yesterday climbed $1.08, or 1 percent, to close at a high of $112.66 a barrel.
Dollar Slumps
The dollar fell to a record $1.5983 against the euro today. It traded at $1.5973 per euro at 10:38
Angie; isn't sales tax cheaper in Howard vs. Independence and Wichita? So you're not only saving in gas, but saving in sales tax! Even if some of the items are more expensive locally, you probably still end up equal or less with all things accounted.
I just had to put my 2 cents worth in regarding the sales tax in other towns. For those who shop in Winfield, when you pay their sales tax, your money is helping to pay for their new county jail and other community projects they have crammed down resident's throats regardless if they wanted it or not. If you shop in Independence, your tax dollars go for helping to pay for their new library, fancy swimming pool, renovation of the Memorial Hall, and now their school system is trying to cram some new school buildings down taxpayers throats (it's been voted down 3 times) and the Montgomery county sheriff is trying to get a new jail built. So there you have it folks!
A short term hold or hesitation in Oil prices before they head higher for the coming summer driving season. Again our big trade deficits are a big part of the problem, along with the Nigerian Militants continuing their sabotage. I have spent some time in the Jungle areas where the Nigerian Treminals are and there is no way to protect them 100% against sabotage.
Oil prices slip
By PABLO GORONDI Associated Press Writer
R12; Oil prices slipped below $115 a barrel Friday amid thin trading volumes as the U.S. dollar held its ground against the euro.
A host of supply and demand concerns in the U.S. and abroad, as well as the depreciating dollar, have pushed crude prices up more than 4 percent this week.
Light, sweet crude for May delivery was down 56 cents to $114.30 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.
On Thursday, the May contract hit a trading record of $115.54 as the dollar fell to a new low against the euro. Crude finished the floor session down 7 cents at $114.86 a barrel after falling back when the dollar strengthened.
In London, Brent crude futures fell 76 cents to $111.67 a barrel on the ICE Futures exchange.
Investors have been buying oil contracts as a hedge against the weakening dollar, betting that rising commodity prices will offset dollar declines.
But Friday, the dollar rose slightly, after falling to all-time record low Thursday against the euro, which hit $1.5982.
By midday in Europe, the euro stood at $1.5867 and was seen staying within a narrow range.
"Oil has been taking so widely its directional clue from the dollar that when the dollar does not move, oil does not know where to go," Olivier Jakob of Petromatrix in Switzerland said in a report.
Traders were also keeping an eye on unrest in Africa's biggest crude producer.
A militant group in Nigeria said it had sabotaged a major oil pipeline operated by a Royal Dutch Shell PLC joint venture and promised further attacks on the country's petroleum industry.
A spokesman for Shell had no immediate comment on any attack.
Attacks since early 2006 on oil infrastructure by the Movement for the Emancipation of the Niger Delta have cut nearly one quarter of Nigeria's normal petroleum output, boosting oil prices.
The militants say they are fighting to force the federal government to send more oil industry revenue to their areas, which remain desperately poor despite decades of oil production.
Prices were supported by a U.S. Energy Department report on inventories, released Wednesday, that showed gasoline supplies fell 5.5 million barrels last week — much more than what analysts had expected.
That slide comes as the U.S. heads into its peak summer driving season, a period when demand and retail gasoline prices surge. The department's Energy Information Administration report also showed crude inventories fell 2.3 million barrels for the same period.
David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney, said strengthening demand in other parts of the world was also supporting oil prices.
"Outside of the U.S., oil demand in some areas has remained firm," Moore said. "Indicative of that was the recent Chinese trade data, which showed very strong growth in both crude oil imports and imports of oil products."
The Chinese government last week reported that China's oil imports surged to a record 17.3 million tons in March, as the country nearly unseated Japan as the world's second-largest buyer of foreign crude oil. China imported an average of just over 4 million barrels a day, according to calculations based on data from China's Customs Administration.
An International Energy Agency report that said Russian oil production dropped this year for the first time in a decade also helped to boost prices.
In other Nymex trading, heating oil futures fell 1.69 cents to $3.2505 a gallon while gasoline prices lost 2.09 cents to $2.9369 a gallon. Natural gas futures fell 1.3 cents to $10.370 per 1,000 cubic feet.
Unfortunately but not unexpected crude oil broke new highs again today trading as high as $117.00 barrel and settling at a new high of $116.69.
Frank
When I got home this morning I drove by P & J's and gas there is now $3.59 per gallon. It was $3.49 in Independence, but I am sure it will go up soon.
This is an interesting insight into who now controls the World oil Production and markets. I doubt that OPEC and Non-Opec-Non US producers have the capacity to raise production appreciably anyway. Hopefully the higher prices and the pain that goes with it will bring about change in the US that will make changes from being the World's largest and most wasteful oil consuming nation to the world leader in conservation and change.
Frank
Energy producers in driving seat
Reuters
Published: April 20, 2008, 23:50
Rome: Consumer countries and international oil firms keen to gain greater access to the world's energy resources are likely to walk away empty-handed from talks with producer nations in Rome.
Record high oil, which struck $117 a barrel on Friday, has helped to drive up the profits of oil majors, but it has also increased the spending power of national oil companies and made them ever more reluctant to grant access to their resources.
"The relative positions of international energy companies and national energy companies are changing - and not in our favour," Paolo Scaroni, chief executive of Italian oil and gas company Eni said in a speech at the opening of the International Energy Forum (IEF).
Organisation of Petroleum Exporting Countries (Opec) member Venezuela, under President Hugo Chavez, has spearheaded a global trend towards resource-holders seeking to maximise their returns from their energy wealth.
International firms have found themselves faced with tougher terms and shut out of the best energy territory.
During the 1970s, the international oil companies controlled nearly three-quarters of global oil reserves and 80 per cent of production, Scaroni said.
Now, they control 6 per cent of oil and 20 per cent of gas reserves, and 24 per cent of oil and 35 per cent of gas production, he said. National oil companies hold the rest. There is little sign the trend will reverse.
But national oil companies still have some need for cooperation with foreign investors as international and national firms alike battle with cost overruns, staff shortages and the difficult of extracting oil and gas from more complex fields.
Meanehile, the world will need every form of energy available - from coal to biofuels -to keep pace with a booming population, the chief executive of Royal Dutch Shell said yesterday.
"... Despite high prices, demand is not dropping, there is only slower growth. Easy oil and easy gas cannot supply all that surge in demand," Jeroen van der Veer said.
Opec: No need 'to raise output'
The Opec sees no need to raise oil production to counter high oil prices, the Opec President said on Sunday. "No," said Chakib Khelil, who is also Algeria's Energy and Mines Minister, when asked by reporters whether Opec should raise production.
"There is a balance between supply and demand," he said, speaking during a visit to Kuwait. He said a previous output increase had failed to bring prices down.
He said Opec wanted an "appropriate" price suiting both consumers and producers, but declined
gas is 3.29 in neosho and joplin, out here where we live there is a little general store type place and it is 3.39 there. deisel is 4.09, I truly can't cut back much more than we already have, only place we drive is to work,five miles one way to the bosses house; and to town;23 miles one way; once a week to pay bills and get what we need that we can afford :P we burn wood for heat, everything else is electric. Lol, people that don't know where i live tell me well you could walk to the store and stuff, I told em yeah and if I start now I'll get there by wednsday lol. Oil companies aren't as blameless as they would have us believe either :P
The problem and the answer is not people who are conserving, like you are.. An example to consider is that a Toyota Prius gets 60 -70 MPG and a Hummer gets 6-7MPG, if you drove them both 100,000 miles over a period of time the Prius would use 1667 gallons of gasoline @ 60MPG or 1429 Gallons @70MPG, the Hummer would use 16,667 gallons of Gasoline at 6MPG and 14,286 gallons at 7MPG, and the people who bought the original Hummers got a tax break for buying them We should be giving a tax break to people that buy the Hybrids.
EFW
Yeah, I get what you are sayin there. I see so many people drivin huge SUV's that never get outside the city limits much less off road! It's a status symbol y'know. We have an ol' chevy 4 wheeler we use to haul wood and hay and stuff but it doesn't go very far and we need it to get in and out of the places we go for that stuff. There really is no easy fix for this situation we find ourselves in. And I'm not even conservin to be virtuous or anything, if I could AFFORD to go somewhere I would once in a while LOL Gas economy is just that to me economic!We bought more gas efficient vehicles for most of the drivin just so we could afford to go see family and stuff.
What about the middle class family of four? How can it be expected that this type of family, that is struggling and living paycheck to paycheck, buy a newer more fuel effecient car? There is no way I would even contemplate driving a Hummer. Just plain overkill. But I have been driving the same Ford Explorer for the past 10 years. Why a four wheel drive you ask?? No status here, just plain and simple live on country roads and drive on icy, snowy roads in the winter.
With grocery prices going up, clothing my children, average monthly perscription expenses of $300, school lunch expenses for kids, monthly mortgage, utility expenses, and those unexpected expenses that always seem to pop up ---- How am I able to afford a Toyota Prius or new hybrid??? I feel lucky to even have a vehicle that starts each morning. I know some of you are probably saying, "Then it is time for a different vehicle." That would be nice, however my paycheck won't allow it.
I think it is time our government listens to us and not the lobbyists. More funding towards a more economical and environmental friendly fuel.
What kills me is the reports of oil companies and their record profits, while my family struggles and sacrifices so many things so that I can buy a stinking tank of gas!!! I remember as a child taking family vacations, what great memories!!! Sorry kids no such memories for you, OPEC needs to break last years record profit & the government has its head buried in the sand!!!
This subject matter just gets a little under my skin. LOL!!!
The comparison of a Hummer to the Hybrid was the extreme. A 5% reduction in consumption of oil in this countyry is 1 Million barrels per day, wehave 4.7% of the world poulation and we consume almost 25% of the world oil production. The people driving a Ford Explorer are not the big problems it is the people driving big V-10 and V-8 engines that don't need the horsepower to do their daily work. Compare the big V-8 engines getting 16-19 MPG to the V-6 engines in say Buicks, Pontiacs, Hondas, Toyotas, etc getting 30+ MPG, the V-6 get 60% better mileage, if we cut our total oil consumption by 60% over the next 10 years that would be a reduction of 12.6Million barrels per day. Any cut is an improvement as the US has increased oil consuption every year since imports began. Not all of our consupmtion is for gasoline or Diesel but all of it could be reduced.
EFW
I hear you Mom, our newest car is 14 years old lol. my truck is a 75 :P but she still starts whenever I need her and I think I'm gonna be buried in her! preferably with the hubs locked in ::). I have the same problem with the reports of record profits while they are makin excuses for the skyrocketing prices, somethin just ain't jibin. I'm not goin to buy a new car for 2 reasons I'm broke and I can't afford one lol and I don't want the debt load if I could afford one. Which means I'll probly be lookin for some harness and a wagon so I can make these ol nags I've got earn their keep :P
I encountered my first $60 fill up yesterday at 3.43.
When you are looking at the Headlines about Oil Companies making record profits, you don't see the record capial investment they have to make to find new production to replace the declining production. You don't see that they have to spend Billions of dollars on offshore projects that may not return a dollar for years down the road and in some cases never. You don't see what risks they take everytime they go out to drill a new well and it turns out a dry hole. You don't see the pipeline projects that they commit to build they make take 10-20 years to complete and start getting revenue. Try buying a farm and all of the machinery it takes to farm it and get no return for 10 years. Exxon is owned by the investors , millions of them and if they don't make a profit for the investors then people don't invest in them and they don't do new projects and you don't have Multi-Billion dollar refineries, and the resulting gasoline and other products. Exxon invests far more each year than what their profits are. America is built on Democracy and free enterprise and Capital investment and the product of that is profits for the investors, if we give that up we are giving up a big part of what this country was built on, the alternative is to let the government take over all of the businesses including the farming see what happens to production then.
EFW
I have to chuckle when the two democrats exclaim that one of the first things they will do as president is launch a high level investigation into the oil companies to root out any conspiracy causes and prosecute those responsible as to why gasoline and oil company profits are so high.
This action will be of no use (they know it) but does ramp up the frenzy for votes.
If they were really sincere, they would have requested their own congressional investigation into the oil companies.
Last I heard, gasoline was no more expensive today than it was thirty years ago in terms of inflation.
Frank,
Do you remember when Fina Oil began a huge advertising gimmick in 1966 to introduce pink air at their stations in 1967? They put out full page advertising, etc. That was when the attendant checked your oil, washed your windows, and checked the air in your tires.
I think Fina was a Belgian company.
I've read reports that say the price of oil has a lot to do with speculation overseas. I've read reports that say the price of oil is due to increased demand in china and other developing countries, reports that say it's due to lack of refining capacity, lack of inventory, shutdowns due to violence and weather etc. etc. etc. I know it costs money to develop new fields and build refineries , I know dry holes cost money and time, I guess I'm just pissed because I'm one of the workin class stiffs who has no choice at the moment but to pour my money down a dry hole which is the oil companies profit margin. :P ;)
Got home last night from a 3 day location shoot and was gathering expenses for that trip and it cost us 177.56 to drive to Edmond Oklahoma. The shooting range was only about 8 miles from our hotel and so that was 16 miles per day. Other than that, we ate breakfast in the hotel... and supper at the resterants that were only about 6 blocks from the Best Western.
That is just horrible. We used to go to Branson for a week and pull the camper.. plus use the bass boat every day and not spend THAT in gas. >:(
On the bright side.. we had a great trip.. got lots of good footage and met lots and lots of new shootin' friends. :)
Waldo, I remember and yes Fina was a Belgian Company. They recently sold their Texas Refineries to an Isralei Company. I did lots of business with fina over the years. The US oil companies do not control the world price of oil anymore. I think the current world oil problems are a warning as to what is to come and hopefully we will take notice and start conserving and also spend more money on research for alternative fuels.
Frank
Right on Girl!!! And what gets my goat is that the oil companies are getting tax breaks. Give me a break!!! Found this article rather interesting. http://money.cnn.com/2008/04/01/news/companies/oil_hearing/index.htm?cnn=yes
Lol, Teresa, we used to go for rides around the countryside because we couldn't afford to do anything else, now we can't afford to do that! Not unless we budget it inLOL.
Teresa, do you drive a Hummer? I calculate it is approximately 190 miles from Howard to Edmond, 380 miles round trip, plus 16 miles a day to the shooting range would be 48 miles for a total of 428 miles. At $3.25 per gallon, $177.56 would be 54.6 gallons, that would equate to 7.8 miles to the gallon!!
I can understand your concern.
Frank
A hummer... me? (http://www.cascity.com/howard/forum/laughingblond.gif)
Only in my dreams.. LOL
No. I drive a Ford 4 door Supercab Lariot pickup.. but it doesn't get too good of mileage.. and we took the longer way to get there and then took the interstate back.
Paid 3.49 a gallon..and had half a tank left when we got home.
:o :o :o Frank - $3.25 a gallon?? Ain't seen that for quite a spell - $3.59 here and 3.39 at Trip co., or was Friday. I'm going to Oklahoma this weekend, hope it just costs $3.25 a gal. to fill up for the trip home. :laugh:
Flo, it has been $3.19 here until the weekend and it went to $3.25 and $3.29 at the 2 stations I trade at.
Frank
Just got back from Miami OK. Sat. gas was $3.29. Yesterday it was $3.33.
Teresa, is that you in the picture laughing and holding the bowl of something. No wonder we never see you in Howard when we are there, we wouldn't have known you. we were looking for somebody as pretty as your Mother.
Frank
Florene, I just went with Myrna to Walmart and i noticed Gas was $3.25/gallon.
Quote from: frawin on April 21, 2008, 05:12:25 PM
Teresa, is that you in the picture laughing and holding the bowl of something. No wonder we never see you in Howard when we are there, we wouldn't have known you. we were looking for somebody as pretty as your Mother.
Frank
hahahaha... well.. everyone tells me I look like my dad... soooooooooooo :-\
In your search engine put: waterfuel
A short video on U-tube about water fuel. Will this make water prices soar?
Comments...................
Quote from: momof 2boys on April 21, 2008, 12:08:45 PM
average monthly perscription expenses of $300,
Totally off subject but here are a couple of links that might help you lower your prescription costs
https://syndication.pparx.org/index.php
http://www.needymeds.com/
http://www.xubex.com/
I was able to cut mine from about $300 to about $90.00. It is not overseas drug companies. It is American pharmacutical companies programs to help people with low income and/or no insurance. The needy meds website is the one the SRS reccomends to people who earn to much to qualify for welfare medical coverage.
IMaybe this will give some of you a better idea of why energy prices are going so high.
Emerging markets' oil use to exceed US for first time
Bloomberg
Published: April 21, 2008, 23:40
Paris: Traffic jams in Beijing and humming air conditioners in Dubai are replacing US highways and suburbs as the driver of global oil prices.
China, India, Russia and the Middle East for the first time will consume more crude oil than the US, burning 20.67 million barrels a day this year, an increase of 4.4 per cent, according to the International Energy Agency in Paris.
US demand will contract 2 per cent to 20.38 million barrels daily, the IEA says.
Economic growth of more than 8 per cent in China and India, coupled with increasing car ownership among the countries' combined populations of 2.45 billion people, will more than compensate for falling US demand. Oil use worldwide will increase 2 per cent this year because of growth in emerging markets, the Paris-based IEA says.
The rising oil price will benefit ExxonMobil Corp, BP Plc and Royal Dutch Shell Plc, while punishing a US airline industry that recorded four bankruptcies in a month. Higher energy costs will push up food costs at a time when corn and rice are close to new highs.
"The US recession will be a footnote as far as the oil market is concerned,'' says Jeffrey Rubin, chief economist at CIBC World Markets Inc. in Toronto, who has correctly forecast higher oil prices since 2000. "Supply isn't growing and demand is growing robustly in the developing world."
Oil will average $120 a barrel for all of 2008, compared with almost $98 in the first quarter of the year, and reach $150 "by the end of the decade," Rubin said.
Historically, a recession in the US would lead to lower prices. Oil fell 26 per cent to $19.84 a barrel in New York in 2001 when the economy contracted. The US consumes 24 per cent of the world's oil, down from 26 per cent seven years ago.
Two giants
Oil demand in both China and India will rise by 4.7 per cent, according to the IEA. China, the world's second-biggest energy user, will consume 7.89 million barrels of oil a day this year. India will use 2.92 million barrels of oil a day in 2008, more than is pumped by Opec member Venezuela.
Emerging markets burn a fraction of the energy of the US, leaving room for growth. The 2.45 billion people in China and India used only half as much crude as 301 million Americans last year.
Middle Eastern economic growth will probably accelerate to 6.1 per cent this year from 5.8 per cent in 2007, the IMF said April 9. Oil demand in the region will surge 5.8 per cent to 6.97 million barrels a day this year, according to the IEA.
read a report from a financial analyst who predicts oil will reach 180.00 a barrel in the next two years, think I'm gonna go amish :P Frank I would like to apologize if it seemed I was bein disrespectful to you, we all got our problems in this economy( I was readin back and thought maybe i was) Sorry dude.
Karma, I didn't take anyone's comments as disrespect. I know that the price of oil is causing problems for lots of people and it concerns me deeply. I have been involved in Crude Oil Supply and transportation for almost 40 years and it was inevitable that the demand was eventually going to outpace supply. Unfortunately the worst is yet to come and our country's leaders are to concerned about their careers and politics to face the challenge of mandating energy conservation. The forum is a great place to post subjects for discussion and I know that some people will agree and some will not agree and that makes for more ideas and discussion.
Frank Winn
Yeah I learn lots by talkin about things most people avoid. Somebody who has a difference of opinion and sticks to it can make you think and MAYBE change your way of thinkin a little lol
Crude oil is trading right at $120.00 now, actually it is at $119.90/barrel. The outer months are trading higher as well.
Frank
A little short-term price relief. The bigger drop in crude came as the trading changed from May Crude to June crude.
Frank
Crude Oil Falls as Dollar Strengthens, U.S. Inventories Gain
By Alexander Kwiatkowski
April 24 (Bloomberg) -- Crude oil fell for a second day in New York after the dollar rose against the euro, reducing the appeal of commodities to investors, and a government report yesterday showed U.S. stockpiles increased more than expected.
The dollar gained versus the euro after an industry report showed German business confidence dropped more than expected in April. Oil supplies rose for the first week in three, gaining 0.8 percent to 316.1 million barrels in the week ended April 18, the Energy Department said.
``It's a mix between a dollar reaction and the fact that crude stocks rose yesterday,'' said Thina Saltvedt, an oil analyst with Nordea Bank AB in Oslo. ``We have seen a very strong correlation between the euro-dollar and the oil price.''
Crude oil for June delivery fell as much as $1.18, or 1 percent, to $117.12 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $117.47 at 11 a.m. in London.
The dollar rose 1.1 percent to $1.5719 against the euro in London, after rising 0.6 percent yesterday. It reached $1.6019 on April 22, the lowest since the euro's 1999 debut.
Crude oil contracts have become attractive to investors seeking to offset a 14 percent decline in the dollar against the euro in the past year. When the dollar strengthens, oil loses some of its appeal as an inflation hedge.
Ineos Strike
Brent crude for June settlement dropped as much as 95 cents, or 0.8 percent, to $115.51 a barrel on London's ICE Futures Europe exchange. It traded at $115.99 a barrel at 11:01 a.m. local time.
Gas prices by zip code
The least expensive gas in your zip code
This is pretty nifty. Yes, it even works in Hawaii ! Just enter your zip code in the site below, and it tells you which gas stations have the cheapest prices (and the highest) on gas in your zip code area. It's updated every evening.
http://autos.msn.com/everyday/gasstations.aspx?zip=&src=Netx
Crude oil traded down $3.12 to $115.63 in the front month and down in the outter months as well. The main reason appears to be the stength in the dollar verses the EURO and other major currencies. Gasoline should come off a few cents.
Frank
In Escondido, our cheapest price, paying cash, is $3.81, the "average" price, paying cash, is $3.90, and the highest price, with cash, is $4.00.
So, we'd be very happy if it atually did come down a few cents!
Bonnie, I think our price here is around $3.39 /gallon for 87 Octane.
Frank
While in Oklahome this weekend I filled up for the return trip at 3.45, the cheapest I found. Here close to home 3.49 - 3.59 is the going rate and that was also between here and Wichita this morning.
I filled both of our vehicles this weekend and at our neighborhood Phillips station it was $3.39, and is today. Walmart maybe a penny or two less.
Frank
I think Phillips 66 was where we filled up, but this was in Blackwell which is probably like the difference between Trip-co and P&J's
The gasoline at Blackwell may have come from the same refinery as the gas I bought in Bartlesville, ConocoPhillips Ponca City Refinery, it is possible that the Phillips Bartlesville gas comes from SUNOCO or the old Tecaco refinery in Tulsa as that would be closer than Ponca is to Bartlesville. In any case the Gas you bought at Blackwell had less transpotation in it than what I buy.
Frank
They must haul ours out here from Oklahoma, that's why it is priced so much higher! ??? ??? ??? :)
I always really enjoy "filling 'er up" in Bartlesville, when we're back that way.
but if it had less transportation, shouldn't it have been cheaper?
Crude Oil traded down again yesterday and is trading down this morning in overnite access. There should be some drop at the pump, be it minor, showing up.
Frank
Somebody on TV yesterday said as an interesting fact that when Bill Clinton left office, gasoline prices averaged $1.51 a gallon. Is that a 100% increase? And the big people are looking into why food prices have risen 15%.
My tongue is in my cheek as this is said; we only had a 2.5% inflation rate last year. That is the Social Security increase anyway. I wonder how they expect everyone to cope with these inflation rates, and how they will get respun when it comes January!? We are going to put the stimulus check away to cope with the gas bill this winter. Probably use it all up in a months' time. ??? ???
OIL IS TRADING AT NEW HIGHS TODAY, CURRENTLY IT IS AT $121.69/BARREL.
By Jane Merriman
LONDON (Reuters) - Oil stood firm on Tuesday after setting a new record high of nearly $121 a barrel, the latest spurt in an advance that has seen prices double over the past 12 months.
Supply disruptions in Nigeria, where a strike and attacks by militants has hit production, has supported a market that is nervous about any threats to supply.
Tensions with Iran ratcheted higher when the world's fourth-biggest oil producer refused to accept intrusive inspections of its nuclear program that the West fears could be linked to weapons.
U.S. light crude for June delivery was up 7 cents at $120.04 a barrel, by 7:55 a.m. EDT after earlier touching a record high of $120.93.
London Brent crude was up 33 cents at $118.32 a barrel, after an earlier record of $119.07.
Gold was also strong, as oil's advance helped spur a rebound from a four-month low last week. But gold is still some way below a record of $1,030.80 an ounce reached on March 17.
"The downward move in oil last week now seems like only a correction," said Christopher Bellew, senior vice president at Bache Commodities.
"The effect of the credit crisis in the United States is reducing people's disposable incomes and you'd expect this to have an impact on the oil price, but it's not having any impact." Continued...
I needed lawnmower gas yesterday so just filled up the vehicle too. I don't see, with travel season coming on, fuel prices dropping very much. Famous last words since I filled up, probably. :-[
Oil has traded at $122.00/Barrel this A.M.
Frank
Crude settled at new highs for June, July, August and September contracts. The front Month June settled at $122.35/Barrel with lots of Long contracts.
Frank
choke... :'( :'( :'(
We went to Kansas City yesterday for doctor appointments today. Gas here at Moline was $3.59, $3.45 at Severy, and $3.36 in North Kansas City yesterday. When we left for the hospital this morning, it was $3.46 at the same Quick Trip we filled at the night before. How are we gonna continue? We had a not too good supper at the Beto Junction Buffet tonight; it cost almost $25.00. W0W!!! Beans the rest of the month! ;D ;D
And dry, not canned at that...saw some today for $3.76. Ouch!!!!
From gas to beans. I thought it was the other way around.
:o :o :o ;D ;D ;D
Crude traded at $126.17 /barrel in overnite access trading and is trading a lot of long contracts. There is unrest in Nigeria, with the rebels continuing to hamper production, Nigeria is a big supplier to the US. I have a feeling that Venzuela and Iran are also holding back exports, both countries are very Anti-American.
Frank
Here is one of the biggest reasons crude has increased so much in the past 3 years. We have made China the 2nd largest consumer of oil in the world and that continues to grow.
China Car Sales Grow Least in Year on Inflation, Stock Market
By Irene Shen and Wendy Leung
May 9 (Bloomberg) -- China's passenger-car sales rose 11 percent in April, the slowest pace in at least a year, as a falling stock market and surging inflation crimped spending.
Automakers sold 604,900 cars and sport-utility vehicles in the country last month, the China Association of Automobile Manufacturers said in an e-mailed statement today. In the first four months, sales jumped 18 percent to 2.46 million.
Chinese consumers have curbed spending on new automobiles and other luxuries as rising food prices have pushed inflation to near an 11-year high. The nation's stock market also plunged 26 percent in the first four months, cutting the investment gains that spurred car sales last year.
``People's wealth shrank because of the stock market and that hurt demand,'' said Huang Zherui, an analyst at CSM Asia. Car sales will probably grow less than 20 percent this year because of ``the uncertainty in China's economic growth.''
Car sales rose 22 percent last year, helped by the nation's benchmark stock index, the CSI 300, more than doubling. At least three-fifths of Chinese stock-market investors use their profits to buy new cars, the automakers' group said last year.
General Motors Corp., Toyota Motor Corp. and other overseas carmakers are banking on China and other emerging markets to offset slower demand in the U.S., the world's largest auto market.
GM, the biggest overseas automaker in China, expects to boost annual sales in the country by about half over the next three years to 500,000 vehicles, it said last month.
Toyota, the world's second-largest automaker, aims to raise China sales 36 percent to 640,000 vehicles in the year ending March 2009, it said yesterday.
North Sea Brent Daily Shipments to Fall 9.5% in June
Thanks, I always enjoy reading these. My Al keeps up on these markets also.
Crude Oil is trading in the $132.70/Barrel range and all of the outter months are up as well. Lots of long contracts trading and the market has every indication of going much higher.
Frank
Wonder what horse futures are?
Good question Waldo. I feel that there are some positive steps the government could take to lessen the impact, but i have learned from this forum that many of the people do not want the government sticking it's nose in their business.
Frank
We've been trying project our gas costs for our upcoming trip west and I think it's a losing battle. I'd been figuring about $1,000.00 and now I think I'm low. yowl!!! :'(
At the risk of starting another tirade against the government, this is one thing I wish they would stick their nose in. The government has frozen prices before. Why couldn't it be done for awhile with gas prices? Oh, yes, it would have to start with crude and that hits some very big people in their back pockets.
Wilma, over 1/2 of the crude oil we use is controlled by foreign governments, so there is no way to freeze half of it. Why should the government freeze the price of gasoline so Americans can continue to be the most energy wasteful nation on Earth. Should we freeze it so people can continue to drive Hummers that get 6 miles per Gallon, or so they can drive 10 cylinder vehicles. I feel the same way about reducing or giving a holiday on the gasoline tax, I am opposed to reducing the tax, we need it to keep up the Nation's highways and why should we reduce taxes so people can burn more gasoline and continue to drive vehicles with oversized engines. The world and most especiall the American people needs to accept the fact that oil is a non-renewable energy source and someday it will run out completely. We have 4.7% of the world population and we use 25% of the world oil production. We have made China, India and Japan big energy consuming nations, we gave them our jobs and they are now they are building automobiles at a fast pace and with that they are consuming huge amounts of oil and using more each day. No other Nation on earth has as many 6,8 or 10 cylinder vehicles as we do.
Frank
everyone is being hit by the price of gasoline. They talk about buying the new "hybrids" and vehicles that get 30,40,50 mph. That is all fine and dandy. IF I HAD THE MONEY TO BUY ONE OF THOSE VEHICLES, I WOULD HAVE THE MONEY TO BUY MY GASOLINE WITHOUT BITCHING ABOUT THE PRICE.
Frank, I know all that. I am just one of those bitchy people that like to blame everything on someone else. But I can say this, my vehicle gets 23 to 25 mpg. I can fill it and park it in the garage and 2 weeks later it is still full. But right here in Howard, I see these big pickups that have to be using a large amount of gas, being driven around the block. I see the same vehicles go around the same corner a dozen times a day. And I wonder where are these people going and what are they doing that they need to make that many trips in the same direction every day.
Wilma, I understand, the problem is not going to be solved overnight. I believe in the old saying that"Necessity is The Mother Of invention", from that I think we will see renewable souces of energy, better electric engines/cars and successful Hydrogen fission. Before all of that happens there will be lots of pain in the coming years. I have long advocated a taxing program that I think would reduce energy consumption, although it will take a few years; announce that beginning in 2010 or 2011 that a tax of $10,000.00 will be levied when you buy a new 10 cylinder vehicle and $10,000.00 tax each year you tag it, $8000.00 when you by an 8 cylinder vehicle and $8000.00 tax each year you tag it, no tax on 6 cylinder vehicles and tax rebate whenever you by a four cylinder or less vehicle or a Hybrid. The forgoing would need to be fined tune but the principle would certainly bring energy consumption down in the coming years.
Frank
Funny what the Government can regulate and what they can't. By the way Frank, I am driving a 8 cylinder vehicle of which is paid for and has been for several years. Maybe the high taxes should be on the people that have the money to run all over God's creation instead of those that just want to go back and forth to work so that we can eat one good meal a day. By the way, without buying a new car, I do get 28 miles to the gallon. MY LAWNMOWER IS ILLEGAL ON THE US HIGHWAY. I don't know anything about stimulating the economy, but I am helping stimulate the Oil companies.
?
?????????????? ??? ??? ??? ???
I have to say that I am very fortunate and don't have to drive very far to work. But we run a farm and to you know the money that we have shelled out a good amount of money to even spray our pastures. My husband usually custom bales hay, not going to happen much if any this year. He owns a diesel tractor and at 4.00 a gallon, the people that he bales for just can't pay the price. It is going to really hurt us. He made money on that and that is money we are not going to have. It really hurts. I run a daycare and thank the Lord that we have a grocery store in town. I don't know what I would do if I had to go out of town every week or even two weeks to get groceries.
But I will tell you what we have done to conserve gas at our place. We buy all that we can LOCALLY!! So the prices are a little higher, who cares. When it cost 75.00 to fill up my van, I am saving gas!! We have purchased to little toys, that is what I call them, but they save us money. We have a mini truck that is not highway legally, but we can use it around the farm, to put out mineral and even to feed some of the cattle. We use it to also make trips to town to get parts and such. We have purchased a newer 4-wheeler. This is to also cut down on gas usage. We use it also with the cattle operation. It helps but it is not the cheapest way either. We had to spend our savings to purchase these. That is what really sucks!! But we are trying to just get by!!
I know that people that have to travel to get to work are really hurting. What used to cost maybe 25.00 to 30.00 a week has went to about 100.00 or more. I just can't imagine!! So, what is these people to do???
Good for you Angie! More people need to think like this.
mlw
I believe that we, the people, should ask, no demand that the government should help bring back the passenger trains that use to travel around to small towns or bring back the bus service (greyhound bus) that made stops at small towns so we can travel back or forth to Wichita and other larger cities for our Dr. appointments and other appointments that we need to keep. The price of gas is going to be so high that those who are on limited budget can't get to a Dr. appointment or to therapies that will keep us healthly. I travel to Wichita once a week to Dr. appointments and therapy sessions. I would like to see train service here or bus service. The vehicle that I drive gets 23 to 24 gallon per mile. I, also, go to Wichita State University to volunteer in an Archaeological lab for two hours on the same day that I have my Dr. appointment.
All great ideas, there needs to be many changes made in the next few years. The rest of the world is increasing their energy consumption every day and as consequence the price is going up. For years the American people have said we need to find and drill for and produce more oil, what we really need to be pushing is conservation.
Frank
I know you all have ethanol mixed gas out there. Do you happen to know what % of the gas is ethanol?
I don't know the % of ethanol in the gasoline, but I do know that it eats up the gaskets in your small gas engines (lawn mowers, weed eaters, chain saws).
The neighbor to the west requires 10 percent.
Most of the stations that I have noticed that have it show 10%, Ethanol is not required in Oklahoma or Texas but it is required to be posted if it is included. The gas mileage is lower on Ethanol, and there remains some thoughts that it maybe detrimental to engines over a long period of usage. I still have a problem with using grains, Corn, etc for gasoline. It will drive up the cost of meat and I have a problem burning corn to drive vehicles when people are starving in the world.
Frank
There's a van there in Elk County that takes people to Wichita, Independence, etc. for Dr. appointments and such. I know that they also stop for shopping, etc. as well. All they require is a small donation for fuel. Some of you might want to check about that service. Several could go on the same day, etc.
MLW
Frank, I totally agree. We're also learning about the gaskets, Wilma, all of our little gas users are quite old. Our Honda CRV supposedly is OK with 10% ethanol, but not 15%, so I guess we'll be alright. I'm still trying to calculate mileage for our trip. Maybe some day we can learn to use corn "waste" as the duPont Co. here is working on, or sugar cane waste as is done in South America.
If they can use sugar cane why can't they use Johnson grass? It was imported for silage, is impossible to kill, and looks much the same to me as sugar cane. Isn't it the cellulose that they use?
I recently read where they are experimenting using Seaweed, it is plentiful and reproduces very fast. Correction that should read Algae instead of Seaweed.
Frank
Has anyone made that suggestion (about Johnson grass) to anybody official?
That just may have possibilities.
The last thing we plan to give up is driving to Tyro to church.
Frank
Johnson grass is a very good idea. We could all grow it in our backyards at no expense. Think I will stop spraying the spot I have and there might be a fortune across the alley from me.
Just think! No fertilizing or tilling; just the expense of bars across the doors and windows to keep it out of the house! LOL! I suspect the folks in the south think the same about kudzu also. However if things get really bad, they can eat their crop! ;D ;D
Speaking of gas ... has anybody seen Ta Ta recently?
I miss her.
I miss her, too, Rudy, but I do see her for a short time each day when she brings my mail in. Maybe she can spend more time with us over the weekend.
Rudy, she'll get ya for that! :laugh: :laugh:
Crude Oil Advances on Concern Long-Term Supply Won't Keep Pace
By Alexander Kwiatkowski and Christian Schmollinger
May 23 (Bloomberg) -- Crude oil rose, headed for a third weekly gain, on concern supply won't be able to keep pace with accelerating demand from Asia.
The International Energy Agency said yesterday it may cut long-term supply forecasts as fields deplete faster than expected. Oil reached a record above $135 a barrel yesterday after banks raised price forecasts and then fell as traders sold to benefit from a 20 percent increase in prices since May 1.
``The market is getting more and more worried about the supply prospects in the long term,'' said Eliane Tanner, commodity analyst at Credit Suisse Group in Zurich. ``This is also driving up long-dated crude prices and is supportive for short-term prices.''
Crude oil for July delivery rose as much as $1.57, or 1.2 percent, to $132.38 a barrel on the New York Mercantile Exchange. It was at $132.08 a barrel at 10:41 a.m. in London.
Yesterday, oil fell $2.36, or 1.8 percent, to settle at $130.81 after reaching $135.09 a barrel, the highest since futures started trading in 1983. Prices are up 4.3 percent so far this week and 100 percent in the past year.
The biggest gains in prices were for futures for later delivery. The December 2016 contract has risen 7.9 percent this week.
The IEA forecasts that China's oil consumption will increase 4.7 percent in 2008. The country's imports, the highest after the U.S. and Japan, rose 15 percent in the first quarter and jumped 25 percent to a record in March of about 4.1 million barrels a day.
U.S. Stockpiles
U.S. crude oil stockpiles posted an unexpected decline of 5.3 million barrels in the week ended May 16, an Energy Department report showed. Gasoline supplies also fell at a time when they normally increase before the summer driving season in the Northern Hemisphere.
``The mood seems very positive, the market is taking some positive leaps from the tight report,'' said Mark Pervan, commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne.
Oil's rally to a record above $135 a barrel came as traders bought crude to cover wrong-way bets that prices would decline. The number of outstanding futures contracts fell this week as prices rose, signs that traders were buying to exit so-called short positions that would profit if oil fell.
Brent crude oil for July settlement rose as much as $1.96, or 1.5 percent, to $132.47 a barrel, on London's ICE Futures Europe exchange. It was at $132.18 a barrel at 10:42 a.m. local time. The contract touched a record $135.14 yesterday.
Brent Wins
Brent is trading above West Texas Intermediate for the second consecutive day, after a U.S. Energy Department report on May 21 showed stockpiles at the delivery point for the U.S. contract rose for the eighth week, cutting the premium at which New York oil typically trades over London.
Crude oil may rise next week as investors buy futures after banks raised price forecasts and U.S. stockpiles declined. This is the first time in 20 weeks that analysts forecast an increase in prices.
Fourteen of 29 analysts surveyed by Bloomberg News, or 48 percent, said prices will rise through May 30. Twelve of the respondents, or 41 percent, said oil will fall and three forecast little change. Last week, 47 percent said futures would decline.
Societe Generale SA and Credit Suisse lifted their price forecasts on May 20 and Goldman Sachs Group Inc. raised its outlook to $141 a barrel for the second half of 2008 on May 16.
I'm Baaackk, Have yall missed me? Puters been down, may go back down at any moment lol. Anyway, about the conservin. I think most people are doin whatever they can. We go to town once a week, just drive back and forth to the bosses house the rest of the week, but hell we were doin that before :P Had to laugh at a guy tellin me well you could walk to the post office and store and stuff and save that way, I said well the post office is ten miles away and town is either 15 or 23 dependin which way you go lol, if I start now I'll get there thursday:P Still think its the big oil usin us for all we are worth sorry Frank, if people bitch loud enough long enough they'll get their rigs in the arctic like they've been itchin to do for years. I have a truck for haulin hay, wood which we burn for heat, and whatever won't fit in the car. It only gets 12 mpg on a good day but it's necesary out here and I only use it when I have to, like Sallys its paid for so don't see me givin it up, it starts every time I need it lol. Got a pontiac for every day that gets probly 22 or 25, don't see any spendin on a different one there either, it's ours and it starts every mornin. Got a big garden, got two big horses we can hitch to a wagon or BBQ whichever we need most LOL, not really BBQ :P ( got cats for that:P) lmao plenty of places to hunt, so we'll get by just like most country people do. City people are gonna be the ones in the most trouble.
Does barbecued cat taste like chicken? ;D
Our gas prices went up again across the holiday weekend, which is normal as people head for the beaches, but I betcha this time it it doesn't come down again on Wednesday as it usually would. Some stations are more than $4.00 now. I'm starting to look for change in the sofa cushions! I have young friends who jog 10 miles without breaking a sweat ( I hate them.) Maybe I'll get them to "run" some errands for me . :laugh: Am I correct that farm vehicles still are exempt from federal taxes?
"Real" city people don't own cars anyway, but Taxi and car service fares are up and of course food prices are up too. If they can't catch a bus, they borrow a car, or a group will rent a car or bus for an outing.
Yeah food and heat is what will cause the problems for city people. My truck isn't classified as a farm truck, just tag it regular. So no mine ain't exempt. Lol I don't know about the cat but guess that means it tastes like chicken by default lol
Half ton pickups are not classified as farm vehicles in Elk County. Doesn't matter what you use it for. You pay the full value in taxes and tags. If it is considered a farm vehicle it can be depreciated for income tax purposes. In that case the cost of the tags and taxes are also deductible as a farm expense. Also, the cost of the gasoline, no matter how much it is, is a business deduction if used for business purposes. Pam, your truck, since it doesn't go anywhere except on farm business would be considered a farm vehicle and if you file a Schedule F, you can put it on a depreciation schedule and use the yearly depreciation as a deduction.
There used to be a farm tag available for pickups that were used for farming, but then everybody started driving trucks for everything, so Kansas. anyway, took that little concession away from the farmers.
yeah I know Wilma, just don't hassle with it. Think farmers can use all the help they can get tho.
We have along way to go but this is a start:
gas goes up, driving goes down
(CNN) -- At a time when gas prices are at an all-time high, Americans have curtailed their driving at a historic rate.
The Department of Transportation said figures from March show the steepest decrease in driving ever recorded.
Compared with March a year earlier, Americans drove an estimated 4.3 percent less -- that's 11 billion fewer miles, the DOT's Federal Highway Administration said Monday, calling it "the sharpest yearly drop for any month in FHWA history." Records have been kept since 1942.
According to AAA, for the first time since 2002, Americans said they were planning to drive less over the Memorial Day weekend than they did the year before.
Tracy and Adam Crews posted on iReport that their annual Memorial Day weekend has traditionally involved camping and fishing.
"Well, due to the continual rise in gas, we felt our only recourse was to nix the idea this year and stay home" in Jacksonville, Florida, they wrote.
Instead, the couple said they "decided to camp out in the backyard. We set the tent up, just finished installing our above ground pool, and cleaned up the grill. ... We have ourselves a campsite! It's been a blast!"
Nakeisha Easterwood of Smyrna, Georgia, said with gas prices on the rise, she sometimes catches rides with friends, and doesn't drive into town more than once a day. "It's crazy," she said.
According to AAA, the national average price for a gallon of regular gas rose to a record $3.936. That compares with an average price per gallon of $3.23 last Memorial Day.
"With it being near $4 a gallon, you definitely have to drive slower and pick and choose when you're going to do it," said Steve Kahn of Roswell, Georgia, at a Memorial Day festival in Atlanta.
Some Americans have turned to public transportation. Ridership increased by 2.1 percent in 2007, in part because of rising gas prices, according to the American Public Transportation Association.
Americans took 10.3 billion trips on public transportation in 2007, the highest level in 50 years, the group said.
The Energy Information Administration says gas consumption for the first three months of 2008 is estimated to be down about 0.6 percent from the same time period in 2007.
For the summer season, gas consumption is expected to be down 0.4 percent from last year.
The price of Diesel in England is $9.50/per Gallon in US Dollar equivalent:
U.K. Trucks Stream Into London to Protest Fuel Prices
By Robert Hutton
May 27 (Bloomberg) -- As many as 1,000 truck drivers were converging on London to protest rising fuel prices and put pressure on Prime Minister Gordon Brown's government to lower transportation taxes.
Transaction 2007, the group organizing the demonstration, said it was expecting between 600 and 1,000 vehicles to arrive in London by 11:30 a.m. local time. There will also be a protest in South Wales.
Average crude oil prices have risen by a third since the start of the year. A liter of diesel fuel now costs around 1.27 pounds ($2.50) in London -- the equivalent of $9.50 a U.S. gallon. More than a half of that is tax.
``This isn't just a crisis, it's a meltdown,'' said protest spokesman Peter Carroll, who is managing director of Seymour Transport Ltd, a haulage company with 50 vehicles based in Kent, southeastern England. ``Quite a lot of owners of companies have come.''
In a separate move, 35 out of the 351 lawmakers in Brown's Labour Party have signed a parliamentary motion calling on Chancellor of the Exchequer Alistair Darling to reconsider plans to increase the tax on the most-polluting cars from next April.
The opposition Conservatives say that more than 1 million families will see their car tax double, and more than 3.7 million people will pay 90 pounds a year more. The government says 24 of the 30 most popular models of car will be taxed less.
Protests over fuel prices by truckers brought roads in Britain to a near standstill in 2000 as refineries and depots were blockaded. The Treasury in 1999 abolished its ``fuel duty escalator,'' which boosted gasoline taxes more quickly than inflation to help plug a budget gap.
Darling has already backed down to lawmaker pressure over one tax change this month, borrowing 2.7 billion pounds to fund a tax rebate for middle- and low-income families after an earlier change left some of the poorest worse off.
This just in..... FROM THE CNN INVESTIGATIVE BUREAU
CNN reports that gas stations across the nation will start showing
porn movies on the screens of the pumps so that you can see someone else
get screwed at the same time you do!!!!!!!!!
It appears that the higher prices are having an effect on the demand and the price. Crude is trading down $2.00 in overnite access.
Oil Falls to Lowest in a Week on Concern Prices Hurting Demand
By Grant Smith
May 28 (Bloomberg) -- Crude oil fell to a one-week low on concern record fuel prices will cut demand at the height of the U.S. driving season.
U.S. consumer confidence dropped to the lowest level since October 1992 yesterday. The average U.S. gasoline pump price reached an all-time high May 26, crimping demand from motorists. Oil demand typically peaks during the summer as U.S. drivers take to the road for vacations.
``The high price of fuel is now finally affecting the man in the street,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``Global economies are creaking at present, with U.S., German and French consumer confidence data all at record lows.''
Crude oil for July delivery dropped as much as $2.35 a barrel, or 1.8 percent, to $126.50 a barrel on the New York Mercantile Exchange. That's the lowest since May 19. It traded for $126.79 at of 10:21 a.m. London time.
Yesterday, oil fell more than $3 a barrel, the biggest one- day drop since April 29, to close at $128.85. Futures reached a record $135.09 on May 22 and have doubled in the past year.
``Consumer confidence is practically in mourning, which leads one to think we'll have a price correction for oil'' Benjamin Louvet, deputy managing director of PRIM'Alternative Investment, said in a television interview.
Brent crude oil for July settlement was at $126.50 a barrel, down $1.81, on London's ICE Futures Europe exchange at 10:22 a.m. London time. It declined $4.06, or 3.1 percent, to settle yesterday at $128.31 a barrel, the biggest decline since March 31. The contract touched a record $135.14 on May 22.
U.S. Demand
Fuel usage in the U.S. averaged 20.3 million barrels a day in the four weeks ended May 16, down 1.3 percent from a year earlier, the Energy Department said last week.
The price of regular gasoline at U.S. pumps, averaged nationwide, rose 0.1 cent to an all-time high of $3.937 a gallon, AAA said yesterday on its Web site.
The Conference Board's confidence index declined more than forecast to 57.2, the lowest level since October 1992, from a revised 62.8 in April, the New York-based research group said.
Indonesia, the only OPEC member in Southeast Asia, will pull out of the organization as its oil imports exceed exports, Energy Minister Purnomo Yusgiantoro said. Indonesia will sign today a decree to exit OPEC, Purnomo said in Jakarta today.
On the way to and from Howard, it appeared that some (just some) big rigs had slowed down, perhaps trying to save on diesel.
Four wheelers, though, were as fast as ever, including SUVs. It may be that gas will have to go yet higher to convince a lot of people.
The highest we filled up at was $4.04 for 87 octane here in Centennial. The lowest was $3.79 at Severy. For some reason PJs in Howard was at $3.94 while Severy was at $3.79. I have never seen that big a difference before. It did not look like too many people were filling up in Howard.
We went to Swinging Bridge Café at the Crooked Creek Lodge in Moline but I could not see the price the Moline station had. They apparently don't post prices.
The Swinging Bridge has really improved and enlarged. Looks like they have a seating capacity of around 60, or so. They were busy because of the alumni homecoming. Their hamburger is as good as ever.
Waldo, good point on the speed, I am really disappointed that Bush has not mandated a 55 MPH speed, that would lower consumption considerably. I have written to my West Texas Congressman who was also Bush's accountant when Bush was in the oil and gas business in Midland, TX, and asked him why Bush and the Republicans were so do nothing about reducing consumption, he has not replied. Frank
In 1974, the Nixon administration suggested a recommended top speed of 50mph, which a lot of people adopted.
I set my speed control at 50 and drove from Independence, Mo to Howard with three elderly female passengers who talked nonstop all the way.
I enjoyed the drive and thought the passengers might be wiling away the time by talking.
However, all three said they never wanted to do that again.
Waldo, in 1974 the 55MPH speed limit was made law and states that did not comply were cut off from Federal Highway funds. The projected savings in a 55 mph speed verses the 70 MPH speed ranges from 1 to 20-25 percent savings, at 25% we would reduce daily consumption by approximately 5.1 million barrels per day.
Frank
Quote from: W. Gray on May 28, 2008, 07:57:36 AM...The highest we filled up at was $4.04 for 87 octane here in Centennial. The lowest was $3.79 at Severy. For some reason PJs in Howard was at $3.94 while Severy was at $3.79. I have never seen that big a difference before....
The prices at gas stations usually are a direct reflection of what it costs them ~ at least in rural areas. It costs more to get gas delivered if you are not close to a refinery or on a main highway or if you use a smaller quantity, so their prices are higher to cover the extra; but they make the same or often less profit on each gallon sold. Also, many places only change their prices when they get the next load and see what they've had to pay for it (but I know in some places they go by the market prices for increases) I've usually only seen a small price difference between here and Severy, and never enough to justify the extra 20 miles to fill up. A 5 cent price difference only means $1.00 on the fillup for me, and that's when I'm running on fumes!
The difference you saw was greater than normal, but I think it is most likely one or the other place had just got a new delivery of fuel at a different cost and adjusted their price to that. Last week I noticed that P&J's stayed at $3.81 for several days while many places around us raised to $3.89 and more. I'm sure glad we didn't have to go any long distances over the weekend! Kudos to you, Waldo, for taking a trip with 3 females, no matter the distance! ;D
We always get fuel at the Co-op station in Severy. Diesel and gasoline are always cheaper there than at P&J's. Tripco is usually lower than P&J's also. We're directly between Howard and Severy, so we usually just head north for fuel. And who wouldn't if you could save a dime a gallon?
I saw on World News Tonight, last night, that gasoline was $8 something a gallon, and diesel over $9/gallon in Germany.
Waldo, we'll be staying at Crooked Creek Lodge June 10 through the 13th. How's breakfast there? Anybody know? I've already got a burger on my list, since you say they are good. I'll be checking with you all for gas prices as we get closer to to Kansas.
We will be gone to New Mexico filming on location while you are here Diane.
Enjoy your visit... :)
Teresa, I had a feeling you might be somewhere else, since your business is blossoming so well. I've been to a lot of New Mexico and really enjoyed all of it. Where will you be?
Albuquerque...
We will be filming the "End Of Trail World Championship" of Cowboy Action Shooting.
Have a good trip...you can practice your Spanish. ;) We enjoyed the "old city there", nice plaza and shops.
Greetings from Staunton, Illinois. We are visiting our daughter & son-in-law, Karen & Gary Crosslin. I'm using their lap top, and I'm not familiar with it, so don't be surprised at any mistakes that show up!
Gasoline in Longton was $3.99 a gallon, in Missouri it was $3.69, and here in Illinois it runs form $4.02 to $4.07.
We are driving a rental car, an "HHR" Chevrolet, and it's getting about 34 mpg, so we're very happy about that! Today we drove to Springfield (Illinois) and toured the Lincoln Museum, very interested. We ate lunch at a Cracker Barrell, so that was great!
We're driving back to Longton on Friday, and will be flying back to San Diego on Monday. (We're getting kind of "homesick")
We enjoyed meeting Frank & Myrna at the Copan truck stop last Tuesday evening, that was so much fun. Then, Jo & Fred dopped by to see us in Longton, and that was really nice, also.
There has been so much rain in this area of Illinois that the farmers have been unable to plant their corn crops. It rained 4", then another 2 or 3" another day. The forecast is for it not to rain again until Friday.
It's been great getting to be here with our daughter and family, and enjoying their new home.
Just wanted to report on the price of gas, and it got to be a little longer than that.
Gas is way too high!
Bonnie, if you want to stay closer to the airport on Sunday night, you know you are welcome here. Sounds like you have had a fun time, glad you got see Jo and Fred, that is always refreshing.
Frank
Thank you, Frank/Myrna...
We don't leave until almost noon from Tulsa on Monday, so we'll have plenty of time to get to the airport & get checked in.
Thanks again.
Bonnie,
Glad to know that you and Bob made it east ok. I worried about you and the storms you had to go through
Hope to see you again, before you and Bob head back home.
The short time we got to visit, was just that, short.
Hugs and God bless,
Front Month Crude Oil was down $4.41/BBL today and closed at $126.62/BBL, conservation and cutbacks are working and consumption is coming some.
Frank
sounds like everyone is having a great time with their traveling. Dianne, I have only had breakfast for supper at the Swinging Bridge and it was very very good as has been every meal we've eaten there and we've eaten a few. As for fuel, I've seen Severy 20 cents plus cheaper than P&J's several times and don't think any of them are making much money off of fuel. But, you do have to consider the fuel you'll burn driving to save that money. If, however, you are going on north, then by all means shop for the cheapest. Teresa, do you need someone to carry your camera for you? ;D ;D. Bonnie, have a good flight home. Frank, was disappointed you weren't with Myrna Sat. I was sorta looking forward to some one-on-one "discussions" :-X ;D ;D
Thanks Flo, thats a good recommendation for both human food and car food.
I am always up for some one to carry the cameras and gear Flo... BUT...
by the end of the days, you will be worn out.. and I would have to give you a massage ...........
hmmmmmm.. (http://www.rightnation.us/forums/style_emoticons/default/headscratch.gif)I think I'm beginning to see your plan here.
You want more massages don't you?
:D
We are all going to go and eat tonight at the Swinging Bridge for supper. Mama gave each of us a gift certificate for supper and I am going to have one of their yummy rib-eye steaks that they have on Friday and Saturdays. Ashley is spending the night with me tonight, so she is excited to get to go to the park afterwards. ( the eating for her is okay..... but the park that is right there has her pumped .. LOL )
well, dang, :-[ 8) thought I was being careful with my wording, but can't slip up on the blind side of Teresa. Folks, if you haven't had a massage by Teresa, you are missing something. That was definately one of the most relaxing hours I have ever or shall ever have.
Ten Simple Truths about Oil
Alan Caruba
http://factsnotfantasy.blogspot.com/search?q=Ten+Simple+Truths+About+Oil
Having written about the energy industry and issues now for a long time, I hope I can be forgiven for being enraged by the comments bySen. Charles Schumer (D-NY) in response to President Bush's press conference Tuesday morning.
There is simply no way to describe them other than false.
The Democrat Party has long made "Big Oil" their favorite punching bag, confident that the public has no idea what influences the price and supply of oil. Saying anything favorable to Big Oil is immediately deemed evidence that one is in their pay and whatever facts are offered are therefore invalid.
There are, however, some simple truths about Big Oil that cannot and should not be ignored. To do so leaves everyone at the mercy of energy policies that have created the situation in which the United States finds itself today.
Fact #1. The combined ownership of oil reserves by the independent, investor-owned oil companies such as ExxonMobil, Conoco-Phillips, BP, Chevron and others is barely 4% of the total known oil reserves in the world. By itself, Exxon-Mobil's share is 1.08%.
Fact #2. Oil is a global commodity sold on mercantile exchanges for whatever price it can command. Speculation in oil prices is the primary reason they have been driven to utterly insane costs per barrel. It has nothing to do with actual supply and demand.
Fact #3. No nation on Earth is or can be "energy independent." The geopolitics of oil is complex, but as nations such as China and India have seen their economies grow, their need for oil grows with it and thus they compete with long established industrialized nations for existing oil supplies. This competition has an impact on prices.
Fact #4. The OPEC nations, those in the Middle East and including Venezuela, control 77% of the world's known oil reserves. Like Russia and Mexico, where the oil industry is controlled by the state, it is generally poorly managed. Several Big Oil companies that were induced to undertake exploration and development in Russia and Venezuela actually had their assets nationalized or stolen at prices well below their investment and value.
Fact #5. Energy is the master resource. All nations with any hope of growing their economies require it, mostly in the form of electricity, but also for oil's role in transportation. The failure to have a national long-range energy policy that is based in reality can severely impact energy prices.
Fact #6. The United States has, for years, pursued an energy policy based on environmental myths such as "biofuels" in which corn is turned into ethanol to reduce the import of oil, but it costs as much to produce ethanol as to refine oil and it provides less mileage per gallon, thus negating any reason for this additive. Likewise, suggesting that wind or solar energy can generate anything more than its current 1% of the nation's electricity needs ignores their unreliability and the fact they are heavily subsidized, a form of hidden consumer tax.
Fact #7. It costs billions to explore, discover, extract and transport oil. It takes lots of lead-time as well. The United States Congress has, for decades, refused to permit the extraction of vast oil reserves in ANWR despite the fact it would have little or no impact on the Alaskan wildlife reserve. In addition, Congress has declared 85% percent of the nation's coastal, offshore areas off-limits to any exploration for oil or natural gas.
Fact #8. The U.S. Environmental Protection Agency, under the mandate of Congress, requires Big Oil to refine oil into some 17 different formulations in the name of clean air. With three grades of gasoline, that means that refiners must produce some 45 different blends. The quality of air in America is excellent, but the cost of gasoline at the pump continues to rise as the result
of these mandates.
Fact #9. America imports two-thirds of the oil it uses. All of its transportation runs on oil. The population continues to grow. Failure to encourage the construction of a single new refinery since the 1970s puts a further strain on the ability of Big Oil to provide the nation's oil and diesel fuel needs.
Fact #10. Democrats continue to demand that Big Oil's profits be confiscated in some fashion and some of the inducements offered to explore for more oil be ended. Because the costs of exploration, extraction, refining, and transporting of oil represents billions, the actual profit margin of a company like ExxonMobil is about 10%, well below what industries such as pharmaceuticals and banking enjoy.
For these and many other reasons, Americans are being impoverished at the gas pump because Congress has dithered and failed in one of its most important responsibilities.
Well said and it fairly well covers our energy problems. The big thing needed now are mandates to lower consumption, smaller engines, lower speed limits, more and cheaper hybrids, more research on Hydrogen Fission and other non-petroelum sources of energy. Lower our massive trade deficits which has devalued our currency and the result is we have to pay more dollars for oil. It will take time and lots of pain but I still think the American "Can Do Attitude" will eventually overcome the energy problems of today. Everytime I hear someone say"Exxon Made 40 Billion Dollars", I wonder if they ever ask what Exxon spent, some projects that the major oil companies do require billions of dollars in capital outlay and they may not recieve a single dollar in return for 10 to 20 years.
Frank
Gas prices around the world. No word on what part of the price is tax but some of these countries levy a stiff tax. Hugo Chavez as the cheapest price and he always likes to bring up gas prices when he is ridiculing the US.
Gas prices around the world per the Associated Press
Germany 11.49 gallon
Turkey 11.49
France 9.66
Britain 8.31
Japan 5.77
Brazil 5.67
India 4.16
US 3.96
Russia 3.68
China 2.93
Indonesia 2.39
Venezuela .12
Just thought I'd add about the cost of gasoline in various locations:
Escondido, CA $4.21.9 per gallon! I about "had a stroke" when we arrived home today, and saw the price of gasoline now!
Diane, take along your "pocket book," on your "road trip!"
We had a great trip back to Longton, (Kansas, of course!) Illinois, and points in between. It's always great to go, and then it's great to get back to our own bed! It was 62º when we landed in San Diego this afternoon. Very nice!
Crude Oil traded down today and settled at $124.31/BBL, down $3.45 for July crude. Hopefully demand will continue to drop and the price will follow it down. July gasoline traded down $0.04 with the outer months trading down $0.05 +
Frank
The prices have dropped here just a bit. Saw some for $3.93 and none more than $4.00. Our gas for the trip will go on the charge card and I'll ignore it until the bill comes. Then I'll move some $ out of my Money Market to pay it off in one big bite. No regrets. Bonnie, glad you had a good and safe trip. I doubt we'll see any 62's.
I've found something interesting today on my trip. I traveled to Omaha, NE yesterday, and the price of gas actually went down as I went North. Which is usually the opposite that I see. But what was odd what that when I drove from Omaha to KC, the diesel/gas price spread was bigger at KC! Like by about $0.12.
Whenever we go to Kansas City, we try to time fill-up so we can get it in North Kansas City. It is always two to five cents less expensive there. Since that is where we stay overnight anyway, it is not out of the way.
What I saw yesterday...
Gas in Council Bluffs on the interstate = $3.75
Diesel = $4.45
Gas in N. KC on the interstate = $3.72
Diesel = $4.55
I'll be out and about in OP today, so I'll check prices around here, but I'm sure it'll be higher.
Please sign and pass this on to all you know.
http://www.americansolutions.com/
This was taken from an e-mail that my West Texas Congressman sends out weekly, I thought some of you would find it interesting, and it may make you think more on the candidate of you choice when you go to the voting booth.
Frank
Special Edition:
American-Made Oil and Gas: A History of Support and Opposition
June 4 , 2008 – Volume 4, Issue 15
Our energy crisis is a long-term issue that did not occur overnight and cannot be solved overnight. As we look at the possible solutions to our ongoing crisis, it is interesting to note how Republicans and Democrats have historically stood on potential supply solutions.
ANWR Exploration
House Republicans: 91% Supported
House Democrats: 86% Opposed
Coal-to-Liquid
House Republicans: 97% Supported
House Democrats: 78% Opposed
Oil Shale Exploration
House Republicans: 90% Supported
House Democrats: 86% Opposed
Outer Continental Shelf (OCS) Exploration
House Republicans: 81% Supported
House Democrats: 83% Opposed
Refinery Increased Capacity
House Republicans: 97% Supported
House Democrats: 96% Opposed
Overall, 91% of House Republicans have historically voted to increase the production of American-made oil and gas. 86% of House Democrats have historically voted against increasing the production of American-made oil and gas.
We must work together to rationally look at possible solutions that will address increasing American-sourced production of crude oil, natural gas, gasoline and electricity.
better leave the Arctic Reserve alone.
(http://i52.photobucket.com/albums/g33/angels_cheyenne/Native%20American/7d.jpg)
Wise man once said "anything you do affects the next seven generations so before you do it you better think about that."
Drilling in the Arctic is goin to have consequences and repercussions nobody can even guess.
These figures come from a quick search of several web sites:
Oil Consumption in US, about 20,000,000 barrels per day
Domestic production about 11,000,000 barrels per day
Oil imports about 9,000,000 barrels per day
Oil exports about 1,000,000 barrels per day
Oil Imports Per Day to the US
Canada 1,795,000 barrels
Saudi Arabia 1,535,000
Mexico 1,232,000
Nigeria 1,154,000
Venezuela 858,000
Iraq 773,000
Angola 384,000
Algeria 247,000
Ecuador 231,000
Kuwait 199,000
Brazil 188,000
Russia 108,000
Congo 105,000
Chad 101,000
I realize what you are saying Pam.. but to continue begging Arab oil sheiks to produce more oil, America should ..if we can...produce our own oil to increase our supplies and drive down prices.
ANWR holds the largest estimated oil reserve on land in North America at ..(they say) 16 billion barrels... and this is according to the U.S. Geological Survey.
You know that I am in favor of Mother Earth to be left alone.. BUT... to the expense of energy domination over people who hate our guts... I would say that ..IF... drilling in a small portion of the Artic , get us out from under the "Sheik".. then we need to do it.
yeah i know
Teresa, that subject has come up in discussions with the oil producing nations, their point , "the United States wants to exploit the land and oil reserves of everyone else while trying to preserve the US lands and reserves". As a consequence of our refusal to develop more of our reserves their is a school of thought that the producing Nations will or are reducing their sales to us in order to stretch their oil reserves over a longer period of time and have future income. People were opposed to the Alaskan Pipeline saying that it would upset the enviroment and destroy the Caribou herds, I think time has proven that to be wrong.
Frank
The Alaska Pipeline begins at Prudhoe Bay and runs south for 800 miles to an oil terminal at Valdez for tanker shipping.
The pipeline has been running for 31 years.
We hear a lot of people saying we should not drill in the Artic National Wildlife Reserve (ANWR) because it will cause a calamity, destroy the environment, etc.
The coastal plain of ANWR where oil drilling would take place begins only 58 miles east of Prudhoe.
I'm a realist. I know they are gonna develop the Arctic sooner or later. I also know there will be environmental consequences. I also know those consequences won't be worth it in the end. I know what land looks like when there is a leak, of either oil or saltwater. I've had to fix broken lines. Nothin grows.......for a LONG time. Where there are rigs there are gonna be leaks. I've been in this fix most of my life, my dad worked in the oil fields most of the time I was growin up, I know oil is a necesary evil, but i also think an oil well is the worst thing you can do to a piece of land. Anyway....................guess it doesn't matter.
I am familiar with the Alaskan Pipeline and the oil movements, I was involved in tanker loadings and the movement of oil out of there for several years. My brother-in-law was an engineer on the piprline during it's construction, and many of the people I worked with at Phillips worked on the project from start to finish. The Major oil companies go to great lengths and expense to protect the enviroment, and for people to compare drilling and production today with what it was 30-40-50 years ago is totally unfair. Moreover to compare what drilling and production was by the independents is also a poor comparison. A good example is the delays that occurred when the Oil companies wanted to drill offshore, lots of people said it will be a disaster it will destroy Marine life, in fact is has been the opposite and Marine life thrives in and around the Platforms. The Oil companies need to educate the people more or they can wait untill people can't get enough gas or it is so high we can't afford it.
Frank
frank, we are just gonna have to agree to disagree.
Pam, I understand, having spent 40 years plus in the oil and gas industry I am used to that. Having been married for 44 years I am used to that. Having had 7 sisters I am used to that. Having raised 3 children, I am used to that.
Frank
I stopped worrying about what oil wells were doing to the environment one day when driving through northern Oklahoma. I don't know exactly where we were and probably couldn't find it today. But here were all these operating pumps and really close together. And you know what else was there surrounding the pumps and tanks? Green grass and contented cattle. Kind of like grazing cows and sheep together. It wasn't supposed to work but it did. I am enough of an optimist that I think that our country isn't going to do anything that will cause the "Big Boom".
How much of the oil drilling rig in space is used.
Did I say that right?
Will it really cause harm and will the leakage be enough to cause problems? Or is that overblown. I am just lately been reading and delving into it..and I see and understand both sides.. which makes it double hard to understand or believe either side.
Help.
Wilma,
For 31 years, the Caribou have been saying the same thing about the Alaska Pipeline.
Teresa,
The last time a bill was defeated in Congress, the bill specified that drill rigs would have to be limited to a total of 2,000 acres.
Oil companies said it would have to be more than 2,000 for them to fully drill the area but I don't know the figure they were proposing.
Angled drilling is supposed to be used to limit the amount of space needed.
ANWR has 19,000,000 acres.
Teresa, I am not going to tell you that there is no risk at all, because there is always a risk when working with men, machinery and the enviroment(Weather). I will tell you that the Major oil companies go to every length to protect the enviroment and if a problem does occur they do everything possible to minimize the damage. In comparison to the huge vastness of the ANWR the amount of land that the drilling rigs will use will be miniscule and after the wells are drilled most of the area where the rig was will be restored to its original state. The area where the remaining production wellhead is will be very small . I think we will drill in the ANWR someday and in the not to distant future, but before that can happen there will have to be a big change in politics in Washington.
Frank
Waldo, the word is Horizontal drilling, which has been very successful in West Texas and other areas of deeper drilling. 2000 acres that wouldn't be enough to hold all of the port a potties they would need.
Frank
Summary of Weekly Petroleum Data for the Week Ending May 30, 2008
U.S. crude oil refinery inputs averaged nearly 15.5 million barrels per day
during the week ending May 30, up 183 thousand barrels per day from the previous
week's average. Refineries operated at 89.7 percent of their operable capacity
last week. Gasoline production moved higher compared to the previous week,
averaging 9.1 million barrels per day. Distillate fuel production increased last
week, averaging 4.5 million barrels per day.
U.S. crude oil imports averaged about 9.8 million barrels per day last week, up
827 thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged nearly 9.5 million barrels per day, 813 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components) last
week averaged 1.3 million barrels per day. Distillate fuel imports averaged 211
thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 4.8 million barrels from the previous week. At
306.8 million barrels, U.S. crude oil inventories are in the lower half of the
average range for this time of year. Total motor gasoline inventories increased
by 2.9 million barrels last week, and are in the lower half of the average
range. Both finished gasoline inventories and gasoline blending components
inventories increased last week. Distillate fuel inventories increased by 2.3
million barrels, and are in the lower half of the average range for this time of
year. Propane/propylene inventories increased by 2.3 million barrels last week
but remain near the bottom of the average range. Total commercial petroleum
inventories increased by 0.2 million barrels last week, and are in the lower
half of the average range for this time of year.
Total products supplied over the last four-week period has averaged nearly 20.4
million barrels per day, down by 1.1 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 1.4 percent from the same period last year. Distillate
fuel demand has averaged 4.1 million barrels per day over the last four weeks,
up 1.6 percent from the same period last year. Jet fuel demand is 0.3 percent
higher 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 05/30/2008
Cumulative
Four Week Averages Daily Averages
Petroleum Supply Ending % 150 Days %
(Thousand Barrels per Day) 05/30/08 05/30/07 Change 2008 2007 Chg
------------------------------------------------------------------------------------
Crude Oil Supply
Domestic Production (1) 5,110 5,240 -2.5 5,111 5,196 -1.6
Net Imports (Incl SPR) (2) 9,453 10,256 -7.8 9,685 9,999 -3.1
Gross Imports (Excl SPR) 9,479 10,292 -7.9 9,708 10,023 -3.1
SPR Imports 0 0 -- 0 0 --
Exports 26 36 -27.8 23 24 -4.2
SPR Stocks W/D or Added -99 -28 -- -50 -11 --
Other Stocks W/D or Added 673 -354 -- -111 -238 --
Product Supplied and Losses 0 0 -- 0 0 --
Unaccounted-for Crude Oil (3) 93 255 -- 76 -13 --
Crude Oil Input to Refineries 15,229 15,369 -0.9 14,712 14,934 -1.5
whew...THAT will take some digesting.. lol
Hope I'm smart enough to go in and read it again and try to understand a part of it.
Thanks.. :)
I don't think they are lined up so you have to count over
Frank,
A diagram I saw looked like a bunch of roto rooter snakes going out all over the place.
I keep hearing about the arguments of Florida residents about the Atlantic prospects . Some argue it will hurt the tourist trade, some are concerned about the marine impact. I've never seen it split along party lines like that chart. I keep hearing about lots of oil shale in Wyoming, Montana and to some extent Colorado. I'll bet residents there would love to get income from it like Alaska residents do. I also would like to see ANWR left in reserve, but not because of damage. I've been up there and was well pleased with how Alaska is a pretty good steward of their land. I've seen the pipeline and frankly, the softening permafrost is more of a problem. The animals don't seem to pay much attention to it. Alaskans fuss about their politicians (and the bridge to nowhere project) just like we do. They are more worried about depleting fish, such as Pollack. They do know what they have and try to manage it well. I've been to Prince William Sound and Cordova and the area where the Exxon Valdez spill was. Nature has recovered well, but there are still areas where there is evidence of oily rocks. I'm more concerned about the Pebble gold mine action.
It is my understanding the US Congress passed a bill prohibiting drilling up to 125 miles off shore from Florida.
It is also my understanding that the Chinese are drilling oil 100 miles off shore from Florida--for Cuba.
Colorado has a lot of oil shale (ie trillions of tons) on the west slope but there seems to be some discussion as to whether this oil has the same "nutritional" value as oil pumped out of the ground.
Yup, that's just what I heard also. So while we're fussin', they're drillin.' :laugh: :laugh: I know oil shale was talked about many years ago, but it was too costly at that time to extract it. I'm sure it's not as "rich" as liquid oil, but surely if oil can be reclaimed from used tires, shale oil is good for something.
I have lived in Valdez, Ak and thought this info may be helpful to your discussion. This was sent to me by my former High School girlfriend who is a Petroleum Engineer for the state of Alaska.
http://www.anwr.org/
1. Only 8% of ANWR Would Be Considered for Exploration Only the 1.5 million acre or 8% on the northern coast of ANWR is being considered for development. The remaining 17.5 million acres or 92% of ANWR will remain permanently closed to any kind of development. If oil is discovered, less than 2000 acres of the over 1.5 million acres of the Coastal Plain would be affected. That¹s less than half of one percent of ANWR that would be affected by production activity.
2. Revenues to the State and Federal Treasury Federal revenues would be enhanced by billions of dollars from bonus bids, lease rentals, royalties and taxes. Estimates on bonus bids for ANWR by the Office of Management and Budget and the Department of Interior for the first 5 years after Congressional approval are $4.2 billion. Royalty and tax estimates for the life of the 10-02 fields were estimated by the Office of Management and Budget from $152-237 billion.
3. Jobs To Be Created Between 250,000 and 735,000 ANWR jobs are estimated to be created by development of the Coastal Plain.
4. Economic Impact Between 1977 and 2004, North Slope oil field development and production activity contributed over $50 billion to the nations economy, directly impacting each state in the union.
5. America's Best Chance for a Major Discovery The Coastal Plain of ANWR is America's best possibility for the discovery of another giant "Prudhoe Bay-sized" oil and gas discovery in North America. U.S. Department of Interior estimates range from 9 to 16 billion barrels of recoverable oil.
6. North Slope Production in Decline The North Slope oil fields currently provide the U.S. with nearly 16% of it's domestic production and since 1988 this production has been on the decline. Peak production was reached in 1980 of two million barrels a day, but has been declining to a current level of 731,000 barrels a day.
7. Imported Oil Too Costly In 2007, the US imported an average of 60% of its oil and during certain months up to 64%. That equates to over $330 billion in oil imports. That's $37.75 million per hour gone out of our economy! Factor in the cost to defend our imported oil, and the costs in jobs and industry sent abroad, the total would be nearly a trillion dollars.
8. No Negative Impact on Animals Oil and gas development and wildlife are successfully coexisting in Alaska 's arctic. For example, the Central Arctic Caribou Herd (CACH) which migrates through Prudhoe Bay has grown from 3000 animals to its current level of 32,000 animals. The arctic oil fields have very healthy brown bear, fox and bird populations equal to their surrounding areas.
9. Arctic Technology Advanced technology has greatly reduced the 'footprint" of arctic oil development. If Prudhoe Bay were built today, the footprint would be 1,526 acres, 64% smaller.
10. Alaskans Support More than 75% of Alaskans favor exploration and production in ANWR. The democratically elected Alaska State Legislatures, congressional delegations, and Governors elected over the past 25 years have unanimously supported opening the Coastal Plain of ANWR. The Inupiat Eskimos who live in and near ANWR support onshore oil development on the Coastal Plain.
Sounds good to me. So, who is against it?
In 2005, the last time it was up for vote, both Kansas Senators voted for it and it passed the Senate.
The Elk County US Representative voted in favor but the full house turned it down.
Crude Oil
Crude oil futures soared by more than $6.00 a barrel to over $134 this morning, bringing the gains for the last two days to $12 as the dollar weakened further on a jump in the jobless rate in
the U.S. to 5.5 %. Remarks by Israel's transport minister that an attack on Iranian nuclear sites looked "unavoidable" has also helped to drive prices higher. A recent forecast by a major
bank is predicting $150 oil by July 4th. Crude hit a record high of $135 last month and had retreated to $122 before yesterday's rally. The fall in the dollar put longer-term worries about
weakening demand on the back burner. World demand growth is still primarily in China, the Middle East and Latin America and through the summer, there is no reason to expect a materi
slowdown in demand.
Natural Gas
Gas futures are currently trading nearly 21 cents above yesterday's $12.63 close as hot weather in major consuming regions and steep rises in crude oil prices combined to push natural
gas prices higher. Weather forecasts for next week suggest temperature highs in parts of the Northeast, New York City in particular, of nearly 100 degrees. These are extremely hot
temperatures in June are above normal or for any time of year in NYC. Natural gas prices have doubled since the Jan. 08 contract settle of $6.38/MMBtu, currently trading at $12.74/MMBtu.
Thanks, DNA. That was much better than what I wrote. Very helpful. It sure is beautiful around that area. Any thoughts on the gold mine?
July Crude Oil closed up $10.75 at $138.54, another all time high.
Frank
I don't want to re-flame this fire, and I may have missed some of it...
But I do have to agree a bit with Pam about oil drilling causing a huge mess if not maintained properly. There are many messes around this country that it seems that people don't care about. Junk-filled oil fields with old, rusty pipe. Areas around oil wells that have no vegetation growth due to spills. Leftover old wells that have just been abandoned. But, I know there are places and companies that do pride themselves on keeping oil fields clean and neat and less of a negative effect on the area around it.
Frank; did you (or have you) explained if drilling in AK will be different? Will they be using companies that will work together with the nature groups?
Tobina, the huge amount of capital that will be required to drill an develop the ANWR wiill dictate that only Major companies will be there. Tobina I agree that there are many old abandoned wellsites around the country, but I would venture that none of them were left there by the Major Oil Companies. My first jobs in the oil field was working on Rotary drilling rigs almost 50 years ago and even then the Major Oil Companies were very strict about the locations and how clean they were kept. The company that I do most of my work for now operates wells on Federal Lands and I can tell you that the Feds have very strict policies and rules on ckleaning up any pollution and maintainig thew production equipment in good condition to avoid any contamination. The Feds will be even more strict when drilling begins in the ANWR. I have said it before and I will say it again, "anytime you are using men, machinery and have Mother nature involved accidents and failures can and will happen". It is almost impossible to do a pilot project to see how it works as it would be to costly to lay the transportation lines out. WE could reinject the gas and not have to transport it but the crude oil is another problem.
Frank
Diane, the Pebble Goldmine near Lake Iliamna is a much more controversial topic in Alaska than drilling in ANWR I was unaware of the proposed mine. What I can tell you is, after a quick internet search on the subject, that any of my friends in Valdez will be very much opposed to the mine. The opposition comes from the Salmon fishing industry and most of the native villages in the area. I will investigate this more, since it is new to me. It may take a while to give you more info. Since most of my friends are right in the middle of the Copper River Salmon run. I will let you know what I find out. Thanks for informing me about the mine.
David (DNA)
That Copper River salmon sure tastes good! We were in Cordova in 2005 when the lots were drawn and the little boats were starting to go out for their turn to fish. I thought the lottery system was very interesting. I think some folks made more money by selling their early number than by selling their catch. I learned about the "bow pickers" and the "stern pickers". It's a fascinating way of life. I'll enjoy hearing more about the Pebble.
yummmmm.. I love salmon..and I bet the fresh right off the boat is to die for.
Makes my mouth water..and I'm not even hungry right now. :-\
Sighhhhhhhhhh..okay!
I got this request from a gal who is a "lurker" on this forum.. :)
But she wants this up on here.. and sent it to me to put up.
So being the "nice" poerson I am.. I said I would..
((You all realize that my ass wouldn't be as far in the controversial sling it is in if everyone put their own stuff up.)) ;)
But.......I'll take it for the team.. cause I really DO think this needs to be listened to.
There is 8 parts to this.
It is very interesting... VERY INTERESTING!
Frank.. I need your input on this.
In fact, it would be interesting to hear what others have to say too.
each part is on the site...but this is part 1)
I have listened to all of his parts... plus some of his other stuff.
This man is no dummy....
Teresa, I got up around 4:30 this morning and I listened to all 8 of Lindsey Williams' segments. I intend to listen to them again. What can you say when there is so much controversal information. My first thought is that he is trying to sell books. I know that you couldn't begin to drill and produce the ANWR and build the infrastrcture in one year and have crude oil flowing into the lower 48 in that short of time. The real point that made me think he was making sensationalism to sell books was when he made the inuendo that JFK was assasinated because he knew about this big conspiracy. I feel that Lee Harvey Oswald acted alone or if in a conspiracy it was with Castro. The other big point is if all of the people that he indicated have or could be killed for knowing this information, why has he not been assasinated. Reserves "ESTIMATES" in an area covering the mass that ANWR is are not firm and absolute , they are calculated and estimated. All in all it is interesting and certainly there is no question that the US and World debt is of GIGANTIC proportions and there will be a day of reckoning. There are massive amounts of Natural Gas being reinjected in the North Slope and ConocoPhillips and partners have been working on getting approval and permits to lay a pipeline to the lower 48 and to transport the gas. It will happen someday but it will take alot of time an massive investment. When people complain about the oil company profits, they need to realize that they are reinvesting those profits in to projects like the Alaska to lower 48 gas pipeline. That project could take 10 + years and 20 Billion dollars, the oil company group that does it will not see a dime return for 10 years.
I will listen again a take notes this time. I would like to know how many millions this guy has made from the 6 or so books he has written. God help us all if he is even half right.
You know the current oil "crisis" may be our last warning to save Earth from the pollution of waste burning from Petroleum Based fuels, if we do develop and have 200 years of oil for Americans to waste I think it would spell disaster. Americans are the most wasteful energy users on Earth, we can change that with the development of altrenate sources of fuel, for the sake of my children and grandchildren I hope we continue to reduce consumption and develop other sources of power such as Hydrogen Fission, electric and whatever else that is clean and non polluting.
Frank
I just googled this guy, he is one of those folks who preach about the end times in a sensational way. His site sells survival gear, a red flag IMO. I will try to locate his book and read it. It might be interesting, although some of the others looked interesting also. I love sci-fi!
Thanks for the input Frank.
**If everyone publically knew what I and those closest to me have done for .." when the survival times" hit.. I would probably be deemed "a sci-fi project myself. ;) ** But I'd rather be prepared..self sufficient and safe, than panicked, caught with my shorts down(so to say) :)
When I listened to more of him.. I figured as much on his marketing his books.. but he isn't stupid..and to have THAT much information (even some of it extreme) doesn't get accumulated overnight and without lots of research.. And he has some valid points and statistics. So it leaves me listening..but not understanding what I am hearing.
I have to say that I kind of fast forwarded on a little bit of it in places. ( I am not really smart enough or up on all of it enough to know in full what he was talking about. )
I feel in your response that you are not totally disputing him ..but that he has maybe sensationalized some of the information ..for the sake of his books? I realize too that no one of us has all the answers ..but I value your opinion and knowledge on this subject.. That is why I wanted your take on it.
Thanks so much for taking the time to listen and comment for me.
I recieved this from my Congressman in West Texas, in response to some questions I e-mailed him about. It is a bit slanted politically but it also contains good information on some things that need to be done now and in the future.
Frank
House Republicans Unveil Energy Plan, Real Solutions for American
Families
Putnam: "Washington is broken, and it is no more apparent than on soaring energy and gas
prices under the Democratic Congress"
May 21, 2007
At a news conference on the steps of the U.S. Capitol today, House Republicans unveiled our plan to deliver real energy
solutions and lower gas prices for Americans facing pain at the pump. Congressman Adam Putnam (R-FL), Chairman of the
House Republican Conference, issued the following statement:
"Washington is broken, and it is no more apparent than on soaring energy and gas prices under the Democrat Congress.
"More than two years ago, Speaker Pelosi promised a 'commonsense plan to help bring down skyrocketing gas prices.' Since
Democrats took control of Congress, gas prices have risen more than 60 percent and Americans are paying a hefty Pelosi
Premium at the pump. This is not the change Democrats promised Americans, and it is the not the change Americans
deserve.
"The American people are hurting from a slowing economy, the housing crunch and rising costs of living. They are tired of
waiting for the long-promised 'commonsense plan' to lower gas prices. They are impatient with a Democrat energy policy that
is chock full of job-killing tax hikes, burdensome regulation and no new American energy.
"Today, House Republicans unveiled an energy plan that offers meaningful solutions for American families. Through this
agenda, we will increase production of American-made energy – including next-generation oil, natural gas, clean-coal,
renewable and alternative energies – while protecting our nation's natural resources. We will cut red tape and increase energy
supplies by spurring the construction of new refineries and nuclear power plants, as many European nations are doing. And
we will make America more energy efficient by offering significant conservation tax breaks to Americans who invest in green
technologies for their home, car or business.
"The American people have had it with skyrocketing gas prices and a Democrat Congress that offers no meaningful solutions.
Our House Republican plan provides real solutions to produce American-made energy, help lower gas prices and make us
more energy independent. That is the change America deserves."
##
House Republicans Work to Lower Energy Prices
Republicans are committed to a comprehensive energy reform policy that will boost supplies of all forms of energy right here
at home to reduce our dependence on foreign sources of energy, protect us against blackmail by foreign dictators, create
American jobs, and grow our economy. Our agenda aims to increase supply of American energy, improve energy efficiency,
and encourage investment in alternative and renewable energy technologies. With 21st Century technologies and the strictest
environmental standards in the world, America must produce more of our own energy right here at home and protect our
environment at the same time. The American people deserve to use their own resources and keep the cost of energy from
skyrocketing further.
When it comes to energy production, while our global competitors are pursuing 21st Century technologies, America is stuck in
the 1970s. On electricity production alone, for example, just to keep up with new demand, by 2030, the United States must
build 747 NEW coal plants, 52 NEW nuclear plants, 2,000 NEW hydroelectric generators, and add 13,000 NEW megawatts of
renewable power. The dire need to increase domestic oil and gas production is no different. Yet, the Democratic Majority
refuses to lead.
How Washington is Broken:
The Democratic Majority's "Just Say No" Energy Policy Darkens America's Energy Future:
No production of American energy resources, which increases reliance on unstable foreign sources such as Venezuela,
Iran, and Saudi Arabia.
No new oil refineries built, which increases gas prices and reliance on imported fuel.
No new transmission lines, which hinders renewable electricity getting to consumers and reduces reliability.
No new coal power plants, which increases electricity prices and stifles the economy.
No new advanced zero-emission nuclear plants, which blocks one of the cleanest, most reliable energy sources
available.
No new zero-emission hydro-electric plants, which blocks reliable clean energy.
No liquefied natural gas terminals, which increases prices and ships jobs overseas.
Democrats' prohibitions on producing American energy resources have made the U.S. more reliant on imported oil and
http://www.gop.gov/c/journal_articles/view_article_content_noheader?g...
2 of 3 5/28/2008 4:58 PM
natural gas.
Democrats' roadblocks on the utilization of energy from our North American neighbors, have made the U.S. more
reliant on the Organization of Petroleum Exporting Countries (OPEC).
Democrats' unfavorable tax rules have sent energy investment and production abroad.
Democrats' unnecessary red-tape and bureaucracy have made it nearly impossible to move forward on new clean
power generation.
Democrats' 1970s-era energy policies have canceled dozens of power plants, reducing electricity supplies and
increasing electricity costs to consumers.
Democrats' refusal to provide incentives for individuals and businesses has made it difficult to invest in efficient
technologies.
How Republican Solutions Will Fix It:
Meeting Our Energy Needs with American Made Energy.
The comprehensive House Republican plan will fund research and development of technologies and innovations which
advance the use of renewable and domestically available energy sources, increase energy efficiency, and ease the
environmental impacts of energy use.
1) Increasing the Production of American-Made Energy in an Environmentally-Safe Way
a. Support actions that reduce America's dependence on energy from unstable foreign governments and dictatorships by
increasing environmentally-safe production of oil and natural gas in areas such as the arctic coastal plain and in deep ocean
energy resources; and
b. Promote unconventional fuels such as coal-to-liquids technology and recovering our vast oil shale reserves by:
Increasing access for environmentally responsible development of conventional and unconventional domestic oil and
natural gas production;
Providing coal-to-liquids financing and tax incentives;
Advancing the commercialization of the nation's two trillion barrel shale oil resource, 80 percent of which occurs on
government-owned land in the West. This is enough to supply all of America's needs for over two centuries.
2) Promoting New, Clean, and Reliable Sources of Energy
a. Encourage more production of environmentally-safe energy to increase the use of our vast domestic supply, reduce
emissions, and keep coal-dependent communities strong; and
b. Expand emissions-free nuclear power, including long term nuclear waste storage solutions and recycling spent fuel by:
Providing production and investment tax credits for all new base-load electricity projects such as advanced nuclear
power and clean coal; and
Allowing immediate expensing for new renewable or zero emission power.
3) Cutting Red Tape and Increasing the Supply of American-Made Fuel and Energy
a. Expedite permitting for enhanced oil recovery projects, including CO2 delivery and injection, as well as permitting for new
refining capacity;
b. Improve environmental review and permitting to encourage the deployment of technologies which increase the efficiency
of existing power plants; and
c. End ill-advised policies that have led to the proliferation of unique gasoline and diesel fuel formulations known as
"boutique fuels," which have fragmented our motor fuels distribution system, choked off supply, and exacerbated the
already-painful Pelosi Premium.
4) Encouraging Greater Energy Efficiency by Offering Conservation Tax Incentives
a. Support technologies to help increase energy efficiency in all sectors of the American economy, including removing
bureaucratic regulatory barriers that prevent businesses from upgrading their facilities with newer, more efficient energy
technologies, by:
Making home energy efficiency upgrades tax deductable;
Providing incentives for home builders and homeowners to make their homes more energy efficient;
Offering investment expensing for industrial and commercial building efficiency upgrades;
Extending the residential and business solar and fuel cell investment tax credits, with enhancements to the residential
solar credit ($2,000 per H kw installed);
Extending the fiber-optic distributed sunlight investment tax credit; and
Increasing the energy efficiency of government-owned buildings.
http://www.gop.gov/c/journal_articles/view_article_content_noheader?g...
3
"Pelosi Premium" at the pump.
I like the ring of that.
Waldo, that might be a good by-word for McCain to use in his speeches.
Frank
July Crude Oil closed down $4.19/BBL at $134.35 for the day.
Frank
How many years did the republicans have control of congress before this last election?
The Republican Revolution or Revolution of '94 is what the Republican Party of the United States dubbed their success in the 1994 U.S. midterm elections, which resulted in a net gain of 54 seats in the House of Representatives, and a pickup of eight seats in the Senate.
The day after the election, Democratic Senator Richard Shelby of Alabama changed parties, becoming a Republican.
The gains in seats in the mid-term election resulted in the Republicans gaining control of both the House and the Senate in January 1995. Republicans had not held the majority in the House for forty years, since the 83rd Congress (elected in 1952) under Republican Speaker Joseph William Martin, Jr..
Large Republican gains were made in state houses as well when the GOP picked up twelve governor seats and 472 legislative seats. In so doing, it took control of 20 state legislatures from the Democrats. Prior to this, Republican had not held the majority of governorships since 1972. In addition, this was the first time in 50 years that the GOP controlled a majority of state legislatures.
Discontent against the Democrats was foreshadowed by a string of elections after 1992, the more notable among them being the capture of the mayoralties of New York and Los Angeles by the Republicans in 1993. In that same year, Christine Todd Whitman captured the New Jersey governorship from the Democrats and Bret Schundler became the mayor of overwhelmingly Democratic Jersey City. The pace of Republican victories in off-year elections gained momentum. Republican Kay Bailey Hutchison took a senate seat from the Democrats in Texas. Republican Ron Lewis picked up a congressional seat from Democrats in Kentucky in May 1994.
Democratic President Bill Clinton said in his January 1996 State of the Union Address, "The era of big government is over." Later in 1996, Republicans would fail to defeat Clinton's re-election bid.
The front month, July 2008 crude, settled at $131.31 down $3.04 on the day.
Frank
Never thought I would see the day that I couldn't afford to go to Walmart :'( :'( :'( :'( :'(
We did pretty well on gas coming here.$3.73 to $ 3.99. never broke $4.00
Well, that's good news! So, are you in Moline tonight? :) :) :)
We are indeed. Drove around some and had a good burger at Swinging Bridge Cafe. Very nice people here.
And tonight there are two more.
Well thank you. :-*
WELCOME TO KANSAS!
Thanks! ;D
Diane, If you read this, while in Howard, and have a chance to do so, I'd love for you to put a flower on your Grandmother Dessie's grave, for me. I loved her dearly.
Below is the weekly Petroleum Inventory report, unfortunately it is somewhat bullish and Crude oil is up considerably at this moment.
Frank
Summary of Weekly Petroleum Data for the Week Ending June 6, 2008
U.S. crude oil refinery inputs averaged 15.3 million barrels per day during the
week ending June 6, down 161 thousand barrels per day from the previous week's
average. Refineries operated at 88.6 percent of their operable capacity last
week. Gasoline production moved lower compared to the previous week, averaging
about 9.0 million barrels per day. Distillate fuel production decreased last
week, averaging nearly 4.5 million barrels per day.
U.S. crude oil imports averaged about 9.7 million barrels per day last week,
down 98 thousand barrels per day from the previous week. Over the last four
weeks, crude oil imports have averaged 9.4 million barrels per day, 819 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components) last
week averaged about 1.2 million barrels per day. Distillate fuel imports
averaged127 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 4.6 million barrels from the previous week. At
302.2 million barrels, U.S. crude oil inventories are at the lower boundary of
the average range for this time of year. Total motor gasoline inventories
increased by 1.0 million barrels last week, and are in the lower half of the
average range. Finished gasoline inventories remained unchanged last week while
gasoline blending components inventories increased during this same time.
Distillate fuel inventories increased by 2.3 million barrels, and are in the
lower half of the average range for this time of year. Propane/propylene
inventories increased by 0.5 million barrels last week but remain near the
bottom of the average range. Total commercial petroleum inventories increased by
0.3 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 20.4
million barrels per day, down by 1.3 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 1.3 percent from the same period last year. Distillate
fuel demand has averaged 4.1 million barrels per day over the last four weeks,
up 0.7 percent from the same period last year. Jet fuel demand is 0.4 percent
higher over the last four weeks compared to the same four-week period last year.
July,front month, Crude Oil closed up $5.07 at $136.38. Inventories were down and the longs bought alot of contracts. I am disappointed that Washington is doing absolutely nothing, or least that is what it appears on the surface. I would like to see a National Speed limit of 55MPH to start with.
Frank
Frank; I'm not sure people are taking it as far as only 55 mph, but being on the road lately I have observed that people are starting to slow down. I am! (except when trying to get home ahead of the storms last week)
I filled up at 4.00.9 today.
A gasoline station in northeastern Colorado dropped the .9 a couple years ago.
If the price is supposed to be 4.00.9 he sells it at 4.01.
Says he has never received a complaint.
He makes an extra 2 cents on every 20 gallons pumped.
Dale, I read your message and I will place a flower for you. Grandma would be so pleased you thought of her.Thank you.
This may provide some relief for the short term. Hopefully steps will be taken for long term conservation.
Frank
Oil Falls on Dollar Gain, Report Saudi Arabia Will Boost Output
By Alexander Kwiatkowski
June 13 (Bloomberg) -- Crude oil fell as the dollar headed for its biggest weekly gain in almost three years, reducing the appeal of commodities, and on a report Saudi Arabia plans a ``sizeable'' increase in crude production.
Oil has fallen 2.3 percent this week as the dollar has risen against the euro, making dollar-denominated commodities more expensive for buyers in other currencies. Saudi Arabia is likely to announce higher oil production at a June 22 meeting with consumers, the Middle East Economic Survey reported today
``The dollar is still a key input,'' said Olivier Jakob, managing director of Petromatrix Gmbh in Zug, Switzerland. ``The market is becoming more and more dominated by financial flows.''
Crude oil for July delivery fell as much as $1.94, or 1.4 percent, to $134.80 a barrel on the New York Mercantile Exchange. It traded at $135a barrel at 12:02 p.m. London time. Futures reached a record $139.12 a barrel on June 6.
The Saudi government considers that current prices threaten the global economy and hurt the long-term interests of oil producers, said the weekly newsletter based in Cyprus, citing Ibrahim al-Muhanna, an adviser to Oil Minister Ali al-Naimi.
Al-Muhanna wouldn't comment on the possible actions to be taken by the kingdom, said MEES, which didn't cite the source of information for a likely production increase from Saudi Arabia.
Brent crude oil for July settlement fell as much as $1.50, or 1.1 percent, to $134.59 a barrel on London's ICE Futures Europe exchange. It traded at $134.62 at 11:39 a.m. local time. Prices climbed to a record $138.12 on June 6.
The July contract expires today. The more-active August contract was at $135.92 a barrel, down $1.33, at 11:44 a.m.
Gasoline Demand
The dollar traded at $1.5322 per euro at 11:44 a.m. in London, compared with $1.5439 in New York yesterday. The dollar has risen 2.5 percent this week, the most since June 2005.
Oil prices may fall next week because of rising U.S. fuel inventories and weakening gasoline demand, as consumers react to record prices, according to a Bloomberg News survey.
Fourteen of 29 analysts surveyed, or 48 percent, said prices will decline through June 20. Six of the respondents, or 21 percent, said oil will rise and nine forecast little change. Last week 64 percent said futures would fall.
U.S. gasoline supplies rose 998,000 barrels to 210.1 million barrels last week, the Energy Department said June 11.
Thanks Frank, I always enjoy reading your posting. Dale, I put a pretty red rose with babies breath and a bit of fern on Grandma Dessie's grave and told her it was from you.
Diane, if you get to Bartlesville, we will buy your lunch or Dinner. I think Uncle Ted would like that.
Frank
Front Month Crude, July, is trading down $2.34 at $134.40/BBL, the trading in the outer months is off with fewer contracts. The improvement in the Dollar and the rumor that the Saudis may or will increase production is pushing it down some.
Frank
Thanks Diane... You are so sweet. I am envious of all these folks back home getting to meet and talk with you. I hope the rest of your trip goes well.
Dale, it was a pleasure. Frank, you are too far south for this time, but I'll hold you to it next time!
You got it. Have a safe trip on.
Frank
July Crude oil traded as high as $138.69, + $3.83, it ended the day and settled at $134.61, down $0.25 on the day. The Saudi's hints of increasing production are making the traders nervous on long contracts.
Frank
Fuel in New Mexico is $4.19 -$4.29 a gallon. :o
Ouch! It was $4.04 in Howard on Saturday. It had been two weeks since I was out; I had filled up at $3.83 in Caney then. I feel like a mole person who has just returned to civilization every time I go out now. The prices of everything are going up so fast.
Regular is $3.75 in Bartlesville.
Gas is 3.73 in Wichita.
We just paid $4.07 for real gas in Wall S.D. The ethanol blend was cheaper but the mileage is worse. There has been some really sneaky advertising up here. They have road signs that say one thing but the pump is something else. They have "super" unleaded which has even more ethanol in it. Some have a discount for cash, but it's at the building, not on the pump.
Crude Oil Drops for a Third Day Amid Economic Slowdown Concern
By Grant Smith
June 17 (Bloomberg) -- Crude oil declined for a third day amid concerns that slower economic growth will curb consumption of oil products.
Oil has retreated more than $7 from yesterday's record of $139.89 a barrel. German investor confidence dropped to the lowest in more than 15 years in June as surging inflation hit Europe's largest economy. The U.K. inflation rate rose to the highest since at least 1997 in May, paving the way for higher interest rates.
``Worries about economic inflation on both sides of the Atlantic are bearish for oil,'' said Rob Laughlin, senior broker at MF Global Ltd. in London.
Crude oil for July delivery fell as much as $2.11, or 1.6 percent, to $132.50 a barrel on the New York Mercantile Exchange and traded at $132.82 at 11:29 a.m. London time. Yesterday, the contract touched a record $139.89.
StatoilHydro ASA, Norway's largest oil and natural-gas producer, said its North Sea Oseberg field may resume operations this week after a fire on platform A halted production June 15.
Brent crude oil for August settlement was at $132.57 a barrel, $2.14 lower, on London's ICE Futures Europe Exchange at 11:29 a.m. local time. Prices reached a record $139.32 a barrel yesterday.
Saudi Arabia, hosting a forum in Jeddah this weekend to address the impact of record prices on importers, will raise output 200,000 barrels to 9.7 million barrels a day next month, King Abdullah told United Nations Secretary-General Ban Ki-Moon, according to a UN spokesman.
`Moving Supply'
``With the pressure OPEC has seen from the Western world that they need to respond, they've been taking the tack that demand is strong,'' said Mark Pervan, a commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. ``That gives them a reason to start moving supply upward.''
The kingdom has called a meeting in Jeddah on June 22 to help stabilize prices. Crude oil fell 2.7 percent in New York last week as Saudi Oil Minister Ali al-Naimi described the surge in the commodity as ``unjustified'' and called a meeting of producers, major industrial nations and banks.
U.S. crude stockpiles probably dropped 1.5 million barrels in the week ended June 13 from 302.2 million barrels, according to a Bloomberg survey before tomorrow's Energy Department report. Gasoline stockpiles probably climbed 1 million barrels from 210.1 million barrels the prior week, according to the median of responses.
The price for crude oil has fallen for several days. So why is the price of gasoline still $4.04 here in Howard? It doesn't take that long for the price to go up when crude oil goes up.
Wilma, your price probably won't change until your dealer gets in a new load of Gasoline, and then the price will go up or down depending on their cost of the new product. Some dealers in our area change it up or down everyday with the wholesale cost that their supply post. This A.M. it is $3.73 in Bartlesville.
Frank
July and August crude are trading down this morning.
Frank
I think my real question is why does gasoline go up the same day as crude oil goes up, but doesn't come down when crude oil drops? This happened all the time in Wichita. Yesterday, Lanning's gasoline was 5 cents cheaper than P & J and we get better mileage from it.
No, from what I have observed the dealers/stations that change daily generally go up or down depending on the Gasoline Markets/Wholesale prices which generally moves with the crude oil price. Gasoline and Diesel etc do not always move in step with crude oil prices, there are many other factors that are considered. Some dealers only change their price when they get a new load of product and the wholesale price to them is up or down. It stands to reason that the further a station is from the source such as the refinery or storage terminal the higher their cost and as a result the price to you. Gasoilne is not a big money maker for most service stations. 7-11 sells gasoline to get people in to buy high margin items like Cokes, Coffee, snacks etc, and I am sure that is part of PJs program.
Nearly all of the stations here in Bartlesville move with the Futures pricing of crude and products.
Frank
Frank; how does corn prices (corn = ethanol) affect the price of gas? I've heard that if the price of gas drops a little, it will take the pressure off of corn (not competing so hard against gas), so the price of corn will go down... which will lead to more people being able to use it for feeding cattle... which will lead to food prices going down, too. Not sure if that's all right or even make sense?
I am not very knowledgeable on Ethanol but have read some on it. I have always been opposed to the use of Food to make Gasoline for people to waste driving vehicles with oversized Engines, when the world has so many hungry people. Right now the Flooding in the Cornbelt is probably driving Corn/Grain futures up more than Ethanol. I do know that Ethanol does not get as good gas mileage as Crude oil derived gasoline and that there are some opinions that Ethanol will damage some engines, Gaskets etc.
If we continue using more feed grains for Gasoline we will push Meat/food prices higher and higher and I think it will have disatorous effects on our economy, crime and population as a whole. Hopefully America will be a leader in Conservation and we will reduce our dependence on oil in the future. This probably doesn't answer your question very well but hopefully it will help.
Frank
Now, I have heard some interesting things about sugar cane ethanol, though. (Have we discussed this before?) They can make ethanol from sugar cane, without decreasing the amount of sugar that's made. Because sugar cane ethanol is made from the by-product of making sugar from sugar cane. So, we actually get MORE use from the original sugar cane product; both sugar and ethanol. And the ethanol-making process is also supposed to be more efficient than corn-based ethanol.
I don't know much about the mileage and the damage to engines for either corn or sugarcane ethanol, but finding another alternative energy source that is American made seems like a good thing to me. And I still agree that Conservation is still the best method.
Tobina, Seaweed/Algae is also being considered for Ethanol. I have read that it is the Fastest reproducing and most plentiful possibility. Seaweed/Algae would not take up Farmland that can be used for Food. The big thing is still long range conservation, America is the most Energy using/Wasteful Nation on Earth by far and that has to change. The World Population is growing at compound rates and so is energy consumption.
Frank
A Denver Lincoln dealer today was advertising Lincoln Mark pickup trucks for $14,000 off list price.
The price is still $31,000.
The truck has a 30 to 36 gallon tank and gets 12 - 16 miles per gallon.
July crude closed at $134.01 down $0.60, on a more positive note there were less long contracts than what there has been. The Crude Oil/Product inventories come out tommorrow and it will be interesting to see what the numbers are.
Frank
This is somewhat encouraging:
June 18 (Bloomberg) -- Crude oil traded little changed before a U.S. report today expected to show fuel stockpiles rose in the world's largest energy consumer, where record prices are slowing demand.
The Energy Department report may show U.S. gasoline stockpiles rose 850,000 barrels last week, according to the median of forecasts in a Bloomberg News survey. Consumers purchased an average 9.305 million barrels a day of motor fuels last week, 3.2 percent less than a year earlier, MasterCard Inc. said in its weekly SpendingPulse report yesterday.
``The U.S. data this afternoon will give some indication on implied demand,'' said Eugen Weinberg, an analyst Commerzbank AG in Frankurt. ``Seasonally gasoline demand is relatively low, but at these levels price levels it should be lower.''
Crude oil for July delivery traded at $133.60 a barrel, down 41 cents, in electronic trading on the New York Mercantile Exchange at 10:36 a.m. London time. Earlier, the contract fell as much as 85 cents, or 0.6 percent, to $133.16 a barrel.
Futures have fallen 4.3 percent since reaching a record $139.89 a barrel on June 16. Still, prices are 93 percent higher than a year earlier.
Inventories are out and there was some decrease in Gasoline and Diesel Consumption verses last year for the same period. July Crude is trading down $1.81 at $132.20. If crude and Gasoline/Diesel were to go down very much, demand and consumption will go right back up and we will be in the same energy crunch. Hopefully there will be some mandates regarding future automobile engine requirements, more spent on research for Hybrids and alternative fuels and some long range conservation measures.
One thing I find interesting is the Democrat controlled congress and the Democrat Nominee for President are advocating big taxes burdens on the Major Oil Companies and out of the other side of their mouth they want the oil companies to spend more on Research, adding refining capacity and adding more production. Basically they are saying we want the oil companies to spend more but we want reduce what you have to spend.
Frank
They also want oil companies to spend more on alternative energy methods.
While that might sound like good advice, government should not be telling private companies what to do or how they should operate.
At some point when oil gets to a certain price, market forces will kick in and alternative energy research will automatically rev up by the oil companies or by someone else.
Does anyone feel like this is just a vicious circle?
So, prices on trucks are going down... which means that more people can afford to buy one and will be driving them more and spending more on gas.
At the same time, since Hybrids and high gas mileage cars are becoming more popular, so the prices of those cars are going up... which means that less people can afford to buy one.
Does anyone know if there are still tax breaks for people who buy a hybrid?
Tobina, heere are the current tax credits avaiable on Hybrids. If it is a leased Vehicle the leasing company gets the credit.
2008 Model Year Hybrid Vehicles
Make
Model
Credit Amount
Chevrolet
Malibu Hybrid
$1,300
Chevrolet
Tahoe Hybrid 2WD and 4WD
$2,200
Ford
Escape Hybrid 2WD
$3,000
Ford
Escape Hybrid 4WD
$2,200
GMC
Yukon Hybrid
$2,200
Honda**
Civic CVT
Purchase Date
Prior to 1/1/08
$2,100
1/1/08 -- 6/30/08
$1,050
7/1/08 -- 12/31/08
$525
1/1/09 and later
$0
Mazda
Tribute 2WD
$3,000
Mazda
Tribute 4WD
$2,200
Mercury
Mariner Hybrid 2WD
$3,000
Mercury
Mariner Hybrid 4WD
$2,200
Nissan
Altima Hybrid
$2,350
Saturn
Aura hybrid
$1,300
Saturn
Vue Green Line
$1,550
Toyota*
Camry Hybrid
Purchase Date
1/1/06 -- 9/30/06
$2,600
10/1/06 --3/31/07
$1,300
4/1/07 -- 9/30/07
$ 650
10/1/2007 and later
$ 0
Toyota*
Prius
Purchase Date
1/1/06 -- 9/30/06
$3,150
10/1/06 --3/31/07
$1,575
4/1/07 -- 9/30/07
$787.50
10/1/2007 and later
$ 0
Toyota*
Highlander Hybrid 4WD
Purchase Date
1/1/06 -- 9/30/06
$2,600
10/1/06 --3/31/07
$1,300
4/1/07 -- 9/30/07
$ 650
10/1/2007 and later
$ 0
Lexus*
RX 400h 2WD and 4WD
Purchase Date
1/1/06 -- 9/30/06
$2,200
10/1/06 --3/31/07
$1,100
4/1/07 -- 9/30/07
$ 550
10/1/2007 and later
$ 0
Lexus*
LS 600h L Hybrid
Purchase Date
1/1/06 -- 9/30/06
$1,800
10/1/06 --3/31/07
$900
4/1/07 -- 9/30/07
$ 450
10/1/2007 and later
$ 0
updated 1/2/08
Accessibility | FirstGov.gov | Freedom of Information Act | Important Links | IRS Privacy Policy | U.S. Treasury
I think the automobile corporations will be getting out of the large vehicle business.
GM has already said they will be going to smaller more fuel efficient vehicles.
Europe, though, long ago went to smaller more efficient cars and they still pay $9-11 per gallon. Of course, part of this is going to support a socialistic lifestyle.
This same thing happened in the 70s fuel crunch when all American manufacturers downsized, etc., but over time as people became used to the higher gas prices, vehicle size crept backup.
I would like to see a tax program on new vehicles that would Tax a new vehicle with a 10 cylinder engine $10,000.00, an 8 Cylinder $8,000.00 no tax on a 6 cylinder at present, a tax break on Hybrids and 4 cylinder vehicles. It could be announced to start in 5 years or sometime out to give the manufacturers time to prepare. On the 10 cylinder vehicles and the 8 cylinder vehicles, apply the same tax every year when they tag them. While this may seem drastic, there are many people in America that have the attitude " I have the Money and I can afford the gasoline for my big vehicle and I am going to keep driving it no matter how inefficent it is and no matter what the fuel cost." America's Achilles Heel is the availibility of Gasoline/Diesel.
Frank
Waldo, it wasn't only that people got used to it, the price of crude wnt from a high of $39.50 during the embargo back down to $10.00/Barrel in 1986, and people went right back to their pre-embargo habits. There was an excess around in the late 80s and 90s but that begin to change with the Industrial revolution in India and China, which was fueled by the US sending massive amounts of business to both countries.
Frank, I agree with the need to decrease use of fuel and move to more efficient vehicles, but I would suggest this tax be only for private-use vehicles, and not commercial or agriculture use. The American Farmer is having hardships enough already, without further taxing the vehicles they drive to put food on our tables. Talk about making food prices go higher... that would do it!
Maybe that list of vehicles was only a partial list? For some reason when I purchased my Honda Pilot, I thought I had the choice of a hybrid. But I looked at Toyota Highlanders, too, so maybe that was what I was thinking.
Tobina, there could and should be some allowances for business vehicles but I also think that Farmers and Ranchers and other businesses should be forced to down size some as well. Thousands of Dodge Pickups were used in Farming and Ranching in the early day and Dodge did not build an 8 Cylinder engine until 1955, the same with Chevrolet Gmc pickups, no V-8 until 1955. In those days many of the 2 ton trucks that were used by local truckers were 6 cylinder, they hauled cattle to Wichita, Sand from Wichita, Grain you name it, they had to shift down more often and they didn't have to run 70 MPH. Times will have to change for everyone and with will come some downsizing, adjustment and discomfort.
In regard to the Hybrid Pilot they did build some but abandoned it, their push now is for the Civic-Hybrid. My wife drives a Pilot and I drive a Ridgeline, we are a Honda Family as our Daughter is a Unit Manager for Honda Motor Corporation in California. I went from V-8s in my cars and pickups to V-6s and I know that someday I will go to 4 Cylinder and they will work fine just won't accelerate as fast.
Frank
I am going to mention a subject that I have been putting off for a long time, maybe it will make you understand why I am so adamant about energy conservation. Maybe I should start a new thread and call it " THE ACHILLES HEEL OF THE US".Our Achilles heel is our waste, consumption and need for Petroleum Based Energy. My concern is that terrorists and/or unfriendly Nations will cut off our oil supply and or destroy some of our refining. Over half of our energy needs come from foreign sources, and we are vulnerable to disruption in that supply at anytime. If any of our refineries are destroyed it could take years to replace that capacity. If someting like that happens it will bring mass problems, crime and shortages of food and other necessities and services. I hope and pray that we can get control of our consumption and supply and reduce our consumption before this happens. Hopefully we will develop better Hybrids, Hydrogen Fission, Perpetual Motion, etc and remove this Achilles Heel that our Children will face.
Frank
I meant to post this under the "ACHILLES HEEL POSTING"
Listed bekow are the Crude Oil Imports from other countries to the US. Look at who we are depending on for our supply.
The numbers below do not include the 1.1 to 1.3 Million barrels/day of Finished product that is imported, i.e., Gasoline, Diesel, Jet Fuel.
Crude Oil and Total Petroleum Imports Top 15 Countries
April 2008 Import Highlights: June 13, 2008
Preliminary monthly data on the origins of crude oil imports in April 2008 has been released and it shows that two countries exported more than 1.50 million barrels per day to the United States. Including those countries, a total of three countries exported over 1.20 million barrels per day of crude oil to the United States (see table below). The top five exporting countries accounted for 69 percent of United States crude oil imports in April while the top ten sources accounted for approximately 89 percent of all U.S. crude oil imports. The top sources of US crude oil imports for April were Canada (1.952 million barrels per day), Saudi Arabia (1.453 million barrels per day), Mexico (1.259 million barrels per day), Nigeria (1.115 million barrels per day), and Venezuela (1.019 million barrels per day). The rest of the top ten sources, in order, were Iraq (0.679 million barrels per day), Angola (0.579 million barrels per day), Algeria (0.393 million barrels per day), Brazil (0.201 million barrels per day), and Kuwait (0.176 million barrels per day). Total crude oil imports averaged 9.921 million barrels per day in April, which is an increase of (0.303) million barrels per day from March 2008. Total crude imports for April include 0.017 million barrels per day for Strategic Petroleum Reserves (SPR).
Canada remained the largest exporter of total petroleum in April, exporting 2.476 million barrels per day to the United States, which is a decrease from last month (2.542 thousand barrels per day). The second largest exporter of total petroleum was Saudi Arabia with 1.462 million barrels per day.
Crude Oil Imports (Top 15 Countries)
(Thousand Barrels per Day)
Country Apr-08 Mar-08 YTD 2008 Apr-07 YTD 2007
--------------------------------------------------------------------------------
CANADA 1,952 1,795 1,902 1,909 1,846
SAUDI ARABIA 1,453 1,535 1,519 1,458 1,358
MEXICO 1,259 1,232 1,230 1,460 1,471
NIGERIA 1,115 1,154 1,105 891 1,089
VENEZUELA 1,019 858 990 1,182 1,070
IRAQ 679 773 693 562 488
ANGOLA 579 384 469 514 556
ALGERIA 393 247 300 530 495
BRAZIL 201 188 182 175 174
KUWAIT 176 199 218 126 187
ECUADOR 160 231 203 159 200
COLOMBIA 149 135 168 79 100
CHAD 133 101 110 80 76
RUSSIA 106 108 77 269 137
LIBYA 85 75 68 45 56
Total Imports of Petroleum (Top 15 Countries)
(Thousand Barrels per Day)
Country Apr-08 Mar-08 YTD 2008 Apr-07 YTD 2007
--------------------------------------------------------------------------------
CANADA 2,476 2,542 2,518 2,479 2,425
SAUDI ARABIA 1,462 1,542 1,533 1,488 1,379
MEXICO 1,357 1,358 1,338 1,572 1,601
NIGERIA 1,214 1,174 1,152 948 1,135
VENEZUELA 1,176 1,033 1,158 1,412 1,311
IRAQ 679 773 693 562 488
ALGERIA 628 441 524 798 718
ANGOLA 591 388 478 526 571
RUSSIA 398 402 410 550 401
VIRGIN ISLANDS 331 290 338 322 353
BRAZIL 232 191 206 246 222
UNITED KINGDOM 207 218 199 386 285
KUWAIT 181 203 222 135 196
COLOMBIA 169 165 192 90 112
ECUADOR 167 238 213 159 202
Note: The data in the tables above exclude oil imports into the U.S. territories.
Frank, where do you get your facts and figures? I have found reading this information to be fascinating! I have tried to locate this type of information online before but have come up with a ton of basically unreadable stuff (looking like doctoral dissertation stuff).
Catwoman, I market Crude Oil and Natural Gas all day everyday and I subscribe to some of the Reporting Services as well as I get information from the Energy departments of some Major banks that I do Energy Hedging for operators with. Also, some of it is from the Federal Government reporting agencies and some from International reporting agencies. I start looking at the overnite access crude and natural gas futures at 6:00 A.M. every Morning. I have been involved in Crude Oil Transportation, Marketing, Purchasing, Trading, Futures and Hedging for 35 + years and I still find it fascinating and fun. I am 67 and I hope I can do it for many years to come. Catwoman when I first started with Phillips Petroleum, in 1970 Crude Oil was $2.73/Barrel at the lease, and Natural gas was going for 15cents to 25Cents an MMBTU. I was in Tanker Chartering in the 70s and one of the US big suppliers was our friends and allies NONE OTHER THAN IRAN. My how it has all changed.
I don't understand what the advantage of me trading my 8 cylinder that gets 28 miles to the gal. , and paid for, for one that is 6 clyinder with no better gas mileage and I would have payments on. Please why you think I should be paying a big penalty.
Sally, just have to ask, what type of 8 cylinder do you drive that gets 28 miles to a gallon. I drive a V-6 2000 Pontiac Montana Mini Van and it only gets 21 miles to a gallon. And on Sunday it was on around 3/4 a tank or so, and it took almost 60.00 to till it up. Just wondering. I don't blame you one bit for keeping it. If it works don't fix it!! Especially at 28 miles to a gallon!!!
Oil Falls as Stronger Dollar Limits Commodities Appeal as Hedge
June 19 (Bloomberg) -- Crude oil declined as a stronger dollar dulled the appeal of commodities as an inflation hedge, canceling the impact of an oilfield closure in Nigeria.
Oil has lost about $4 from its $139.89 a barrel record, set three days ago, as speculation the Federal Reserve will resist further interest rate cuts bolstered the U.S. currency. Royal Dutch Shell Plc said it shut down the Bonga oil field in Nigeria following the first a militant attack on the deepwater facility.
``Oil prices were a little lower this morning, with the strengthening dollar outweighing fresh supply concerns over Nigeria,'' said Andrey Kryuchenkov, an analyst at Sucden (U.K.) Ltd. in London.
Crude oil for July delivery fell as much as $1.16, or 0.9 percent, to $135.52 a barrel on the New York Mercantile Exchange, trading for $135.57 at 11:47 a.m. London time.
This kind of long, but I wanted to get it out there so you would have an idea of the massive long term investment that offshore exploration requires.Dearth of Ships Delays Drilling of Offshore Oil
As President Bush calls for repealing a ban on drilling off most of the coast of the United States, a shortage of ships used for deep-water offshore drilling promises to impede any rapid turnaround in oil exploration and supply.
In recent years, this global shortage of drill-ships has created a critical bottleneck, frustrating energy company executives and constraining their ability to exploit known reserves or find new ones. Slow growth in oil supplies, at a time of soaring demand, has been a major factor in the spike of oil and gasoline prices.
Mr. Bush called on Congress Wednesday to end a longstanding federal ban on offshore drilling and open the Arctic National Wildlife Refuge for oil exploration, arguing that the steps were needed to lower gasoline prices and bolster national security. But even as oil trades at more than $135 a barrel — up from $68 a year ago — the world's existing drill-ships are booked solid for the next five years. Some oil companies have been forced to postpone exploration while waiting for a drilling rig, executives and analysts said.
Demand is so high that shipbuilders, the biggest of whom are in Asia, have raised prices since last year by as much as $100 million a vessel to about half a billion dollars.
R20;The crunch on rigs is everywhere,R21; said Alberto Guimaraes, a senior executive at Petrobras, the Brazilian oil company that has discovered some of the most promising offshore oil but has been unable to get at it.
R20;Almost 100 percent of the oil companies are constrained in their investment program because there is no rig available,R21; he said.
As a result, drilling costs for some of the newest deepwater rigs in the Gulf of Mexico — the nation's top source of domestic oil and natural gas supplies — have reached about $600,000 a day, compared with $150,000 a day in 2002.
These record prices have spurred a new wave of drill-ship construction. This boom could lead to renewed offshore oil exploration that would eventually bring more supplies to the oil market, and push down prices.
Already, 16 new drill-ships are scheduled to be delivered to oil companies this year — more than double the number delivered over the last six years combined. In fact, 75 ultra-deepwater rigs should be delivered from 2008 to 2011, according to ODS-Petrodata, a firm that tracks drilling rigs.
Shipyards from South Korea to Norway are working overtime to meet a huge influx of orders.
Robert L. Long, the chief executive office of Transocean, the world's largest drilling company, said he has nine deepwater rigs under construction, eight of which are already under contract for periods ranging from four to seven years once they leave the shipyards. He expects to receive the ships between the beginning of 2009 and the end of 2010.
Transocean believes the deepwater market will continue to be constrained until at least 2012. Over three-quarters of the drill-ships currently under construction have already been contracted to oil companies eager to benefit from triple-digit oil prices, Mr. Long said.
Petrobras, whose full name is Petróleo Brasileiro, is expected to drive much of the growth in the booming new market. The company has outlined an aggressive program to increase its drilling capacity, and plans to contract or build 69 deepwater drill-ships by 2017.
Brazil stunned the oil world when it announced the discovery of a vast oil field 200 miles south of Rio de Janeiro last November, turning the country's deep blue waters into the world's most exciting oil frontier. Energy experts said the field could turn out to be just a small part of the largest oil discovery in 30 years.
But seven months later, the problem is still how to retrieve it. Petrobras has only three rigs capable of drilling in waters that exceed 6,500 feet, like the sites of the new fields.
But drilling constraints are not the only problem facing international oil companies, which are seeking to expand at a furious pace after a decade of underinvestment in the 1990s. They have also had to contend with a doubling of development costs across the industry in the last five years, more acute competition for energy resources, shortages in steel, engineering and manufacturing capacity, and pressures posed by an aging work force.
Also, gaining access to countries that hold oil reserves is becoming tougher as many oil-rich governments see fewer incentives to raise production as they reap the benefits of higher prices.
As a result, explorers are scouring ever-more remote corners of the globe in their hunt for hydrocarbons. That quest has found petroleum reserves off the shores of Africa and Brazil, and opened up promising exploration regions in the South China Sea, off the shore of India, and around the coast of Australia. But those sites will remain largely off limits until the new drill-ships arrive.
Most new orders for drill-ships have gone to Asian shipyards. Companies in Singapore and China have benefited, but South Korea's big three shipbuilders — Samsung Heavy Industries, Daewoo Shipbuilding and Marine Engineering and Hyundai Heavy Industries — have gotten the bulk of orders for the most complex and expensive types of vessels.
R20;The market for offshore exploration is now the hottest sector in the global shipbuilding industry,R21; said Lee Jae-kyu, shipbuilding analyst at Mirae Asset Securities in Seoul.
At Samsung's sprawling shipyard on the southern Korean island of Geoje, next to the gigantic hulls of half-finished supertankers, cranes and dry docks work overtime to construct odd-looking drill-ships like the West Polaris.
At 62,400 tons, the West Polaris, due for delivery this month, is larger than a World War II aircraft carrier. The pipes and steel scaffolding of its drill loom over the other ships lining the construction yard, like cars in an oversize parking lot.
The shipyard and its 25,000 workers bustle with activity, emitting a cacophony of clanging construction sounds, the roar of motors and short musical ditties that warn of moving cranes. These sounds echo in the emerald hills behind the yard, which stretches across one side of a deep blue bay.
R20;The oil reserves that were easy to reach are all drying up,R21; said Harris S. Lee, vice president in charge of SamsungR17;s offshore drilling rig business. R20;The future is in exploring the deep seas and harsh environments."
A big challenge in deep-sea drilling is to stay over the same spot on the sea floor even as the vessel is buffeted by strong winds, currents and waves. Because water depths can reach up to 10,000 feet, far too deep for traditional rigs that are moored to the seafloor, ships like the West Polaris rely on high-speed computers that use global-positioning satellites to control an array of six swiveling propellers on the hull's bottom.
The ship was ordered by Seadrill, a Bermuda-based offshore exploration company, for $453 million
Last month, Samsung announced it had received a $942 million contract to build an even hardier type of drill-ship made specifically for Arctic conditions. The vessel, ordered by Stena Offshore, a Swedish company, will have a hull strong enough to break through ice, withstand 50-foot waves and insulate the men and machinery inside from outside temperatures as low as 40 degrees below zero. Samsung's sales of all types of offshore drilling vessels jumped to $7.8 billion last year, up from $1.5 billion in 2005.
Despite the construction frenzy, constraints in the rig market could last several more years.
The last such boom in orders came in the late 1970s and early 1980s, when exploration rose after the 1970s oil shocks. In the 1990s, low oil prices and overflowing oil supplies led oil companies to cut back on exploration drastically.
R20;It will certainly mean more drilling activity and more discoveries in the deepwater side,R21; said Tom Kellock, the head of consulting and research at ODS-Petrodata.
Very interesting Frank!
Would I be correct to assume that it takes specialized labor to run these drill rigs as well and I would have to imagine that would be in shortage as well.
At least offshore oil rig drilling wasn't on the class schedule when I went to Emporia State!!
Dan, I am sure crew shortages are a problem. I just moved back to Bartlesville in November from Midland, Texas. Midland is the heart of Domestic production in the US and shortages of crews for Drilling Rigs, Pulling Units, Completion Rigs, truck drivers to haul crude oil, etc is critical. One of the biggest problems is finding people that can pass the mandatory drug test. All of the crews, drivers etc have to pass drug tests and the failure rate is mind boggling. It is hard to accept that there should be any unemployment with all of the job openings that are available.
Dan, Emporia State is my Alma Mater.
Frank
I have been told that the art of working in the oilfield was one of a apprentice nature. It is an "on the job" learning that cannot be taught any other way. When the oil boom of the 70's-80's was over, the jobs got thin and people had to look elsewhere for jobs and the trade got sort of lost. I also know it is VERY hard work, which probably attributes to today's society not wanting much to do with it.
Crude Oil for July is trading at $132.90 down $3.78, thanks to several factors; the Saudis making some statements about possibly increasing production, some decrase in demand is beginning to show and the improvement of the dollar verses the EURO. Hopefully this trend will continue.
Frank
Hopefully this will be of interest to some. If I am posting to much data on this subject I will curtail it. Your comments appreciated.
Frank
EIA REPORT WEEKLY COMMENTARY
Crude imports saw another jump last week, climbing 571 MB/D to 10.4 MMB/D. As a result, crude stocks saw it smallest decline in 5 weeks.
However, with refinery runs rising crude imports must continue to show an upward trend to keep stocks from falling to uncomfortable levels.
Gasoline stocks saw a large draw last week, with both production and imports showing a small decline. Distillate and propane stocks saw
increases due to low seasonal demand, but jet fuel and resid stocks declined. Refinery crude runs rose 120 MB/D to 15.44 MMB/D, the highest
rate since early March. Refinery operating rates rose 0.7% to 89.3%.
2008 Crude Stock Levels Relative to Historical - MMB
Source: EIA
EIA Weekly Storage Inventory
(In MMB)
Frank, Don't curtail it. I always look forward to your postings. Thank you for your efforts to keep us informed.
Hey Dale you chaged your picture, my wife and i thought the other one looked some US Senator that had just won election, it was very formal.
Gas is up to 3.80 in Wichita...OUCH.
A little more encouragement, July Crude oil closed at $131.93 down $4.75 on the day. In fact crude oil was off $3.00 plus all the way out to 2015 on the futures market, which is somewhat of a good sign that there are some people feeling the crude futures are going to pull back more. One of the big reasons given is that the Chinese have said they are going to raise Gasoline prices and that should reduce their consumption.
Frank
I thought this might give a better insight as to why oil has gone up so much in recent years. The number of automobiles is compounding at a very high rate.
The Physics Factbook™
Bibliographic Entry Result
(w/surrounding text) Standardized
Result
"The Automobile." New Book of Popular Science.6th ed. Republic of China: Grolier, 1978. "In 1900 only 4,192 passenger cars (and no trucks or buses) were built in the United States." 4,192
(1900)
"America Start Your Engines." US News and World Report. (27 December 1999). "At the start of the century, when America had only 8,000 cars and 144 miles of paved roads, the brake on an auto resembled that on a horse buggy: a padded stick pressed against a wheel." 8,000
(1900)
Brooklyn Public Library. Electronic Mail. 30 May 2001. "Automobile Manufacturers Association's 1970 Automobile Facts and Figures,
Passenger cars, World Total, 1968: 169,994,128.
Trucks and buses, World Total, 1968: 46,614,342." 46,614,342
(1968)
169,994,128
(1970)
"The World in Figures, compiled by The Economist, it indicates the number of passenger cars worldwide in 1985 was 375,000,000, while in the same year, the number of commercial vehicles was 109,000,000." 375,000,000
(1985)
"Citing Ward's Motor Vehicle Facts & Figures, 1999, this almanac reports that, in 1996, the most recent date covered, there were 485,954,000 cars registered worldwide, and 185,404,000 trucks and buses, for a total, worldwide, of 671,358,000 motor vehicles." 485,954,000
(1996)
Stein, Jay. New Cars for Better Future: Driving Us Crazy. Earthgreen, 1990. "You probably have known that the world's human population is increasing dangerously. So is the world's car population. In 1970, there were 200 million cars in the world. In 1990, there were almost 500 million." 200,000,000
(1970)
500,000,000
(1990)
"Automobile." World Book Encyclopedia. Chicago: World Book, 2001. "About 450 million passenger cars travel the streets and roads of the world." 450,000,000
(2001)
Cars Emit Carbon Dioxide. Global Warming, Focus on the Future, 1997. "There are over 600 million motor vehicles in the world today. If present trends continue, the number of cars on Earth will double in the next 30 years." 600,000,000
(1997)
1,200,000,000
(2030)
If an alien were to land on earth, the first thing he would notice about the "green planet"is the amount of cars there are on the streets. He would see that they come in all shapes and sizes, colors and are of many different brands. He would attempts to count the cars, but would get lost quickly because no brain can comprehend a number so large. In 1900 there were only 4,192 passenger cars built in the US (the only country to be manufacturing cars). There were no buses or trucks. By 1985 there were 109 million cars in existence. Today, with dozens of countries participating in the creation of automobiles, that number is six times larger.
It is estimated that there are approximately 600 million motor vehicles being driven on the streets of earth, the alien would be dumbfounded with this number. The biggest manufacturers are Japan, producing 8,056,000 cars in 1998, the US, with 5,554,000, and Germany with 5,348,000. With passing time, these numbers experience a rapid growth. For example, in 1960 Japan produced 185,000 cars, but by the end of the 1990s it was producing nearly 10 million a year. It is believed that at this growth rate, the number of cars on earth will double within the next 30 years. In this time scientists predict that traffic congestion will become 10 times worse than it is today. If in 2001 it is difficult to cross a major street without having to wait five minutes for the traffic to stop, how long will one have to wait in 2050?
Today the alien will notice that with such a large number of cars and people on earth, there are approximately ten people per car. But what will happen when he returns for a second trip in a hundred years? Will there be as many cars as people, or maybe by that time we'll have discovered a new method of transportation that is much more efficient and eco-friendly than the car? Only time can tell.
Marina Stasenko -- 2001
Bibliographic Entry Result
(w/surrounding text) Standardized
Result
Miller, Leslie. Cars, trucks now outnumber drivers. Salon. 29 August 2003. "There are 107 million US households, each with an average of 1.9 cars, trucks or sport utility vehicles and 1.8 drivers, the Bureau of Transportation Statistics reported. That equals 204 million vehicles and 191 million drivers." 204,000,000
(US 2003)
Editor's Supplement -- 2003
External links to this page:
A Look at Statistics, Interfaith Peacebuilding and Community Revitalization (IPCR) Initiative
Are 'Alternative Fuels' Our/The Answer? Vincent Gioia, Post Chronicle and National Ledger, 16 August 2006
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Frank, I hope you don't mind if I call you that in this situation.
I hope you can give me\us some insight into what domestic oil prospects really are, how long it will take, and how much it will help.
My impression from what I have seen is the following.
ANWR oil is an unknown and the first step is to do more exploration to determine its real value.
Regarding the question of offshore oil and ANWR. It will take anywhere from 5 to 10 years minimum to start extracting this oil in the best of circumstances. Even in the best case scenario for oil from these sources it would result in only a 75 cent discount on the price of what we pay for gasoline today.
I have seen your many posts on how important it is for conservation and for development of other alternative sources
If all we are going to gain is a relative discount of 75 cents off of todays prices and not reap this for 10 or more years. I am more apt to change my mind and oppose offshore/ ANWR drilling . The cost benefit doesn't work for me in that situation.
What is your opinion?
David
(In this instance feel free to call me Dave)
David I don't mind if you call me on anything you want. I do think that we should be doing some Exploratory drilling in ANWR and the OCS. If you look at the growing demand worldwide the oil supply is going to get tighter and tighter, we have to concentrate on conservation and alternative power be it Hydrogen Fission, Battery, whatever we have to downsize in engines and whatever we can do. It will take a decade to really get much infrastructure in place in AWR and we should be starting now. THe world oil supply is not increasing but the world usage is.
Uncle Frank
Uncle Frank I think you misread my question. Trying to have a little humor I was asking what is the expert's (you) opinion on how much domestic oil can really help us? And is what I hear on some of the tv shows correct? I know better than to be subtle on e-mail which has no tone of voice to back it up. Sorry for the misunderstanding
Here is my question:
What is the expert's (you) opinion on how much domestic oil can really help us? And is what I hear on some of the tv shows correct?
David
David, I am not sure what you hear on the talk shows because I don't watch talk shows. My biggest push is for conservation. we have 4.7% of the world population and we are using 25% of the world oil production, that cannot continue. The American people will only change their habits and conserve if forced to do so, and unfortunately price and penalty, (Tax on big engines) are the main ways to accomplish that. If we don't start conserving more and do some long range planning to produce more domestically the penalty is going to be worse and more chaotic than high price the penalty will be a shortage of supply at any price. If we could reduce our energy consumption by 5% a year that would be a reduction in demand by 1million barrels of oil per day per year. If we also started development of ANWR and OCS and could start producing from these sources in say 10 years we could possibly be energy independent from foreign oil.
Frank
Thanks for your analysis. In your opinion will it only help a relative 75 cents at the pump in todays prices? Also, if I get your point the benefit is more from utilizing all sources that reduce our dependence on foreign oil and domestic oil is just a part of that plan.
David
Uncle Frank I was calling on you not calling you on it.
David
We have more room in the short term for conservation than for increased supply. It will take a combination of everything in the future. Our dollar is no longer the premier currency of the world and we can only improve the dollars value by reducing our trade deficits of which oil makes up the biggest portion of that deficit. I don't know about the 75 cent number, it would be difficult to know what impact it will have.
Wheeeeeeee....this is pretty heady stuff, listening to the two of you!
Wait everybody no disagreement here. I just think my attempt at humor got us on the wrong track. I was truly asking for my Uncle Frank's opinion because I know he is an expert on this topic and I had no confidence on what I had heard on tv. I am just trying to work through all the information to make an educated decision on what is the correct plan of action. Uncle Frank I was not challenging you. I hope my questions and intent are clear now.
David
David, I didn't take it that you were challenging me. maybe I better go back and read your post again. David I look at world population, energy use, automobile manufacturing and any other information I can find all day long. I do play the oil and gas futures some and there are so many factors that affect them both long and short. It is intersting o watch the oil and gas prices for 7-8 years out and see what they are doing with the short term and long term projections and happenings.
Enough on this subject.
I thought some of you would find this intereasting and encouraging.
Americans drive 1.4 billion fewer highway miles
WASHINGTON (CNN) -- Americans drove 1.4 billion fewer highway miles in April than they did in April 2007, the Department of Transportation said Wednesday.
That marks the sixth consecutive monthly drop and coincides with record gas prices and an increase in transit ridership, Transportation Secretary Mary Peters said.
April's drop is more than three times larger than the drop from March 2007 to March of this year, which was 400 million fewer highway miles.
Peters said vehicle miles traveled on all public roads for April fell 1.8 percent from April 2007.
Americans have driven nearly 20 billion fewer miles overall this year and nearly 30 billion fewer miles since November, the department said.
Peters expressed concern that the cutbacks have resulted in the collection of fewer taxes on gasoline. Such taxes are funneled to the federal Highway Trust Fund, which gets 18.4 cents per gallon from gasoline and 24.4 cents per gallon from diesel fuel.
"History shows that we're going to continue to see congested roads while gas tax revenues decline even further," she said.
In addition to driving less, Americans are buying smaller vehicles. Peters said sales of midsize SUV dropped 38 percent last month compared with May of last year as Americans increasingly choose to drive cars, the department said.
Uncle Frank (hey, you kinda feel like an uncle, and since I don't have any uncles on this forum...) ;)
I thought of you last night when watching the news, and hoping you weren't watching... or hoping that if you were, you were taking your blood pressure meds...
They were talking about if the price of gas was going to affect tourism in Kansas this summer. Kansas gets a lot of business and tourism by being in the middle of the country and many people drive through to get to other places. They interviewed one guy who was driving the biggest RV I'd ever seen... AND pulling a full-size GMC truck behind it on a trailer! He was headed to New York (not sure where from), and he said it is a 3,000 mile trip. And his RV gets 6 miles to the gallon. That's $2,000 just on gas alone (est avg $4.00 per gallon, but will probably be much higher by the time he gets to NY). Not to mention the amount of gas the GMC truck uses to run around towns when they stop.
But I find myself between a rock and a hard place in this gas situation, too. We have a company retreat in the CO mountains in July, and I'm debating wether to drive or fly. Flight prices are getting high, and with this bag issue, I really don't want to support the airline industry (on principles). But I also know that from SE KS to Grand Lake, CO... that's quite a bit of gas.
Tobina, I have over 200+ Nieces and Nephews all the way to Great-Great-Great ones so one more is fine. As far as the RVs, there are people who can afford the luxury and will continue to drive them. There may come a time when there will be controls that elliminate some of our really energy wasteful habits, hopefully it won't come to that. I am a big believer in that old saying"NECESSITY IS THE MOTHER OF INVENTION" and I keep telling myself that good old American ingenuity will get us through this. You have a Pilot and I am assumming it gets 24+ MPG in Highway driving, take your trip and enjoy it.
Frank
Quote from: frawin on June 20, 2008, 11:38:22 AM
I have over 200+ Nieces and Nephews all the way to Great-Great-Great ones so one more is fine. Frank
This is true. Check out how many visits have been made to Anita's obituary compared to the rest of the obits. Amazing!
Take your Pilot and go! It's only one state over to your west. After what we are doing, we've skewed the national average for many months to come. I think we'll have been in 15 different states, some more than once, by the time we arrive back home.
Several pages back Sally Signer mentioned that she drives an 8 cylinder vehicle that gets 28 MPG, but she didn't say what kind it was. I have heard of big 8 cyl. cars that get really good mileage. In fact, we had a Crown Vic that got good mileage. Now I am wondering, if they can make 8 cyl. that get good mileage, why can't they improve the mileage on all 8 cylinder vehicles? And why isn't the mileage on smaller cars better than what it is? Does anyone have an explanation for this?
Canadian gas price converted to US dollar price (Just for comparison)
Montreal 1.37/litre
Ontario 1.25/litre
Calgary 1.26/litre
BC 1.35/litre
Canada Avg 1.3075 Canadian dollars/litre
Avg price per gallon in Canadian dollars 4.95
$4.95 canadian dollars converted to U.S. dollars is $4.87
Avg of gas in Canada is $4.87 per gallon.
NYMEX August crude Oil is trading at $134.85 down $0.51, this morning.
Frank
Crude oil has moved into positive territory trading at $136.40, plus $1.04 for August. It seems all of the news this A.M. is Bullish for Crude Oil, Nigerian Rebels shutting in Production, Israel threatening Iran, Saudis saying they will increase production by 200,000BPD which would equal an increses of approximately 2/10 of 1 percent of the current world output. Natural Gas continues to trade higher, being pulled up by the Crude Oil futures. This is the time of year we should be building our Natural Gas Inventories for the winter months, instead it is being used everywhere possible in place of Fuel Oil, due to the cost of Natural gas being so much cheaper on a BTU Basis. Unless the trend changes pretty quick, Natural Gas will be very High in the coming Winter Months. Some days it seems we are in a LOOSE LOOSE situation.
Frank
Crude Oil is trading higher this A.M. with August crude at $138.05 up $1.31 and Natural Gas continues to trade higher with July trading at $13.255 up $0.052MMBTU. Gasoline in Bartlesville is at $3.66 and will probably go up today given yesterday's higher crude price and today's trading level.
Frank
Our Trade Deficit Continues to devalue the Dollar and cause Rising Commodity Prices
Frank
Oil Rises as U.S. Dollar Drops, Nigeria Strike Threatens Output
By Grant Smith
June 24 (Bloomberg) -- Crude oil rose for a third day as the U.S. dollar dropped, enhancing the appeal of commodities as an inflation hedge, and a labor strike threatened to deepen production losses in Nigeria.
A white-collar workers' union began a strike against Chevron Corp.'s local unit today in Nigeria, where attacks last week cut output by 300,000 barrels a day. OPEC members besides Saudi Arabia have no intention of raising output to bring down near-record prices, Abdalla El-Badri said in Brussels today.
``The euro is recovering against the dollar after some bearish data yesterday, driving oil's gains this morning,'' said Andrey Kryuchenkov, an analyst at Sucden (U.K.) ltd. in London. ``There's also bullish support from the attacks and strikes in Nigeria.''
Crude oil for August delivery rose as much as $1.21, or 0.9 percent, to $137.95 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $137.63 at 9:55 a.m. London time.
Prices touched a record $139.89 on June 16 and are up 98 percent in the past year. Yesterday, oil rose $1.38, or 1 percent, to settle at $136.74 a barrel.
OPEC President Chakib Khelil, also speaking in Brussels, said Saudi Arabia's pledge at the weekend to raise supplies by 200,000 barrels a day next month won't temper prices. Speculation rather than a lack of crude is driving the market, Secretary General El-Badri said.
Strike Impact
Chevron spokeswoman Margaret Cooper said yesterday said it's too early to comment on the impact of the strike on operations. Last year. the company 2007 produced about 350,000 barrels of oil a day from its 32 fields in Nigeria, according to the company's Web site.
``When you have so many short-termed focused traders in the market, something like what's happening in Nigeria has a big influence,'' said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne.
Chevron already halted 120,000 barrels a day of onshore production after a pipeline was blown up last week. Royal Dutch Shell Plc may halt exports from its 190,000 barrel-a-day Bonga field following a June 19 attack on its platform there, the company said last week.
The dollar's fall against the euro made commodities cheaper for buyers outside the U.S. The U.S. dollar was at $1.5573 per euro as of 8:42 a.m. London time, compared with $1.5493 earlier.
Brent crude oil for August settlement was at $136.79 a barrel, up 88 cents, on London's ICE Futures Europe exchange at 9:55 a.m. London time. It rose $1.05, or 0.8 percent, to settle at $135.91 a barrel yesterday. Prices climbed to a record $139.32 on June 16.
I'm curious. What do you make of all the reports from different places that speculation is what is driving oil prices up not supply and demand?
Pam, I agree that speculation is driving it some, but that is only part of the problem, along with supply/demand, our trade deficit and the resulting devaluation of the dollar. The reason the politicians are jumping on the Futures trading and what they say is the resulting speculation and price increases is it is what they think the voting public wants to hear and it is something they can point fingers at. Don't get me wrong I feel that some of the increases are speculation related but the futures market was designed to allow Refiners, operators and suppliers to be able to hedge against price swings and supply needs.
Frank
Pam, the biggest problem with crude oil and rising energy prices is still world supply and demand, and the biggest problem causing the supply/demand problem is America's wasteful energy habits coupled with America being the number one cause of China and India's ever increasing appetite for energy. We fueled India's and China's industrial revolution by sending so much Manufactring and other jobs to those countries and now those people have the money and they want what we have had for the past 100 years. That coupled with the fact that the trade with China and India and the high oil prices have devalued our dollar so much that we have to pay more for oil in dollars to keep OPEC's buying power on a level with the EURO currency.
Frank
i agree with you mostly Frank. We created a monster by shippin all our jobs overseas and now its bitin us in the butt like those goobers should have known it would. I was just curious because CBS news had an analyst on sayin at least 45 -50% of the price of oil was due to speculation.
Do you know anything about ICE?
I don't think it is that high of percent that is caused by speculation, and how would you put a number on it. Further, how do you stop the Saudis, and other foreign groups from speculating. Our NYMEX is not the only futures market that traders can utulize for speculation and the futures market is agreat tool when used for what it was designed for. The news media loves to sensationalize and they do plenty of it. Obama has come out with big comments about speculation and CBS is an Ultra Liberal group and I am not surprised that they picked up on it. America, the Government and the people need to accept that we no longer control the Energy Markets and we no longer have the clout economically or any other way that we once had.
Frank
Pam, I am somewhat familiar with ICE and the London Crude Oil Futures.
Frank
I'm just lookin for information from both sides. I learned a long time ago the real deal is always somewhere in the middle :) You just gotta find the two extremes before you can figure out where it is!
I understand, I try to look at all of the factors, and I am sure I have somewhat other opinions than most due on this subject but I have been watching it for almost 40 years and the changes have been both interesting, disappointing and mind-boggling. I think we will survive all of it but it will be painful and require lots of adjustment.
Frank
yeah it will, the problem is I don't have room to adjust much more. We already didn't do much drivin and we have already cut out anything extra. Be hitchin up the horses and takin two day trips to town if somthin don't give lol
Pam, I know that it is making it difficult for Millions of Americans, unfortunately I don't think there is any quick fix, no matter who is President. I do think changes are taking place that will make a difference in the future but it will be gradual. All of the US auto makers are reducing their slate on large vehicles and V-8 and V-10 engines. When I travel I watch closely the types of vehicles I see and the trend is changing to more and more smaller vehicles but it is doing it slowly, ever so slowly and it will take several years to make the transition, in the meantime I think good old American ingenuity and perseverence will get us through it all. I see signs that OPEC and others are having concerns that the price of oil is getting so high that it will result in development of alternative fuels and power sources and that we, the World, will eventually reduce our dependence on oil enough reduce OPEC's income drastically.
Frank
Pam, I am amazed that our politicians didn't at least have an idea that the energy crisis was coming. Look at the world population growth, in 1980 there were 4.5 billion people in the world, in 1990 there were 5.3 billion people in the world, in 1999 there were 6 billion , in 2006 there were 6.5 billion and currently the population is estimated at 6.8 Billion. In addition consider that in America we have somewhere between 12million to 18 million Illegals consuming energy.
Frank
I see where you are coming from with decreasing the use of v-8 and v-10 engines, but we have to use them in our line of work. I will say that we have been using the 4-wheeler alot more and the mini truck. But when its muddy like it has been, we have to use something with a 4 wheel drive in it just to get to town. The roads are better now, but to tell you the truth why, if we are already conserving gas usage should we get rid of them. I don't think the everyone understands that if we didn't use these trucks we wouldn't have them. If we haul cattle or something like that we have to have a pickup to pull it. I know this is being a little grippy, but I had to drive the truck 3 of the 5 days last week to town. That was a lot of money, just to go a couple of miles. We have spent alot of money the last 2 weeks on gas. Jeff's Grandma Wiseman is in the hospital in Wichita and we went and saw her the last two weekends. We normally don't go out of town to much, and those visits cost us about 100.00 plus eating out. That was a whole bill that I could have paid. When we bought my van, price of gas was around 2.00 or so. I do get 21 miles to a gallon, but man oh man!!
You know Angtown, when I was growing up there was mostly 6 cylinder vehicles, including trucks, pickups, etc. We made it through a lot of muddy roads. Yes, sometimes we got stuck, sometimes we had chains on the vehicles to get through. People used stockracks to haul animals not pull trailers. We need to think about the mindset that we have these days. I am sorry to hear that Gracie is in the hospital. Please let her know that we are thinking of her.
Mlw
Al is thinking about getting a scooter for around town and good weather. He had one years ago and still has his license for one. if I have to, I have a grocer I can walk to.
I tend to think that one of the issues that Frank is trying to address is the vast number of "city slickers" that drive big gas guzzlers... things like Lincoln Navigators, Ford Expeditions, Excursions, Dodge Ram quad-cab pickups and etc. I commute through Atlanta, Georgia everyday, and the roads are filled with them. They really have absolutely no need for these big vehicles. They have just become "status symbols." When these people stop driving what they consider to be "status symbols" and get realistic, then we can start to address the energy needs.
I grew up in Howard and fully get why the farmer needs more power. I can remember going out to West Eagle Head with Ernie Small and the Ford Pickup he had at that time could not pull the empty trailer up that hill, let alone filled with cattle.
My Prius that gets 57 miles per gallon might not be the prettiest thing on the road, but when I'm at the pump filling up, I'm pretty happy I'm not the guy in the Hummer H3 at the next pump!
Dale, very well said. We lived in Midland Texas for 27 years and the Joke was the National Car of Texas was the Big Surburban. If they didn't drive a big Surburban,or Ford Ecscursion, they drove a big pickup, and so did many of the kids going to High school, most of them were people that had no use for a pickup or at least one with a big V-8 or V-10, but they had to have one. The biggest abuser is the Hummer, 6 MPG in town and 7MPG on the Highway for the big models. Time and the high cost of gasoline will reduce those numbers over the next 10-20 years. Rationong will reduce them faster.
Frank
Diane, I notice more Scooters on the roads here in Bartlesville and a lot more Motorcycles on the streets and highways.
Frank
I remember well the days of rationing and I hopeland pray we don't have to go back to that. Having said that, we all can cut back on a lot of things, but having to pull the rabbit out of the hat by some of us to let the rest do as them darn well please, gets my dander up...but good !!!
I use shanks' mare for here in town, limit my out of town shopping to every two weeks. I probably put 100 wasteful miles on my Miata per year. It is purely a toy, having done without through the years, this is my vanity. It gets about 25 mi per gallon which is the same for my van. I plan to buy one more vehicle in my lifetime, but not picking it out just yet. Gonna drive this van till it drops, a few dollars at the pump won't make that much difference in what we save.
I think a lot of the folks drive large vehicles back east and on the coast is for safety reasons. The roads are so crowded, it is not if you will have an accident, but when you will have an accident. The heavy vehicles are safer in the long run, and I can see why people want them. I do however hate to see these big vehicles driving around the town loaded with kids. Just driving and driving. Too bad. :-\ :-\
Frank; I can't remember if you addressed this already, but I saw something on the news that gas in Mexico is much cheaper than across the borders in the US... BUT... their gas is made with more sulpher and can/might be dangerous to typical US vehicles. That hasn't stopped a lot of people, though, as short-term needs for lower gas prices has outweighed the fear of having their engines damaged quicker.
Angie; I agree about needing gas-guzzling trucks and tractors for farmers/ranchers to survive. The ranch has recently purchased one of those mini trucks to try out, like the one you have! They might get another for Chuck; instead of him hauling his horse to the pastures to move cows one day, and then drive back 2 days later to put out mineral, he might be able to cut out the 2nd trip with his truck and use the Mini to haul mineral. At 7 mpg for the diesel truck vs. 40 mpg for the Mini, that will add up to a big savings for the ranch.
Tobina, one reason gas is cheaper in Old Mexico is they have an excess of oil and in fact they sell the US crude Oil. Also they do not have the automobiles per capita and they don't drive the same size vehicles we do and they don't drive the miles per capita. In some parts of Mexico poverty is at its worst.
Tobina, I have driven cattle horseback from Howard to the Hills, Eagle head and other areas, also from Howard to the Roby Ranch. That was 50 t0 55 years ago and it was done to save the trucking costs. Also I have hauled Cattle to the Hills in a 2 ton truck with a 6 Cylinder engine, I couldn't go as fast as the big v-8s and I had to shift down more but it can be done. I have Pulled Horse trailers to the hills loaded with a 6 Cylinder 4 wheel drive truck and never thought anything about it. Only saying it is not impossible to do lots of Farm and Ranch work without the monster Diesel and V-8s gas engine. I have feed cattle all day long in the worst of weather with a 6 cylinder 4 wheel drive truck and didn't think anything about it. Hopefully the necessary changes will come gradual and be less painful than many think. We are a spoiled nation when it comes to the Automobile and what we think we HAVE to have.
Frank
Kuwait produces 2.58 Million Barrels of oil per day, they sell 200,000 Barrels per day to the US. This is a country that Saddam Hussein over ran, slaughtered masses of people and the United States stepped in and kicked Hussein's tail back to Baghdad. Somehow there seems to be something wrong with this, Kuwait has always been an Ally to the US in the Middle East.
Frank
Gas in NEW Mexico isn't cheaper.
Gas was $4.09 in places but most was $3.90. :'(
We drove a Ford Expedition...and it really didn't do that bad with gas mileage. I was surprised. And the ride was wonderful. We got home early this morning and we were worn slick.
Kjell drove the whole way and was bound and determined that he was going to sleep in his own bed last night( or this morning :-\)
We left Albuquerque at 11:00 a.m. and pulled into Howard at 3:30 a.m. We stopped for a gasoline, stretch and bathroom break 3 times, and ate at McDonald's in Oklahoma City and came right on from there.
It is real good to be home. :)
Welcome home! Knowin' you are dog tired. Been there, done that! Sleep well!
"Home Sweet Home" sure has a nice ring to it, eh?
Crude Oil Little Changed Before Forecast Drop in U.S. Supplies
By Grant Smith
-- Crude oil traded little changed near $137 a barrel in New York before a U.S. government report forecast to show a decline in U.S. crude inventories.
Crude-oil stockpiles probably fell 1.1 million barrels in the week ended June 20 from 301 million barrels, according to a Bloomberg survey before an Energy Department report today. Oil gained earlier on output losses in Nigeria, where Chevron Corp. yesterday suspended export obligations on onshore production.
Crude oil for August delivery was at $136.88 a barrel, 12 cents lower in electronic trading on the New York Mercantile Exchange at 10:45 a.m. in London. It earlier gained as much as 58 cents.
Inventory Report comes out today, it will be interesting to see the numbers and the trend. Crude is trading flat to off this A.M.
Frank
Gasoline Demand Falls 2.7% Amid Record Prices, MasterCard Says
By Barbara Powell
June 24 (Bloomberg) -- U.S. gasoline demand fell 2.7 percent last week, a sign motorists are cutting back on vacation plans as pump prices touch records, a MasterCard Inc. report today showed.
Consumers purchased an average 9.45 million barrels of gasoline a day in the week ended June 20, down from 9.71 million a year earlier, MasterCard, the second-biggest credit-card company, said in its weekly SpendingPulse report. It was the ninth consecutive week of declines from the year-earlier period.
Demand rose 1.5 percent from the previous week.
``High gasoline prices are depressing the normal peak driving season that occurs this time of year,'' Michael McNamara, vice president of research and analysis for MasterCard Advisors, said in an e-mail.
The national average pump price for regular gasoline rose 3 cents to $4.07 a gallon, up 36 percent from a year earlier and the highest in data going back to October 2006, the report showed. Prices on the West Coast rose 7 cents to an average $4.45 a gallon.
The report from Purchase, New York-based MasterCard was assembled by MasterCard Advisors, the company's consulting arm, and is based on credit card swipes and cash and check payments at about 140,000 U.S. gasoline stations.
The Energy Department estimated demand of 9.25 million barrels a day for the week ended June 13. MasterCard said demand was 9.1 million barrels a day for the same period. The government's next petroleum report is set for release tomorrow.
Visa Inc. is the biggest credit card company by transactions processed.
$
Below is the weekly Petroleum Inventory report, the US continues to show a year-over-year decrease in demand.
Frank
Summary of Weekly Petroleum Data for the Week Ending June 20, 2008
U.S. crude oil refinery inputs averaged nearly 15.3 million barrels per day
during the week ending June 20, down 181 thousand barrels per day from the
previous week's average. Refineries operated at 88.6 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 about 4.6 million barrels per day.
U.S. crude oil imports averaged about 10.3 million barrels per day last week,
down 8 thousand barrels per day from the previous week. Over the last four
weeks, crude oil imports have averaged nearly 10.0 million barrels per day, 86
thousand barrels per day below the same four-week period last year. Total motor
gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged nearly 1.2 million barrels per day. Distillate
fuel imports averaged 107 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those million barrels from the
previous week. At 301.8 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 decreased by 0.1 million barrels last week, and are in the lower
half of the average range. Finished gasoline inventories increased last week
while gasoline blending components inventories decreased during this same time.
Distillate fuel inventories increased by 2.8 million barrels, and are in the
middle of the average range for this time of year. Propane/propylene inventories
increased by 1.2 million barrels last week but remain below the lower limit of
the average range. Total commercial petroleum inventories increased by 5.4
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 20.2 million
barrels per day, down by 2.3 percent compared to the similar period last year.
Over the last four weeks, motor gasoline demand has averaged about 9.3 million
barrels per day, down by 2.1 percent from the same period last year. Distillate
fuel demand has averaged nearly 4.1 million barrels per day over the last four
weeks, down by 1.1 percent from the same period last year. Jet fuel demand is
3.6 percent lower over the last four weeks compared to the same four-week period
last year.
The Bearish inventory report and the fact that Americans are doing their part to reduce demand has resulted in the August crude futures trading off $-4.70 at $132.30 and Natural Gas for July Delivery trading off $0.21 $12.805/.MMBTU. Hopefully this trend will continue and the pullback extended.
Frank
What do you make of this?
API reports rise of 1.6 million barrels in crude supply
By Myra P. Saefong
Last update: 10:46 a.m. EDT June 25, 2008Comments: 2
SAN FRANCISCO (MarketWatch) -- The American Petroleum Institute reported a rise Wednesday of 1.6 million barrels in crude supplies for the week ended June 20. The Energy Department had reported a climb of 800,000 barrels for the latest week. Motor gasoline supplies were up 1.1 million barrels, the API said. The government had reported that supplies fell by 100,000 barrels. Distillate supplies climbed by 3.2 million barrels, the API said. They were up 2.8 million barrels, according to the Energy Department.
It is not uncommon for the A.P.I. and the EIA to have minor differences in the data they recieve. Given the total overall numbers there is very little difference in them. In some cases the cutoffs for each reporting group can have minor time differences, not a big deal and not that uncommon.
Frank
sounds reasonable, the difference in gas supplies just caught my attention. Seemed like a big difference
Pam, given the overall numbers is a pretty minor difference, in any case the overall picture is encouraging.
Frank
August Crude Oil closed down $2.45 at $134.55, Natural Gas for July closed down $0.258/MMBTU at $12.753. With Natural Gas this high for this time of year, Electric Bills will be going up.
Frank
August Crude is trading at $135.775 up $1.225, note the news article below from this morning's Bloomberg report.
Crude Oil Rises on Lower Dollar, Possible Libya Production Cut
June 26 (Bloomberg) -- Crude oil rose above $135 a barrel as a lower U.S. dollar spurred commodities investment and Libya said it may cut production.
Oil, gold and copper gained as a weaker dollar increased demand for commodities as a hedge against inflation. The U.S. currency dropped after the Federal Reserve gave no signal of higher interest rates yesterday. The head of Libya's national oil company said the country may reduce output because the market is oversupplied.
``After the Federal Reserve meeting the dollar depreciated and this is supportive for the oil market,'' Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna, said in a phone interview
Crude oil for August delivery rose as much as 68 cents, or 0.5 percent, to $135.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $135.01 a barrel at 11:17 a.m. London time. It earlier fell as much as 0.7 percent.
Brent crude oil for August settlement traded up 50 cents at $134.83 a barrel on London's ICE Futures Europe exchange.
The dollar's fall against the euro made commodities cheaper for buyers outside the U.S. The dollar was at $1.5511 per euro as of 11:13 a.m. London time, compared with $1.5574 earlier.
Front Month, August Crude Oil closed at $139.64 up $5.09, and Natural Gas Front Month July Closed at $13.13 up $0.352. A lot of today's increase was due to Rhetoric out of our old enemy Libya saying they may cut production. A cut in world production anywhere, even if it is a country we don't recieve crude from can have an impact on our NYMEX futures.
Unfortunately there were a lot of long contracts traded and it looks like it can go higher.
Frank
I'm glad we did take our trip when we did. We only paid more than $ 4.00 a few times, with the gas in MO. being the cheapest we saw anywhere.
August Crude Oil continues to trade higher overnite reaching a new all time high of $140.925, up $1.285. Natural Gas for August is trading higher as well at $13.31 up $0.062.
Frank
Frank; do you get tired of all my questions? You're such a plethora of information, I figure I better ask while you'll still let me!
So, while in Denver this week, I was driving with a co-worker and she was complaining about someone who was driving slow. I told her that she probably should get used to it with the price of gas going up, the speeds would probably be going down. She said she heard that it doesn't matter if you slow down; if your car is used to (and "broke in") driving faster speeds, it will actually perform worse at lower speeds.
I know there are so many "wives tales" out there about vehicle performance and conserving gas; do you have any insight on this? I know that a news station in Wichita had a story about that, and one lady said she calculated her gas mileage and it was better at lower speeds. I think I get better mileage when I drive lower speeds, too, although I haven't taken the time to calculate it and confirm. But is there any stock to your car being "broke in" at higher speeds and not performing as well at lower speeds (and vice-versa)?
Tobina, I am not well versed on that subject but I have researched it some and based on everything I read you will consume less fuel at lower speeds. I have seen numbers of anywhere from 1% less fuel consumed to 25% less fuel consumed. I know from my farming days that atractor consumed considerably more fuel if under a load such as plowing verses other work. I will pull up my notes on this subject. I know during the "EMBARGO" the government changed the national speed limit to 55 MPH with the reason being it would reduce consumption apprecably. Good Question.
Frank
Tobina here is what one website has to say about it:
Drive Sensibly
Aggressive driving (speeding, rapid acceleration and braking) wastes gas. It can lower your gas mileage by 33 percent at highway speeds and by 5 percent around town. Sensible driving is also safer for you and others, so you may save more than gas money.
Fuel Economy Benefit: 5-33%
Equivalent Gasoline Savings: $0.20-$1.35/gallon
Observe the Speed Limit
While each vehicle reaches its optimal fuel economy at a different speed (or range of speeds), gas mileage usually decreases rapidly at speeds above 60 mph.
You can assume that each 5 mph you drive over 60 mph is like paying an additional $0.30 per gallon for gas.
Observing the speed limit is also safer.
Fuel Economy Benefit: 7-23%
Equivalent Gasoline Savings: $0.29-$0.94/gallon
Remove Excess Weight
Avoid keeping unnecessary items in your vehicle, especially heavy ones. An extra 100 pounds in your vehicle could reduce your MPG by up to 2%. The reduction is based on the percentage of extra weight relative to the vehicle's weight and affects smaller vehicles more than larger ones.
Fuel Economy Benefit: 1-2%/100 lbs
Equivalent Gasoline Savings: $0.04-$0.08/gallon
Avoid Excessive Idling
Idling gets 0 miles per gallon. Cars with larger engines typically waste more gas at idle than do cars with smaller engines.
Use Cruise Control
Using cruise control on the highway helps you maintain a constant speed and, in most cases, will save gas.
Use Overdrive Gears
When you use overdrive gearing, your car's engine speed goes down. This saves gas and reduces engine wear.
Note: Cost savings are based on an assumed fuel price of $4.08/gallon.
Data Sources
Estimates for fuel savings from sensible driving are based on studies and literature reviews performed by Energy and Environmental Analysis, Inc., Washington, DC.
Estimates for the effect of speed on MPG are based on a study by West, B.H., R.N. McGill, J.W. Hodgson, S.S. Sluder, and D.E. Smith, Development and Verification of Light-Duty Modal Emissions and Fuel Consumption Values for Traffic Models, Oak Ridge National Laboratory, Oak Ridge, Tennessee, March 1999.
Tobina, this is probably the most crdible report, it is from Consumer reports:
Fuel economy: Save money on gas
Consumer Reports' tests show how to get the best gas mileage
VIDEO:
FUEL ECONOMY: Get the most mileage
All videos
The best way to burn less fuel is to buy a car that gets better gas mileage. But our tests with a Toyota Camry and other vehicles show there are ways to minimize what you spend at the pump with your current car.
Drive at a moderate speed. This is the biggest factor. You may have to be a little patient, but driving at 55 mph instead of 65 or 75 will save you money. When we increased the Camry's highway cruising speed from 55 mph to 65, the car's fuel economy dropped from 40 mpg to 35. Speeding up to 75 mph cost the car another 5 mpg. One reason is that aerodynamic drag increases exponentially the faster you drive; it simply takes more fuel to power the car through the air.
Drive smoothly. Avoid hard acceleration and braking whenever possible. In our tests, frequent bursts of acceleration and braking reduced the Camry's mileage by 2 to 3 mpg. Once up to speed on the highway, maintain a steady pace in top gear. Smooth acceleration, cornering, and braking also extend the life of the engine, transmission, brakes, and tires.
Reduce unnecessary drag. At highway speeds, more than 50 percent of engine power goes to overcoming aerodynamic drag. So don't carry things on top of your vehicle when you don't have to. Installing a large Thule Cascade 1700 car-top carrier on our Camry dropped its gas mileage from 35 mpg to 29 at 65 mph. Even driving with empty racks on the car reduces its fuel economy.
Don't use premium fuel if you don't have to. If your car specifies regular fuel, don't buy premium under the mistaken belief that your engine will run better. The only difference you'll see is about 20 cents more per gallon. Most cars are designed to run just fine on regular gasoline. Even many cars for which premium is recommended will run well on regular. We have found that the differences are imperceptible during normal driving. Check your owner's manual to find out if your engine really requires premium or if you can run on other grades.
Minimize driving with a cold engine. Engines run most efficiently when they're warm. In our city-driving tests, making multiple short trips and starting the engine from cold each time reduced fuel economy by almost 4 mpg. Engines also produce more pollution and wear faster when they're cold. When possible, combine several short trips into one so that the engine stays warm.
Keep tires properly inflated. The Camry experienced a 1.3 mpg loss in highway fuel economy when the tires were underinflated by 10 psi. More important, underinflated tires compromise handling and braking, and wear faster. And they run much hotter, which can lead to tire failure. Check the pressure of your vehicle's tires at least once a month with a tire gauge. The owner's manual explains how to do it.
Buy tires with lower rolling resistance. A tire's rolling resistance can add or detract another 1 or 2 mpg. In our tire ratings, look for high-rated tires with low rolling resistance. They generally won't cost more, and replacing a worn tire could save you more than $100 a year in fuel.
Avoid idling for long periods. Think of it this way: When you're idling, your car is getting zero miles per gallon. When we let a Buick Lucerne, with a V8, idle for 10 minutes while warming up, it burned about an eighth of a gallon of gas. A smaller engine would probably burn less, but idling still adds up over time. As a rule, turn off your engine if you expect to sit for more than about 30 seconds. An engine warms up faster as it's driven anyway.
For more information on saving fuel and alternative fuel vehicles, see our
Quote from: frawin on June 27, 2008, 12:28:31 PM
...
Minimize driving with a cold engine. Engines run most efficiently when they're warm. In our city-driving tests, making multiple short trips and starting the engine from cold each time reduced fuel economy by almost 4 mpg. Engines also produce more pollution and wear faster when they're cold. When possible, combine several short trips into one so that the engine stays warm.
...
Avoid idling for long periods. Think of it this way: When you're idling, your car is getting zero miles per gallon. When we let a Buick Lucerne, with a V8, idle for 10 minutes while warming up, it burned about an eighth of a gallon of gas. A smaller engine would probably burn less, but idling still adds up over time. As a rule, turn off your engine if you expect to sit for more than about 30 seconds. An engine warms up faster as it's driven anyway.
OK, these 2 quotes seem to contradict each other? Can you explain? You want your car to warm up, but not idle?
Great points, though! Thanks for the info!
I'm pretty sure they mean to try to do all your errands for the day in one trip (which is just common Kansas sense anyhow). After your auto engine is warmed up, you can turn it off and it will stay warm for quite a while. So for most of us, a stop at the bank, the hardware store, the gas station, the feed store etc. wouldn't be too long and the engine would still be warm to start and go to the next errand; you wouldn't be "cold" starting it each time. If you were somewhere that you stayed parked for an hour or so, the engine would probably cool off so you could plan those for either the first or last stops of your trip.
Unless you are in Kansas in the summer ~ in which case I don't think you'd ever get a cold start. Ha! :D ;D :D ;D
This I know from waiting (forever) for an engine to cool enough to check/add water to the radiator. But that's another story...
They are good tips! Especially the tire pressure one which most people don't think to check. It can make a huge difference in gas mileage and is also extremely important for your safety!
Gas jumped 16 cents per gallon here in Wichita today.
Catwoman, that is a result of crude going up $5.00 yesterday.
Frank
Ya know...I am beginning to remember Dante's Inferno when I am stopping to consider what these price increases are doing to the people who have to make a choice between filling their car with enough petrol to get to work or buying food for their kids. I am almost to the point where it would seem plausible!
It's starting to cause trouble here too. The very night we got home, my "boat neighbor", the one who is so generous with his fish, had a half tank of gas siphoned out of his truck as it sat at the curb. Our vehicles are garaged so they weren't bothered.
History is repeating itself from the 1970s when I had to put a locking gas cap on my car.
Nowadays, there is something about not being able to siphon from newer cars, so gas thieves are resorting to drilling into gas tanks, which is a whole new problem to both the driller and the owner.
THOUGHT FOR THE DAY
OPEC sells oil for $136.00 a barrel.
OPEC nations buy U.S. grain at $7.00 a bushel.
Solution: Sell grain for $136.00 a bushel.
Can't buy it? Tough! Eat your oil!
Ought to go well with a nice thick grilled filet of camel rump!!!
Crude Oil is trading at new highs in overnite trading, August crude traded as high as $143.60 and is $143.00, up $2.79. September crude is at $143.55, up $2.80 and October Crude is at $144.00 up $2.94.
Frank
G-r-r! >:(
Diane, I understand, unfortunately it is going to get worse in the near term. I don't want to think about the negatives of the longer term.
Frank
August crude has come off of the earlier highs and is trading off $0.06 at $140.15, the outer months, October 08 thru Jan 09 are trading higher on the day. The consumption numbers/highway miles driven continue to go down some and hopefully that will stabilize the markets, or at least slow the pace.
Frank
The solution to high priced oil & gasoline?
More u-tube videos...
http://www.youtube.com/watch?v=UOpcPfAarjY
This a continued threat to our supply. Iran, Libya and venzuela all or any of them could cause big problems in world and our supply.
Oil Rises to Record on Concern Iran Supplies May Be Disrupted
By Grant Smith and Alexander Kwiatkowski
June 30 (Bloomberg) -- Crude oil rose to a record above $143 a barrel on speculation the dispute over Iran's nuclear program may disrupt supply from OPEC's second-largest producer.
Pressure on Iran to end its uranium enrichment program and the falling value of the U.S. dollar may drive prices to $170 a barrel, OPEC President Chakib Khelil said on June 28. Oil is headed for its biggest six-month gain since 1999 as investors shun equities for commodities, looking for a hedge against a weaker dollar and quickening inflation.
``Tensions ratchet up in Iran and troubles continue in Nigeria, drawing funds into the market,'' Robert Montefusco, a broker at Sucden (U.K.) Ltd. in London, said before the latest record was reached. ``The weak dollar is also helping. The market does not want to break down just yet.''
Crude oil for August delivery rose as much as $3.46, or 2.5 percent, to $143.67 a barrel in electronic trading on the New York Mercantile Exchange. It was at $143.27 a barrel at 11:33 a.m. in London.
Brent crude oil for August settlement rose as much as $3.22, or 2.3 percent, to $143.53 a barrel on London's ICE Futures Europe exchange, the highest since trading began in 1988. It was at $143.46 a barrel at 11:34 a.m. London time.
Foreign ministers from the Group of Eight nations last week suggested more talks to coax Iran into opening its nuclear program to inspectors, after speculation the Islamic Republic faces an imminent Israeli strike.
Israel Strike
John Bolton, the former U.S. envoy to the United Nations, has said Israel would strike Iran between the U.S. presidential election in November and inauguration in January.
Little Delaware has finally taken a positive step! Blue Water Wind and Delmarva Power have come to an agreement to build a wind farm off the Delaware coast. There will be 50 some turbines between 17 and 25 or so miles off the shore line. They will also build a manufacturing plant nearby. (jobs!) We'll be the first state to have done it, although most shore states are considering it. Go away hurricanes!
Quote from: Diane Amberg on July 01, 2008, 10:10:14 AM
We'll be the first state to have done it, although most shore states are considering it.
Diane; do you mean you'll be the first shore state to consider building wind turbines?
Tobina, if it happens they will be the first wind turbines operating off shore in the Ocean. It has been discussed in the Gulf and also off florida.
Frank
August Crude Futures closed at $140.97, up $0.97, and August Natural Gas Futures closed at $13.505, up $0.152/MMBTU, Natural Gas for December/January delivery is in the $14.40 range.
Frank
Thanks Frank, that's correct. Other states are considering it, but we're the first to sign the papers and get started. Virginia might be next.
Ah, I missed the "off-shore" part of it. That's pretty cool! What an amazing site to see; windmills in the middle of the ocean!
Diane, when it gets up and going, be sure to post a picture if you can.
Sure thing. If I can see them from shore.They may be too far out to be seen easily.
Awesome! I will never forget the first sight I had of the local wind farm I just couldn't get enough! It looked like the aliens coming over the rise from an H.G.Wells movie!
Diane, did you see the wind farm that we have northwest of Howard while you were here? It is quite an awesome sight. It is just south of Beaumont, northwest of Howard and can be seen from several spots on Highway 99, then again from 400 when you get close to Beaumont.
We sure did see it. It's quite amazing.
Unfortunately Crude Oil Inventories were down again in the EIA weekly Report and crude was up on the day, the front month August closed at $143.57, up $2.60 on the day, the outer monthhs traded in the $145.00 range. I have been travelling all day and
just now got my laptop on line.
Frank
August, front month Crude traded higher in overnite access, it is $146.30, up $1.78 and September has traded as hiigh as $146.25.
Frank
Frank, what does the front month and outer months that you refer to mean? Is that the first month that futures are traded?
Dee Gee
Dale, you can buy or sell futures contracts, for any month out for years, right now I watch it for 8 years out. The trading for the 1st month out is currently August, so that is the front month, the trading for August will end around the 20th of July and then September will be the front month. The front month impacts the current crude prices the most.
You can hedge almost anything , Crude Oil, Gasoline, Natural Gas, Beef, Corn, Wheat, Pork, all crude oil derivatives. The future market is agreat tool but it can also be a detriment, and there is some thought and I think evidence that it is being manipulated by traders buying long contracts to push it higher and higher. There needs to be and I think there will be some controlls put on to limit some of the , what I call gambler trading.
Frank
Frank,
What effect is the weakness in the dollar contributing to the crude prices? The way I am looking at it, the currency weakness has got to be fueling some of this.
Dan
In my previous job, I traded Live Cattle futures. "Speculators" is what we called those people who buy and sell just on the numbers games (what Frank calls "gamblers"). For example, yesterday (or day before), the Corn acres numbers were released which tells how many acres of corn are planted (and how many were ruined by the flood). Speculators were pushing the market higher before this release, as they speculated that the flood destroyed a lot more corn and there would be a high demand for corn. But the numbers actually told that more corn was planted this year than previously thought, so there will be a higher supply, which made the futures prices go down.
The company I worked for, we actually owned feedyards, so if the prices of the contracts were too low to sell them back (compared to the price we were buying them), then we'd actually "deliver" cattle on the contract at the end of the front month. So, whoever had bought a contract... now owned approximately 50 head of cattle. I don't know how much this "delivery option" is used in other markets, though. Not very many other companies did the cattle delivery like we did. I think they used it on corn, because our company was also a grain company, too.
Anyway, we always got irritated with the speculators/gamblers, too. Any little bit of news affected the markets horribly. You can imagine what happened every time there was a suspected case of BSE somewhere in the world!
Tobina, that is a very good example of how the futures market works. I think that is an example that everyone can understand.
David
Thanks, David. I fretted over that post for a bit before I submitted. It's been almost 4 years since I've done that stuff, and I wanted to make sure my terms were correct. I had to put orders in directly to the CME floor, and that was so nerve-racking! You could hear everyone in the pit yelling. Sometimes they'd fill the order while I was still on the phone (the guy would be yelling in my ear)! I did mix up Buy and Sell... but only ONCE (and I still had a job). We SOLD contracts when we BOUGHT cattle. And we BOUGHT contracts when we SOLD cattle.
I remember the difference in "bullish market" and "bearish market" this way: Bulls have horns and they hook them UP. Bears have claws and they tear things DOWN.
The one thing I didn't get to do yet was visit the CME floor. It would have meant more when I was working for my old company because I could have had a floor tour from our brokers, but it will still be neat just to view it from above during trading hours sometime!
I always thought the bull and bear markets were represented by the red line the animals body made on the profit/loss chart; the bulls back was an upward arc, and the bears' belly was a downward arc. I like the hook 'em up term though.
Just heard on the news this morning the stock market is now officially in a bear market. (20% off the market high).
David
Dan, the devaluation of our currency is a big problem and one of the big reasons the price of crude continues to go up. The world is flooded with our currency. The huge trade deficits we are running are due in part to the high price of oil and also in part because we have sent so much of our manufacturing and services overseas, added to that is the 14-18 Milion illegals working in this country, burning gasoline and send the dollars they get here back to their foreign country to add to the imbalance.. As the dollar goes down in value against other world currencies, the Yen, the Euro, etc, OPEC and non-Opec producers then demand more dollars for a barrel of oil so they can maintain their buying power in World Trade, for other goods and service. This problem will no doubt continue bto get worse until we make some big changes in our Oil consumption and in Importing so many goods and services. Unfortunately there is no quick fix, even if our congress did allow drilling in the ANWR and the OCS now , it would be 10 years before it would help ,our oil supply needs, and it is still a questin what the avaiable/recoverable reserves are. America will face some trying times ahead but Im still think that good old American ingenuity and perseverance will prevail. We will need lots of prayers to get us through. We have so many other problems that will get worse with the deterioration of our economy, Drugs, Crime, people who want a free ride at the expense of the working class. I could discuss this subject for hours with you if we had the chance.
Frank
Tobina, all futures markets have their "Speculators", I think we have what I call Gamblers and Manipulators in the Oil Markets these days. They are really pushing up the price everyday and making big profits doing it. The number of Crude Contracts traded around the world dwarfs all other commodities. They buy long out for months and years then bid up the market for big profits, alot of the trading in world crude oil futures is no doubt done by some OPEC members and or their families, that has to be a conflict of interest in the worst sense. I think their will be a day of reckoning and the LONGS could get wiped out. I do some hedging for operators but it s done to protect or gurantee a floor price on drilling projects, or prices needed to cover capital projects. I do Collars, Swaps, and other configurations, the Futures market is a good tool if used right. I would venture that their are far more people trading energy futures that have no oil interets that those trading that do. That was not the original intent.
Frank
The devaluation of our dollar is greatly influenced by our voracious consumer economy and the imbalance of what we export vs. what we import. I urge you all to support your local merchants and American companies. One of our most powerful votes is with our consumer dollar. I also realize the Global economy is a fact and we will have to compete in it as well.
David
about the only advantage of being poor is I don't have to even try to understand all this "trading" and "futures" and "what have you". I only need to worry about whether my small social security check will stretch for my needs till the end of the month then be ready for the same thing next month, that'll be the month some are "trading" or whatever :-\ :-\
We aren't the only ones that wait for the 3rd of the month, Flo. I was in a Wal-mart today and wondered why there were so many old people out, then I remembered it was the 3rd, social security check day for us old ones.
Yupper, had to go get those M80s! WooooHooo!! ;D ;D
Did you really get M-80's? We aren't allowed to have fire works here.
You know, I don't know if you can still get M80's, we used to though. As far as I know there is not a local ban on any fireworks.
I don't think you can get bottle rockets in Kansas anymore. You can get them in Oklahoma.. but not Kansas. :'(
That's probably a good thing. Back when we lived in the old Claypool house on South Pennslyvania, we had one of those tent-trailer campers. The neighbor kids across the street were setting off their bottle rocks and one of them landed on our trailer and set it on fire. I haven't been such a big fan of bottle rockets since then.
I actually think that is why they banned them here. Generally it is so dry in Kansas by July 4th that they were and had caused so many fires, so it was actually a fire safety reason that we can't get them here. That is why the Howard Fireworks are shot over the lake. It is a "no worry" for the fireman in the fire hazard dept.
(http://i273.photobucket.com/albums/jj216/marshalette/cow.jpg)
My exact thought at the grocery store several days ago. Where's the chicken? Have you priced eggs?
Teresa, I love that cartoon!!!
Back in the summer of 1962 my sister and I went to visit our grandfather in North Eastern Kansas. Since we were there over the 4th of July, grandpa decided we should go buy some fire works. Boy were we surprised to find that they were made in Elkton Maryland, not far from where we lived back home in Pa. What a laugh we all had!
We have a weird situation here. Pa. can sell fire works but the residents of Pa. can not possess them or set them off. What's the point? Here in Delaware they can not sell them and the residents can not possess them or set them off. We can buy them in Pa. but you have 48 hours to get out of Dodge. Maryland can sell them but they are all safe and sane as in sparklers and fountains. Nothing that goes bang. The closest state to us that can sell them and you can set them off is Florida.
Frank; in light of the recent comments you made about oil speculation, I wanted to post this e-mail that I just received today from United Airlines.
An Open letter to All Airline Customers:
Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help now.
For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers. Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.
Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.
Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper.
The nation needs to pull together to reform the oil markets and solve this growing problem.
We need your help. Get more information and contact Congress by visiting www.StopOilSpeculationNow.com.
All the Presidents/CEO's of 12 different airline companies signed it.
Thank you for posting this Tobina. :)
This will make us all feel better!!!!
A recent study found that the average American walks about 900 miles in a year. Another
study found Americans drink, on average, 22 gallons of alcohol a year. That means, on
average, Americans get about 41 miles to the gallon. Kind of makes you proud to be an American.
Thanks Tobina, that is what I was referencing, and I feel sure a lot of that speculation/Manipulation is by some OPEC Producers and alot is by the big hedge funds that have come into play. The Saudis have had their own trading house in London for years.
Southwest Airlines is much better managed than many of the other airlines, Southwest hedged alot of their fuel and kept their costs down considerably.
Frank
Japan was biggest buyer of Middle East Crude in 2007, OPEC says
Dubai: Japan was the biggest buyer of Middle East crude oil last year, taking a third of Saudi Arabia's exports and two-thirds of shipments from the United Arab Emirates, OPEC said in a report.
Asia's largest economy bought 2.21 million barrels a day of Saudi crude last year, or 32 percent of the kingdom's overall exports of 6.96 million barrels a day, the Organization of Petroleum Exporting Countries said in its Annual Statistical Bulletin. The rest of Asia took about 26 percent of Saudi crude exports, the U.S. 22 percent and Europe 12 percent.
With no domestic production of its own, Japan is vulnerable to price increases and reliant on deliveries of oil, most of which it gets from the Middle East.
Last year, Japan bought 1.58 million barrels a day from the United Arab Emirates, or 67 percent of that nation's exports; 450,000 barrels a day, or 18 percent of Iran's crude oil exports; 437,000 barrels a day, or 71 percent of Qatar's exports; and 296,000 barrels a day, or 18 percent of Kuwait's crude exports, the OPEC report said.
Japan's oil imports totaled 4 million barrels a day in 2007, down from 4.1 million barrels a day in 2006, OPEC said.
Japan accounted for 21 percent of imports of crude from all OPEC nations last year. Other Asia-Pacific region countries accounted for 24 percent, Western Europe 18 percent and the U.S. 26 percent.
Appears to be going through the roof this morning Frank. Crude was tapping 148 when I left the house this morning. Appears everyone sold off some profits a couple days ago and once it broke 138 yesterday it has been like a freight train.
Crude oil is trading higher in overnite access, August us trading at $146.375 up $$4.72, Novemeber crude is trading at close to $150.00 range. Problems with Nigerian workers, the Iranian Nuclear crisis , Brazilian workers unrest and the continued devaluation of the dollar are continuing push the price higher. I would really like to see our goverment announce some test drilling in the OCS and ANWR, at least do enough to define the reserves and the areas.
Good Morning Dan, I was typing my post at the same time you were posting. The present world situation is not very encouraging.
The potential coming shortages are going to make the 1973 Embargo look like it was nothing.
I agree about the test drilling Frank. If nothing else it might be like the "sword rattling" that would quell some of the speculators in the market. I would also like to see the administration throw a bluff of letting 30 or 40 million barrels out of the reserve to see how the market would respond to that. Don't know if it is wise to use the reserve oil, but I know that it has been done in the past during national emergencies. It seems to be getting to that point.
Housing market is taking a beating as well. Both Fannie and Freddie lost almost 50% overnight and now appears to have deep capital problems making the housing problem even bigger.
The problems with Freddie and Fannie are really mind boggling, I never in my wildest imagination thought I would ever see both entities in this condition. Unfortunately the energy crisis is only going to put more people out of work and cause more failures in home loans and other crdeit facilities. OPEC, gave us a warning shot in 1973 and we ignored it.
I'm with you! We got through '73 OK because as firefighters we were exempt...if we could find gas at all. We could buy gas on odd or even days according to the last digit on our car plate. This situation scares me. Everything seems to be falling apart now. Our investments have really taken a hit ( on paper at least) and we moved some money back into a money market just to protect it. Even our bank stocks that were doing well are slipping. It's hard to know how to defend well. Help! :(
Toyota has announced they will convert their Tundra plant in Mississippi to a Prius plant. That is great news, I think the Hybrid vehicles will get better and better with time. One of the best things about Honda and Toyota is they build a majority of their vehicles right here in the US, the result is jobs for Americans and it doesn't add to the trade deficit.
This article mentions Algae as one of the sources as renewable energy that will be researched, I have read several articles on algae as a renewable Energy source and it seems to make sense. It is fast growing, won't use up land that is needed for raising food and can be grown around the world. I have a problem with using food grains such as corn for fuel, when we have so many people starving in the world.
ConocoPhillips to build big center in Colorado
By ROD WALTON World Staff Writer
ConocoPhillips' decision to build a 432-acre research and training campus in Colorado that could eventually employ 7,000 people will not have any negative effect on the oil giant's operations in Bartlesville, a company spokeswoman said Wednesday.
The site in Louisville, Colo. will be focused on studying renewable energy sources and also function as a global training center, Tracy Harlow said.
Bartlesville, where Phillips Petroleum Co. maintained its headquarters for nearly eight decades before its 2002 merger with Conoco Inc., will remain ConocoPhillips' global operations center for logistics, Internet technology and other services, employing more than 3,000 people, she said. And Houston will remain as world headquarters.
"We want our Oklahoma and Texas audiences to know that ConocoPhillips is still committed to Oklahoma and still committed to Houston," Harlow said. "What we're doing in Colorado is new."
ConocoPhillips, the nation's third largest energy company, announced this week that it signed a $5 million research deal with the Colorado Center for Biorefining and Biofuels. The center includes several university research arms and energy laboratories aimed at new ways to covert biomass into low-carbon fuels.
One of the center's first projects will involve trying to convert algae into renewable fuel, according to reports.
"Even without climate change as an issue, fossil fuels are non-renewable," Colorado Gov. Bill Ritter said in a statement. "For ConocoPhillips to partner with us to convert biomass to transportation fuels fits in nicely with how we think about the new energy economy in the state."
The Louisville — pronounced "Lewisville" — site between Denver and Boulder is a former Storage Technology Corp. campus. Construction could begin in 2012.
The surge in Colorado research efforts surrounding new fuels is part of what attracted ConocoPhillips to the area, Harlow said.
"It's going to be a place where we're going to look at anything from a new technology standpoint," she added.
The other half of the campus will house a global training center. The company needed such a place to promote special work with every employee level, from senior management to new hires, Harlow noted.
"There's so many reasons we chose that location," she said. "In Houston and Bartlesville, we're really running out of space."
Most of the new hires likely will come from the nearby area, although several hundred people could be moved from Houston, according to reports.
Harlow said ConocoPhillips does not expect it to change the employee head count in Bartlesville, where about 500 contractors also work with the company.
"We're still active in the community, whether it's financial resources or volunteers," she said.
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I thought the below information would be of interest to some, the estimated captial required by the Oil and Gas industry to deveolp ANWR could run in to the hundreds of Billions. I would like to see our Government allow some Geological Mapping and possible expolatory drilling to define what the reserves might be. Another big factor in producing ANWR is building the infrastructure to get the oil and natural gas out if it is ever produced, a lot of preliminary work is needed to determine the problems in building a pipeline system that will be safe and workable in the soil and temperature extremes of the area. Everyday we delay just pushes the time frame further and further out. We are importing almost 70% of our curent oil supply and the major portion of that supply could be cut off at any time. Coupled with the Crude Oil Supply problem is an ever increasintg need to import more and more of our Natural Gas supply. Prudhoe Bay has massive Natural Gas reserves that are being reinjected as there is no infrastruture to move the gas to the lower 48 states. The project to build a pipeline to the lower 48 has been on hold for 30 years and the estimated cost has increased to 20-30 billion to build the pipeline. The right-of-way permitting alone for this project could take years, As long as our Congressman are warm and cozy and have plenty of gasloine for their big automoblies these projects will not be a priority.
Investment and Other Uses of Cash Flow by the Oil Industry
Today's oil and natural gas industry earnings are invested in new technology, new production and environment and product quality improvements to meet tomorrow's energy needs. This new Ernst & Young study shows the five major oil companies had $765 billion of new investment between 1992 and 2006, compared to net income of $662 billion during the same period. The industry overall, which includes 57 of the largest U.S. oil and natural gas companies, had new investments of $1.25 trillion over the same period, compared to net income of $900 billion and cash flows of $1.77 trillion. High oil and gas prices in recent years increased oil and natural gas companies' cash flows from operations and net income, which facilitated record levels of investment spending. Download the complete report below (Published May 2007) .
August, the front month, crude and natural gas are both trading flat to down in overnite access.
I have to sneak in here and say something.
I am sooooo ignorant on futures and commodities and everything that is posted here .. but I read word for word trying so hard to understand it all.
( sad when your own son is worlds ahead of you in things like this) :'( ( but I'm also VERY proud of him too :) )
I appreciate all who take the time to get this information and post it here for all for the ones who understand it and for the ones of us (me :'( ) who don't.
Teresa, I'm with you...I have to go back, read and re-read these posts...but Frank, I do so appreciate your posting this information...I have gotten a real education on this subject, thanks to you! I have been in the Phillips Mansion personally and was fascinated by how that huge business got its start. Thanks to you, maybe I'll understand more than just the pattern of the wallpaper in the Phillips kids' room! (l0l)
Teresa, the futures market gives one the right to buy or sell a certain Commodity, Corn, Beef, Crude oil, Gasoline, Gold, Silver, almost anything, at some given time in the future. It maybe to buy or sell at a fixed price 1 month, 1 year, even 10 years out. Most Commodities are now traded around the clock and around the world. It is an excellent way to gurantee a certain price for a certain period of time. Dan is always a pleasure to communicate with. When I was in Howard for Ellwoods services, I happened to be in line behind Dan at Poplar Pizza and i introduced myself, Dan is a very impressive young man. I told him that I had lots of great in-depth conversations with his Grandfather Gene, Great Uncles Glenn and Bob, and also had talked to his Great Grandfather Cookson. I remember when the cookson Boys came to Howard, i think it was from the St Lous area. Dan has some great Genes, (no pun intended) his Grandfather Fred and his Grandmother Jo, are first class quality people. When I was a young boy and Jo and Fred came to town I though Jo was the most attractive woman I had ever seen. Myrna and i really enjoyed our visit with them sometime back and plan to stop and see them again when in the area.
Frank
August Crude settled at $145.18 up $0.10 on the day, interestingly not as many contracts traded as usual. Natural Gas has not settled yet buy is at $11.955 up $0.051 for the day.
This is very hard to understand and for awhile I thought Frank was very fluent in "greek" - I agree, for those that understand this, it's a good thing, ::) ::) I think. :-\ I try to read and understand, but I tend to just watch the "bottom line" that appears at the pump. That pretty well tells you the direction things are going.
The nice thing about this forum is that there are many topics of interest. Some topics are fun, some topics are important, some topics are over our heads, and some topics are of no interest personally. The great thing is that the internet has given us more exposure to all the knowledge that exists. Yes sometimes it is overwhelming, vulgar, false, you get the idea where I am going. I may have to do a lot of thinking about what I find on the internet but I think if I give it a hard look I can make a better decision as to what I think, and what is best to make my life better. This is a long winded way to say that I think we all benefit by the posts on this forum no matter what our opinion. I think the way that this forum makes us better friends and more informed is one of the great advancements we have made. So don't be turned off by things you don't understand or are not interested in you just might change your mind or learn something new. If you read it and it doesn't interest you then go on; nothing wrong with that.
David
exactly, David. I read most of the posts, even those in catagories I'm usually not "into", but you never know what you might learn and just might learn something about a new subject and actually enjoy it.
Oil Rises Above $146 as Falling Dollar Boosts Crude's Appeal
July 15 (Bloomberg) -- Crude oil rose above $146 a barrel as the dollar fell to a record low against the euro, boosting the appeal of commodities as a currency hedge for investors.
Oil has gained 52 percent this year as a sliding U.S. currency and falling U.S. equities prompted investors to buy commodities. The dollar fell on speculation Federal Reserve Chairman Ben S. Bernanke and U.S. Treasury Secretary Henry Paulson will tell lawmakers today credit-market losses will weigh on U.S. economic growth.
``There is still a flow of money into oil out of the equities market because it is so weak and out of the dollar because it is so weak,'' said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. Oil prices ``will be looking for $150 in coming weeks.''
Crude oil for August delivery rose as much as $1.37, or 0.9 percent, to $146.55 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $146.52 a barrel at 10:35 a.m. London time. Futures reached a record $147.27 a barrel on July 11 and have risen 96 percent in the past year.
The dollar fell to an all-time low of $1.6038 per euro in London from $1.5908 yesterday.
Brazil's state oil company Petroleo Brasileiro SA said a strike by employees had cut 63,000 barrels a day of production as of 5 a.m. Singapore time today. The union representing the workers had said the action could reduce output by as much as 400,000 barrels a day.
Campos Basin
Petrobras said it is still pumping crude from all but two of 38 offshore platforms affected by the strike in the country's Campos Basin, the source of about 82 percent of Brazil's production of 1.8 million barrels a day. Employees began a 5-day strike in the area yesterday over pay.
Chevron Corp.'s Nigeria unit resumed oil production that was cut after a militant attack on a pipeline nearly one month ago. The pipeline was breached June 19, resulting in about 120,000 barrels a day of lost production, Agence France-Presses reported at the time.
``The pipeline is back into service and production is resumed,'' Chevron spokeswoman Margaret Cooper said in an e- mailed statement yesterday.
Brent crude oil for August settlement traded at $145.31 a barrel, up $1.39, on London's ICE Futures Europe exchange at 10:33 a.m. local time. The August contract, which expires tomorrow, reached a record $147.50 on July 11. The more-widely held September contract rose 97 cents to $146.30 a barrel.
U.S. Supplies
U.S. crude-oil supplies probably fell as record prices discouraged buying by refiners, according to a Bloomberg News survey of analysts.
Supplies of crude declined 2 million barrels in the week ended July 11 from 293.9 million, according to the median of responses by six analysts before an Energy Department report July 16. Supplies fell 5.84 million barrels in last week's report, double the forecast.
Gasoline stockpiles probably gained 500,000 barrels from 211.8 million barrels the week before, the survey showed.
Inventories of distillate fuel, including heating oil and diesel, probably rose 2 million barrels from 122.5 million barrels the week before. All the analysts predicted an increase.
Refineries probably operated at 89.3 percent of capacity, up 0.1 percentage point from the week before, the survey showed.
Bear in mind that 10 years ago China was not even a factor in the world energy supply, now they are the second largest energy consumer and will be Number 1, Numero Uno, if we keep helping them grow.
Frank
China Boosts Fuel Imports to Highest in Five Years
By Winnie Zhu
July 15 (Bloomberg) -- China, the world's second-largest energy consumer, increased diesel and gasoline imports last month to meet rising demand from next month's Olympics Games and reconstruction after the May earthquake.
Diesel imports rose to 960,000 metric tons, the highest in at least five years, the Customs General Administration of China said in an e-mailed statement today. Gasoline purchases surged to 282,996 tons, with exports at 150,000 tons, the country remaining a net importer of the fuel for the second time.
China is increasing fuel imports for relief efforts after a 7.9-magnitude temblor struck the nation's southwestern Sichuan province on May 12. The August Games in the capital city Beijing increases the nation's need to build up stockpiles before the event, said Li Yujing, an oil analyst with China International Chemical Consulting Corp.
``State oil companies have been increasing overseas purchases for months to avoid shortages during the most important event,'' Li said by telephone from Beijing, referring to the Aug. 8-24 Olympics.
Diesel imports jumped more than 12-fold to 3.85 million tons in the first six months, today's figures show. Gasoline imports soared 31-fold to 837,322 tons.
China, traditionally a supplier of gasoline to Asian countries, became a net importer of the fuel for the first time in May after overseas purchases of the fuel more than doubled from April to 338,527 tons.
China was a net coal exporter in June as a bigger gap between international selling prices and domestic levels spurred overseas sales. Imports fell 32 percent to 2.78 million tons while exports jumped 83 percent to 6.99 million tons.
China's government on June 19 imposed ``temporary caps'' on domestic prices of coal used in power stations to help ease an electricity shortage, widening the gap with regional benchmarks.
Only the U.S. consumes more energy than China.
WOW, just checked the NYMEX Frank!!! Did everyone take the gains and bail or what?
August down to 137
Sept down to 138
Etc...all look to have lost about 7-8 dollars per barrel in the last hour.
Dan, below is a news blurb that was posted on one of the news websites. If you look at the far outter months some of them were flat to up on crude oil and the same on Natural Gas, I think much of the sell off is what we discussed earlier today, the economy is going to get worse and Precious metals and Cash will be a good thing. Maybe Bush's speech yesterday had some psycological impact or created some pessimism. If the dollar would improve I think we could see some lower near term oil prices.
Frank
Investors have a slew of gloomy news to digest today, but the markets picked up after dive in the price of oil this afternoon.
Light, sweet crude oil plunged $7.30 to $137.88 a barrel by midday.
"We're getting to the point where the market's looking at an increasing likelihood of a deep recession," James Ritterbusch, president of Ritterbusch & Associates, told Bloomberg News. "Traders are looking at this decline in the stock market and saying oil demand is going to be a lot weaker than we thought."
Dan, alot of the NYMEX business I have done in the past few weeks has been Costless collars on both Crude Oil and Natural Gas, buy a put and sell a call , you are covered at the floor price you paid for in the put, if the ceiling price on the call is breeched on the upside you pay everything over the call value, I locked in some crude oil at $95.00 Floor and $135.00 Ceiling for June thru October, I thought he might have to pay some for July and the outter months on the crude but maybe not. The main operator that wanted them is a pretty astute individual when it comes to politics and the Stock Market, he wanted some downside protection as he felt it being an election year the Republicans would try to push oil down to help their cause and his main reason was that our economy will not be able to withstand the price of oil above the $120.00 range for an extended period of time
Let's hope that the downward trend continues!
Dan the outter momths trading in Crude is pretty thin, Natural gas is trading more a little more in the outter months, I am guessing it is because of the Winter Months and the lower than usual Gas inventories at this time.
August Crude traded down considerably today, settling at $138.74 Down $6.44, it traded down in the negative $4.00 range all the way out to December 2015 Futures, Natural Gas traded down and settled at $11.477, down $0.482 on the day and traded down all the way out by a negative $0.40 cent range. Hopefully this will scare the longs into selling and push it down further in the coming days.
Really good to see the longs down that much and not just the shorts. Maybe the pressure will drift it off and get it going in the other direction. I think some positive news from the banking industry or some strength in our dollar would help even further.
Quote from: DanCookson on July 15, 2008, 03:24:49 PM
Really good to see the longs down that much and not just the shorts. Maybe the pressure will drift it off and get it going in the other direction. I think some positive news from the banking industry or some strength in our dollar would help even further.
Dan, I bet the shorts took a little sigh of relief thinking that might get to cover for less.
Frank
So...how much lower does everybody think the markets are goin to go?
Pam which markets are you referring to, if it is Crude Oil and/or Natural Gas, they could go either direction depending on what happens in the world, that market is so volital and so many things can have a big impact on it.If you are talking about the stock market, there doesn't seem to be many bright spots out there at the moment to make it move up. Certain sectors could move up but overall I think it will continue to drift down some, the big question for all the markets is the election and the price of world oil, the world political situation and of course Iran could be the wild card. That is my 2 cents for whatever it is worth, which is probably nothing.
That depends . ;D copper is worth more now. We've seen cases here where thieves are stealing copper downspouts, air conditioner pipes and even mausoleum doors. So your pennies are worth something after all.
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.''
Quote from: pam on July 15, 2008, 04:14:36 PM
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!
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
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 (8) 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
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!!!!
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.
Quote from: DanCookson on July 16, 2008, 09:39:07 AM
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!!!!
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.
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***
Dan, we could go back to the old push reel type mowers that didn't use any gas. Do they even make them anymore?
Yup...HSN...roughly $100 a pop.
LOL.. I actually have a reel push mower. I use it for my front lawn. I read an article that said that they are much better for the grass, so that's what I use.
Dale, you must stay in pretty good shape pushing that thing.
Frank... it's not a very big lawn, and it's bermuda grass, which I keep VERY short. It's not that bad to push. And the price is right.
Dale, I have Bermuda, I may get my wife one of those for her exercise, she is a pretty tough farm girl
Hmmmmm.... you might want to consult with her on this first.
Speaking on behalf of all womankind...don't go doing any favors!!!!! The self-propelled mower is the best thing ever created, third only to the power of flight and the power of penicillan! (lol)
August Crude closed down $4.14 at $134.60 and August Natural Gas Closed down $0.079 at $11.398, I am hoping the longs out there may make a run for the exit and it will come down appreciably. If we see continued declines in consumption and no blowups in the Middle East we could see a good pull back in Crude, Natural Gas is another story, we need to build more inventory and start doing it pretty quick.
So, how soon do we see lower prices at the pumps? Son-in-law just got back from Wichita and he said it hasn't gone down there, yet.
Probably a minimum of a week.
We were in Kansas City Monday and Tuesday. Gasoline was $3.96 when we got there on Monday night, and went up to $4.06 by Tuesday morning. I couldn't figure that out since oil had closed considerably down on Monday. Funny how it is so fast to go up at the pump but is so slow to go back down. ??? ??? ???
Oil didn't close down on Monday,
You are right I think, but didn't it open down on Tuesday? That was why I couldn't believe the ten cent price jump over night, especially when later that day we saw everything from $3.99 to $4.16, all before we left the city.
The open doesn't set the price for the day, the close does.
I just saw more on the early news that New York City is replacing 13,000 Cabs with Hybrid Vehicles. They are doing at the rate of 300 a month and hope have all hybrids by 2012. That is encouraging, every 1% of consumption we reduce is is a reduction of 200,000 barrels of oil a day, and that is 200,000 less we have to depend on from the Muslim world.
Crude in overnite trading is off a $1.00 in the front months, hopefully this pullback will continue. We still need to reduce consumption a lot more in the long run and increase the avaliability of more crude that we have control of.
Front Month Crude opened flat to down this A.M, tomorrow is the last day of trading for August, Natural Gas also opened flat to down, the Storage Report comes out today and I anticipate storage will still be off considerably.
Frank
Oil Falls for Third Day as Slowing Economic Growth Curbs Demand
By Alexander Kwiatkowski
July 17 (Bloomberg) -- Crude oil fell for third day, the longest losing streak for a month, on speculation slower global economic growth is curbing fuel consumption.
Crude has plunged more than $13 from last week's record $147.27 on falling U.S. gasoline purchases. Economic growth in China, the world's second-largest oil user, was the slowest since 2005 in the second quarter. Plans for renewed diplomatic contacts between the U.S. and Iran eased concern a conflict will cut supplies from the Middle East's second-largest producer.
`` The demand picture is clearly demonstrating that current high prices are slowing both industrial and personal usage,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``Geopolitical worries are receding especially in U.S. and Iranian relations.''
Crude oil for August delivery fell as much as $1.20, or 0.9 percent, to $133.40 in electronic trading on the New York Mercantile Exchange. The contract traded at $134.08 at 10:19 a.m. London time.
Prices have dropped 7.7 percent in the past three days, the biggest three-day decline since March. Oil fell as low as $132 a barrel yesterday, more than 10 percent below the record $147.27 reached on July 11. A drop of that magnitude is commonly referred to as a correction.
Prices fell yesterday after the Energy Department reported an unexpected increase in U.S. stockpiles and a drop in monthly gasoline demand. Consumption of motor fuel in the U.S. averaged 9.3 million barrels a day over the past four weeks, down 2.1 percent from the same period last year, an Energy Department supply report showed.
Nuclear Negotiations
Prices also fell as plans by a high-ranking American diplomat to take part in nuclear negotiations with Iran tempered speculation that the U.S. or Israel may attack OPEC's second- biggest oil producer in a dispute over its nuclear program. Concern about a possible attack helped push oil prices to a record last week.
Undersecretary of State William Burns will participate in the European Union-Iran talks this weekend in Geneva, State Department spokesman Sean McCormack said yesterday without giving details. This is a shift in the U.S. position on talks with a government it has shunned since 1980.
The U.S. will announce in the next month plans to establish a diplomatic presence in Tehran, the U.K.'s Guardian newspaper reported today, without citing anyone. The Bush administration intends to set up a U.S. interests section in Tehran staffed by American diplomats almost 30 years after severing ties with Iran, the London-based newspaper said.
China Slowdown
Brent crude oil for September delivery traded at $135.84 a barrel, down 35 cents, on London's ICE Futures Europe exchange at 9:46 a.m. local time. Yesterday it declined $4.05, or 2.9 percent, to $135.81 a barrel.
China's economic expansion cooled to the slowest pace since 2005 as gross domestic product grew 10.1 percent in the second quarter from a year earlier, down from 10.6 percent in the first, the statistics bureau said today in Beijing.
Gasoline for August delivery was at $3.2650 a gallon in New York, down 1.44 cents, at 9:14 a.m. London time. Futures reached $3.631 a gallon on July 11, an all-time high.
``U.S. drivers continue to curb travel whenever possible with retail gasoline prices above $4 a gallon,'' Harry Tchilinguirian, a senior oil market analyst at BNP Paribas SA in London, said in a report. ``Prospects for the U.S. economy and gasoline demand go hand in hand.''
Confidence in the global economy deteriorated this month from Asia to the U.S. as oil prices rose to a record and the financial crisis deepened, a survey of Bloomberg users on six continents showed.
T
This project is really good news for our future supply of oil. Canada is the safest outside supply we have and they have alot of untapped reserves. This is 7 billion dollar investment( and could run 50% more than that) that will take years to recover.
Oil may flow from Canada to Gulf
ConocoPhillips and TransCanada expand project reaching Midwest
By TOM FOWLER
A $7 billion pipeline project planned by TransCanada and ConocoPhillips could bring Canadian crude to Gulf Coast refineries as early as 2012.
The project, an expansion of a previously announced joint venture to move Canadian oil to the Midwest, will be the first time oil has flowed from the north all the way to the Gulf of Mexico. That's a reversal of what has been decades of south-to-north shipments
It would also deepen U.S. reliance on Canadian oil imports, which averaged about 2.5 million barrels per day in 2007, or 20 percent of all imports, according to Department of Energy data.
"I think we'd all prefer to import more from Canada than other less reliable regions of the world," said Jeff Dietert, an analyst with Simmons & Company International.
The 36-inch pipeline, called Keystone XL, would begin in Hardisty, Alberta, and run 1,980 miles through Montana, South Dakota, Kansas and Oklahoma before ending in Texas near Port Arthur.
A 50-mile spur could also extend the pipeline to the Houston area.
TransCanada said it already has commitments for 300,000 barrels per day for 18 years from producers, but the pipeline will be able to handle up to 590,000 barrels per day.
The remaining capacity will be made available through an "open season," a process pipeline companies use to gauge interest in a project, that started this week and continues through Sept. 4.
Future expansions would increase capacity to 1.1 million barrels per day.
The increased Canadian shipments will likely offset declining imports from Mexico's quickly shrinking Cantarell field and from Venezuela, which is aiming more of its exports to China, analysts note.
Oil sands fertile
Development of the Canadian oil sands in a massive region that consulting firm Wood Mackenzie estimates holds more than 170 billion barrels of oil means similar projects like Keystone XL may follow.
Oil sands output is expected to increase from 1.2 million barrels per day to 3.5 million barrels by the end of the next decade, according to the Canadian Association of Petroleum Producers.
In addition to being from a nation on good terms with the U.S., Canadian crude is also less expensive. Dietert notes Canadian heavy crudes usually trade at about a $20 discount to West Texas Intermediate, which is the price of oil most commonly quoted.
So-called Maya crude from Mexico and Venezuela trades at about a $13 discount to WTI.
TransCanada and ConocoPhillips signed an agreement to build the Keystone Pipeline to deliver crude to the Midwest.
Construction has begun in Manitoba and North Dakota for that project, which will cost an estimated $5.2 billion. Delivery to refineries in Wood River and Patoka in Illinois are expected by late 2009 and shipments should be able to reach the key storage hub of Cushing, Okla., by late 2010.
Construction on Keystone XL could start by 2010 pending regulatory approvals.
Fits with strategy
ConocoPhillips spokesman Bill Graham said the Keystone expansion fits into the company's strategy of bringing together its North American assets.
ConocoPhillips is already one of the largest players in the oil sands, with more than 1 million acres under lease.
"It fits our strategic plan connecting our exploration and production assets in Canada with our refineries in the U.S.," Graham said.
While ConocoPhillips and TransCanada are joined on this project, the two companies are positioned as foes in Alaska, where both have proposed massive natural gas pipelines to bring that stranded fuel off the North Slope to other markets.
"That's just the nature of the business, where you can be both partners and competitors from one project to another," Graham said.
Gas is 3.79 in Wichita today.
I filled up today.
Crude oil closed at $129.29 down $5.31 on the day and Natural Gas closed at $10.537 down $0.861 on the day. Crude is trading up this A.m due to more threatened strikes by the Nigerian Rebels and market corrections.
Crude Oil Gains on Speculation Prices Fell Too Far, Too Fast
By Alexander Kwiatkowski
July 18 (Bloomberg) -- Crude oil rose, rebounding from the biggest four-day decline in more than three years, on speculation that prices fell too far, too fast this week.
Oil rallied as buyers bet that the 11 percent decline in the first four days of this week, the biggest since December 2004, was excessive. Prices fell after the U.S. decided to participate in nuclear talks with Iran, easing concern a conflict will cut supplies from OPEC's second-largest producer.
``We have come down about $14 this week which is too much,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``Maybe it is a bit of a dead cat bounce today and there will be more selling next week.''
Crude oil for August delivery rose as much as $2.55, or 2 percent, to $131.84 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $131.20 at 10:19 a.m. London time.
Yesterday, oil fell $5.31, or 4 percent, to settle at $129.29 a barrel, the lowest close since June 5. Futures are up 74 percent from a year ago.
Prices also rose after the International Monetary Fund raised its forecast for global economic growth this year. The world economy will expand 4.1 percent this year, faster than the 3.7 percent pace projected in April, the IMF said yesterday.
Brent crude oil for September settlement gained as much as $2.45, or 1.9 percent, to $133.52 a barrel on London's ICE Futures Europe exchange. It was at $132.83 a barrel at 10:20 a.m. local time.
Yesterday, it declined $4.74, or 3.5 percent, to settle at $131.07 a barrel, the lowest close since June 11. Prices climbed to a record $147.50 on July 11.
Supply Disruptions
``At current price levels, it's seen as a good opportunity to buy back as supply bottlenecks are still a concern,'' said Toby Hassall, an analyst at Commodity Warrants Australia in Sydney. ``The market is sensitive to any real or potential supply disruptions.''
Eni SpA, Italy's largest oil company, said 47,000 barrels a day of Nigerian production had been suspended yesterday after an ``unforeseen drop in pressure'' on pipelines leading to the Brass export terminal.
Crude oil may fall next week as slowing economic growth curbs fuel demand and the U.S. takes part in talks with Iran over its nuclear plans. Concern about a possible attack helped push oil prices to a record last week.
Iran Talks
Ten of 22 analysts surveyed by Bloomberg News, or 45 percent, said prices will fall through July 25. Seven of the respondents, or 32 percent, said oil will rise and five forecast little change. Last week 63 percent said futures would increase.
Undersecretary of State William Burns will participate in the European Union-Iran talks this weekend in Geneva. This is a shift in the U.S. position on talks with a government it has shunned since 1980.
Gasoline for August delivery was at $3.2126 a gallon in New York, up 4.93 cents, at 9:39 a.m. London time. Prices have fallen 9.9 percent this week.
In the U.S., regular gasoline at the pump declined 0.2 percent to $4.105 a gallon, AAA, the nation's biggest motoring group, said today on its Web site. Prices were at a record $4.114 a gallon yesterday.
It is somewhat encouraging to see that we are building back some of the Underground Natural Gas Storage. Hopefully we won't have many Hurricane threats which require shutting the big volume offshore gas in. On a BTU basis gas is so much cheaper than fuel oil, that power plants and other users that have the capability to switch back and forth have been using Natural Gas.
Weekly Natural Gas Storage Report Release Schedule
Sign Up for Email Updates
--------------------------------------------------------------------------------
Released: July 17, 2008 at 10:35 A.M. (Eastern time) for the Week Ending July 11, 2008.
Next Release: July 24, 2008
Working Gas in Underground Storage, Lower 48 other formats: Summary TXT CSV
Region Stocks in billion cubic feet (Bcf) Historical Comparisons
07/11/08 07/04/08 Change Year Ago (07/11/07) 5-Year (2003-2007) Average
Stocks (Bcf) % Change Stocks (Bcf) % Change
East 1,245
1,177
68
1,382
-9.9
1,262
-1.3
West 325
314
11
390
-16.7
347
-6.3
Producing 742
717
25
901
-17.6
753
-1.5
Total 2,312
2,208
104
2,673
-13.5
2,361
-2.1
Notes and Definitions
Summary
Working gas in storage was 2,312 Bcf as of Friday, July 11, 2008, according to EIA estimates. This represents a net increase of 104 Bcf from the previous week. Stocks were 361 Bcf less than last year at this time and 49 Bcf below the 5-year average of 2,361 Bcf. In the East Region, stocks were 17 Bcf below the 5-year average following net injections of 68 Bcf. Stocks in the Producing Region were 11 Bcf below the 5-year average of 753 Bcf a net injection of 25 Bcf. Stocks in the West Region were 22 Bcf below the 5-year average after a net addition of 11 Bcf. At 2,312 Bcf, total working gas is within the 5-year historical range.
Working Gas in Underground Storage Compared with 5-Year Range
Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2003 through 2007.
Source: Form EIA-912, "Weekly Underground Natural Gas Storage Report." The dashed vertical lines indicate current and year-ago weekly periods.
Data
History (XLS)
5-Year Averages, Maximum, Minimum, and Year-Ago Stocks (XLS)
References
Methodology
Differences Between Monthly and Weekly Data
Revision Policy
Related Links
Storage Basics
Natural Gas Weekly Update
Natural Gas Navigator
A "dead cat bounce?" I never heard that one before! ;D Love those posts Frank.
Front Month August Crude closed at $129.80 down $0.41 , this was the last trading day for Aug 08 and Monday Sept 08 will be the front month, Natural Gas settled at $10.57, up $0.03 for Aug Gas. I think if we can avoid a shouting match with Iran, and Nigeria can hold the Militants down, we could see some more downside, if the NYMEX continues to drop more, it could cause the longs to stampede and that could bring crude down appreciably. Unfortunately if crude goes down to much then consumption will increase and the vicious cycle starts all over again. I would still like to see a nationwide speed limit of 55 MPH, a cylinder/horsepower tax and tax incentives for more efficent and hybrid vehicles. Continued research and development of alternate fuels, electric power packs and any thing else that will yield vehicles that do not need petroleum based fuel, is imperative.
I think you're right on all that. I saw 75 MPH speed limits on our trip...I'd never seen that before and of course some drivers were going much faster. They were good straight roads, but still... Al played around with our Honda checking mileage against engine RPMs and I was surprised it how well it did at higher speeds. I'm waiting for a mileage tax...the more miles you drive, the more you pay. I'd do pretty well. Some of you would surely be hit hard. If I have to I can buy a bike again. With as little traffic as Newark has right now it would be quite safe. But after the schools reopen, that's something else. I have to add at least 10 min. to everywhere I go.
It has not been that long ago that the speed limit on the Kansas Turnpike was 80mph.
Waldo, it has been 34 years, which was when the "Emergency Highway Conservation Act was passed and it lowered the speed limits to 55 MPH. Several of the Turnpikes in Oklahoma have 75 MPH now.
Just like yesterday wasn't it?
Seems like it sometimes
Even driving at 80 mph on the turnpike could get boring especially if you were going "all the way."
I always wondered that if you arrived at your exit gate and your time indicated you would had to have driven 90 or 100 whether you would get a ticket.
I did not mind paying the $2.55 (at one time) but I know a number of people who stayed off it for that reason.
That was some roadway for long curves and I think the standards for it might have been stricter or greater than when the Defense Highways were built.
I have not been on it for many years, now.
Well, I'm wrong. Al reminded me I have seen 75 MPH highways before. The stretch between Phoenix and Tuscon is 75. I completely forgot that one. I guess all the cotton fields distracted me. :laugh:
thank you, but 55 and MAYBE 60 is plenty fast enough. Wish people would slow down and enjoy the scenery around them. Always in a hurry to get to where they are going. I say start a little sooner. I just let 'em pass me. However, I remember when the speed limits changed. We were driving a Mercury Marquis Brohm SE 8 passenger station wagon. That durn thing wasn't made to drive 55 mph. :-\ Only speeding ticket I've ever gotten was right after the speed limits changed to 55.
Heard tonight on the news that they're thinking about reinstating the 55/hr. thing...only the public is resistant to the idea...gee...the stats on not only the gas savings but also the amount of lives that were spared speak for themselves...although...I like speed as much as the next person! I hear the echoing strains of that great rock mantra..."I can't drive....55!". :-) What big hair rock group was it that sang that? Probably one in spandex, to boot.
A bit of trivia , the American people, millions of them have 500Billion dollars invested in Exxon, a less than 8% return seems reasonable.
Cat, that was Sammy Hagar, 1984, I think...Your love is drivin' me crazy....
Frank, that 8% would be a lot more reasonable if it were going in my pocket! (lol) Diane...Sammy Hagar, huh...hmmm...I can almost picture him in my mind...wasn't he the one who fronted for Van Halen for awhile? I think it was during that time that the song "55" came out, maybe...OH does that bring back memories! By the way, did anyone catch the press calling our gov a "kindred soul" to Obama??? Hillary, without the dark side??? I sure wish our democratic press wouldn't quite so obvious about their being so Democrat in their leanings (check out all of the press that Obama is getting just for boarding a plane...press coverage is enormous just for his ability not to get airsick...McCain should be getting the same kind of coverage but can't even get an honorable mention...and NO I'm not "for" McCain...I just think that everyone should get the same amount of airtime)! Now, before our resident Liberals get in an uproar, being a Democrat isn't a necessarily a bad thing...uhm...uh...no, I guess it's not a bad thing. (Just kidding! Put the lynch rope away!)
Yes, Sammy Hagar was with Van Halen for a time, and yes it was when "55" came out. I don't remember why he left though.
I don't want it to be 55 mph. If I want to drive 55 I can.. but I want the option to go 70 if I want to also.
Crude Oil is trading up this morning at $130.775 up $1.895 and Natural Gas is at $10.725 up $0.1555.
I thought this was an interesting article that would give some of you that have an interest in understanding the Futures Markets use and Impact in oil trading, supply and Pricing.
Frank
Oil futures: Know when to hold 'em
Rumors that Mexico is locking in oil contracts for future delivery at today's prices prompt questions of whether oil's record run has come to a halt.
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See all CNNMoney.com RSS FEEDS (close) By Steve Hargreaves, CNNMoney.com staff writer
Last Updated: July 17, 2008: 5:35 PM EDT
With prices at $135 a barrel, some producers scramble to lock in long-term contracts.
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NEW YORK (CNNMoney.com) -- In the last three days oil prices have fallen by roughly $10 a barrel. Many analysts say slackening demand, or the threat of it, is the main culprit.
But another force could be at work in the background. Last week various analysts said there was talk that Mexico, the world's fifth largest oil producer, was hedging its bets - the country was said to be signing contracts to deliver oil several years into the future at today's prices. Essentially, it was betting oil prices have peaked.
"This is a smart move," said Phil Flynn, senior market analyst at Alaron Trading in Chicago, who also thinks there's a good chance prices have peaked. "If I were an oil producer, I'd want to lock in these prices."
Analysts say if other oil producers follow suit and lock in future contracts, that could be one thing that would cause oil prices to fall, far and fast.
But it's hard to tell if that's happening because information about who is buying what is kept private for competitive reasons.
"I don't know who else is doing it," said Nauman Barakat, an energy trader at Macquarie Futures, and one of the traders who mentioned the Mexico news in a research note. "There's been a lot of talk, but it's kept very confidential."
One analyst, speaking on background only, said he had confirmed Mexico was locking in futures contracts. He said it was being done at the behest of the Mexican government, eager to balance a long-term budget, rather than a bet by state oil company PEMEX, that prices will fall.
But could Mexico's move inspire similar steps from other oil producers, and cause oil prices to fall further?
"Absolutely," said Neal Dingmann, senior energy analyst at Dahlman Rose & Co., a New York-based energy investment boutique. "It could create a top in [oil prices] in the near term."
Dingmann said about 50% of the production from the firms he covers - mostly small firms - has been sold for future delivery at today's prices.
Why isn't everyone doing it?
The selling from Mexico also raises another question: Oil companies and OPEC have long said oil prices are too high - driven by Wall Street speculators and a falling dollar rather than supply and demand.
So if they really think prices are too high, why aren't they all locking in contracts now?
For starters, it's believed some heavyweights, like Saudi Arabia and Exxon Mobil, don't play the futures market at all - they don't get into the complicated dance of buying and selling futures contracts on NYMEX or any other markets.
In vastly simplified terms, they take whatever price is being offered when their tankers pull into port.
Second, there aren't enough takers for these types of contracts. There simply aren't enough people who are willing to pay $135 dollar for a barrel of oil delivered in 2013, said Fadel Gheit, a senior energy analyst at Oppenheimer.
"Exxon produces 1.2 billion barrels of oil a year," said Gheit. If someone locked in all that production for five years out at today's prices, and crude fell 20%, "it would be a disaster," he said.
For Saudi Arabia and other OPEC counties, non-OPEC oil producers like PEMEX locking in future contracts is a problem.
When the price of oil falls OPEC likes to pump less oil to keep prices up. If producers sign long term contracts, they're obligated to pump that oil making it more difficult for OPEC to control prices.
"You get stuck with this extra production that's out there," said John Kilduff, an energy analyst at MF Global in New York. "Then OPEC has to reduce market share just to maintain price."
On the New York Mercantile Exchange, things are looking fairly balanced for the first time in a long time.
Big commercial users of oil, like refineries, trucking companies and airlines, are holding just slightly more "short" contracts - contracts where they are betting the price of oil will fall - than "long" contracts, according to Addison Armstrong, director of market research at Tradition Energy Futures, an energy brokerage based in Stamford, Conn.
Previously, commercial users had overwhelmingly been betting prices would fall, and much of the runup in oil prices over the last few months was a result of them selling or closing out those short contracts and buying long ones, said Armstrong.
Meanwhile, non-commercial users - like banks and pension funds - are holding just slightly more long positions. The market, said Addison, is pretty well balanced.
However, that doesn't mean we won't see more of the huge price swings of the last few days, swings that have come to characterize the oil market of late.
"
I RECENTLY NOTED AN ARTICLE THAT SAID" BY AMERICAN ONLY", I READ IT AND IT MADE A LOT OF SENSE UNTIL I REALIZED IT DIDN'T MENTION ENERGY CONSUMPTION. IF WE BOUGHT AMERICAN ONLY INCLUDING ENERGY, WE WOULD HAVE APPROXIMATELY 70% LESS ENERGY WE HAVE A LONG WAY TO GO TO BE ENERGY SELF SUFFICENT AND WE ARE NOT DOING A VERY GOOD JOB OF TRYING TO GET THERE.
Oil Rises From Six-Week Low on Tropical Storm, Iran Tensions
By Alexander Kwiatkowski
July 21 (Bloomberg) -- Crude oil rose from a six-week low as a tropical storm headed toward the Gulf of Mexico and Iran, the world's fourth-biggest producer, resisted demands to suspend nuclear research.
U.S. forecasters said there is a 29 percent chance Tropical Storm Dolly may strengthen to a hurricane after it enters the Gulf of Mexico. Iran risks ``further isolation'' if it doesn't respond in two weeks to the United Nations offer of economic aid in return for halting uranium enrichment, U.S. officials said July 19.
``U.S. refinery operations in the Gulf of Mexico are safe at present, but Mexico's oil operations are at risk,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``If the direction was to change, a protective shut in of production facilities across the Gulf of Mexico is likely.''
Crude oil for August delivery rose as much as $2.14, or 1.7 percent, to $131.02 a barrel on the New York Mercantile Exchange. It was at $130.53 at 11:36 a.m. in London.
The contract fell 41 cents, or 0.3 percent, to settle at $128.88 on July 18, the lowest close since June 5. Prices dropped 11 percent last week, the most in more than three years, on signs of slowing global economic growth and faltering U.S. fuel demand.
Iran snubbed Western efforts to get it to suspend nuclear enrichment at talks in Geneva on July 19, setting the stage for new sanctions if the Middle East's second-largest oil producer doesn't respond to an existing proposal within two weeks.
Top Negotiator
``We did not get what we were looking for,'' European Union foreign policy chief Javier Solana said at a press conference following four hours of talks with Iran's top nuclear negotiator, Saeed Jalili.
``The assumption was the talks would take some pressure off the market, but they didn't end as they were supposed to,'' said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. ``Any escalation of aggression will definitely affect the price positively.''
Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, borders the Straits of Hormuz and has in the past threatened to close the waterway carrying about a fifth of the world's oil deliveries.
Brent crude oil for September settlement rose as much as $2.35, or 1.8 percent, to $132.54 a barrel on London's ICE Futures Europe exchange. It was trading at $131.87 a barrel at 11:37 a.m. local time.
Hurricane Season
The North Atlantic hurricane season runs June through November. September is historically the busiest month for storms and hurricanes.
The northern Gulf of Mexico accounts for about 25 percent of U.S. oil production. Tropical Storm Dolly's projected path over the tip of the Yucatan Peninsula takes it north of Campeche Bay, where Petroleos Mexicanos produces about 1.07 million barrels of oil a day.
Dolly may strengthen again as it crosses the gulf on a path that may take it toward the Mexico-Texas border, hurricane center said. There is a 43 percent chance it will remain a storm, with wind speeds between 39 and 73 miles an hour and a 12 percent chance it will dissipate before making land a second time around July 24.
Tropical Storm Dolly Crosses Yucatan, May Strengthen (Update1)
By Alex Morales
July 21 (Bloomberg) -- Tropical Storm Dolly pounded Mexico's Yucatan Peninsula with 50 mile-per-hour winds and may become a hurricane by tomorrow as it passes back over sea, the U.S. National Hurricane Center said.
Dolly's center was located about 150 miles (240 kilometers) east of Progreso, Mexico, and heading northwest at 15 mph, the center said in an advisory posted on its Web site at about 5 a.m. Miami time. A tropical storm warning was in place for the Yucatan Peninsula from the border between Mexico and Belize to Campeche.
``Strengthening is expected to begin when the center of the storm moves into the Gulf of Mexico and Dolly could become a hurricane by Tuesday,'' the center said. Hurricanes have maximum sustained winds of at least 74 mph.
Dolly's tropical storm-force winds, of at least 39 mph, extend outwards by up to 175 miles and may affect the western tip of Cuba with gusts early today, the center said.
To the northeast, Tropical Storm Cristobal moved away from North Carolina's Outer Banks islands, and was located about 110 miles northeast of Cape Hatteras at 5 a.m. Miami time, the center said. Packing 50 mph winds, the system was moving northeast at 13 mph.
``On this track Cristobal will be well offshore of the mid- Atlantic coast later today,'' the center said.
Crude Oil close at $131.04 up $2.16 and Natural Gas Closed at $10.51 down $0.06.
I wish we still had our oil wells! :laugh: :laugh: :laugh:
September, front month Crude is trading flat at $131.80 , off $0.02 and Natural Gas for front month August is trading down at $10.36 off $0.15
Hopefully we can avoid in long term shutdowns of Platforms in the Gulf. We need to rebuild Natural Gas inventories before Winter and a lot of our gas comes from the Gulf Offshore Producing Platforms.
Frank
Oil Is Steady as Storm Forecast to Miss Gulf Production Areas
By Christian Schmollinger and Grant Smith
July 22 (Bloomberg) -- Crude oil traded little changed in New York as forecasters said a storm in the Gulf of Mexico will probably miss U.S. oil fields and refineries, easing concern that supplies will be disrupted.
Tropical Storm Dolly is predicted to come ashore tomorrow near the Texas border with Mexico, south of the Gulf of Mexico area that accounts for about 25 percent of U.S. oil output, the National Hurricane Center said. U.S. crude supplies probably dropped last week as near-record prices discouraged buying, according to a Bloomberg News survey.
``We're expecting Dolly to miss the row of refineries that lies in the Gulf of Mexico,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``Local weather is calm with warm water so there is nothing to suggest that she will change direction.''
Crude oil for August delivery traded 14 cents higher at $131.18 a barrel at 10:40 a.m. in London. Earlier today the contract fell as much as 77 cents, or 0.6 percent, to $130.27 a barrel on the New York Mercantile Exchange. Futures are up 74 percent from a year ago.
Yesterday, oil rose $2.16, or 1.7 percent, to settle at $131.04 a barrel. It was the first increase in five days. The August contract expires today. The more-active September futures rose 21 cents to $132.02 a barrel at 10:38 a.m. London time.
Oil settled at $128.88 on July 18, the lowest close since June 5. Prices dropped 11 percent last week, the most in more than three years, on signs of slowing global economic growth and faltering U.S. fuel demand.
Dolly's Winds
Brent crude oil for September settlement was at $132.84 a barrel at 10:39 a.m. London time on the ICE Futures Europe exchange. The contract yesterday rose $2.42, or 1.9 percent, to settle at $132.61 a barrel. Prices climbed to a record $147.50 on July 11.
Dolly strengthened over the Gulf of Mexico, and may become a hurricane before making landfall near the Texas-Mexico border, the U.S. National Hurricane Center said today.
Dolly's maximum sustained winds strengthened to 60 miles (97 kilometers) per hour, the agency said in an advisory on its Web site at about 4:30 a.m. Miami time. The storm was 295 miles southeast of Brownsville, Texas, and moving west at 15 mph, with a turn toward the west-northwest forecast.
Exxon Evacuates
Exxon Mobil Corp., the world's biggest energy company, said it started evacuating workers from oil and gas wells in the Gulf of Mexico before Dolly arrives. There has been minimal production impact for Exxon, the company said in a statement today.
Royal Dutch Shell Plc, Europe's biggest oil company, has started evacuation of personnel from oil platforms in the Gulf of Mexico because of the approaching storm. The company removed about 125 people from its operations in the western part of the Gulf July 20, and was planning to evacuate another 60 yesterday, it said in an e-mailed statement.
``No further evacuations are planned at this time after yesterday, and based on current information and forecast we do not expect any impact on Shell-operated production in the Gulf of Mexico,'' The Hague-based Shell said.
No oil or natural-gas production has been shut as a result of the approaching storm, the Minerals Management Service, part of the U.S. Interior Department, said yesterday.
Mexican Output
Petroleos Mexicanos, Mexico's state oil company, produces about 1.07 million barrels of oil a day in the Bay of Campeche, which is south of the projected track of the storm. Dolly isn't expected to reach company platforms after it enters the Gulf, Petroleos Mexicanos spokesman Javier Delgado Pena said in a telephone interview yesterday.
U.S. crude oil and fuel production plunged and prices rose to records when hurricanes Katrina and Rita shut refineries and platforms as they struck the Gulf of Mexico coast in August and September 2005. Katrina shut 95 percent of offshore output in the region. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by the hurricanes.
The North Atlantic hurricane season runs from June through November. September is historically the busiest month for storms and hurricanes.
U.S. oil inventories have fallen in seven of the past nine weekly government supply reports. Stockpiles rose 2.95 million barrels in the week ended July 11, the Energy Department said last week.
Tropical Storm Dolly Strengthens Over Gulf of Mexico
By Alex Morales
July 22 (Bloomberg) -- Tropical Storm Dolly strengthened over the Gulf of Mexico, and may become a hurricane before making landfall near the Texas-Mexico border, the U.S. National Hurricane Center said.
Dolly's maximum sustained winds strengthened to 60 miles (97 kilometers) per hour, the agency said in an advisory on its Web site at about 4:30 a.m. Miami time. The storm was 295 miles southeast of Brownsville, Texas, and moving west at 15 mph, with a turn toward the west-northwest forecast.
``Additional strengthening is forecast, and Dolly is expected to become a hurricane prior to landfall,'' the agency said. Hurricanes have maximum sustained winds of at least 74 mph.
Dolly late yesterday prompted authorities to issue hurricane warnings and advise boat-owners to make preparations for the storm. U.S. oil and natural-gas operations in the Gulf aren't likely to be affected by the storm, AccuWeather.com forecaster Kate Wotring said yesterday in an e-mail.
A hurricane warning is in place along a 300-mile stretch of coast from the San Fernando River, Mexico, to Port O'Connor in Texas, and a tropical storm warning is in effect from north of Port O'Connor to San Luis Pass and in Mexico from La Pesca to south of the San Fernando river.
``Preparations to protect life and property should be rushed to completion,'' the center said.
To the northeast, Tropical Storm Cristobal accelerated across the Atlantic and is forecast to weaken. The system, with 60-mph winds, was about 485 miles northeast of Cape Hatteras, North Carolina, and 450 miles south-southwest of Halifax, Canada, the center said in a separate advisory.
Cristobal was moving northeast at 21 mph and forecast to speed up and turn toward the east-northeast.
Exxon Starts Evacuating Workers From Gulf of Mexico Platforms
By Christian Schmollinger
July 22 (Bloomberg) -- Exxon Mobil Corp., the world's biggest energy company, started removing workers from oil and gas wells in the Gulf of Mexico before the arrival of Tropical Storm Dolly, the company said.
``We have initiated evacuation of non-essential personnel from facilities expected to be in the path of the storm,'' according to an e-mailed statement from spokeswoman Margaret Ross. ``We are prepared to evacuate remaining personnel from offshore facilities safely in advance of the storm.''
Oklahoma has nation's cheapest gas prices
By Associated Press
7/22/2008 8:52 AM
OKLAHOMA CITY — It's less expensive to buy gasoline in Oklahoma than anywhere else in the country.
According to AAA, the average price for a gallon of gasoline in Oklahoma on Tuesday is about $3.83 a gallon. It's the second time in a little less than a month that Oklahoma has had the nation's cheapest gas.
Missouri is second on the list with an average price of about $3.86 a gallon, while South Carolina is at $3.87 a gallon.
Better run out and fill up all the cans Frank!!!
Dan, crude is trading down $1.62 at $130.20 for Sept 08 ands Natural Gas is trading down a whopping $0.585 at $10.00 even. If the hurricane hype doesn't get to negative I think we could trade down considerably due to the "Speculators bailing out. I keep both of our vehicles full all of the time and never go below a half, the first big rumor of an embargo or cutoff and there is a mad dash by everyone to fill up and it immediately creates a big shortage. The Nation's inventory goes from the service station tanks to the customers tanks. I remember the 73 embargo all to well.
Gas was 3.69 in Wichita yesterday.
I just checked the NYMEX and it appears everything is selling down about $3.70 to $127 out for the next 8 months. Speculators bailing out is my hope. I agree, hopefully we will see limited problems with the hurricane and no saber rattling from the Middle East. If so, we might get some major relief in the coming weeks.
That is unless the speculators don't scoop the profits and jump back in at a bottom trough and start running up contracts.
I was travelling all day and just got to where I could post. September 08 Crude oil closed down at $127.95 down $3.09 and August 08 Natural Gas closed at $10.067, down $0.443. I noticed gasoline was $3.76 when I went thru Ponca City. Dan I think the speculators are getting nervous, they could end up with Pelosi and company and the penalty might be having to spend the day with that idiot. That should scare them in to being more careful buying long.
Frank, Honestly that would be worse than losing money
September 08 Crude is trading off at $126.175 , down $2.245, Aug 08 Natural Gas is trading off at $9.96 off $0.107.
Below is the EIA weekly Crude Oil and Products inventory report. It is somewhat bearish but not as much as I had hoped for. I would like to see a build in crude oil inventories, not just in products. NYMEX Crude is still trading off but not as much as I would like to see.
Summary of Weekly Petroleum Data for the Week Ending July 18, 2008
U.S. crude oil refinery inputs averaged 15.1 million barrels per day during the
week ending July 18, down 355 thousand barrels per day from the previous week's
average. Refineries operated at 87.1 percent of their operable capacity last
week. Gasoline production rose last week, averaging 9.2 million barrels per day.
Distillate fuel production decreased last week, averaging 4.6 million barrels
per day.
U.S. crude oil imports averaged 9.8 million barrels per day last week, down 985
thousand barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged nearly 10.1 million barrels per day, 144 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 1.1 million barrels per day. Distillate fuel imports averaged 102
thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 1.6 million barrels from the previous week. At
295.3 million barrels, U.S. crude oil inventories are in the lower half of the
average range for this time of year. Total motor gasoline inventories increased
by 2.9 million barrels last week, and are just above the upper boundary of the
average range. Both finished gasoline inventories and gasoline blending
components inventories increased last week. Distillate fuel inventories
increased by 2.4 million barrels, and are in the upper half of the average range
for this time of year. Propane/propylene inventories increased by 0.3 million
barrels last week but remain below the lower limit of the average range. Total
commercial petroleum inventories increased by 1.9 million barrels last week,and
are in the lower half 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 2.1 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 2.4 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 3.6 percent from the same period last year. Jet fuel demand is 2.5
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 07/18/2008
Cumulative
Four Week Averages Daily Averages
Petroleum Supply Ending % 199 Days %
(Thousand Barrels per Day) 07/18/08 07/18/07 Change 2008 2007 Chg
------------------------------------------------------------------------------------
Crude Oil Supply
Domestic Production (1) 5,097 5,128 -0.6 5,120 5,181 -1.2
Net Imports (Incl SPR) (2) 10,051 9,897 1.6 9,789 9,981 -1.9
Gross Imports (Excl SPR) 10,078 9,934 1.4 9,811 10,010 -2.0
SPR Imports 0 0 -- 0 0 --
Exports 27 37 -27.0 22 29 -24.1
SPR Stocks W/D or Added -48 0 -- -47 -8 --
Other Stocks W/D or Added 230 235 -- -18 -170 --
Product Supplied and Losses 0 0 -- 0 0 --
Unaccounted-for Crude Oil (3) 41 237 -- 58 63 --
Crude Oil Input to Refineries 15,370 15,497 -0.8 14,902 15,047 -1.
I thought this was an interesting article, I have said for a long time that America was the most Oil wasteful Nation on earth by far. Queen Pelosi wants to block drilling from our largest reserves to make us cut down because of the higher prices that will come. I would like to see some preliminary studies and testing done now so we can have a better idea of what we are talking about as to the amount of reserves and the potential for the future. By refusing to bring the issue to a vote, Queen Pelosi is making the choice by herself. Our long term efforts to solve our energy problems are being put on hold or at least in slow motion due to childish partisan politics. If we don't get started on additional production, massive research for alternative energy, this Nation faces grave circumstances. In regard to energy supply now, our fate is in the hands of our enemies in the Muslim World.
America's need for oil like an 'addiction,' expert says Story Highlights
Expert sees parallels in America's dependence on oil and addiction
American society has "rewired" itself to cheap, plentiful oil, he says
Changing behavior may be painful, like an addict weaning himself off drugs
Additional drilling similar to a nicotine patch for a smoker, expert says
Next Article in U.S. »
By Elaine Quijano
CNN White House Correspondent
WASHINGTON (CNN) -- You've no doubt heard the language by now -- that Americans are plagued by an oil addiction.
More oil drilling could act like a nicotine patch for smokers, an addiction expert says.
In his 2006 State of the Union address, President Bush used the analogy while pushing for more research into alternative energy sources, saying, "Here we have a serious problem. America is addicted to oil."
But is U.S. dependence on oil a true "addiction"?
Jack Henningfield, an adjunct professor at Johns Hopkins University who has extensively studied addictions, said there are parallels.
"Oil addiction is not an addiction in the medical sense, like a drug addiction or a tobacco addiction," Henningfield said. "But it is an addiction in the sense that powerful behaviors are involved. They're difficult to change, [and] it can be agonizing for people to change."
Henningfield said when it comes to substance addiction, the brain rewires itself to depend on the chemical.
Similarly, in the case of oil, Henningfield noted, "Our nation has been rewired. Our national infrastructure has been wired by cheap plentiful oil."
So, how does Bush's proposal for more oil drilling offshore and in the Arctic National Wildlife Refuge fit in to the science of addiction?
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Henningfield said the idea is similar to a smoker using a nicotine patch and said based on addiction studies, the notion has merit. "We have to give people ... some kind of aid to just function and just get along," Henningfield said.
At the same time, he warned those aids run the risk of making people "forget that we need long-term solutions."
Democrats argue Bush's proposal would only enable America's oil addiction.
House Speaker Nancy Pelosi, D-California, said recently, "Foreign oil, the president said we were addicted to it. And what does he want to do? He wants to reinforce the addiction."
Pelosi has said she will not schedule votes in the House of Representatives to lift the bans on offshore drilling and oil exploration in ANWR.
Henningfield said that's why any strategy to break an addiction must have a long-term goal. Ultimately, he said, kicking any habit can boil down to economics, as smoking studies have shown.
"Money talks for addictions. Money gets people's attention. And the most important single driver to get people to quit smoking is the rising cost of cigarettes," Henningfield said. "So, with addictions -- whether it's cocaine, nicotine or oil -- money talks."
All About Energy Policy • Oil Production and Refining • Addiction and Recovery
September Crude Closed at $124.44, down $3.98, the outer months were off $4.00 plus, August Natural Gas settled at $9.788, down $0.279, the outer months were down $0.40 plus. Opec and the Muslim world does not want us to develop alternate energy, total electric cars and they sure don't want us to drill in the OCS, ANWR or the Oil Shale in the Rockies. To big of a dip in the price is just going to put us further behind and more dependent on foreign oil.
Retirement plans compared...
If you had purchased $1000.00 of Nortel stock one year ago, it would Now
be worth $49.00.
With Enron, you would have $16.50 left of the original $1000.
With WorldCom, you would have less than $5.00 left.
If you had purchased $1000.00 of Delta Air Lines stock you would have
$49.00 left.
If you had purchased United Airlines, you would have nothing left.
But, if you had purchased $1000.00 worth of beer one year ago, drank All
the beer, then turned in the cans for recycling, you would have $214.00.
Based on the above, the best current investment advise is to drink
Heavily and recycle.
This is called the 401-Keg Plan.
(((sorry.....(http://www.rightnation.us/forums/style_emoticons/default/blush.gif).. I just HAD to)))) ;D
Dan -- the picture of you and "your ladies" is wonderful,
Not that I have any special interest, of course. :laugh:
Front Month Crude is trading at $125.25 up $0.81, and Front Month Natural Gas is trading at $9.71 down $0.078. Natural Gas Storage numbers come out today and it will be interesting to see what the build is.
The Risk Reward level makes this Acreage very risky , that plus the lack of infrastructue to gather and transport any oil or gas found makes tehe acreage released almost worthless.
U.S. to permit oil companies to bid for oil, gas leases
(AP) For the fifth time in a decade, the U.S. government will allow oil companies to bid for oil and gas leases in the National Petroleum Reserve-Alaska, officials announced Wednesday. No oil or gas production has resulted from previous lease sales. However, officials with the Bureau of Land Management said the coming sale would be an opportunity to offset high fuel costs. The government estimates that the roughly 3 million acres it plans to put up for bid this fall could yield several billion barrels of oil and a significant amount of natural gas. Oil companies face difficult hurdles in getting the fuels to market. The Colville River separates reserve lands from the Prudhoe Bay oil field and its satellites to the east. The lack of roads, pipelines and other infrastructure in the reserve makes production risky. Last year ConocoPhillips, Anadarko Petroleum Corp. and Pioneer Natural Resources returned 300,000 acres in the reserve to the federal government, saying the land did not contain enough oil and gas to justify the high costs of extraction and transportation in the remote environment. Those companies and others continue to pay for the rights to extract fossil fuels from more than 3 million acres, secured in previous lease sales. Oil companies have paid from $5 to $950 an acre for leasing rights, plus annual rental fees of from $3 to $5 an acre, to the state and federal governments, according to Bureau of Land Management records. Alaska and the federal government split those fees evenly, said a bureau spokeswoman. Federal estimates of technically recoverable oil and gas in the reserve vary widely. According to 2002 data from the U.S. Geological Survey, the numbers range from 5.9 billion to 13.2 billion barrels for oil and 39 trillion to 83 trillion cubic feet for natural gas.
Below is the EIA wekly Natural Gas Storage report, this week's is fairly bullish as we are still under the 5 year average and time is getting shorter to make up the bigger pulls we have had to make to replace fuel oil with Natural Gas.
Frank
--------------------------------------------------------------------------------
Released: July 24, 2008 at 10:35 A.M. (Eastern time) for the Week Ending July 18, 2008.
Next Release: July 31, 2008
Working Gas in Underground Storage, Lower 48 other formats: Summary TXT CSV
Region Stocks in billion cubic feet (Bcf) Historical Comparisons
07/18/08 07/11/08 Change Year Ago (07/18/07) 5-Year (2003-2007) Average
Stocks (Bcf) % Change Stocks (Bcf) % Change
East 1,308
1,245
63
1,438
-9.0
1,310
-0.2
West 336
325
11
395
-14.9
350
-4.0
Producing 752
742
10
909
-17.3
758
-0.8
Total 2,396
2,312
84
2,743
-12.7
2,418
-0.9
Notes and Definitions
Summary
Working gas in storage was 2,396 Bcf as of Friday, July 18, 2008, according to EIA estimates. This represents a net increase of 84 Bcf from the previous week. Stocks were 347 Bcf less than last year at this time and 22 Bcf below the 5-year average of 2,418 Bcf. In the East Region, stocks were 2 Bcf below the 5-year average following net injections of 63 Bcf. Stocks in the Producing Region were 6 Bcf below the 5-year average of 758 Bcf a net injection of 10 Bcf. Stocks in the West Region were 14 Bcf below the 5-year average after a net addition of 11 Bcf. At 2,396 Bcf, total working gas is within the 5-year historical range.
Working Gas in Underground Storage Compared with 5-Year Range
Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2003 through 2007.
Source: Form EIA-912, "Weekly Underground Natural Gas Storage Report." The dashed vertical lines indicate current and year-ago weekly periods.
Data
History (XLS)
5-Year Averages, Maximum, Minimum, and Year-Ago Stocks (XLS)
References
Methodology
Differences Between Monthly and Weekly Data
Revision Policy
Related Links
Storage Basics
Natural Gas Weekly Update
Natural Gas Navigator
The NYMEX is trading down on Crude oil, with Sept 08 at $123.90 down $0.54 and Aug 08 gas is trading down $0.648 at $9.14 with the outer months trading down in the $0.24 to $0.25 range. I was hoping we could get Washington to make some positive Committments before crude falls to far, instead our politicians are going to do absolutely nothing. They are more interested in their own well-being than the future of the PEOPLE.
I didn't take the time to scroll back to previous posts, so this may have already been discussed.
Frank, are you following the SemGroup LP bankruptcy? I'm amazed that a company like that can go down so quickly. To find itself $2.4 billion short in futures contracts therefore not have cash to meet margin calls or cash deposits is shocking.
The crazy thing is: I don't think the execs at SemGroup did anything particularly wrong or unusual. They were victims of Wall Street trading as a result of the fluctuating price on oil futures. When those stocks started dropping, it caused a sell-off by traders and the company simply was caught short of cash to pay those who were selling.
The bottom line will be that the company will now sell all its assets and lay off its employees. In short: They're broke. And only a month ago they were pledging millions of dollars to the new BOK Center and the new Tulsa Drillers Stadium projects.
I don't understand big-time finance, at all.
As a small business owner, I have no hanky-panky accounting options at my disposal. If I can't create enough revenue to cover my expenses, I become history mighty fast. Why the corporate world thinks that hedging is the answer, I'll never know. But then again, I don't have a corporate mentality.
Rudy
Rudy, I am following it as I am familiar with the Principals and have friends in the company. The Founder was the mastermind of Koch Oil Company's NYMEX trading programs. I do some business with them for operators but had no exposure at this time. It is a sad thing, but I don't agree with you that they done nothing wrong, you don't loose $2.9 Billion without doing something wrong.. They had way to much "bare" exposure in the futures market, and that is the one thing that took them down. They, SEM Group/SEM Crude knew better that to go that long in this market with out some offsets and they also knew the risk of betting them farm with the risk that it was a winner take all. Hopefully it will make some of the big Futures Players take notice and reduce their exposure. Rudy, my concern is that we haven't seen the worst of what can happen to the "Speculators" out there, SEM Group/SEM Crude was not the only big speculator out there that was betting "Long" in the market and there could be some even bigger losses show up.
Frank
In overnite trading, Sept 08 Crude is at $125.975 up $0.385, and Aug 08 Natural Gas is at $9.41 up $0.087. The market may be a bit oversold and is taking a breather.
Rudy,
I agree wholeheartedly with Frank. It is insane to think that they had no offsets as a "just in case" scenario. On the other hand, it is companies like this who are causing a lot of the inflated pricing on the NYMEX. Going to be tough as the CEO had pledged a large gift to the KU football program as well.
Thanks for your thoughts on the SemGroup. My world is so far from theirs that I have trouble identifying. But I do try to understand as I read the morning paper. The hedging thing has never clicked in my mind --- but lots of things don't click there anymore.
Yes, KU will miss the SemGroup's donations, and I noticed this morning that the LPGA tournament that is scheduled for 2009 might be in jeopardy especially it's known as the SemGroup Open or something equally clever. They made major donations to the BOK Center in Tulsa and were set to make significant donations to the new Driller baseball park.
According to this morning's Tulsa World, Bank of Oklahoma will lose $71 million "more" than they originally had forecast for this quarter because of accounts receivable due from the SemGroup.
It will be interesting to see what other large companies must suffer because of inept management at SemGroup. OK, yes, I also noticed that several top managers will receive compensation for the next two years following their dismissal. Again, that's a part of the big-time that I have never understood.
Rudy
Rudy, Tom Kivisto, X-Koch Oil VP, was the founder, CEO of SemGroup, Tom was also on the Board Of Directors of BOK. Tom was a KU Grad and big supporter. Tom is probably one of the most knowledgable NYMEX/Futures Traders in the business. I feel sure that he full well knew the risk thay were taking. I start my day with reading the Tulsa World, Bloombergs and CNN on line, I did see the benefits/severance package that the "key" employees are to receive. That is the biggest bunch of bull I know of. The people that sold goods and services, i.e. oil, natural gas, services etc to SemGroup may and probably will loose but the employees get up to 2 years salary. In my opinion that money should go to the suppliers. I am surprised that the Referee will approve that severance.
Frank
Sept. 08 Crude is trading at $123.10 down $2.39, there does not seem to be much trading in the months months, Aug 08 Natural Gas is trading at $9.24 down $0.083.
Frank
Sept 08 Crude settled at $123.26 down $2.23 on the day, Aug 08 Natural Gas closed at $9.06 on the day, down $0.263. Crude and natural Gas have come down considerably this week. If demand stays down or continues to drop, Iran doesn't get to horsey, we don't have a lot of Gulf Area Hurricane threats and the dollar will improve some, we could see crude down more.
I think the longs in the NYMEX are trying to roll out of some of their positions, in light of the SEM Group Bankruptcy Filing.
I didn't realize it, but these coupons are good for one gallon of gas at most retailers.
I have seen them around, but never knew what they were good for.
You probably have one lying around somewhere.
Make sure you use it before it expires.
Scroll down
(http://www.cascity.com/howard/forum/pointfinger.gif)
(http://i273.photobucket.com/albums/jj216/marshalette/five.jpg)
;D ;D ;D
and you get a little bonus cash beside!
The day will come when you will need more than that for a gallon of gas, infact there won't be enough to go around at any price.
Ours actually went down to about $3.79 .9 On a summer weekend no less. I was surprised. When it gets past $5.00 to stay, I'll get a bike or moped or something.
Diane,
Isn't that what you said when gas hit $3.00 and if it got to 4.00.....
Waldo, we will see what she says when it goes by $5.00.
Gas was actually 3.49 in Wichita today...I had to look twice to make sure and then almost had an accident doing so...who would have ever thought I'd consider that to be CHEAP.
Alright you two guys, I've already cut way back on my driving. They won't let me keep a horse here in town or my problem would be solved. We'll see what's next. :laugh: I have a grocery store close enough to walk to, but it's up hill both ways, so I won't do that until I'm desperate.
Maybe we can all go to Delaware someday to see the uphill both ways hill. Might be worth the trip (not to mention blue crab).
Honest, it really is! You go down a hill to the bottom of my street, around a left turn and up a steep hill to the main road. The little shopping center is across the street. I'd have to walk up hills both ways. ;D ;D ;D Do come for the summer crabs, but bring your fat wallet. If you have to buy them they are $200.00 a bushel for fat jumbo males. (jimmies)
Do come for the summer crabs, but bring your fat wallet. If you have to buy them they are $200.00 a bushel for fat jumbo males. (jimmies)
[/quote]
Wowzer, probably won't come for crabs afterall! :'( :'( :'(
That's OK, I can get you some for free. I know where those yummy fat crabs live.
WooHoo!! Goin' fishin' for crabs!! BTW we just got ANOTHER nice rain! Any rain received in July and particularly the latter part of July is nice indeedy! Supposed to be upwards of 100 tomorrow; we can steam those crabs on the sidewalk Diane! Wish I could come back there to tour. My aunt and cousin went back east to Maine for a tour and before we knew it they had pulled up stakes and moved there! She loved the ocean; just talked about it all the time. Glad she found it before the end of her life, she was a favorite aunt.
I like the rugged Maine coast too, but we rarely go up there. Frankly, getting around New York City is a pain. We have to really time it right to not catch rush hour traffic on the Tapanzee Bridge or you just sit there. I keep kidding Al that I want a good lobster roll from one of the coastal lobster shacks, but now the gas is too high, plus we just spent our money for now.
Teds' transplnt coordinator went to Maine for vacation this year. She said she ate lobster for every meal and it wasn't any less expensive than it is here. But she said it was soooo good! I'd like to try it sometime.
Sept 08 Crude is trading at $123.70, up $0.44 and Aug 08 Natural Gas is trading at $9.105, up $0.021. I have been out of my office all morning and just got the chance to open my laptop and check the markets.
Sept.08 crude closed at $124.73, up $1.47 on the day, Natural Gas closed at $9.163, up $0.079 on the day. The back months were pretty much in line with the front months on Crude and gas.
Below is a description of the "Republican Energy Plan" that has been proposed by the House Republican Committee. Democrats are trying to keep anything from passing that will make it look like Republicans did something good, and/or reduced our independence on Foreign oil.. Nancy Pelosi is without a doubt the worst Speaker of The House in my lifetime, bar none. I think what the Republicans are proposing is good, and we could ad to it as different options develop. To sit and do nothing as the democrat controlled house is doing is just taking us closer and closer to disaster.
The American Energy Act:
Reducing the Price at the Pump through an "All of the Above" Energy Strategy
House Republicans have transformed their "all-of-the-above" energy strategy into
a single piece of legislation: the American Energy Act. The bill – a product made
possible by energy policies proposed by Members throughout the House Republican
Conference – will increase the supply of American-made energy, improve conservation
and efficiency, and promote new and expanding energy technologies to help lower the
price at the pump and reduce America's increasingly costly and dangerous dependence
on foreign sources of energy.
Bipartisan passage of the American Energy Act would demonstrate to the world
that America will no longer keep its rich energy resources under lock-and-key. Not only
will it help bring down the price of gasoline now, but it will make needed investments in
the alternative fuels that will power our lives and our economy in the future. Following is
a brief summary of the American Energy Act:
To increase the supply American-made energy in environmentally sound ways,
the legislation will:
• Open our deep water ocean resources, which will provide an additional three
million barrels of oil per day, as well as 76 trillion cubic feet of natural gas, as
proposed in H.R. 6108 by Rep. Sue Myrick (R-NC). Rep. John Peterson (R-PA)
has also worked tirelessly on this issue.
• Open the Arctic coastal plain, which will provide an additional one million barrels
of oil per day, as proposed in H.R. 6107 by Rep. Don Young (R-AK) ;
• Allow development of our nation's shale oil resources, which could provide an
additional 2.5 million barrels of oil per day, as proposed in H.R. 6138 by Rep.
Fred Upton (R-MI); and
• Increase the supply of gas at the pump by cutting bureaucratic red tape that
essentially blocks construction of new refineries, as proposed in H.R. 6139 by
Reps. Heather Wilson (R-NM) and Joe Pitts (R-PA).
To improve energy conservation and efficiency, the legislation will:
• Provide tax incentives for businesses and families that purchase more fuel
efficient vehicles, as proposed in H.R. 1618 and H.R. 765 by Reps. Dave Camp
(R-MI) and Jerry Weller (R-IL);
• Provide a monetary prize for developing the first economically feasible, superfuel-
efficient vehicle reaching 100 miles-per-gallon, as proposed in H.R. 6384 by
Rep. Rob Bishop (R-UT); and
• Provide tax incentives for businesses and homeowners who improve their energy
efficiency, as proposed in H.R. 5984 by Reps. Roscoe Bartlett (R-MD), Phil
English (R-PA), and Zach Wamp (R-TN), and in H.R. 778 by Rep. Jerry Weller
(R-IL).
To promote renewable and alternative energy technologies, the legislation will:
• Spur the development of alternative fuels through government contracting by
repealing the "Section 526" prohibition on government purchasing of alternative
energy and promoting coal-to-liquids technology, as proposed in H.R. 5656 by
Rep. Jeb Hensarling (R-TX), in H.R. 6384 by Rob Bishop (R-UT), and in H.R.
2208 by Rep. John Shimkus (R-IL);
• Establish a renewable energy trust fund using revenues generated by exploration
in the deep ocean and on the Arctic coastal plain, as proposed by Rep. Devin
Nunes (R-CA);
• Permanently extend the tax credit for alternative energy production, including
wind, solar and hydrogen, as proposed in H.R. 2652 by Rep. Phil English (R-PA)
and in H.R. 5984 by Rep. Roscoe Bartlett (R-MD); and
• Eliminate barriers to the expansion of emission-free nuclear power production, as
proposed in H.R. 6384 by Rep. Rob Bishop (R-UT).
I have two questions? How many barrels of GASOLINE do we export every day? And why don't the oil companies drill in the areas they already have access to?
We don't export any gasoline that I know of. We import alot of gasoline. We are basically importing almost 70% of our crude oil needs.
As far as drilling what they have by all of the oil and gas industry, they are doing that. Every Rig available is drilling aroud the clock, but the type of wells we are drilling will not even keep up with the decline of the existing production. The OCS, ANWR and Federal Lands that contain large volumes/reserves of oil shale possibilities are off limits.
What we are facing in energy shortages should not be a political issue, we need to concentrate and spend more money and research on other sources of energy. I have said this before and it is worth repeating, we have approximately 4.7% of the world population and we consume almost 25% of the world daily oil production. Worse, a large portion of the oil we need and consume comes from countries that are our enemy, countries that seek to destroy America. Time is running out and the longer we do nothing the worse it will be.
Frank
Reuters
ANALYSIS-US oil firms seek drilling access, but exports soar
07.03.08, 2:40 PM ET
United States - By Tom Doggett
WASHINGTON3 (Reuters) - While the U.S. oil industry want access to more federal lands to help reduce reliance on foreign suppliers, American-based companies are shipping record amounts of gasoline and diesel fuel to other countries.
A record 1.6 million barrels a day in U.S. refined petroleum products were exported during the first four months of this year, up 33 percent from 1.2 million barrels a day over the same period in 2007. Shipments this February topped 1.8 million barrels a day for the first time during any month, according to final numbers from the Energy Department.
The surge in exports appears to contradict the pleas from the U.S. oil industry and the Bush administration for Congress to open more offshore waters and Alaska's Arctic National Wildlife Refuge to drilling.
"We can help alleviate shortages by drilling for oil and gas in our own country," President Bush told reporters this week. "We have got the opportunity to find more crude oil here at home."
"As a nation, we can have more control over our energy destiny by supplying more of the oil and natural gas we'll be consuming from resources here at home," Red Cavaney, president of the American Petroleum (otcbb: AMPE.OB - news - people ) Institute, said in a letter last week to U.S. lawmakers.
But environmentalists and other opponents to expanding drilling areas could seize on the record exports to argue Congress should not open more acres if U.S. refineries are churning crude oil into petroleum products that are sent out of the American market.
"It doesn't look good to say: 'We need more oil.' But then export the refined products that you're getting. It doesn't seem to be consistent," said Jim Presswood, energy lobbyist for the Natural Resources Defense Council.
But many energy experts say oil and petroleum products are traded globally, and it may make economic sense to export gasoline refined along the U.S. Gulf Coast to Latin America and import European-refined gasoline to U.S. East Coast markets.
"The fact is that the (United States) participates in global markets for both crude and refined products, and there are any number of variables that impact supply and prices in those markets," said Bill Holbrook, spokesman for the National Petrochemicals and Refiners Association.
The 1.6 million barrels a day in record petroleum exports represented 9 percent of total U.S. refining capacity of 17.6 million barrels a day.
However, with refiners operating at 85 percent of capacity during the January-April period, the shipments represented a much a larger share of total U.S. oil products produced.
The exports were also equal to half the 3.2 million barrels of gasoline, diesel fuel and other petroleum products the United States imported each day over the 4-month period.
The biggest share of U.S. oil products exported went to Mexico, Canada, Chile, Singapore and Brazil.
U.S. consumers are paying record prices for gasoline and diesel fuel, which the Bush administration blames in part on tight supplies.
While the administration argues that more supplies would help to bring down prices, U.S exports of diesel fuel in April averaged 387,000 barrels per day, up almost seven-fold from 59,000 barrels a day in the same month a year earlier.
U.S. gasoline shipments in April averaged 202,000 barrels a day, the most for the month since 1945, when America was sending fuel overseas to ease supply shortages in other countries during World War II. Gasoline exports in April 2007 were almost half at 116,000 barrels per day.
Residual fuel exports in April were 377,000 barrels per day, the fourth highest level for any month, and up 10 percent from 344,000 barrels per day a year earlier.
John Felmy, the chief economist at the American Petroleum Institute, said a portion of the oil products exported, especially diesel, was fuel that did not meet U.S. clean air requirements and therefore could not be sold in America. "You may have some that you're not able to use," he said.
Also, while U.S. gasoline demand is down due to high prices and a weak American economy, there is "strong economic growth outside the United States" where fuel is often subsidized and demand is high, said John Cook, director of EIA's Petroleum Division.
However, both the EIA and API admitted they did not know why daily U.S. gasoline exports to Canada skyrocketed to 41,000 barrels in January-April this year from 9,000 barrels in 2007.
The EIA said more U.S. diesel is going to Latin American to fuel power plants because of a shortage of natural gas in the region, and China has switched to diesel from coal to run some of its generating facilities in order to reduce smog ahead of the summer Olympics next month in Beijing. (Editing by Christian Wiessner)
Copyright 2008 Reuters, Click for Restriction
My guess is that we ARE NOT A NET EXPORTER of any usable products. This article mentions that we exported some small volume of product to Canada, Canada is our largest single supplier of petroluem, crude oil and products. During the 1973 embargo, we had the opportunity to reduce crude costs by shipping our Alaskan crude to Japan, and Japan would in turn ship Persian Gulf Crudes to the US, a trade that would have reduced the transportation for both countries, Jimmy Carter and company blocked it and said we will not ship US crude to Japan. There are lots of trades everyday in the oil and gas industry that make good sense. I repeat that I do not think the US is a net exporter of any petroleum. How can anyone make an issue out of some export amounts when this country consumes far more oil per capita than any nation in the world, we import almost 70% of our crude oil and we are importing massive amounts of Natural Gas and that will grow more all the time. So many people are so full of poison from the liberal left they can't comprehend how big a mess we are in. If we don't quit all of the political bickering and get busy we face serious consequences. As massive as the dependency is on other nations, people sit around and try to make excuses over some little piddling amounts of claimed exports.
I wouldn't call 1.6 million barrels a day a little piddly amount of petroleum product. That is the average exported during the first four months of this year. This is with the refinerys working at 85% capacity.
Sept 08 crude is trading at $125.275 up $0.545, Sept 08 Natural Gas is trading at $9.240, up $0.045.
So why do we export any oil or gas? Trade agreements? Higher profits somehow? To whom does it go?
Sept-08 Crude is trading at $121.75, down, $2.98, Aug-08 Natural Gas is trading at $9.23, up $0.069, the back months are trading down 8-9 cents.
THE UNITED STATES IS NOT A NET EXPORTER OF CRUDE OIL OR PRODUCTS. We do some exchanges which reduce transportation considerably, in exchanges you take crude or products in one location and return an equal value in another location. As far as the Posts that our refinery utilization is 85%, that alone would dictate that we would refine for other countries and return products in exchange, in order to utilize our facilities and reducing refining costs in this country.. We are importing 70% of our oil needs we couldn't do that without doing trades all over the world, in trades you have to return something. The high 80s percent range is close to the maximum percentage of utilization that is possible anyway, refineries are very high maintanence and they have to be taken down for maintanence on regular schedules. There is never a time when all of the refineries are down all at once and never a time when they are all up running at once. This subject could go on and on as the Worldwide trading of crude oil is a massive project everyday for all of the countries and governments around the world.
Gotcha, thanks! I know a little about refineries, since we have the big Valero refinery at Delaware City 15 miles east of here. I did first responder classes there and got to know the guys pretty well. We used to have a lot of classes to get everybody through because groups of them were always doing P.M. on something and couldn't make it. That big place used to scare me to death. It is such an imposing looking place with all the cracking towers and such.
Sept 08 Crude oil closed at $122.19, down $2.54, Sept 08 Natural Gas closed at $9.13, down $0.065 on the day.
Another note on the subject regarding the US having exported products, Citgo Refining is wholly owned by the Venzuelan Government, Citgo refines 750,000 BOPD and the Product Yield could very well all be shipped back to Venzuela.
Frank
Thanks for the thread info Frank. Everyone......We are a consumer of goods now, not a producer. The only thing we make a lot of now is CO2 and politicians. Neither one is worth a squirt of goat piss. Lucky to even get a hold of a farm fresh tomato anymore. The mere taste of the damn thing will probably give you a heart palpitation.
The fact that anyone that is smart enough to get through the login on this forum and thinks that we actually EXPORT OIL is one that I personally cannot believe.....(No Offense...Politicians can be confusing)
pepelect is going to have to fill me in on some new quiz bowl economics because when I got my degree it worked like this.....
More Supply than Demand=EXPORT
More Demand than Supply=IMPORT
Last I looked, we are the worlds largest consumer of the Texas T.
Excuse me? Reuters is not a political entity, and that is the source for this article. We did indeed EXPORT 1.6 MILLION barrels a day of petroleum products for the first four months of this year. Why are we continuing to support this industry; Exonn Mobile made a profit of 40.6 BILLION dollars last year, and the industry is awarded 14 BILLION dollars in tax breaks and incentives every year? What could Elk County do with even a small portion of that corporate welfare check?
I really don't want to split hairs, but pepelect's quiz bowl team is haunting the back of my brain.
If you export 1.6 million barrels of oil a day and import 15 million barrels of oil a day did you really export anything???
I am certain we use more product than we produce. If not we wouldn't have the MASSIVE TRADE DEFICIT.
I don't know what Elk County would do with that corporate welfare check.
I suppose we would have more welfare
Quote from: DanCookson on July 29, 2008, 09:41:23 PM
Thanks for the thread info Frank. Everyone......We are a consumer of goods now, not a producer. The only thing we make a lot of now is CO2 and politicians. Neither one is worth a squirt of goat piss. Lucky to even get a hold of a farm fresh tomato anymore. The mere taste of the damn thing will probably give you a heart palpitation.
Uhmm Dan, i got two large bowls of farm fresh heirloom tomatos here :D :D mMMmmmmmmmmmm
SOLD....
That is an Import I can negotiate with!!!!!!!!!!!
Quote from: DanCookson on July 29, 2008, 10:31:37 PM
SOLD....
That is an Import I can negotiate with!!!!!!!!!!!
LOL! Next year i am going to start up a tomato crop. I found out they grow pretty good here :D
I gotta go up to howard thursday, i'll bring some by for ya :)
UUUUHHHHH---- there is a difference between crude oil and petroleum products such as gasoline and deisel fuel etc etc. There lies your confusion??
Quote from: DanCookson on July 29, 2008, 10:23:40 PM
If you export 1.6 million barrels of oil a day and import 15 million barrels of oil a day did you really export anything???
Quote from: sixdogsmom on July 29, 2008, 09:56:43 PM
Excuse me? Reuters is not a political entity, and that is the source for this article. We did indeed EXPORT 1.6 MILLION barrels a day of petroleum products for the first four months of this year. Why are we continuing to support this industry; Exonn Mobile made a profit of 40.6 BILLION dollars last year, and the industry is awarded 14 BILLION dollars in tax breaks and incentives every year? What could Elk County do with even a small portion of that corporate welfare check?
We imported approximately 3.6 million barrels a day of petroleum products and we exported approximately 1,6 million barrels of product, we are not a net exporter of petroleum products. I don't see what the point is anyway. We have been the worlds largest user of crude oil since the beginning of the automoble and we have depended on the world for our supply. WE ARE NOT A NET EXPORTER OF PETROLEUM PRODUCTS AND WE NEVER HAVE BEEN. REUTERS IS A REPORTING AGENCY AND THEY ONLY REPORT THEY DON"T SUPPORT, AUTHENICATE OR INVESTIGATE THE REPORTS.
We are currently exporting or trading approximately 1.4 million barrels of product a day and importing approximately 3.4 million barrels of product a day, that is just normal business and I fail to see anything negative about it.
Sept -08 Crude is trading at $121 675 down $0.515, Sept-08 Natural Gas is trading at $9.10 down $0.03.
This a good news bad news item, if oil/gasoline falls to much we will reduce our efforts to cut consumption, develop alternative energies and get started drilling in the areas that would reduce our energy dependence. Opec does not want us to reduce our consumption, and they sure don't want us to drill our better reserve areas.
Crude Oil Falls for a Second Day on Slowing Gasoline Demand
By Nesa Subrahmaniyan and Grant Smith
July 30 (Bloomberg) -- Crude oil fell for a second day on speculation gasoline demand in Asia and the U.S. may slow after near-record prices reduced consumption.
A U.S. Energy Department report today may show that gasoline supplies rose for a fifth week, according to a Bloomberg News survey. Gasoline use has slipped for 14 straight weeks, MasterCard Inc. reported yesterday.
``The key consideration in the market this week has been demand destruction,'' said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. ``All the warning signs about the U.S. economy have prompted speculators to reduce their exposure, so that the next layer of support is at $117.''
Crude oil for September delivery fell as much as 79 cents, or 0.7 percent, to $121.40 a barrel on the New York Mercantile Exchange. It was $121.71 at 11:06 a.m. London time.
Yesterday, it fell $2.54, or 2 percent, to $122.19 a barrel, the lowest close since May 6. Prices have dropped more than $25 a barrel, or 17 percent, from their July 11 record.
The Energy Department report will probably show that gasoline inventories rose 400,000 barrels last week, according to the Bloomberg survey.
``The market is bracing for a slowdown and the report tonight could reinforce bearish views,'' said David Moore, a commodity strategist with Commonwealth Bank of Australia Ltd. ``Consumption is not going great in the U.S.,'' the world's biggest energy user.
India, Vietnam, Malaysia and Indonesia have raised prices of diesel and gasoline in the past two months to cut government expenditure aimed at capping fuel prices and keeping inflation in check.
Less Driving
U.S. motorists drove less for a seventh consecutive month in May, as vehicle-miles traveled on all U.S. roads fell 3.7 percent during the month from a year earlier, the Federal Highway Administration said in a report July 28. The seven-month slide is the longest downward streak since 1979.
Demand for oil and petroleum products dropped 4.3 percent in May from a year earlier to 19.7 million barrels a day, according to Energy Department data released July 28. That's 889,000 barrels a day less for the first five months of the year, compared with the same period a year earlier.
There is 5 percent to 10 percent gasoline ``demand destruction'' now from the year ago in industrialized nations of the Organization for Economic Cooperation and Development, BP Chief Executive Officer Tony Hayward told reporters in London yesterday.
Pump Prices
Regular gasoline at the pump, averaged nationwide, fell 1.7 cents to $3.941 a gallon, AAA, the U.S.'s biggest motoring group, said yesterday on its Web site.
Brent crude for September delivery was at $122.17 a barrel, down 54 cents, at 10:50 a.m. local time on London's ICE Futures Europe exchange. Yesterday, it fell $3.13, or 2.5 percent, to $122.71 a barrel, the lowest close since June 4.
OPEC President Chakib Khelil said yesterday in Jakarta should the dollar strengthen and political tensions in the Middle East ease, then the long-term oil price will be about $70 to $80 a barrel.
The Organization of Petroleum Exporting Countries produces about 40 percent of world oil supplies.
Quote from: frawin on July 30, 2008, 06:50:26 AM
This a good news bad news item, if oil/gasoline falls to much we will reduce our efforts to cut consumption, develop alternative energies and get started drilling in the areas that would reduce our energy dependence. Opec does not want us to reduce our consumption, and they sure don't want us to drill our better reserve areas. Opec wants us to keep the Liberal Left in power.
Crude Oil Falls for a Second Day on Slowing Gasoline Demand
By Nesa Subrahmaniyan and Grant Smith
July 30 (Bloomberg) -- Crude oil fell for a second day on speculation gasoline demand in Asia and the U.S. may slow after near-record prices reduced consumption.
A U.S. Energy Department report today may show that gasoline supplies rose for a fifth week, according to a Bloomberg News survey. Gasoline use has slipped for 14 straight weeks, MasterCard Inc. reported yesterday.
``The key consideration in the market this week has been demand destruction,'' said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. ``All the warning signs about the U.S. economy have prompted speculators to reduce their exposure, so that the next layer of support is at $117.''
Crude oil for September delivery fell as much as 79 cents, or 0.7 percent, to $121.40 a barrel on the New York Mercantile Exchange. It was $121.71 at 11:06 a.m. London time.
Yesterday, it fell $2.54, or 2 percent, to $122.19 a barrel, the lowest close since May 6. Prices have dropped more than $25 a barrel, or 17 percent, from their July 11 record.
The Energy Department report will probably show that gasoline inventories rose 400,000 barrels last week, according to the Bloomberg survey.
``The market is bracing for a slowdown and the report tonight could reinforce bearish views,'' said David Moore, a commodity strategist with Commonwealth Bank of Australia Ltd. ``Consumption is not going great in the U.S.,'' the world's biggest energy user.
India, Vietnam, Malaysia and Indonesia have raised prices of diesel and gasoline in the past two months to cut government expenditure aimed at capping fuel prices and keeping inflation in check.
Less Driving
U.S. motorists drove less for a seventh consecutive month in May, as vehicle-miles traveled on all U.S. roads fell 3.7 percent during the month from a year earlier, the Federal Highway Administration said in a report July 28. The seven-month slide is the longest downward streak since 1979.
Demand for oil and petroleum products dropped 4.3 percent in May from a year earlier to 19.7 million barrels a day, according to Energy Department data released July 28. That's 889,000 barrels a day less for the first five months of the year, compared with the same period a year earlier.
There is 5 percent to 10 percent gasoline ``demand destruction'' now from the year ago in industrialized nations of the Organization for Economic Cooperation and Development, BP Chief Executive Officer Tony Hayward told reporters in London yesterday.
Pump Prices
Regular gasoline at the pump, averaged nationwide, fell 1.7 cents to $3.941 a gallon, AAA, the U.S.'s biggest motoring group, said yesterday on its Web site.
Brent crude for September delivery was at $122.17 a barrel, down 54 cents, at 10:50 a.m. local time on London's ICE Futures Europe exchange. Yesterday, it fell $3.13, or 2.5 percent, to $122.71 a barrel, the lowest close since June 4.
OPEC President Chakib Khelil said yesterday in Jakarta should the dollar strengthen and political tensions in the Middle East ease, then the long-term oil price will be about $70 to $80 a barrel.
The Organization of Petroleum Exporting Countries produces about 40 percent of world oil supplies.
Good thing its dropping. Same thing happened in the 80's. The prices are high enough now though that they will continue to develop and drill our own resources.
MAYBE just maybe they will stop this insane usage of our food supplies to create fuel.
I agree with you, I have always been opposed to the use of food supplies, in a world of staving people, for energy to burn in a car.
Unfortunately our politicians are more interested in their own political career than what is best for the people, and the long term future of America.
Sept -08 crude is trading down at $121.40, off $0.79, Natural Gas for Sept -08 is reading down at $8.875, off $0.2555. I am somewhat surprised at how much natural Gas has come off of the highs the past few days. Inventories are lower than they have been and I look for Gas to move up in November trading or before if we have any appreciable hurricane activity. Many of the Rural area Propane suppliers offer hedging for your winter months supply, I would think now, or in the near future, would be a good time to lock in a winter price.
Sept-08 Crude oil closed at $126.77 up $4.58 on the day, the move up was attributed to a bigger than expected drop in gasoline inventory, natural gas closed at $9.248, up $0.118 on the day. I think the Natural gas moved was in line with the crude oil move and the use of gas on a BTU basis as compared to crude. The Natural Gas Sorage report comes out tomorrow, I hope we have a better build in storage than what we have been seeing the past few weeks. A bigger concern is the Earthquake news an predictions come out of California. One thing this country does not need is a major earthquake . With the energy crisis, the housing crisis and the Banking crisis the last thing we need is a major earthquake.
Sept-08 Crude is trading at $125.875, down $0.895, Sept-08 Natural Gas is trading at $9.19, down $0.058. The Natural Gas Storage report comes out today, it will be interesting to see what the build is.
Oil Drops on Speculation U.S. Fuel Demand Will Weaken Further
By Grant Smith
July 31 (Bloomberg) -- Crude oil declined on speculation that high prices and slowing economic growth will further reduce demand in the U.S., the world's biggest energy user.
U.S. fuel consumption averaged 20.2 million barrels a day in the past four weeks, down 2.4 percent from a year earlier, according to a weekly report by the Energy Department yesterday. Nigeria, the U.S.'s fourth-largest supplier, said production remains close to 2 million barrels a day even after recent pipeline attacks.
The price ``is not sustainable,'' said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. ``We've seen some demand destruction already. Prices will go back to $120, and $110 before the end of the year.''
Crude oil for September delivery fell as much as $1.21, or 1 percent, to $125.56 a barrel. The contract traded for $125.80 at 11:48 a.m. London time. Prices are 62 percent higher than a year ago.
Futures gained $4.58, or 3.8 percent to settle at $126.77 yesterday, the highest close since July 22, after the Energy Department report showed gasoline inventories fell for the first week in five.
Gasoline supplies dropped 3.53 million barrels to 213.6 million barrels last week, compared with a gain of 350,000 barrels estimated in a Bloomberg News survey.
``On closer examination the gasoline data should not be regarded as that supportive,'' said Gareth Lewis-Davies, research analyst at Dresdner Kleinwort Group Ltd. ``Deliveries from refineries and terminals into the wholesale market were very large indeed, while other data has shown continuing weak retail gasoline sales.''
Even with the inventory drop, gasoline stockpiles remain 3 percent higher than the five-year average for the period.
``Do not be fooled,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``Yes, the draw was impressive, but demand still weakens across the U.S. on a weekly basis in the midst of the driving season.''
Brent Crude
Brent crude oil for September settlement traded at $125.65 a barrel, down $1.45, at 11:42 a.m. London time on London's ICE Futures Europe exchange. The contract rose $4.39, or 3.6 percent, yesterday to settle at $127.10.
Prices are likely to slide toward $110 before the end of the year unless supply risks intensify in Iran or Nigeria, Commerzbank's Weinberg said.
Nigerian Petroleum Minister of State H. Odein Ajumogobia denied newspaper reports that militant sabotage, such as an assault this week on a Royal Dutch Shell Plc pipeline, had reduced national output to less than a million barrels a day.
Iranian Supreme Leader Ayatollah Ali Khamenei said his country will push forward with its uranium enrichament program. Speculation that Israeli will use force to stop Middle East's second-largest exporter from acquiring nuclear technology has supported prices since 2006.
Sept -08 Crude is trading at $123.95, down $2.82, Sept -08 Natural gas is trading at $9.17, down $0.078. The weekly storage report came out this A.M, with a build of 65 BCF, for a total underground storage of 2,461 BCF, which is 357 BCF under a year ago and 12 BCF under the 5 year average.
Crude closed at $124.08, down $2.69,crude was down by around $2.50 all the way out, natural Gas closed at $9.119, down $0.129.
Sept-08 Crude is trading at $123.30, down $0.78, Sept-08 Natural gas is trading at $8.94, down $0.179.
Front Month Crude Oil is trading at $128.10, up $4.02, and Natural Gas is trading at $9.415, up $0.296.
Why such the swing in 3 hours, Frank? Is there some event that caused the Specs to go crazy?
Tobina, the news services are crediting it to a "Surprise spike" in Gasoline futures.
So what has become of our natural gas? I thought we had at least 150 years worth here?
Diane, our reserves are still there. Alot of the high volume reserves are off shore, in Alaska and in the Rockies. At present the infrastructure to move the Alaskan gas is not in place and the same for the Rockies. Alot of the large volume reserves are in the OCS as well.
So is any serious talk going on about getting the infrastructure built? Is that as complicated as I think it is?
There is a big move underway now, ConocoPhillips and another group have made a proposal and are trying to get the necessary approvals from Alaska and the Feds. It is a 20-25 Billion Dollar project at today's estimates. I am sure the cost will go up substantially every year. It has been awhile since I read much on it but i think estimates are like a 10-15 year project. Maybe Queen Nancy Pelosi can kill it by putting a big windfall profits tax on the industry. The delays in the necessary infrastructure from the Rockies faces the same problems but the Terrain and the surface structure presents big problems in building pipeline from those areas. It is a serious enviromental issue and will be delayed for years.
Sept -08 Crude settled at $125.10 up $1.02 on the day, the back months were also up all the way out, Sept -08 Natural Gas settled at $9.389 up $0.27 on the day, the back months were up about the same all the way out. Any hurricane threat is going to push natural gas up.
Sept -08 Crude is Trading at $124.40 , off $0.70, Sept -08 Natural Gas is trading at $9.265, off $0.124. Natural Gas is trading up in the winter back months. Natural gas inventories continue to be under last years volumes for the same period and under the 5 year averages as well. I think we continue to use more Natural Gas in place of Crude Oil derivative Fuels, on a BTU basis Natural gas is much cheaper than Fuel Oil. On a BTU Basis Natural Gas should be much higher.
From the latest weather reports, Hurricane Edouard could come in somewhere around the Galveston and Texas City area, it may shut down some production, also there is a lot of Refining just East of Galveston in the Texas City, TX area. The crude and product markets may move up in anticipation of interruptions in both production and refining.
Sept -08 Crude is trading at $124.15, down $$0.95, September -08 Natural Gas is trading at $8.97, down $0.419.
Sept-08 Crude Closed yesterday at $121.41, down $3.69 on the day, Sept-08 Crude is trading this morning at $119.40 Down $2.019, Sept-08 Natural Gas closed yesterday at $8.726, down $0.663, Sept-08 Natural Gas is trading this morning at $8.52, down $0.206.
Sept -08 Crude settled at $119.17, down $2.24 on the day, and Sept -08 Natural Gas setteled at $8.726, unchanged on the day.
Sept -08 Crude is trading at $119.35 range, up $0.18, Sept -08 natural Gas is trading at $8.695, down $0.031. EIA Crude and Petroleum Inventories come ot today.
Crue oil is trading at $120.70, up $2.12 in overnite night trading and Nautral Gas is trading at $8.90, up $0.127.
I have advocated a similar plan for the US for several years. With our "DO NOTHING" Congress we will be on fuel rationing while they continue to argue amongst themselves. Nancy Pelosi is the worst excuse, in my lifetime, for a "House Speaker" . Scary Harry is right behind her.
China Raises Taxes on Large Cars to Cut Fuel Usage
By Tian Ying
Aug. 13 (Bloomberg) -- China's finance ministry said it will raise taxes on large automobiles while cutting rates for smaller cars in an effort to spur demand for fuel-efficient vehicles in the world's second-largest oil-consumer.
The government will double the tax rate to 40 percent for automobiles with engines larger than 4 liters in capacity starting Sept. 1, the finance ministry said on its Web site. The tax on vehicles between 3 liters and 4 liters in engine size will be raised to 25 percent from 15 percent, the ministry said.
Automobiles account for about half of China's total oil consumption, and this may rise to 60 percent by 2020, according to the Development Research Center of the State Council. China, the world's second-largest auto market, raised the price of gasoline, diesel and other fuels in June to cool its economy and reduce energy use.
``The move is part of government's efforts of cutting energy consumption,'' said Yu Bing, an analyst with Pingan Securities Co. in Shanghai. ``It will help increase sales of small cars and damp demand for bigger vehicles.''
Cars with engines of 1 liter capacity or less will become cheaper, with a 1 percent tax rate instead of the current 3 percent, the finance ministry said.
Sedans with engines between 3 and 4 liters were the fastest- selling models last year in China, with sales rising almost six- fold to 12,100 units, according to the China Association of Automobile Manufacturers. Sales of cars with engines less than 1 liter fell 31 percent to 251,700 units last year.
Last Updated: August 13, 2008: 2:20 PM EDT
NEW YORK (CNNMoney.com) -- Oil prices soared Wednesday after the government reported a surprisingly sharp decline in the nation's petroleum inventories.
U.S. crude for September delivery was up $4.37 to $117.38 a barrel in electronic trading. Oil had traded up just 88 cents to $113.89 a barrel just before the report's release at 10:35 ET.
The Energy Department said crude supplies fell by 400,000 barrels during the week ended Aug. 8. The report also said gasoline supplies fell by 6.4 million barrels, while distillates, which are used to make diesel fuel, fell by 1.7 million barrels.
Economists polled by Platts, a division of McGraw Hill Cos., had expected the government to report a 500,000 barrel rise in crude stocks, a 2.2 million barrel decline in gasoline stockpiles, and a rise in distillates of 1.9 million barrels.
Refineries were operating at 85.9% of capacity, down from last week, and a sharper drop than the 86.25% predicted by the Platts poll.
Concerns that high fuel prices are cutting into demand have sent crude prices sharply lower in recent weeks.
Oil has been trending lower since the end of July and is down about $32, or 21%, from its all-time high.
However, the larger-than-expected decline in supplies suggested that demand may not have been as low as many investors had thought.
"This suggests that refiners are cutting back and that should bring gasoline and, to a lesser extent, distillates back up," said Michael Lynch, president of Stretegic Energy and Economic Research in Massachusetts.
The reduced supplies came as fighting continued in a strategically important region of Eastern Europe.
Georgian conflict: Fighting between Russia and Georgia over the breakaway regions of South Ossetia and Abkhazia continued Wednesday, despite a cease-fire brokered by French President Nicolas Sarkozy. According to reports, Russian troops raided the strategically important city of Gori and pressed on in the direction of Tbilisi, the nation's capital.
"The combination of the inventory [decline] and the war in Georgia gave people the incentive to buy [oil]," said Lynch.
Georgia serves as an important hub for transporting oil and natural gas between Europe and Asia.
The oil market has largely ignored threats to international supplies over the past few weeks as investors were more concerned about demand. Georgia's largest oil pipeline had been shut down before the fighting began due to a fire along its Turkish span, and worries about supply disruption failed to significantly rattle investors a day earlier.
However Tom Orr, head of research for Weeden & Co. said he believes the oil market has been undervalued, and expressed concern about a disruption in supplies due to the conflict between Russia and Georgia that flared up this week.
"It amazes me how little attention crude oil traders have paid to the conflict between Russia and Georgia. A month ago crude would have shot up $5 or maybe even $10 per barrel if it looked like we might lose a million barrels per day of supply," wrote Orr in a research report.
Fuel-price pinch: Many investors believe the high price of fuel has been taking a toll on U.S. consumers.
The most recent evidence comes in a report on retail sales released Wednesday by the Commerce Department.
The report showed that retail sales had fallen slightly in July, but that sales of gasoline had grown nearly a percent due to higher prices at the pump.
"You strip out the gasoline and there's not much growth in what [consumers] are buying," said Rachel Ziemba, energy analyst at RGE Monitor.
Demand forecast: Many investors also believe the rising price of crude oil and gasoline has begun to cut demand in the United States, the world's largest oil consumer.
Gas prices remain more than a dollar higher than where they were 12 months ago. However, the average price of retail gas in the United States has fallen more than 8% to $3.787 gallon at the pump over the past 27 days, according to motorist group AAA.
Prices have fallen below the psychological barrier of $4 a gallon in all but 8 states, according to AAA data. But that might be causing a slight uptick in demand.
"With the prices being down at the pump, I think people are starting to drive a little bit more," said Mark Waggoner, president of Excel Futures in California.
Dollar: Mixed view: Also adding to investor concerns was a mixed U.S. dollar.
The dollar sent conflicting signals to investors on Wednesday, turning slightly lower against the 15-nation euro, but rising versus the Japanese yen.
The U.S. currency has been steadily gaining strength amid worries about slowing economic growth outside the United States.
Oil is traded in dollars, so when the dollar strengthens, crude oil becomes relatively more expensive for foreign investors. Oil and other commodities are also commonly used as a hedge against inflation.
©
Oil: What the drilling advocates say
Supporters say there could be much more oil offshore than the government predicts as they fight for access to new supplies to lower the price of oil.
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Last Updated: August 13, 2008: 1:51 PM EDT
NEW YORK (CNNMoney.com) -- Support for more U.S. oil drilling is on the rise, despite the opinions of many analysts who say the potential supply is too small to significantly lower the price.
Government estimates assume that drilling off the east and west coasts offers just over 1 million barrels a day. Even John McCain - who has made offshore drilling a cornerstone of his energy platform - doesn't dispute that figure which is dwarfed by worldwide production. Currently world production stands at about 73 million barrels of oil each day.
Drilling in Alaska's Arctic National Wildlife Refuge could kick in another million barrels, though many drilling advocates - including McCain - don't support lifting the ban there.
Republicans were first to make the case for drilling saying that more domestic supply would significantly bring down global prices despite government experts who say it would only shave two or three cents off the price of a gallon of gas.
Now Democrats, including Barack Obama and House Speaker Nancy Pelosi, are grudgingly getting on board - as a part of a compromise to push through a comprehensive energy policy in congress.
Polls show that Americans are overwhelmingly in favor of expanded drilling too.
The current debate over drilling is holding up other energy fixes in Congress. They include tax breaks that are essential for further investments in renewable energy and other measures to help Americans use less oil.
Given the seeming futility of expanded drilling to lower prices, how do drilling's boosters support their argument?
Hoping for more oil
For starters, they think there could be more oil than the government says.
"We think the estimates are extremely conservative," said Brian Kennedy, a spokesman for the Institute for Energy Research, a Washington, D.C.-based think tank that supports more drilling.
Kennedy said the government thought Alaska's Prudhoe Bay field originally held 6 billion barrels of oil. Since the field began producing in 1977, Kennedy said it has provided about 14 billion barrels of oil.
Other reports have shown the discrepancy between estimated production and actual production in Prudhoe Bay to be smaller, but still it ended up producing more oil than initial projections.
"They have a bit of a weatherman's track record when it comes to forecasting," Kennedy said.
Boosting spare capacity is important
Kennedy also said more drilling would increase the world's spare production capacity - the difference between what the world currently produces and what it could produce if all the spigots were turned on.
Spare production capacity is currently about 1.5 million barrels a day, most of which is held by Saudi Arabia. But just a few years ago, spare production capacity was 4 or 5 million barrels a day. That tight margin today is one reason why oil prices are so high - there is less surplus crude available to cover a disruption in supplies.
But while Kennedy believes additional drilling may double spare production capacity, the U.S. Energy Information Administration says the Saudis would simply invest less in new fields if the United States increased its own investment, leaving spare production capacity little changed.
A safer supply source
Kennedy said another reason to drill is that a million barrels of oil a day - or whatever the final number is - means a million barrels we don't have to buy from a foreign country.
That, he said, would help our trade deficit and create jobs at home.
"It would protect the U.S. from supply shocks elsewhere, and it's probably the best stimulus we could come up with," said Kennedy.
We need all the oil we can get
Taylor Griffin, a spokesman for the McCain campaign, said that any extra oil is needed in a tight market. "You're talking about a million barrels day coming online, the additional supply is a big deal."
'It's part of a comprehensive solution, you can't do just one thing," Griffin said, noting that McCain is calling for more drilling offshore but not in Alaska's wildlife refuge, and is championing other energy initiatives including a suspension of the federal gas tax and a big push in nuclear power.
That sentiment is echoed by the oil industry, which has consistently told Congress that among the many things lawmakers could do to lower gas prices one is to open up more areas of the country for drilling.
"Let's do everything," said Rayola Dougher, senior economic advisor for the American Petroleum Institute, noting that the discussion doesn't have to be either drilling or renewables, but can be both. "No one knows what impact it's going to have 10 years down the road, but we're still going to need more oil and gas."
If everyone agrees that we should do everything, why is it that we're spending so much time talking about drilling, and less time on other measures like conservation and alternatives?
Griffen said because drilling is one area in energy policy where Obama and McCain disagree.
"We're not talking about alternatives because we both support alternatives," he said.
People against more drilling cite the estimates from the government - EIA says opening Alaska's wildlife refuge would cause gasoline prices to fall by 2 or 3 cents a gallon by 2020 - and say Republicans are keeping the issue alive simply to use against the Democrats in the November election.
"The Republicans think they've identified an issue they can win on," said Karen Wayland, legislative director for the natural Resources Defense Council. "This is just about making it a wedge issue."
Wayland, channeling similar sentiments from many Democrats and citing numbers showing the oil industry already has access to nearly 80% of the oil reserves in North America, called the whole debate about expanding offshore drilling "a distraction from the real solutions."
First Published: August 13, 2008: 3:57 AM EDT
America's untapped oil
Alaska: Energy fix meets political pandering
Offshore oil: What's really out there?
Frank, did you happen to catch Pelosi on Larry King Live a few nights ago? Interesting
Every time I hear or see Ms. Pelosi I have to turn the channel real quick or I start to lose the last meal I ate.
What I can't stand about Pelosi is that she talks with this really fakey-fake smile on her face...the variety of smile that people greet you with when they've just concluded talking about you behind your back...and you just happened to walk through the door at that particular moment.
Lol, hell they ALL do that :P
I don't care if they are missing all their teeth and have purple heads,,,,,tell me about the real issues!
I thought this was a really good article about the changing World Oil Picture. The future supply picture for the US is for less supply and higher prices. More years of Pelosi, Reid and Obama is just going to hasten our shortages and problems. Obama is touting "Windfall Profits Tax" the ultimate result of that will be less energy and higher prices for the people in the long run.
Oil Giants Lose Influence, Supply Drops
By JAD MOUAWAD
Oil production has begun falling at all of the major Western oil companies, and they are finding it harder than ever to find new prospects even though they are awash in profits and eager to expand.
Part of the reason is political. From the Caspian Sea to South America, Western oil companies are being squeezed out of resource-rich provinces. They are being forced to renegotiate contracts on less-favorable terms and are fighting losing battles with assertive state-owned oil companies.
And much of their production is in mature regions that are declining, like the North Sea.
The reality, experts say, is that the oil giants that once dominated the global market have lost much of their influence — and with it, their ability to increase supplies.
R20;This is an industry in crisis,R21; said Amy Myers Jaffe, the associate director of Rice UniversityR17;s energy program in Houston. "It's a crisis of leadership, a crisis of strategy and a crisis of what the future looks like for the supermajors," a term often applied to the biggest oil companies. "They are like a deer caught in headlights. They know they have to move, but they can't decide where to go."
The sharp retreat in all of the commodities' prices over the last month, about 20 percent, reflects slowing global growth and with it reduced demand for more oil in the short term. But over the next decade, the world will need more oil to satisfy developing Asian economies like China. The oil companies' difficulties suggest that these much-needed future supplies may be hard to come by.
Oil production has failed to catch up with surging consumption in recent years, a disparity that propelled oil prices to records this year. Despite the recent decline, oil remains above $100 a barrel, unimaginable a few years ago, causing pain throughout the economy, like higher prices at the gas pump and automakers posting sizable losses.
The scope of the supply problem became more clear in the latest quarter when the five biggest publicly traded oil companies, including Exxon Mobil, said their oil output had declined by a total of 614,000 barrels a day, even as they posted $44 billion in profits. It was the steepest of five consecutive quarters of declines.
While that drop might not sound like much in a world that consumes 86 million barrels of oil each day, today's markets are so tight that the slightest shortfalls can push up prices.
Along with mature fields, the companies have contracts with producing countries whose governments allocate fewer barrels to oil companies as prices rise.
R20;It has become really, really difficult to grow production,R21; said Paul Horsnell, an analyst at Barclays Capital. R20;International companies have a portfolio of assets in areas of significant decline and no frontier discoveries to make up for that."
As a result of the industry's troubles, energy experts do not expect oil supplies to grow this year in countries outside the Organization of the Petroleum Exporting Countries. Global demand for oil is expected to expand by 800,000 barrels a day, mostly because of rising demand in China and the Middle East, despite lower consumption in developing countries.
This imbalance between supplies and demand will be one thing that OPEC ministers will consider when they meet next month to decide whether or not to increase their production. OPEC has about 2 million barrels a day in untapped capacity that its members control.
The new oil order has been emerging for a few decades.
As late as the 1970s, Western corporations controlled well over half of the world's oil production. These companies — Exxon Mobil, BP, Royal Dutch Shell, Chevron, ConocoPhillips, Total of France and Eni of Italy — now produce just 13 percent.
TodayR17;s 10 largest holders of petroleum reserves are state-owned companies, like RussiaR17;s Gazprom and IranR17;s national oil company.
Sluggish supplies have prompted a cottage industry of doomsday predictions that the world's oil production has reached a peak. But many energy experts say these "peak oil" theories are misplaced. They say the world is not running out of oil — rather, the companies that know the most about how to produce oil are running out of places to drill.
R20;There is still a lot of oil to develop out there, which is why we donR17;t call this geological peak oil, especially in places like Venezuela, Russia, Iran and Iraq," said Arjun Murti, an energy analyst at Goldman Sachs. "What we have now is geopolitical peak oil."
Western companies are far better than most national oil companies at finding and extracting petroleum, experts say. They have developed advanced exploration technologies and can muster significant financing to develop new fields. Many of the world's exporting states, however, have spurned their expertise.
Oil company executives see a straightforward explanation: a trend known as resource nationalism. They contend that they have been shut out of promising regions by a rising assertiveness in the Middle East, in Russia, in South America and elsewhere by governments determined to keep full control of their oil.
Even in places where they are allowed to operate, the Western oil companies face growing problems. Countries like Russia, Algeria, Nigeria and Angola have recently sought to renegotiate their contracts with foreign investors to capture a bigger share of the profits.
R20;The problem with the supply side of the equation is a problem of accessing the resources in the ground so they can be explored and developed,R21; Rex W. Tillerson, the chairman of Exxon, said in a recent interview. "That's a political question where governments have made choices."
This sense of being hemmed in helps explain why the Western oil companies want more offshore drilling in the United States. They see it as one of their few options.
These companies have also tried to diversify. They have turned to natural gas as a profitable source of growth. They are tackling hydrocarbon resources, like deep-water reserves, heavy oil or tar sands. And some companies, like Shell and BP, are investing in renewable fuels.
Unquestionably, the oil companies could have done more. They failed to invest heavily in exploration after the oil-price collapse of the mid-1980s, which lasted through the 1990s.
In 1994, the top five oil companies spent 3 percent of their free cash on share buybacks and 15 percent on exploration. By 2007, they were spending 34 percent of their free cash on buybacks — in effect, propping up their share prices — and a mere 6 percent on exploration, according to figures compiled by a team led by Ms. Jaffe and Ronald Soligo of Rice University. As a result, some experts warn that supplies will fall short of the demand over the next decade, perhaps sending prices well above today's levels.
At a recent conference in Madrid, Christophe de Margerie, the chief executive of the French company Total, said the world would be hard-pressed to raise supplies beyond 95 million barrels a day by 2020. Only a few years ago, forecasters expected 120 million barrels a day by 2030, a level many analysts now view as unrealistic.
The major companies picked up their capital spending around 2005, although much of the increase has been offset by the soaring cost of development. Exxon, for example, expects to spend about $25 billion annually for the next three years to expand its business, compared with $15 billion a year from 2002 through 2006.
R20;ItR17;s amazing the difference from the 1970s, where a lot of money went into exploration, development and production of new resources,R21; said Paul Stevens, a senior research fellow at Chatham House, a London policy research organization. "It is happening a little bit now, but it is not going to be enough."
As the power and clout of Western companies erode, the world may become increasingly dependent on government-controlled entities for oil.
While some may be up to the task, like Saudi Aramco, others, like Petróleos de Venezuela, suffer from bureaucratic inefficiencies and political interference.
R20;We are going to depend on the Venezuelan, the Nigerian or the Iranian oil companies for the future of our oil supplies,R21; said Bruce Bullock, the director of the energy institute at Southern Methodist University. "This is a troubling trend."
September -08 Crude closed up $1.66 at $114.53 for the day, Natural Gas closed at $7.976, up $0.088 on the day. Traders were blaming the Crude increase on a weaker dollar and the storm threats in the Gulf.
October crude is trading at $116.20, up $1.66 in overnite trading, Natural gas for September 08 is trading at $8.16, up $0.184. there is still some Hurricane threat and that is pushing the market up some, also Crude and product inventories come out today and if there is a draw overall , the market will move up more on crude and products.
Current Weekly EIA Crude and Products Inventory Report:
Summary of Weekly Petroleum Data for the Week Ending August 15, 2008
U.S. crude oil refinery inputs averaged 14.8 million barrels per day during the
week ending August 15, relatively unchanged from the previous week's average.
Refineries operated at 85.7 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 4.4 million barrels
per day.
U.S. crude oil imports averaged nearly 11.0 million barrels per day last week,
up 1.3 million barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged over 10.2 million barrels per day, 93 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 794 thousand barrels per day. Distillate fuel imports averaged 73
thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 9.4 million barrels from the previous week. At
305.9 million barrels, U.S. crude oil inventories are in the middle of the
average range for this time of year. Total motor gasoline inventories decreased
by 6.2 million barrels last week, and are below the lower boundary of the
average range. Both finished gasoline inventories and gasoline blending
components inventories decreased last week. Distillate fuel inventories
increased by 0.5 million barrels, and are in the upper half of the average range
for this time of year. Propane/propylene inventories increased by 1.6 million
barrels last week but remain below the lower limit of the average range. Total
commercial petroleum inventories increased by 8.2 million barrels last week,
and are in the lower half of the average range for this time of year.
Total products supplied over the last four-week period has averaged 20.2 million
barrels per day, down by 3.0 percent compared to the similar period last year.
Over the last four weeks, motor gasoline demand has averaged about 9.5 million
barrels per day, down by 1.6 percent from the same period last year. Distillate
fuel demand has averaged 4.2 million barrels per day over the last four weeks,
up by 3.3 percent from the same period last year. Jet fuel demand is 6.2 percent
lower over the last four weeks compared to the same four-week period last year.
Very interesting. I thought the dollar had strengthened somewhat. But not much, I guess. Jet fuel demand is down too, interesting.
Sept -08 crude closed at $114.98, up $0.45 on the day, the Back months settled up in the $1.50 to $2.30 range. Sept-08 Natural Gas closed at $8.077, up $0.101 on the day, the back months settled up in the $0.12 range. The biggest factor in the market today appears to be the Hurricane threat in the Gulf.
Crude is trading higher this morning, below is a good article regarding some of what impacts crude pricing around the World, and that the American Oil Companies have absolutely no control over the World Price of Oil.
Oil rises on shrinking gas supply
Crude gains more than $1 as investors digest U.S. inventory report showing drop in gasoline stockpiles.
Special Reportfull coverage
SINGAPORE (AP) -- Oil prices rose Thursday in Asia above $116 a barrel as investors mulled a fall in U.S. gasoline inventories and a possible output tightening by OPEC at its next meeting in September.
U.S. crude for October delivery was up $1.20 at $116.76 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract rose $1.01 overnight to settle at $115.56 a barrel.
The September contract expired Wednesday after rising 45 cents to $114.98 a barrel.
The price gains came despite a huge rise in U.S. crude inventories. But not all U.S. fuel supplies were abundant.
Gasoline inventories shrank by a larger-than-expected 6.2 million barrels to below-average levels in the week ended Aug. 15, the U.S. Energy Department's Energy Information Administration said Wednesday. Meanwhile, distillate inventories - which include heating oil and diesel fuel - rose by less than expected, the EIA said.
That was enough to offset a hefty 9.4 million barrel rise in U.S. crude stocks last week when the average analyst forecast had been for a 1.7 million barrel increase, according to energy information provider Platts.
"That report had something for everyone," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. "On the one hand, the crude inventory buildup was quite strong, but the gasoline draw was also very prominent."
Investors are also trying to anticipate the outcome of the next Organization of Petroleum Exporting Countries meeting in early September, as supply concerns could rise further if members of the cartel decide to lower their output in response to slower demand. Venezuelan Oil Minister Rafael Ramirez said he might propose an output cut at the next OPEC meeting.
"The market is looking to the OPEC meeting," Moore said. "Before that meeting, we're going to get quite a few statements from OPEC officials expressing opinions. In the end, I don't expect a production cut, but they may push for greater adherence to output quotas."
Oil prices have rebounded after falling about $35, or nearly a quarter, from their all-time trading record $147.27 on July 11. Many investors expect that high gasoline prices and slowing economic growth in the U.S., Europe and Japan will undermine global energy demand.
Prices were supported Thursday by a slightly weaker dollar compared to the euro. The 15-nation euro traded was up to $1.4775, while the dollar fell to ¥109.62. A falling greenback encourages investors to seek commodities such as oil as a hedge against inflation and a weaker dollar.
In other Nymex trading, heating oil futures rose 3.01 cents to $3.1936 a gallon, while gasoline prices gained 1.84 cents to $2.9287 a gallon. Natural gas futures increased 1.8 cents to $8.095 per 1,000 cubic feet.
First Published: August 21, 2008: 4:14 AM EDT
I don't take credit for this.. but I DID get it from a very good friend who is a "digger".
Snopes lists the e-mail below as - Undetermined....
I checked further and found the following report by the USGS, the U.S. Geological Survey.
First read the report below, then click on the following link to get the USGS report. www.usgs.gov/newsroom/article.asp?ID=1911
That will help separate the wheat from the chaff............... At first I wasn't sure about this, but Google just sent me a copy of the government report. I knew we had something out West, but nothing like this. Now I'm wondering why Obama and some others are yelling to get Bush to deplete the reserve by 1/3rd or more. George Mason.
Bakken Formation oil find in Dakotas
1. Ever heard of the Bakken Formation? GOOGLE it. It will blow your mind.
The U.S. Geological Service issued a report in April ('08) that only scientists and oilmen/women knew was coming, but man was it big. It was a revised report (hadn't been updated since '95) on how much oil was in this area of the western 2/3 of North Dakota; western South Dakota; and extreme eastern Montana ... check THIS out:
The Bakken is the largest domestic oil discovery since Alaska's Prudhoe Bay, and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at
503 billion barrels. Even if just 10% of the oil is recoverable... at $107 a barrel, we're looking at a resource base worth more than $5.3 trillion.
'When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea.' says Terry Johnson, the Montana Legislature's financial analyst.
'This sizable find is now the highest-producing onshore oil field found in the past 56 years,' reports The Pittsburgh Post Gazette. It's a formation known as the Williston Basin , but is more commonly referred to as the 'Bakken.' And it stretches from Northern Montana, through North Dakota and into Canada . For years, U.S. oil exploration has been considered a dead end. Even the 'Big Oil' companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken's massive reserves... and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!
That's enough crude to fully fuel the American economy for 41 years straight.
2. [And if THAT didn't throw you on the floor, then this next one should - because it's from TWO YEARS AGO, people!]
U.S. Oil Discovery- Largest Reserve in the World! Stansberry Report Online - 4/20/2006 Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction.
[(???) What the!??]
They reported this stunning news: We have more oil inside our borders, than all the other proven reserves on earth. Here are the official estimates:
-8-times as much oil as Saudi Arabia
-18-times as much oil as Iraq
-21-times as much oil as Kuwait
-22-times as much oil as Iran
-500-times as much oil as Yemen - and it's all right here in the
Western United States.
HOW can this BE!? HOW can we NOT BE extracting this!? Because the democrats and leftwing republicans have blocked all efforts to help America become independent of foreign oil. James Bartis, lead researcher with the study says we've got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels. Untapped. That's more than all the proven oil reserves of crude oil in the world today, reports The Denver Post
-Don't think 'OPEC' will drop its price - even with this find? Think again! It's all about the competitive marketplace, - it has to.
----
[Got your attention / ire up yet? Hope so! Now, while you're thinking about it ... and hopefully P.O'd, do this:
3. Take 10 minutes and compose an e-mail; fax or good old-fashioned letter to all your friends and associates. Alert them to the fact that democrats and "liberal" republicans have been and will continue to obstruct all plans to make America independent of foreign oil. The only solution is to vote all democrats and Marxist oriented republicans out of office.
If you don't take a little time to do this, then you should stifle yourself the next time you want to complain about gas prices .. because by doing NOTHING, you've forfeited your right to complain.
I actually heard about this just this week, when visiting w/ someone from CO. I don't know how true this is, but "trapped beneath the Rock Mountains" isn't exactly true... he said, "it's on the West side of the mountains, the ugliest part of the US". The problem is that people are picturing all these oil wells in the beautiful mountain scenery, and that where the bulk lies is NOT in the mountains, but to the west.
I think what is being referred to is the Roan Plateau.
It is in "scrub country" but is still at 9,000 feet.
I had heard about this in April and did quite a bit of research on the Bakken Formation and the Williston Basin. Both areas are under current drilling. Actually messaged Frank on this one because I wanted to buy stock in a couple of the companies that are doing extensive drilling. Ended up picking up stock on two of the companies and it has done very well.
Problem is the oil is two miles deep, and also must be horizontally drilled. A report on one of the companies I bought into estimated that each well drilled was running an average of 5 million dollars and they had drilled about 70 of them!!! Takes money to make money. Production has been good though, as in 22 months they have gotten over 5 million barrels off of the 72 wells.
Keep on pumping and drilling, my parachute car isn't built yet :P
October Crude Oil, (Front Month) closed at $121.18 up $5.62, the back months were up in the $6.00+ range. Sept-08 Natural Gas settled at $8.252, up $0.175 on the day, the back months were up as well. Analysts were crediting, weathe threat and the biggest reason given was due to tensions between US and Russia over the US Signing the Missle-Shield agreement with Poland. Concerns are that Russia, the worlds second largest oil producer might cut back on exports to punish the US. The higher crude prices pulled Natural Gas up as well. There were lots of long cintracts traded in crude oil today and we could see more run-up in the coming days.
Quote from: DanCookson on August 21, 2008, 09:41:08 AM
Keep on pumping and drilling, my parachute car isn't built yet :P
Yeah... and I want you to put me in a nice upscale nursing home... so let 'em drill.. ;D :D ;D :D
Quote from: Tobina on August 21, 2008, 08:59:17 AM
I actually heard about this just this week, when visiting w/ someone from CO. I don't know how true this is, but "trapped beneath the Rock Mountains" isn't exactly true... he said, "it's on the West side of the mountains, the ugliest part of the US". The problem is that people are picturing all these oil wells in the beautiful mountain scenery, and that where the bulk lies is NOT in the mountains, but to the west.
I can't remember the name of the unocal site. i think parachute colorado. its shale oil. They mine shale out and crush it and heat it much like coal to extract the oil.
They don't drill for oil there, they just mine the shale and crush it. I used to work there back years ago til they shutdown due to eco groups raising heck.
BTW its Rock and more rock and more rocky rocks there. Hardly the vision of beauty that the ecofruits try to portray it to be.
The US is so addicted to Petroleum Source Energy and there are so many factors that affect the Crude Supply and price and yet both houses of Congress do nothing and the Democratic Presidential Candidate is advocating windfall profits tax on the oil companies. Our enemies and other outside suppliers provide us with 70% of our energy supplies and that number continues to grow. If we are really serious about being less dependent on others then we need to make big changes and we need to start now. If we start now it will be 10 years+or- before we can get the infrastructure in place and increase our production appreciably. In the meantime we are going to face some really serious energy shortages. Today's Bloomberg news note is an example of the outside sources that impact our energy supply.
Crude Oil Futures May Rise as Dollar Weakens, Survey Shows
By Mark Shenk
Aug. 22 (Bloomberg) -- Crude oil may rise next week because of a weakening dollar, tension between the U.S. and Russia and falling gasoline stockpiles.
Sixteen of 29 analysts surveyed by Bloomberg News, or 55 percent, said prices will increase through Aug. 29. Seven of the respondents, or 24 percent, said oil will be little changed and six said there would be a drop in prices. Last week 63 percent expected prices to increase.
Energy and metals futures climbed yesterday as the U.S. currency fell the most against the euro in 11 weeks. A falling dollar prompts investors to by hard assets as an inflation hedge. Russia reacted angrily after Poland agreed to host a U.S. anti- missile base two weeks after Russia invaded Georgia.
``The dollar is correcting, and there are tensions in various parts of the world,'' said Kyle Cooper, an analyst at IAF Advisors in Houston. ``We fell more than $30 from last month's record so it's normal for prices to bounce back.''
U.S. gasoline supplies declined 6.2 million barrels to 196.6 million barrels last week, a U.S. Energy Department report on Aug. 20 showed. Inventories have dropped 9.4 percent in the past four weeks as refineries cut operating rates.
Crude oil for October delivery fell $7.24, or 6.4 percent, to $121.18 a barrel so far this week on the New York Mercantile Exchange. Futures have dropped 18 percent since touching $147.27 a barrel on July 11, the highest since trading began in 1983.
The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.
Bloomberg's survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:
RISE NEUTRAL FALL
16 7 6
I actually went out and filled my car's gas tank today at $3.42 .9. I guess it could be worse. We went on a provision trek today... worked our way up one side of the road and back down the other. I'm being very smug at how sale conscious and mileage efficient we were. Keep up the great posts I read every one.
Wild market today, Oct-08 crude settled at $114.59, down $6.59, Sept-08 Natural Gas Settled at $7.843, down $0.409.
Here is an excerpt from Bloombergs analysis for the day.:
Aug. 22 (Bloomberg) -- Crude oil fell more than $6 a barrel, dropping the most in percentage terms since December 2004, as the U.S. dollar strengthened and BP Plc restored shipments on a Caspian Sea pipeline through Turkey.
Oct-08 Crude is up in overnite trading, currently trading at $115.075, up $0.485, Sept-08 Natural gas is trading at $7.71, down $0.133. Crude is said to be trading higher due to Russian-Georgia tensions.
In overnite trading Oct-08 Crude is trading down at $113.475, off $1.635 and Natural Gas for Sept -08 is trading at $8.025, up $0.20.
I thought this was a good article on all of the different world happenings that can impact the price of oil.
Oil Falls as Dollar Strengthens, BP Resumes Caspian Shipments
By Grant Smith
Aug. 26 (Bloomberg) -- Oil fell as the dollar strengthened to a six-month high against the euro, limiting the appeal of commodities as a hedge, and shipments of Caspian crude resumed after a pipeline fire.
Crude, gold and wheat dropped as flagging business confidence in Germany boosted the dollar against the single European currency. Two tankers at the Turkish port of Ceyhan are loading crude pumped through the Baku-Tbilisi-Ceyhan pipeline for the first time since the one million barrel-a-day link was shut by a fire on Aug. 5.
``Futures are under more pressure this morning following a strong recovery in the dollar and after reports that the Baku- Tbilisi-Ceyhan pipeline was operating again,'' said Andrey Kryuchenkov, an analyst at London-based Sucden (U.K.) Ltd.
Crude oil for October delivery fell as much as $2.31, or 2 percent, to $112.80 a barrel on the New York Mercantile Exchange. The contract traded for $112.90 at 11:01 a.m. London time. Prices are up 57 percent from a year ago. Yesterday, futures rose 0.5 percent to settle at $115.11.
The euro slid to $1.4609, the lowest level since Feb. 14, and was trading at $1.4617 by 9:25 a.m. in London, from $1.4754 yesterday in New York.
A tropical storm, Gustav, strengthened to become a hurricane as it blew through the Caribbean Sea toward Haiti and the Dominican with 80-mile (128-kilometer) per hour winds. The system was heading northwest at 9 mph, the U.S. National Hurricane Center said in an advisory posted on its Web site shortly before 5 a.m. Miami time.
``Gustav's direction and wind speed over the next 24 to 36 hours will be key,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``It's too early to predict whether it will churn into the Gulf of Mexico but it could well pose a threat to offshore production and ultimately onshore refining.''
U.S. crude-oil inventories probably rose 1.1 million barrels last week because refinery operations are lower than in previous years, a Bloomberg News survey before tomorrow's Energy Department report showed. Refineries operated nearly 14 percentage points below full capacity, according to the survey.
Crude and Natural Gas are both up considerably, due to the threat of Hurricane Gustav, which may move in to the Gulf of Mexico later this week. Aproximately one-fifth of US production is in the Gulf of Mexico.
Oct-08 Crude settled at $116.27, up $1.16 for the day, Natural Gas for Sept-08 settled at $8.278, up $0.453 on the day, Natural Gas was up almost 6% just on the Hurricane hype. I filled up my pickup this A.M for $3.29 a gallon, here in Bartlesville.
Oct-08 crude is trading at $117.225, up $0.955, Oct-08 Natural Gas is trading at $8.75, up $0.363. The Hurricane concerns are the main reason the Crude and Natural Gas are trading up. Approximately one-Fifrh of US Production is in the Gulf of Mexico.
The trend continues the end of an era. When i started with Phillips they had just completed acquisitions tp enable them to Merket in all 50 States and now the have just completed sales to end marketing everywhere. Kind of a sad happening to me.
ConocoPhillips is latest to sell its gas stations
Big oil companies have been saying goodbye to the troubled business
By BRETT CLANTON
Aug. 27, 2008, 11:00PM
ConocoPhillips on Wednesday became the latest major oil company to exit the troubled gas station business and pass on the guardianship of familiar store brands to new owners.
The Houston-based oil company agreed to sell its 600 remaining stores to PetroSun Fuel, a privately held Seattle company, in an $800 million deal that puts a bookend on an effort announced in 2006 to unload the company's fuel stations.
The move follows similar ones recently by Exxon Mobil Corp. and BP, which announced plans to jettison U.S. gas stations amid higher fuel costs, increasing competition from low-price rivals and slumping profits.
It also heralds the end of an era in which the name on the big neon sign on the highway told drivers where their money was going.
Today, fewer than 2 percent of the 115,157 convenience stores selling motor fuels in the U.S. are owned and operated by major oil companies — although many retain the brand names, according to the Association for Convenience and Petroleum Retailing in Alexandria, Va.
"Every day it gets closer to zero," said Jeff Lenard, a spokesman for the trade group.
Most of the stations included in the ConocoPhillips deal are on the West Coast. Only one is in Texas.
All will continue to carry their Conoco, Phillips 66 or 76 brands.
But once the deal is closed, the stores will have a more distant relationship with their former parent.
ConocoPhillips will act solely as a wholesale fuel supplier to the sites, as well as to other stores that are not part of the deal, said Terry Hunt, a spokeswoman for the Houston-based oil company. She called the arrangement a "more sustainable business model."
With retail pump prices topping $4 a gallon earlier this year and still often more than $3.50, customers might assume gas stations are big moneymakers. But the slowing economy and falling U.S. fuel demand this year have made it difficult for retailers to raise prices enough to cover the wholesale price of gasoline they sell.
The convenience store association estimates that retailers made a penny or two per gallon in pretax profit last year, despite high pump prices. The group has not released profit estimates for 2008, when gasoline prices climbed still higher.
Bruce Bullock, director of Southern Methodist University's Maguire Energy Institute, said the deal announced Wednesday suggests ConocoPhillips and its rivals don't see the gas station business improving anytime soon.
"I think this is a pretty good indication that most of the companies continue to believe that prices are going to be either stable or increasing," he said.
On Wednesday, regular gasoline sold for an average $3.67 per gallon nationwide and $3.41 in Houston, AAA reported.
Amid higher prices, U.S. gasoline demand was down 1.5 percent during the first six months of this year, according to the U.S. Energy Department's Energy Information Administration.
If the trend continues, the U.S. could register its first full-year decline in gasoline demand in 17 years.
But Sam Hirbod, chief executive of PetroSun, said his company sees opportunity where the major oil companies see a drag on earnings.
"We are very much interested in participating in the consolidation that's happening in the retail gas station sector," he said, adding that his company is working on two other deals that could add as many as 200 more stores by next year.
The deal Wednesday will make PetroSun, which now has about 120 properties on the West Coast, one of the nation's largest independent petroleum and convenience store operators. The company agreed to acquire the ConocoPhillips properties through a newly formed affiliate called Pacific Convenience & Fuel.
The 600 stores in the deal are spread over 10 states and represent more than 1 billion gallons of fuel sales each year.
Most are in urban areas in California, Oregon and Washington. Others are in Denver, Salt Lake City and Albuquerque, N.M. A Dallas store is the only Texas site.
In Houston, ConocoPhillips sells fuel through Phillips 66 and Conoco stations, but the deal doesn't affect them because they are independently owned.
One way PetroSun aims to offset rising operating costs is by upgrading the ConocoPhillips properties with better in-store products and services, Hirbod said.
In some cases, that will include the addition of fresh deli sandwiches and salads, healthier snacks and perhaps even financial services, he said.
Yet SMU's Bullock said current market conditions will likely test any fuel retailer.
"It's a question of whether a company with a different focus can make money doing the same thing that someone else has already tried," he said. "My sense is that's going to be a tough road."
Oct-08 Crude is trading at $119.525, up $1.375 and Oct-08 Natural Gas is trading at $8.665, up $0.057. One would be wise to fill up now as a Hedge against Hurricane Gustav coming into the US Gulf at a category 3 or worse. Lots of things can happen when a big Hurricane comes into the Gulf, Tankers Carrying Foreign Crude can't Lighter or Unload, Refineries are shut down and offshore platforms are shutin.
Oct-08 Crude Oil settled at $115.29, down $2.56 on the day, Oct-08 settled at $8.050, down $0.558 on the day, the reason given for the Crude Oil drop was a Statement out of the IEA saying they would release crude from the SPR if Hurricane Gustav shuts in the Gulf Production, Natural Gas was down due to an unexpectedly big increase in the build and inventory that came out today.
All the more reason we should get busy and start drilling the OCS, ANWR and other BLM controlled lands. We are dependent on the rest of the world for almost 70% of our energy needs and Nancy Pelosi refuses to let the Vote be heard to release drilling in a huge portion of our reserves. It seems inconcievable to me that she won't even allow some exploratory search and at least let the oil and gas industry try to define the fields to some degree, it is a big unknown what reserves are really in place and where. Our enemies are going to use oil more and more to destroy or control us.
Russia may cut off oil flow to the West
By Ambrose Evans-Pritchard
Last Updated: 10:39am BST 29/08/2008
Fears are mounting that Russia may restrict oil deliveries to Western Europe over coming days, in response to the threat of EU sanctions and Nato naval actions in the Black Sea.
Any such move would be a dramatic escalation of the Georgia crisis and play havoc with the oil markets.
Reports have begun to circulate in Moscow that Russian oil companies are under orders from the Kremlin to prepare for a supply cut to Germany and Poland through the Druzhba (Friendship) pipeline. It is believed that executives from lead-producer LUKoil have been put on weekend alert.
"They have been told to be ready to cut off supplies as soon as Monday," claimed a high-level business source, speaking to The Daily Telegraph. Any move would be timed to coincide with an emergency EU summit in Brussels, where possible sanctions against Russia are on the agenda.
Any evidence that the Kremlin is planning to use the oil weapon to intimidate the West could inflame global energy markets. US crude prices jumped to $119 a barrel yesterday on reports of hurricane warnings in the Gulf of Mexico, before falling back slightly.
Global supplies remain tight despite the economic downturn engulfing North America, Europe and Japan. A supply cut at this delicate juncture could drive crude prices much higher, possibly to record levels of $150 or even $200 a barrel.
With US and European credit spreads already trading at levels of extreme stress, a fresh oil spike would rock financial markets. The Kremlin is undoubtedly aware that it exercises extraordinary leverage, if it strikes right now.
Such action would be seen as economic warfare but Russia has been infuriated by Nato meddling in its "backyard" and threats of punitive measures by the EU. Foreign minister Sergei Lavrov yesterday accused EU diplomats of a "sick imagination".
Armed with $580bn of foreign reserves (the world's third largest), Russia appears willing to risk its reputation as a reliable actor on the international stage in order to pursue geo-strategic ambitions.
"We are not afraid of anything, including the prospect of a Cold War," said President Dmitry Medvedev.
The Polish government said yesterday that Russian deliveries were still arriving smoothly. It was not aware of any move to limit supplies. The European Commission's energy directorate said it had received no warnings of retaliatory cuts.
Russia has repeatedly restricted oil and gas deliveries over recent years as a means of diplomatic pressure, though Moscow usually explains away the reduction by referring to technical upsets or pipeline maintenance.
Last month, deliveries to the Czech Republic through the Druzhba pipeline were cut after Prague signed an agreement with the US to install an anti-missile shield. Czech officials say supplies fell 40pc for July. The pipeline managers Transneft said the shortfall was due to "technical and commercial reasons".
Supplies were cut to Estonia in May 2007 following a dispute with Russia over the removal of Red Army memorials. It was blamed on a "repair operation". Latvia was cut off in 2005 and 2006 in a battle for control over the Ventspils terminals. "There are ways to camouflage it," said Vincent Sabathier, a senior fellow at the Centre for Strategic and International Studies in Washington.
"They never say, 'we're going to cut off your oil because we don't like your foreign policy'."
A senior LUKoil official in Moscow said he was unaware of any plans to curtail deliveries. The Kremlin declined to comment.
London-listed LUKoil is run by Russian billionaire Vagit Alekperov, who holds 20pc of the shares. LUKoil produces 2m barrels per day (b/d), or 2.5pc of world supply. It exports one fifth of its output to Germany and Poland.
Although Russia would lose much-needed revenue if it cut deliveries, the Kremlin might hope to recoup some of the money from higher prices. Indeed, it could enhance income for a while if the weapon was calibrated skilfully. Russia exports roughly 6.5m b/d, supplying the EU with 26pc of its total oil needs and 29pc of its gas.
A cut of just 1m b/d in global supply – and a veiled threat of more to come – would cause a major price spike.
It is unclear whether Saudi Arabia, Kuwait or other Opec producers have enough spare capacity to plug the shortfall. "Russia is behaving in a very erratic way," said James Woolsey, the former director of the CIA. "There is a risk that they might do something like cutting oil to hurt the world's democracies, if they get angry enough."
Mr Woolsey said the rapid move towards electric cars and other sources of power in the US and Europe means Russia's ability to use the oil weapon will soon be a diminishing asset. "Within a decade it will be very hard for Russia to push us around," he told The Daily Telegraph.
It is widely assumed that Russia would cut gas supplies rather than oil as a means of pressuring Europe. It is very hard to find alternative sources of gas. But gas cuts would not hurt the United States. Oil is a better weapon for striking at the broader Western world.
The price is global. The US economy could suffer serious damage from the immediate knock-on effects.
While the Russian state is rich, the corporate sector is heavily reliant on foreign investors. The internal bond market is tiny, with just $60bn worth of ruble issues.
Russian companies raise their funds on the world capital markets. Foreigners own half of the $1 trillion debt. Michael Ganske, Russia expert at Commerzbank, said the country was now facing a liquidity crunch. "Local investors are scared. They can see the foreigners leaving, so now they won't touch anything either. The impact on the capital markets is severe," he said.
Oct-08 Crude Oil is trading at $117.15, up $1.56 and Oct-08 Natural Gas is trading $8.195, up $0.145. If Hurricane Gustav increases in intensity and moves in to the Gulf both Crude and Natural Gas will move up considerably. If that does happen some will blame the Energy Industry for the Hurricane, fortunately only The Good Lord can control the weather.
Quote from: frawin on August 29, 2008, 06:31:11 AM
All the more reason we should get busy and start drilling the OCS, ANWR and other BLM controlled lands. We are dependent on the rest of the world for almost 70% of our energy needs and Nancy Pelosi refuses to let the Vote be heard to release drilling in a huge portion of our reserves. It seems inconcievable to me that she won't even allow some exploratory search and at least let the oil and gas industry try to define the fields to some degree, it is a big unknown what reserves are really in place and where. Our enemies are going to use oil more and more to destroy or control us.
I would call that a act of treason to jeapordize our national security like that.
Steve, she is holding back anything that will help our energy situation so it won't look like the Republicans helped it. She wants it to look like Hussein Obama and the Democrats did it.
If what you suspect about Pelosi is true, then it is horrific to contemplate the fact that any one political party would play hell with our economy in such a way. I have been truly appalled by that woman from the start...and this profile would only fit my estimation (or lack thereof) regarding her.
where have you people been Antarctica? That's the way our government operates democrat and republican alike. Come on.......
In overnite trading, Oct-08 Crude Oil is trading at $107.95, down $7.51, and Oct-08 Natural Gas is trading at $7.26, down $0.683.
More evidence of our dependence on Foreign Oil, the only way we can break some of OPEC and the rest of the Worlds control over our destiny is drill our own reserves, again Nancy Pelosi and the Democrat controlled Congress refuses to do anything. Some of you keep blaming the US Oil Industry, THE US OIL INDUSTRY HAS NO CONTROL OVER THE PRICE OF OIL, BUT IF WE ARE GOING TO REDUCE OUR INDEPENDENCE ON FOREIGN OIL IT WILL HAVE TO BE THE US OIL INDUSTRY THAT DOES IT.
Opec could agree on output cut this month
Reuters
Published: September 01, 2008, 21:15
Tehran: Iran's Opec governor said on Monday the group could agree to cut output when it meets this month because of a fall in oil prices, Mehr News Agency said.
Oil has fallen from a record level of just above $147 a barrel in July to around $116 a barrel on Monday.
"In view of the drop in oil prices, there is this possibility that Opec would approve an output cut in its upcoming meeting in Vienna," Mohammad Ali Khatibi told Mehr.
Iranian Oil Minister Gholamhossein Nozari said on Sunday that $100 a barrel was the lowest appropriate price for oil, echoing a figure cited by another price hawk in the Organisation of Petroleum Exporting Countries, Venezuela.
Even as prices surged to all-time highs this year, Iran said the market was oversupplied with crude and blamed the price surge on other factors, such as speculation and geopolitics.
"The supply of oil is more than demand in the market. If Opec is interested in removing the excess oil from the market, it must approve the output cut plan," Khatibi told Mehr.
Irrational trend
Most commentators predict Opec will leave output targets unchanged when its meets in Vienna on Sep-tember 9.
Venezuela, like Iran, has spurned calls from consumers like the United States to hike output, even when prices surged.
But Venezuelan President Hugo Chavez, in a departure from previous rhetoric, said in early Aug-ust it was a good thing oil prices had fallen. He said the price should settle near $100 a barrel, calling prices near $150 "irrational."
Khatibi said big consumers were hurting their interests by imposing sanctions on producers. He did not mention names but it was clearly directed at the countries like the United States which have targeted Iran over its disputed nuclear programme.
"The enforcement of these sanctions will disrupt the production of oil and cause consuming countries to pay more for the oil they buy," Khatibi said.
Washington and its Western allies accuse Tehran of seeking to build nuclear warheads, a charge Iran denies.
The world's fourth big-gest oil producer and No 2 Opec producer says it is mastering nuclear technology to generate electricity.
If Iran has so much oil, why do they need nuclear energy for electricity?
Diane, what else can they say in this scenario? I don't think anyone believes them.
Frank
Oct-08 Crude Oil continues to trade down at $108.80, down $6.66 and Nov-08 is down $8.73 at $107.12, Oct-08 Natural Gas is at $7.44 down $0.503 and Nov -08 Natural gas is trading at $7.905, down $0.458. We may be in somewhat of an anomaly, with crude trading down, tankers being able to unload but many big volume refineriers shut in, the result is we build some crude inventories but we pull down product inventories, at a time when product inventories are already low, the result can be lower crude prices but higher product prices. The big question is how much refining capacity is shut down, how long it takes to get it back up. The Gulfcoast area is home to a very large amount of our refining capacity.
I thought this was a good article and worth posting. The Democrat program is to do nothing, and the clock is ticking, if we don't get started on finding more oil and start the infrastructuer to transport it the Price won't be the big factor, but unstead having a supply at all will be the problem. We are importing almost 70% of our energy needs and much of it is from our enemies that will eventually cut us off.
McCain, Palin Put Energy at Top of Agenda, Papering Over Rifts
By Kim Chipman
Sept. 3 (Bloomberg) -- Delegates at the Republican National Convention this week got a laminated card listing their party's principles. The top item, ahead of the economy, national security and fiscal accountability: ``energy independence and lower gas prices.''
The marquee billing reflects the Republicans' push to make energy their hallmark campaign issue for the first time in decades as they attempt to put aside internal rifts over oil drilling and climate change and focus on tapping voters' anxiety over high gasoline prices.
Arizona Senator John McCain -- who will officially become the Republican presidential nominee at the St. Paul, Minnesota, convention -- is betting that an aggressive push for more drilling will give his party the edge over Democrats who are lukewarm about or opposed to new domestic oil exploration.
The platform allows Republicans to recast the energy issue as ``a populist one,'' said John Pitney, a government professor at Claremont McKenna College in California. ``Until this year, support for energy production was largely a business issue, but with rising gas prices, drilling is now a cause for the guy at the gas pump.''
Climate Change
The unified Republican front glosses over longtime divisions within the party even as its platform and candidates call for accelerated oil drilling combined with stronger action to address climate change.
The split is evident at the very top of the ticket: While McCain, 72, opposes drilling in Alaska's Arctic National Wildlife Refuge and has long spoken out about the threat of global warming, his running mate, Alaska Governor Sarah Palin, favors exploration in ANWR and has questioned scientific claims that humans are contributing to higher temperatures and sea levels.
``She's going to have to clarify her position because that's a pretty significant disconnect,'' said Reid Dechton, an official in former President George H.W. Bush's administration. ``It's an untenable situation.''
Still, some Republicans said Palin may be able to sway McCain.
Alaska Drilling
``The governor may very well persuade McCain that you can drill in .0009 percent of ANWR and that this is manageable from both an environmental and security point of view,'' said Robert ``Bud'' McFarlane, national security adviser under President Ronald Reagan.
Others are confident that McCain, who idolizes Republican President Theodore Roosevelt, who built up the national parks system, will stay true to his environmental leanings and lead his party back to its conservationist roots.
``If McCain had not been the Republican nominee I'm not sure the party would have gone as far in the platform as it has because they don't want to contradict what he stands for,'' said Jim DiPeso, policy director of Albuquerque, New Mexico-based Republicans for Environmental Protection.
He said the mention of climate change in the platform -- the first in party history -- and exclusion of a call to drill in ANWR are ``huge'' developments.
Agenda
``It illustrates the power of a candidate to set an agenda,'' he said. ``Once that agenda is set, then you can start pushing harder in that direction. It's like trying to push a car out of a ditch.''
McCain has said he will consider almost any measure that will help end U.S. dependence on foreign oil, even drilling in ANWR, though he has also repeatedly said the 20-million-acre area should be protected.
In June, McCain reversed his opposition to offshore drilling and called for lifting federal rules that prevent states from allowing oil exploration off their coasts. The move prompted his Democratic rival, Illinois Senator Barack Obama, to shift his position on drilling by saying he would accept it under limited conditions as part of a broader energy plan.
McCain was able to put Obama, 47, on the defensive, reflecting ``the surprising Republican success at taking ownership of the issue,'' Pitney said.
Former Republican Governor George Pataki of New York agreed.
`In Tune'
``Republicans are in better tune with the American people when it comes to this issue,'' Pataki, 63, said in an interview in St. Paul.
McCain has pledged to expand oil exploration and increase the use of natural gas. He and Obama both support a carbon- emissions trading program to reduce global-warming pollution. McCain also says he will encourage development of alternative- energy sources such as wind and solar power. His plan includes building 45 new nuclear power plants by 2030 and upgrading the national electricity grid.
The platform calls for a long-term goal of moving to an energy economy with zero global-warming pollution. That appeal comes just a few years after the Republican chairman of the Senate environment committee, James Inhofe of Oklahoma, called the notion of human-induced global warming the ``greatest hoax ever perpetrated on the American people.''
The document says: ``The same human economic activity that has brought freedom and opportunity to billions has also increased the amount of carbon in the atmosphere.''
McFarlane said most Republicans would embrace that language.
``I think we've put together a very solid platform that McCain can run on that meets the concerns of both the green community of the party as well as those who are more production oriented,'' McFarlane said. ``There is a balance.''
Last Updated: September 3, 2008 00:01 EDT
Oct-08 Crude Oil is trading at $108.15 down $1.56, Oct-08 Natural Gas is trading at $7.20, down $0.061. Due to the Labor day holiday the EIA Inventory reports will be delayed a day. Due to the normal delays in issuing the report verses when the data is gathered, the production loses in the Gulf due Hurricane threats won't show up until next weeks report.
Oct-08 Crude settled at $109.35, down $0.36 on the day, Oct-08 Natural Gas settled at $7.264, basically unchanged at minus $0.003 on the day.
I may have missed this if it has been posted before but I would like to have Frank's thoughts about this algae based ethanol. This is one of the links: http://news.cnet.com/8301-11128_3-9966867-54.html
Carl, I have mentioned Algae on here before, what you have posted is a new article to me and a good one. It has been proven that Algae will produce a good quality Ethanol and at a much better yield per acre than Corn and/or Sugar. To me the biggest plus for Algae based Ethanol is that we can raise it in waters that are not used for sustaining life otherwise, we have massive areas that can be utilized and the biggest plus of all is that it is not taking food away from a rapidly growing population that has many people starving in the world. I have always been opposed to using Corn or other food sources to make fuel for people to burn in their Hummers, Big V-10s etc. Anything we can do to reduce our dependence on Foreign Oil is important. The clock is ticking and it is just a matter of time until the Nations of Islam, Russia, Venzuela and others decide to cut the US off from their oil. I don't think people have any idea how bad it will be if we loose half or more of oil supply. One of the biggest concerns I have about Ethanol is the long range damage to the current engines, most articles I have read say it is not as efficent as Petroleum Based Gasoline and Diesel, that we can live with, but there have been several articles written about the damage it can do to the engines with prolonged use. Also given the current engines I think 10% Ethanol is considered the optimum mix, that can no doubt be improved as we use more Ethanol. Again, I am for anything that reduces our independence on Foreign Oil.
CARL, ONE THING I WANTED TO ADD IS THAT ETHANOL IS NOW TRADED IN THE FUTURES MARKET. THERE MUST BE ENOUGH OF IT AVAILABLE NO TO MAKE A MARKET IN IT.
Oct-08 Crude is trading at $109.50, up $0.15, no trades showing in the back months. Trading is slim probably due to the inventories coming out today( they are a day late due to the Holiday) and traders waiting to see what the Hurricanes do. Oct-08 Natural Gas is trading at $7.17, off $0.094, the Winter back months are off in the same trading ranges.
Oct-08 Crude settled at $107.89, down $1.46 on the day, the back months were down by $2.00 and some change. Oct-08 Natural Gas settled at $7.322, up $0.058 on the day, the back months were up $0.05 or less. Natural Gas inventory comes out tomorrow (it was delayed one day due to the Labor Day Holiday).
Oct-08 Crude is trading at $106.975, down $0.915, Oct-08 Natural Gas is trading at $7.39, up $0.068. The main reason given for crude trading down is improvement in the Dollar verses the EURO.
Quote from: DanCookson on August 21, 2008, 09:41:08 AM
I had heard about this in April and did quite a bit of research on the Bakken Formation and the Williston Basin. Both areas are under current drilling. Actually messaged Frank on this one because I wanted to buy stock in a couple of the companies that are doing extensive drilling. Ended up picking up stock on two of the companies and it has done very well.
Problem is the oil is two miles deep, and also must be horizontally drilled. A report on one of the companies I bought into estimated that each well drilled was running an average of 5 million dollars and they had drilled about 70 of them!!! Takes money to make money. Production has been good though, as in 22 months they have gotten over 5 million barrels off of the 72 wells.
Keep on pumping and drilling, my parachute car isn't built yet :P
Dan, this article is about what you and I discussed sometime back, basically the pipelines are at capacity and I don't think any of the Oil Companies want to spend Billions of Dollars building a new mainline until they see who is going to win the election. If Obama wins and puts massive tax penalties on the industry projects like this will not get done. Hard to understand the Democrat Obama tax Philosyphy. Without additional pipeline capacity drilling will have to stop in this area and so will the movement of additional Canadian crude, I think this is a project that Sarah Palin could get going in the right direction.
N. Dakota oil pipeline capacity limited as production, imports climb
Nick Snow
Washington Editor
WASHINGTON, DC, Sept. 4 -- North Dakota crude oil production and imports from Canada exceed current pipeline capacity in the region, Federal Energy Regulatory Commission Chairman Joseph H. Kelliher told a US Senate subcommittee Sept. 3.
"Both domestic and Canadian crude oil production are increasing, exacerbating the competition for limited pipeline capacity. There have been additions to pipeline takeaway capacity in the region, not enough to limit constraints or accommodate future increases," he told the Senate Appropriations Committee's Energy and Water Subcommittee at a field hearing in Bismarck, ND.
FERC supports energy infrastructure development and has participated as a member of a crude oil market infrastructure task force that the Interstate Oil and Gas Compact Commission initially convened in 2006 to investigate Rocky Mountain crude oil market dynamics, Kelliher continued. "However, the parties themselves must resolve who will commit to support the development of new infrastructure and who is willing to pay for it," he said.
The subcommittee's chairman, Byron L. Dorgan (D-ND), said that he convened the hearing because he wanted to determine what steps will need to be taken to transport and refine the increasing amount of crude being produced from the Bakken Shale formation in western North Dakota.
"With the current infrastructure, it is a challenge to transport the oil from wellhead to refineries, both in and out of state, without experiencing a bottleneck. As this new oil is produced, we need to make sure the transportation infrastructure exists so that future oil production is not limited," he said.
Already increasing
Williston Basin oil production within the state and imports from Canada already put pressure on pipeline capacity, Kelliher said. North Dakota's oil production rose from 125,000 b/d in 2007 to 147,000 b/d in March, he noted. Existing pipelines are operating at full capacity, requiring that they apportion that capacity among shippers, he said.
Meanwhile, crude oil imports from Canada also have risen, according to Kelliher. Annual Alberta Basin oil production levels for 2007 published by the province's conservation board showed a 3% increase from 2006 to 1.86 million b/d, he said. "Significantly, Canadian imports are projected to reach 3.4 million b/d by 2017," he indicated.
He pointed out that imports from Canada currently comprise 20% of total US crude supplies and are the United States' largest foreign source. "We expect this trend to continue. These imports are reliable supplies from a friendly country and improve our energy security," Kelliher maintained.
"However, Canadian imports require space in the pipeline and can create bottlenecks in capacity that can limit the amount of crude oil that can be moved out of the North Dakota production region. Pipelines serving North Dakota are increasing their capacity; nevertheless, it is likely that with additional growth in North Dakota oil production and Canadian imports, the pipelines' proposed capacity increases still will not be adequate to transport North Dakota production without capacity prorationing among shippers seeking that capacity," he added.
Other scheduled witnesses at the hearing included Lynn D. Helms, director of the North Dakota Department of Mineral Resources; Harold G. Hamm, chairman and chief executive of Continental Resources Inc. in Enid, Okla.; Kevin Hatfield, regional director for Enbridge Pipelines Inc.'s North Dakota system, and State Rep. Shirley Meyer (D-Dickinson), co-chair of the Task Force to Establish a North Refinery.
When Sarah Palin was talking about her wish to get more drilling going in Alaska, she said the pipelines were only at half capacity and would actually flow better if there was more oil in them. ??? Comment?
Diane, some areas of the line are insulated and buried , the insulation is required to keep the heated oil from defrosting or thawing the soil in the Tudra, some areas are elevated due to the instability of the tundra. The line is at half or less capacity and I am sure all equipment will function more efficently, including the heating systems, pumps etc. at some optimum capacity that is more than half or less as it is operating now. Certainly a higher volume would reduce the fixed costs per barrel appreciably. I am not sure how much infrastructure would be required to eventually move oil from the ANWR to the Alyeska System (yes that is the correct spelling for the system name, I think that was derived from an Alaskan Indian Native name), but I am sure it would be a very expensive project, the enviromental problems and requirements would be exstensive.
The 800-mile-long Trans Alaska Pipeline System is one of the largest pipeline systems in the world. Starting in Prudhoe Bay on Alaska's North Slope, TAPS stretches through rugged and beautiful terrain to Valdez, the northernmost ice-free port in North America. Since pipeline startup in 1977, Alyeska Pipeline Service Company, TAPS' operator, has successfully transported more than 15 billion barrels of oil.
TAPS Pipeline Reliability
July 100%
Year to Date 99.64%
There were no prorations during the month that impacted the reliability factor.
Barrels Pumped from Pump Station 1
July 20,144,458 BBLS *
Average
649,821 BPD **
Year to Date 150,646,173 BBLS *
YTD Average
707,259 BPD **
Frank--I just did some reading on this earlier in the week when one of the companies I invested in suspended some of the new drilling they were planning because of pipeline restriction. EOG is a big pumper up there (and everywhere for that matter). They look to be on hold to see what plays out.
Dan, the EOG Management has been very sucessful in finding Natural Gas and are also doing very well finding Oil now. They should probably do a name change to get a better arms length from the old, now defunct parent, Enron. It is really a sad thing that projects like this are being delayed due to politics, I don't blame the investors for not wanting to invest if Obama is going to get elected. The Liberal left Democrats have never provided a comfortable investment climate for projects like this one.
Thanks Frank, I'm familiar with the Alyeska system. We drove part way up to Prudhoe Bay. It sure is beautiful wild and wooley country up there.
As of Saturday September 6 gas in Northern California dipped below $4.00 to $3.97. Basically down 70 cents over the last several weeks. Almost make you feel that gas is cheap.
David
wow.... 3.97 in northern Cali. I just paid $3.529 this morning in Atlanta. It is a sad commentary when we think "Wow, only $3.529." How quickly we get accustomed to the high prices.
We were $3.38 .9 this past week. "Getting used to it" was all part of the plan, unfortunately. Folks have to learn to redistribute their pieces of their own pie chart.
uhmm i'm not used to it! I still bi*** and moan when i go to the pump, and i still voice my displeasure at the price when i go in to pay!
Remember when the gallons used to go around faster than the dollars?
Yes, I remember that. When I was a young man and worked in a service statation (full service) the very first time I put in $10.00 + of gas in a car, which was over 30 gallons of gasoline, what a big deal.
Oct-08 Crude is trading at $107.67, up $1.445, the back months are trading up in the +$3.50 range, Oct-08 Natural Gas is trading at $7.57, up $0.121. The hurricane threats may push crude higher in the coming days. Regular Gasoline is $3.39 in Bartlesville.
Here is who controls the price of world oil, not the American Oil Industry.
OPEC to Pump at Near Record as Prices Stunt Growth
By Fred Pals and Ayesha Daya
Sept. 8 (Bloomberg) -- OPEC, the supplier of 40 percent of the world's oil, will probably keep producing at a near record pace as $107-a-barrel crude squeezes the global economy.
``Nothing significant,'' Nigerian Petroleum Minister Odein Ajumogobia responded, when asked by Bloomberg News today what OPEC was likely to decide at a meeting in Vienna tomorrow. ``Our position is to leave everything unchanged,'' Ecuador's Energy Minister Galo Chiriboga told reporters in the Austrian capital yesterday. ``The market is well supplied.''
The 13-nation Organization of Petroleum Exporting Countries will keep production unchanged, according to 29 of 32 energy analysts surveyed by Bloomberg last week. Iran and Venezuela will urge the group to trim supplies to prevent oil prices retreating below $100 a barrel.
``They want to prevent a build-up of crude stocks, which rules out an increase, but don't want to send prices skyrocketing by announcing a cut,'' said Mike Wittner, head of oil research at Societe Generale SA in London. ``OPEC won't take any formal action.''
Oil has plunged $40 a barrel, or 27 percent, from its record $147.27 on July 11 as economies slowed, the dollar halted a three-year slide against the euro and Hurricane Gustav caused almost no damage to U.S. drilling platforms and refineries. Demand for crude will increase 1 percent in 2009, the slowest growth in seven years, according to an Aug. 15 OPEC forecast.
Exceeded Quota
The OPEC members with quotas produced about 592,000 barrels a day more than their official limit of 29.673 million last month, according to Bloomberg estimates. Iraq has no quota. Output from all 13 members slipped 200,000 barrels a day from July's record.
All the countries except Saudi Arabia are pumping at close to capacity to meet rising demand and compensate for declining supplies from Nigeria and Venezuela.
While leaving quotas unchanged, the group may curtail production to prevent inventories from swelling, said Adam Sieminski, Deutsche Bank AG's chief energy economist in Washington.
``If prices are rising, they will leave production alone, and if they are falling, they will trim a little,'' he said.
Slower Growth
Record oil prices spurred European inflation to 4 percent in July and contributed to the first quarterly contraction in the region's economy since the euro was introduced almost a decade ago. In the U.S., gasoline demand fell for 19 consecutive weeks, according to MasterCard Inc., with fuel now near $3.70 a gallon.
The world economy is ``precariously close'' to a recession in 2009, UBS AG said last month as it cut next year's global growth forecast to 2.9 percent. It considers a 2.5 percent rate as one that is consistent with a recession.
Oil for October delivery rebounded from a five-month low in New York today, rising as much as 2.7 percent to $109.12 a barrel as the approach of Hurricane Ike delayed the resumption of production in the Gulf of Mexico. It was at $107.30 as of 10.50 a.m. in London.
``The rise of the U.S. dollar makes it easier for the group to agree to keep the status quo,'' said Stephen Schork, editor of the Schork Report. ``If they cut output, they put themselves in the headlines and increase animosity among the U.S. electorate protesting foreign oil's grip on the U.S. economy.''
Above Average
Oil stockpiles in industrialized nations, excluding government reserves, were above average in July and enough to meet 54 days of demand, according to the International Energy Agency.
The agency's executive director, Nobuo Tanaka, recommended in a Sept. 4 interview in Brussels that OPEC maintain output levels, adding that recent price declines reflect ``the slowdown of the economy.''
``If stocks were ballooning then you could see pressure mounting within the cartel for a cut,'' said Harry Tchilinguirian, senior oil analyst at BNP Paribas SA.
Most of OPEC's extra pumping in the past few months has come from Saudi Arabia, the world's largest oil producer, which raised output by 500,000 barrels a day in June and July to calm markets.
An OPEC production cut would ``surprise'' the market, Jan Stuart, a global oil economist with UBS Securities LLC, said in a Sept. 5 Bloomberg Radio interview from New York.
Saudi Arabia
``Where Saudi Arabia is in this debate is crucially important; that is your linchpin,'' Stuart said. ``We don't know what the Saudis are ready to defend, and we do know the Saudis are the ones that would have to do most of the production cutting.''
Venezuela and Iran, OPEC's second- and third-largest producers, want the group to consider reducing supply. Venezuelan President Hugo Chavez said on Aug. 27 he considers prices of just over $100 a barrel as ``fair.''
The oil market is over-supplied, Iranian Oil Minister Gholamhossein Nozari said today ahead of the OPEC meeting. ``We will review the market and then we will decide,'' he told reporters upon his arrival in Vienna.
The group meets again Dec. 17 in Algeria.
Oct-08 Crude Oil is trading at $105.225 down $1.115 and Oct-08 Natural Gas is trading at $7.31, down $0.217.
We will see if OPEC holds the line or cuts. It is very disturbing that our energy supply and price are totally in the hands of our enemies and Congress is doing absolutely nothing. The day will come when we will pay big time for our inaction now.
Crude Oil Falls After OPEC's Al-Naimi Says Market Is `Balanced'
By Alexander Kwiatkowski
Sept. 9 (Bloomberg) -- Crude oil fell in New York as Saudi Arabia's oil minister said supplies are sufficient to meet demand, signaling that OPEC may maintain production levels when it meets today.
The oil market is ``well-balanced'' and inventories are ``healthy,'' Saudi Arabian Oil Minister Ali Al-Naimi said this morning in Vienna. Most analysts polled by Bloomberg expect the 13 members of the Organization of Petroleum Exporting Countries, which supplies more than 40 percent of the world's oil, to keep quotas unchanged and output near record levels.
``At the moment they are very satisfied with what is happening,'' said Eugen Weinberg, a commodity analyst at Commerzbank AG in Frankfurt. ``The oil price is still above $100. From what we have heard they will come short of cutting production.''
Crude oil for October delivery fell as much as $2.11, or 2 percent, to $104.23 a barrel and traded at $104.79 at 12:49 p.m. London time on the New York Mercantile Exchange. Oil has dropped 29 percent from the record $147.27 reached on July 11.
Oil also declined as Hurricane Ike weakened to Category 1 on the 5-step Saffir-Simpson scale of intensity as it passed over Cuba, easing concerns it will damage Gulf of Mexico oil facilities. Sustained winds dropped to 80 miles (130 kilometers) per hour, the U.S. National Hurricane Center said on its Web site at 5 a.m. Miami time.
Output Disruption
The contract climbed as much as 3.5 percent yesterday as Ike delayed the restoration of Gulf of Mexico output that was closed because of Hurricane Gustav last week. Ike was moving across Cuba's western tip and was forecast to strengthen as it turns west into the Gulf of Mexico. The centre's 5-day forecast shows the storm making landfall near Corpus Christi, Texas, early on Sept. 13.
``It is very early days yet, the storm tracker looks a little less dangerous than it did last night,'' said Mike Wittner, head of oil research at Societe Generale SA in London. ``It is a given they will shut everything down. The question is how much damage is sustained and how quickly it can be bought back up.''
U.S. energy producers have resumed 21 percent of oil production and 36 percent of natural-gas output in the Gulf of Mexico after Hurricane Gustav.
Energy companies reported 15 rigs and 200 production platforms are evacuated, the Minerals Management Service said in a statement on its Web site. About 1 million barrels of daily oil production and 4.7 billion cubic feet of gas remain shut in.
Brent crude oil for October settlement fell as much as $2.17, or 2.1 percent, to $101.27 a barrel on London's ICE Futures Europe exchange. It was at $101.98 a barrel at 12:50 p.m. local time.
OPEC Meets
The Gulf of Mexico accounts for 26 percent of U.S. oil production and 14 percent of natural-gas output. The Gulf produces 1.3 million barrels of oil and an estimated 7.4 billion cubic feet of gas a day, according to the Minerals Management Service, part of the U.S. Interior Department.
Natural gas for October delivery fell 4.1 percent to $7.218 per million British thermal units, while gasoline futures fell 2.9 percent to $2.6704 a gallon.
OPEC will review production targets for the fourth quarter at a meeting tonight. The group will probably keep output unchanged, according to 29 of 32 energy analysts surveyed by Bloomberg last week.
U.S. Relations
Prices will continue to fall irrespective of what the group decides to do, OPEC President Chakib Khelil said in a Bloomberg television interview today.
``A production cut would not serve much of a purpose,'' Khelil said in Vienna. ``Rather, it will damage the advantage the organization has got by making a positive gesture toward consuming countries,'' he said.
Khelil, who is also Algeria's oil minister, said there probably wouldn't be any need for OPEC to meet again between now and December.
OPEC does not want to jeopardize its relations with the U.S. by cutting output, possibly sending prices back towards the record $147.27 a barrel reached in July, said Stephen Schork, president of energy markets analysis firm Schork Group Inc., in a Bloomberg radio interview.
``Crude oil is still well over $100, gasoline, heating oil prices and fuel oil prices here in the United States and in Europe are still very expensive,'' he said. ``OPEC would like to cut production, but given the elections in the United States, I think they will refrain.''
To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net
Last Updated: September 9, 2008 08:08 EDT
This is about right, Nancy Pelosi is 3 years behind. The Democrats continue to play games while the possibility of a major energy cutoff by our enemies looms somewhere in the future.
Dems' offshore drilling plan comes with catch
Zachary Coile, Chronicle Washington Bureau
Tuesday, September 9, 2008
(09-09) 04:00 PDT Washington - -- Just three years ago Richard Pombo, the cowboy boot-wearing Tracy Republican lawmaker, faced an outcry from Democrats for pushing a bill to lift the 27-year-old ban on drilling off the East and West coasts and let states choose whether to allow oil rigs off their shores.
In a sign of how much the energy debate has shifted in an era of nearly $4-a-gallon gasoline, virtually the same proposal that Pombo floated will be introduced on the House floor this month - by Democratic House Speaker Nancy Pelosi.
But Republicans aren't exactly cheering the new Pelosi proposal. She plans to tie new offshore drilling to measures that are loathed by the GOP - such as revoking billions of dollars in tax breaks for oil companies and forcing utilities to get more of their energy from wind and solar.
As Congress returns this week for a three-week legislative sprint, the two parties will face off in a chess match over energy with high stakes for both the November elections and the nation's energy future.
For weeks, Republicans have dominated the debate by demanding more domestic drilling. Polls show that strong majorities of Americans support the idea. It was a leading refrain at last week's Republican convention in St. Paul, Minn., where delegates chanted, "Drill, baby, drill."
Beyond drilling
But Democrats believe the GOP may have overplayed its hand by focusing on drilling when polls also show Americans want the country to quickly develop new cleaner, renewable energy sources.
"All the Republicans want to talk about, all Sen. (John) McCain has talked about is drilling," Senate Majority Leader Harry Reid, D-Nev, said Monday. "I don't oppose drilling, but this isn't a be-all, end-all. We need a comprehensive approach."
House Democrats are expected to make public their energy bill as early as this week, but Democratic aides are already indicating it will include a "state options" plan that would give coastal states the right to choose whether to allow drilling - and perhaps a share of the royalties.
To win support from environmentalists, who have long opposed lifting the drilling ban, Democrats also plan to repeal at least $18 billion in subsidies to oil companies and shift that money to tax credits for renewable energy. Democrats also plan to revive a plan, passed by the House last year, to require electric utilities to get at least 15 percent of their energy from wind, solar, geothermal or other renewable sources by 2020.
But House Republicans are already complaining that the Democratic plan would keep too much of the nation's energy locked up. They want to force Pelosi to allow a vote on their energy plan, which also would open areas of the eastern Gulf of Mexico and Alaska's Arctic National Wildlife Refuge to oil and gas exploration.
"Clearly, they're inching toward some sort of domestic supply component so we have to look at that," said Rep. Joe Barton, R-Texas, the top Republican on the House Energy and Commerce Committee. "But I can't imagine accepting a half a slice of bread when the whole loaf is out there."
Senate Democrats are plotting a similar strategy as their House counterparts, planning to vote next week on three separate energy provisions that include both drilling and renewable energy provisions.
Senate amendments
The Senate will vote on an amendment being crafted by Sen. Jeff Bingaman, D-N.M. and Sen. Max Baucus, D-Mont., that would revoke tax breaks for oil companies, open areas off the eastern Gulf of Mexico and the East and West coasts to drilling, renew expiring wind and solar tax credits and new energy-efficient building codes.
Reid said he also would allow a vote on an energy plan proposed by the "Gang of Ten," a group of five Democrats and five Republicans, that would allow drilling off the coast of four states - Virginia, North Carolina, South Carolina and Georgia - while also revoking tax breaks for oil companies and offering new incentives for wind and solar, biofuels, coal-to-liquid fuels and nuclear energy.
Most Capitol Hill insiders believe there's little chance any of the measures will become law. Congress has a short time to act - it's just three weeks before the House is set to adjourn. President Bush has promised to veto any legislation that raises taxes on oil companies, which he believes would limit production. Oil companies may never let the legislation reach his desk.
Kevin Book, a senior energy policy analyst at FBR Capital Markets, said he's betting the only energy legislation that's likely to pass is an extension of the tax credits for wind and solar, which expire at the end of the year and are popular with both parties.
"The Republicans could still potentially strike a deal, but it's not clear whether the Democrats have any incentive," Book said. "They can paint Republicans as objecting to cutting a deal - particularly as all the political analysis suggests they are going to come back next year with the upper hand" by picking up seats in the House and Senate in November.
Decision time
Both parties are already game-planning for another scenario: On Sept. 30, the congressional moratorium on offshore drilling and a similar ban on oil shale development are set to expire. President Bush already has lifted the presidential moratorium on offshore drilling.
Congress also must move a temporary spending bill by Sept. 30 to keep the government funded and prevent a government shutdown. Democrats are expected to include a renewal of the two moratoriums as part of the spending bill, arguing that the only way they will let the bans lapse is as part of a broader energy bill that moves the country toward renewable sources.
But Republicans say they may call the Democrats' bluff and risk a government shutdown, and then lay the blame at Pelosi's doorstep.
It would be a huge gamble. The last time Republicans took the risk of forcing a temporary government shutdown - during a 1995 budget showdown with President Bill Clinton - they faced a major public backlash and ended up losing seats in the 2006 House elections.
Oct-08 Crude settled at $103.26, down $3.08 on the day, the back months were down in the $3.00 + range as well, Oct-08 Natural Gas settled at $7.535 on the day, down less than one cent on the day, the back months were down 4 to 5 cents on the day.
Oct-08 crude is $103.525 in overnite trading, up $0.265, and Oct-08 Natural Gas is trading at $7.350, down $0.185. The Hurricane threats are probably going to end up pushing both markets up some.
This is disappointing but not surprising. Unfortunately OPEC controls our supply and the price and with the do nothings in congress that is only going to get worse.
Oil rises in Asia after OPEC vows to lower output
By ALEX KENNEDY Associated Press Writer
Sept. 10, 2008, 3:34AM
SINGAPORE — Oil prices rose Wednesday in Asia after OPEC said it would cut more than 500,000 barrels a day of production that exceed its self-imposed output quotas.
Light, sweet crude for October delivery rose 77 cents to $104.03 a barrel in electronic trading on the New York Mercantile Exchange midafternoon in Singapore. The contract fell $3.08 overnight to settle at $103.26, the lowest close since April 1.
A statement by the Organization of Petroleum Exporting Countries issued after oil ministers ended their meeting Wednesday in Vienna said the organization had agreed to produce 28.8 million barrels a day. OPEC President Chakib Khelil said that quota in effect meant that member countries had agreed to cut back 520,000 barrels a day of excess production.
OPEC members regularly churn out oil above the organization's overall quota, last set in November at 27.3 million barrels a day. The new production limit of 28.8 million barrels a day is above that November quota, and the statement said it reflected adjustments to include new members Angola and Ecuador and exclude Iraq, as well as Indonesia, which is withdrawing from the cartel.
The move was viewed as a compromise meant to avoid new turmoil in crude markets while seeking to prevent prices from falling too far.
"This isn't a fundamental shift in OPEC policy," said John Vautrain, an energy analyst at consultancy Purvin & Gertz in Singapore.
The output cut won't likely spark a sustained rally in oil prices as most investors remained concerned over slowing economic growth in the U.S, Europe and Japan,
"I don't think this is enough to change the bearish market sentiment in New York or London," Vautrain said. "The market already expected OPEC would scale back some of the extraordinary production of the last few months."
Keeping a lid on oil prices were expectations Hurricane Ike would veer to the west of the oil refineries and off-shore drilling platforms of the Louisiana coast region.
Early Wednesday, Ike was about 95 miles west of Havana, Cuba, moving west-northwest at 10 mph with sustained winds near 75 mph. It was expected to cross the Gulf of Mexico, strengthening to a Category 3 with winds of up to 130 mph.
Forecasters said that it could hit on Saturday morning just about anywhere along the Texas coast, with the most likely spot close to the Corpus Christi area.
"Just a few days ago it looked like it was heading for New Orleans and the coast of Louisiana," Vautrain said. "Now Ike has come off the radar screen some and the market is discounting the threat of hurricane damage."
Investors are also waiting for the U.S. Energy Department's Energy Information Administration to release its report on U.S. oil stocks for the week ended Sept. 5 later in the day. The petroleum supply report was expected to show that oil stocks fell 3.9 million barrels, according to the average of analysts' estimates in a survey by energy information provider Platts.
The Platts survey also showed that analysts projected gasoline inventories fell 4.7 million barrels and distillates went down 2.3 million barrels during last week.
In other Nymex trading, heating oil futures rose 3.66 cents to $2.9613 a gallon, while gasoline prices gained 4.82 cents to $2.7008 a gallon. Natural gas for October delivery fell 2.6 cents to $7.509 per 1,000 cubic feet.
In London, October Brent crude rose 47 cents to $100.81 a barrel on the ICE Futures exchange.
I have been writing letters to US Congressman and US Senators about lowering the National speed limit. Below is the second response I have received, it is from Oklahoma US Senator Jim Inhofe.
Dear Mr. Winn:
Thank you for your comments regarding the need to re-impose a national maximum speed limit of 55 mph. As your voice in Washington, I appreciate knowing your views.
As you may know, the 55 mph national maximum speed limit was established with the enactment of the Emergency Highway Energy Conservation Act of 1973. The law withheld federal highway funds from states that did not adopt the 55 mph maximum speed limit. Although it was intended to be a temporary solution to the gas shortage created by the OPEC oil embargo, the national maximum speed limit remained until 1995, when President Clinton signed into law the National Highway System and National Speed Limit Act. This act returned to the states their right to set speed limits based on their local road and traffic conditions.
Given the various commuting conditions in each state, I believe setting speed limits should remain with the states. As of July 2008, a majority of states have a maximum speed limit of 65 mph or less on the urban interstates and 70 mph or less on rural interstates.
Again, thank you for your comments. Please do not hesitate to contact me again.
Following my Uncle Frank's suggestion that we talk to our Congressman about this; I too sent letters to several state and federal government officials. One of the findings that surprised|made me mad was the U.S. Congress has rules that say that if a person is not your constituent you must refer the person to their home US Rep. and US Senator. Also, Frank's Rep. statement about it being a state issue makes sense. The quickest way to by pass this would be for "we the people" to take the issue away from them and do it ourselves. We can all continue to increase our conservation without the need for our government to do it for us. I grew up hearing stories how during WWII the people of the US pitched in and saved\conserved everything for the war effort. They became known as the "greatest generation". It is time for us to follow their example.
David
Note: the rules of Congressional Courtesy require that individuals residing outside of the 8th Congressional District be referred to the Member of Congress who represents them. To verify your congressional district, search the Member of Congress directory by zip code or visit www.house.gov.
Quote from: dnalexander on September 10, 2008, 01:59:29 PM
Following my Uncle Frank's suggestion that we talk to our Congressman about this; I too sent letters to several state and federal government officials. One of the findings that surprised|made me mad was the U.S. Congress has rules that say that if a person is not your constituent you must refer the person to their home US Rep. and US Senator. Also, Frank's Rep. statement about it being a state issue makes sense. The quickest way to by pass this would be for "we the people" to take the issue away from them and do it ourselves. We can all continue to increase our conservation without the need for our government to do it for us. I grew up hearing stories how during WWII the people of the US pitched in and saved\conserved everything for the war effort. They became known as the "greatest generation". It is time for us to follow their example.
Thanks David, good response, I still think in the interest of the nation, we should again mandate a 55 MPH speed limit. I think the time will come when we have another embargo and the next one will make the 73 embargo look like a piece of cake. For one thing OPEC has a much broader market for their oil now than they did in 1973, and we have less allies in OPEC than we did in 1973, in 73 our biggest ally was Iran and this time they are one of our biggest enemies.
David
I just felt a bit of the old governmental run around. I actually talked to Rep.Jackie Speir(D) who I am not a constituent of and later got an e-mail announcing she was introducing legislation for a reduced speed limit.
David
HR 6458
Establishing a National 60 mph Speed Limit
July 30, 2008
The skyrocketing price of gasoline is the number one issue facing the American public today. That is why I introduced HR 6458, the "Gasoline Savings and Speed Limit Reduction Act" which sets a national 60 miles per hour speed limit in urban areas and 65 mph elsewhere.
In the 1970s, the implementation of a national speed limit resulted in a 2-3% reduction in fuel consumption and saved American drivers $2 billion a year in fuel costs. At today's oil prices, a 2 percent drop in fuel consumption would net $28 billion in savings to American drivers. An added benefit is the estimated 2,000-4,000 lives per year saved while the old law was in effect.
There is a direct and undeniable correlation between speed and fuel efficiency. The Environmental Protection Agency website (www.fueleconomy.gov) says: "While each vehicle reaches its optimal fuel economy at different speeds... gas mileage usually decreases rapidly at speeds over 60 mph. You can assume that each 5mph you drive over 60 mph is like paying an additional 30 cents per gallon for gas."
Businesses concerned about their bottom lines have already recognized this. Companies such as Staples, with fleets of large trucks, have voluntarily adopted a company-wide speed limit of 60 mph. The United States Postal service is redrawing routes for its trucks so they make fewer left turns, since idling at traffic signals is another big gas-waster. Asking Americans to reduce their speed by just five miles an hour is an easy, painless and patriotic way of not only saving money for themselves, but reducing our county's reliance on foreign oil, limiting our addiction to fossil fuels and cutting back on noxious fumes and dangerous greenhouse gases that lead to global warming.
HR 6458 has received backing from a wide array of organizations, including the American Trucking Associations, the Union of Concerned Scientists and Friends of the Earth.
Since the oil companies are unlikely to lower gas prices themselves, it is time for Congress and the American people to take matters into our own hands. We can all pay less at the pump by simply easing up on the accelerator and reducing their consumption of gasoline.
Yall,
I'm sorry but i must disagree with this idea completely! I lived through the 55mph era and it accomplished very little but
cause more problems with getting somewhere. It added hours upon hours to travel times increased fatigue in drivers.
The Government doesn't need to saddle us with another law in which it would do absolutely no good, and fill the state coffers
with fine money. The state gets enough of our money as it is.
I don't need the Government to intervene with a law to save me money. I can do that on my own and its my choice. IF i wish
to run 75mph which is the speed limit in many states on interstate, then thats my choice to spend the extra money to get there in fuel
loss. In fact to me it is worth the less mpg to drive lets say from here to Atlanta in 13 1/2 hours as opposed to 22 hours. Give me the 9 hours savings over the 30 dollar cost.
Locally i drive maybe 15 miles a day as it is. I use only 22 gallons a month. If i decide to go on a trip, i want at least to be able to get there in my lifetime.
I used to drive a truck for a living. I know that if you decrease the speed to 60 mph, you will increase prices on products, and you will increase accidents on drivers. They will require them to slow down but set unrealistic delivery times based on the higher speeds which will require the drivers to drive illegally and drive without rest. Been there done that.
I don't know if I agree about 55 miles per hour being unsafe. I just hate to go on 400 and have idiots that pass me and drive out of control. I do drive about 65-70 but when a big truck rides my tale, especially if I have my kids with me, it just upsets me terrible. >:( >:( I have a brother who is a truck driver and some friends that drive trucks, too. But it's not just them. I call how I drive, defensive driving!!!
I am awfully dense tonight. Explain to me how you can drive to Atlanta at a higher speed in 61% of the time it takes at a lower speed. That is almost 1/2 the time. How fast is the slow speed and how fast is the faster speed?
Quote from: Wilma on September 10, 2008, 04:23:57 PM
I am awfully dense tonight. Explain to me how you can drive to Atlanta at a higher speed in 61% of the time it takes at a lower speed. That is almost 1/2 the time. How fast is the slow speed and how fast is the faster speed?
Atlanta is 1000 miles approximately. :) IF you could go 55 mph steady speed all the way, no flucutation in speed, it would take you
18 1/2 hours to drive it. But since thats not possible you have to average 55mph by going 65 mph. IF you go 65 mph you will average 55 mph thus taking 18 1/2 hours. But if you drop the speed limit to 55mph, then you can't possibly average 55mph. SO that drops it down to a 45mph average and that gives you 22.22 hours drive time.
Currently the speed limit is 75mph in all the states on interstate between here and Atlanta. So that means you can drive it in 13.33 hours if you average 75 mph. Since you can't maintain 75mph then the average speed you can maintain is 68 mph since you are going a higher speed and that leaves you with a average drive time of 14.70 hours.
Trucks get better average times at higher speeds due to the inertia of the weight they are carrying pushing them up hills. Cars do the same but its not as pronounced as a truck is.
Quote from: angtown3 on September 10, 2008, 04:06:09 PM
I don't know if I agree about 55 miles per hour being unsafe. I just hate to go on 400 and have idiots that pass me and drive out of control. I do drive about 65-70 but when a big truck rides my tale, especially if I have my kids with me, it just upsets me terrible. >:( >:( I have a brother who is a truck driver and some friends that drive trucks, too. But it's not just them. I call how I drive, defensive driving!!!
I was a OTR driver and i ran anywhere from 70mph - 85 mph in a truck but only on open roads. Never in a city. I have over 2million miles over the road with zero accidents. So you can drive safely at higher speeds. I agree there are some real ass's out there behind the wheels of a truck. Unfortunately they can kill you just as fast at 55mph as they can at 70mph and quite frankly more deaths occur at 45mph or less than higher speeds.
The best thing you can do when you get a jerk like that pressing down on you is to pull off and let them pass. I have known people stupid enough to think their going to slow someone down by driving slower in front of them, and they end up getting run off the road or something. Don't put it past these wannabe truck drivers to not do it. You don't even know if their legal these days anymore with them coming in over the border now.
Quote from: dnalexander on September 10, 2008, 07:05:54 PM
Only doing the math no comment since I understand Steve's points.
Per Google Maps. Howard, KS to Atlanta, Ga is 903 miles. Using The
13.33 hours time that is an avg speed of just under 68mph. At 55mph the trip would take 16.42 hours..
David
David you can't get a 68mph avg speed unless you drive 75 mph. and 55mph avg speed requires a speed of 65mph.
So if you cap the speed at 55mph your avg speed is 45mph.
And atlanta is over 903 miles. :D It was 948 miles to Blairsville where my property is from here and thats in north georgia near chattanooga.
you could go back roads across alabama and ms from memphis but that will increase your drive time by 4 hours.
Quote from: dnalexander on September 10, 2008, 07:05:54 PM
Only doing the math no comment since I understand Steve's points.
Per Google Maps. Howard, KS to Atlanta, Ga is 903 miles. Using The
13.33 hours time that is an avg speed of just under 68mph. At 55mph the trip would take 16.42 hours..
David
You know what i am looking at right now to cut my fuel usage in half is building a HHO generator to hook up to my
truck. I should be able to double my mileage per gallon of gas. Right now my 1986 S10 pickup gets 24 -28 mpg, and if i can
double it that would be around 50mpg. I have a 1968 ford pickup i would love to see if i could double the mileage on it from
18mpg to 36 mpg. I have a 1998 blazer in atlanta that gets 18 -20 mpg which would make me estatic if i could double the
mileage on it.
A-A-R-G-H, I still don't understand it. Just put me down as a girlie old woman with no head for mathematics. You've worn me out just reading through it. Good night.
Quote from: dnalexander on September 10, 2008, 07:23:58 PM
My calculations are correct. And I gave my source for the distance. At 45mph avg it would then take 20 hours. So maybe that explains your numbers.
Thats right 45mph average is 22.22 hours. Thats all thats possible with a 55mph speed limit.
You can't average any more than that without exceeding teh 55 mph cap.
Crude Oil is trading at $101.75, down $0.83, the $100.00 mark is a big technical barrier, if we break through that we could it come down more, depends on OPEC's cuts. Natural Gas is trading at $7.525, up $0.132.
Quote from: frawin on September 11, 2008, 04:59:01 AM
Crude Oil is trading at $101.75, down $0.83, the $100.00 mark is a big technical barrier, if we break through that we could it come down more, depends on OPEC's cuts. Natural Gas is trading at $7.525, up $0.132.
Oh i could use some wonderful news like we dropped below 100 a barrel.
Steve, I understand, unfortunately I don't think OPEC is going to allow Crude to stay below $100.00/barrel. The main reason OPEC is letting it go down where it is now, is because they hope with a little lower price the Democrat Congress will not approve the US drilling in major reserve areas. In any case if we start now it will take years to develop the reserves and build the infrastructure to transport it to markets. The clock is ticking and the Democrats in Congress are playing games with our Nations future.
Some more of the many things that affect the crude Oil Market:
Crude Oil Falls as Stronger Dollar Dims Commodities' Appeal
By Alexander Kwiatkowski
Sept. 11 (Bloomberg) -- Crude oil fell for a third day as the dollar gained against the euro, reducing the appeal of commodities as a hedge.
Oil dropped after the dollar rose to a one-year high against the euro on speculation that growth in Europe will slow more than in the U.S. Investors looking to hedge against the dollar's decline helped lead crude oil and other commodities to records earlier this year. Hurricane Ike was set to miss platforms off the Louisiana coast as it passes through the U.S. Gulf.
``The sentiment in the market is very negative at the moment since demand for oil and commodities has declined sharply,'' said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. ``Quite a lot of investors are pulling out of commodities.''
Crude oil for October fell as much as $1.15, or 1.1 percent, to $101.43 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $101.75 at 1:02 p.m. London time.
Crude has fallen about 30 percent from a record $147.27 a barrel on July 11 as high prices and slowing global economic growth reduce demand for fuels.
The International Energy Agency lowered its 2008 oil demand forecasts yesterday, citing an expectation of weakening fuel consumption in the U.S., the world's biggest gasoline consumer.
The dollar climbed to $1.3893 per euro, the strongest since Sept. 18, 2007, before trading at $1.3936 as of 1:03 p.m. in London from $1.3998 late yesterday in New York.
Hurricane's Eye
Hurricane Ike's eye was 620 miles (995 kilometers) east of Brownsville, Texas, and moving west-northwest at 9 miles per hour, the National Hurricane Center said in an advisory at 4 a.m. Houston time today.
Ike strengthened to a Category 2 hurricane with sustained winds of 100 mph, up from 80 mph yesterday. The storm is forecast to sweep through the center of the Gulf, missing the offshore Louisiana oil and natural gas fields.
Some rigs, refineries and platforms shut down by Hurricane Gustav last week are staying closed as Ike tracks across the region. Gulf operators have evacuated personnel from 63 percent of the production platforms, the Minerals Management Service said on its Web site yesterday.
The agency estimates that as much as 96 percent of Gulf of Mexico oil production, and 73.1 percent of natural gas output, is shut. That is about 1.25 million barrels a day of oil and 5.4 billion cubic feet a day of gas.
`Skirting Away'
``Ike appears to be skirting away from the oil and gas production fields and should make land around the Corpus Christi area,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``The oil market may have escaped again.''
Brent crude oil for October settlement fell as much as $1.12, or 1.1 percent, to $97.85 a barrel on London's ICE Futures Europe exchange. It was at $98.25 at 1:03 p.m. London time.
Oil's decline led the Organization of Petroleum Exporting Countries to say this week it will try to limit production.
OPEC members, who supply about 40 percent of the world's oil, agreed at a meeting in Vienna to a total production limit for 11 members of 28.8 million barrels a day, unchanged from previous targets. OPEC Secretary-General Abdalla El-Badri said this means it will trim ``oversupply'' by about 500,000 barrels a day.
The decision is a signal that OPEC is ``entering price defense mode,'' Barclays Capital analysts led by Paul Horsnell said in a research note.
``Saudi Arabia would be perfectly happy with prices in the $90 to $100 range,'' the Barclays analysts said. ``It appears that other OPEC members wished to give a stronger signal.''
Barclays slashed its fourth-quarter oil price forecast by 21 percent on weakening demand. The bank expects West Texas Intermediate to average $97.50 a barrel in the fourth quarter, $26.40 less than a forecast of $123.90 in its previous weekly report. The bank's Brent crude forecast was reduced to $95.90, from $122.20, for the fourth quarter.
Natural gas for October delivery rose 0.8 percent to $7.454 per million British thermal units on Nymex, while gasoline futures rose 1.5 percent to $2.7005 a gallon.
To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net
Last Updated: September 11, 2008 08:32 EDT
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Norway has been a longtime supplier to Western Europe and the US. Phillips Petroleum in a joint venture with Norway developed the Ekofisk Field in the North Sea.
Norway's energy industry to hike capital spending
Bloomberg News
Sept. 11, 2008, 5:28AM
Norway's oil and gas industry will raise investments to $22.9 billion, or 132.8 billion kroner , in 2009 as companies increase exploration, the statistics office said.
The spending forecast is 15.9 billion kroner higher than a June projection, Statistics Norway said today on its Web site. Investment in 2008 is estimated at 128.2 billion kroner, 4.4 billion kroner lower than in June, the agency said.
Companies such as StatoilHydro ASA and Det Norske Oljeselskap ASA are spending more on exploration and production as oil prices have climbed to a record. That's raised demand and costs for drilling rigs and engineers.
Norway lags behind Saudi Arabia, Russia, the United Arab Emirates and Iran in oil exports and is the world's third-largest gas exporter. The statistics bureau surveys about 220 companies on their investment plans each quarter
The Saudi's have always been pro US and Pro Western, probably because we have supplied them with so much weaponry, planes ets, and trained their pilots as well. Plus the Saudi's have a lot of investment in Western Europe and the US and they know what to high of energy prices will do to their investment portfolio.
Saudis Vow to Ignore OPEC Decision to Cut Production
By JAD MOUAWAD
VIENNA — Hours after suffering a rare setback in a negotiating session at OPEC's headquarters, Saudi Arabian officials assured world markets on Wednesday that they would ignore the wishes of other cartel members and continue to pump plenty of oil.
The late-night bargaining session ended early Wednesday morning with a surprise declaration that OPEC would cut production to shore up sagging prices. Saudi negotiators publicly endorsed that position, but then spent much of Wednesday privately spreading the word that they did not feel bound by it.
The back-and-forth illustrated new pressures and power politics at play in the group that controls 40 percent of the world's oil production. The meeting could be a harbinger of things to come for the Organization of the Petroleum Exporting Countries as the cartel faces its most difficult challenge in years: how to respond to falling oil prices in a weakening global economic climate.
The confusion surrounding this week's meeting slowed the decline in prices as oil markets struggled to understand the cartel's byzantine politics. Oil closed Wednesday at $102.58 a barrel in New York trading, a decline of 68 cents.
After a 30 percent drop in prices since July, and with oil seemingly headed below the psychological milestone of $100 a barrel, OPEC producers are getting anxious. The cartel's president, Chakib Khelil, said the group was particularly concerned that slowing demand for oil was creating a glut in the market that might provoke a collapse in prices.
Still, going into the meeting, Saudi Arabia was expected to prevail in its stated goal of keeping enough oil on the market to drive prices below $100 a barrel. The Saudi view is that lowering prices moderately now will shore up the world economy and prevent a recession that would cause oil prices to collapse. The Saudi oil minister, Ali al-Naimi, described the markets as being "well balanced" when he arrived in Vienna.
But after a six-hour private meeting, OPEC ministers decided to pare their production by complying strictly with targets that had been set up last year but were largely ignored. According to Mr. Khelil, who is also AlgeriaR17;s oil minister, OPECR17;s actual production would have to be lowered by about 500,000 barrels a day within the next 40 days.
R20;We are oversupplying the market, and we are cutting that oversupply,R21; said Abdalla Salem el-Badri, the groupR17;s secretary general. R20;We donR17;t want to see these prices decline dramatically."
It remained unclear Wednesday exactly how the Saudis lost the argument behind closed doors. And despite the OPEC communiqué, it is far from clear that OPEC members will actually reduce their output. After a short night, Saudi officials were quick to reassure markets.
R20;Saudi Arabia will meet the marketR17;s demand,R21; a senior OPEC delegate said. "We will see what the market requires and we will not leave a customer without oil. The policy has not changed."
The Saudi message is to wait and see where demand is headed before eventually paring supplies. The Saudis made their strategy clear Wednesday in informal talks and briefings with some oil industry analysts and reporters, but as is their custom, they would not speak for attribution because they did not want to appear to undermine a collective OPEC decision.
In June, King Abdullah pledged that his country would pump at full tilt to bring prices down. In August, the kingdom increased its production to 9.7 million barrels a day, the highest in three decades. Saudi Arabia is now producing around 9.5 million barrels a day, 600,000 barrels a day more than its quota.
R20;This seems to set Saudi Arabia up as the unilateral decision-maker on output for the fall," said Greg Priddy, an energy analyst at Eurasia Group, in a research note. "Clearly, other OPEC members are not going to trim their own production without Saudi Arabia returning to its quota. Saudi Arabia also seems to be eager to avoid headlines about it cutting production in advance of the U.S. elections."
Adding to the confusion, OPEC said that two new members, Angola and Ecuador, were given new production quotas while Indonesia, a member since 1962 that has become a net importer of oil in recent years, was suspending its membership in the organization by the end of the year. OPEC officials had trouble explaining precisely how much production would need to be cut. Mr. Badri also declined to provide new targets for each member state.
OPECR17;s discordant message is a reflection of the competing policies at play within the group, which includes countries like Kuwait, Nigeria, and its newest and smallest member, Ecuador. Some countries are carefully managing their oil windfall, while others are spending freely with the expectation that prices will remain high.
Moderate and pro-Western states like Saudi Arabia and the United Arab Emirates are aware that high energy costs are hurting demand and might push consumers to seek alternatives to oil. These countries want to see prices fall below $100 a barrel to ease political enmity against the cartel.
Another group, composed of OPEC's traditional price hawks, increasingly needs high prices to finance a wide range of social and military policies. Analysts say they believe that Iran and Venezuela, for example, cannot afford prices below $100 a barrel as they seek to project power in their respective regions.
As OPEC worked to push up prices from lows reached in the late 1990s, members of the cartel all shared the same interests and were willing to leave their differences aside. But now that demand is weakening and prices are falling, some analysts say they believe that tensions within the group are resurfacing. In past years, OPEC has been notoriously bad at maintaining discipline in its ranks when prices fall.
The perception that OPEC was unwilling to do its part to bring down prices brought sharp criticism Wednesday from Western officials. "We'd like to see more oil on the market, not less," the White House press secretary, Dana M. Perino, said at a briefing.
The decision represents a rare case of the cartel going against the position of its biggest member. As he walked from his hotel to the OPEC headquarters on Tuesday evening, Mr. Naimi, the Saudi minister, seemed particularly proud of his country's efforts to pump as much oil as needed to push down prices.
R20;It was hard work,R21; Mr. Naimi said, strolling along the cityR17;s cobbled streets. R20;The market is in a very healthy position.R21;
Six hours later, Mr. Naimi left the meeting without a word of public comment.
It looks like it wouldn't take much for the whole thing to implode. Wind and all will be great, but what do we do in the meantime...Natural gas? With a conversion I could fill my car right here at home and have plenty for runaround.
Diane, you are right about one thing, the whole thing could blow up at anytime. Venzuela, Iran and others are our enemies and they are entirely capable of another embargo. On the other hand our enemies know what an embargo will do to our economy and that without us as a big market for world oil the price would fall very fast and very low. If our economy goes, so does China, Europe, Japan, India and the rest of the countries that depend on us and others for a market for their goods.
This is not a smart alec comment, just somthin I was thinkin about.......depending on what you believe about the beginnings of the world it either took millions or thousands of years to create the oil we've managed to deplete in basically less than ONE hundred years..................does that make ya think or what?
Quote from: pam on September 11, 2008, 10:38:51 AM
This is not a smart alec comment, just somthin I was thinkin about.......depending on what you believe about the beginnings of the world it either took millions or thousands of years to create the oil we've managed to deplete in basically less than ONE hundred years..................does that make ya think or what?
Pam, definitely a very good point. I think there are a lot of reserves left but we, the world, are depleting them at the rate of 31 billion barrels+ a year. It took millions of years to create the oil in the earth and it will be gone in a total of say 150-200 years or less. Man has definitely abused the earth and it's resources. Maybe the Lord is giving us warning or a chance to redeem ourselves by forcing us to use renewable non petroleum sources of energy. Frankly I think the worst invention/discovery/development was and is Atomic/Nuclear energy development, that scares me more than anything else. It has the possibility or in fact the likelihood of fulfilling the Phrophecies.. My greatest concerns are for my Children and Grandchildren, I lay awake at night and worry about it alot, and I know there is nothing I can do about it. Your post was a good one and one everyone should consider.
We are all still alive so it ain't too late to change the way we do things, it is pretty mindboggling tho. I agree about the atomic, nuclear. That was one little discovery we could have done without....
Kind of off to the left but have you ever heard the HOPI prophecy about the gourd of ashes? Some people think it's talkin about nuclear war.
I think Nuclear power is the salvation for our energy needs. Its not the demon folks make it out to be.
I have lived near nuclear plants and they are some of the safest energy sources around. No pollution, no problems,
low energy costs, best of all recycleable materials. You can take the spent rods and put them in another type of reactor
and use them until they need to go to another reactor.
It is a source that will power our electric grids for at least a thousand years or more.
Then we can take the oil, coal, and natural gas and utilize it more efficiently. Wind and solar are only good in certain areas. so
they aren't as viable as nuclear. Hydro is ok but too many problems with leaking pcb's into the water from hydro plants.
Oct-08 Crude came very close to breaking the downside technical barrier of $100.00, it traded as low as $100.10, and settled at $100.87, down $1.71 on the day, Oct-08 Natural Gas settled at $7.248 down $0.145 on the day. Hurricane damage and lost production could drive both Crude Oil and Natural Gas both higher in the coming days.
Quote from: srkruzich on September 11, 2008, 04:45:47 PM
I think Nuclear power is the salvation for our energy needs. Its not the demon folks make it out to be.
I have lived near nuclear plants and they are some of the safest energy sources around. No pollution, no problems,
low energy costs, best of all recycleable materials. You can take the spent rods and put them in another type of reactor
and use them until they need to go to another reactor.
It is a source that will power our electric grids for at least a thousand years or more.
Then we can take the oil, coal, and natural gas and utilize it more efficiently. Wind and solar are only good in certain areas. so
they aren't as viable as nuclear. Hydro is ok but too many problems with leaking pcb's into the water from hydro plants.
Steve, Using Nuclear energy for power sources is not what I was referring to. My concern is the WMDs that are a result of Atomic, Hydrogen and now Nuclear. We are talking about weapons that can destroy the population of entire countries, I think the world would be far better off without any Nuclear capabilities. Such capabilities are quickly falling into the hands of countries with leaders that would have no problem using such weapons even if it destroyed them as well. The Muslim world would not hesitate for one minute to use them on Israel and others that I won't mention now.
This is what we are subject to as long as we have to depend on other countries for 70% of our Crude Oil supply.
Chavez Expels American Envoy, Threatens to Cut U.S. Oil Exports
By Matthew Walter and Jose Orozco
Sept. 12 (Bloomberg) -- Venezuelan President Hugo Chavez yesterday ordered the American ambassador to Caracas to leave and threatened to halt oil exports to the U.S. in a show of solidarity with his Bolivian counterpart Evo Morales.
Chavez recalled his ambassador from Washington and said he won't send another until after the U.S. presidential elections in November. Chavez and Morales, who expelled the top U.S. envoy from his country two days ago, have accused the U.S. of backing opposition movements in their countries.
Chavez, a self-proclaimed socialist who refers to America as an ``empire,'' threatened to halt Venezuelan oil shipments to the U.S. if it attacks his country. Venezuela is the fourth- biggest supplier of foreign crude oil to America.
``The U.S. is behind the plan against Bolivia, behind the terrorism,'' Chavez said at a political rally for his United Socialist Party of Venezuela. ``We're committed to being free. Enough crap from you Yankees.''
In a televised speech, Chavez gave Ambassador Patrick Duddy, who arrived in Caracas a year ago, 72 hours to depart. Noel Clay, a State Department spokesman, said there hasn't been any official communication through diplomatic channels.
Chavez, who has built his political career on thwarting U.S. influence in Venezuela and Latin America, may have expelled the ambassador to rally support among poor voters ahead of state and city elections scheduled for November, said Jose Vicente Carrasquero, a professor of political science at the Universidad Simon Bolivar in Caracas.
`Tendency to Overreact'
``The president has a tendency to overreact,'' Carrasquero said in a telephone interview. ``He's appealing for people's sympathy.''
Morales expelled the U.S. ambassador Sept. 10 after accusing him of supporting regional leaders wanting more autonomy. The U.S. responded yesterday by ordering Bolivia's ambassador to Washington to leave.
Morales's move came during a week of intensifying political disputes between his government and regional leaders opposed to a new constitution and energy taxes. Morales frequently accused U.S. Ambassador Philip Goldberg of conspiring with opposition groups, charges the State Department called ``baseless.''
The expulsion of the two U.S. ambassadors is another example of Chavez's success at building a coalition of socialist-leaning governments in Latin America that are prepared to confront America. The Venezuelan leader has tapped into his country's surging oil revenue to provide billions of dollars of aid and financing to his allies.
``There are a lot of countries in Latin America with social debts that can be taken care of with Chavez's assistance,'' Carrasquero said.
Marxist Guerrillas
Ties between Venezuela and the U.S. have been increasingly strained over the past year as George W. Bush's administration has stepped up charges that Chavez is funding Marxist guerrillas in neighboring Colombia and ignoring the increased flow of illegal drugs across his country's borders.
Chavez has countered that the Bush administration is helping opposition parties in Venezuela try to overthrow him. Yesterday, he ordered an investigation into an alleged military plot to assassinate him, which Foreign Minister Nicolas Maduro said had U.S. support. The minister didn't provide any evidence.
The Venezuelan leader has also pledged support for Russia's recognition of the independence of the Georgian breakaway regions of South Ossetia and Abkhazia. Both the U.S. and Europe have condemned Russia's actions in Georgia.
Two Russian bombers landed in Venezuela this week and plan to carry out training exercises over neutral waters.
`Revolutionary Movements'
Hundreds of Chavez backers gathered outside the Miraflores presidential palace last night to show their support, according to images broadcast by state television.
``The U.S. is trying to stop revolutionary movements in Latin America,'' Chavez said. ``This is a dignified people. Damn Yankees, go to hell 100 times.''
Chavez has been named directly in a U.S. criminal trial taking place in Miami this week. Prosecutors have provided evidence that the president directed the head of Venezuela's intelligence agency to manage a scandal caused by the seizure of $800,000 in cash at an Argentine airport.
Prosecutors allege that the money came from the Venezuelan government and was intended to finance the election campaign last year of Argentine President Cristina Fernandez de Kirchner. Both Chavez and Fernandez have denied the allegations.
Venezuela and the U.S. are unlikely to sever ties permanently, said Carrasquero.
``Trade between the two countries is gigantic,'' he said. ``Venezuela wouldn't have anywhere to put all the oil it sells the U.S. so quickly.''
To contact the reporters on this story: Jose Orozco in Caracas at jorozco8@bloomberg.net; Matthew Walter in Caracas at mwalter4@bloomberg.net.
Last Updated: September 12, 2008 00:43 EDT
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Crude is trading higher due to the Hurricane moving into the Gulf which has shutin a lot of production and refineries. Gotta run to the airport and pick up my daughter-in-law- and grandkids they are flying in from Houston this A.M. to be with us until the weather improves in Houston.
Quote from: frawin on September 11, 2008, 06:02:45 PM
Steve, Using Nuclear energy for power sources is not what I was referring to. My concern is the WMDs that are a result of Atomic, Hydrogen and now Nuclear. We are talking about weapons that can destroy the population of entire countries, I think the world would be far better off without any Nuclear capabilities. Such capabilities are quickly falling into the hands of countries with leaders that would have no problem using such weapons even if it destroyed them as well. The Muslim world would not hesitate for one minute to use them on Israel and others that I won't mention now.
I do understand your concern on that. But that is one specific reactor that produces plutonium. At present there are only a handful that i know of in operation in the US, Savannah Ga, Knoxville Tn, Boulder Colorado are three that i know of. I don't think we are doing anything with the plutonium right now that is produced except storing it and we don't have to produce it with these reactors.
But there are several around like one in Downtown Atlanta Georgia, yes they have one smack dab in the middle of Atlanta, and the sequoiah reactor on the tennessee river upstream from chattanooga are two that i know of that do not produce plutonium. They however do produce cobalt from the rods and other isotopes that are commonly used in todays medical treatments.
I really am excited over the third generation plants and the future ones to be built if we can ever get pat this fear of them as a country. shoot imagine a grid of them that produce our power for the entire nation. Their not too far off from nuclear fusion, i remember a few years ago the science lab at MIT fused molecules together and created enough power in that fusion to light the city of detroit for a hour. Thats off of a drop of sea water.
As for the nuclear missles and destruction capability, that genie is never going to be put back into the bottle. The only way we can assure that it will never be used on us by a stable country is detente. The fruitloops in the middle east, they don't care one way or another so it will take All nations working together to keep them out of the terrorists hands. I think that we will gain co-operation out of those bigger nations in that, IF terrorists gain those weapons, they are not only going to try and use them against us, but these other nations too.
Personally if the terrorists do get ahold of them, we should issue a warning to give them up, or face a targeting of 5 islamic holy cities. Peer pressure. I wouldn't even give them the names of the targets, just let them wonder if Medina, or mecca go up in a mushroom cloud.
Gas jumped 11 cents overnight to 3.49/gal here in Wichita.
QuoteAs for the nuclear missles and destruction capability, that genie is never going to be put back into the bottle,
True statement, that. I agree it has great potential for good. I also wish the guy who had this idea had lost his train of thought before it ever became a fully formed idea.
Quote from: Catwoman on September 12, 2008, 06:57:32 AM
Gas jumped 11 cents overnight to 3.49/gal here in Wichita.
guess they haven't heard oil is down.
Well, anytime there is a hiccup from the Gulf, the prices shoot up. No news there.
MURPHY'S LAW - The price of fuel goes down right after I fill the gas tank and goes up just before I need to fill again.
Same here.
Just saw on CNN fuel is goin for over five dollars a gallon on the east coast, places like north carolina........
I expect there will be some investigations into this; I remember when 9/11 occurred, they did a lot of price gouging here in Kansas, and those guilty of it were punished by the state. And well they should, it is disgraceful to take unfair advantage of a situation.
Yeah some of that went on down here, there is one station in Anderson that is still closed down. Nobody else will even open it because they made people so mad.
Quote from: sixdogsmom on September 12, 2008, 12:55:52 PM
I expect there will be some investigations into this; I remember when 9/11 occurred, they did a lot of price gouging here in Kansas, and those guilty of it were punished by the state. And well they should, it is disgraceful to take unfair advantage of a situation.
I don't believe in making laws limiting what a person can sell a product for. Thats going beyond what the governments
powers are. I believe if they wish to sell a gallon of gas for 100 dollars a gallon during any emergency then
they ought to be able to sell it for that. The way you stop them from doing it is voting with the dollar not the power of government
The state here has regulations about keepin people from gouging on things that are needed by people in a bind. Good deal in my opinion, keeps the vultures at bay. During the ice storm a couple years ago we had people buyin up generators and bringin em in and sellin for twice, sometimes more, what they paid just because there weren't any anywhere else. WE had a wood stove for heat and cookin, lots of people didn't and got ripped off.
Quote from: pam on September 12, 2008, 01:27:20 PM
The state here has regulations about keepin people from gouging on things that are needed by people in a bind. Good deal in my opinion, keeps the vultures at bay. During the ice storm a couple years ago we had people buyin up generators and bringin em in and sellin for twice, sometimes more, what they paid just because there weren't any anywhere else. WE had a wood stove for heat and cookin, lots of people didn't and got ripped off.
A few years ago, one of them hurricanes hit florida, and a buddy of mine and me went and rented trucks and hauled supplies down
to folks down there. We bought generators and all kinds of supplies and transported them down. I got mine emptied out and on my way back, he was about empty and waited a while to try to sell all that he had then start back. The state came in on him and stole everything from him. We bought the gensets for like around 100 bucks a piece, sold them for 150 bucks and part of that price markup
was rental and fuel costs to take them down. We were making like 10 bucks a genset profit for our time invovled.
THey said we were gouging them but no one said a word about home depot, or lowes or any of those box stores refusing to
bring gensets in. We took inititive and risked our money to bring needed items in and sell at a fair price.
That's cool bud. I think you got screwed. The guys I was talkin about were sellin em for 2 and 3 times what they paid for em or what you could've got one at home depot or lowes for if they had had any left. Hell, people were goin around STEALIN em off of peoples houses and takin em and sellin em. It was outrageous. Out here at our place we had no power for 12 days, some people were without for 3 weeks and were in no way prepared for it, them guys racked up some serious bad karma points. There's a big difference between them guys and you all.
Quote from: pam on September 12, 2008, 05:57:23 PM
That's cool bud. I think you got screwed. The guys I was talkin about were sellin em for 2 and 3 times what they paid for em or what you could've got one at home depot or lowes for if they had had any left. Hell, people were goin around STEALIN em off of peoples houses and takin em and sellin em. It was outrageous. Out here at our place we had no power for 12 days, some people were without for 3 weeks and were in no way prepared for it, them guys racked up some serious bad karma points. There's a big difference between them guys and you all.
ROTFL, wellll last year, I lived in Georgia. I didn't have electric, or running water, i cooked on a grill,
used my ice cooler to keep my meats and food cool. I had a laptop going, dialup internet since i don't have to
have electricity to have a phone, and a battery that i charged with my pickup when i drove anywhere.
i had a little ole black n white 6" tv, a radio and even a microwave if i wanted to fire up my generator that i bought
for 100 bucks.
Boy when i got here in october last year, I think i stayed in the shower as much as possible for about a week or two! Mmmmm
Amazing isn't it what simple things are the best things! Long hot shower is one of lifes most wonderful pleasures!
BTW i can have a long hot shower in the dead middle of winter without electric or gas too :D....
just using the sun and a black water tank. It gets so hot you have to add cold water to it
Lol, been there. Joe keeps sayin he's gonna build our own wind generator but never seems to get around to it :P We didn't have any prolems havin no power, like I said we have a wood stove for heat and cookin, a smoker and a fire pit outside, oil lamps and candles, my campin coffee pot......we were havin fun while everybody else was freakin out lol. We just set the freezer out on the porch and put everything else in a big cooler.
I went onto theoildrum.com and got to take a good look at where the oil rigs are located...both the shallow water and deep water facilities, as well as future facilities. I was a little dismayed at how easily I was able to access this information...not a good thing when dealing with national security issues. However, I was glad to see that the majority of facilities were not in Ike's path. Ergo, we should see prices come back down since the facilities shouldn't have sustained that much damage, right???? (I'm dying laughing as I type this, as we still haven't seen pre-Katrina prices...and it's been HOW long since that debaucle???).
14 Refineries are shutdown and/or have suffered considerable damage due to hurricane IKE, in addition a lot of the ports that the imported crude comes into the US to are damaged. The refineries are some of the largest refinery complexes in the US, we could see some shortages of Gasoline and Diesel from this one.
This is the latest report from CNN, I am anxious to see the Bloomberg report in the morning:
Ike's aftermath: The return of $4 gas
Gas prices poised to climb towards record levels again as hurricane hits center of nation's oil refining base; Ike could also cost insurers up to $18 billion.
Last Updated: September 14, 2008: 12:17 PM EDT
Ike spikes gas prices
iReporters eye gas prices
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Ike's aftermath: The return of $4 gas
NEW YORK (CNNMoney.com) -- Gas prices are poised to shoot back toward record highs after Hurricane Ike's direct hit to the heart of the nation's oil refineries, analysts said.
The average price of gasoline nationwide has already shot up 12 cents in the past two days to $3.795 a gallon, according to figures released by the AAA Sunday. And the average price of gas is now at or above $4 in Alaska, Georgia, Hawaii, Illinois, Indiana, Michigan and South Carolina.
In addition, Hurricane Ike could turn out to be the third-most expensive natural disaster in U.S. history, according to preliminary forecasts from a firm that does loss estimates for the insurance industry.
Experts say it's too soon to know exactly how much damage the hurricane - which slammed into Galveston, Texas, early Saturday - did to the refineries.
Some early reports suggested that the damage could be limited despite the nearly direct hit.
But the output at the refineries, which produce nearly 25% of the nation's gasoline, could still be affected if it takes weeks or months to restore full power to the region.
The uncertainty left experts projecting everything from a nationwide gasoline spike above $5 a gallon to a jump to just below the $4 mark.
Gas prices already climbing
Many consumers throughout the Southeast have already started to see sharp increases in gas prices before the storm even hit. The latest nationwide survey by AAA conducted Friday showed that prices were up nearly 6 cents a gallon to $3.733.
Some areas, particularly in the Gulf Coast and South, have been hit with a more than a 20 cent a gallon overnight increase. For example, the price of gas jumped 27 cents in Knoxville, Tenn., to $3.924.
"This is a fear factor among station owners," said Kevin Kerr, editor of Global Commodities Alert. "They're worried that they're not going to get any more supply or if they do it's going to be a lot more expensive."
Gas prices soared three years ago in the week after Hurricane Katrina slammed into New Orleans. Prices jumped 17% to a then-record high of $3.0569 due to damage to refineries and pipelines.
In a statement to CNN, the U.S. Department of Energy said it "is very concerned about the impact of gasoline prices on American families" and encouraged people to report price gouging at its Web site.
The Department of Energy added that it is ready to release crude oil from the Strategic Petroleum Reserve "when and where it is necessary to ensure refineries are capable of maintaining operations" and that is analyzing the amount of fuel production likely to be lost because of Hurricane Ike and Hurricane Gustav, which hit near New Orleans on Sept. 1.
Kerr said the path of Hurricane Ike was the worst possible scenario. There are about 20 refineries between Lake Charles, La., and Corpus Christi, Texas. All of them saw winds and heavy rain from the storm. Together, they can refine nearly 5 million barrels a day.
Almost half of that capacity is concentrated in the Houston-Galveston area - where the center of the storm hit. In addition to area refineries, gasoline pipelines and other key transportation infrastructure could limit the supply of gas reaching consumers.
"We could see gas go up to $6 in certain states," said Kerr. "I think the baseline will be more like $4.50, maybe even $5."
The ExxonMobil (XOM, Fortune 500) refinery in Baytown, Texas, with a daily capacity of 567,000 barrels, is the largest refinery in North America. And the eye of the hurricane passed right over it.
CNN correspondent Ali Velshi reported Saturday morning that there was no apparent damage to the outside of the refinery, despite extensive damage in Baytown.
Kevin Allexon, spokesman for ExxonMobil, said the company has not yet determined if there was damage that could further disrupt operations.
"There's still some pretty significant weather that affects how safe it is to do assessment work," he said.
Oil analyst Peter Beutel of Cameron Hanover said he's encouraged by initial reports suggesting that crucial oil facilities in the region survived without substantial damage. He's hopeful that if refineries can resume near normal operations later this week, gas prices will remain below record levels.
"Right now it looks like we took a licking and we kept on ticking, although it's still early to get full reports," he said. "As of now, I don't have reason to believe it's going to be a lasting factor. It doesn't look like you'll get to $4 nationwide, but you'll see $4 gas in a number of places," he said.
But Tom Kloza, the chief oil analyst for the Oil Price Information Service, which provides the data for the AAA survey, said he's worried about how long it will take to get full production going again.
"Even if we missed the worse of it, it's going to be a mess," he said. "U.S. refineries are really dependent on local utilities. When you hear them talking about power outages lasting for weeks, it's a worry."
The Department of Energy reported that 2.4 million customers were without power as of Saturday morning, essentially everyone in the direct path of the hurricane.
Kloza said fear of a political backlash could keep oil companies and wholesalers from raising prices as high as the market might support in the face of such a tight supply.
But he said that even if consumers are spared the full brunt of price increases, they could end up dealing with limited supplies in some markets.
"You're going to see a lot of stations in some places that don't have gasoline and you'll see some lines," he said. He's predicting nationwide gasoline prices to rise to about $4 a gallon, give or take a dime for the next month.
What's more, production at refineries along the Gulf Coast had yet to return to normal since they shutdown in preparation for Hurricane Gustav, even though the hurricane caused limited damage.
Kloza added that jet fuel, diesel and heating oil prices could sharply increase - partly because they don't get the public attention or political scrutiny that gasoline prices do.
Ike cost may only lag Katrina and Andrew
But Hurricane Ike will prove to be costly even beyond the impact on gas and other energy prices.
Catastrophe risk modeling firm AIR Worldwide Corporation said Saturday that it estimated insured losses to onshore properties would be between $8 billion and $12 billion. The firm said it expected significant wind damage to skyscrapers in Houston as well as to mobile homes and warehouses.
And Eqecat Inc., a firm that makes catastrophe estimates for the insurance industry, initially forecast insured losses from Ike at between $8 billion and $18 billion.
The low end of that estimate would make Ike the fifth most expensive storm in history after adjusting earlier storms' costs for inflation.
But the high end of that forecast would put Ike behind only Hurricanes Katrina and Andrew as the most expensive natural disasters, according to the Insurance Information Institute.
Hurricane Katrina cost insurers an inflation-adjusted $43 billion, while Hurricane Andrew, which hit South Florida in 1992, cost the industry an inflation-adjusted $22.9 billion.
First Published: September 13, 2008: 2:22 PM EDT
Aaron Tippin's new song:
http://www.americansolutions.com/General/?Page=5211e44c-32fd-40a8-919f-1449531d61da
Forwarded to me by a friend:
Dear xxxxxxx,
I just finished up a radio interview with Sean Hannity and I wanted to share with you some exciting news. I was on Sean's show to debut country music star Aaron Tippin's new single entitled "Drill Here, Drill Now." The song was inspired by our "Drill Here, Drill Now, Pay Less" movement and masterfully captures the pulse of Americans who are tired of paying too much for gas while Congress does nothing about it. You can listen to the interview here.
As a country music fan, I've always known Aaron as an outspoken artist who takes a stand for hardworking Americans. And when I first heard his song, I knew it would become the rallying cry for more American-made energy. Just read the opening lines of the song and you'll see why:
Hello.....Is anybody out there listenin' in Washington D.C.
This is the suffering voice of America crying out for relief
Now I don't know what a gallon of gas costs up on Capitol Hill
But we sure know what it costs down here in Realityville
If you're anything like me, once you hear this song you'll immediately want to forward it to your friends and family so they can hear it too.
Can you help us make this song a huge hit by downloading it today and asking your local radio stations to play it?
You can download or preview the song at www.AmericanSolutions.com/DrillSong.
A powerful collision between pop culture and politics, this terrific song is sure to take America 's airwaves - and Capitol Hill - by storm.
Thank you for everything you do.
Your friend,
Newt Gingrich
P.S. In light of President Bush's July announcement to eliminate the executive ban on offshore drilling, the U.S. Minerals Management Service has decided to initiate a new plan to increase energy production on the outer continental shelf (OCS). As part of the regulatory process, the agency is calling for public comments on offshore oil and gas development through September 15, 2008.
In the meantime, unfortunately, Congress is planning votes on bills that would actually make all or part of the offshore drilling ban permanent. Take immediate action by clicking here and letting your voice be heard in favor expanding American offshore energy production.
------------------------------------------------------------------------------------------------
Paid for by American Solutions for Winning the Future. Not authorized by any candidate, or candidate committee.
Not printed at government expense.
www.AmericanSolutions.com
Sigh i give up. damn ecofruits have screwed us royally. 25% reduction in production, theres NO EXCUSE for that. we should have enough backup refineries built to handle this. We need to tell them to sit down shut up get the heck out of the way. As for congress voting to ban drilling permanently, well lets make there term in office a short one! Get them out of office.
Its a crying shame that we have enough petroleum in the ground on our soil, along our coasts that we could supply ourselves for the next 200 years and we are sitting here getting nailed because some small special interest groups want to stop it.
Oct-08 Crude is trading at $95.925, down $5.25 and Oct-08 Natural Gas is trading at $7.27, down $0.096. Gasoline may jump due to the huricane damage and refinery shut downs. A big concern for the long term is getting the coastal ship channels cleared so imported oil can get in.
This is welcome news:
Open Web Site Updated: New York, Sep 15 09:00London, Sep 15 14:00Tokyo, Sep 15 22:00
Bloomberg Press
Gulf Refiners Report Minimal Ike Damage, to Restart (Update2)
By Robert Tuttle and David Wethe
Sept. 15 (Bloomberg) -- Oil refiners in Texas and Louisiana prepared to restart plants after Hurricane Ike caused minimal damage to facilities in an area that supplies about 50 percent of the fuel and crude used in the eastern half of the U.S.
Valero Energy Corp., the largest U.S. refiner, said it found ``no significant structural damage'' at three Houston-area refineries shut before the storm. Royal Dutch Shell Plc said it was assessing its Texas plants and it was too early to say when they will restart.
``We think in probably a week to 10 days we should have a majority of the refineries back up,'' James Cordier, founder of Tampa-based OptionSellers.com, said in a telephone interview from New York. ``Very little damage was done.''
A total of 14 Texas and Louisiana refineries, with combined crude processing capacity of 3.57 million barrels a day, are closed because of Ike. Exxon Mobil Corp. said its Baytown refinery, the largest in the U.S., has power and damage appears ``limited.'' Ike came ashore near Galveston Sept. 13, shutting about 20 percent of the U.S.'s oil-refining capacity.
Valero said power has been restored to ``most production units'' at its Houston refinery and is working to resume electricity supply to its Texas City and Port Arthur plants. All three refineries are working on ``startup plans,'' Bill Day, a company spokesman, said in a telephone interview yesterday.
ConocoPhillips said its Sweeny, Texas, refinery has power and its condition is being assessed. The company's Lake Charles refinery is operating at reduced rates and continues the restart process. Exxon Mobil said it is checking its Beaumont, Texas, plant, which is without electricity.
`Several Days'
LyondellBasell Industries Houston refinery will be down for at ``least several days,'' David Harpole, a company spokesman said. Exxon Mobil and Marathon Oil Corp.
Shell said ``varying levels'' of services were available at its Deer Park, Texas, refinery and there was no electricity at its Port Arthur plant, which it operates in a joint venture with Saudi Arabia's state oil company. ``It is too early to predict when the refinery will resume normal operations,'' Shell said in a statement on its Web site at 6 p.m. yesterday Houston time.
Colonial Pipeline Co. said yesterday it restored operations to its gasoline and distillate pipelines, which carry from the Gulf Coast to the Northeast.
Strategic Reserve
The U.S. Department of Energy said yesterday it has released a total of 939,000 barrels of crude oil from its Strategic Petroleum Reserve because of shortages at refineries caused by Ike and Hurricane Gustav, which struck the Louisiana Coast on Sept. 1. Companies that have received oil from the reserve include ConocoPhillips, Placid Oil and Marathon Oil Corp.
Deliveries were to begin for the ConocoPhillips refinery at Wood River along the Capline pipeline system and Placid Oil's Port Allen refinery, the Energy Department said in a statement. Ike weakened to a tropical depression as it moved inland over Missouri and Illinois. The storm left Houston without drinking water and severed power to millions after ripping through America's fourth-largest city.
Citgo Petroleum Corp., owned by Venezuela's state oil company, requested yesterday for 1 million barrels of crude oil from the U.S. Strategic Petroleum Reserve.
The oil is needed for its refinery in Lake Charles, Louisiana, after Gustav and Ike disrupted crude deliveries, Citgo Chief Executive Officer Alejandro Granado said in a statement late yesterday.
About 2.2 million Texas households, mostly in the Galveston and Houston area, were without power because of the storm, the U.S. Federal Emergency Management Agency said yesterday.
Ike was the first storm to hit a major U.S. metropolitan area since Hurricane Katrina devastated New Orleans in 2005.
Output Shut
A total of 99.6 percent of oil production and 91.9 percent of natural-gas output was idled in the Gulf of Mexico because of the storm, the U.S. Minerals Management Service said yesterday. Gulf fields produce 1.3 million barrels of oil a day, about a quarter of U.S. output, and 7.4 billion cubic feet of gas, 14 percent of the total, government data showed.
Shell, Europe's largest oil company, said in a statement at 7 p.m. Houston time yesterday that it had redeployed a total 175 people to offshore oil and gas facilities. A flyover of its offshore Gulf facilities found ``no major structural damage,'' the statement said.
The company will continue to deploy workers until it reached pre-storm staffing levels of 1,400 people, Darci Sinclair, a company spokeswoman, said.
Exxon Mobil also said it was sending workers to Gulf oil and gas facilities that weren't in the direct path of the storm.
Marathon said it was sending workers to the Ewing Bank oil and gas platform to asses its condition. The platform, which produces 11,700 barrels of oil and 10.5 million cubic feet of gas a day, appears ``structurally sound,'' the company said.
The Louisiana Offshore Oil Port, the biggest U.S. oil- import terminal, was scheduled to start offloading tankers today, Barb Hestermann, a spokeswoman for the port, said in a telephone interview yesterday.
To contact the reporter on this story: Robert Tuttle in New York at rtuttle@bloomberg.net; David Wethe in New York at dwethe@bloomberg.net.
Last Updated: September 15, 2008 00:08 EDT
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Crude Oil Falls More Than $7 as Lehman Fails, Ike Spares U.S. Refineries Lehman is Suspended From ICE Energy, LME Metals Trading After Bankruptcy Shell Found `Moderate' Damage to Offshore Oil Installations From Hurricane
MURPHY'S LAW ALIVE AND WELL - :-\ Fri. nite when we came by Trip-Co, regular was 3.49 so Marvin stopped and filled up. I went to Severy Sat. morning to get a pug puppy so thought I'd fill up while in the area. It had gone up to 3.59 :'(. Told Marvin I had filled up but that the price had gone up 10 cents a gallon overnight and he said "good, glad you filled up cause that means the price will come down" and he laughed. Now Frank posts that crude is down $7. Yep, that's about right. >:(
Flo...... a pug puppy?
Flo, crude is down but Gasoline/Diesel may go up, depending on the refining damage in the gulf and how long it takes to bring all of it back up.
Why the Gasoline Engine Isn't Going Away Any Time Soon
Blame it on technology, cost -- and the American way of life
By JOSEPH B. WHITE
September 15, 2008; Page R1
An automotive revolution is coming -- but it's traveling in the slow lane.
High oil prices have accomplished what years of pleas from environmentalists and energy-security hawks could not: forcing the world's major auto makers to refocus their engineers and their capital on devising mass-market alternatives to century-old petroleum-fueled engine technology.
With all the glitzy ads, media chatter and Internet buzz about plug-in hybrids that draw power from the electric grid or cars fueled with hydrogen, it's easy to get lulled into thinking that gasoline stations soon will be as rare as drive-in theaters. The idea that auto makers can quickly execute a revolutionary transition from oil to electricity is now a touchstone for both major presidential candidates.
That's the dream. Now the reality: This revolution will take years to pull off -- and that's assuming it isn't derailed by a return to cheap oil. Anyone who goes to sleep today and wakes up in five years will find that most cars for sale in the U.S. will still run on regular gas -- with a few more than today taking diesel fuel. That will likely be the case even if the latter-day Rip Van Winkle sleeps until 2020.
THE JOURNAL REPORT
.
Free to Drive
Cars aren't iPods or washing machines. They are both highly complex machines and the enablers of a way of life that for many is synonymous with freedom and opportunity -- not just in the U.S., but increasingly in rising nations such as China, India and Russia.
Engineering and tooling to produce a new vehicle takes three to five years -- and that's without adding the challenge of major new technology. Most car buyers won't accept "beta" technology in the vehicles they and their families depend on every day. Many senior industry executives -- including those at Japanese companies -- have vivid memories of the backlash against the quality problems that resulted when Detroit rushed smaller cars and new engines into the market after the gas-price shocks of the 1970s. The lesson learned: Technological change is best done incrementally.
Integral to Modern Life
Technological inertia isn't the only issue. Cars powerful enough and large enough to serve multiple functions are integral to modern life, particularly in suburban and rural areas not well served by mass transit.
Ditching the internal-combustion engine could mean ditching the way of life that goes with it, and returning to an era in which more travel revolves around train and bus schedules, and more people live in smaller homes in dense urban neighborhoods.
Economic and cultural forces -- high gas prices and empty-nest baby boomers bored with the suburbs -- are encouraging some Americans to return to city life, but by no means all. In rising economies such as China, meanwhile, consumers are ravenous for the mobility and freedom that owning a car provides.
CAR MAKERS AND ALTERNATIVE FUEL
Desire Isn't Enough
That doesn't mean auto makers and their technology suppliers aren't serious about rethinking the status quo. But displacing internal-combustion engines fueled by petroleum won't be easy and it won't be cheap.
It also may not make sense. Over the past two decades, car makers have at times declared the dawn of the age of ethanol power, hydrogen power and electric power -- only to wind up back where they started: confronting the internal-combustion engine's remarkable combination of low cost, durability and power. One effect of higher oil prices is that car makers now have strong incentives to significantly improve the technology they already know.
"There are a lot of improvements coming to the internal-combustion engine," says John German, manager for environmental and energy analysis at Honda Motor Co.'s U.S. unit.
Refinements to current gasoline motors, driven by advances in electronic controls, could result in motors that are a third to half the size and weight of current engines, allowing for lighter, more-efficient vehicles with comparable power. That, Mr. German says, "will make it harder for alternative technologies to succeed."
THE ROAD AHEAD
By 2020, many mainstream cars could be labeled "hybrids." But most of these hybrids will run virtually all the time on conventional fuels. The "hybrid" technology will be a relatively low-cost "micro hybrid" system that shuts the car off automatically at a stop light, and then restarts it and gives it a mild boost to accelerate.
Cheaper Than Water
Gasoline and diesel are the world's dominant motor-vehicle fuels for good reasons. They are easily transported and easily stored. They deliver more power per gallon than ethanol or other biofuels. And until recently petroleum fuels were a bargain, particularly for consumers in the U.S. Even now, gasoline in the U.S. is cheaper by the gallon than many brands of bottled water.
Car makers have made significant advances in technology to use hydrogen as a fuel, either for a fuel cell that generates electricity or as a replacement for gasoline in an internal-combustion engine. But storing and delivering hydrogen remains a costly obstacle to mass marketing of such vehicles.
Natural gas has enjoyed a resurgence of interest in the wake of big new gas finds in the U.S., and Honda markets a natural-gas version of its Civic compact car.
But there are only about 1,100 natural-gas fueling stations around the country, of which just half are open to the public, according to the Web site for Natural Gas Vehicles for America, a group that represents various natural-gas utilities and technology providers.
Among auto-industry executives, the bet now is that the leading alternative to gasoline will be electricity. Electric cars are a concept as old as the industry itself. The big question is whether battery technology can evolve to the point where a manufacturer can build a vehicle that does what consumers want at a cost they can afford.
"The No. 1 obstacle is cost," says Alex Molinaroli, head of battery maker Johnson Controls Inc.'s Power Solutions unit. Johnson Controls is a leading maker of lead-acid batteries -- standard in most cars today -- and is working to develop advanced lithium-ion automotive batteries in a joint venture with French battery maker Saft Groupe SA.
[The Journal Report: Energy]
Harry Campbell
The Costs Add Up
Cost is a problem not just with the advanced batteries required to power a car for a day's driving. There's also the cost of redesigning cars to be lighter and more aerodynamic so batteries to power them don't have to be huge.
There's the cost of scrapping old factories and the workers that go with them -- a particular challenge for Detroit's Big Three auto makers, which have union agreements that make dismissing workers difficult and costly.
A world full of electricity-driven cars would require different refueling infrastructure but the good news is that it's already largely in place, reflecting a century of investment in the electric grid.
The refueling station is any electric outlet. The key will be to control recharging so it primarily happens when the grid isn't already stressed, but controllers should be able to steer recharging to off-peak hours, likely backed by discount rates for electricity.
Big utilities in the two most populous states, California and Texas, are adding millions of smart meters capable of verifying that recharging happens primarily in periods when other electricity use is slack. Studies show the U.S. could easily accommodate tens of millions of plug-in cars with no additional power plants. Three big utilities in California are planning to install smart meters capable of managing off-peak recharging. The estimated cost: $5 billion over the next five years.
Remembering the Past
Americans often reach for two analogies when confronted with a technological challenge: The Manhattan Project, which produced the first atomic bomb during World War II, and the race to put a man on the moon during the 1960s. The success of these two efforts has convinced three generations of Americans that all-out, spare-no-expense efforts will yield a solution to any challenge.
This idea lives today in General Motors Corp.'s crash program to bring out the Chevrolet Volt plug-in hybrid by 2010 -- even though the company acknowledges the battery technology required to power the car isn't ready.
Even if GM succeeds in meeting its deadline for launching the Volt, the Volt won't be a big seller for years, especially if estimates that the car will be priced at $40,000 or more prove true.
Moon-shot efforts like the Volt get attention, but the most effective ways to use less energy may have less to do with changing technology than with changing habits.
A 20-mile commute in an electric car may not burn gasoline, but it could well burn coal -- the fuel used to fire electric power plants in much of the U.S. The greener alternative would be to not make the drive at all, and fire up a laptop and a broadband connection instead.
--Mr. White is a senior editor for The Wall Street Journal in Washington.
Oct-08 Crude settled at $97.69, down $5.47 on the day, the back months were down $5.00+ as well, Oct-08 Natural Gas Settled at $7.375, up $0.009 on the day, Nov-08 gas was down $0.181 at $7.46.
I really don't worry that much, no more than I drive I only fill up about twice a month and then I usually have at least half a tank or more. I get paranoid if I'm driving on the bottom half. Yes, Teresa, a pug puppy. ;D ;D ;D
How old is he / her? What color is he/ her? What did you name him/her? Where did you get him/her?
I am so jealous. I want another dog so bad, but we just aren't ready yet cause of our stupid schedules.
Do you need a picture of him taken and posted?? Do you need a babysitter? Do you need ...a... do you need... ahhhmmm... hell.. do you need me to hold him and kiss on him?
hahaha
well, you gotta come see her. She's 14 wks., fawn/black, and had her first doctor visit today. Got her Sat. Bunyards are going out of the dog business. I had a "rescued" pug, 8 yrs. old, that I had to have put down. That was 3 yrs. ago and just now ready for another dog. They had an ad iin the Good News of adult pugs Free, so I called them. By the time they got to my name, they were all gone. I'm not surprised at THAT price. But they did have 4 puppies left at close out prices, so I now have one. Her name is Missy (the other was Sissy) and she's not quite a hand full yet and follows me EVERYWHERE. Not sure I"m up to the housebreaking, but we're getting there. She does seem to know her name already. She's from registered stock, but I'lll probably not register her. Dr. Fechter set her "operation" date up today. And this fits under this thread cause I can't seem to get her "filled up". She does like her puppy chow. I give her what I think she needs but she ck's at regular intervals just to be sure there's not some more in her dish. :D I think her pic does need to be posted.
It definitely does, because she isn't going to get any cuter, just more fun. Makes me wish I could have one, but Bud wouldn't allow it in the house and what good is a pet if it doesn't live with you.
Puppies are to be on full dry feed.
When we raised the Brittanies, ( I had 12 puppies) Dr. Williams told me that until they were about 6-8 months old..( Sold all but 2 before that age) I should have dry food out. He said that they would not over eat.In fact sometimes would eat less than if fed only a few times a day. But I fed them some wet canned food only once in the evening. We just filled an automatic feeder of puppy chow and they ate when they wanted, of the dry. But that they needed to eat whenever they were hungry or wanted a few bites. That they needed the puppy chow and not other dog food because their bones are growing so fast and it is higher in calcium that the other.
There.. you have my 2 cents. Take it and spend it or tuck it away for a rainy day.. LOL
And on Wednesday, I'll make a note to come by and take a picture of her and post it..
Plus I'll bring her a treat and spoil her a bit. :)
Oct-08 crude is trading at $91.40, down $4.31, Oct-08 Natural Gas is trading at $7.38, up $0.006
The Democrats keeping trying to make up reasons for high energy prices when they know that it is due to the Clinton Trade agreements which have made China and India the fastest growing energy consumers in the world. The energy shortage is due to China, India and Japan buying up all of the excess oil with the US dollars they have from trade with the US. Until we develop alternate renewable energy and produce more oil that we control the situation is only going to get worse. THINK ABOUT THE BULL THAT THE DEMOCRATS PUT OUT ABOUT TAXING THE OIL INDUSTRY MORE, HOW WILL THE OIL AND GAS INDUSTRY DRILL ALL THE HIGH COST WELLS, BUILD ALL OF THE PIPELINES AND NEEDED INFRASTRUCTURE IF WE TAX THEM MORE. THE ONLY REASON AMERICA HAS HAD THE CHEAPEST AND MOST PLENTIFUL ENERGY IN THE WORLD FOR THE PAST ALMOST 100 YEARS IS DUE TO THE AMERICAN OIL AND GAS INDUSTRY.
Congress has Ideas galore, but energy bill unlikely
by Houston Chronicle
Midland Reporter-Telegram
Published: Sunday, September 14, 2008 12:31 AM CDT
By David Ivanovich
Houston Chronicle Washington Bureau
WASHINGTON -- Drill, drill, drill.
Suddenly, oil and gas exploration is all the rage on Capitol Hill.
With energy prices a red-hot political issue, the Democratic-controlled Congress, in the midst of its final, three-week legislative sprint before the presidential elections, can't get enough of drilling bills.
Not that most Capitol Hill watchers seriously believe that -- in the absence of a major supply disruption -- any substantive energy legislation will actually emerge from this frenzy and become law.
"You don't pass energy bills in the heat of the campaign season," noted Frank Maisano, an energy specialist with Bracewell & Giuliani. Still, there should be plenty of action.
House Speaker Nancy Pelosi, D-Calif., was crafting an energy package that would open new areas offshore to oil and gas drilling, with plans to bring the bill to the floor for a vote as early as this week.
Senate Majority Leader Harry Reid, D-Nev., has declared this "Energy Week" in the Senate, with votes on a series of drilling amendments possible.
Drilling gains traction
Republicans are widely viewed in this town as having gained some real political traction with their calls for expanded drilling.
GOP presidential nominee John McCain has been crisscrossing the country calling on the U.S. to "drill here ... drill now." Delegates to the Republican convention were chanting "Drill, baby, drill," while President Bush, during his Saturday radio address, all but goaded Democratic leaders for having ""ignored the public's demand for relief from high energy prices.
"This is their final chance to take action before the November elections," Bush said. "If members of Congress do not support the American people at the gas pump, then they should not expect the American people to support them at the ballot box."
House Republicans were out on the Capitol west front steps touting what they call an "All of the Above" energy strategy, which would open the federal waters offshore and the Arctic National Wildlife Refuge to drilling, while encouraging development of oil shale and pushing for construction of new refineries.
The GOP news conference, however, was all but drowned out by environmental activists chanting, "Spill, baby, spill."
Hoping to snatch back some of the political ground lost to Republicans, House Democrats -- in a significant policy shift -- are expected to unveil a bill that would allow coastal states to decide whether to allow drilling in the federal waters off their shores.
That potentially could pave the way for drilling off Virginia, Georgia and the Carolinas -- all areas that have expressed at least some interest in drilling.
Gulf proposal
Senate Energy Committee Chairman Jeff Bingaman, D-N.M., and Senate Finance Committee Chairman Max Baucus, D-Mont., will push a proposal to open portions of the eastern Gulf of Mexico -- an area oil and gas producers are most intent on exploring -- as well as other offshore areas to drilling, Bingaman said.
Last month, a bipartisan group of senators calling itself the Gang of 10 proposed its own plan to open new areas in the eastern Gulf of Mexico and southeast Atlantic to oil and gas drilling. That group, which has expanded to become the Gang of 16 and could swell to the Gang of 22, will be championing its own package. And Reid has promised to allow Republicans to bring their own drilling measure up for a vote.
But passage of a drilling bill remains highly uncertain.
Energy legislation, by necessity, must be written in a collaborative fashion, Maisano argued. "And we're not in a collaborative time right now."
The House Democratic package, for instance, is expected to hit the oil companies up with higher taxes, but Bush has threatened to veto previous bills that included similar language.
The plan also is likely to require electric utilities to generate a portion of their power using renewable sources like wind and solar. That provision faces opposition from Southern lawmakers.
House Republicans already are complaining about Democrats crafting an energy bill without their input.
"My guess is we're going to vote against everything they throw up until we get a process that's open and fair," said Rep. Joe Barton of Ennis, the ranking Republican on the House Energy and Natural Resources Committee.
Time for showdown?
The whole energy debate may be headed toward a high-stakes showdown at month's end, when lawmakers will have to vote on a resolution to continue funding the federal government during the next fiscal year, which begins Oct. 1.
Republicans are threatening to oppose that resolution -- and possibly shut down the federal government -- unless Democrats agree to drop a congressional moratorium that bars oil and gas producers from drilling in most of the federal waters offshore. Bush lifted a similar presidential ban back in July.
Two variables, however, could upset the calculus of the debate -- Hurricane Ike and the Commodity Futures Trading Commission, noted Kevin Book, an energy policy analyst with FBR Capital Markets.
If Ike were to inflict the kind of damage on the nation's energy infrastructure Katrina and Rita did three years ago and send gasoline prices soaring, the political support for expanded offshore drilling could change quickly.
The Commodity Futures Trading Commission, meanwhile, has been examining why oil prices spiked so high this year. And an agency official testified on Capitol Hill Thursday. If the agency were to uncover real evidence of market manipulation, that could spark its own congressional stampede, Book noted.
Oct-08 Crude settled at $91.15, down $4.56 on the day, the back months were down in the $5.00 to $5.50 range all the way out, Oct-08 Natural Gas hasn't settled yet but is trading at $7.325, off by $0.049. For some reason the EIA did not post the weekly Petroleum Inventory Report, I am guessing it was due to Hurricane IKE and the Gulf Coast area inventories not available.
Here we go again, how did we get from crude oil prices to a pug puppy?
Maude
Maude, I was thinking the same thing, maybe if we check all of the post it will turn out that the puppy had gas, which would probably qualify the post for this thread.
Oct-08 Crude is trading at $94.475, up $3.325, Oct-08 Natural Gas is trading at $7.43, up $0.151.
Quote from: flo on September 15, 2008, 02:52:31 PM
And this fits under this thread cause I can't seem to get her "filled up".
Below is the current EIA Weekly Petroleum Inventory Report, It is encouraging in regard to the continued reduction in demand but the continued inventory reductions overall are very disturbing.
Summary of Weekly Petroleum Data for the Week Ending September 12, 2008
U.S. crude oil refinery inputs averaged 13.2 million barrels per day during the
week ending September 12, down 246 thousand barrels per day from the previous
week's average. Refineries operated at 77.4 percent of their operable capacity
last week. Gasoline production fell last week, averaging 8.3 million barrels per
day. Distillate fuel production decreased last week, averaging 3.8 million
barrels per day.
U.S. crude oil imports averaged 8.5 million barrels per day last week, down 71
thousand barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged 9.2 million barrels per day, 1.1 million barrels per
day below the same four-week period last year. Total motor gasoline imports
(including both finished gasoline and gasoline blending components) last week
averaged nearly 1.0 million barrels per day. Distillate fuel imports averaged
131 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 6.3 million barrels from the previous week. At
291.7 million barrels, U.S. crude oil inventories are in the lower half of the
average range for this time of year. Total motor gasoline inventories decreased
by 3.3 million barrels last week, and are below the lower boundary of the
average range. Both finished gasoline inventories and gasoline blending
components inventories decreased last week. Distillate fuel inventories
decreased by 0.9 million barrels, and are in the middle 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 decreased by 11.9 million barrels last week,
and are at the lower boundary of the average range for this time of year.
Total products supplied over the last four-week period has averaged about 19.9
million barrels per day, down by 4.4 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged 9.2 million
barrels per day, down by 2.6 percent from the same period last year. Distillate
fuel demand has averaged 4.0 million barrels per day over the last four weeks,
down by 2.7 percent from the same period last year. Jet fuel demand is 7.6
percent lower over the last four weeks compared to the same four-week period
last year.
You know Maude.. It is the same in real life.. When .. if ever .. have you and I talked and EVER stayed on topic? LOL
hmmmm... I would say .. never. ;)
But that works for us , cause no one else around us can get a word in edge wise.. and we don't care anyway.. ;D ;D
Oct-08 Crude oil closed at $95.90 up $6.01 on the day, Oct-08 Natural Gas closed at $7.73, up $0.631 on the day. I have been hoping that crude and natural gas would continue down as I think that would do alot to help out our current financial problems. The House Energy bill that they passed is a real joke .
How many years do you believe it will take to recover from Bill Clinton?
I don't know...how many years did it take to recover from the Carter administration? It will probably be approximately the same.
Quote from: greatguns on September 17, 2008, 05:29:47 PM
How many years do you believe it will take to recover from Bill Clinton?
Good question Sally. I think if we could get some of our manufacturing and jobs back home from China, India, Japan and other countries and put our people back to work, that would start helping pretty quick. It would help the value of the dollar. it would reduce some of the demand for petroleum by China, Japan , India and others. In addition let's start drilling our oil reserves and Natural gas reserves, expand our research on alternate energy, more mass transit, if we really worked at it I think we could be somewhat energy independent of OPEC and others, in say 10-15 years. The American Consumer should start demanding more goods made in America, we would all have to do without for awhile but if we don't do something we are all going to do without because we can't afford to buy it. We need to cleanout Washington"throw the bums out" and get people in that are there to serve America and the people instead of people there to line there own pockets and collect their own big retirement.
Quote from: greatguns on September 17, 2008, 05:29:47 PM
How many years do you believe it will take to recover from Bill Clinton?
Quote from: frawin on September 17, 2008, 07:05:23 PM
Good question Sally.
Good answer Frank...
But I expect nothing less from you. :)
Oct-08 Crude is trading at $99.50, up $2.34, Oct-08 Natural Gas is trading at $8.235, up $0.325, The EIA Natural Gas Storage Inventory comes out today, it will be interesting to see where the numbers are.
This has gotten buried with all the bad news in the economy, but I thought it indicative of much business that is conducted between lobbyists and government. This all came about last week.
By Tom Doggett
Thu Sep 11, 5:07 PM ET
WASHINGTON (Reuters) - U.S. Interior Secretary Dirk Kempthorne on Thursday said he was "outraged" by department workers who had sex, used drugs and took gifts from employees at regulated oil companies, while one senator called for a Bush administration official to resign over the scandal.
The Interior Department's inspector general issued a scathing report on Wednesday that found "a culture of substance abuse and promiscuity" at the department's Minerals Management Service, whose employees handled billions of dollars in oil and natural gas supplies that were turned over by companies as in-kind royalty payments for drilling on federal lands.
"I am outraged by the immoral behavior, illegal activities, and appalling misconduct of several former and current long-serving career employees in the Minerals Management Service's royalty-in-kind program," Kempthorne said. "We will take swift action to restore the public trust."
Democratic Sen. Bill Nelson of Florida called for the agency's top head, MMS director Randall Luthi, to resign.
In response to the inspector general's report, Luthi had said that "I do not believe Americans have lost financially," but admitted "it is too early to tell" if government workers gave oil companies financial favors at the expense of taxpayers.
In a letter to Kempthorne on Thursday, Nelson asked for all department employees involved in the scandal to be immediately fired and for the secretary to ask Luthi to submit his resignation.
"Besides being a sad commentary on the failures of certain public servants, this case shows us how the oil industry can hold sway over government officials," Nelson said.
Nelson called for hearings into the scandal by the Senate Commerce Committee, on which he serves. The House Resources Committee is planning a hearing on the matter next week.
While not responding directly to the senator's letter, Kempthorne said: "We must and we will eliminate any remaining negative elements in the Minerals Management Service."
In his report, the inspector general said some MMS workers in the royalty-in-kind program took cocaine and marijuana and had "illicit sexual encounters."
Government workers also got drunk at social events with employees of oil companies doing business with the agency and MMS workers had "brief sexual relationships" with industry contacts, the inspector general said.
The oil companies named in the report were Chevron (CVX.N), Shell Oil (RDSa.L), Hess Corp (HES.N) and Gary Williams Energy Corp.
(Reporting by Tom Doggett; editing by Jim Marshall)
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Quote from: frawin on September 17, 2008, 07:05:23 PM
The American Consumer should start demanding more goods made in America
What would Wal-mart sell?
Oh now Sixdogsmom you know that's probably just a democratic conspiracy to make the big guys look bad.
Quote from: frawin on September 18, 2008, 05:42:19 AM
Oct-08 Crude is trading at $99.50, up $2.34, Oct-08 Natural Gas is trading at $8.235, up $0.325, The EIA Natural Gas Storage Inventory comes out today, it will be interesting to see where the numbers are.
whats causing it to jump this time :(
Quote from: sixdogsmom on September 18, 2008, 10:30:40 AM
This has gotten buried with all the bad news in the economy, but I thought it indicative of much business that is conducted between lobbyists and government. This all came about last week.
And this is important how?? Are we now into regulating what people do??
Steve, the dollar is going down in value which pushes crude up. All of our imported crude is purchased in dollars and when the dollar drops against a basket of currencies it takes more dollars to buy a barrel. If we would develop our own reserves this is another problem we would do away with. Besides if we didn't import 70% of our energy needs our dollars value and buying power would go up. Also if we started reducing the amount of clothes, electronics, furniture and other items that we are importing our dollar would go up even more.
Quote from: jprxmkt on September 18, 2008, 11:07:41 AM
Quote from: frawin on September 17, 2008, 07:05:23 PM
The American Consumer should start demanding more goods made in America
What would Wal-mart sell?
Goods made in America, everyone thinks the cheaper prices on all of the goods imported are so great, well they aren't so cheap when you look at the job losses, high energy costs and other associated penalties and problems.
Quote from: frawin on September 18, 2008, 12:29:43 PM
Steve, the dollar is going down in value which pushes crude up. All of our imported crude is purchased in dollars and when the dollar drops . . .
Frank, did I read this somewhere or was I dreaming. . . they sell us oil by our dollar, but they want paid in their dollar
There are lobbyists in every major business and industry and their people in both parties that take gifts, attend parties and other functions with lobbyists. It is no greater in the oil industry on a comaprison basis that in any other industry.
Quote from: srkruzich on September 18, 2008, 12:20:26 PM
Quote from: sixdogsmom on September 18, 2008, 10:30:40 AM
This has gotten buried with all the bad news in the economy, but I thought it indicative of much business that is conducted between lobbyists and government. This all came about last week.
And this is important how?? Are we now into regulating what people do??
These people were breaking the law by accepting goods and favors from the oil companies involved. In turn they accepted certain bids and then lowered the real return that the American people should have received as royalties on the oil removed by these companies from public lands.
Quote from: flo on September 18, 2008, 12:34:44 PM
Quote from: frawin on September 18, 2008, 12:29:43 PM
Steve, the dollar is going down in value which pushes crude up. All of our imported crude is purchased in dollars and when the dollar drops . . .
Frank, did I read this somewhere or was I dreaming. . . they sell us oil by our dollar, but they want paid in their dollar
No, they sell us oil by our dollar value but at the time of the lifting of the cargo or whatever the agreed date is, they compare the value of the dollar to several currencies, the EURO, Yen, Rupee and others that are considered major currencies, and if the dollar is valued less then we pay more if the dollar is valued more then we pay less dollars. Flo, I worked in London alot in the 70s and there were alot of wealthy Arabs staying there and partying there, they had Rolls Royces, Chauffers, and Blonde haired English women with them all of the time, they could spend the dollars and I am sure they are still spending millions there now and they are concerned alot with currency exchange values.
Quote from: sixdogsmom on September 18, 2008, 12:40:38 PM
Quote from: srkruzich on September 18, 2008, 12:20:26 PM
Quote from: sixdogsmom on September 18, 2008, 10:30:40 AM
This has gotten buried with all the bad news in the economy, but I thought it indicative of much business that is conducted between lobbyists and government. This all came about last week.
And this is important how?? Are we now into regulating what people do??
These people were breaking the law by accepting goods and favors from the oil companies involved. In turn they accepted certain bids and then lowered the real return that the American people should have received as royalties on the oil removed by these companies from public lands.
Happens in every industry. I question that the royalties were lowered, in fact I doubt that very much. Believe what you want, but if wasn't for the American Oil and Gas industry we would still be farming with horses. No other nation has had so plentiful supply or cheaper supply than the United States and it was all due to the Oil and Gas industry, in spite of what the liberals and Democrats have tried to do. If we ever become energy independent it will be because of the Oil and Gas Industry and in spite of what the liberals and the dems try to do to stop it.
Liberals and Democrats or communists or socialists had nothing to do with this! This involves greed pure and simple on both sides, the emplyees of the Mineral Management department and the oil companies involved. By appealing to the baser instincts or these few employees they were able to cut a deal and cheat the American people of what was rightfully theirs. This is not a charge that comes out of any campaign, but the result of an investigation by the FBI. Sorry Frank, but the oil industry deserves no more thanks for the development of this country than any other industry, and I refuse to think this should be overlooked.
Quote from: sixdogsmom on September 18, 2008, 12:40:38 PM
These people were breaking the law by accepting goods and favors from the oil companies involved. In turn they accepted certain bids and then lowered the real return that the American people should have received as royalties on the oil removed by these companies from public lands.
Ohh kinda like obama is doing by accepting free haircuts, dinners, parties, favors, and all kinds of graft while being senator huh.
:)
Steve, these folks are public employees with strict guidelines on the gifts they may accept and associations they may have with the oil companys. On the other hand, Senator Obama was the author and sponser of a successful bill that limits perks that can be accepted by members of the senate. This is not a partisan issue, but an instance where some people got caught stealing from you and me on the behalf of the oil companys involved and received gifts of money, cocaine, marijuana, alcohol, and sex. This is a clear cut scandal in the Minerals Management Office in Denver Colorado, and will probably have some repercussions that echo down for awhile. >:( >:(
Conservatives Stay Under The Covers With Big Oil
Read More: Big Oil, Clean Energy, Energy, Offshore Drilling, Oil, Green News
As predicted here last week, House leaders put an "All of the Above" energy bill on the floor.
And conservatives in Congress -- who pretended to support an "All of the Above" energy policy all summer -- rejected it, staying under the covers in bed with Big Oil.
The compromise bill -- which both allows states to lift bans on coastal drilling and repeals handouts to Big Oil so we can invest in clean energy -- passed the House without conservative support. Furthermore, President Bush -- for years the lead whiner demanding more drilling -- threatened to veto the bill.
Why? As the New York Times reports:
Among other objections, House Republicans joined industry in criticizing the measure because it would eliminate about $18 billion in tax breaks for oil companies, including a manufacturing deduction of particular benefit to large firms. The savings from the oil companies would be diverted to pay for tax breaks and incentives for renewable fuels, vehicles that use alternative energy and other fuel efficiency programs and research.
To review, conservatives are rejecting a bill that allows for more coastal drilling and more clean energy -- the exact "All of the Above" approach they claimed they wanted -- because it would take away special favors for Big Oil.
Whatever problems there are with this bill, it has served a useful purpose. It has exposed the lie that conservatives really believe in a comprehensive "All of the Above" energy policy.
Anything that makes Big Oil the least bit unhappy -- making oil companies pay their fair share in taxes, forcing oil companies to compete with clean energy companies, and actually giving us a choice for the energy we buy -- conservatives will fight to the hilt.
And since the conservative minority is large enough to either filibuster a compromise bill in the Senate, or sustain a veto from President Bush, we will remain at the mercy of Big Oil -- and forced to keep buying huge amounts of increasingly expensive oil.
Look out people, I can see it coming now, this person is going to dig up something that says Obama and Biden are going to drill and produce all of the oil we need. You don't have a clue of what it takes to find and develop a big oilfield. And it is obvious you know absolutely nothing about the Capital Markets.
Refilling fuel tanks after Ike to take weeks
Thu Sep 18, 2008 1:47pm EDT
HOUSTON (Reuters) - Oil refiners and producers on Thursday rushed to restore Gulf of Mexico production following Hurricane Ike, but energy traders and analysts warned it will take several more weeks to refill U.S. fuel inventories, increasing the risk of shortages.
At least five refineries were restarting out of 15 shut by Hurricane Ike that hit Texas on Saturday, while two switched off by Hurricane Gustav at the beginning of the month were restarting, as producers flew crews back to platforms across the Gulf of Mexico.
"They (The markets) are factoring in a quick return of refineries and are looking the other way regarding the gasoline situation," said one trader, who asked not to be identified by name. "I think that's a mistake."
Gustav and Ike's one-two punch sent national gasoline inventories to record lows according to statistics released by the U.S. Energy Information Administration on Wednesday, fueling a rebound in U.S. crude oil prices hammered by the dismal U.S. economic outlook as investment banks meltdown in the global credit crunch.
"Total refined products losses may top 80 million barrels," Mark Kellstrom, analyst for Strategic Energy, said in a note.
"The huge hurricane related adjustment in just two weeks has moved comparative inventories to a very low level that was last matched in August of 2003, just prior to a 30-month run-up in (benchmark West Texas Intermediate crude oil) prices," Kellstrom wrote.
On Thursday morning, U.S. crude oil prices have climbed to over $100 a barrel before falling to just below the $97.16-per-barrel level where it finished on Wednesday.
As of Wednesday, 95.9 per cent of the 1.3 million barrels of oil and 82.3 percent of the 7.4 billion cubic feet in natural gas taken daily from the Gulf remained shut, according to the latest information from the U.S. Minerals Management Service.
The Gulf provides a quarter of U.S. oil production and 15 percent of natural gas output.
Hurricane Ike destroys 49 oil platforms in Gulf
By H. JOSEF HEBERT – 13 hours ago
WASHINGTON (AP) — At least 49 offshore oil platforms, all with production of less than 1,000 barrels a day, were destroyed by Hurricane Ike as it raced across the Gulf of Mexico, and some may not be rebuilt, the Interior Department said Thursday.
It said in the latest hurricane damage assessment that the platforms altogether accounted for 13,000 barrels of oil and 84 million cubic feet of natural gas a day. There are more than 3,800 production platforms in the Gulf producing 1.3 million barrels of oil and 7 billion cubic feet of gas each day.
Most remain shut down.
The report by Interior's Minerals Management Service said the agency was conducting helicopter flyovers of the Gulf waters to investigate unconfirmed reports of oil spills and oil sheens, but that it was too early to issue any definitive findings.
"There are no reports of oil impacting the shoreline or affecting birds and wildlife from releases in the Gulf of Mexico federal waters," said the agency.
The agency also said five gas transmission pipeline systems sustained damage, although the extent of damage is not yet known. It earlier had reported four oil drilling rigs had been destroyed and another damaged.
Meanwhile, the Energy Department reported that as of midafternoon Thursday, 12 of 31 refineries in Texas and Louisiana, with a total production capacity of 3 million barrels a day, remained shut down as a result of the hurricane that swept through the region on Sept. 13. A number of the others are operating at reduced runs.
More than 2.3 million electricity customers in six states as far away as Pennsylvania remain without power as a result of the hurricane and its aftermath of heavy rain, said the department. Of those, 1.6 million customers are in Texas.
Other states affected are Louisiana (18,804 customers), Kentucky (167,740), Indiana (36,800), Ohio (488,900) and Pennsylvania (16,730), according to the department.
About 93 percent of the Gulf's crude oil production remains shut down as does 77.6 percent of its natural gas production, said the Minerals Management Service.
The Energy Department said 10 of 39 natural gas processing facilities also were still closed as a result of the Hurricane Ike and Hurricane Gustav which hit two weeks earlier, giving the Gulf's energy infrastructure a glancing blow.
The Gulf region accounts for 25 percent of the country's domestic oil production, or about 1.3 million barrels a day, and 15 percent of its natural gas supplies, or about 7 billion cubic feet of gas a day.
Oct-08 Crude is trading at $100.15, up $2.27, Oct-08 Natural Gas is trading at $7.655, up $0.034.
In the last day of trading for Oct-08 Crude settled at $104.55 up $6.67 on the day, Oct-08 Natural Gas settled at $7.531, down $0.09 on the day.
Ouch. I think we're headed in the wrong direction!
Catwoman, unfortunately you are right, the hurricane knocked out alot of production.
I know that this will probably draw some rebuttal from the Left Wing Liberals, but consider one thing that the left is pushing, "TAX THE OIL AND GAS INDUSTRY MORE" if I say to you I want you to buy more land, buy more and bigger machinery so you can raise more food and cheapen the price to the people, and I am going to raise your taxes so you will have less money to do it with. In addition if you have crop failure, (like drilling a drilling a 10,20, 30 million dollar dryhole) you can't write it off on your taxes. The result will be that you have less and higher food.
Wamp: Our Economy Needs A Real Energy Bill
by Rep. Zach Wamp
posted September 16, 2008
One issue is burning in the American public like no other issue, and that is the cost of energy. While the American people continue to suffer at the gas pump, House Democrats have decided to bring a so called "energy" bill to the floor that does not do enough to increase our domestic supply of energy now. We cannot afford to pick and choose only certain energy sources. An "all of the above" strategy that includes using all American-made energy is what the American people want and need.
By taking advantage of our own domestic energy sources, we decrease our dependence on foreign oil and create jobs here at home in the process. While advances in conservation and renewable energy are making progress, the technology is not yet ready to replace all of the oil and gas that make up a large part of our energy use. That's why it's so important to invest in research and development so this technology becomes more mainstream in the market. In the meantime, we still need new domestic production of oil and gas, if we have any hope of decreasing our dependence on foreign oil. New production from the Outer Continental Shelf (OCS) could help provide relief to millions of American's feeling the crunch of soaring gas prices, while additional energy sources from renewables are coming online.
Currently, 85 percent of America's territorial waters are off limits to energy exploration, but the U.S. Department of the Interior conservatively estimates that these off-limits areas contain at least 19.1 billion barrels of oil. This is the equivalent of about 35 years of current imports from Saudi Arabia. The Democrat energy bill calls for limited offshore drilling, but it permanently locks up vast amounts – about 88 percent – of America's oil and natural gas resources. The limited drilling in the bill doesn't include drilling in Alaska, the eastern Gulf of Mexico or within 50 miles of the coasts. But the majority of the known capacity of oil reserves in the OCS is within 50 miles of our coasts.
Other countries explore their OCS for energy because they view it as an asset, whereas the Democrats in Congress and extreme environmental groups view ours as an environmental hazard. Radical environmentalists, the Natural Resources Defense Council, Sierra Club and the Center for Biological Diversity among others, have filed lawsuits to block every single oil lease issued in this country to tie it up in court and have locked up our energy resources. As recently as February 2008, when 487 oil leases were issued in the Chukchi Sea, off the west side of Alaska, environmental groups challenged all 487 of these leases with a lawsuit.
While the Democrats energy bill does provide for limited leasing and drilling for oil between 50 and 100 miles if coastal states opt-in, it does not include a pivotal revenue-sharing provision to share benefits with the states. Without such a measure, very few states are apt to opt-in. And if extreme environmental groups have already filed lawsuits to block oil leases that have been previously issued, any energy bill without a limited liability provision to prevent future lawsuits on leases or exploration will not actually yield any new oil or gas supply. This means that no real energy exploration will occur.
In addition, the bill has no provisions to cut red tape and increase American refining capacity. The gas spike that occurred because of Hurricane Ike is another reminder that we need to increase our refining capacity in this country.
The Democrat energy bill limits sources of energy at a time when we need expanded sources of energy. As financial markets struggle, the most important thing we can do for an American economy is to pass the American Energy Act. This Republican alternative energy bill would open up all of the oil and gas resources in this country for jobs, productivity, exports and in turn help stand up our economy. The American Energy Act also helps promote renewable energy and energy efficiency by creating a renewable trust fund using revenues generated by exploration in the deep ocean and on the Arctic coastal plain, not at the expense of the American taxpayer.
While President Bush lifted the executive ban on off-shore energy exploration on the OCS earlier this summer, Congress hasn't acted to remove its moratorium that has been in place for more than a quarter of a century, when gasoline cost $1.30 per gallon. But the moratorium expires September 30 if it is not renewed.
Let's lower the cost of energy before it's too late. This is not about politics, it's about the people we represent. We need action and we need it today.
Nov-08 Crude is trading at $106.50, up $3.75 and Oct-08, Natural Gas is trading at $7.550 Up $0.019,
Ughh....looks like the pain train is leaving the station again.
Dan, I am hoping that crude will comeback down some, once the refineries and Gulf Coast area production get back to normal. It will be along time before all of the production is back up but fortunately this is the time of year when we normally drop in gasoline consumption and are not at peak fuel/heating oil production.
Interesting article on crude oil prices. It is obvious that OPEC does and will continue to control world oil prices. If the Democrats stay in power that will only get worse as US production will be hindered by a do nothing congress that wants to tax the industry more. The Democrats gained control pf both houses 2 years ago, look at what oil prices have done in the past 2 years.
Oil Price Is Too High as Slowdown Spreads, IEA Says
By Suttinee Yuvejwattana
Sept. 22 (Bloomberg) -- Crude oil prices are ``too high'' because the economic slowdown is yet to spread to India and China, where subsidies are propping up demand, the International Energy Agency's deputy executive director said.
``When the government gets involved, that makes the market more rigid and more volatile,'' William Ramsay said in Bangkok today.
The IEA, an adviser to 27 nations, on Sept. 10 lowered its 2008 demand forecast as high prices and slowing economic growth trimmed demand for diesel, gasoline and jet fuel. The agency cut this year's forecast by 100,000 barrels to 86.8 million barrels a day and next year's by 140,000 barrels to 87.6 million barrels a day.
``The economic slowdown in the U.S., Europe hasn't gotten into China, India much but at some point you have to presume it will,'' Ramsay said.
The Organization of Petroleum Exporting Countries, the supplier of more than 40 percent of the world's oil, this month also reduced its forecast for 2009 oil demand.
The 13-member group cut its estimate for average oil consumption next year to 87.66 million barrels a day, compared with an estimate last month of 87.80 million barrels, according to a monthly oil market report on Sept. 16. OPEC, based in Vienna, also trimmed its forecast for this year by 120,000 barrels a day.
``Supply has improved a bit since May,'' Ramsay said. ``The market recognized the improvement and oil prices fell from July's high. If you can produce oil for a lot less than $100, why do we have to pay that range?''
Crude oil should be trading between $20 a barrel and $100 a barrel, Ramsay said.
Oil in New York was at $105 a barrel, up 45 cents, at 1:14 p.m. Singapore time. Prices surged to a record $147.27 a barrel on July 11.
Correction it is October-08 Crude that is is trading $13.75 a barrel higher, this is last day of trading for October and all of the refiners are trying to get enough crude for October runs. I would fill up today just to be safe:
Oil Rises More Than $10 on U.S. Bailout Plan, Weaker Dollar
By Mark Shenk
Sept. 22 (Bloomberg) -- Crude oil climbed more than $10 a barrel on speculation that a proposed $700 billion U.S. government rescue plan for the finance industry may bolster the economy and shore up demand.
Oil has risen 26 percent since Sept. 16, the biggest four- day gain since at least June 1998, as lawmakers pledged fast consideration of the Treasury's plan to buy devalued mortgage- related securities. The dollar fell to a three-week low against the euro, increasing the appeal of commodities as a hedge.
``There's a flight to quality and the energy markets are benefiting,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``The dollar is down again and investors are fleeing to commodities. We are back to the cycle that pushed prices to records earlier this year.''
Crude oil for October delivery rose $10.70, or 10 percent, to $115.25 a barrel at 1:39 p.m. on the New York Mercantile Exchange. Futures climbed as much as $11.12 to $115.67 a barrel, the highest since Sept. 2.
``There's positive sentiment in most asset markets,'' said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky. ``The paralysis of financial markets may be ending. The implication is that once the financial markets function, the economy will grow and demand will rise.''
The U.S. currency dropped on concern that the Treasury's plan to buy $700 billion of troubled assets will widen the country's budget deficit. Investors looking to hedge against the dollar's decline earlier this year have helped lead oil, gold, corn and gasoline to records.
Wall Street
``A lot of Wall Street traders are more secure in their jobs this week, which is providing a little extra juice to the relief rally,'' said Tim Evans, an energy analyst with Citi Futures Perspective in New York. ``It's still unclear how much the relief on Wall Street will trickle down and lead to increased demand on Main Street.''
The dollar declined 2.1 percent to $1.4769 per euro, from $1.4466 on Sept. 19. It touched $1.4778, the weakest level since Aug. 29.
Oil fell more than $10 a barrel early last week as the bankruptcy filing of Lehman Brothers Holdings Inc. shocked world equity markets.
Net-Long Positions
Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended Sept. 16, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered long positions by 19,379 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report.
Gasoline for October delivery increased 7.85 cents, or 3 percent, to $2.6782 a gallon in New York. Heating oil rose 14.33 cents, or 5 percent, to $3.0411. Heating oil is heading for the biggest single-session gain since June 6.
Regular gasoline, averaged nationwide, declined 1.8 cents to $3.739 a gallon, AAA, the nation's largest motorist organization, said today on its Web site. Pump prices reached a record $4.114 a gallon on July 17.
Saudi Production
Saudi Arabia, the world's biggest oil exporter, reduced crude-oil supplies to major international oil companies by about 5 percent, compared with the previous month, and cut supply to U.S. refiners, Reuters said, citing industry sources.
The desert kingdom, along with the 12 other members of the Organization of Petroleum Exporting Countries, resolved on Sept. 10 to conform more closely to official quotas by trimming supply.
Brent crude oil for November settlement rose $6.12, or 6.1 percent, to $105.73 a barrel on London's ICE Futures Europe exchange.
Crude oil prices are ``too high'' because the global economic slowdown may spread and cut consumption, the International Energy Agency's deputy executive director said.
``The economic slowdown in the U.S., Europe hasn't gotten into China, India much, but at some point you have to presume it will,'' William Ramsay said in an interview in Bangkok today.
Last Updated: September 22, 2008 13:41 EDT
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In the last day for trading for October-08 Crude it settled at $120.92, up $16.37 on the day, the back months were by $6.00, Oct-08 Natural Gas settled at $7.658, up $0.127 on the day
Nov-08 Crude is trading at $107.50, down $1.87, Oct-08 Natural Gas is trading at $7.665, up $0.007
With the Democrats wanting to raise taxes on the oil and gas industry, and cut tax breaks, more and more companies are reducing their Drilling budgets. Exxon is cutting way back on their Exploration and Drilling budgets. The liberals may get more tax dollars but the American People are going to pay the penalty in less supply and higher prices.
Chesapeake Energy cuts capital budget, production outlook
By Wallace Witkowski
Last update: 4:16 p.m. EDT Sept. 22, 2008
SAN FRANCISCO (MarketWatch) -- Chesapeake Energy Corp. said late Monday it is reducing its drilling capital expenditure budget for the remainder of 2008 until the end of 2010 by $3.2 billion, or by 17%, because of falling natural gas prices. Chesapeake said the cut is in response to a 50% fall in natural gas prices since June 30, and "concerns about the possibility of an emerging U.S. natural gas surplus in advance of increased demand from the U.S. transportation sector." Also, the company reduced its full-year 2008 production growth estimate to 18% from 21%, and its anticipated annual production growth forecasts in 2009 and 2010 to 16% from 19%.
Nov-08 Crude settled at $106.61, down $2.76 on the day, Oct-08 Natural Gas setteld at $7.931, up $0.273 on the day.
Nov-08 Crude is trading at $108.85, up $2.24, Oct-08 Natural Gas is trading at $8.07, up $0.139
Venzuela is one of our bigger suppliers, and they would like nothing more than to cut us off completely. The need for more domestic Cude supply and alterante fuels is getting more critical everyday.
Venezuela, China to Build Refineries, Boost Sales
By Steve Bodzin and Wang Ying
Sept. 24 (Bloomberg) -- Venezuela, the world's fifth- largest oil exporter, and China plan to build refineries and boost oil shipments, said President Hugo Chavez, who is seeking to lessen dependence on the U.S.
The countries will sign agreements that will include building a refinery in block Junin 8 in the Orinoco Belt, South America's biggest oil area, Chavez said today in Beijing in a phone interview with Venezuelan state television. The accords will deepen cooperation between the two countries, he said.
Chavez, who is in China this week in a tour that includes Russia and Cuba, has sought closer ties with U.S. rivals. Earlier this month, Chavez expelled the U.S. ambassador to Caracas and signed an agreement with Russia's OAO Gazprom on offshore projects. China, the world's second-biggest oil user, needs fuel as it economy grows at a double-digit pace.
``China is short of oil and it has to extend cooperation with foreign countries,'' Xia Yishan, a senior research fellow with the China Institute of International Studies, said by phone in Beijing. ``The country will need to increase imports and expand overseas exploration to meet local demand.''
China's growth domestic product expanded 10.1 percent in the second quarter. Last year, its economy grew 11.9 percent, the quickest pace in 13 years. The nation will surpass the U.S. as the world's biggest energy consumer in five years, Jeremy Bentham, vice president of global business environment at Royal Dutch Shell Plc, said on Sept. 16.
Cabruta Refinery
China and Venezuela are continuing work on a previously announced refinery at Cabruta and both governments will sign several agreements later today, Chavez said, without providing details. Cabruta is located at the Latin American country's geographical center.
President Hu Jintao and Chavez will sign the agreement at a welcome ceremony at China's Great Hall of the People in central Beijing.
The two countries had agreed in May to build a refinery in China and create a joint venture to drill for oil in the Junin 4 area, where China National Petroleum Corp. has been quantifying and certifying reserves. Venezuela plans to export 1 million barrels of oil a day to China by 2011 or 2012, Chavez said then.
Trade between the nations will exceed $8 billion this year and Venezuela is currently shipping 331,000 barrels a day of oil and oil products to PetroChina Co., China's biggest oil company, said Chavez.
U.S. Sales
Bilateral trade in the first seven months reached $6.23 billion, compared with $5.9 billion for all of 2007, Foreign Ministry spokeswoman Jiang Yu said yesterday.
The Latin American nation supplies 4 percent of China's total oil imports, Jiang said.
Chavez, who took office in 1999, has repeatedly threatened to cut off oil sales to the U.S., alleging its government has attempted to assassinate or overthrow him. The U.S. buys about two-thirds of Venezuela's daily exports of 2 million barrels.
``China-Venezuela relations are normal state-to-state relations, not based on ideology, and are not targeted against any third party,'' said Jiang.
-- .
In my opinion, of lot of the cutbacks in spending by the industry is due to the rhetoric coming out of Obama and the Democrats, threats of higher taxes, reducing tax incentives and the Democrats philosyphy of taking more control of business.
Chesapeake sees other companies cutting gas spending
Tue Sep 23, 2008 12:15pm EDT
NEW YORK, Sept 23 (Reuters) - Chesapeake Energy Co (CHK.N: Quote, Profile, Research, Stock Buzz), which has cut its spending on natural gas well drilling, expects other energy producers to begin reducing exploration spending in coming months.
"While we may be the first, we will certainly not be the last," Chief Executive Aubrey McClendon said during a conference call on Tuesday.
On Monday, Chesapeake, which says it is now the largest U.S. natural gas producer, announced it had cut its capital expenditure for drilling 17 percent through 2010, trimming its forecast for gas production growth.
Natural gas producers had ramped up exploration and production activities during the first half of the year, when natural gas futures NGc1 prices nearly doubled, reaching a peak at $13.69 per thousand British thermal units in early July.
Since then, natural gas futures have slipped more than 40 percent to trade at about $8. When that price goes below $7.50, production at many wells becomes uneconomical, McClendon said.
"If those prices stay out there for very long the industry will have to restrict its capital expenditures," he said.
The number of rigs drilling natural gas is likely to drop by 200 to 400 in the coming six months as companies pare back spending on rigs that were hired when gas prices were rising, he added.
A total of 2,018 rigs were drilling for oil and gas in the United States, oilfield services company Baker Hughes said in its most recent weekly report.
Chesapeake's shares were flat at $40.89 on Tuesday on the New York Stock Exchange, outperforming the Standard & Poor's Energy index , which was down 1.2 percent
Nov-08 Crude Oil settled at $105.73, down $0.88 on the day, Oct-08 Natural Gas settled at $7.679, down $0.252 on the day.
More reason we need to get started drilling now in the OCS and ANWR. We need to get a Gas Pipeline from the North Slope to the lower 48 states. There is so much that can be done but with the Democrats in control of both houses, it is an uphill battle.
Russia Seeks Greater Control on Crude Prices (Update1)
By Lyubov Pronina
Sept. 25 (Bloomberg) -- Russia, the world's largest energy supplier, wants greater control over oil prices as it seeks a stronger say in the global economy, Energy Minister Sergei Shmatko said.
The Energy Ministry is working on a set of measures, including the development of ``reserve'' fields that can be used to increase or decrease national oil output quickly, and will present them to members of the Organization of Petroleum Exporting Countries at a meeting in Algeria in December, Shmatko said today.
``There has to be a Russian factor'' in determining world oil prices, ``and maybe not just one,'' Shmatko told reporters in Petropavlovsk-Kamchatsky, the capital of the Far East Kamchatka region. Shmatko is traveling with President Dmitry Medvedev on a weeklong tour of remote regions to assess their economic potential.
Oil production in Russia, the largest exporter of the fuel after Saudi Arabia, is declining for the first time in a decade as companies struggle with costs and maturing fields. The government is granting tax breaks to producers to encourage development of fields in remote regions.
At the same time, price volatility is making it harder for companies to plan capital expenditures for expansion. The price of Urals crude, Russia's main export blend, has fallen 30 percent since July 4, when it reached a record high of $142.94 a barrel.
With such ``rollercoaster'' swings, Russia must take measures to better influence price performance, including some that ``may be unexpected,'' Shmatko said.
Medvedev sent Deputy Prime Minister Igor Sechin to OPEC's meeting in Vienna on Sept. 10 to forge closer ties with the producer group and offer to sign a memorandum of understanding. Sechin, who is also chairman of OAO Rosneft, the country's biggest oil producer, said at the time that ``extensive cooperation with OPEC is one of Russia's priorities.''
OPEC's Secretary General Abdalla el-Badri on Sept. 10 said he would further discuss details of the memorandum suggested by Russia at a petroleum conference that he would attend in Moscow on Oct. 22.
Russia has been an observer at OPEC meetings for 10 years. The organization controls more than 40 percent of the world's oil supply. Its membership will drop to 12 from 13 in 2009 after Indonesia decided to quit the group because it became a net oil importer.
Nov-08 Crude is trading at $104.70, down $1.03 and Oct-08 Natural Gas is trading at $7.65, down $0.029
Nov-08 crude settled at $108.02, up $2.29 on the day the back months were up in the $2.50 range as well. Oct-08 Natural Gas settled at $7.724 , up $0.045 on the day.
Crude Oil Declines on Concern U.S. Bailout Plan May Be Delayed
By Grant Smith and Christian Schmollinger
Sept. 26 (Bloomberg) -- Crude oil fell after a Congressional plan to rescue the financial industry was delayed, adding to concern that economic growth in the world's biggest energy consumer is under threat.
Negotiations on the $700 billion rescue of the U.S. financial system stalled as House Republicans rejected the plan and left it to congressional leaders to hammer out a compromise to calm markets. Average consumption of U.S. oil products for the past four weeks was down 6.6 percent from last year, the Energy Department said Sept. 24.
``This bailout package is very much needed to prevent a bigger credit crunch and economic deterioration,'' said Jochen Hitzfeld, an analyst at UniCredit Markets & Investment Banking in Munich. ``If it's thrown out the window we'll see a much bigger fall in oil prices.''
Crude oil for November delivery fell as much as $3.77, or 3.5 percent, to $104.25 a barrel in electronic trading on the New York Mercantile Exchange. It was at $105.38 a barrel at 11:44 a.m. London time.
Total SA, Europe's third-largest oil company, restored power to its Port Arthur refinery in Texas following Hurricane Ike and plans to restart the plant, the Houston Chronicle reported. About 41 percent of oil production in the Gulf of Mexico remains shut following this summer's storms, the Minerals Managements Service said.
Gasoline Demand
Prices may extend their 28 percent decline from the July 11 record of $147.27 a barrel next week, according to a Bloomberg survey. Fourteen of 29 analysts surveyed by Bloomberg News, or 48 percent, said prices will decrease through Oct. 3.
Oil is headed for a 0.8 percent weekly increase despite having posted a record one-day gain on Sept. 22, when investors rushed to cover short positions before the October contract's expiry. The financial crisis and plans for its solution have since kept prices within a $4 range.
Sales of new homes in the U.S. fell in August to a 17-year low, Commerce Department data showed yesterday, while orders for U.S. durable goods declined more than twice as much as forecast.
Gasoline demand averaged 9 million barrels a day in the past four weeks, down 3.4 percent from the same period last year, the Energy Department report showed. Gasoline inventories dropped 5.9 million barrels to 178.7 million barrels, the lowest since 1967. Supply levels prior to 1990 were reported on a monthly basis.
Brent crude oil for November settlement fell as much as $3.40, or 3.2 percent, to $101.20 a barrel on London's ICE Futures Europe exchange. It was at $102.25 a barrel at 10:21 a.m. London time.
OPEC continues to export large volumes of oil as it may take time for the group to cut back output to its quota.
OPEC's daily shipments of oil will increase 2.2 percent in the four weeks to Oct. 11, according to data from industry consultant Oil Movements released yesterday.
The Organization of Petroleum Exporting Countries will load 24.75 million barrels a day in the period, compared with 24.21 million barrels a day shipped in the four weeks ended Sept. 13, the Halifax, England-based consultant said.
Last Updated: September 26, 2008 07:03 EDT
Nov-08 Crude is trading at $105.325, down $2.695, Nov-08 Natural Gas is Trading at $7.85, down $0.081.
Interesting article and if you believe in what Boone says, then we need to get started drilling our reserves now. It is just a matter of time before our enemies, Russia, Iran Venzuela, and others cut us off in hopes of destroying us. The high cost of energy is one of the big reasons our economy has deteriorated so much in the past 2-3 years.
Pickens' natural gas nation
DAVID PARKINSON
Globe and Mail Update
September 25, 2008 at 9:45 PM EDT
T. Boone Pickens, the 80-year-old oilman-turned-hedge-fund-manager, has already promised to pay $60-million (U.S.) of his own money to push his vision to reduce U.S. dependence on foreign oil. Now he is convinced he has worked up a way to drive the message home in Washington, with a burgeoning grassroots lobby force he calls his army.
The Texas billionaire says he has dropped a billion in the recent turmoil, but the recent painful pullback in oil prices has not shaken his conviction as a long-term energy bull, or his belief that the largest economy in the world has to source more of its energy needs at home.
As the U.S. presidential election heats up, he's taken on the issue as a personal crusade with his Pickens Plan for a new U.S. national energy policy, accompanied by a new book and a grassroots lobby push. Drawing on supporters, he is talking tough about using his influence on the White House.
He has tossed the next president a 100-day deadline to get a comprehensive energy plan together after inauguration.
His plan calls for large-scale development of wind and solar power, but its cornerstone remains a twist on a tried-and-true fossil fuel unlocking the ample supplies of natural gas that are contained in shale deposits throughout the United States, and converting U.S. drivers to this cheaper, cleaner-burning and domestic-sourced energy supply.
His push for leaders to embrace the Pickens Plan has been gaining momentum through the same medium that helped propel Democratic candidate Barack Obama's presidential campaign: the Internet. Through his website, pickensplan.com, he has signed up 450,000 public supporters, who are being enlisted to turn up the heat on lawmakers and candidates through letter and e-mail campaigns.
We call them my army, Mr. Pickens, 80, told The Globe and Mail.
We're leaning pretty hard on those two [presidential] candidates now they have to have an energy plan by the time we vote in November. To date, they have no energy plan. They talk about some things, but they don't have a plan.
I think we're going to have enough grassroots to push that through in the first hundred days you don't want to let it go beyond that, he said. We'll step up the pressure.
Despite being a long-time Republican supporter he was a major campaign contributor to President George W. Bush Mr. Pickens insisted his Pickens Plan is a non-partisan effort, and he has met with both Mr. Obama and Republican candidate John McCain to discuss it. But he suggested yesterday that he would be willing to throw his support behind whichever candidate was willing to embrace his plan.
If one accepted the plan and one didn't, it would be hard to say I'm still non-partisan, he said.
Mr. Pickens said that with 70 per cent of U.S. oil supplies coming from foreign sources, the tab for Americans is $700-billion (U.S.) a year at this summer's prices. And he believes that despite recent pullbacks, the price of oil is ultimately headed higher.
In my mind, there's very little doubt we'll be back at $150 a barrel within a year from now, he said. In 10 years, oil will be $300 a barrel. If that's going to be the case, you're going to go from $700-billion to $1.5-trillion or $2-trillion. It'll break us.
In that light, he said, people will increasingly support domestic supply solutions over the costly outflow of American dollars into foreign hands.
It's going to be a patriotic issue, he said. Over time, you're not going to want to say you're still driving on foreign gasoline.
Mr. Pickens is quick to clarify, though, that he doesn't consider Canada a foreign oil and gas source.
It's considered North America we're all one big happy family.
In fact, he has urged Washington to make a deal with Canada to secure access to the rich oil sands even if it means giving some ground to Canada on other trade issues.
I have said to the President on several occasions that you need to work out something with the Canadians on the oil sands, he said. I know the Canadians want something from us. I'd make a deal.
I definitely believe natural gas is the only way to go right now. Its the only viable alternative that currently exists. Electric cars will never be good until they are able to make a high capacity, long lasting battery which still seems to be far off. Hydrogen fuel cell seems to be promising... but... we already have a very good network for natural gas. Almost every home even has it and it shouldn't be difficult at all for filling stations to get natural gas pumps.
The only downside is simply converting the fuel system in cars will net you less power and fuel economy but, natural gas is definitely cheaper and off hand I bet the drop in fuel economy isn't actually enough to make natural gas "more expensive". Of course you get the cleaner emissions as well but another awesome benefit is how cleanly in burns inside the engine (which goes along the clean emissions of course). If you've ever changed or even just checked the oil in your car, and you have a somewhat older vehicle, you've probably noticed the oil is rather dirty and sometimes even completely black. With natural gas that won't happen, at least not for a huge amount of miles well past when the oil has broke down. Its simply cleaner in your engine and will likely even make your engine last longer. It would simply be an excellent alternative... no, replacement. ;D
Mark, One of the Groups I worked for in Midland, Texas was Pickens' partners on some of the takeover attempts, . The group i worked for had a lot of gas production and also had some Gas plants of their own, they put in CNG filling stations for vehicles at all of their plants. Many of the pumpers in the areas of these plants had their vehicles fitted for CNG and stopped and filled at the plants. The group I worked for at the time started this program 15 + years ago. They were also working on a home CNG fillup system whereby you could fill your vehicles at home, it was a small compressor system. The home fill system was never widely accepted, but it maybe a possibility now.One of the things I remember about CNG fuel for vehicles was that people were afraid of it because they didn't understand it. CNG does have great possibilities. Anything and everything we do is going to take 10 years minimum to really have a big impact on our energy/fuel needs. It is obvious that the Democrats intend to hobble the oil and gas industry which will only delay our energy independence longer.
Well... the home filling units still have some work. The current popular home units called Phill, by FuelMaker, fill the tanks at a rate of 1.2 gge (gasoline gallon equivalent) per hour, and that's the highest rated one. That's the equivalent of 1.2 gallons of gas per hour. The slowest model fills at a rate of .9 gge per hour but will fill the tanks to their 3,600 PSI rated capacity meaning a full tank. The others go to 3,000 PSI.
They do make multi-compressor units that fill at a much faster rate but are more designed for companies that have multiple CNG powered vehicles. The fastest fills at a rate of 4.9 gge and the unit that fills to the max rated pressure fills at 3.7 gge.
So, take that CNG Honda Civic for example where it has an 8 gge tank. It would literally take nearly 8 hours to fill it up with a home unit and still nearly 2 hours with the larger units, from empty. Now a filling station would only take about 2 minutes to fill an 8 gge tank so once all of the stations were converted that wouldn't be much of an issue at all.
As far as the fear of CNG, I've seen a lot of people afraid that it could blow up. What's funny is gasoline is just as flammable, actually more so than CNG really. What's awesome about CNG is that if the tank were to break or be punctured it is a gas so would escape as a gas and is lighter than air as well. It would quickly dissipate into the air instead of pooling like gasoline would. Propane on the other hand is heavier than air so would pool down but being in gas form would likely dissipate rather quickly as well.
Just got all of my October business finished. Nov-08 Crude settled at $106.89 down $1.13 on the day, Oct-08 natural Gas settled at $7.742, down $0.252 on the day, today was the last day for October futures to trade.
President Regan said the closest thing to eternal life is a government program and this is a perfect example.
What was the reason given for developing the Department of Energy during the Carter administration?
We have spent multi-billions of dollars in support of this agency and I will bet not one person
who reads this will remember the reason given.
It was very simple.
"THE DEPARTMENT OF ENERGY WAS INSTITUTED TO LESSEN OUR DEPENDENCE ON FOREIGN OIL."
NOTE:
IN 2008, THE BUDGET FOR THIS DEPARTMENT IS NOW AT $24.2 BILLION A YEAR.
THEY HAVE 16,000 FEDERAL EMPLOYEES AND APPROXIMATELY 100,000 CONTRACT EMPLOYEES.
Nov-08 Crude is trading at $103.60, down $3.29, Nov-08 Natural Gas is trading at $7.45, down $0.178.
Nov-08 Crude is trading at $101.51, down $5.38, Nov-08 Natural Gas is trading at $7.19, down, $0.438.
Have you all been watching all the red "down" arrows on the stock market today? The world is dumping us. Way to go congress! >:( >:( >:( Even oil is dropping.
Nov-08 Crude oil settled at $97.37, down $10.52 on the day. Nov-08 Natural Gas settled at $7.221, down $0.407 on the day. If crude continues to fall it will be interesting to see what the worlds crude oil Exporters do.
Nov-08 Crude is trading at $98.225, up $1.85, Nov-08 Natural Gas is trading at $7.28, up $0.059.
The NYMEX trading in the Energy Sector is pretty thin, Nov-08 Crude is trading at $97.80, up $1.43, Nov-08 Natural Gas is trading at $7.34, up $0.119. there is very little activity in the back months. I think the Oil and Gas industry is taking a wait and see attitude in regard to where we go with the Bailout plan and what happens in the upcoming election. I think if Obama is elected and the Democrats maintain control of Both Houses of Congress that the Oil and Gas Industry could very well reduce drilling and exploration.
Saw on the news last night that Wichita has the cheapest gas in the nation... $3.17 last night. Last time it was that cheap was mid-April.
Also, maybe the stock market drop will be a wake-up call to those congressmen/women to get their butts in gear. I'm betting they have more money invested in the stock market than I do.
Nov-08 Crude settled at $100.64, up $4.27 on the day, Nov-08 Natural Gas settled at $7.438, up $0.217 on the day.
Nov-08 Crude is trading at $100.975, up $0.335, Nov-08 Natural Gas is trading at $7.50, up $0.062.
Note in this article, Europe is also having bank Failures, the high cost of energy is taking it's toll on all of the energy consuming nations. Our economic problems are directly tied to the high cost of energy.
Oil Falls Below $100 on Speculation Recession May Curb Demand
By Alexander Kwiatkowski
Oct. 1 (Bloomberg) -- Crude oil fell below $100 on speculation the U.S. economy will fall into recession, curbing fuel demand in the world's biggest gasoline consumer.
Crude fell on concern that credit-related bank failures in the U.S. and Europe will trigger a global recession. An Energy Department report later today will probably show U.S. crude inventories rose, the first increase in six weeks.
``With economic growth faltering in a number of countries, we have to assume that energy demand will be adversely impacted,'' said Edward Meir, analyst at MF Global Ltd. in Connecticut. ``Oil prices should be below last year's levels of $80 a barrel as the current picture looks far worse than it did at this time last year.''
Crude oil for November delivery dropped as much as $1.78, or 1.8 percent, to $98.86 on the New York Mercantile Exchange. It traded at $99.20 at 1:43 p.m. London time. It earlier gained as much as 2.2 percent to $102.84.
Futures fell 28 percent in the third quarter, the largest drop since 1991. Oil slumped $10.52, or 9.8 percent, to $96.37 a barrel, on Sept. 29, the most in percentage terms since Nov. 15, 2001, as the Standard & Poor's index of 500 stocks tumbled the most since the 1987 crash.
A week earlier, prices jumped a record 16 percent. Such swings have increased volatility to its highest since the first Gulf War in 1991.
Crude inventories are expected to rise 2.75 million barrels from 290.1 million barrels a week earlier, according to the median of 13 analyst estimates before an Energy Department report today.
Brent crude oil for November settlement fell as much as $1.84, or 1.8 percent, to $96.36 a barrel on London's ICE Futures Europe exchange. It was at $96.55 at 1:26 p.m. London time.
Last Updated: October 1, 2008 08:44 EDT
Nov-08 Crude is trading at $99.05, down $1.59 and Nov-08 Natural Gas is trading at $7.495, up $0.057. Crude and product inventories come out today. The market is expecting a build due to reduced demand.
We filled Al's Honda today at $3.27.9. ... not as good as Wichita, but pretty good for here.
Nov-08 Crude settled at $98.53, down $2.11 on the day, Nov-08 Natural Gas settled at $7.728, up $0.290 on the day.
Quote from: Diane Amberg on October 01, 2008, 01:27:52 PM
We filled Al's Honda today at $3.27.9. ... not as good as Wichita, but pretty good for here.
Gas at conoco in augusta is 3.08 a gallon.
Y'all are lucky... here in Atlanta, Georgia, it would be about $4.00 a gallon, IF you could find it. Most people that I know are saying that they are going to about 10 or 11 gas stations before they finally find some... and then they have to wait in line for more than an hour. Oh, once again I am so thankful for my hybrid.
I heard on CNN this morning that the cheapest gas in the nation was in Topeka, KS @$2.99 a gallon
JO
One of the gas price web sites says that regular sold in Longton at 3.79 last Saturday and at 3.29 today in Severy.
The latest edition of the AARP Bulletin has a story which says that oil was selling at the 2006 equivalent of $500 per barrel shortly after the first oil well began producing in 1859.
Waldo, when the East Texas field came on big in the early 1930s crude was 10cents a barrel.
Nov-08 Crude is trading at $97.60, down $0.93, Nov-08 Natural Gas is trading at $7.68, down $0.048.
Oil Falls a Second Day on Stronger Dollar, Lower U.S. Fuel Use
By Grant Smith
Oct. 2 (Bloomberg) -- Oil fell for a second day as the dollar reached a one-year high against the euro and U.S. fuel demand dropped to the lowest since the last recession.
Crude dropped after Senate approval of a revised bank rescue proposal yesterday bolstered the U.S. currency, dimming the appeal of commodities often used to hedge against a weaker dollar. U.S. fuel use over the past four weeks averaged 19 million barrels a day, the lowest since October 2001, according to Energy Department data.
``Oil should continue its downward slide today as some eyes track the U.S. dollar's strengthening against its European counterparts,'' said Rob Laughlin, senior broker at MF Global Ltd. in London. ``Traders are reflecting on yesterday's negative inventory data showing further decline in end-user demand.''
Crude oil for November delivery fell as much as $2.51, or 2.6 percent, to $96.02 a barrel time in electronic trading on the New York Mercantile Exchange. It was at $97.55 a barrel at 11:10 a.m. London time.
Oil has fallen 35 percent since reaching a record $147.27 in July on concern the global financial crisis will spread through the economy, sapping energy demand. U.S. manufacturing contracted last month at the fastest pace since 2001 as new auto sales plunged 27 percent.
Prices may fall as low as $50 a barrel next year in the event of a ``global recession,'' Merrill Lynch & Co. said in a report today. Such an occurrence is still ``unlikely,'' Merrill said, while reducing its 2009 oil forecast by 16 percent to $90 a barrel.
Consumption Falls
U.S. oil use is declining faster than expected, while European consumption is falling ``rapidly,'' and production capacity among the Organization of Petroleum Exporting Countries is ``just about to soar,'' Merrill said.
Yesterday, the contract dropped $2.11, or 2.1 percent, to settle at $98.53 a barrel after an Energy Department report, which showed crude inventories rose more than forecast last week. Stockpiles climbed 4.28 million barrels to 294.5 million.
The House of Representatives may take vote on the rescue package tomorrow, said Brendan Daly, a spokesman for House Speaker Nancy Pelosi.
The dollar advanced to $1.3918 per euro at 10:56 a.m. in London, from $1.4009 late yesterday in New York. It touched $1.3882 three weeks ago, the strongest since Sept. 18, 2007.
Brent crude oil for November settlement fell as much as $2.80, or 2.9 percent, to $92.53 a barrel, on London's ICE Futures Europe exchange. The contract was at $94.10 a barrel at 11:10 a.m. London time.
Nov-08 Crude is trading at $94.50, down $4.03, Nov-08 Natural Gas is trading at $7.46 down $0.268.
Sorry, I have been out this afternoon. Nov-08 Crude settled at $93.97, down $4.56 on the day, Nov-08 Natural Gas settled at $7.481, down $0.247 on the day.
I attended a meeting in Wichita yesterday and decided it would be a good idea to purchase gas while I was there. When I left town, P-J's was $3.49 for the cheap stuff. Down the road at Conoco, it was $3.29. When I got into Andover it was $3.19, and also in Wichita. After the meeting, I went to Dillons for some groceries (apologies to Batson's, but it was stuff I can only get at Dillons) and decided to use my 10 cents off deal at the gas station there. So I paid $3.07 a gallon, and wasn't the only one....talk about a line of cars there! Then on the return trip, I noticed gas had dropped to $3.08 in both Andover and Augusta, but was still $3.49 at P-J's in Howard. I do know the reasons, but it's still pretty hard to swallow.
Nov-08 Crude is trading at $94.20, up $0.23, Nov-08 Natural Gas is trading at $7.44 down $0.041.
Falling Oil Price Is a Positive Note Amid Turmoil
By JAD MOUAWAD
For the last year, rising oil prices have taken a toll on the economy, driving up gasoline and food costs, punishing airlines and automakers, and ripping a large hole in people's pockets.
But lately, nearly lost amid the chaos in the markets, oil prices have been dropping sharply from July's triple-digit peak. If that trend continues, as many analysts expect, it will put billions of dollars back into consumers' wallets and provide badly needed support for a battered economy.
Ben S. Bernanke, the chairman of the Federal Reserve, pointed to the drop in energy prices as "a positive note" in recent testimony to Congress, even as he warned of the many other stresses facing the economy.
Oil has been volatile in recent weeks, bobbing from $91 to $120 a barrel amid wild swings in the markets.
But with oil demand falling in most Western countries and growth weakening in some of AsiaR17;s booming economies, the trend is down. Crude oil futures closed at $93.97 a barrel, down $4.56, on Thursday and have lost 13 percent in the last week alone.
While consumers welcome the decline, which will reduce the nation's $1.3 billion daily oil import bill, oil producers are wary. Mexico said it might have to cut its budget next year as petroleum revenue dropped. Countries like Russia and Venezuela, which have been riding a wave of energy-fueled nationalism, could be forced to scale back their ambitions and energy projects that require enormous financing could be delayed.
These difficulties could prompt the Organization of the Petroleum Exporting Countries to step in forcefully to stem the slide in prices, analysts said. Saudi Arabia, the oil cartel's most powerful member, has signaled it wants to see oil fall below $100 to bolster the world economy, but it is unclear how low the Saudis and other producers will let prices fall.
Whatever OPEC tries to do, a growing number of experts say that a combination of weaker global growth and slumping demand is likely to keep pushing oil prices down in coming months.
R20;The fall in oil prices is equivalent to a new stimulus package for consumers," said Lawrence J. Goldstein, an energy analyst at the Energy Policy Research Foundation. He calculated that each drop of $10 a barrel in the price of oil lowered the nation's annual bill by about $70 billion. That is $230 for every American.
Gasoline now sells at $3.60 a gallon on average nationwide, according to AAA, down from its record of $4.11 a gallon in July, although prices are higher in some states because of lingering problems from Hurricane Ike. Experts say that if oil prices stayed from $75 to $100 a barrel for a while, that would likely push gasoline under $3.50 a gallon.
A result of record energy costs is that Americans have drastically cut back on their driving this year, reducing their gasoline usage at the fastest pace since 1983.
As prices peaked, oil consumption fell by 6 percent in July to its lowest level in five years, while the number of miles driven dropped the most since 1979, according the latest statistics from the Federal Highway Administration. For industrialized countries, which account for about 60 percent of global oil demand, consumption could fall by 1.3 million barrels a day this year, the steepest decline since 1982, according to analysts at Bernstein Research. That would more than offset the growth in consumption from developing nations like China, the analysts said.
R20;A study of the 1980s reaffirms our pessimism about oil demand in 2008 and 2009," the Bernstein analysts said in a recent research note. "Recent data suggests we may finally be reaching the point of negative demand."
Many analysts agree. Merrill Lynch said on Thursday that oil prices could fall as low as $50 a barrel in a global recession. Lawrence Eagles, an oil analyst for JPMorgan Chase, said: "This is the weakest fundamental situation we've had since 2002."
Oil prices are still high by historical standards. Many businesses had not managed to raise their prices enough to compensate for this summer's oil spike to more than $145 a barrel, and they say the high prices are still causing problems.
R20;We get excited when prices break below $100 a barrel, but we are still in a high feedstock and hydrocarbon environment," said Rich Wells, the vice president for energy at Dow Chemical.
Automakers have appealed for government aid as consumers shun their gas guzzlers, a problem worsened lately by a credit squeeze for potential car buyers. The Ford Motor Company said this week that its United States sales had dropped 34 percent in September. Automakers like General Motors and Toyota, also reported sharp sales declines.
Oil costs are a big reason the global airline industry has lost money in all but one year since 2000. Fuel costs amounted to 14 percent of airlines' expenses in 2000 but are forecast to reach 40 percent next year, the International Air Transport Association says.
R20;Our industry is like Sisyphus,R21; Giovanni Bisignani, IATA's chairman, told an industry conference in Istanbul this summer. "After a long uphill journey, a giant boulder of bad news is driving us back down."
A sustained drop in oil prices could lead to a new wave of mergers in the energy industry. Given the sharp increase in prices in recent years for everything from drill rigs to steel pipes, costs in the industry have risen sharply. The cost of adding production is now $70 to $90 a barrel, according to JPMorgan and other analysts.
Any drop below that range may curb investment in new oil supplies. Already, some producers are feeling the pinch. Petro-Canada, for example, signaled recently that the cost of developing oil sands in Canada would not be economical below $100 a barrel.
R20;Prices are still searching for true value and no one is quite sure what that is," said Tom Bentz, an energy analyst at BNP Paribas in New York. "A lot will depend on how the global economic picture will shape up. We still have a world that is a scary place to live in."
I had to go to town today and gas was 2.99!! in a couple of places, most of the others it was like 3.05
Nov-08 Crude is trading at $89.85, down $4.03, Nov-08 Natural Gas is trading at $7.20 down $0.158.
Oil Falls Below $90 for 1st Time in 8 Months on Demand Concern
By Grant Smith
Oct. 6 (Bloomberg) -- Crude oil fell below $90 a barrel in New York for the first time since February as the credit crisis deepened in Europe, adding to concerns that global economic growth will slow and reduce demand for fuels.
Oil dropped as much as 5.1 percent as European leaders pledged to bail out troubled banks and protect depositors. World markets are oversupplied, Iranian Oil Minister Gholamhossein Nozari said on Oct. 4, and Saudi Aramco, the world's largest state oil company, cut its official selling prices for exports to Asia and the U.S.
``With the stream of economic distress signals continuing unabated the oil market is betting that demand will really suffer,'' said Christopher Bellew, a senior broker at Bache Commodities Ltd. ``A further push towards $85 is looking highly likely in these feverish conditions.''
Crude oil for November delivery fell as much as $4.81 to $89.07 a barrel in electronic trading on the New York Mercantile Exchange. That's the lowest since Feb. 8. It was at $90.43 at 10:56 a.m. in London.
Futures have fallen 39 percent from the record $147.27 reached on July 11.
New York oil prices declined 12 percent last week as reports showed U.S. fuel demand the previous four weeks was the lowest in almost seven years and manufacturing shrank in September at the fastest pace since the last recession in 2001. The country's Labor Department reported a bigger-than-expected 159,000 drop in payrolls in September last week.
`Vicious'
``It is doubtful that the vicious downward decline we are seeing in most markets will end any time soon, even if credit markets start to thaw out,'' said Edward Meir, an analyst at MF Global Ltd. in Connecticut. ``In crude's case, we are still staggered by the fact that prices are well above where they were at this time last year, and so would not be surprised to see much sharper falls.''
The U.S. may fall into a recession, the International Monetary Fund said on Oct. 2 in its most pessimistic outlook for the world's largest economy since the credit crisis began last year.
Saudi Aramco trimmed the price of its Arab Extra Light crude by 30 cents to a discount of $3.40 a barrel below the West Texas Intermediate benchmark, the Dhahran, Saudi Arabia-based producer said yesterday in a faxed statement. The company also cut the price of its Arab Light grade.
The dollar rose to a 13-month high against a basket of currencies, reducing the investment appeal of dollar-denominated commodities. The euro fell as low as $1.3618 from $1.3772 in late New York trading last week, after Germany said it will guarantee personal bank deposits in a bid to stabilize the nation's banking system.
Brent crude oil for November settlement declined as much as $4.69, or 5.2 percent, to $85.56 a barrel on London's ICE Futures Europe exchange, and traded at $86.79 at 10:40 a.m. London time.
Last Updated: October 6, 2008 06:00 EDT
I actually saw $2.99/gal gas today!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Let's hope and pray it continues to fall!!!!!!!!!!!!!!!!!!
Just got back from gettin gas for my truck, it was 2.85! Way out here!
I have read some really low bottom numbers Frank, somewhere in the 60-65 range. What is your feeling?
Our gas today was still in the 3.30 to 3.40 range with one station asking 3.99.
Hi Dan, good question, if you look at the NYMEX all the way out to 2015, it is really a wild set of numbers. There is everything from $136.00 down to $70.00. I will make a really far out prediction, that we could see $50.00 oil. Having said that I want add that it depends on when how much worldwide consumption stops falling and/or goes up and/or levels out and how soon the world economies level out and/or start improve. OPEC is very smart and they know that they have pushed the price over into the level that will destroy the world economies. They also know that they may not be able to depend on the Democrats to stop drilling in the major reserve areas in the US and they sure do not want us to have increased production and reduced dependence on them. Also thay can see that the price has started a big push to find alternate renewable sources of energy and smaller more efficent cars . My greatest concern is that if we have really low oil prices the world will go right back to their wasteful ways. I saw it after the embargo ended in the early 80s, people forgot very quick and went back to their wasteful ways.
Dan, if we have $50.00 to $70.00 oil it is going to stop a lot of drilling in the US, at least until Pipe, Tubing, Drilling Costs and completion costs come back down. With the drilling boom on and inflation due to high oil prices, we need $80.00 to $90.00 dollar oil to justify the deep expensive projects. I probably said more than you wanted to hear but I am seeing more and more operators tell me they are curtailing projects both due to costs verses price and the fear of an unfriendly tax climate if the Democrats maintain control.
Waldo, I saw $2.99 Regular last night and that is with no ethanol.
No Frank, that was perfect. I had read that Japan's August oil usage was down 8% from August 07, which is pointing toward a world wide slowdown, not just US. I know what you mean about the costs of everything from pipe to drilling operators being high. Seems it always takes much longer for those things to come down in cost. I hope the price does come down, but hope we have learned a valuable lesson in the direction our energy programs need to be headed!
Nov-08 Crude settled at $87.81, down $6.07 on the day, the back months were down $5.00 and change all the way out, Nov-08 Natural Gas settled at $6.835, down $0.523 on the day.
Just saw on the news that sales of larger SUV's and trucks, "gas guzzlers", have risen again. Apparently, our hindsight is about as good as our foresight.
Nov-08 Crude is trading at $90.70, up $2.89, Nov-08 Natural Gas is trading at $6.94, up $0.105.
Oil Rises for First Time in Five Days on Rate Cut Speculation
By Grant Smith
Oct. 7 (Bloomberg) -- Crude oil rose for the first time in five days as an interest-rate cut in Australia triggered speculation that other central banks will ease policy to shore up economic growth.
Oil also rose on speculation OPEC may trim supply. Qatar's oil minister said it's reducing output in line with official quotas, while group President Chakib Khelil said OPEC will take ``appropriate measures'' to stabilize international markets.
``We'll see more commitment from central banks that will help the market in the short term,'' said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. ``If prices fall to $80, the possibility of OPEC cutting before its December meeting increases.''
Crude oil for November delivery jumped as much as $3.27, or 3.7 percent, to $91.08 a barrel in electronic trading, and was at $90.41 at 11:47 a.m. London time on the New York Mercantile Exchange. Crude oil futures have declined 38 percent from the record $147.27 reached July 11.
Yesterday, crude futures fell $6.07 to settle at $87.81 a barrel in New York. The contract touched $87.56, the lowest since Feb. 7, as the dollar rose against the euro, while OPEC chief Khelil said the price slide will continue next year.
Arjun Murti, the Goldman Sachs Group Inc. analyst who predicted a crude ``super spike'' in March 2005, said there is a ``downside'' risk to his forecast that oil may rise to $120 in the fourth-quarter.
`Mounting Concern'
``Oil prices increasingly appear unlikely to sustain a rally until global GDP expectations bottom,'' Goldman said in a note. ``While we believe oil supply/demand fundamentals are not as bearish as is sentiment, we recognize that concern continues to mount towards global oil demand growth.''
The U.K. government may invest at least 45 billion pounds ($79 billion) in banks including Royal Bank of Scotland Group Plc and Barclays Plc to bolster capital depleted by mortgage- related losses, two people with knowledge of the situation said.
Petroleos Mexicanos, the third-largest supplier of crude to the U.S., closed six wells in the Gulf of Mexico and removed 33 workers from offshore platforms as Tropical Storm Marco passed nearby. Output from the producer's Lankahuasa platform was shut at 3 p.m. yesterday, Mexico City-based Pemex, as the company is known, said on its Web site. The El Raudal natural gas processing center was also shut, it said.
OPEC Output
Brent crude oil for November settlement gained as much as $2.75, or 3.2 percent, to $86.37 a barrel on London's ICE Futures Europe exchange. It was at $85.38 at 10:58 a.m. London time. Yesterday, the contract fell $6.57, or 7.3 percent, to $83.68 a barrel, the lowest closing price since Oct. 23, 2007.
Qatari Minister Abdullah bin Hamad al-Attiyah said today the country would trim by ``small amounts.'' Qatar was producing about 50,000 barrels a day above its last known quota in September, according to Bloomberg data.
Oil production by the Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's crude, fell 1.3 percent in September as output in Iraq dropped to a 13-month low, a Bloomberg News survey released Oct. 3 showed.
OPEC members pumped an average 32.19 million barrels a day last month, down 425,000 barrels a day from August, according to the survey of oil companies, producers and analysts. August output was revised up by 40,000 barrels a day because of higher Nigerian output.
OAO Gazprom Deputy CEO Alexander Medvedev said he expects OPEC members to prevent a further ``substantial'' drop in the oil price. Medvedev spoke in an interview with Bloomberg Television in Moscow today.
Last Updated: October 7, 2008 06:49 EDT
Nov-08 Crude settled at $90.06, up $2.25 on the day, Nov-08 Natural Gas settled at $6.768, down $0.067 on the day.
Gas here is $2.91 today, thank God in his heavens!
Nov-08 Crude is trading at $89.225 down $0.835, Nov-08 Natural Gas is trading at $6.685, down $0.083.
Nov-08 Crude settled at $88.95, down $1.11 on the day, Nov-08 Natural Gas settled at $6.742, down $0.026 on the day.
Oil Falls as U.S. Supplies Climb Amid Concern of Waning Demand
By Margot Habiby
Oct. 8 (Bloomberg) -- Crude oil fell to the lowest in 10 months as the U.S. government reported a bigger-than-expected gain in crude and gasoline inventories and the global economic crisis curbed demand.
Oil supplies rose 8.12 million barrels to 302.6 million barrels in the week ended Oct. 3, as imports and output resumed after halting last month for hurricanes, the Energy Department said today. The agency yesterday cut its forecast for 2008 global oil demand by 340,000 barrels to 86.14 million barrels a day.
``The big builds in crude and gasoline were the big surprises in this week's data,'' said Tim Evans, an energy analyst with Citi Futures Perspective in New York, in an e-mail. ``Product-demand numbers were surprisingly weak.''
Crude oil for November delivery fell $1.11 or 1.2 percent, to settle at $88.95 a barrel at 2:54 p.m. on the New York Mercantile Exchange. Futures touched $86.05 a barrel, the lowest since December, and have fallen 40 percent since reaching a record $147.27 a barrel on July 11.
Oil pared earlier losses on a report that the Organization of Petroleum Exporting Countries may meet Nov. 18 in Vienna to discuss the effect of the financial crisis on oil markets. The state-owned Algerie Presse Service cited a person it didn't identify. Algerian Oil Minister Chakib Khelil is OPEC's current president.
Libya's top oil official, National Oil Corp. Chairman Shokri Ghanem, said ``it's high time'' for OPEC to meet, in a telephone interview from Tripoli. The OPEC Secretariat couldn't immediately confirm the meeting. The next scheduled meeting of ministers is Dec. 17 in Algeria.
Demand Plummets
U.S. fuel demand averaged about 18.7 million barrels a day during the past four weeks, the lowest since June 1999. The figure is down 8.6 percent from the year-earlier period, the department said.
U.S. gasoline demand dropped 9.5 percent last week, the biggest decline in more than three years, as the slowing economy curtailed driving, a MasterCard Inc. report showed yesterday.
Gasoline for November delivery fell 3.3 cents, or 1.6 percent, to $2.0298 a gallon after touching $1.95, the lowest price since Oct. 2, 2007. The motor fuel is down 44 percent from a record $3.631 on July 11.
Supplies of gasoline rose 7.18 million barrels, or 4 percent, to 186.8 million barrels as refinery capacity climbed 8.7 percentage points to 80.9 percent. It was the biggest increase in refinery utilization in records that go back to 1989. Gasoline inventories had the biggest gain in seven years.
Gasoline stockpiles were expected to rise 1.5 million barrels, and refinery utilization was forecast to increase by 6 percentage points, according to the median of analyst estimates in a Bloomberg News survey. Oil inventories were estimated to rise 2.2 million barrels.
Pump Prices
Regular gasoline at the pump, averaged nationwide, dropped 3.3 cents to $3.447 a gallon, according to AAA, the nation's largest motorist organization. The price has fallen 16 percent from a July record.
Heating oil for November delivery dropped 1.12 cents, or 0.5 percent, to $2.4945 a gallon after touching $2.3971, the lowest since Oct. 25, 2007.
``We're entering a steep cyclical downturn across almost all commodities,'' said Helen Henton, head of commodity research at Standard Chartered Plc in London. ``The demand picture will look increasingly worrisome for the next six months regardless of what central banks do.''
Rate Cuts
The Federal Reserve, European Central Bank, Bank of England, Bank of Canada and Sweden's Riksbank each cut their benchmark rates by half a percentage point to shore up confidence and global growth.
``Forget even about $70 a barrel next year if there's a major recession,'' Leo Drollas, deputy executive director at the Center for Global Energy Studies, said today in an interview in Amsterdam. Oil ``will go slowly down further because the world economy is heading for the rocks.''
Brent crude oil for November settlement fell 30 cents, or 0.4 percent, to $84.36 a barrel on London's ICE Futures Europe exchange.
Last Updated: October 8, 2008 15:31 EDT
Nov-08 Crude is trading at $88.90 down $0.05, Nov-08 Natural Gas is trading at $6.815, up $0.073.
Gas at P & J Quick Mart in Howard is 2.89. Feels like forever since it has been below 3 bucks.
Almost feel foolish feeling "good" about 2.89 fuel........I can remember .69 fuel, and I know there are many that remember it much, much lower!
Lowest I ever saw in my life was 14.9 for regular during a "gas war" in the Kansas City area around 1958.
We paid $2.86 yesterday in ElDorado.
It's 2.85 here today.
Our lowest is 3.23 and one station is still holding out at 3.99. Not sure what his problem is.
We are only about thirty miles from a refinery in Commerce City, CO.
And they were gatting $2.92 yesterday in Bartlesville. Go figure?? :-\ :-\
$2.75 at Kistlers today.
Nov-08 Crude is trading at $81.925, down $4.665, Nov-08 Natural Gas is trading at $6.61, down $0.215.
Nov-08 Crude settled at $77.70, down $8.89 on the day, Nov-08 Natural Gas settled at $6.535, down $0.29 on the day.
I can't believe it...gas is $2.76 here today. It just keeps on dropping...Thank God!
$3.79 for regular. $4.05 for Premium. This is at my local ARCO station which generally has the least expensive gas in the area.
Down from a high of what?
Quote from: Catwoman on October 10, 2008, 06:10:38 PM
Down from a high of what?
I assume Catwoman you are asking me. The prices have been so crazy the last 3 months I can't tell you. My guess is a peak of around $5.25 for regular and $6 or more for premium.
David
Quote from: Catwoman on October 10, 2008, 06:02:12 PM
I can't believe it...gas is $2.76 here today. It just keeps on dropping...Thank God!
SAw it for 2.68 a gallon today
Paid $2.599 in Joplin today.
$3.49 as of last night here in Macclenny FL.
Have you got plenty of fuel now? I know there were some problems after the hurricane in Texas.
2.54 here in Springfield. I must say I am surprised. I will fill up on the way home.
sixdogsmom, we never had any shortage. some of the stations did put a limit of only 10 gals at a time for about a week but that was only to keep from possibly having a shortage. other than that there was never an actual shortage in NE Fl.
Atlanta was mostly where the shortage was, which lasted for about three weeks. It was extremely difficult to find gasoline. On average, you'd have to go to about 10 - 11 stations, then wait in line 45 minutes to an hour, in the hope that they would still have some gas when it was finally your turn.
2.61 yesterday in Wichita...yea!!!!!!!! :laugh:
I saw some here for $2.99.9. I never thought I'd ever see less than $3.00 ever again.
Nov-08 Crude is trading at $80.95, up $3.25, Nov-08 Natural Gas is trading at $6.675, up $0.14.
I filled in Wichita yesterday for 2.59. I filled at the same station exactly a week previous for 2.99. Forty cents in a week.
Gas was between 2.54 and 2.49 here yesterday dependin on where you were. Haven't been anywhere yet today to see.
We finally got below 3.00 at 2.96 per gallon but it is at a Safeway grocery station.
The high is still 3.99 per gallon for regular.
The two stations are 6.5 miles apart.
Over on the west side of Denver near the foothills all gas is below 3.00.
Quote from: W. Gray on October 13, 2008, 12:45:35 PM
We finally got below 3.00 at 2.96 per gallon but it is at a Safeway grocery station.
The high is still 3.99 per gallon for regular.
The two stations are 6.5 miles apart.
Over on the west side of Denver near the foothills all gas is below 3.00.
Waldo, $3.99, that must constitute price gouging, if he sells any gas. Surely he does a very low volume of business.
He (assuming it is a he) has been at that price for several weeks. I suspect the person reporting the price each day is not filling up but having fun just broadcasting the price.
It is in a very dense, busy, and heavily traveled section of town. I have the address and every time I go by there I have intended to check to see who it is and how busy they might be.
However, each time I get to the area I seem to stumble into a senior moment.
Belmont,CA ARCO
$3.75 for Reg. $3.99 for SuperPremium.
Afternoon update. Just went to ARCO for a second coffee. Big drop from this a.m.
$3.69 and $3.93.
Nov-08 Crude settled at $81.19, up $3.49 on the day, Nov-08 Natural Gas settled at $6.688, up, $0.153 on the day.
Whoops...we're headed in the wrong direction...although, you knew the downturn was too good to last!
Nov-08 Crude is trading at $84.475, up $3.285, Nov-08 Natural Gas is trading at $6.77, up $0.082.
Nov-08 Crude settled at $79.70, down $2.56 on the day, the back months were down by the $2.50 range as well, Nov-08 Natural Gas settled at $6.727, up, $0.039 on the day. The EIA Inventory reports will run a day late this week due to the Holiday on Monday. It will be interesting to see both the Crude and product inventories and the Natural Gas inventory report.
Frank, do you suppose there are still folks on this forum that know beyond any shadow of a doubt that the oil companies are manipulating the oil and gasoline prices?
Waldo, there are probably some that still think that. I can tell you the day is coming when they will know who is controlling them and it won't be pretty. I will say that I am pleased at the progress that has been made in reducing consumption. Granted a big reason is the world economy but still people are cutting back. Also, I see fewer and fewer big gas guzzlers on the road and more smaller vehicles.
The American Oil and Gas Industry has not controlled the crude oil prices since the Embargo in 1973. When the prices fell to $10.00 a barrel in 1986 there were people that still thought the oil companies were controlling it.
I hope we will keep pushing for renewable energy sources and drilling in the big reserve areas. The sooner the better.
Nov-08 Crude is trading at $77.275, down $1.355, Nov-08 Natural Gas is trading at $6.645, down $0.082.
OPEC Is Likely to Cut Output 1 Million Barrels, PFC Energy Says
By Grant Smith
Oct. 15 (Bloomberg) -- OPEC will probably announce a production cut of 1 million barrels a day at its November meeting, said PFC Energy, an industry consultant that correctly called the decision at the group's last summit.
The Organization of Petroleum Exporting Countries, due to meet Nov. 18 in Vienna, is concerned the 47 percent drop in crude prices from July's record indicates that supplies may overtake demand, according to Washington-based PFC. A million barrels is about 3 percent of the group's current output.
OPEC, whose 13 members produce more than 40 percent of the world's crude, announced the November meeting last week as oil plunged on concern the financial crisis will push the world into recession, cutting energy demand. The group's president Chakib Khelil said a production cut is ``very likely.'' Saudi Arabia, the world's largest exporter, hasn't said whether it would support a reduction.
``There's a growing consensus among the group that they should take a million barrels off the market,'' PFC analyst David Kirsch said in a telephone interview from Paris today. ``Saudi Arabia may not have been behind the initial public call for the meeting, but they recognize production has to be trimmed.''
The day before OPEC's last gathering in Vienna on Sept. 9, PFC Energy correctly predicted the organization would announce supply restrictions of about 500,000 barrels a day. Twenty-nine of 32 analysts surveyed by Bloomberg prior to that meeting had predicted production would be unchanged.
PFC also accurately called the group's decision to raise production at its Sept. 11, 2007, conference when all 23 analysts polled by Bloomberg had anticipated no change.
`Strike Balance'
``They're trying to strike a balance between the risk of over-tightening the market and creating a glut,'' Kirsch added. ``In a perfect world OPEC would like $90 a barrel.''
The plunge in oil prices will cut record revenue for OPEC members. Members are likely to earn $1.08 trillion from exports next year, according to U.S. Department of Energy figures released on Oct. 9. That's less than the $1.22 trillion forecast the previous month.
The 11 members with output targets pledged to keep production at 28.8 million barrels a day at its last meeting, about 520,000 barrels below actual July production. That excludes Iraq, which has no quota, and Indonesia, scheduled to leave the group at the end of the year.
Gas is 2.49 here...yippee!!! :-)
This is a daily report I recieve from a very reputable source. I continue to be amazed that OPEC is talking about cutting production, the high price of energy is the main cause of the World Wide Economic Crisis. In their Greed and disdain for the West they are killing the economies that buy their only export.
Crude
WTI crude lost $2.56 per barrel to $78.63 on Tuesday on concerns that the economy is sliding into recession. Crude futures fell along with equities as a massive bank rescue package
failed to ease concerns about corporate profits, an indication of weaker demand for energy. Downside risk globally is increasing and in the US, negative GDP growth is likely next year
Iran's OPEC governor called for cooperation among oil producers to create balance between supply and demand. Lloyd's Marine Intelligence Unit reported seaborne exports fell
600,000 bbl/day in September, 840,000 bbl/day from Gulf suppliers. WTI resistance is $82.40, then $83.45, support is $73.25, then $68.90. The National Weather Service 8-14 day foreca
is calling for above normal temps for the upper Midwest and western third of the US, with seasonal or below temperatures for part of the Southwest, GC and East.
Natural Gas
Natural gas futures traded up on Tuesday as traders looked at gas as oversold and cooler weather fueled a strong cash market. The November contract gained 3.9 cents to close at
$6.73/MMBtu after trading between $6.64 and $ 6.84. The MMS reported that 37%, or 2.74 Bcf, of GoM production remain shut in, down from 38% on Friday. The EIA data shows 3.2 Tcf
in storage is 3.5% below last years level and 2% above the 5 yr average. The expectations for Thursday's injection report range from 73 Bcf to 83 Bcf, vs. the 5 yr average for the same
time of 63 Bcf. Natgas resistance is $6.895, then $6.935, support is $6.64, then $5.585. The National Weather Service 8-14 day forecast is calling for above normal temps for the upper
Midwest and western third of the US, with seasonal or below temperatures for part of the Southwest, GC and East.
Nov-08 Crude settled at $74.54, down $4.09 on the day, Nov-08 Natural Gas settled at $6.592, down, $0.135 on the day.
Nov-08 Crude is trading at $72.025, down $2.515, Oil traded as low as $71.225 in overnite trading, Nov-08 Natural Gas is trading at $6.50, down $0.092, Natural Gas Traded as low as $6.435 in overnite trading.
Nov-08 Crude settled at $69.85, down $4.69 on the day, Nov-08 Natural Gas settled at $6.703, up $0.111 on the day.
One must wonder how long we'll be so comfortably supplied with so many
majors cutting production and capex. Depletion rates for nat gas wells are hardly a straight line.
Gas has dropped to $3.03 here in Surprise.... still too high. Its not dropping here at the gas pumps percentage wise like it has on the stock market.
Nov-08 Crude is trading at $71.00, up $1.15, Nov-08 Natural Gas is trading at $6.855, up $0.152.
Oil Rises From 13-Month Low on Speculation OPEC Will Cut Supply
By Alexander Kwiatkowski
Oct. 17 (Bloomberg) -- Crude oil advanced from a 13-month low on speculation OPEC will announce production cuts at a meeting next week.
Oil rallied after OPEC said it brought forward to next week a November meeting to discuss output levels, raising speculation the group will slash production to stem a price slump. Oil has tumbled more than 50 percent since reaching a record $147.27 in July as the worst financial crisis since the 1930s threatens to push the world into a recession, curbing fuel demand.
``With an oil price at $70 a barrel, OPEC members will push for a cut of at least 1 million barrels a day,'' said Rob Laughlin, senior broker at MF Global Ltd. in London. ``Anything less would be worthless in terms of the current crisis in the demand outlook.''
Crude oil for November delivery rose as much as $3.17, or 4.5 percent, to $73.02 a barrel, and traded at $70.98 at 12:12 p.m. London time on the New York Mercantile Exchange.
Yesterday, it fell $4.69, or 6.3 percent, to $69.85 a barrel, the lowest settlement since Aug. 23, 2007.
The Organization of Petroleum Exporting Countries, which supplies more than 40 percent of the world's oil, will likely reduce oil output by 1 million barrels a day at next week's meeting to check the drop in prices, Qatari Oil Minister Abdullah al-Attiyah said.
``It will be one million, or more,'' he told Qatar's Al- Jazeera television channel. ``Prices have fallen a lot and we need to take measures.''
OPEC Supplies
OPEC oil supplies fell 3.8 percent in September to 31.8 million barrels a day, according to revised data from Geneva- based consultants PetroLogistics Ltd. The amount declined from 33.05 million barrels in August because of lower sales by Saudi Arabia and Iran, company founder Conrad Gerber said by e-mail yesterday.
Preliminary estimates from PetroLogistics had indicated a reduction in September supply of 2.4 percent to 32.6 million barrels a day.
``I don't think OPEC will cut by more than 1 million barrels in October, only because there is another meeting in December,'' at which they will probably crimp production again, said Hannes Loacker, analyst at Raiffeisen Zentralbank Oesterreich in Vienna. ``The problem now is very, very weak demand data.''
U.S. fuel demand averaged about 18.6 million barrels a day during the past four weeks, the lowest since June 1999, according to a weekly supply report from the Energy Department, released yesterday. The U.S. consumes 24 percent of the world's oil.
U.S. oil supplies rose 5.6 million barrels to 308.2 million barrels last week, the department said. Crude oil inventories were forecast to rise 2.6 million barrels, according to the median of analyst estimates in a Bloomberg News survey.
Brent crude oil for December settlement rose as much as $2.76, or 4.1 percent, to $70.60 a barrel on London's ICE Futures Europe exchange. It was at $68.60 a barrel at 11:54 a.m. London time.
Gas was 2.39 here today...I can't believe it...I wonder how long this downward trend will last.
You know similar thing happened in the 80's when reagan deregulated the gas prices. It skyrocketed upwards and after a while it settled back down to around 90 cents a gallon and stayed that way around 1.00 a gallon til around 2004.
Here in Macclenny it dropped 10 cents from Sat. morn. to Sat. evening. $2.95 to $2.85. To bad I filled up Sat. morn. :(
I actually saw it at 2.29 here...I had to look twice to make sure I wasn't seeing things!
Oil Declines as Dollar's Gain Dims Commodities' Appeal as Hedge
By Grant Smith
Oct. 21 (Bloomberg) -- Crude oil fell for the first day in three as the U.S. dollar rose to its highest in more than a year against the euro, dimming the appeal of commodities as a currency hedge.
Crude climbed earlier on expectations that the Organization of Petroleum Exporting Countries, supplier of 40 percent of the world's oil, will reduce output at an extraordinary meeting in Vienna this week. Iran, the group's second-largest producer, said it favors a cut of between 2 million and 2.5 million barrels a day.
``Over the long-term, the oil-dollar correlation is still rather high -- it's about 60 percent,'' said Jochen Hitzfeld, an analyst at UniCredit Markets & Investment Banking in Munich. ``We think OPEC will cut production by about 1 million barrels, stabilizing prices.''
Crude oil for November delivery fell as much as $1.13, or 1.5 percent, to $73.12 a barrel on the New York Mercantile Exchange, and was at $73.77 as of 10:46 a.m. in London. It earlier advanced $1.44 or 1.9 percent to $75.69.
Besides Iran, ministers from Algeria, Libya, and Qatar have said OPEC will need to trim supplies when it gathers on Oct. 24 in Vienna.
``They have to give more than a million'' or else ``you may see prices sliding further,'' Johannes Benigni, chief executive officer Vienna-based JBC Energy, said in a television interview. ``Taking the severity of the financial meltdown,'' a ``million is enough when it comes to the volume, but not when it comes to the sentiment.''
Move Forward
Crude, down more than 50 percent from its July 11 record of $147.27 a barrel, has gained nearly 8 percent since Oct. 16 when OPEC moved forward the date of their extraordinary meeting, initially scheduled for November.
Investors often choose to sell crude and other dollar- priced commodities when the U.S. currency gains, undermining their use as an inflation hedge. Gold, copper and soy beans also declined.
The dollar climbed to $1.3273 against the euro from $1.3344 late yesterday in New York. It earlier reached $1.3258, the strongest since March 2007.
Last Updated: October 21, 2008 05:51 EDT
Nov-08 Crude is trading at $74.30, down $0.09, Nov-08 Natural Gas is trading at $6.77, up $0.029.
Nov-08 Crude settled at $70.89, down $3.36 on the day, the back months are from $3.00 to $17.00 higher than the front trading month, I am sure that is in anticipation of OPEC cutting exports until they get crude above $90.00 again, Nov-08 Natural Gas settled at $6.844, up, $0.103 on the day, the back months are up about the same.
Gas is 2.27/gal here...I am completely amazed.
As the price goes down let's not forget where we were a couple months ago. If we don't keep consumption in decline and we start driving super charged v-8 2 ton trucks all over the place again we will be in a world of hurt. Read the Better Fill Up Today thread on the coffee shop part of the forum. Don't forget and tell your friends.
David
I WISH i had the money for a tank to store gas. I have been spending as much money as i have in the past few months since gas prices came down and storing it. I have 25 gallons in my green truck now, and a full tank in my red truck and two 5 gallon gas cans full. Sigh i know i can't out run the prices but at least i can buy it now while its cheap
The Nov-08 contracts expired yesterday and Dec-08 Crude is trading at $69.55, down $2.63, Nov-08 Natural Gas is trading at $6.88, up $0.036.
OPEC Risks Split Over Oil Cuts as Economies Reel, Prices Drop
By Grant Smith and Margot Habiby
Oct. 22 (Bloomberg) -- OPEC, founded five decades ago to unify oil producers, risks dividing members as the group plans to cut output and raise prices just as developed nations face their worst recession since 1983.
Iran's energy minister, Gholamhossein Nozari, said yesterday OPEC may slash output quotas by 2.5 million barrels a day, or 8.7 percent, an amount about equal to what's pumped from Kuwait. The Algerian minister and OPEC president, Chakib Khelil, said two days earlier the reduction may be only 1 million barrels.
The debate in the Organization of Petroleum Exporting Countries pits Saudi Arabia, the group's biggest producer and a U.S. ally, against Venezuela and Iran, two nations that oppose U.S. foreign policy and advocate higher oil costs. Crude plunged 52 percent to $70.89 yesterday from its July 11 record of $147.27 on the New York Mercantile Exchange.
``The divisions arise in OPEC because what countries need and want varies,'' said Gareth Lewis-Davies, an oil analyst at Dresdner Kleinwort Group Ltd. in London. ``The Saudis are playing a long-term political game. Other countries have higher costs.''
Saudi Arabia needs oil prices of less than $30 a barrel to balance its government budget, according to Merrill Lynch & Co. estimates. The United Arab Emirates requires $40 a barrel and Qatar $55.
Iran, with double the population of Saudi Arabia, has a breakeven point of about $100 a barrel, according to Edward Morse, managing director and chief economist at Louis Capital Markets LP in New York. In Venezuela, where President Hugo Chavez's government is spending oil revenue on social programs, the figure is about $120, he said.
Below $50
Oil options trading shows the probability that crude will fall below $50 a barrel by June has more than doubled in 10 days, Deutsche Bank AG said in an Oct. 17 report. There is a 9 percent likelihood that June 2009 crude oil contracts will expire below $50, up from 4 percent, Deutsche said.
The world's industrialized economies will expand next year at the slowest pace since 1982, the International Monetary Fund said Oct. 8. Growth will weaken to 0.5 percent in 2009, from 1.5 percent this year, sending U.S. unemployment to its highest level in 16 years, the agency said.
Oil demand may fall for the first time in 15 years this year as the worst financial crisis in decades tips economies into recession, according to the Centre for Global Energy Studies, a London-based consulting company.
Different Agendas
``OPEC members have completely different agendas,'' Merrill Lynch analysts led by Francisco Blanch said in an Oct. 20 report. ``History shows that it is difficult to maintain discipline in a falling price environment, and OPEC cohesion has already started to decline.''
Eleven years ago, OPEC members bickered about output quotas as oil slid 28 percent in 10 months amid the onset of the Asian financial crisis. At a meeting in Jakarta in November 1997, they raised quotas, ignoring the turmoil that slowed Asian economies and cut oil demand. Prices fell another 44 percent by December 1998 to below $11 a barrel.
``OPEC members are worried that they will be slow to react and oil prices will drop to $50 or $40 a barrel,'' said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts.
After the late 1990s price drop, Saudi Arabia, Venezuela and non-OPEC nation Mexico led efforts to cut production to boost prices.
``The death of OPEC typically comes up as a question or a theme at times when prices are falling dramatically,'' said Tim Evans, an energy analyst at Citi Futures Perspective in New York. ``It is exactly at those moments when the OPEC membership tends to recognize that they need to come up with a combined response to the market.''
`Consensus to Reduce'
Algeria's Khelil said ``there is a consensus to reduce production, but there is no agreement on how much to cut'' on Algerian television Oct. 19.
Saudi Arabia, where officials haven't made any comments before this week's meeting, is likely to resist a cut of more than 1 million barrels because it's conscious of the political response in the U.S. and other consuming countries, said John Sfakianakis, chief economist at Saudi British Bank in Riyadh.
``I don't think we will see a 2 million-barrel cut, given the reaction that this will have both by the market and by the politicians,'' Sfakianakis said in a phone interview.
Saudi King Abdullah said at a June 22 oil summit in Jeddah that the world's largest oil-exporting nation seeks ``reasonable'' prices to producers and consumers.
`Absolutely Scandalous'
U.K. Prime Minister Gordon Brown said last week that it was ``absolutely scandalous'' that OPEC is considering cuts as the global economy risks falling into a recession.
At OPEC's last meeting in September, the group's members agreed to adhere more strictly to production quotas, trimming output by about 500,000 barrels a day.
Saudi Arabia produced 9.45 million barrels a day in September, according to Bloomberg estimates. Its output target is set at 8.94 million barrels. Iran, OPEC's second-largest producer, trimmed production by 130,000 barrels to 3.95 million barrels day, close to its quota of 3.82 million barrels, according to Bloomberg estimates.
Saudi Arabia will probably forge a compromise for production cuts to be taken over coming months instead of all at one time, analysts said.
``Everyone recognizes that oil needs to be taken off the market,'' Morse said in a phone interview. ``If they cut a million, they will almost certainly have to go in for a second round of cuts.''
OPEC members will meet again in Algeria in December.
Last Updated: October 21, 2008 21:42 EDT
Dec-08 Crude settled at $66.75, down $5.43 on the day, Nov-08 Natural Gas Settled at $6.777, down $0.067 on the day. Opec meets Friday and it will be very interesting to see what they agree on. Crude and Products inventories came out today and consumption was down again.
Dec-08 Crude is trading at $67.95, up$1.20, Nov-08 Natural Gas is trading at $6.69, down $0.087.
Frank,
Safe to think OPEC will at least cut 1 million a day? If they get radical and cut like 2.5 million or so, what do you think that will do to the outer months as well as the current trend? Will the consumption data balance out the supply data?
Sorry for all the questions, but I know you have the answers and I am curious!
Dan
Dan, below is from Bloombergs morning report. I think the Hawks, Iran, Venzuela and Libya are pushing for 2 to 2.5 Million barrel/day cut and hoping to get a concenus on 1 million/day cut. The Saudi's are pushing for 500,000barrel/day cut, the Saudi's have always been the price moderates for several reasons, they get their Military Planes from the US, they have Billions invested in the US Stock Markets and Real Estate and the Saudi's fear Iran, and the other warring Arabs, and want to stay on the good side of the US for protection. My guess is they will agree on a 1 Million/day cut and add the announcement that they will watch closely and be prepared to cut more, that being said, remember that the OPEC Members are notorious cheaters when it comes to their quotas. A big factor is the World economies and where demand goes, can we and the rest of the world continue on the present demand decline curve, my guess is the quick and easy demand reductions have been taken. A big concern is the pullback in US Drilling and exploration at a time when we should be expanding and doing everything we can to reduce dependence on Foreign oil and Petroleum based energy. In regard to the price I think we will be in a range from a possible low of $50.00 to a high of $90.00 on crude oil, I don't think even the Saudis want the price below $50.00 and I don't think the Russians, Iran and others want to push the price above $90.00 until the world economies improve, which may take 1 to 3 years.
Opec faces internal dissent over reduction of output
Bloomberg
Published: October 22, 2008, 23:56
Riyadh: Opec, founded five decades ago to unify oil producers, risks dividing members as the group plans to cut output and raise prices just as developed nations face their worst recession since 1983.
Iran's energy minister, Gulam Hossain Nozari, said yesterday Opec may slash output quotas by 2.5 million barrels a day, or 8.7 per cent, an amount about equal to what's pumped from Kuwait. The Algerian minister and Opec president, Chakib Khelil, said two days earlier the reduction may be only 1 million barrels.
The debate in the Organisation of Petroleum Exporting Countries pits Saudi Arabia, the group's biggest producer and a US ally, against Venezuela and Iran, two nations that oppose US foreign policy and advocate higher oil costs. Crude plunged 52 per cent to $70.89 (Dh260) Tuesday from its July 11 record of $147.27.
"The divisions arise in Opec because what countries need and want varies," said Gareth Lewis-Davies, an oil analyst at Dresdner Kleinwort Group Ltd. in London. "The Saudis are playing a long-term political game. Other countries have higher costs."
Below $50
Oil options trading shows the probability that crude will fall below $50 a barrel by June has more than doubled in 10 days, Deutsche Bank AG said in a recent report. There is a 9 per cent likelihood that June 2009 crude oil contracts will expire below $50, up from 4 per cent, Deutsche said.
The world's industrialised economies will expand next year at the slowest pace since 1982, the International Monetary Fund said. Growth will weaken to 0.5 per cent in 2009, from 1.5 per cent this year, sending US unemployment to its highest level in 16 years, the agency said.
Oil demand may fall for the first time in 15 years this year.
Dan, it is interesting to think back who our major foreign crude suppliers were 40 years ago, and to look at their positons now. In my early days at Phillips I was in the Tanker Chartering group and Iran was one of our main crude sources. We lifted cargoes almost daily from Iran, today they are a bitter enemy and do not like to sell crude to the US. With the fall of the Shah, the middle East lost it's stability and the Far Left Muslim, terrorists took over. The worst is yet to come to and from that entire region.
Dec-08 Crude settled at $67.84, up $1.09 on the day, Nov-08 Natural Gas Settled at $6.419, down $0.358 on the day. Opec meets Friday and it will be very interesting to see what they agree on, and even more interesting how they adhere to it. Natural Gas storage numbers came out today and there was a 70BCF build.
Dec-08 Crude is trading at $63.75, down $4.09, Nov-08 Natural Gas is trading at $6.295, down $0.124.
OPEC Agrees to Cut for First Time in Two Years as Prices Slump
By Maher Chmaytelli and Margot Habiby
Oct. 24 (Bloomberg) -- The Organization of Petroleum Exporting Countries cut oil production targets for the first time in almost two years to stem a collapse in prices.
The 13 OPEC nations decided to lower supply by 1.5 million barrels a day from November, oil ministers said today at the end of a meeting at the group's Vienna's headquarters. The reduction will be from the existing quota for 11 members of 28.8 million barrels a day.
The cut was ``one quick decision,'' Saudi Arabian Oil Minister Ali al-Naimi said in an interview. Crude oil has tumbled 57 percent from a July 11 record of $147.27 a barrel as the financial market crisis spreads, job cuts increase and fuel consumption slows. Prices fell as much as 7.1 percent after the decision.
``OPEC has offered the market all the ammunition they had,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``With the bearish economic outlook and manufacturing in freefall this accord is not good enough.''
The International Energy Agency said Oct. 10 that demand among industrialized nations will fall 2.2 percent this year, reducing overall world demand growth to 0.5 percent.
OPEC President and Algerian Oil Minister Chakib Khelil said at a news conference that the cut will be ``100 percent effective'' in stabilizing prices.
Saudi Arabia, the group's largest producer, will reduce its output target by 466,000 barrels a day. Iran, the second- biggest, will cut 199,000 barrels, OPEC said in a statement. Kuwait's share of the reduction will be 132,000 barrels and the United Arab Emirates's 134,000 barrels.
Another Cut
Another cut in December is ``possible,'' depending on how the oil market reacts, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said in an interview after the decision.
Oil for December delivery dropped as much as $4.79, or 7.1 percent, to $63.05 a barrel on the New York Mercantile Exchange and was at $64.58 a barrel at 10:26 a.m. London time.
At a meeting last month, OPEC urged greater compliance with existing quotas, saying that would reduce supply by about 500,000 barrels a day. OPEC members excluding Iraq and Indonesia last month pumped 390,000 barrels a day more than their combined quota of 28.8 million barrels a day, according to Bloomberg estimates.
The last time OPEC decided to slash official quotas was at a December 2006 meeting in Abuja, Nigeria. The 500,000 barrel-a- day cut took effect in February 2007, expanding an earlier reduction agreed in October. The cuts were reversed later in 2007 as oil rallied.
.
Last Updated: October 24, 2008 05:48 EDT
Dec-08 Crude settled at $64.15, down $3.69 on the day, Nov-08 Natural Gas Settled at $6.239, down $0.18 on the day.
Gas is 2.19/gal here...I topped off my tank, as full as it would go...I'm fully expecting it to go up tomorrow, what with the cut in production having been announced today. I can't believe how much it's gone down. :laugh:
Dec-08 Crude is trading at $62.25, down $1.90, Nov-08 Natural Gas is trading at $6.04, down $0.199.
Dec-08 Crude settled at $63.22, down $0.93 on the day, Nov-08 Natural Gas Settled at $6.121, down $0.118 on the day.
Interesting Crude Stats from a report received today: I won't bore you with the full report but thought the miles driven was interesting.
The US Energy Information Administration announced last week that oil products demand during the previous four weeks was 18.7 million barrels per day, down 8.5% from a
year ago. The US Transportation Department said motorists drove 15 billion miles less in August 2008 than last year, the biggest decline in any month ever recorded.
Dec-08 Crude is trading at $63.90, up$0.68, Nov-08 Natural Gas is trading at $6.12, down $0.001.
Oil Rises as Share Prices Rebound, OPEC Considers Extra Meeting
Oct. 28 (Bloomberg) -- Crude oil rose from a 17-month low as stocks in Europe and Asia rebounded and OPEC ministers said the group may meet again before December, raising speculation of deeper cuts in production.
Crude advanced, tracking equities, as the MSCI World Index added 1.2 percent to 844.36 at 9:15 a.m. in London, snapping a two-day, 8.4 percent drop. OPEC's secretary-general said the producer group may call a meeting earlier than a scheduled December date if prices fail to react to the 1.5 million-barrel- a-day production cut it announced last week.
``The oil market is really looking at what is happening on the equities markets,'' said Hannes Loacker, analyst at Raiffeisen Zentralbank Oesterreich in Vienna. ``OPEC is already thinking again about a cut at the meeting in December or even earlier.''
Crude oil for December delivery climbed as much as $1.67, or 2.6 percent, to $64.89 a barrel on the New York Mercantile Exchange after falling as low as $61.75 earlier today. It was at $63.86 a barrel at 9:50 a.m. London time.
OPEC's decision last week to trim production for the first time in almost two years failed to stop prices falling yesterday to the lowest settlement price since May 29, 2007. Crude has fallen 56 percent since reaching a record $147.27 on July 11 and is down 32 percent from a year ago.
Deteriorating or Stabilizing?
``If circumstances dictate we have another meeting; of course we will meet,'' OPEC Secretary-General Abdalla el-Badri said today at a conference in London. He said he expects a market response to last week's production cut after about a week.
Shokri Ghanem, chairman of Libya's National Oil Corp., echoed el-Badri's comments, and said he's watching the market to see whether it's ``deteriorating or stabilizing.''
Oil was also supported by potential disruptions in supply to the U.S. from Mexico. Petroleos Mexicanos, the third-largest supplier of crude to the U.S., closed two of its oil export terminals in the Gulf of Mexico because of heavy rains and wind.
The terminals at the ports of Pajaritos and Dos Bocas shut at 4 p.m. yesterday, according to a weather bulletin on the Web site of Mexico's Merchant Marine.
Brent crude oil for December settlement gained as much as $1.48, or 2.4 percent, to $62.89 a barrel on London's ICE Futures Europe exchange. It earlier fell as much as $1.31, or 2.1 percent, to $60.10 a barrel. The contract was at $61.62 a barrel at 9:52 a.m. local time.
Oil is heading for a 38 percent drop this month, the steepest since at least 1986 in New York, even after the output cut announced by the Organization of Petroleum Exporting Countries at an emergency meeting in Vienna last week.
The U.S. Energy Department will probably report tomorrow that U.S. supplies of crude oil, gasoline and distillate fuel, a category that includes heating oil and diesel, rose last week, a Bloomberg News survey showed.
Dec-08 Crude settled at $62.73, down $0.49 on the day, Nov-08 Natural Gas Settled at $6.186, up $0.065 on the day.
Gas is 2.05 here...will miracles never cease...I totally anticipated it going up way before this. We haven't seen these types of prices in such a very long time!!!!!!!!!!!!!!
Dec-08 Crude is trading at $65.175, up$2.445, Dec-08 Natural Gas is trading at $6.60, up $0.184.
Oil Rises on Surge in Global Equities, Possible Fed Cut
By Alexander Kwiatkowski
Oct. 29 (Bloomberg) -- Crude oil rose for the first time in four days, tracking stock prices, on speculation that efforts to unlock global credit markets are beginning to work and possible central bank interest rate cuts may help revive demand.
Crude advanced as much as 6.3 percent after global equities markets rallied. The MSCI World Index added 2.63 percent to 912.97 in London today. Prices also rose on speculation that a possible interest rate cut by the U.S. Federal Reserve may help an economic recovery in the world's biggest fuel consumer.
``It's all moving on the back of the equity feel-good factor. That's what is driving markets'' said Robert Laughlin, a senior broker with MF Global Ltd. in London. ``The fundamentals of the oil market have gone for the moment.''
Crude oil for December delivery climbed as much as $3.98 to $66.71 a barrel on the New York Mercantile Exchange. It was at $65.23 a barrel at 10:22 a.m. London time. Prices reached a record $147.27 on July 11.
Yesterday, futures fell 49 cents, or 0.8 percent, to $62.73 a barrel, the lowest close since May 16, 2007.
U.S. equities rallied yesterday as the cheapest valuations in 23 years lured investors and increased commercial-paper sales signaled credit markets are thawing. The Dow Jones Industrial Average posted its second-best points gain in 23 years, climbing 889.35, or 11 percent, to 9,065.12.
``Given the increase in equity markets, I am surprised the reaction of oil prices wasn't more pronounced,'' said Eugen Weinberg, a commodity analyst at Commerzbank AG in Frankfurt. ``If interest rates are at 1 percent, then there really is a possibility that the Americans will recover from the trough before anyone else.''
Fed Rate
The U.S. Federal Reserve may lower its benchmark interest rate by half a point to 1 percent today, according to the median forecast of economists surveyed by Bloomberg News.
Global oil output is falling faster than expected, leaving producers struggling to meet demand without extra investment, the Financial Times reported today, citing the draft of report by the International Energy Agency.
Annual production is set to drop by 9.1 percent in the absence of additional investment, according to the draft of the agency's World Energy Outlook obtained by the newspaper, the FT reported. Even with investment, output will slide by 6.4 percent a year, it said.
OPEC Cut
The Organization of Petroleum Exporting Countries will ``probably'' cut crude output quotas a second time to avoid the growth of inventories, Venezuelan Oil Minister Rafael Ramirez said in an interview on state television.
The producer group reduced its production target by 1.5 million barrels a day after meeting Oct. 24. Ramirez said the group would analyze the reaction of the oil market between that cut and a planned Dec. 17 meeting.
``OPEC has to say that if demand and the oil price are still weak then they will look for more cuts,'' said Andy Sommer, an analyst with HSH Nordbank in Hamburg. ``That is not really a surprise.''
The U.S. Energy Department will probably report that U.S. supplies of crude oil, gasoline and distillate fuel, a category that includes heating oil and diesel, rose last week, a Bloomberg News survey showed.
Crude oil stockpiles probably climbed 1.55 million barrels in the week ended Oct. 24 from 311.4 million the week before, according to the median of 12 analyst estimates before an Energy Department report.
Brent crude oil for December settlement rose as much as $3.90, or 6.5 percent, to $64.19 a barrel on London's ICE Futures Europe exchange. It traded at $62.60 a barrel at 10:27 a.m. local time. The contract yesterday dropped $1.12, or 1.8 percent, to settle at $60.29 a barrel, the lowest settlement since March 20, 2007.
Gasoline for December delivery gained as much as 9 cents, or 6.4 percent, to $1.4993 a gallon in New York, and last traded at $1.4675 a gallon.
Dec-08 Crude settled at $67.50, up $4.77 on the day, Nov-08 Natural Gas Settled at $6.469, up $0.283 on the day, this was last day settle for November trading. .
We bought gas for $1.99 today in Wichita.
Dec-08 Crude is trading at $68.325, up$0.825, Dec-08 Natural Gas is trading at $6.775, down $0.003
Crude Oil Rises as Interest Rate Cuts May Spur Economic Rebound
By Grant Smith and Nesa Subrahmaniyan
Oct. 30 (Bloomberg) -- Crude oil advanced on speculation interest rate cuts in the U.S. and China may spur a global economic recovery and increase demand for fuels.
Oil rose above $70 a barrel for the first time in a week after the U.S. and China, the world's top two energy users, reduced rates yesterday. Stocks rallied around the world and U.S. index futures climbed after the rate cuts, aimed at boosting bank lending and economic growth.
``There's a good chance the rate cut will help the economy to grow again,'' said Wolfgang Kraus, chief energy and commodities trader at BayernLB in Munich. ``We've seen from the corporate side massive buying interest'' and ``that's normally a good indicator they see limited downside risk.''
Crude oil for December delivery climbed as much as $3.10, or 4.6 percent, to $70.60 a barrel on the New York Mercantile Exchange. It traded at $68.17 as of 10:31 a.m. London time. Yesterday, crude oil jumped $4.77, or 7.6 percent, to settle at $67.50 a barrel.
Oil prices, which have tumbled 52 percent since reaching a record $147.27 on July 11, are down 22 percent from a year ago.
Crude prices also climbed as the dollar fell to a one-week low against the euro. The U.S. currency slipped to $1.3048 per euro, the lowest since Oct. 21, from $1.2963 late yesterday.
Investors often purchase crude oil and other dollar-priced commodities when the U.S. currency drops because of their use as an inflation hedge.
Fed's Delivery
``The tight credit situation has made it hard for even good companies to fund their plans and the rate cuts could help to address that,'' said Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo. ``Equities are rebounding and that's filtering through to other markets.''
The MSCI World Index added 2 percent to 942.4 in London, advancing for a third day, the longest winning streak in two months.
Commodities such as gold and corn were buoyed by a drop in the U.S. dollar and a rebound in equities after borrowing costs were reduced to alleviate a credit freeze and spur growth.
Brent crude oil for December settlement increased as much as $2.88, or 4.4 percent, to $68.35 a barrel on London's ICE Futures Europe exchange, and last traded at $66. The contract yesterday gained $5.18, or 8.6 percent, to $65.47 a barrel.
Oil ministers from Iran and Venezuela said this week that OPEC will probably meet again before the group's next scheduled gathering in December to consider a second production cut.
OPEC Cut
The Organization of Petroleum Exporting Countries reduced its production target by 1.5 million barrels a day after meeting Oct. 24.
``OPEC's cut would probably be felt in the next few weeks and they would probably wait until the next meeting unless prices drop back again rapidly,'' Mitsubishi's Nunan said.
U.S. inventories of crude oil and distillate fuel, a category that includes heating oil and diesel, rose last week, an Energy Department report yesterday showed.
Crude oil stockpiles climbed 493,000 barrels to 311.9 million barrels in the week ended Oct. 24, the department said. A 1.55 million-barrel gain was forecast, according to the median of 12 analyst estimates before the report.
Last Updated: October 30, 2008 06:33 EDT
Below is an excerpt from yesterdays EIA Petroleum Inventory report, hopefully America will continue to reduce demand and increase energy sources of all kind.
Total products supplied over the last four-week period has averaged nearly 18.9
million barrels per day, down by 7.8 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged 8.9 million
barrels per day, down by 3.4 percent from the same period last year. Distillate
fuel demand has averaged nearly 4.0 million barrels per day over the last four
weeks, down by 5.2 percent from the same period last year. Jet fuel demand is
13.1 percent lower over the last four weeks compared to the same four-week period
last year.
Dec-08 Crude settled at $65.96, down $1.54 on the day, Dec-08 Natural Gas Settled at $6.431, down $0.347 on the day.
Natural Gas storage report came out today, there was a little more build that expected and more than the historical build for this period.
Dec-08 Crude is trading at $63.425, down $2.535, Dec-08 Natural Gas is trading at $6.395, down $0.036 .
Crude Oil Is Poised for Record Monthly Drop as Demand Declines
Oct. 31 (Bloomberg) -- Crude oil fell in New York, poised for its biggest monthly drop since trading began in 1983, on concern that the decline in the U.S. economy will curb fuel demand in the world's largest energy user.
Oil retreated, taking this month's decline to 37 percent, after the U.S. Commerce Department said yesterday that gross domestic product contracted in the third quarter at the biggest annual pace since 2001. Showa Shell Sekiyu K.K., Royal Dutch Shell Plc's Japanese unit, will cut its crude processing by 7 percent during the fourth quarter on falling domestic demand.
``The outlook for demand remains weak while we wait for economic rescue measures to feed their way through the system,'' said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. ``Even in emerging markets the growth there is likely to be lower than was previously expected.''
Crude oil for December delivery fell as much as $2.78, or 4.2 percent, to $63.18 a barrel. It was at $63.49 a barrel at 9:06 a.m. London time on the New York Mercantile Exchange. Oil's monthly decline may surpass February 1986 as the worst month ever, when it dropped 30 percent to $13.26 a barrel.
Prices have tumbled 56 percent from a record $147.27 on July 11 and are down 32 percent from a year ago. Futures dropped $1.54, or 2.3 percent, yesterday to settle at $65.96 a barrel.
Oil climbed more than $4 a barrel on Oct. 29, the biggest gain in a month, after the U.S. and China, the two biggest energy consumers, cut interest rates to spur economic growth. Prices also rose because the dollar fell the most against the currencies of six major U.S. trading partners since 1998.
Slowing Demand
Showa Shell said today it will process about 465,000 barrels a day from October to December. Nippon Oil Corp., Japan's largest refiner, said yesterday it will continue processing less crude than a year ago.
Monthly data for U.S. August fuel consumption, measured in terms of products supplied by refiners, dropped to 17.4 million barrels a day, according to the Petroleum Supply Monthly. That was down from 19.1 million barrels in August 2007.
Brent crude oil for December settlement fell as much as $3.07, or 4.8 percent, to $60.64 a barrel on London's ICE Futures Europe exchange. It was at $60.84 a barrel at 3:17 p.m. Singapore time. Prices have fallen 32 percent in the past year.
Crude oil may rebound next week on speculation that interest-rate cuts in the U.S. and China will boost fuel demand.
Dec-08 Crude settled at $67.81, up $1.85 on the day, Dec-08 Natural Gas Settled at $6.783, up $0.352 on the day.
Dec-08 Crude is trading at $67.05, down $0.76, Dec-08 Natural Gas is trading at $6.72, down $0.063 .
Oil Falls as Asian Import Cuts Heighten Demand Slowdown Concern
By Grant Smith
Nov. 3 (Bloomberg) -- Crude oil fell as reduced imports by Asian refiners reinforced concerns that a demand slowdown is spreading to emerging markets.
China Petroleum & Chemical Corp., Asia's biggest refiner, will process less crude at some plants because of falling fuel demand, its parent said today. South Korea imported 1.4 percent less crude oil in October as the global credit crisis sent shockwaves through Asia's fourth-biggest economy.
``Demand growth in the emerging markets seems to be slowing down massively,'' said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. ``The outlook is disturbingly weak and alarming for commodity traders and investors.''
Crude oil for December delivery dropped as much as $1.27, or 1.9 percent, to $66.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $67.06 a barrel at 10:16 a.m. London time.
Oil climbed 5.7 percent last week, the first gain in five weeks, as the U.S. and China lowered interest rates to prop up economic growth. Crude has fallen 53 percent from its record $147.27 a barrel on July 11.
The United Arab Emirates has notified customers that they will receive less crude as a result of OPEC's Oct. 24 resolution to cut production by 1.5 million barrels a day, Oil Minister Mohamed al-Hamli told reporters in Abu Dhabi today.
Iran will cut crude oil sales to Total SA, Europe's third- largest oil company, by some 70,000 barrels per day, Iranian oil Minister Gholamhossein Nozari said on Nov. 2. Nigeria's national oil company announced shipment cuts of 5 percent in November and December last week.
Algeria Meeting
The Organization of Petroleum Exporting Countries, producer of more than 40 percent of the world's crude, is next due to meet on Dec. 17 in Algeria.
``Most market participants expect that oil supplies will tighten up in the months ahead,'' said Victor Shum, senior principal at energy consultant Purvin & Gertz Inc. in Singapore.
Brent crude oil for December settlement dropped as much as $1.71, or 2.6 percent, to $63.61 a barrel on London's ICE Futures Europe exchange. It traded at $64.18 at 9:42 a.m. in London.
Dec-08 Crude settled at $63.91, down $3.90 on the day, Dec-08 Natural Gas Settled at $6.838, up $0.055 on the day.
Dec-08 Crude is trading at $64.175, up$0.265, Dec-08 Natural Gas is trading at $6.885, down $0.047.
Crude Oil Trades Little Changed as Demand Concerns Intensify
Nov. 4 (Bloomberg) -- Crude oil futures were little changed before a report that may show accumulating stockpiles of crude in the U.S., where manufacturing shrank at the fastest pace in 26 years last month.
U.S. crude oil inventories probably rose for a sixth week because of declining demand, according to a Bloomberg survey before tomorrow's Energy Department report. Credit Suisse Group AG, Switzerland's second-biggest bank, cut its 2009 price forecast to $58 a barrel from $73 on prospects of weak demand in China.
``U.S. demand is sluggish; it will stay weak, and I'm not expecting the emerging markets will be able to support demand,'' Bayram Dincer, a commodity research analyst at Dresdner Bank, said by phone from Zurich. ``The market will probably test $60, and maybe we will have new lows of $55 this year.''
Crude oil for December delivery fell 19 cents to $63.72 a barrel on the New York Mercantile Exchange at 11:02 a.m. London time. Earlier, prices fell as much as $1.66, or 2.6 percent.
Brent crude oil for December settlement on London's ICE Futures Europe exchange was down 48 cents at $60. Earlier, Brent fell as much as 3.5 percent to $58.38, the lowest since Feb. 20, 2007.
Oil in New York has tumbled 57 percent from a July record of $147.27 a barrel as the U.S. economy shrank in the third quarter by the most since 2001. Yesterday, futures fell $3.90, or 5.8 percent, the biggest drop since Oct. 22.
China Slowdown
The Institute for Supply Management's factory index fell to 38.9, the lowest level since September 1982, the Tempe, Arizona- based group reported yesterday.
``Our oil price forecast has changed on the back of the latest set of economic data from China, which suggests a more severe economic slowdown is underway there,'' Credit Suisse analysts Tao Ly and Stuart Joyner wrote in a note today.
China Petroleum & Chemical Corp., Asia's biggest refiner, will process less oil at units because of falling demand, its parent said yesterday.
Oil production by members of the Organization of Petroleum Exporting Countries averaged 32.18 million barrels a day last month, down 70,000 barrels from September, a Bloomberg News survey of oil companies, producers and analysts showed yesterday.
OPEC members Nigeria, Iran, Kuwait and the United Arab Emirates have cut shipments to customers. Saudi Arabia, the world's biggest oil producer, hasn't yet notified customers of any reduction in shipments.
Abu Dhabi National Oil Co., the state-owned oil company that produces almost all of the oil in the United Arab Emirates, has delayed an output target of 3.5 million barrels a day by eight years to 2018.
``It will take about 10 years to get to 3.5 million barrels a day,'' Abdulla Nasser al-Suweidi, the company's deputy chief executive officer, told reporters in Abu Dhabi today. ``We regularly revise our plans.''
Dec-08 Crude settled at $70.53, up $6.62 on the day, Dec-08 Natural Gas Settled at $7.219, up $0.381 on the day.
The back months were up all of the way out, with the concerns of Obama being elected drilling is pulling back at a time when we need to be drilling everythng we can.
Frank; are you OK? I don't think the markets have been closed the last 2 days, and I've missed your posts.
I hope its not more serious than a post election headache. ;D
Frank is just fine.
OK, seems Dec 08 crude is trading at $62.41.....Will try and fill in a bit for Frank, but really not going to be as good as him!
I filled up yesterday at $2.09 There were a couple of places at $1.99, but they were too far away to be worth the drive.
Marvin and I were in Missouri this weekend. He filled up a couple times at $1.86. Seen some places $1.83, but didn't need gas at the time. Hit Kansas and it was back to $2.09, but he had topped off the tank before we crossed the line.
Gas is 1.89 here...almost literally jumping for joy!!! :laugh:
December 08 crude @ $59.33, down $3.08. Natural Gas closed @ $6.708 down $0.54. I can help too Dan.
Thanks to you both. I was too lazy to look it up.
Dec 08 futures are trading down $1.67 to $57.66. Seems down turning economy has people driving less and the recession seems to be global as Europe, Asia, and China have all seen demand fall as well.
Dec 08 settled down on the day. $55.98
The EIA inventory report came out today, a day later than usual due to the Veteran's Day holiday. Below is an excerpt from the report which clearly shows why prices are down at the pump. Given the economy it is easy to see why demand and hence pricies are going down. Unfortunately OPEC is getting very restless and calling for another special meeting to lower exports amd raise prices. It is imperative that we get back on track to increasing our domestic supply, reducing our dependence on foreign oil and developing alternate energy sources of every kind.
Total products supplied over the last four-week period has averaged 19.1 million
barrels per day, down by 6.6 percent compared to the similar period last year.
Over the last four weeks, motor gasoline demand has averaged nearly 9.1 million
barrels per day, down by 1.9 percent from the same period last year. Distillate
fuel demand has averaged about 4.0 million barrels per day over the last four
weeks, down by 4.6 percent from the same period last year. Jet fuel demand is
18.8 percent lower over the last four weeks compared to the same four-week
period last year.
Hey Frank! Know you ain't gonna believe this but I missed ya lol. Welcome back :)
Thanks Pam, I have stayed really busy with catching up in my Marketing business, building some new shelves Myrna wanted. Also buried one cousin and drove to West Texas and buried a long time friend. This getting old is very painful in losing so many friends and family. In this past year I attended funerals for 9 family members and three close friends.
I needed a break from the political scene.
Well Frank, I am sorry to hear about your losses. I too missed you and was afraid that you might be worried that somebody was gonna say NannyNanny-Boo Boo. Getting old is certainly not for the faint of heart, weak of mind or those lacking in courage. Welcome back! ;)
I'm sorry to hear that Frank......time catches up don't it....
Dec-08 Crude settled at $58.28, up $2.08 on the day, Dec-08 Natural Gas settled at $6.318, down $0.087 on the day.
Thanks Dan and Jerry for covering some for me while I was taking a rest, trying to recuperate from a a very disappointing election and handling other personal and business matters. At least Oklahoma was the only state that all counties, 100% went Republican, and some almost 90% Republican, maybe if Texas secedes Oklahoma can go with them.
Dec-08 Crude is trading at $57.90, down $0.34, Dec-08 Natural Gas is trading at $6.365, up $0.047
LOL, great to have you back Frank....That damn NYMEX page was going to get the best of me in the long run!
If OK secedes with TX, maybe it will drag southern KS with it!
Dan, I don't know anyone I would rather be in the Alamo with than you and your Mother.
pssttt.... ( Danny is a whole lot better shot than I am).. but I can give a better "mean face".. ;D ;D
Dec-08 Crude settled at $57.04, down $1.20 on the day, Dec-08 Natural Gas settled at $6.312, down $0.006 on the day. Gasoline at my neighborhood station is $1.69.
Gas here is 1.86...I'll take it! ;D Frank, it's so good to read you again. Missed you and your posts! ;)
Yes it is GREAT to see ya back Frank!! Gas is 1.95 in Independence....they even said it was gonna drop again over the weekend, but we will see..... :-\
Glad you are back Frank, I missed your daily reports and insight to the energy status. Gas in B-Vlle is 1.69 so I filled up.
Dec-08 Crude is trading at $55.625, down $1.415, Dec-08 Natural Gas is trading at $6.385, up $0.073.
Gasoline at our neighborhood station is $1.64.
Crude Oil Falls as Global Slowdown Cuts Demand in China, Japan
By Gavin Evans and Grant Smith
Nov. 17 (Bloomberg) -- Oil fell for a second day as Japan entered its first recession since 2001 and China's largest crude producer said demand has declined ``sharply.''
Japan's economy contracted 0.4 percent in the third quarter, official figures today showed. China National Petroleum Corp., the biggest producer in the world's second-largest oil consumer, said demand has fallen since September because of the global credit crisis. OPEC may wait until December to cut output, the group's president said.
``As the stream of bearish news continues unabated, oil prices are again under pressure,'' said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. ``The only hope for a price recovery is a big production cut by OPEC or a shut-in of some high-cost non-OPEC production.''
Crude oil for December delivery dropped as much as $1.44, or 2.5 percent, to $55.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $55.83 at 11:11 a.m. in London.
Prices remained lower today even after Royal Dutch Shell Plc and Chevron Corp. announced pipeline disruptions in Nigeria. Shell extinguished a fire at a pipeline that carries crude to the Forcados export terminal. Chevron shut its onshore production in the country after a pipeline breach last week.
China Slowdown
Prices declined 6.6 percent last week, touching a 21-month low of $54.67 on Nov. 13, as world equity markets dropped, Germany entered its worst recession in 12 years and U.S. retail sales fell for a fourth straight month.
``Economies are looking poor, the demand outlook is not good, so that's why oil prices are following the stock markets,'' Johannes Benigni, chief executive officer of JBC Energy, said in a television interview. ``In due course, oil prices have to balance around $80. If prices are below, oil companies will not invest sufficiently.''
The International Energy Agency last week slashed its global oil consumption forecast for 2009 by 670,000 barrels a day. Demand will rise 0.4 percent to 86.5 million barrels a day, as growth in emerging nations partly offsets a 1.6 percent contraction in fuel use in developed economies, the Paris-based agency said.
The Organization of Petroleum Exporting Countries is due to release its own monthly market report today.
Brent crude for January settlement dropped as much as $1.24, or 2.3 percent, to $53 a barrel on London's ICE Futures Europe exchange. It was at $53.21 a barrel at 11:06 a.m. London time.
G-20 Meeting
Leaders from the Group of 20 urged a ``broader policy response'' to the financial crisis at a weekend meeting in Washington, citing the potential for additional interest-rate cuts and fiscal stimulus.
Hedge-fund managers and other large speculators increased their net-short position in New York crude-oil futures in the week ended Nov. 11, according to U.S. Commodity Futures Trading Commission data.
Speculative short positions, or bets prices will fall, outnumbered long positions by 52,984 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-short positions rose by 42,441 contracts, or 403 percent, from a week earlier.
OPEC is likely to wait until December before cutting output again, the group's president, Chakib Khelil, said in Algeria yesterday. Saudi Arabia, the world's biggest oil producer and OPEC's largest member, will help alleviate global financial stress by maintaining stable oil markets, King Abdullah said after the meeting of Group of 20 leaders in Washington Nov. 15.
Iran, OPEC's second-largest producer, may seek a production cut of as much as 1.5 million barrels a day when the group meets in Cairo later this month, the Associated Press reported Nov. 15, citing televised comments by the nation's OPEC Governor Mohammad Ali Khatibi.
``We see OPEC reducing supply in October 1.5 million barrels a day,'' said JBC's Benigni. ``At the end of the month in Cairo there might be another cut.''
The group, which pumps about 40 percent of the world's oil, cut output by 1.5 million barrels a day last month. It will have more information on which to make a decision on further cuts at the Dec. 17 meeting in Oran, Algeria, Khelil said yesterday.
Dec-08 Crude settled at $54.95, down $2.09 on the day, Dec-08 Natural Gas settled at $6.533, up $0.221 on the day.
So, that's why it's 1.79 here now...I couldn't believe it when I saw it...I haven't seen it that low in over 5 years, I think...actually, the last time I saw it that cheap was way back 8 years ago...and I thought it was outrageously high back then...time is a cruel teacher.
Dec-08 Crude is trading at $54.85, down $0.10, Dec-08 Natural Gas is trading at $6.515, down $0.018.
Gas at our neighborhood station was a $1.61 last night.
Crude Oil Falls to 22-Month Low in New York on Demand Concerns
By Grant Smith
Nov. 18 (Bloomberg) -- Oil slid to the lowest in almost 22 months before a report forecast to show that U.S. crude inventories increased for an eighth week as a looming recession erodes demand worldwide.
Crude oil stockpiles probably climbed 1 million barrels in the week ended Nov. 14 from 311.9 million the week before, according to a Bloomberg survey before the Energy Department's report tomorrow. Oil also declined as the dollar strengthened against the euro, undermining the appeal of commodities as a currency hedge.
``It's doom and gloom,'' said Eugen Weinberg, a Commerzbank AG analyst in Frankfurt. ``The market is playing the recession card. There could be some negative surprises still to come.''
Crude oil for December delivery dropped as much as 82 cents, or 1.5 percent, to $54.13 a barrel on the New York Mercantile Exchange. That's the lowest since Jan. 30, 2007. It traded for $54.55 at 9:06 a.m. London time.
It may be too early for OPEC, which supplies 40 percent of the world's crude, to cut output when it meets in Cairo on Nov. 29, group Secretary-General Abdalla el-Badri said, according to Kuwaiti news agency KUNA.
The Organization of Petroleum Exporting Countries called the Cairo meeting after the 1.5 million-barrel-a-day production cut announced last month failed to stem a slump in prices. Crude has lost more than $90 from its July 11 record of $147.27 a barrel.
``OPEC would damage its situation if it decides to decrease supplies in Cairo as it would be using up its most efficient weapon: production cuts,'' said Commerzbank's Weinberg.
No End-User Demand
Brent crude oil for January settlement fell as much as $1.06, or 2 percent, to $51.25 a barrel on London's ICE Futures Europe exchange. It was at $51.81 at 9:41 a.m. London time.
The Energy Department is scheduled to release its weekly report tomorrow at 10:35 a.m. in Washington.
Refineries probably operated at 84.6 percent of capacity, unchanged from the week before, Bloomberg's survey showed. Gasoline stockpiles probably increased 1 million barrels from 198.1 million barrels a week earlier, and supplies of distillate fuel likely rose 700,000 barrels from 128.4 million barrels.
``It really highlights that there isn't any end-user demand in the market,'' said Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne. ``Refinery rates were moving up toward 90 percent this time last year so it's definitely down year on year.''
The U.S. dollar rose to $1.2588 against the euro as of 9:06 a.m. in London from $1.2650 yesterday in New York.
Dec-08 Crude settled at $54.39 down $0.56 on the day, Dec-08 Natural Gas settled at $6.516, down $0.017 on the day.
Gas is 1.78 here!!!!!!!!!! I can't believe it...I wonder how much further it'll drop.
WOOHOO!!! Gas has finally broken the $2 mark here in Macclenny Fl. $1.99 is what the local station around the corner from my house had just before I got home this evening.
Dec-08 Crude is trading at $54.275, down $0.115, Dec-08 Natural Gas is trading at $6.505, down $0.011.
Oil Falls to 22-Month Low on Forecast U.S. Stockpiles Expanded
By Christian Schmollinger and Grant Smith
Nov. 19 (Bloomberg) -- Crude oil fell for a fourth day, dropping below $54 to its lowest in 22 months, on expectations U.S. inventories gained last week as fuel demand in the world's largest user declined.
Stockpiles probably climbed 1 million barrels last week while refinery output is likely to have fallen for a third week, according to the median of analyst estimates before an Energy Department report today. U.S. gasoline purchases fell for a 30th consecutive week, MasterCard Inc. said yesterday.
"We see nearly every day now some downward revision in global demand," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "If we see really bad inventory data today, we can go to $45 in one day."
Crude oil for December delivery fell as much as $1.09, or 2 percent, to $53.30 a barrel in electronic trading on the New York Mercantile Exchange. That's the lowest since Jan. 23, 2007. It traded at $53.94 a barrel at 11:39 a.m. London time.
The December future expires tomorrow. The more active January contract was down 86 cents at $52.83 a barrel.
Oil has dropped 63 percent since reaching a record $147.27 in July. Futures fell 56 cents, or 1 percent, to $54.39 a barrel yesterday, the lowest settlement since Jan. 29, 2007.
Prices rose yesterday as a hijacked Saudi Arabian supertanker was anchored close to the Somali coast. Pirates directed the Sirius Star, the largest merchant ship ever seized, to the Eyl coastal area to the north of Somalia, the U.S. Navy said. The vessel is carrying 2 million barrels of crude oil.
"The effect on the price is marginal and it's been overshadowed by the demand side worries," David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. "The market is still very worried about consumption."
China Slowdown
China's economy may grow by less than 9 percent in the fourth quarter of this year as overseas demand weakens, the China Securities Journal reported, citing People's Bank of China adviser Fan Gang.
The Asian nation's economic expansion may slip to below 8 percent next year before rebounding to between 8 and 9 percent in 2010, the Xinhua News Agency-affiliated newspaper said today, citing Fan's interview. The country is the world's second- biggest oil consumer.
Most Asian stocks fell today, led by commodity producers as oil and metals prices dropped. Woodside Petroleum Ltd., Australia's second-largest oil company, lost as much as 6.3 percent. Cnooc Ltd., China's biggest offshore explorer, fell 1.8 percent to HK$5.60.
U.S. Stockpiles
Refineries probably operated at 84.5 percent of capacity, down 0.1 percentage point from the week before, the survey of 12 analysts showed. The plants used 87 percent of their capacity a year ago as they raised their output to produce heating fuels.
"Seasonally it is a time where demand for heating oil starts to pick up," said Toby Hassall, a research analyst with Commodity Warrants Australia in Sydney. "But offsetting that is the economic slowdown which should mute any seasonal support."
Analysts were split over whether gasoline stockpiles rose or fell last week. Supplies were probably unchanged from 198.1 million barrels the week before, according to the survey.
Purchases of gasoline in the U.S. fell 2.8 percent last week, MasterCard Inc. said in its weekly SpendingPulse statement.
Supplies of distillate fuel, a category that includes heating oil and diesel, rose 600,000 barrels from 128.4 million barrels the week before, according to the survey.
The Energy Department is scheduled to release its weekly report today at 10:35 a.m. in Washington.
Brent crude oil for January settlement was at $51.47 a barrel, down 37 cents, on London's ICE Futures Europe exchange at 11:33 a.m. in London. The contract declined yesterday 47 cents, or 0.9 percent, to $51.84 a barrel, the lowest settlement since Jan. 18, 2007.
Opec 'lost $700bn on cheaper oil'
Opec members have lost about $700bn (£467bn) because of falling crude prices, the oil cartel's president Chakib Khelil said in an interview.
Oil prices have fallen 60% from their $147 peak, prompting speculation Opec will cut output again to boost prices.
However, speaking to Algerian newspaper El Khabar, Mr Khelil said Opec was unlikely to make a decision this month.
He said the following meeting on 17 December would be "the most important" as the cartel would get necessary data.
The data will show whether Opec's previous output cuts have been applied by its members.
The cartel, which controls 40% of the world's oil supply, agreed on a 1.5 million barrel-a-day reduction last month.
On Wednesday, US light, sweet crude stood at $54.47 a barrel, while Brent crude cost $51.84 a barrel.
"The Cairo meeting [on 29 November] is considered as an internal debate, while the meeting scheduled in Oran [on 17 December], will be more important in a sense that we will obtain, by that time, more information about the oil market trend," El Khabar quoted Mr Khelil as saying.
"All members... are very concerned about the economic situation which has worsened in the United States and Europe who have entered into a recession, followed by Japan," the Opec president said.
Frank,
Do you have any opinion on a bottom. I have read in some blogs and articles that the expected recession in Japan and China is going to be much more severe than even here, causing a massive reduction in demand. This said, I have heard the 30-35 dollar amount bounced around. What do you think?
Dan, I think you and I discussed this some months back and I told you $50.00 range would be a low, as I felt at that number, Gasoline would be low enough that people would start driving more and also that OPEC would cut exports big time. The whole playing field has changed, $147.00 oil and the resulting $4.00 US and $10.00 European Gasoline prices have resulted in a worldwide recession, and unfortunately I think things are going to get much worse before they get better, that said, I think we could see $30.00 to $35.00 oil. OPEC keeps saying they are going to cut exports big time but I think they know they need to keep oil prices down to help with the recovery of the World economy and I think cooler heads, Saudi Arabia, Kuwait, U.A.E and Russia will keep exports up.
The longterm negative is that drilling in the US is dropping and we are only pushing back any efforts to be less energy dependent on foreign sources for our energy needs.
Let's visit this discussion again periodically, it will be interesting to see where we are.
Ive learned alot for reading this topic and i dont keep know enough about what youre talking about but however i do know it only cost me $40.00 to fill up from empty on my truck and i almost did a cartwill at the station now if some one would just check the oil and wash my windows id realy get excited.
Below is an excerpt from todays, weekly EIA/DOE Crude and product Inventory report:
Total products supplied over the last four-week period has averaged nearly
19.1 million barrels per day, down by 7.0 percent compared to the similar
period last year. Over the last four weeks, motor gasoline demand has averaged
9.0 million barrels per day, down by 2.2 percent from the same period last
year. Distillate fuel demand has averaged 4.0 million barrels per day over the
last four weeks, down by 3.3 percent from the same period last year. Jet fuel
demand is 20.3 percent lower over the last four weeks compared to the same
four-week period last year.
ok i just looked at my last post and im realy not as stupid as it might look . sorry about that ill make sure i proof read next time
Dec-08 Crude settled at $53.62 down $0.77 on the day, Dec-08 Natural Gas settled at $6.743, up $0.227 on the day.
Dec-08 Crude is trading at $52.625, down $1.475, Dec-08 Natural Gas is trading at $6.70, down $0.043.
Oil Falls Toward $50 a Barrel as Fuel Use Falls, Equities Slump
By Christian Schmollinger and Grant Smith
Nov. 20 (Bloomberg) -- Crude oil fell for a fifth day, approaching $50 a barrel, as the contracting world economy increased concerns that demand for fuels will slow.
U.S. fuel use during the past four weeks averaged 19.1 million barrels a day, down 7 percent from a year ago, an Energy Department report said yesterday. Stocks declined worldwide after the Dow Jones Industrial Average dropped to a five-year low yesterday.
"We have a good chance to make another leg down to the downside," said Gerrit Zambo, an oil trader at BayernLB in Munich. "Fifty is a critical point, and if this is broken we could see Brent going down to $40."
Crude oil for December delivery fell as much as $1.13, or 2.1 percent, to $52.49 a barrel on the New York Mercantile Exchange. It was at $52.78 a barrel at 9:22 a.m. London time. Yesterday, futures touched $52.79 a barrel, the lowest since Jan. 23, 2007.
Brent crude oil for January settlement fell as much as $1.24, or 2.4 percent, to $50.48 a barrel on London's ICE Futures Europe exchange. It was at $50.90 a barrel at 9:22 a.m. London time. The contract yesterday declined 12 cents to $51.72 a barrel, the lowest settlement since Jan. 11, 2007.
"U.S. demand has really been collapsing and dragging the OECD demand as well," said Antoine Halff, head of energy research at Newedge USA LLC in New York, in an interview with Bloomberg Television. "We might end up with a contraction in global demand growth for the year."
Japan Exports Drop
Oil has dropped 64 percent since reaching a record $147.27 a barrel on July 11. Yesterday, December futures fell 77 cents, or 1.4 percent, to $53.62 a barrel, the lowest settlement since Jan. 22, 2007.
The more active January futures contract was down 78 cents, or 1.4 percent, at $53.32 a barrel. December futures expire at the close of trading today.
In the latest evidence that the global recession is deepening, exports from Japan dropped at the fastest pace in almost seven years in October. Japan, the world's largest oil importer, fell into a recession last quarter.
Democratic congressional leaders disagreed with Republicans and President George W. Bush's administration over how to provide $25 billion in aid to GM, Ford Motor Co. and Chrysler LLC. Only two days remain in a lame-duck session for lawmakers to resurrect a compromise.
The MSCI World Index lost 1.9 percent to 806.29, the lowest since April 2003, as of 8:30 a.m. in London.
Stockpiles Grow
Oil prices also fell as U.S. crude inventories climbed because of declining demand for fuels.
Crude-oil supplies rose 1.6 million barrels to 313.5 million barrels last week, the Energy Department said yesterday. Stockpiles were forecast to rise 1 million barrels, according to a Bloomberg News survey of analysts.
Gasoline inventories rose 539,000 barrels to 198.6 million barrels in the week ended Nov. 14, the report showed. Analysts surveyed by Bloomberg News were split over whether supplies of the motor fuel increased or declined.
U.S. fuel demand fell 5.2 percent in the first 10 months of this year, the biggest drop since 1981, the American Petroleum Institute said in a report yesterday.
OK...not to sound too ignorant...but what exactly is brent crude?
Good Morning Cat, Brent is the Main or Marker Crude in Western Europe, it is Equivalent to our WTI-Cushing NYMEX/Futures Crude. Brent trades in the Commodities Futures Market pretty much in line with WTI (West Texas Intermediate, Sweet Crude), except for some location difference. US Refiners run quite a lot of Brent Crude here in the States, mainly in the Atlantic Coast Area refineries. Phillips Petroleum, now ConocoPhillips has had a long on going Partnership with the British in developing their North Sea production.
Dec-08 Crude settled at $49.62 down $4.00 on the day, Dec-08 Natural Gas settled at $6.316, down $0.427on the day.
The close below $50.00 is below what the technical barriers were, this could signal significantly lower numbers in trading overnite and tomorrow.
Below is the summary for the Weekly Natural Gas Storage Report that came out today. The market was calling for the first draw of the Winter Heating season, instead we had a slight build which took the Natural Gas NYMEX Futures market down considerably
Summary
Working gas in storage was 3,488 Bcf as of Friday, November 14, 2008, according to EIA estimates. This represents a net increase of 16 Bcf from the previous week. Stocks were 51 Bcf less than last year at this time and 140 Bcf above the 5-year average of 3,348 Bcf. In the East Region, stocks were 103 Bcf above the 5-year average following no net change in storage levels. Stocks in the Producing Region were 5 Bcf above the 5-year average of 969 Bcf after a net injection of 11 Bcf. Stocks in the West Region were 32 Bcf above the 5-year average after a net addition of 5 Bcf. At 3,488 Bcf, total working gas is within the 5-year historical range.
Jan-09 Crude is trading at $50.00, up $0.58, Dec-08 Natural Gas is trading at $6.345, up $0.029.
Note: Trading for Dec-08 Crude Futures went of the board yesterday and today the front month is January 2009.
Crude Oil Rises as Governments May Take Steps to Revive Growth
Nov. 21 (Bloomberg) --Oil rose for the time in six days to trade above $50 on speculation governments will step up efforts to revive economic growth.
Crude gained as the Bank of Japan said it will consider pumping more money into the financial system to prop up an economy that fell into a recession last quarter. The European Commission will announce a fiscal-stimulus plan next week, President Jose Barroso told reporters in Brussels yesterday.
"If the market believes these packages are working then they can put a floor under prices," Andy Sommer, an analyst with HSH Nordbank in Hamburg. "Many analysts think these prices are not justified by fundamentals and are saying now is the time to buy."
Crude oil for January delivery rose as much as $1.02, or 2.1 percent, to $50.64 a barrel on the New York Mercantile Exchange. It was at $50.24 at 9:34 a.m. in London.
The contract earlier fell as much as $1.17, or 2.4 percent, to $48.25 a barrel. Futures have dropped 67 percent since reaching a record $147.27 a barrel on July 11.
Bank of Japan Governor Masaaki Shirakawa has instructed his staff to study new ways of making money available for lending, such as accepting corporate debt as collateral, the central bank said in a statement in Tokyo today.
Stimulus Package
German officials have put the size of the European economic stimulus package at 130 billion euros ($162.5 billion), a figure that European Commission President Barroso refused to confirm yesterday.
Barroso was scheduled to discuss the stimulus proposal yesterday with French President Nicolas Sarkozy, whose government currently holds the rotating EU presidency. The plan is to be approved by the commission on Nov. 26 and put before European leaders at a December summit in Brussels.
Brent crude oil for January settlement rose as much as $1.34, or 2.8 percent, to $49.42 a barrel on London's ICE Futures Europe exchange.
.
Gas was 1.63 in town yesterday.........
Below, is an interesting article on Ethanol from Switchgrass, this aired on Channel 2, Tulsa last Night.
Growing fuel with switchgrass
To cut back on our oil dependency Congress mandated that refineries produce a certain amount of 10% ethanol blend gasoline, which is made from corn.
Scott Dewald with the Oklahoma Cattlemen's Association says that's sent the demand for corn sky high, and the cost of cattle feed right up with it.
"If there's not enough corn to go around, the market goes up. It's a supply and demand function. All of a sudden we find ourselves in this situation, where the feed is costing us twice as much as it did a year before," said Dewald.
Dewald says it doesn't look like it's going to get any better soon. He says the market shows we will have a shortage of corn in the future.
"Congress has said thou shall use X-amount, without regard to our ability to produce it, without regard to the American consumer's willingness to purchase it," said Dewald.
But some say there is another way to get ethanol that doesn't compete with food, and it's right here in Oklahoma.
We headed out west to the panhandle, Gymon, Oklahoma, a town of just 10,000, where the farming community holds a secret that could be a cash cow.
"Could be the future of how we fuel our cars and our vehicles," said Adam Calaway with the Noble Foundation.
He's talking about switchgrass. Supporters say the native Oklahoma grass can be converted to the same ethanol as corn. The Noble Foundation, a non-for-profit group, has teamed up with OSU and OU to grow a switchgrass research field in Gymon.
"It is the first of its type, and it is the world's largest right now," said Calaway.
Calaway says the field should be ready to harvest in just two and a half years. Once it's ready, he says switchgrass can produce 800 gallons of ethanol per acre, that's almost twice as much as corn. Once it is ready for harvest, crews will take it across the border to Hugeton, Kansas where a bio-refinery is being built to convert the grass to ethanol.
Once it is fully grown, Calaway says there's another cost benefit to switchgrass, "You don't have to establish it every year because it's a perennial, so you're not going to be using as much water or as much fertilizer." However, he says corn must be planted every year.
Jan-09 Crude settled at $49.93 up $0.52 on the day, Dec-08 Natural Gas settled at $6.48, up $0.164 on the day.
Gas is down to 1.72 here...YEAH!!!!!!!!!!!!!! :laugh: :laugh:
Jan-09 Crude is trading at $49.875, down 0.055, Jan-08 Natural Gas is trading at $6.655, up $0.152.
Gasoline at our neighborhood station is $1.48
OPEC May Decide on Further Cut in Cairo, Libya Says (Update2)
Nov. 24 (Bloomberg) -- The Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world's oil, may decide to cut output when it meets in Cairo later this week, Libya's top oil official Shokri Ghanem said.
"It is too early to say how much needs to be cut," Ghanem said in an interview from Tripoli today. "I don't want to start throwing numbers out without consulting my colleagues. We want a consensus."
OPEC's decision to trim output by 1.5 million barrels a day at a meeting in Vienna last month failed to stem the decline in crude prices as the global economic slump crimps fuel demand. Prices have since tumbled more than 22 percent to a three-year low, raising speculation the group will reduce production again.
Shipping data released last week indicate the group will cut oil supplies by 3.8 percent this month as it implements its Oct. 24 resolution. The group's 13 members supplied 30.98 million barrels a day this month, compared with 32.2 million a day in October, according to Geneva-based consultant PetroLogistics Ltd.
The reduction failed to stop the rout in oil markets. Crude futures fell to the lowest since May 2005 on Nov. 21 on signs of lower oil consumption in Europe, Asia and the U.S. The International Energy Agency, the Energy Department and OPEC have slashed demand projections this month because of the deteriorating economic outlook.
Estimated Oversupply
Slowing global demand has left a 1 million barrel-a-day oversupply that needs to be removed by year-end, Venezuela's Oil Minister Rafael Ramirez said yesterday. Crude prices are down 66 percent from a record $147.27 a barrel on July 11.
OPEC, which supplies of more than 40 percent of the world's oil, will discuss compliance with a previous cut at the Nov. 29 meeting in Cairo, according to Ghanem.
"We won't have production data yet, but at least we can consult with each other. It does not mean we can't take a decision," he said.
OPEC's main goal is to stabilize the market, Ghanem said.
"We are worried about the direction of prices -- we need to see if the oil price is falling because liquidity is leaving the market or if there is too much oil in the market," he said in the interview.
As well as this week's meeting in Cairo, OPEC is due to hold another summit in Algeria on Dec. 17 after its decision last month to slash production by 1.5 million barrels a day failed to stop oil prices crashing to below $50 a barrel.
Crude oil for January delivery traded for $49.85 a barrel on the New York Mercantile Exchange at 10:44 a.m. London time.
Update, Jan-09 crude is trading at $51.625, up $1.695, Jan-09 Natural Gas is trading at $6.68, up $0.177.
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.
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.
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.
Frank, do you think this is the beginnning of high gas prices again?
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.
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.
Jan-09 Crude is trading at $52.575, down$1.925, Jan-08 Natural Gas is trading at $6.73, down $0.097.
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.
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
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.
Jan-09 Crude is trading at $54.43, down$0.01, Jan-08 Natural Gas is trading at $6.51, down $0.368.
Crude trading is very thin with very few contracts showing.
I found this on renewable energy: interesting!------
Ocean currents can power the world, say scientists
A revolutionary device that can harness energy from slow-moving rivers and ocean currents could provide enough power for the entire world, scientists claim.
By Jasper Copping
Last Updated: 2:39PM GMT 29 Nov 2008
Existing technologies require an average current of five or six knots to operate efficiently, while most of the earth's currents are slower than three knots Photo: AP
The technology can generate electricity in water flowing at a rate of less than one knot - about one mile an hour - meaning it could operate on most waterways and sea beds around the globe.
Existing technologies which use water power, relying on the action of waves, tides or faster currents created by dams, are far more limited in where they can be used, and also cause greater obstructions when they are built in rivers or the sea. Turbines and water mills need an average current of five or six knots to operate efficiently, while most of the earth's currents are slower than three knots.
The new device, which has been inspired by the way fish swim, consists of a system of cylinders positioned horizontal to the water flow and attached to springs.
As water flows past, the cylinder creates vortices, which push and pull the cylinder up and down. The mechanical energy in the vibrations is then converted into electricity.
Cylinders arranged over a cubic metre of the sea or river bed in a flow of three knots can produce 51 watts. This is more efficient than similar-sized turbines or wave generators, and the amount of power produced can increase sharply if the flow is faster or if more cylinders are added.
A "field" of cylinders built on the sea bed over a 1km by 1.5km area, and the height of a two-storey house, with a flow of just three knots, could generate enough power for around 100,000 homes. Just a few of the cylinders, stacked in a short ladder, could power an anchored ship or a lighthouse.
Systems could be sited on river beds or suspended in the ocean. The scientists behind the technology, which has been developed in research funded by the US government, say that generating power in this way would potentially cost only around 3.5p per kilowatt hour, compared to about 4.5p for wind energy and between 10p and 31p for solar power. They say the technology would require up to 50 times less ocean acreage than wave power generation.
The system, conceived by scientists at the University of Michigan, is called Vivace, or "vortex-induced vibrations for aquatic clean energy".
Michael Bernitsas, a professor of naval architecture at the university, said it was based on the changes in water speed that are caused when a current flows past an obstruction. Eddies or vortices, formed in the water flow, can move objects up and down or left and right.
"This is a totally new method of extracting energy from water flow," said Mr Bernitsas. "Fish curve their bodies to glide between the vortices shed by the bodies of the fish in front of them. Their muscle power alone could not propel them through the water at the speed they go, so they ride in each other's wake."
Such vibrations, which were first observed 500 years ago by Leonardo DaVinci in the form of "Aeolian Tones", can cause damage to structures built in water, like docks and oil rigs. But Mr Bernitsas added: "We enhance the vibrations and harness this powerful and destructive force in nature.
"If we could harness 0.1 per cent of the energy in the ocean, we could support the energy needs of 15 billion people. In the English Channel, for example, there is a very strong current, so you produce a lot of power."
Because the parts only oscillate slowly, the technology is likely to be less harmful to aquatic wildlife than dams or water turbines. And as the installations can be positioned far below the surface of the sea, there would be less interference with shipping, recreational boat users, fishing and tourism.
The engineers are now deploying a prototype device in the Detroit River, which has a flow of less than two knots. Their work, funded by the US Department of Energy and the US Office of Naval Research, is published in the current issue of the quarterly Journal of Offshore Mechanics and Arctic Engineering.
Hello, everyone, and a belated Happy Turkey Day! Hubby and I just returned home from a weeklong trip back to see family and friends in Indiana and Illinois. What a blessing the lower gas prices are .... the highest we paid was $1.79 a gallon and the lowest was $1.45 (in Missouri). It felt so strange to get a half a tank of gas for $10. I read a headline in a St. Louis newspaper that some stations were having price wars and charging just a few cents over cost. I also heard on NPR that people are starting to buy SUVs again. I'm sure car dealers are thrilled to get them off the lot, but I fear it means people are going to quickly revert to past driving and vehicle-purchasing habits and we'll be back in the same (leaking) boat before long. How quickly we forget! However, I do think that overall the lower gas prices will help boost the economy since people have a bit more money to spend at the stores instead of at the gas station.
Opec isn't cutting production this month. Their meeting again in december. probably will cut 1.5 million barrels then.
We spent most of the week in California enjoying Thanksgiving with our daughter. Gasoline was $1.80 range up to $2.00 range. When we got back into Bartlesville it was a $1.42.
Jan-09 Crude is trading at $52.075, down$2.355, Jan-08 Natural Gas is trading at $6.415, down $0.095.
OPEC Will Cut Oil Output This Month, El-Badri Says (Update2)
Dec. 1 (Bloomberg) -- OPEC, supplier of more than 40 percent of the world's oil, will reduce crude production further when the group meets this month in Algeria, the group's Secretary General Abdalla el-Badri said.
"For sure there will be action" at the OPEC meeting in Oran, Algeria, Dec. 17, el-Badri told reporters in Tehran today, declining to specify the amount of output that may be reduced. "Everybody is in favor of a cut in the Algeria meeting - we are all gearing towards a cut."
Ministers from the Organization of Petroleum Exporting Countries postponed debate on a second cut in output in as many months during meetings in Cairo on Nov. 29. OPEC members said they would wait to gauge the effect of a 1.5 million-barrel cut agreed to on Oct. 24.
Crude oil for January delivery fell as much as $2.03, or 3.7 percent, to $52.40 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $52.45 a barrel at 4:15 p.m. in Singapore. New York oil futures have tumbled 64 percent from their July 11 record of $147.27 a barrel as the U.S., Europe and Japan headed for their first simultaneous recession since World War II.
$75 a Barrel
OPEC is likely to lower output further as it seeks oil at $75 a barrel, a price el-Badri said was a "reasonable" level at this time. "There is a consensus among ministers. They want to defend a reasonable price," he added.
For the long-term, the group is looking at a price of $70 to $90 a barrel, from 1996 to 2030, he said.
"Oil prices are very low and it is obvious that they have to do something to stabilize prices," said Sintje Diek, an analyst at HSH Nordbank in Hamburg. "They have said they need prices in the range of $70-90 a barrel. They will cut oil production in December."
Slowing global growth means demand will be "much lower" than expected a month ago, OPEC said in a statement after the group's meeting in Cairo. Another cut on Dec. 17 may not be needed if member states complied with 80 percent of the 1.5 million barrel-a-day reduction agreed in October, Al Hayat reported, citing Saudi Arabia's Oil Minister Ali al-Naimi.
Forecasts from secondary sources suggest that OPEC members will meet 80 percent of the target output cut, el-Badri said today. The group didn't make a cut in Cairo because there was no clear data available yet, "so we didn't want to shoot in the dark."
'Cairo Downplayed'
"It feels as if Saudi Arabia is almost inviting market participants to push prices lower to pressure better OPEC compliance and some non-OPEC participation in the next round of cuts," said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix, in a research note today. "The Cairo meeting had been downplayed by OPEC but it did not even produce a common statement and provided no clear hint as to the next line of action."
The International Energy Agency, an adviser to 28 oil- consuming nations, and OPEC cut their demand forecasts for a third month in November. Crude-oil supplies in the U.S., which consumes a quarter of the world's oil, rose for a ninth week, the longest stretch since April 2005, the Energy Department said Nov. 26.
"The short-term outlook for oil is gloomy," el-Badri said. "It is more likely that oil demand will continue to decrease next year."
Jan-09 Crude settled at $49.28, down $5.15 on the day, Jan-08 Natural Gas settled at $6.604, up $0.094 on the day.
Jan-09 Crude is trading at $48.52, down$0.76, Jan-08 Natural Gas is trading at $6.528, down $0.076.
Oil Falls to 3-Year Low on Signs U.S. in Longest Post-War Slump
Dec. 2 (Bloomberg) -- Crude oil fell to the lowest in more than three years on signs the U.S., the world's largest energy consumer, may be in the longest slump since World War II.
The U.S. first entered a recession in December 2007, the panel of economists that dates American business cycles said yesterday. The country's manufacturing output in November contracted at the fastest pace in 26 years, a report showed. Crude pared losses as the dollar weakened against the euro, making commodities more attractive as a currency hedge.
"Demand is going down from week to week, hand-in-hand with the worldwide slowdown in economic growth," said Gerrit Zambo, an oil trader at BayernLB in Munich. "If sentiment gets worse and equities move lower we could see oil go to $40."
Crude oil for January delivery dropped as much as $1.92, or 3.9 percent, to $47.36 a barrel in electronic trading on the New York Mercantile Exchange. That's the lowest since May 20, 2005. It was at $48.56 at 10:47 a.m. in London.
Oil prices have tumbled 68 percent since reaching a record $147.27 on July 11 as the U.S., Europe and Japan face their first simultaneous recession since World War II.
Crude is also under pressure after the United Arab Emirates' state-owned producer said it would provide full contractual volumes to Asian refiners, indicating members of the Organization of Petroleum Exporting Countries may fail to fully comply with production cuts last month.
"All the poor economic news plus the lack of clear indication of full compliance on the part of OPEC, means a further downturn is possible," said Victor Shum, senior principal at consultants Purvin & Gertz Inc. in Singapore.
December Recession
Brent crude oil for January settlement fell as much as $1.95, or 4.1 percent, to $46.02 a barrel, on London's ICE Futures Europe exchange, the lowest intraday price since Feb. 18, 2005. It was at $47.71 a barrel at 10:38 a.m. London time.
The euro advanced to $1.2660 at 10:24 a.m. in London, from $1.2610 in New York yesterday.
The declaration on the U.S. recession was made by the National Bureau of Economic Research, a private, non-profit group of economists based in Cambridge, Massachusetts. The last time the U.S. was in a recession was from March through November 2001, according to the agency.
The longest economic slumps since 1945 were the 16-month downturns that ended in March 1975 and November 1982. The Great Depression lasted 43 months, from August 1929 to March 1933.
The Institute for Supply Management's factory index dropped to 36.2, the lowest level since 1982, the Tempe, Arizona-based group reported. A reading of 50 is the dividing line between expansion and contraction.
Ministers from the Organization of Petroleum Exporting Countries put off debate on a second cut in output in as many months during the Nov. 29 meeting in Cairo.
Abu Dhabi Supplies
Abu Dhabi National Oil Co., the United Arab Emirates state- owned producer, will supply full crude shipments to its Asian customers in January, said four traders at refiners in Japan, South Korea and Singapore.
Abu Dhabi National, known as Adnoc, will supply contracted volumes of its Murban, Upper Zakum, Lower Zakum and Umm Shaif grades next month, said the traders, who asked to remain unidentified because of company policy. The U.A.E. was OPEC's fourth-largest supplier in October.
OPEC will reduce crude production when it meets in Oran, Algeria, this month, OPEC Secretary General Abdalla el-Badri said. Oil demand is likely to drop further next year, he said.
"For sure there will be action" at the meeting, el-Badri told reporters in Tehran yesterday, declining to specify the amount of output that may be curbed.
Stockpiles May Rise
U.S. crude-oil inventories probably rose for a 10th week as imports rebounded, a Bloomberg News survey of analysts showed.
Crude-oil stockpiles probably climbed 850,000 barrels in the week ended Nov. 28 from 320.8 million the week before, according to the median of six analyst estimates before an Energy Department report this week.
Refineries probably operated at 86.5 percent of capacity, up 0.3 percentage point from the week before, the survey showed.
Gasoline stockpiles probably increased 1.5 million barrels from 200.5 million the week before, according to the survey. Seven analysts gave product-supply estimates.
Supplies of distillate fuel, a category that includes heating oil and diesel, rose 1 million barrels from 126.7 million barrels the week before, according to the survey.
The Energy Department is scheduled to release its weekly report tomorrow at 10:35 a.m. in Washington.
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Jan-09 Crude settled at $46.96, down $2.32 on the day, Jan-08 Natural Gas settled at $6.424, down $0.18 on the day.
The EIA crude and products inventory report comes out tomorrow.
Jan-09 Crude is trading at $47.30, up $0.34, Jan-08 Natural Gas is trading at $6.381, down $0.043.
Oil Rises From 3-Year Low as OPEC Signals Plan to Cut Supplies
Dec. 3 (Bloomberg) -- Crude oil rebounded from a three-year low on speculation OPEC will cut production further this month to check the collapse in prices.
The Organization of Petroleum Exporting Countries intends to redice output when it meets on Dec. 17 in Algeria, Qatar's Oil Minister Abdullah bin Hamad al-Attiyah said today. The U.S. Energy Department releases its weekly report on fuel inventories later today. Gasoline purchases last week rose from the previous week by 1.7 percent, according to MasterCard Inc.
"I'm very sure OPEC will cut on Dec. 17, it has to be at least 1 million barrels a day," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "Prices are at a very low level, well below the marginal cost of supply, so I don't expect oil to drop too much."
Crude oil for January delivery rose as much as $1.14, or 2.4 percent, to $48.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $47.34 a barrel at 10 a.m. London time.
Yesterday, futures fell $2.32, or 4.7 percent, to $46.96 a barrel, the lowest settlement since May 20, 2005. Oil has tumbled 68 percent from a record $147.27 a barrel reached on July 11 and is set to decline 50 percent this year, snapping six years of gains.
U.S. gasoline demand dropped 0.3 percent last week from a year earlier, the smallest decline since April, as motor fuel prices fell, MasterCard Inc. said in its SpendingPulse report.
OPEC 'Definitely' to Cut
OPEC, supplier of more than 40 percent of the world's oil, will "definitely" cut output at its next meeting in Algeria on Dec. 17 after postponing a decision last month, Qatar's al- Attiyah said in Dubai today.
He added that he doesn't know by how much the Organization of Petroleum Exporting Countries would reduce output. The group wants crude oil prices at between $70 and $80 a barrel "because this is the range at which you can invest."
The group deferred a decision to cut output at a meeting on Nov. 29 in Cairo. OPEC agreed on Oct. 24 to cut shipments by 1.5 million barrels a day.
OPEC Secretary General Abdalla el-Badri said Dec. 1 in Tehran that "for sure there will be action" at this month's summit.
U.S. Recession
The U.S. is facing its longest economic slump since World War II, said the National Bureau of Economic Research, a private non-profit group of economists based in Cambridge, Massachusetts.
"The demand isn't going to get any stronger in the near- term," said Toby Hassall, an analyst at Commodity Warrants Australia in Sydney. "We have to get a sense of how deep the recession is going to be in the U.S."
U.S. crude inventories probably gained for a 10th week as demand continues to plummet in the world's largest energy user, according to a Bloomberg survey before the Department of Energy releases its weekly report.
The report will likely show that crude-oil supplies rose 1 million barrels last week, according to the median of 13 responses in a Bloomberg News survey. It would be the 10th consecutive weekly gain. Stockpiles of gasoline and distillate fuel, a category that includes heating oil and diesel, also rose, according to the survey.
Brent crude oil for January settlement gained as much as $1.15, or 2.5 percent, to $46.59 a barrel on London's ICE Futures Europe exchange. It was at $46.06 a barrel at 9:27 a.m. London time. The contract declined $2.53, or 5.3 percent, to $45.44 a barrel yesterday, the lowest settlement since Feb. 15, 2005.
Jan-09 Crude settled at $46.79, down $0.17 on the day, Jan-08 Natural Gas settled at $6.347, down $0.077 on the day.
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Jan-09 Crude is trading at $46.17, down $0.62, Jan-09 Natural Gas is trading at $6.326, down $0.021.
Crude Oil Falls a Fifth Day as U.S. Fuel Demand Drops Further
Dec. 4 (Bloomberg) -- Crude oil fell for a fifth day to the lowest in almost four years after a report showed U.S. fuel demand extended declines because of the country's deepening economic slump.
The average amount of fuel products such as gasoline and diesel supplied by refiners for the past four weeks was 7.9 percent less than a year earlier, according to a U.S. Energy Department report yesterday. Refinery operating rates in the world's largest energy-consuming nation declined as falling demand lowered processing profits.
"Nothing except a major shock is going to revive this market as long as risk aversion predominates," said Andrey Kryuchenkov, an analyst with VTB Group in London. "Demand numbers were down again yesterday, reflecting the economic crisis."
Crude oil for January delivery today dropped as much as $1.49, or 3.2 percent, to $45.30 a barrel on the New York Mercantile Exchange. That's the lowest since Feb. 9, 2005. It was at $46.13 a barrel at 9:58 a.m. London time.
Futures have tumbled 69 percent after reaching a record $147.27 on July 11.
"The most important data is the petroleum products supplied, which is the demand figures, and the trend there remains weak," said David Moore, a commodity strategist with Commonwealth Bank of Australia Ltd. in Sydney. "There are broad worries about consumption."
The four-week average of petroleum products supplied in the U.S. was 19.3 million barrels a day, down from 20.9 million barrels a day a year ago, the Energy Department report showed. The U.S. entered a recession in December 2007, the National Bureau of Economic Research, a private, non-profit panel of economists that dates American business cycles, said on Dec. 1.
U.S. Inventories
Crude-oil supplies fell 456,000 barrels to 320.4 million barrels last week, the first decline in 10 weeks, the department said. Inventories were forecast to rise 1 million barrels, according to the median of 13 responses in a Bloomberg survey.
Supplies at Cushing, Oklahoma, where New York-traded West Texas Intermediate oil is stored, climbed 2.35 million barrels to 22.9 million last week. The increase left inventories at their highest since June 2007.
Refineries operated at 84.3 percent of capacity, down 1.8 percentage points from the week before. It was the biggest one- week drop since September, when hurricanes Gustav and Ike struck the Gulf Coast.
The price difference between gasoline futures and oil contracts, known as the crack spread and seen as a profit margin for refiners, was at minus $3.07 a barrel. The crack has been negative for almost two months, reducing the incentive to process fuels.
Widening Recession
Gasoline stockpiles dropped 1.53 million barrels to 198.9 million in the week ended Nov. 28. Supplies of distillate fuel, a category that includes heating oil and diesel, fell 1.72 million barrels to 125 million last week.
Brent crude oil for January settlement fell as much as $1.64, or 3.6 percent, to $43.80 a barrel on London's ICE Futures Europe exchange, and traded at $44.66 at 9:23 a.m. London time.
Oil prices have dropped as the U.S., Japan and Europe are all in recession for the first time since World War II.
Service industries in the U.S. contracted the most in at least 11 years, the Institute of Supply Management's index of non-manufacturing business showed. Companies eliminated 250,000 jobs in October, the most since November 2001, ADP Employer Services said yesterday.
The Labor Department's November jobs report may show payrolls fell by 330,000, the biggest decrease since 1982, according to a Bloomberg News survey of economists.
"I do think this non-farm payrolls data will be quite important to the market," said Commonwealth Bank's Moore. "I'm sure some of it's factored into the market but the actual printing of the number might still cause people to worry about oil consumption in the U.S."
Jan-09 Crude settled at $43.67, down $3.12 on the day, Jan-08 Natural Gas settled at $6.017, down $0.330 on the day.
Jan-09 Crude is trading at $44.30, up $0.63, Jan-08 Natural Gas is trading at $5.779, down $0.238.
Oil Set for Biggest Weekly Drop Since March 2003 on Demand Slip
Dec. 5 (Bloomberg) -- Crude oil is set for its biggest weekly decline since March 2003, trading near a four-year low as the economic contraction and job losses in the U.S. cause a slump in fuel demand.
Oil has fallen 19 percent this week after the U.S. was declared to be in a recession. Energy, wheat and copper led a plunge in commodities yesterday as the Standard & Poor's GSCI raw materials index fell to the lowest since February 2005. A report today will probably show U.S. November payrolls dropped the most since the 2001 terrorist attacks.
"All the weak economic data is really disturbing the oil market," said Sintje Diek, an analyst with HSH Nordbank in Hamburg. "If the labor market is weaker again, we will see lower consumption by consumers, they will lower their demand of gasoline."
Crude oil for January delivery was at $44.29 a barrel, up 62 cents, at 10:27 a.m. London time on the New York Mercantile Exchange. Yesterday, futures tumbled $3.12, or 6.7 percent, to $43.67 a barrel, the lowest settlement price since Jan. 5, 2005.
Oil prices have fallen 70 percent since reaching a record $147.27 a barrel on July 11. Crude's weekly drop is the largest since a 24 percent decline during the week ending March 21, 2003.
The U.S. entered a recession in December 2007, the National Bureau of Economic Research, a private, non-profit panel of economists that dates American business cycles, said Dec. 1. U.S. equity markets declined yesterday as oil stocks dropped on forecasts of $25-a-barrel crude from analysts at Merrill Lynch.
Fuel Demand
U.S. fuel demand during the four weeks ended Nov. 28 was down 6.2 percent from a year earlier, an Energy Department report showed Dec. 3.
The GSCI raw materials index has slumped 63 percent from its peak on July 3 as a credit crunch and global recession slash demand for energy and raw materials.
The economies of the U.S., Japan and Europe are all in recession for the first time since World War II. The European Central Bank yesterday cut its benchmark interest rate by the most in its 10-year history to stem the collapse. The Bank of England and Sweden's central bank followed with reductions.
Brent crude oil for January settlement was at $42.75 a barrel, up 47 cents, on London's ICE Futures Europe exchange at 10:11 a.m. London time. The contract yesterday fell $3.16, or 7 percent, to $42.28, the lowest settlement since Jan. 5, 2005.
Qatar's oil minister said on Dec. 3 that the Organization of Petroleum Exporting Countries will "definitely" cut output at its next meeting in Algeria on Dec. 17.
"I am sure we will see a cut in December," said HSH Nordbank's Diek. "The cuts in oil production should stabilize prices."
OPEC oil ministers agreed on Oct. 24 in Vienna that the 11 members with quotas would lower supply by 1.5 million barrels a day starting in November. Production by the 11, excluding Iraq and Indonesia, declined 725,000 barrels to 28.24 million barrels a day last month, according to data compiled by Bloomberg News.
I saw where merriyl lynch is predicting oil to drop below 25 a barrel by next year
In the Wichita Eagle this morning, there was an article in the A section about talk regarding the fact that we could see gas costing $1 a gallon in the future.
That was in the Denver paper also.
However, there is a another shoe waiting to drop....
Would that shoe be known as cutbacks in exports? Or would that shoe be known as an administration change in the US?
That shoe would be the combination of anything that could possibly effect the market to send the price back up.
Well, so far the shoe hasn't dropped just yet...it's 1.519 here...an early Merry Christmas! :-)
Jan-09 Crude is trading at $42.98, up $2.17, Jan-08 Natural Gas is trading at $5.58, down $0.162.
Gasoline at my neighborhood station is $1.36.
Jan-09 Crude settled at $43.71, up $2.90 on the day, Jan-08 Natural Gas settled at $5.566, down $0.176 on the day.
Jan-09 Crude is trading at $44.375, up $0.665, Jan-08 Natural Gas is trading at $5.65, up $0.084.
Crude Oil Rebounds as Equity Markets Rise on Stimulus Packages
Dec. 9 (Bloomberg) -- Crude oil rebounded in New York as stock indexes rose on optimism that stimulus plans will lift economies out of recession.
Crude oil for January delivery rose as much as 81 cents, or 1.9 percent, to $44.52 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $44.48 at 12:28 p.m. London.
Last Updated: December 9, 2008 07:34 EST
Jan-09 Crude settled at $42.07, down $1.64 on the day, Jan-08 Natural Gas settled at $5.595, up $0.013 on the day.
Jan-09 Crude is trading at $44.35, up $2.28, Jan-08 Natural Gas is trading at $5.58, up $0.001.
The EIA inventory report for crude and products comes out today, it will be interesting to see the new numbers.
Crude Oil Rises on Speculation OPEC Will Reduce Supplies Again
Dec. 10 (Bloomberg) -- Crude oil rose on speculation that OPEC will cut production at a meeting next week to end the five- month slump in prices.
The Organization of Petroleum Exporting Countries, which pumps more than 40 percent of the world's oil, may reduce its output limit by as much as 2.5 million barrels a day to reverse recent declines, billionaire hedge-fund manager Boone Pickens said yesterday. Prices also rose as traders bought contracts to close out bets that prices will fall further.
"It seems that $40 a barrel is a bastion of support for oil," said Robert Laughlin, senior broker at MF Global Ltd. in London. "I am expecting OPEC to do something major, there is no option to do nothing."
Crude oil futures for January delivery rose as much as $1.89, or 4.5 percent, to $43.96 a barrel in electronic trading on the New York Mercantile Exchange. It was at $43.91 a barrel at 11:52 a.m. London time.
Traders who held short positions, or bets prices would fall, are purchasing futures after oil dropped more than 20 percent in the past two weeks. Yesterday, futures fell $1.64, or 3.8 percent, to $42.07 a barrel, capping a 23 percent drop since Nov. 26.
OPEC should make a "substantial" output cut when it meets on Dec. 17 in Algeria, Shokri Ghanem, Libya's top oil official, said on Dec. 8. Oil has tumbled more than 30 percent since the group announced a 1.5 million-barrel-a-day reduction in supply on Oct. 24.
OPEC will "work it back up to $100," Pickens said in an interview in New York. "It will all be determined by the global economy. If you get a recovery in the global economy, you will get it back up."
2009 Forecasts
The International Energy Agency and OPEC have lowered demand forecasts in the past month because of the economic contraction.
The Paris-based agency reduced its demand forecast by 170,000 barrels a day from its November estimate to 86.37 million barrels a day, analyst David Martin said on Dec. 5. OPEC cut its forecast for next year by 530,000 barrels a day, or 0.6 percent, to 86.68 million barrels a day, in its monthly oil market report on Nov. 17.
The IEA is likely to lower its 2009 demand growth forecast again in its monthly oil report which will be released tomorrow, said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna.
"They should come out with a negative demand revision," Loacker said. "Their number is still too high."
China Imports
China's November crude-oil imports fell to the lowest in a year, the first decline since July. Imports fell 1.8 percent from a year earlier to 13.36 million metric tons last month, or 3.25 million barrels a day, the Beijing-based Customs General Administration of China said on its Web site today.
A government report today is forecast to show U.S. crude- oil inventories rose 1.3 million barrels last week, according to the median of 14 responses in a Bloomberg News survey. The report will probably show a drop in U.S. supplies of gasoline and distillate fuel, which includes diesel and heating oil.
The Energy Department is scheduled to release its weekly report at 10:35 a.m. today in Washington.
Brent crude oil for January settlement rose as much as $1.73, or 4.2 percent, to $43.26 a barrel on London's ICE Futures Europe exchange. It was at $43.19 a barrel at 11:52 a.m. local time.
The Weekly Crude Inventory Report came out this morning, below are some comments that I thought were interesting. The Hawks in OPEC are wanting to cut back and push prices up, the Saudis, Kuwait, UAE and some of the more levelheaded OPEC members are wanting to hold prices down to hopefully avoid a full blown worldwide depression. I am hopeful that the more levelheaded members prevail. However I see where Americans are already starting to buy more of the big V-8 Suvs and pickups that are being discounted so much, it seems we never learn from our mistakes.
Global Perspective
NYMEX crude moved lower yesterday with the back of the curve falling more than the front as heavy producer selling was evident. Spreads rallied sharply and after a decline of over $100/bbl may be signaling a bottom in the front part of the curve. Furthermore, US gasoline demand is starting to show signs of life with the 4th consecutive week of higher demand and 1st y-o-y increase since April per MasterCard survey.
The U.S. Energy Information Administration (EIA) forecast that the global economic slowdown would decrease world oil consumption for the first time since 1983. Furthermore, in its monthly short term outlook EIA revealed it expected global oil demand to fall by 450,000 barrels per day in 2009. The International Air Transport Association also forecast a 3% reduction in global air traffic next year, stating that it does not expect a recovery until 2010.
With oil prices slumping, an OPEC cut at its meeting on December 17th appears likely, especially as Saudi Arabia is rumored to be looking to defend the $40 mark. The issue of compliance still remains unknown.
As a result of the falling prices, China has reportedly been filling its third strategic reserve. However, latest estimates have shown that crude imports have still fallen in November by 15% vs. October's imports figure. Market participants will look towards today's DOE inventory and Thursday's monthly EIA data for short term direction.
The Bloomberg survey for today's DOE petroleum report shows:
Crude Oil +1.3 mln bbls
Gasoline - 0.4 mln bbls
Distillates - 1.5 mln bbls
Refineries No Change
Technical Analysis: NYMEX WTI remains in a very strong downtrend, though it's starting to look as if a bottom may be forming. A rally and close above $48.11 would signal a reversal with an eventual target of the low $60s. Furthermore, a rally in Euro/Yen would add further conviction the bottom is in.
Jan-09 Crude settled at $43.52, up $1.45 on the day, Jan-08 Natural Gas settled at $5.686, up $0.107 on the day.
Jan-09 Crude is trading at $45.475, up $1.955, Jan-08 Natural Gas is trading at $5.68, down $0.006.
Jan-09 Crude settled at $47.90, up $4.46 on the day, Jan-09 Natural Gas settled at $5.598, down $0.088 on the day.
Jan-09 Crude is trading at $44.875, down $3.105, Jan-09 Natural Gas is trading at $5.49, down $0.108.
Drilling in the US is being cut way back, it is understandable but disturbing for the future. We have seen the peaks and valleys in pricing and supply 3-4 times since the 1973 Embargo and the aftershocks are not good for the US and World Economy and the Industry.
Energy giants trim spending plans for 2009
Industry absorbing shock of market whiplash
Alberta's oil balloon continued to deflate yesterday after Canadian petroleum giants EnCana Corp. and Petro-Canada squeezed more than $3 billion from their 2009 capital spending plans, citing the need to stay flexible during uncertain economic times.
The capital deferrals are in effect a wait-and-see strategy at a time of unprecedented volatility in the price of oil, which jumped 10 per cent yesterday to $47.98 (U.S.) a barrel on the New York Mercantile Exchange.
Crude prices are up about 19 per cent since last week but still down two-thirds from their mid-July high of $147.27. Industry players are being forced to absorb the shock of this market whiplash.
Calgary-based EnCana, which dropped its 2009 spending to $6.1 billion from $7 billion, said its capital program for next year could increase or fall by a further $500 million as economic circumstances unfold. "This model positions us very well to deal with the current market uncertainty," chief executive Randy Eresman said.
Most of the money is being taken out of oil-sands developments and diverted to projects with lower risk and resource costs. Nexen Inc. on Wednesday announced a 15 per cent scale-back of its investments following Suncor Energy Inc.'s decision earlier this fall to slash a third from its 2009 spending plans.
"All of this has happened quite fast," said Dragan Trajkov, an oil and gas analyst with Salman Partners in Calgary. "Companies that do better will be the ones that can adjust to the situation quickly."
The International Energy Agency said yesterday the West's economic woes and falling fuel demand in China will shrink worldwide oil demand in 2008 to 85.8 million barrels a day, the first decline in 25 years. Earlier this week the U.S. Department of Energy issued a similarly grim outlook.
Members of the Organization of the Petroleum Exporting Countries, eager to stem the plunge in their national oil revenues, have vowed to collectively cut production again in hopes of boosting crude prices. A meeting of members will be held Dec. 17 in Oran, Algeria, to discuss reduction targets.
OPEC president Chakib Khelil, who is also Algeria's oil minister, told his country's state radio yesterday that a "severe production cut" will be decided.
Jeff Rubin, chief economist at CIBC World Markets, warned that "supply destruction" as a result of low oil prices is a "surefire recipe" for higher prices down the road.
"Although capacity is ample for now, we expect supply strains to emerge beyond mid-2009 as GDP growth and global demand turn the corner, setting the stage for a return to the $100-barrel mark by year-end (2009)," wrote Rubin in a research brief.
"In the Alberta oil sands alone, we estimate that project cancellations and delays, affecting $100 billion of investment, will shave over 800,000 barrels from daily new capacity, roughly half of earlier projected growth in the next five years. And what is happening there is occurring in Brazil, West Africa and the Middle East itself."
Trajkov said industry isn't just reacting to rapidly falling oil prices. Project costs, including labour and materials, are expected to gradually fall as the sector cools off. The trick is to find the sweet spot for investment.
"We could see a shortage in supply and commodity prices going back up, and at the same time project costs coming down," he said.
Jan-09 Crude settled at $46.28, down $1.70 on the day, Jan-09 Natural Gas settled at $5.488, down $0.110 on the day.
Jan-09 Crude is trading at $48,325, up $2.045, Jan-09 Natural Gas is trading at $5.56, up$0.072
Crude Oil Rises as OPEC's El-Badri Says Sizeable Cut Is Needed
Dec. 15 (Bloomberg) -- Crude oil rose after OPEC's Secretary-General Abdalla El-Badri said the group needs to make a "sizeable" production cut at this week's meeting in Algeria.
The Organization of Petroleum Exporting Countries, which pumps 42 percent of the world's oil, will probably lower output targets by at least 2 million barrels a day, or 7.3 percent, at a Dec. 17 meeting in Oran, according to 18 of 33 analysts surveyed by Bloomberg.
Prices are being "buoyed by expectations that OPEC will make a significant cut," Robert Laughlin, a senior broker at MF Global Ltd. in London, said by phone today. "The necessity for cuts has never been so vital."
Crude oil for January delivery rose as much as $2.72, or 5.9 percent, to $49 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $48.75 at 10:36 a.m. London time.
R20;Stocks are very high, we need to take action at this time," El-Badri told reporters when he arrived at his hotel in Oran today. The oil market has 100 million barrels in excess stockpiles, he said.
OPEC is asking Russia, the largest producer outside the group, to cut oil output by between 200,000 and 300,000 barrels a day to help revive prices, OAO Lukoil Chief Executive Officer Vagit Alekperov said in Moscow today.
Oil has fallen more than $100 a barrel from July's record as the global economic slump cuts fuel consumption. World oil demand will fall this year for the first time since 1983, the International Energy Agency said last week.
China Slows
ChinaR17;s November crude-oil processing fell to a 15-month low as an economic slowdown cut demand. Refineries processed 27.27 million tons of crude last month, or 6.64 million barrels a day, the lowest since September last year, the China Mainland Marketing Research Co. said in a faxed statement today.
R20;People were expecting Chinese demand increases to overcompensate for the demand slump in the OECD countries," said Eugen Weinberg, a senior commodity analyst at Commerzbank AG in Frankfurt, Germany. "Right now it's not looking like this."
A report today will probably show industrial production in the U.S., the world's largest oil consumer, contracted 0.9 percent last month as automakers cut output, according to a survey of economists. Sentiment among the largest manufacturers in Japan, the third-largest oil user, fell the most in 34 years, according to the nation's quarterly Tankan survey today.
Brent oil for January settlement rose as much as $2.21, or 4.8 percent, to $48.62 a barrel on LondonR17;s ICE Futures Europe exchange. The contract expires tomorrow. The more actively traded February futures gained 3.7 percent to $50.88 a barrel at 10:18 a.m. London time.
Iran Warning
Oil prices will fall further if OPEC nations don't cut daily output by at least 1.5 million barrels at this week's meeting, Iranian Oil Minister Gholamhossein Nozari said yesterday.
Hedge-fund managers and other large speculators increased their net-long positions in New York crude-oil futures in the week ended Dec. 9, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 10,807 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 8,558 contracts, or 381 percent, from a week earlier.
Jan-09 Crude settled at $44.51, down $1.77 on the day, Jan-09 Natural Gas settled at $5.645, up $0.157 on the day.
So is that report the reason why gas jumped .15 today? It went from 1.44/gal to 1.59/gal...still, can't complain...it's still far less than it was. I think this is someone's way to keep the oil producers from cutting production...but it won't work...they're greedy.
Jan-09 Crude is trading at $45.05, up $0.54, Jan-09 Natural Gas is trading at $5.635, down $0.010.
Jan-09 Crude settled at $43.60, down $0.91 on the day, Jan-09 Natural Gas settled at $5.751, up $0.106 on the day.
Jan-09 Crude is trading at $44.65 up $1.05, Jan-09 Natural Gas is trading at $5.78, up $0.029.
OPEC Will Make Record Output Cut to Revive Oil Prices (Update1)
Dec. 17 (Bloomberg) -- OPEC, supplier of more than 40 percent of the world's oil, will reduce production by a record 2 million barrels a day to shore up prices as a global recession cuts demand, Saudi Arabia's oil minister said.
The Organization of Petroleum Exporting Countries is set to slash production quotas from 27.3 million barrels a day starting on Jan. 1, Ali al-Naimi, who sets policy in the world's largest oil exporter, said before today's meeting in Oran, Algeria. A formal announcement is expected once the meeting is over.
Oil's $100-a-barrel collapse from July's record prices has curbed revenue for producers, threatening government budget shortfalls. Saudi Arabia's King Abdullah said last month that his country needs crude at $75 to spur development. Russia, the largest non-OPEC producer, may join the group in cutting output as global oil demand falls for the first time since 1983.
"Now, the question mark is non-OPEC cooperation," said Mike Wittner, head of oil market research at Societe Generale in London. "More importantly, will the market believe that Russia or other non-OPEC" producers will agree to further reductions on top of declines that are going to happen anyway.
Russia may announce a 400,000-barrel-a-day cut in output to support the group's action, Kuwaiti Oil Minster Mohammed al-Olaim said yesterday. Azerbaijan's oil minister said today his country may lower production as much as 300,000 barrels a day.
Al-Naimi said the group's rate of compliance with a previous output cut was 85 percent. Asked if the latest reduction would start from Jan. 1, the minister replied: "Yes."
Manifa Start
Saudi Arabia's Manifa oil field will start in 2011 only if consumers require the extra crude, al-Naimi said later in an interview. "When we need it, it will be there," he said, adding that the start of the field depends on the "market situation."
Crude oil for January delivery climbed as much as $1.90 to $45.50 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $45.46 as of 9:37 a.m. London time.
The price slump since July spurred OPEC to reduce output for the first time in two years when it met in October. The group deferred a decision on further cuts at its Nov. 29 consultative meeting in Cairo.
Today's decision will exceed the 1.9 million-barrel cut agreed on in March 2000. That was a bigger reduction in percentage terms than today's likely 7.3 percent cut because Iranian production was excluded from the quota at that time.
The meeting started today with an opening session at 9:30 a.m. local time in the Sheraton Hotel in Oran, followed by a closed-door session at 11 a.m., a lunch with Algerian President Abdelaziz Bouteflika at 1 p.m., and a further closed-door session later in the afternoon. A press conference is tentatively scheduled for 4 p.m.
Jan-09 Crude settled at $40.06, down $3.54 on the day, Jan-09 Natural Gas settled at $5.619, down $0.132 on the day.
Fox Business Channel reported today that the mortgage rate is averaging at 4.7% to 5% for 30 year fixed.
One company is advertising on the AT&T web site: 30 year fixed at 4.25%.
Jan-09 Crude is trading at $40.55 up $0.49, Jan-09 Natural Gas is trading at $5.61, down$0.009.
The Natural Gas Storage report comes out today. It will be very interesting to see the amount of draw. We are drawing less gas from storage than normal, given the weather across the Nation. I think people are lowering their thermostats and putting on another layer of clothes.
Jan-09 Crude settled at $38.20, down $3.84 on the day, Jan-09 Natural Gas settled at $5.548, down $0.071 on the day.
President Bush, Exxon and the American Petroleum industry has done a great job of bringing the prices down. Actually they had nothing to do with bringing the prices down but everyone wanted to blame them for the prices going way up when they had nothing to do with it so they should get credit for the prices going down.
I wonder if those same people will be just as quick to blame Obama when the prices start to rise again.
Not the same ones that voted for him and they are the ones that were trying to blame Bush and the Major oils. If it goes up with Obama in there they will say it is part of his program to force the Major Oils to make more profirt so it will generate a bigger Windfall profits Tax.
Isn't the domestic oil production taxed while the foreign-imported oil is not taxed?
Jan-09 Crude is trading at $33.57, down $2.65, Jan-09 Natural Gas is trading at $5.515, down $0.033.
Today is the last day of trading for January crude futures, February 09 crude is trading at $42.225, up $0.555. The back months are trading higher in anticipation of OPEC cuts in production.
Oil Set for Weekly Decline as Deepening Recession Curbs Demand
http://www.bloomberg.com/apps/news?pid=20601072&sid=aFpTq.Tdek.M&refer=energy
By Alexander Kwiatkowski and Christian Schmollinger
Dec. 19 (Bloomberg) -- Crude oil headed for the second- biggest weekly decline in more than five years as a deepening global recession sapped demand, countering efforts by OPEC to boost prices.
Oil has slumped 33 percent this month even as OPEC agreed to its largest production cut in more than a decade, because traders speculated that declining demand may outweigh the reduction. Global oil use may drop the most since 1983 next year, Deutsche Bank analyst Adam Sieminski said yesterday.
R20;Demand is falling faster than OPEC is able to tighten supply," said Thina Saltvedt, an oil analyst at Nordea Bank AB is Oslo. "As long as the global economy weakens, demand will continue to fall."
Crude oil for January delivery traded at $36 a barrel, down 0.6 percent, on the New York Mercantile Exchange as of 10:48 a.m. London time. The contract has fallen 22 percent this week.
The January contract expires today. The more-active February contract rose as much as 98 cents, or 2.4 percent, to $42.65 a barrel and was at $42.10 a barrel as of 10:48 a.m.
Futures prices have tumbled 75 percent from a record $147.27 a barrel on July 11 and declined 62 percent this year, snapping six years of consecutive gains.
The drop in oil prices "threatens investment" and is "wreaking havoc," Saudi Arabia's Oil Minister Ali al-Naimi said today at a conference in London. "A number of upstream projects have already been canceled or delayed."
Brent Crude
Brent crude oil for February settlement was at $43.90 a barrel, up 54 cents, on LondonR17;s ICE Futures Europe exchange at 10:50 a.m. local time.
The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's oil, agreed on Dec. 17 to cut output by 2.46 million barrels a day starting on Jan. 1. That's larger than a 2 million-barrel reduction indicated a day earlier by al-Naimi before OPEC ministers met in Oran, Algeria.
The producer group has called on other exporting countries to help it bolster prices. Non-OPEC members Russia and Azerbaijan signaled on Dec. 17 that they may be willing to trim supplies.
World oil consumption next year will drop by 0.2 percent to 85.68 million barrels a day, OPEC said in a Dec. 15 report. The U.S. Energy Department said on Dec. 9 that global demand will decline 0.5 percent to 85.3 million barrels a day.
Oil Contango
February futures cost $5.45 a barrel more than January oil yesterday, based on Nymex settlement prices. That's the biggest premium between the two most-active contract months in Bloomberg data going back to 1986. The spread allows oil traders who can line up credit and storage space to lock in profits by buying and holding crude to sell a month from now.
R20;If you can pick it up and hedge it forward and put in storage, then people will do that, but it seems like storage is already getting full," said Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo. "That time spread is unbelievable and it just shows you how worthless prompt crude is."
Oil for delivery in January 2010 costs 53 percent more than crude for delivery in January 2009, increasing the opportunity for traders to profit. This price structure, in which crude for future delivery is more expensive than near-month prices, is known as contango.
Contango trading encourages companies to increase stockpiles. U.S. crude-oil supplies rose in 11 of the past 12 weeks, according to the Department of Energy. Inventories at Cushing, Oklahoma, where oil that's traded on Nymex is stored, climbed 21 percent to 27.5 million barrels last week, the highest since May 2007, the government said on Dec. 17.
Jan-09 Crude settled at $33.87, down $2.35 on the day, Jan-09 Natural Gas settled at $5.334, down $0.214 on the day.
Today was the last trading day for Jan-09 crude oil futures, Monday the front month will be Feb-09. Feb -09 and the back months are trading much higher with the near term back months in the $50.00 t0 $60.00 range and the far out back months trading as high as the $74.00 range. It is apparent that the traders and refiners are counting on OPEC cutting production and that Crude is going up.
Shell to quit wind projects
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5299195.ece
ROYAL DUTCH SHELL has become the second big energy company to abandon the UK wind-energy sector in the last month.
Shell, Danish firm Dong Energy and Scottish Power have cancelled the £800m Cirrus Array project off the northwest coast after five years and millions of pounds in investment. The consortium blamed Ministry of Defence concerns over radar interference from turbines.
Less than a month ago, Shell denied a Sunday Times report that it had exited the project. However, on Friday the company confirmed that it had no plans for further investment in the UK wind sector.
Shell said: "The focus for new projects will be in North America where we can benefit from the availability of undeveloped wind resources to deliver wind energy at what we expect to be a competitive cost."
Last month BP also moved its wind-energy focus to America, citing generous subsidies and a less-onerous planning process.
Feb-09 Crude is trading at $42.50, up $0.14, Jan-09 Natural Gas is trading at $5.24, down $0.094.
Oil Rises as OPEC Announces Resolve to Implement Output Cuts
Dec. 22 (Bloomberg) -- Crude oil rose above $43 a barrel after OPEC restated its commitment to enact record production cuts announced last week in the face of a global economic slowdown.
The Organization of Petroleum Exporting Countries is "determined" to stabilize oil markets, Saudi Oil Minister Ali al-Naimi told reporters in Doha, Qatar, yesterday. Oil is poised for the first annual decline in seven years, falling 55 percent in New York so far in 2008.
R20;OPEC is lining up all its big guns to tell the world that the action taken in recent days will push prices higher," said Rob Laughlin, senior broker at MF Global Ltd. in London.
Crude oil for February delivery rose as much as $1.08, or 2.6 percent, to $43.44 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $42.50 at 11:29 a.m. London time.
Non-OPEC members Russia and Azerbaijan signaled that they may trim supplies after the producer group agreed to cut output starting January. U.S. crude oil inventories have climbed 11 percent since Sept. 19.
Oil surged almost fivefold to reach $95.98 a barrel at the end of last year from $19.84 in 2001. It has fallen 72 percent from July's record of $147.27.
Stockpiles Rise
R20;OPEC has come in and said they are concerned about the price of oil where it is and non-OPEC countries have come in," Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said in a Bloomberg Television interview. "When you combine these cuts it really starts to take effect."
The January contract, which expired last week, plunged 6.5 percent to $33.87 a barrel on Dec. 19, the lowest settlement for a contract nearest to expiration since Feb. 10, 2004. Oil is down 21 percent in December.
Futures dropped 27 percent last week on skepticism that OPEC will implement output cuts of 2.46 million barrels a day starting in January. The reduction will be in addition to the 1.5 million barrel-a-day cut the group started in November.
Oil prices fell as crude stockpiles at Cushing, Oklahoma, jumped to a 19-month high. The city is the delivery point for the New York oil futures and the amount of supplies already in place caused investors to sell the contract rather than take on barrels.
Brent crude oil for February settlement rose as much as 77 cents, or 1.8 percent, to $44.77 a barrel on LondonR17;s ICE Futures Europe exchange, and traded at $44.03 at 11:15 a.m. London time.
Falling Dollar
Crude oil also climbed as the dollar slid against the euro, increasing the attractiveness of commodities as an investment. The currency dropped to $1.3999 per euro from $1.3912. It fell to an 11-week low of $1.4719 on Dec. 18.
Hedge-fund managers and other large speculators last week increased bets on rising oil prices to the most in seven months, the U.S. Commodity Futures Trading Commission said Dec. 19.
Net-long positions, the difference between orders to buy and sell the commodity, increased more than fivefold to 64,120 contracts on Dec. 16, the commission said.
Feb-09 Crude settled at $39.91, down $2.45 on the day, Jan-09 Natural Gas settled at $5.294, down $0.04 on the day.
Feb-09 Crude is trading at $40.00, up $0.09, Jan-09 Natural Gas is trading at $5.375, up$0.081.
Feb-09 Crude settled at $38.98, down $0.93 on the day, Jan-09 Natural Gas settled at $5.737, up $0.443 on the day.
Feb-09 Crude is trading at $37.40, down $1.58, Jan-09 Natural Gas is trading at $5.60, down $0.137.
Feb-09 Crude is trading at $40.825, up $3.115, Feb-09 Natural Gas is trading at $6.00, up$0.188.
Our local Station has Regular Gas at $1.349.
Crude Oil Rises After Israeli Attacks on Gaza Roil Middle East
Dec. 29 (Bloomberg) -- Crude oil rose the most in two weeks after Israeli air strikes in the Gaza strip raised concerns that supply from the Middle East, the world's largest producing region, may be disrupted.
Defense Minister Ehud Barak said Israel is fighting a "war to the death" with Hamas, the group that controls Gaza. Prices also advanced as China, the world's second-biggest energy consumer, said it will supplement its emergency oil stockpiles while prices are low, while Libya and the United Arab Emirates announced compliance with OPEC output cuts agreed on this month.
"The instability in the Middle East may well push oil prices higher," said Rob Laughlin, a senior broker with MF Global Ltd. in London. "China's plans to stockpile crude may take up some slack from the demand destruction from the economic slowdown."
Crude oil for February delivery rose as much as $4.49, or 12 percent, to $42.20 a barrel in electronic trading on the New York Mercantile Exchange, the biggest gain since Dec. 11. It was at $40.21 at 1:49 p.m. in London. Today's gain pares oil's plunge from its $147.27 record on July 11 to 73 percent.
Hamas, the militant Islamist group that seized control of Gaza last year, is backed by Iran and considered a terrorist organization by the United States. Iran holds the world's second-largest oil reserves and sits on the narrow sea channel through which oil from the Persian Gulf is shipped.
Futures prices fell 11 percent last week, reaching a four- year low of $32.40 on Dec. 19.
Dollar Weakens
Crude was supported today as the U.S. dollar lost more than 2 percent against the euro, its biggest decline in more than a week, bolstering the appeal of dollar-priced assets used to hedge against inflation such as gold and oil. The U.S. currency traded at $1.4279 a euro at 1:28 p.m. London time.
Abu Dhabi National Oil Co., the United Arab Emirates state- owned producer, will reduce crude-oil exports in January and February after OPEC agreed to lower output as of Jan. 1. Libya is asking companies to cut by 270,000 barrels a day from that date, oil official Shokri Ghanem said in a telephone interview today.
The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world's oil, agreed on Dec. 17 to trim daily production targets by 2.46 million barrels next month.
"There's an expectation now that we'll see better compliance among OPEC countries than normal, better than people had expected," said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix. "It's a given that the Saudis will comply."
China's Stockpiles
Chinese companies will be encouraged to utilize spare oil- storage capacity while state and commercial reserves of other "strategic resources" will be set up, Zhang Guobao, head of the National Energy Administration and the vice chairman of the National Development and Reform Commission, wrote in an article in the official People's Daily today.
Brent crude oil for February settlement climbed as much as $4.81, or 13 percent, to $43.18 a barrel on London's ICE Futures Europe exchange.
The Israeli air strikes, launched to halt rocket attacks by Islamic militants after a six-month truce with Hamas ended Dec. 19, killed more than 285 people, prompting protests across the region from Saudi Arabia to Syria.
Israeli tanks and armored personnel carriers began taking up positions outside the perimeter fence of the Gaza Strip, Israel Radio said. The army refused to comment on the report.
Oil prices soared to a then-record $78.40 a barrel in July 2006 after Israel attacked Iranian-backed Hezbollah forces in Lebanon. At the time, Iran, the fourth-largest oil producer, was facing international sanctions over its nuclear program, while pipeline attacks had also cut output in Nigeria.
Feb-09 Crude settled at $40.02, up $2.31 on the day, Jan-09 Natural Gas settled at $6.136, up $0.31 on the day.
Our neighborhood station has regular at $1.329.
Feb-09 Crude is trading at $39.60, down $0.42, Feb-09 Natural Gas is trading at $6.075, down $0.009.
Our neighborhood Station has Regular Gas at $1.329.
Feb-09 Crude settled at $39.03, down $0.99 on the day, Feb-09 Natural Gas settled at $5.859, down $0.225 on the day.
Feb-09 Crude is trading at $37.10, down $1.93, Feb-09 Natural Gas is trading at $5.70, down $0.159.
Our neighborhood Station has Regular Gas at $1.329.
Feb-09 Crude settled at $44.60, up $5.57 on the day, Feb-09 Natural Gas settled at $5.622, down $0.237 on the day.
Better keep your tank full, if the Israelis escalate their action, crude is going up.
Feb-09 Crude is trading at $41.875, down $2.725, Feb-09 Natural Gas is trading at $5.57, down $0.052.
Feb-09 Crude settled at $46.34, up $1.74 on the day, Feb-09 Natural Gas settled at $5.971, up $0.349 on the day.
Crude Oil and natural Gas are both trading higher in Singapore, the increased offensive by Israel is pushing the Petroleum Sector higher, in overseas markets.
Feb-09 Crude is trading at $46.975, up $0.635, Feb-09 Natural Gas is trading at $5.985, up $0.014.
Oil Rises a Third Day; Gaza Attacks Threaten Mideast Stability
By Christian Schmollinger and Will Kennedy
Jan. 5 (Bloomberg) -- Crude oil rose for a third day after Israeli troops entered the Gaza Strip, escalating the conflict and threatening stability in the Middle East, the largest oil- producing region.
Oil gained after thousands of Israeli troops crossed the border on Jan. 3 to capture bases that Hamas militants have used to launch rocket attacks on the country. Arab nations and the international community must do more to support GazaR17;s population, Tehran-based Press TV reported IranR17;s Foreign Minister Manouchehr Mottaki as saying yesterday.
R20;In the last one, two days, with the ground offensive going on, oil traders start looking at it and are a bit more concerned," said Johannes Benigni, chief executive officer of Vienna-based JBC Energy. "We expect for the year to have an average price of $74."
Crude oil for February delivery rose as much as $2.34, or 5.1 percent, to $48.68 a barrel in electronic trading on the New York Mercantile Exchange. It was at $46.83 a barrel at 10:14 a.m. London time.
Prices climbed 23 percent last week, the most since August 1986, buoyed by the Gaza conflict, a natural gas dispute between Russia and Ukraine, and a rebound in equity prices. Oil tumbled 27 percent the week before.
The Middle East accounts for almost a third of the world's oil production. Prices jumped to a then-record $78.40 a barrel in July 2006 after Israel attacked Iranian-backed Hezbollah forces in Lebanon. Iran is the fourth-largest oil producer.
R16;Nervous MarketR17;
R20;This has got the market nervous,R21; said Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo. "There's always a chance that the violence could widen. Because the Mideast is the No. 1 producer of crude this tends to provide support to oil."
Crude pared earlier gains today as the U.S. dollar strengthened against the euro, undermining the appeal of dollar- priced commodities used to hedge against inflation. The U.S. currency was at $1.3707 per euro.
Oil surged in 1974, helping spur a recession in the developed world, after an oil embargo that followed the Arab- Israeli war in October 1973.
Israel has resisted international calls for a halt in hostilities, saying it needs to shut down the military wing of Hamas. The Islamic group refused to renew a six-month cease-fire that expired on Dec. 19, citing IsraelR17;s economic blockade of the province.
Oil fell 54 percent last year, the first annual drop since 2001 and the biggest loss since trading started. Prices reached a five-year low of $32.40 a barrel on Dec. 19.
Cushing Inventories
Crude oil in New York is trading at a discount to Brent as a result of a surge in inventories at Cushing, Oklahoma, said Mitsubishi's Nunan. Storage tanks near the town are the delivery point for futures contracts on the New York Mercantile Exchange.
Cushing supplies in the week ended Dec. 26 were at 28.1 million barrels, said the U.S. Energy Department on Dec. 31. That's slightly down from 28.6 million barrels in the previous week, the most the Department has ever reported.
R20;Cushing stockpiles are out of control," said Mitsubishi's Nunan. "They've increased the capacity there so we're not at tank top but we can't be far from it."
The surplus of crude may exacerbate the so-called contango structure in oil prices, where futures for prompt delivery are cheaper than those for later, he said.
R20;If you think there wonR17;t be a shortage of crude in the next couple of months and your storage is full, you'll have to dump the oil at whatever price," said Nunan. "So I think we'll continue to see this steep contango, which means the front month could test the lows again near expiry."
Jan
Feb-09 Crude settled at $48.81, up $2.47 on the day, the back months are trading higher with near term in the $50.00 to $60.00 range and the further out back period trading in the $70.00 range , Feb-09 Natural Gas settled at $6.072, up $0.101on the day, the back months are trading higher.
I think the higher crude prices are due to the OPEC announced cuts or in anticipation of the OPEC Cuts and Natural Gas is trading higher due to the cold winter weather across a broad section of the country and also Gas is trading higher based on BTU comparison to crude/fuel/heating oil verses Natural Gas.
Feb-09 Crude is trading at $50.15, up $1.34, Feb-09 Natural Gas is trading at $6.20, up $0.128.
Oil Rises to 5-Week High Above $50 on OPEC Cuts, Russia Dispute
By Grant Smith
Jan. 6 (Bloomberg) -- Crude oil rose to a five-week high above $50 as Kuwait and Qatar indicated they will implement supply cuts announced by OPEC last month, and a dispute between Russia and Ukraine reduced natural gas shipments to Europe.
Kuwait and Qatar plan to cut oil shipments to Asia starting in January, refinery officials in the region said today, after the Organization of Petroleum Exporting Countries agreed on a record output reduction on Dec. 17. OAO Gazprom cut gas shipments to Europe through Ukraine to less than one third of normal levels, a NAK Naftogaz Ukrainy spokesman said.
R20;The focus is shifting from demand to supply again," said Eugen Weinberg, a Commerzbank AG analyst in Frankfurt. "We know demand is going to be very weak, but cuts from OPEC and the latest geopolitical risk will compensate."
Oil for February delivery gained as much as much as $1.66, or 3.4 percent, to $50.47 a barrel in electronic trading on the New York Mercantile Exchange. That's the highest since Dec. 1. It was at $49.86 at 12:29 p.m. London time.
Brent crude oil for February settlement climbed as much as $2.24, or 4.5 percent, to $51.86 a barrel on LondonR17;s ICE Futures Europe exchange, also the highest since Dec. 1. The contract traded at $51.31 a barrel at 12:29 p.m.
R20;Russia continues to play hardball with Ukraine on the natural gas contract," said Olivier Jakob, managing director of Petromatrix Gmbh in Zug, Switzerland. "If a solution for a return to normality is not found very quickly, this should result in incremental demand on fuel oil, naphtha, heating oil to substitute for the missing natural gas."
Gaza Conflict
Oil also advanced as the conflict between the Israeli army and Hamas reached its 11th day, with pitched battles in the Gaza Strip. Iran, the second-largest producer in OPEC and a supporter of Hamas, has called for a suspension of crude exports to allies of Israel.
OPEC decided to cut production by 4.2 million barrels a day from September levels at a Dec. 17 meeting in Algeria in response to tumbling prices, which last year had a record drop of 54 percent.
Kuwait, OPEC's third-largest producer in November, will reduce shipments of oil sold under long-term contracts by 5 percent starting Jan. 22, said refinery officials. Qatar, the group's second-smallest producer, will slash cargoes by as much as 6 percent in February, compared with 5 percent in January.
The U.S. Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington.
U.S. crude stockpiles probably increased 1 million barrels in the week ended Jan. 2, from 318.7 million the week before, according to the median of seven analyst estimates.
Feb-09 Crude settled at $48.58, down $0.23 on the day, Feb-09 Natural Gas settled at $5.983, down $0.089 on the day.
The Back months are trading up and are in the $55.00 to $60.00 range near term, say March-09 thru Oct-09.
Feb-09 Crude is trading at $48.325, down $0.255, Feb-09 Natural Gas is trading at $5.99, up $0.007.
Crude Oil Falls Before Report Forecast to Show Stockpile Gain
By Grant Smith
Jan. 7 (Bloomberg) -- Crude oil fell for a second day before a report forecast to show that crude inventories increased in the U.S. as its economy contracted.
U.S. crude oil stockpiles probably rose for a second week in the week ended Jan. 2, according to a Bloomberg News survey before an Energy Department report today. Traders are seeking as many as 10 supertankers to store crude, according to Frontline Ltd., the largest owner of the vessels, suggesting demand for oil remains weak.
R20;The fall in demand is still one of the factors that will keep prices down for a while," said Gerrit Zambo, an oil trader at BayernLB in Munich. "There is enough oil for traders to put it in storage and profit by selling it later. You can only do this if no one wants to buy this oil now."
Oil for February delivery declined as much as 97 cents, or 2 percent, to $47.61 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $47.81 at 10:02 a.m. London time.
Yesterday, crude reached a five-week high because of the conflict between Israel and Hamas, RussiaR17;s gas dispute with Ukraine, and signs that OPEC members are enacting supply cuts. It later fell as manufacturing data indicated the U.S. recession is deepening.
Iran, the Middle East's second largest oil exporter, will trim exports to two refiners in Asia in February, officials from the companies said today, to conform with OPEC's Dec. 17 decision to curb supplies.
The U.S. Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington.
U.S. crude oil stockpiles probably increased 900,000 barrels in the week ended Jan. 2, from 318.7 million the week before, according to the median forecast of 10 analysts surveyed by Bloomberg News.
R20;WeR17;ve seen over the last few months that the market has been really focused on demand," said Gerard Burg, an energy economist at National Australia Bank Ltd. in Melbourne. "Anytime we get negative economic news out of the U.S. it puts a damper on the crude market."
Supplies of distillate fuel, a category that includes heating oil and diesel, probably increased 1.1 million barrels from 136 million barrels. Refineries probably operated at 82.5 percent of capacity, unchanged from the week before, when they ran at the lowest since the period ended Oct. 10 because of damage caused by Hurricanes Gustav and Ike.
Gasoline inventories rose 1 million barrels from 208.1 million, according to the survey. It would be the fifth consecutive weekly gain. Gasoline supplies have risen in 12 out of the past 14 weeks.
Feb-09 Crude settled at $42.63, down $5.95 on the day, Feb-09 Natural Gas settled at $5.872, down $0.111 on the day.
The Doe inventory report came out with a bigger than expected build in Crude Oil, Gasoline, Distillate fuel and Propane.
Feb-09 Crude is trading at $41.25, down $0.45, Feb-09 Natural Gas is trading at $5.59, down $0.007.
Feb-09 Crude settled at $40.83, down $0.87 on the day, Feb-09 Natural Gas settled at $5.516, down $0.067
on the day.
Feb-09 Crude is trading at $38.50, down $2.33, Feb-09 Natural Gas is trading at $5.51, down $0.006.
Crude Oil Falls Below $40 as Demand Drops Faster Than Supply
By Grant Smith and Angela Macdonald-Smith
Jan. 12 (Bloomberg) -- Crude oil fell below $40 in New York on concern production cuts by the Organization of Petroleum Exporting Countries will fail to counter a slump in demand.
Oil consumption will fall by 1 million barrels a day this year as the U.S., Europe and Japan face their first simultaneous recessions since the Second World War, Deutsche Bank AG predicted last week. U.S. stockpiles have climbed in 13 of the past 15 weeks, according to the Energy Department. OPEC members signaled last week they will curb sales to refiners in February.
R20;The health of the global economy is the dominant consideration in the short term, and that is weighing down on prices," said Harry Tchilinguirian, senior market analyst at BNP Paribas SA in London. "OPEC cuts may prove to be supportive in future but it'll take time for them to take effect."
Crude oil for February delivery fell as much as $2.40, or 5.9 percent, to $38.43 a barrel in electronic trading on the New York Mercantile Exchange. It was at $38.52 a barrel at 11:28 a.m. in London.
China, the fastest-growing oil consumer, may miss the government's 8 percent economic growth target, two top officials said today. Oil prices fell 12 percent last week as economic data showed the economic slump worsening. On Jan. 9, the U.S. said it lost 2.589 million jobs last year, the most since 1945.
OPEC, supplier of more than 40 percent of the world's oil, agreed last month to slash production quotas by 9 percent to revive prices as the global recession erodes demand. Oil has plunged more than $100 in the last six months.
Saudi Notices
Saudi Aramco, the world's biggest state oil company, sent notices to refiners in Asia on Jan. 9 that it would lower crude supplies to Asia by around 10 percent in February. This was the third month the company had reduced sales.
R20;Although OPEC have made substantial production cuts there is an overhang of prompt oil and until that is absorbed the market may not rally substantially," Christopher Bellew, senior broker at Bache Commodities Ltd. in London.
OPEC may trim production further should crude prices continue to decline, IranR17;s OPEC Governor Mohammad Ali Khatabi said Jan. 11. OPEC is scheduled to meet next in Vienna on March 15. Iran is the group's second-largest producer, after Saudi Arabia.
Oil for March delivery is at a more than $5 a barrel premium to the front-month contract, while the April future is $9 above February-delivered supplies. The situation where near- term crude is cheaper than later-dated oil is called contango.
R20;The curve is very steep, which is consistent with the view that the market tightens up in time and we get higher prices down the track," said David Moore, a commodity strategist at Commonwealth Bank of Australia. "It will take a while for those production cuts to eat away at inventories."
Cushing Stockpiles
Oil for February dropped last week as stockpiles at Cushing, Oklahoma, the delivery point for crude traded at Nymex, climbed to 32.2 million barrels, the highest since the U.S. Energy Department started tracking the supplies in 2004. Total capacity in the area is about 47.7 million barrels, according to estimates from Andy Lipow at Houston-based consultants Lipow Oil Associates LLC.
Brent crude for February settlement fell as much as $2.02, or 4.6 percent, to $42.40 a barrel on LondonR17;s ICE Futures Europe exchange. It was at $42.54 a barrel at 11:29 a.m. London time.
Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended Jan. 6, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 76,658 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 12,110 contracts, or 19 percent, from a week earlier.
Feb-09 Crude settled at $37.59, down $3.24 on the day, Feb-09 Natural Gas settled at $5.542, up $0.026 on the day.
Feb-09 Crude is trading at $36.825, down $0.765, Feb-09 Natural Gas is trading at $5.465, down $0.077.
Crude Oil Falls for Sixth Day on Concern Stockpiles Are Rising
By Grant Smith
Jan. 13 (Bloomberg) -- Crude oil fell for a sixth day in New York, its longest decline in a month, on speculation that slumping demand caused U.S. crude inventories to accumulate.
U.S. crude stockpiles probably gained 2.25 million barrels in the week ended Jan. 9, according to a Bloomberg survey before an Energy Department report tomorrow. That would be the 14th gain in 16 weeks. The U.S. economy will contract 1.5 percent in 2009, a monthly poll of economists showed.
The U.S. inventory build-ups have been massive, said Eugen Weinberg, a Commerzbank AG analyst in Frankfurt. Coupled with weak economic data, they are keeping near-month prices under strong pressure.
Crude oil for February delivery fell as much as $1.49, or 4 percent, to $36.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract, down 25 percent in six days, traded for $36.92 a barrel at 10:39 a.m. London time.
Futures, down 61 percent from a year ago, declined $3.24 to $37.59 a barrel yesterday, the lowest settlement since Dec. 24. Oil for February delivery is now at a 35 percent discount to the December future, a market situation known as contango where traders fetch higher prices for contracts for later delivery.
China, the worlds second-largest energy user after the U.S., increased crude-oil imports by 12 percent last month as the country took advantage of falling fuel purchase costs to boost stockpiles.
Imports rose to 14.37 million metric tons from a year earlier, the Beijing-based Customs General Administration of China said on its Web site today. Full-year imports increased 9.6 percent to 178.9 million tons.
Commodities Drop
Most commodities declined yesterday because of falling demand for raw materials, with corn, soybeans and wheat dropping the most allowed by the Chicago Board of Trade in a single day. The Reuters/Jefferies CRB Index of 19 commodities slid as much as 4 percent.
Brent crude oil for February settlement fell as much as $1.07, or 2.5 percent, to $41.84 a barrel on Londons ICE Futures Europe exchange. It was at $42.92 a barrel at 10:16 a.m. London time.
U.S. crude-oil and fuel inventories probably rose last week as refineries reduced operating rates and the recession curbed consumption, a Bloomberg News survey of analysts showed.
Crude-oil stockpiles probably increased 2.25 million barrels in the week ended Jan. 9 from 325.4 million the week before, according to the median of eight analyst estimates before an Energy Department report this week.
Gasoline Stockpiles
Gasoline stockpiles probably rose 1.5 million barrels from 211.4 million, according to the survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably climbed 1.5 million barrels from 137.8 million.
Gasoline for February delivery dropped as much as 1.5 cents, or 1.4 percent, to $1.0691 a gallon in New York, and last traded at 108.50 as of 10:17 a.m. in London.
The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
The U.S. economy will contract 1.5 percent this year, a half percentage point more than projected last month, according to the median of 59 forecasts in the survey taken from Jan. 5 to Jan. 12.
I dont see much movement in the oil price this year, prices wont go much above $50 a barrel, Mohammed al-Rumhy, Oil Minister of Oman, said in an interview in New Delhi today. Of course, it depends on Obamas success -- he wants to create 4 million jobs, so if we have 4 million new drivers tomorrow that we dont have today, demand will rise and so will the price.
OPEC Cuts
The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the worlds oil, agreed last month to slash production quotas by 9 percent to revive prices as the global recession erodes demand. Oil has plunged more than $100 a barrel in the past six months.
Saudi Arabian Oil Co., the worlds biggest state oil company, sent notices to refiners in Asia on Jan. 9 that it would lower crude supplies to the region by about 10 percent in February. This was the third straight month that the company reduced sales.
Feb-09 Crude settled at $37.78, up $0.19 on the day, Feb-09 Natural Gas settled at $5.184, down $0.358 on the day.
Feb-09 Crude is trading at $38.775, up $0.995, Feb-09 Natural Gas is trading at $5.165, down $0.019.
Oil Rises a Second Day as OPEC May Make Deeper Production Cuts
By Grant Smith and Christian Schmollinger
Jan. 14 (Bloomberg) -- Crude oil rose for a second day after OPEC leaders said they may deepen production cuts to bolster prices.
OPEC members Saudi Arabia and Venezuela signaled yesterday that output will be reduced further. Saudi Arabian Oil Minister Ali al-Naimi said February output will be "lower than the target" set at the group's Dec. 17 meeting. The U.S. Energy Department will likely say today that crude oil stockpiles gained a third week, according a Bloomberg News survey.
R20;OPECR17;s policy right now is to verbally intervene in order to influence the market," said Bayram Dincer, a commodity analyst at Dresdner Bank AG in Zurich. "Today, prices are responding to their talk about production cuts."
Crude oil for February delivery rose as much as $1.67, or 4.4 percent, to $39.45 a barrel and was at $38.85 at 10:36 a.m. London time on the New York Mercantile Exchange. Oil has tumbled 59 percent in the past year as fuel demand falls because of a global recession.
Brent crude oil for February settlement gained as much as $1.17, or 2.6 percent, to $46 a barrel on LondonR17;s ICE Futures Europe exchange. The contract expires tomorrow. Brent was $6.78 more expensive than New York crude, the widest gap since Dec. 19.
The more active March contract was at $47.98 a barrel, up 54 cents, at 10:22 a.m. London time.
Saudi Arabia is currently producing 8 million barrels a day, about level with its 8.051 million barrel-a-day allocation, al-Naimi said at a conference in New Delhi yesterday.
Qatari Oil Minister Abdullah bin Hamad al-Attiyah, also in New Delhi, said today that the right price for oil is $70 a barrel.
Last month the Organization of Petroleum Exporting Countries agreed in Algeria to cut supply by 9 percent to 24.845 million barrels a day starting Jan. 1.
Further Reduction
R20;WeR17;re willing to cut 2 million more, 4 million more barrels to preserve the price of oil," Venezuelan President Hugo Chavez said in a speech to the National Assembly in Caracas yesterday.
U.S. crude-oil stockpiles probably gained 2.75 million barrels in the week ended Jan. 9, according to the median of 14 responses by analysts in a Bloomberg News survey. The department will release its weekly petroleum supply report today.
Inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, also rose, according to the Bloomberg News survey.
The Energy Department reduced its forecast for crude prices this year by 15 percent to $43.25 a barrel as the economic slump in the U.S., Europe and Japan cuts global fuel demand. Global demand will shrink by 810,000 barrels a day in 2009 from last year to 85.1 million barrels a day, it said.
R20;A severe recession is expected,R21; said Dresdner's Dincer. "After the expiry of February futures I expect in the short- term another test of lows around $33."
Contango Structure
The price of oil for delivery December 2009 is 55 percent more than for February, allowing traders to profit if they have the ability to store crude. This structure, in which the subsequent month's price is higher than the one before it, is known as contango.
Oil supplies at Cushing, Oklahoma, rose to 32.2 million barrels the week ended Jan. 2, up 81 percent from a year earlier and the highest in at least four years, Energy Department data show. The city is the delivery point for oil futures traded on Nymex.
R20;Storage at Cushing is near a historical high," said Ken Hasegawa, a commodity derivatives sales manager at Newedge Group in Tokyo. "No one can buy because there is no place to store. So the spread between the front month and the second month will expand more."
Below are excerpts from today's EIA weekly crude and product inventory report. The US crude and product demand continues to drop and inventories continue to grow.
UU.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased 1.2 million barrels from the previous week. At
326.6 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
increased by 2.1 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 6.4 million barrels, and are above the upper limit of the average
range for this time of year. Propane/propylene inventories decreased last week
by 2.6 million barrels and are in the upper half of the average range. Total
commercial petroleum inventories increased by 8.2 million barrels last week and
are above the upper limit of average range for this time of year.
Total products supplied over the last four-week period has averaged 19.7 million
barrels per day, down by 4.0 percent compared to the similar period last year.
Over the last four weeks, motor gasoline demand has averaged 8.9 million barrels
per day, down by 2.1 percent from the same period last year. Distillate fuel
demand has averaged about 4.1 million barrels per day over the last four weeks,
down by 2.4 percent from the same period last year. Jet fuel demand is 11.0
percent lower over the last four weeks compared to the same four-week period last
year.
Looks like we're putting the hurt on opec. They keep dropping production, we keep dropping demand. Wonder how long they will keep it up.
Steve, they are in a dilema, high energy cost brought us to a World Recession that may turn into a World Depression. OPEC has to be careful or they will push the World Economy over the edge. It will be interesting to see where energy prices go in the next few months. The negative side is that the US is doing nothing to increase our own supply, drilling is grinding to a halt in many areas and Money for alternate and renewable energy is drying up.
Feb-09 Crude settled at $37.28, down $0.50 on the day, Feb-09 Natural Gas settled at $4.97, down $0.214 on the day.
Feb-09 Crude is trading at $37.675, up $0.395, Feb-09 Natural Gas is trading at $4.975, up $0.005.
Weekly Natural Gas Storage Report comes out today.
I thought this was an interesting article that some of you might find interesting as well.
Where Is Oil Going Next?
By CLIFFORD KRAUSS
HOUSTON — From the Indian Ocean to the South Atlantic to the Gulf of Mexico, giant supertankers brimming with oil are resting at anchor or slowly tracing racetrack patterns through the sea, heading nowhere.
The ships are marking time, serving as floating oil-storage tanks. The companies and countries leasing them for that purpose have made a simple calculation: the price of oil has fallen so far that it is due for a rise.
Some producing countries are trying to force that rise by using the tankers to withhold oil from the market, while traders are trying to profit by buying cheap oil now to store and sell at a higher price later. Oil storage has become so popular that onshore tank capacity is becoming scarce.
Only six months ago, companies up and down the energy pipeline were rushing oil to market, struggling to keep up with galloping demand and soaring prices. Now, with the global economy slumping and people driving less, demand for oil has plunged — and the same companies are acting in ways that would have been unimaginable until recently.
Oil producers are shutting down rigs, refiners are producing less gasoline, and investment planning throughout the industry is in turmoil.
The problem for the companies is not just that prices are lower, but that they have become volatile — historically, a sign of an unstable market whose direction is uncertain. Between Christmas and a week ago oil prices soared 40 percent, only to reverse course almost as sharply in recent days. Just last week, the price of a barrel of crude oil dropped by nearly 12 percent in one day alone.
R20;The oil markets are suffering acute whiplash," said Daniel Yergin, an energy consultant and author of "The Prize," a history of world oil markets. "Price volatility is adding to the sense of shock and confusion and uncertainty."
The wild price swings are a continuation of last year's trends, when the price of a barrel of oil swelled to nearly $150 in July from just below $100 in January before collapsing to less than $35 last month. Daily oil prices rose or dropped by 5 percent or more 39 times, versus just four times over the previous two years. The only recent year that was comparably volatile was 1990, the year Iraq invaded Kuwait.
The continuing volatility is sending waves of anxiety up and down the complex production and investment chains of the oil world.
A year ago, oil producers and refiners could not move their products fast enough to meet growing world demand and chase rising prices. Now, with demand and prices slumping, they are sitting on 327 million barrels at tank farms around the country, particularly at Cushing, Okla., a major storage hub and a crossroads for pipelines. That is more than 40 million barrels more in storage than this time last year, and more than 30 million barrels higher than the five-year average.
The mounting buildup has come during the last 100 days or so, as consumption of oil fell behind imports and domestic production.
With storage tanks filling up onshore, private and national oil companies, refiners and trading companies are storing another 80 million barrels aboard 35 supertankers and a handful of smaller tankers, the most in 20 years, according to Frontline Ltd., the world's largest owner of supertankers.
The different players have different reasons for storing oil, whether onshore or offshore.
National oil companies are hoping to reverse the price slide by holding oil off the market. Iran alone is reportedly using as many as 15 tankers to store crude oil in hopes that higher prices will prop up its economy, which is dependent on oil exports.
Private trading companies like Vitol and Phibro are storing oil in expectation of higher prices. They are taking their cues from markets where traders buy and sell contracts for future delivery of oil, which are signaling higher prices down the road.
Adam Sieminski, chief energy economist at Deutsche Bank, noted that a trading company could buy oil at the spot price of nearly $40 a barrel, store it and sell a contract to deliver it in a year for about $60. "You pay between $6 and $10 a barrel to store it, and you can make $10 a barrel," he said. "That's why Cushing is filling up rapidly and people are leasing tankers."
One small example of how the price uncertainty has affected behavior is the Devon Energy Corporation, an Oklahoma City company that in recent years has excited the energy world with announcements about expensive new investments in Canadian oil sands and deepwater oil exploration projects.
The company recently put off announcing details of its drilling program. Chip Minty, a Devon spokesman, said: "The volatility we have seen in the last year, and particularly the last few months, is making it more difficult to plan a drilling program that is funded through cash flow. Everybody is laying down rigs."
DevonR17;s caution is a sign that the go-go days of investment are giving way to more modest expectations. Schlumberger and Halliburton, the two top oil service companies, are cutting jobs. Many oil companies are delaying investments in more expensive projects, like mining Canadian oil sands. A couple of refiners face bankruptcy.
The volatility is showing up at the retail level. Drivers who only a few weeks ago were finding relief from the summer's $4-a-gallon gasoline are now shaking their heads as the average national price for unleaded regular gasoline has surged to $1.79, from $1.62, since Dec. 30.
Oil volatility has complicated the efforts of automobile companies to figure out future strategies. Toyota had to suspend production at one plant that builds the Tundra pickup truck for several months when gasoline prices soared last summer. Toyota then delayed completion of a second plant meant to build the Prius hybrid when falling gasoline prices led to weakening demand for that fuel-efficient model.
The gyrations in prices affect shipping and other businesses around the world. Cathay Pacific, one of many airlines that use fuel hedging strategies, recently acknowledged that it had hedging losses of hundreds of millions of dollars as a result of the collapse in fuel prices.
The slowdown in oil investment is so rapid that some analysts say they believe it is a matter of time before shortages appear that will push oil prices to new heights and damage the economy.
From day to day, the price swings reflect a push and pull among the various players in the market, and diverging geopolitical and economic trends.
After months of sharply dropping prices, psychology on the oil markets seemed to shift strongly after Christmas — sending oil prices to almost $50 in January, from just below $34 on Dec. 19.
Traders were putting investment money back into oil as OPEC appeared to be serious about cutting output. Fighting between Israel and Hamas in Gaza appeared to threaten a broader Middle East conflict that might crimp oil supplies. The conflict between Russia and Ukraine over natural gas shipments threatened European supplies, raising fears that Europeans might have to switch from natural gas to oil.
But the mood shifted just as quickly last week when the Energy Department reported that crude oil inventories at Cushing had climbed by four million barrels, to 32 million barrels, for the week that ended Jan. 2, the highest since the government started tracking supplies in 2004. That number jumped again in a report on Wednesday, to 33 million barrels, near Cushing's operating capacity of 35 million barrels.
Spooked by the signs of surplus, traders drove the spot price of oil down to $37.28 a barrel on Wednesday, a drop of 1.3 percent.
Gasoline, meanwhile, has become pricier at the pump because refiners have been producing less of it. Profits from refining have been so thin over the last several months that refiners have been earning little, or even losing money, on producing gasoline. So now they are storing oil or selling it to traders, or retooling their refineries to produce less gasoline and more products with better profit margins, like heating oil, diesel or jet fuel.
Valero has curtailed gasoline supplies by extending maintenance time at some refineries and cutting production at eight of its 16 refineries. "There is not a lot of incentive right now to produce gasoline because there is lots of it," said Bill Day, a spokesman for Valero, the nation's largest refiner. "Obviously it would be better for us if there were more stability in prices."
While Goldman Sachs has predicted the slumping global economy will soon drive the price of oil down to $30, a top Kuwaiti oil official predicted recently that big production cuts by the Organization of the Petroleum Exporting Countries would soon push oil prices back up.
R20;ItR17;s a sure bet that both will be right," Mr. Yergin said, basing his opinion on the sharp swings of recent days.
Analysts foresee prices staying volatile for much of the year.
R20;Volatility is just another way of saying uncertainty," said Adam J. Robinson, director of commodities at Armored Wolf, a California hedge fund. "The demand outlook is very uncertain, the general outlook for prices is very uncertain, and the supply outlook is very uncertain."
.
Yes sir, that was interesting. Sometimes we can forget that markets do change from time to time.
Redcliff, I think the last paragraph says it all, UNCERTAINTY
Thanks for pointing that out. As I recall in July 2008 when oil was at $147,
it never entered my mind that we'd be at $30 today.
In July, I was thinking we had a couple more years before $30 oil.
The outer/back months ( out 3-5 years) are trading in the $70.00 to $80.00 range, the traders are betting the world economy will recover and consumption will be back up by then.
Feb-09 Crude settled at $35.40, down $1.88 on the day, Feb-09 Natural Gas settled at $4.843, down $0.127 on the day.
Feb-09 Crude is trading at $35.725, up $0.325, Feb-09 Natural Gas is trading at $4.94, up $0.097.
March crude is trading at $43.40 and April is trading at $48.50, it will be interesting to see where they go as they become front month. If the world economies don't improve the the near term back months will move down.
Feb-09 Crude settled at $36.51, up $1.11 on the day, Feb-09 Natural Gas settled at $4.801, down $0.042 on the day.
March-09 Crude is trading at $41.15, down $1.42 Feb-09 Natural Gas is trading at $4.69, down $0.111.
March-09 Crude is trading at $40.375, down $2.195 Feb-09 Natural Gas is trading at $4.595, down $0.206.
Feb-09 Crude settled at $38.74, up $2.23 on the day, Feb-09 Natural Gas settled at $4.642, down $0.159 on the day.
Today was the last day for Feb-09 trading in Crude, March-09 will be the front month tomorrow, March-09 settled at $40.84, down $1.72 on the day.
March-09 Crude is trading at $41.175, up $0.335, Feb-09 Natural Gas is trading at $4.665, up $0.023.
EIA Weekly Inventory report comes out today, it will be interesting to see where the inventories are.
I forgot about the Monday Holiday, the inventory report won't come out until tomorrow.
Crude Oil Rises as Dollar Retreats, Spurring Commodity Buying
By Grant Smith
Jan. 21 (Bloomberg) -- Crude oil rose as the U.S. currency retreated from its highest in six weeks against the euro, spurring investor demand for dollar-priced commodities.
Oil earlier declined on forecasts a U.S. Energy Department report will probably show that crude stockpiles, 10 percent above their five-year average, increased for the 15th time in the past 17 weeks. U.S. inventories probably rose 1.5 million barrels last week, according to the median of analyst estimates in a Bloomberg News survey.
R20;WeR17;re seeing oil rebound this morning as the dollar pulls back," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "The softer dollar normally underpins commodity prices as they become relatively cheaper for foreign investors and a hedge against inflation."
Crude oil for March delivery advanced as much as $1.09, or 2.7 percent, to $41.93 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $41.57 a barrel at 10:58 a.m. London time.
The February contract expired yesterday, up $2.23, or 6.1 percent, at $38.74 a barrel in the biggest gain since Dec. 31. Sales volume for the contract was less than March's as traders avoided taking supplies at the Cushing, Oklahoma, delivery point for Nymex futures.
R20;Oil will not stay as cheap as it is, we believe the downward trend will turn very soon," Georg Schuh, chief investment officer of Deutsche Bank Advisors, said in a television interview in Frankfurt. "Investment demand came down with the deleveraging of many hedge funds. The long-term trend of rising demand in emerging countries, however, is intact."
Inventory Report
The dollar traded for $1.2936 per euro as of 10:30 a.m. in London, having earlier climbed to $1.2848, its strongest level against the single European currency since Dec. 9.
The Energy Department is scheduled to release its weekly inventory report tomorrow, a day later than usual because of the Jan. 19 Martin Luther King Jr. holiday.
R20;We can see oversupply in the market, it's obvious that inventories are very high," said Sintje Diek, an analyst at HSH Nordbank in Hamburg. "For the coming months, oil demand will be weak, and then recover at the end of the year."
Crude oil stockpiles at Cushing, where West Texas Intermediate traded on the Nymex is stored, climbed 2.5 percent to 33 million barrels during the week of Jan. 9, the Energy Department said last week. It was the highest since at least April 2004, when the department began keeping records for the location. Total capacity there is 47.7 million barrels, according to data from Lipow Oil Associates LLC.
Brent crude oil for March settlement traded for $43.72 a barrel, 10 cents higher on LondonR17;s ICE Futures Europe exchange as of 10:31 a.m. local time.
Our local gas is back up to about $1.67 or so....sigh.
March-09 Crude settled at $43.55, up $2.71 on the day, Feb-09 Natural Gas settled at $4.78, up $0.138 on the day.
March-09 Crude is trading at $44.625, up $1.075, Feb-09 Natural Gas is trading at $4.77, down $0.010.
Below are excerpts from the weekly EIA Crude and Products report that came out today, a day late due to the Monday holiday. Crude is trading down right now.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased 6.1 million barrels from the previous week. At
332.7 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
increased by 6.5 million barrels last week, and are at the upper limit of the
average range. Both finished gasoline inventories and gasoline blending
components inventories increased last week. Distillate fuel inventories
increased by 0.8 million barrels, and are above the upper limit of the average
range for this time of year. Propane/propylene inventories decreased last week
by 3.1 million barrels and are in the upper half of the average range. Total
commercial petroleum inventories increased by 11.8 million barrels last week and
are above the upper limit of average range for this time of year.
Total products supplied over the last four-week period has averaged 19.4 million
barrels per day, down by 4.7 percent compared to the similar period last year.
Over the last four weeks, motor gasoline demand has averaged about 8.9 million
barrels per day, down by 1.6 percent from the same period last year. Distillate
fuel demand has averaged about 4.1 million barrels per day over the last four
weeks, down by 2.6 percent from the same period last year. Jet fuel demand is
13.8 percent lower over the last four weeks compared to the same four-week
period last year.
March-09 Crude settled at $43.67, up $0.12 on the day, Feb-09 Natural Gas settled at $4.681, down $0.099 on the day.
March-09 Crude is trading at $42.875, down $0.795, Feb-09 Natural Gas is trading at $4.60, down $0.081.
Natural Gas Storage Report comes out today, a day late due to the Holiday.
Crude Oil Falls as Deepening Recession Causes Supplies to Swell
By Grant Smith and Christian Schmollinger
Jan. 23 (Bloomberg) -- Crude oil fell after U.S. stockpiles increased and data signaled the economic slump is deepening around the world.
U.S. crude inventories rose four times more than forecast to the highest since August 2007 as refineries cut operating rates, the Energy Department said yesterday. Recession in the worlds largest energy consumer has cut demand for heating and motor fuels. The U.K. economy shrank more than forecast during the fourth quarter, posting the biggest contraction since 1980.
The market is still absorbing the picture of poor demand from the inventory data, said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. Even with refiners cutting runs, product stocks are very high compared to five year-averages.
Crude oil for March delivery fell as much as $1.74, or 4 percent, to $41.93 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $42.55 a barrel at 10:29 a.m. London time.
Prices are down 3.8 percent since the end of December and 51 percent lower than a year ago.
There is a high risk that oil prices will test $30 again, said Yingxi Yu, a commodities analyst at Barclays Capital in Singapore, said in a Bloomberg Television interview. There is potential for going below that as demand continues to weaken and crude inventories continue to accelerate.
Brent crude oil for March settlement fell as much as $1.34, or 2.1 percent, to $44.05 a barrel on Londons ICE Futures Europe exchange.
U.K. Economy
U.K. gross domestic product fell 1.5 percent from the previous quarter, the Office for National Statistics said today in London. Economists predicted 1.2 percent, according to the median of 33 estimates in a Bloomberg News survey. The economy has now shrunk in two quarters, the conventional definition of a recession.
Chinas economic slowdown, already the deepest in seven years, is set to worsen, according to economists in a Bloomberg News survey. China is the worlds second-biggest energy user.
Gross domestic product will grow 6.3 percent this quarter from a year earlier, the survey showed. The countrys economy expanded 6.8 percent in the fourth quarter.
Supplies of crude oil in the U.S. rose 6.1 million barrels to 332.7 million last week, the highest since August 2007, the Energy Department said yesterday. Stockpiles were forecast to climb by 1.4 million barrels by a Bloomberg News survey.
Fuel consumption in the U.S., the worlds biggest oil consumer, during the four weeks ended Jan. 16 averaged 19.4 million barrels a day, down 4.7 percent from a year earlier, the Energy Department report showed.
Cushing Supplies
Supplies at Cushing, Oklahoma, where oil traded on Nymex is stored, climbed 0.7 percent to 33.2 million barrels last week, the highest since at least April 2004, when the department began keeping records for the location.
Gasoline inventories increased 6.48 million barrels to 220 million, the Energy Department said. Stockpiles were forecast to climb by 1.8 million barrels, according to the Bloomberg News survey. Refineries reduced operating rates, or runs, by 2 percentage points to 83.3 percent as fuel consumption tumbled.
The price of oil for delivery in April is $2.45 higher than for March, and December futures are up $11.13 from the front month. This structure, in which the subsequent months price is higher than the one before it, is known as contango, and is often an indicator of oversupply.
Steep Curve
Its still a very steep curve, said Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne. Theres no place to store this stuff so people are putting it into the very visible inventories.
Companies including Citigroup Inc.s Phibro LLC, Royal Dutch Shell Plc and BP Plc have stored oil on tankers as the contango allows them to profit from hoarding crude.
Refineries operated at 83.3 percent of capacity last week, the Energy Department report showed, the lowest for the week since 1991. Analysts forecast that there would be a 0.5 percentage point drop.
Frank, where are you??? I am missing my daily oil news fix!
Frank. My ol' black buddy Slappy Monroe, came up to me today here at the 19th Hole and asked me,"Why gas be so high again, master Warph?" "Good question Slappy," I said, "I'll check it out with Frank." So, we want to know why we are paying $1.89 per gal. for gas at Chevron when two weks ago it was at $1.43? I know that ol' barrel hasn't gone up much for a couple of months.... has OPEC cut prodution? Afraid I haven't kept up with the oil situation lately. BTW, Slappy, who has a few million and can afford to pay $10 bucks a gal., shoots in the low 70's and claims he related to Tiger's old nanny. I think he's lying about the nanny.
March-09 Crude is trading at $41.58.
LOL on your post, Warph! ;D Hope Frank's OK...haven't read him in awhile. Thanks for the info, Dan...It's interesting to follow the rise and fall of those prices.
March-09 Crude is trading at $41.35.
March-09 Crude is trading at $42.74.
Didn't someone post something like this previously? I tried to go back in the thread but couldn't find it...this is a very interesting read...
OIL!?!?!?
GOOGLE it or follow this link. It will blow your mind.
http://www.usgs.gov/newsroom/article.asp?ID=1911
The U. S. Geological Service issued a report in April ('08) that only scientists and oil men knew was coming, but man was it big. It was a revised report (hadn't been updated since '95) on how much oil was in this area of the western 2/3 of North Dakota ; western South Dakota ; and extreme eastern Montana . check THIS out:
The Bakken is the largest domestic oil discovery since Alaska 's Prudhoe Bay , and has the potential to eliminate all American dependence on fore ign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable... at $107 a barrel, we're looking at a resource base worth more than $5.3 trillion.
'When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea.' says Terry Johnson, the Montana Legislature's financial analyst.
'This sizable find is now the highest-producing onshore oil field found in the past 56 years.' reports, The Pittsburgh Post Gazette. It's a formation known as the Williston Basin , but is more commonly referred to as the 'Bakken.' And it stretches from Northern Montana, through North Dakota and into Canada . For years, U. S. oil exploration has been considered a dead end. Even the 'Big Oil' companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken's massive reserves... and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!
That's enough crude to fully fuel the American economy for 41 years straight.
2. And if THAT didn't throw you on the floor, then this next one should - because it's from TWO YEARS AGO!
U. S. Oil Discovery- Largest Reserve in the World!
Stansberry Report Online - 4/20/2006
Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction.
They reported this stunning news: We have more oil inside our borders, than all the other proven reserves on earth.
Here a re the official estimates:
- 8-times as much oil as Saudi Arabia
- 18-times as much oil as Iraq
- 21-times as much oil as Kuwait
- 22-times as much oil as Iran
- 500-times as much oil as Yemen
- and it's all right here in the Western United States .
HOW can this BE? HOW can we NOT BE extracting this? Because the environmentalists and others have blocked all efforts to help America become independent of foreign oil!
James Bartis, lead researcher with the study says we've got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels untapped. That's more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.
----
Don't think 'OPEC' will drop its price - even with this find? Think again! It's all about the competitive marketplace, - it has to.
----
Got your attention/ire up yet? Hope so! Now, while you're thinking about it ... and hopefully P.O'd, do this:
3. Pass this along.. If you don't take a little time to do this, then you should stifle yourself the next time you want to complain about gas prices .. because by doing NOTHING, you've forfeited your right to complain.
http://tonto.eia.doe.gov/ftproot/features/ngshock.pdf
The Williston/Bakken is oil shale....this explains some of the problems involved with gettin the oil out. It's "technically" recoverable. Not necesarily economical for the oil companies. It's not sittin there in a big pool, it has to be extracted from the shale.
Quote from: pam on February 02, 2009, 05:39:44 AM
http://tonto.eia.doe.gov/ftproot/features/ngshock.pdf
The Williston/Bakken is oil shale....this explains some of the problems involved with gettin the oil out. It's "technically" recoverable. Not necesarily economical for the oil companies. It's not sittin there in a big pool, it has to be extracted from the shale.
Actually the facilities are already there to extract it. Its been built. It was in operation in 1984. So there is no long timeframe to startup extraction and no real cost associated with building the infrastructure. They just shut it down and mothballed it.
yeah I know but it's a problem keepin the wells fron collapsin and pluggin up. Too much pressure from the weight.....
March-09 Crude is trading at $40.44.
Talked to Frank today...he's doing fine. Just pursuing some other interests...I told him he was missed. :-[ :-[
March-09 Crude is trading at $39.86.
Thank you to all that keep this going when my Uncle Frank can't post. This is a unique topic that you can't find on other forums. It is a very important topic today. It makes me proud that others fill in the gaps.
David
Just wish I could fish around for relevant articles!! All I really have is the NYMEX info. I know we all miss Franks insight into this sector of the market and what makes it fluctuate up and down.
March-09 Crude is trading at $41.78.
Hear that, Mr. Frank???? We miss you and need your input. Please?
March-09 Crude is trading at $40.09.
Crude Oil Trades Near $40 in New York Before U.S. Jobs Report
By Grant Smith
Feb. 5 (Bloomberg) -- Crude oil traded near $40 a barrel in New York before a report forecast to show that the jobless rate in the U.S. probably jumped in January to the highest level in 16 years.
Oil has lost 9 percent this year amid concerns that the deepening global recession will further erode fuel consumption. U.S. crude supplies rose 7.2 million barrels to 346.1 million barrels last week, the highest since July 2007, the Energy Department said yesterday. OPEC is in the process of implementing a record supply cut announced in December to reverse the slump in prices.
"Oil traders are likely to wait for non-farm payroll data release tomorrow as a leading indicator of underlying oil demand," said Gareth Lewis-Davies, an analyst at Dresdner Kleinwort Group Ltd. in London. "The cuts already announced by OPEC will probably be sufficient to tighten up the market."
Crude oil for March delivery was at $40.34 a barrel, up 2 cents, in electronic trading on the New York Mercantile Exchange at 1:19 p.m. London time. Prices are down 9.3 percent this year and 54 percent from a year earlier.
Brent crude in London traded at a $4.42 premium over West Texas Intermediate futures on the Nymex. Brent oil for March settlement rose as much as 95 cents, or 2.2 percent, to $45.10 a barrel on London's ICE Futures Europe exchange. It traded for $44.77 at 1:20 p.m. local time.
"European crude is tighter than U.S. crude, and that this should support Brent relative to WTI," said Mike Wittner, head of oil research at Societe General SA in London. "European refinery runs are hardly lower than a year ago, while U.S. crude runs are sharply lower than a year ago."
Payrolls Falls
U.S. unemployment climbed to 7.5 percent, and payrolls fell by 530,000, the 13th consecutive decrease, according to the median estimate in a Bloomberg News survey ahead of Labor Department figures tomorrow.
U.S. fuel demand during the past four weeks averaged 19.5 million barrels a day, down 2.8 percent from a year earlier, the report showed.
"The market is stuck in a sideways range as the impact of the OPEC production cuts conflicts with high stock levels and weak demand," said Christopher Bellew, senior broker with Bache Commodities Ltd. in London.
The Organization of Petroleum Exporting Countries decided on Dec. 17 to trim production by 9 percent beginning on Jan. 1. The 12-member group pumped an average 28.565 million barrels a day last month, down 1.05 million from December, according to a Bloomberg News survey of oil companies, producers and analysts.
Crude oil has been trading at about $40 a barrel in the past three days. The 30-day historical price volatility for crude oil has fallen to 97 these two days, the first time the reading has dropped below 100 in about six weeks, according to data compiled by Bloomberg.
March-09 Crude is trading at $40.17.
March-09 Crude is trading at $41.46.
March-09 Crude is trading at $38.15.
IEA Cuts Demand Outlook, Sees 1 Million-Barrel Drop
By Grant Smith
Feb. 11 (Bloomberg) -- The International Energy Agency cut its global oil demand forecast for 2009, projecting consumption will decline by 1 million barrels a day as the worldwide recession deepens, the biggest drop since 1982.
The adviser to 28 nations trimmed its 2009 forecast by 570,000 barrels to 84.7 million a day because of a weaker economic outlook from the International Monetary Fund. The agency warned slipping investment in capacity may trigger a price rebound that "could again destabilize the global economy."
"We've been following the downward spiral in economic expectations," David Fyfe, head of the IEA's oil industry and markets division, said in a phone interview from Paris. "We're on a downward escalator in terms of economic expectations, but at the same time the supply side is being hit."
Oil prices have plunged more than $100 a barrel from a record in July as the U.S., Europe and Japan face their first simultaneous recession since World War II. Crude futures in New York traded below $40 a barrel today.
It's the agency's sixth consecutive reduction of its 2009 crude demand estimate, now forecast to shrink 1.1 percent from 2008. The biggest revision was made to the world's most developed economies in the Organization for Economic Cooperation and Development. The IEA cut demand expectations there 340,000 barrels a day to 46 million barrels a day, implying a contraction of 1.5 million barrels a day, or 3.2 percent.
Developing Nations
Estimates for oil consumption this year among developing nations were lowered by 230,000 barrels a day to 38.7 million a day, with the outlook for Asia and the former Soviet Union "particularly grim," it said.
The IEA trimmed its forecast for supplies from outside the Organization of Petroleum Exporting Countries next year by 110,000 barrels a day to 50.9 million barrels a day. The total now includes 1 million barrels a day from Indonesia, which left OPEC at the start of the year.
While non-OPEC supply is still projected to increase 400,000 barrels a day from last year, the IEA's Fyfe said the downward revision "could well go further into 2009 if spending cuts have an immediate impact on drilling."
"There's a real risk that supply takes a hit this year because of lower prices and scant credit," Fyfe said.
OPEC Supply
OPEC, responsible for more than 40 percent of the world's oil, will have to provide about 28.8 million barrels a day this year to balance supply and demand, the IEA said.
Its 12 members pumped 29 million barrels a day of crude oil in January, 950,000 barrels a day less than in December, as the organization implemented announced supply cuts, the IEA said. Saudi Arabia, OPEC's biggest producer, cut by 300,000 barrels a day last month to 8.1 million barrels a day, according to the agency.
The 11 OPEC nations bound by production quotas pumped 26.65 million barrels a day last month, the IEA said, compared with their official Jan. 1 limit of 24.845 million a day.
The IEA has reduced its estimate for OPEC's average capacity this year to 35.1 million barrels a day from 35.5 million a day in July, when prices reached a record $147.27 a barrel.
Interesting.. I traveled last week from Emporia to Manhattan to Hastings, NE to Colby, KS to Limon, CO and back to Howard this week via I-70 and I-135, and the gas all ranged from $1.89 to $1.91 pretty much the whole way. BUT, I drive through El Dorado last night (on a full tank, of course), and the cheap gas is $1.68 there!
March-09 Crude is trading at $34.98.
Quote from: DanCookson on February 12, 2009, 11:12:17 AM
March-09 Crude is trading at $34.98.
Nice! It appears that Opec is shooting blanks. :)
Steve, I agree. I also believe that if it breaks the $30 threshold it will fall even further. Much like it did when it eclipsed the $40 ceiling.
March-09 Crude is trading at $34.98.
Quote from: DanCookson on February 13, 2009, 08:34:23 AM
Steve, I agree. I also believe that if it breaks the $30 threshold it will fall even further. Much like it did when it eclipsed the $40 ceiling.
Oh i'm a praying it will. I think the fat arabs need to cut back on their spending just like the rest of the world has to.
The outer months are all down as well, which seems to give the overall oil market a very bearish outlook.
March-09 Crude is trading at $36.85.
March-09 Crude is trading at $34.98.
Thanks Dan.
March-09 Crude is trading at $34.79.
March-09 Crude is trading at $37.40.
How Oil Pipelines Work
Oil pipelines are frequently in the news these days because they can have a big effect on oil prices. For example, if a war or terrorist activity threatens to shut down an important pipeline, oil prices can rise. Oil pipelines can also make the news when they leak.
One of the best-known pipelines in the United States is the Trans Alaska Pipeline System. It stretches north-to-south for 800 miles across the state of Alaska. The oil comes out of the ground at the North Slope near Prudhoe Bay, flows down the pipeline to the port of Valdez, loads onto a supertanker, floats down to the west coast, unloads into another pipeline and makes its way to a refinery. The Alaska pipeline is needed because Prudhoe Bay freezes in the winter, while the port of Valdez is ice-free year round.
At its simplest level, you can think of a pipeline as a pipe and a pump. The pump sucks up oil from a storage tank and sends it down to the other end of the pipe. If the pipe is only a few miles long, this simple system works fine. In the early days of oil drilling and distribution, pipelines this simple were common. But modern oil pipelines like the Alaska pipeline are far more sophisticated.
For example, the Alaska pipeline carries approximately 40 million gallons of oil per day, and can approach 100 million gallons per day if necessary. To handle this volume of oil, the pipeline is four feet in diameter. As the oil flows, friction against the pipe wall slows it down. Therefore, approximately every 100 miles, a pumping station boosts the pressure. The oil pressure inside the pipeline is over 1,000 PSI. To handle that kind of pressure, the pipeline is made of steel that is more than three inches thick.
That still sounds pretty simple - you have a big pipe and some pumping stations. But then you have to consider expansion. The steel in the pipeline can potentially get as cold as minus 60 degrees F. Or, with a maximum load of high-pressure oil flowing, it can get as hot as 145 degrees F. That's a 205 degree temperature swing. Keeping in mind that steel contracts when it is cold and expands when it gets hot, you can see the problem. An 800 mile long steel pipeline can grow or shrink by more than a mile depending on the temperature. To handle that much expansion, the pipeline has to be able to expand and contract at all of its joints without leaking.
What happens if something goes wrong and the pipeline springs a leak? With the oil at such a high pressure, you can get a geyser. For example, in 2001, the pipeline was shot by a drunk man wielding a hunting rifle. Although the hole was small, more than 2 gallons of oil per second shot out of the pipeline. Since it took more than a day to find the leak, almost 300,000 gallons of oil inundated nearby trees and tundra.
Fixing the leak presents its own problems. You have to shut down the flow of oil on the entire pipeline, find the leak, isolate that section of the pipeline, drain the oil and fix the problem. It can be a huge, messy project. The Alaska pipeline has experienced hundreds of leaks over its lifetime.
You might be wondering how a rifle bullet could penetrate steel that is three inches thick. The problem is corrosion, which thins the steel over time and makes the pipeline more prone to leaks. To check for corrosion, pipeline engineers use a robot called a "smart pig" to run down the inside of the pipeline and check for problems. The thickness of the steel can be detected with a magnetic field. Where the steel gets thin, the way it handles a magnetic field changes, and sensors can detect those changes. When the pipeline gets too thin, sections have to be replaced.
Given all this complexity, you might be surprised to learn that there are oil and gasoline pipelines crisscrossing the United States. These pipelines stretch for tens of thousands of miles. They work around the clock to connect ports, oil fields, refineries, and major distribution points. Because these pipelines are almost always buried, they tend to be invisible. But they are essential to our day-to-day life. Without them, the flow of oil and gasoline in the United States would come to a standstill.
That's interesting. Thanks to all who are adding to this thread.
....and here's another one....
How an oil refinery works
Every time you pump gas into your gas tank, you are benefiting from one of the most amazing chemical factories know to humans: the oil refinery. An oil refinery produces gasoline as well as many other substances - everything from dry cleaning fluid to petroleum jelly to road tar comes from an oil refinery. Let's go behind the scenes and see how an oil refinery works.
An oil refinery is made possible by the amazing nature of crude oil. When an oil company pumps crude oil out of the ground, it is pumping a mixture of many different substances. All those substances have one thing in common: They are all made of hydrocarbon chains of different lengths. The goal of an oil refinery is to sort out all the different chains by length.
A hydrocarbon chain is simply a molecule made of hydrogen and carbon. Carbon atoms link together to form the backbone of the chain, and then hydrogen atoms attach to the carbons. The simplest hydrocarbon chain has just one carbon atom along with four hydrogen atoms. This hydrocarbon chain is called methane. Methane gas is so light it floats, like helium. When you use natural gas, you are using methane. Ethane is next, with two carbons in the chain.
Once you get five carbon atoms in a chain, you have a liquid, and the liquids get thicker and thicker as the chains get longer. Gasoline, kerosene, diesel fuel and motor oil are all made from hydrocarbon chains. Gasoline has between seven and 11 carbons in the chain. Kerosene has between 12 and 15 carbons, and so on. Once you get beyond 20 atoms in a chain, you move from liquids to solids: things like petroleum jelly, paraffin wax and finally tar.
An oil refinery sorts out all these different substances using heat. If you heat crude oil up to 600 degrees centigrade, it boils and all the crude oil evaporates. This crude oil steam then flows into the bottom of a tall distillation column. The column is set up so that, at different heights inside the column, there are different temperature zones. As the crude oil steam rises in the column, it cools, and the different hydrocarbon chains condense out into liquids. There are trays at different levels that collect the different liquids and send them through pipes to storage tanks.
If you were to go back 100 years, an oil refinery was this simple. You had a tank that boiled crude oil and a distillation column to collect the different kinds of hydrocarbons. The big problem with this approach is that only 40 percent of a barrel of oil is naturally gasoline. The rest of the barrel naturally contains longer or shorter chains. Many oil refineries today want to make mostly gasoline, so there needs to be a way to change longer and shorter chains into gasoline, either by putting them together or splitting them apart.
Cracking is the process of breaking longer chains apart. Using heat and catalysts, long hydrocarbon chains break down into shorter, gasoline-length chains. So the refinery might take the paraffin wax from a barrel of crude oil and run it through a cracker. Then it can distill the output of the cracker and extract a lot more gasoline.
The other side of the coin is unification. Here, short hydrocarbon chains link together to form longer chains. A catalyst breaks hydrogen atoms off the end of the chain and links chains together.
Using these techniques, an oil refinery can turn almost everything in a barrel of oil into gasoline-length chains. The chains are blended together to get gasoline that performs perfectly in a car engine.
The final step at a refinery is to purify the gasoline. For example, there might be a step that removes sulfur from the fuel. Another step removes any water and nitrogen compounds.
What comes out of the refinery is gasoline ready to go into a pipeline or tanker truck so that it ends up at your local gas station. From there, you pump it into your tank.
Thanks you, Warph. I like your simple explaination of a refinery.
How Octane Works
Every time you pull up to a gas pump to buy your gas, you are faced with a choice: Do you want 87, 89 or 93 octane gas? Which leads to the obvious question: What is octane, and why would you care? Why can't there be just one kind of gasoline? Let's take a look at what is really going on with octane.
It all starts with your car's engine. Any gasoline engine is inhaling air, mixing the air with gasoline, compressing the air/gas mixture and igniting it with a spark plug. The compression part is important when it comes to octane. The amount of compression is called the compression ratio of the engine. A typical engine might have a compression ratio of 8-to-1.
When an air/gasoline mixture gets compressed, there is some amount of compression that will cause the gasoline to spontaneously ignite. The gas doesn't need a flame or a spark just the act of compressing it will cause the gas to ignite. This kind of spontaneous ignition in an engine is bad because it causes knocking, and knocking can damage an engine.
So when you fill your tank with gas, you need to know whether the gas will spontaneously ignite (and therefore knock) or not. The octane rating gives you a way to measure gasoline's resistance to spontaneous ignition. Eighty-seven octane gasoline is good enough to work in normal engines that have a normal compression ratio. But many "high performance" engines use higher compression ratios, and they need 91 or 93 octane gas.
How do you find out if your engine needs 87 octane or 93 octane gas? You look in the owner's manual and it will tell you. Before you buy a new car you should check this, just to make sure, since 93 octane gas is getting pretty expensive these days.
What happens if you put 87 octane gas in a "high performance" engine? If it is an older engine, it is likely that it will knock like crazy. With newer computer-controlled engines, the computer can sense the knocking and make some adjustments. It might change the ratio between air and fuel, or change the spark timing, to try to reduce the knocking. Your engine might not perform very well and it might not get the best mileage, but it probably won't be damaged by knocking.
What happens if you put 93 octane gas in a "normal" engine that needs 87 octane gas? Nothing. It is a waste of money, because 93 octane gas isn't needed in a "normal" engine.
You might be wondering what the number 87 actually means, and where the name "octane" comes from. The name comes from the following fact: When you take crude oil and process it in a refinery, you end up getting hydrocarbon chains of different lengths. These different chain lengths can then be separated from each other and blended to form different fuels.
Heptane has seven carbon atoms chained together, and octane has eight.
It turns out that heptane handles compression very poorly. Compress it just a little and it ignites spontaneously. Octane handles compression very well. You can compress it a lot and nothing happens.
Eighty-seven-octane gasoline is gasoline that contains 87-percent octane and 13-percent heptane (or some other combination of fuels that has the same performance of the 87/13 combination of octane/heptane). It spontaneously ignites at a given compression level, and can only be used in engines that do not exceed that compression ratio.
During WWI, it was discovered that you can add a chemical called tetraethyl lead (TEL) to gasoline and significantly improve its octane rating above the octane/heptane combination. Cheaper grades of gasoline could be made usable by adding TEL. This led to the widespread use of "ethyl" or "leaded" gasoline. But lead was eventually banned because it is toxic and because it clogs catalytic converters.
When lead was banned, gasoline got more expensive because refineries could not boost the octane ratings of cheaper grades any more. High octane gas got especially expensive. Airplanes, therefore, are still allowed to use leaded gasoline (known as AvGas), and octane ratings of 100 or more are commonly used in super-high-performance piston airplane engines.
I remember leaded gas, and compression ratio's of 10.5:1 and 11:1. You can't even run a engine on gas these days.
Gas is down to 1.599 here...I used my Dillons card and got my fill up for only 1.499/gal...Only .05 more than Christmas time! Even though I know this is a sign of how bad things are right now, I'm still grateful. Every penny that stays in my pocket helps me out just that much more.
Sorry, been really slacking of late.....Will try to do better ???
April-09 Crude is trading at $41.54.
Appears all the outer months are trading higher as well. I haven't had a chance to do much reading or talk to Frank, but I would make a general assumption that there is fear of the weaking of our dollar to to all the stimulus and gov't producing capital. (printing money).
Quote from: DanCookson on March 03, 2009, 08:21:12 AM
Sorry, been really slacking of late.....Will try to do better ???
April-09 Crude is trading at $41.54.
Appears all the outer months are trading higher as well. I haven't had a chance to do much reading or talk to Frank, but I would make a general assumption that there is fear of the weaking of our dollar to to all the stimulus and gov't producing capital. (printing money).
its quite interesting that its still as high as it is even thuogh yesterday the world markets crashed big time.
Squandered opportunities?
Commentary: Smart traders know oil's retreat is temporary
By Kevin Kerr, Global Commodities AlertLast update: 12:01 a.m. EST March 2, 2009
NEW YORK (MarketWatch) --
Human beings are a predictable bunch and we tend to wait until things get to a painful crisis mode before taking drastic action.
My question is why does it always have to get to that point?
Take the most recent run-up of oil prices, when crude hit $147 a barrel and gasoline was trading around $5.
As prices reached nosebleed levels, the general public was in a great deal of pain and they acted accordingly. There was an outcry for more alternatives, more refineries, conservation, infrastructure investment etc. Everything from clean-coal technology to nuclear was on the table.
Fast forward to today, with crude prices at around $38 and gas back below $2, and it's a very different picture. No pain means no gain in solving the problem.
Let me be clear, though. That problem hasn't gone anywhere.
$300 crude not far off
While the global recession and credit crunch have severely impacted global demand for energy, it's only temporary. The problems propelling oil prices to $147 haven't gone away. The patient is, at best, in temporary remission.
Traders are seasick from the oil markets lately; the volatility has been so extreme. Aside from the obvious macro-factors, what else is driving the abnormally large swings in crude oil?
It's called "contango." Contango occurs when futures prices are higher than current prices. The scenarios are not uncommon, but the recent spread widths are extreme by any measure.
For example: the April 2009 crude oil contract is around $38.10 -- while the April 2010 crude contract, crude for delivery a year from now, is trading at $50.26. That's a $12.16 spread.
That means major oil companies like Royal Dutch Shell royal dutch shell can store oil on tankers and then sell the April 2010 contract at $50.26.
Even factoring in the cost of storage, they come out better selling forward than selling at current market prices. This maneuvering causes additional volatility throughout the oil curve, as physical oil companies position themselves in the futures markets to take advantage.
Contract rolls
Another strategy we see consistently in the energy market is contract rolls at major hedge funds, commodity-trading advisers and exchange-traded funds. One ETF is the U.S. Oil Fund LP (USO united states oil fund lp units USO) , the world's largest oil fund, said to account for 22% of the outstanding front-month contracts each month.
When the front-month contract approaches expiration, this gigantic ETF must sell its position in the expiring month and buy it back for the coming month.
Also, long-term trends following CTAs and hedge funds have been short on the front months. When a contract expiration approaches, the fund has to roll its short position into the next month's contract, since most CTAs and hedge funds have neither the ability nor the interest to take physical delivery of oil.
The volatility in energy is due to the gigantic tug of war going on around key days of the month where funds, ETFs and oil companies are adjusting for the roll.
Old problems are new again
So what were the major factors that drove oil to record levels the last two years? There are many.
Global demand is among the biggest. Pent-up demand is exploding in growth areas like China and India. Once that global manufacturing engine begins firing again, you can count on energy prices ramping up. Here in the U.S., demand is down dramatically, but as the economy recovers, it will pick up swiftly.
Any economic recovery results in higher energy prices -- it's elementary. That means $300 crude oil could be one year away or three years away, but certainly not much more.
There's been almost no progress on the march to alternatives. The global investment engine has ground to a halt. With oil prices at these levels and the market in tatters, the last place investors want to put their money is in the alternative energy space.
Every sector from uranium miners and clean-coal technology to bio-fuels and oil drillers has seen investment and share prices dry up. The call for building of new refineries and pipelines has all but gone silent.
But OPEC has cut production across the board. We already are seeing supplies start to taper off. Eventually, demand will catch up with supply and we'll be right back in the same boat we were in a year ago.
The realities are chilling. The largest oil field in Mexico Cantarell is still in major decline and when it does run out civil unrest in that nation could explode. These types of chokepoints, both political and physical, still exist with several major oil exporting nations.
Adult do-over
You know when you made a mistake as a kid you'd want a "do-over"? If only managing a portfolio were so easy.
In a way, though, it can be.
With oil prices and commodity prices retreating, we have opportunities to take advantage of pricing we thought we'd never see again. Many of the solid energy, refining, drilling and exploration companies that performed exceptionally during the last surge in prices likely will do well again.
Also, several of the more established alternative energy plays should rebound along with crude oil, and they're at just a fraction of their year-ago levels. Investors need to be wary of volatility. But it's prudent to have some exposure.
Shares of many key oil stocks took a plunge, and now they're offering some great entry points. A few ways to play the coming rally in oil is to simply buy the December 2009 crude oil call options. If you prefer to play the equity side, Exxon Mobil is a good bet for the majors while Halliburton HAL is one for the drilling side. Many others are attractive.
It's disappointing that during this lull in energy prices, more immediate action isn't being taken to stave off the rapid return of even higher energy prices. But as investors, we need to take action and responsibility to hedge our own portfolios.
High energy prices will be back soon for those that don't prepare. So will the pain, unfortunately.
Kevin Kerr has been trading commodities since 1989. He currently manages the Cane Garden Capital institutional agricultural fund and edits the Global Commodities Alert at www.kerralert.com
Oil Falls as U.S. Jobless Rate May Climb, Limiting Fuel Demand
By Alexander Kwiatkowski and Christian Schmollinger
March 5 (Bloomberg) -- Crude oil fell below $45 a barrel in New York amid speculation the U.S. will report higher jobless figures, adding to signs of the deepening global recession.
The number of people claiming unemployment benefits climbed to a record 5.155 million last week, a Labor Department report may show today. U.S. crude oil stockpiles were at 351 million barrels in the week ending Feb. 27, near the highest level since July 2007, the Energy Department said yesterday.
R20;There is not much prospect for the upside in oil prices as long as we still see weak macroeconomic data," said Eliane Tanner, commodity analyst at Credit Suisse Group in Zurich. "Demand in the U.S. has stabilized now but it is still weak."
Crude oil for April delivery fell as much as $1.26, or 2.8 percent, to $44.12 a barrel in electronic trading on the New York Mercantile Exchange. It was at $44.19 a barrel at 9:24 a.m. London time.
Yesterday, futures rose $3.73 to $45.38. Prices are down 69 percent from the record $147.27 a barrel reached on July 11.
Commodities yesterday had their biggest increase since Dec. 31. The Reuters/Jefferies CRB Index of 19 raw materials rose 7.78, or 3.8 percent, to 211.45.
Crude oil supplies in the U.S. fell 757,000 barrels to 350.6 million barrels in the week ended Feb. 27, the Energy Department said in a report yesterday. Inventories were forecast to rise 1 million barrels, according to the median of analyst estimates in a Bloomberg News survey.
R16;Jumpy MarketR17;
R20;This is a very jumpy market and very news-sensitive to things such as the inventories," said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. "There are a lot of investors that are looking to buy the dip, to buy the bottom."
Brent crude oil for April settlement fell as much as $1.48, or 3.2 percent, to $44.64 a barrel on LondonR17;s ICE Futures Europe exchange. It was at $44.76 a barrel at 9:27 a.m. London time.
Stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate crude is delivered, declined 553,000 barrels to 34 million barrels last week, the report showed. Inventories in the week ended Feb. 6 were the highest since at least April 2004, when the department began keeping records for the location.
The decline in inventories has narrowed the difference between WTI futures and LondonR17;s Brent crude. New York oil's discount to Brent narrowed to 50 cents a barrel today, the smallest since Dec. 15.
Contango Narrowing
The price of oil on Nymex for delivery in May is more than $1 a barrel higher than for April. The situation where prompt- month futures are less expensive than later-dated contracts is called contango. The difference narrowed from $2.83 on Feb. 23.
For the Brent contract, the contango between the April and May contracts has narrowed further. It has moved from $1.37 a barrel on Feb. 23 to $1.02 a barrel today.
R20;The Brent market currently provides the best indication at the global level as to how the contango is narrowing," Barclays Capital analysts Paul Horsnell and Costanza Jacazio said in a report yesterday. "Even amidst all the cacophony of noise that West Texas dislocations generate, there still appears to be at least a delicate tightening trend in place."
U.S. refineries operated at 83.1 percent of capacity, up 1.8 percentage points from the prior week, the Energy Department report showed. Analysts were split over whether there was an increase or decline.
Gasoline inventories rose 168,000 barrels to 215.5 million barrels, the report showed. Analysts forecast that supplies would decline 800,000 barrels.
OPEC Output Falls
The Organization of Petroleum Exporting Countries, due to meet again on March 15, cut output by 2.7 percent in February, a Bloomberg News survey showed. OPEC production averaged 27.78 million barrels a day last month, down 770,000 from January, according to the survey of oil companies, producers and analysts. Output in January was revised 20,000 barrels a day lower.
R20;The market is in a tightening process with the OPEC production cuts, which will keep prices around these levels," according to Tanner of Credit Suisse.
The survey showed the 11 OPEC members with output quotas, all except Iraq, produced 545,000 barrels a day above the target of 24.85 million barrels a day. The countries pumping the most over their quotas were Iran, Angola and Libya.
OPEC May Forgo Cut as Dollar Boosts Oil's Value: Chart of Day
By Ayesha Daya
March 5 (Bloomberg) -- Saudi Arabia, OPEC's largest producer, may oppose a further production cut this month as a stronger dollar boosts the value of revenue from oil sales.
The CHART OF THE DAY shows that while crude futures have slumped 70 percent to around $44 from a July 11 record, the strength of the dollar means the country has about $12 a barrel more in spending power than if the currency had kept steady.
R20;The Saudis would prefer prices in the $60-70 range, but can live with $50 a barrel, given a world which is in meltdown," said Leo Drollas, deputy director of the Centre for Global Energy Studies, a London-based consultant founded by former Saudi Arabian Oil Minister Sheikh Ahmad Zaki Yamani. "They don't want to push the price up against all the odds. OPEC won't do much on March 15."
The euro has fallen 10.2 percent against the dollar this year on concern the financial crisis is worsening in Europe. The European Union is the largest trading partner for Middle East Gulf countries including Saudi Arabia, according to European Commission data.
OPEC members, scheduled to meet in Vienna on March 15, may earn $428 billion from oil exports this year, half of the $857 billion they made in 2008, yet close to the level the group got in 2005, Drollas said.
Crude oil, which fell to a five-year low of $33.87 on Dec. 19, has rebounded as OPEC restricted supply. At its last meeting in December, members agreed to a record 9 percent reduction in supply targets effective Jan. 1.
Welcome back Frank, I enjoy your reports, Thanks
It sounds like Bartlesville will be hit with layoffs affecting ConocoPhillips. Sad news for many, as well as the whole town......... In our years with Phillips, we weathered a lot of layoffs, and even when we weren't directly affected, knowing others that were let go created lots of stress throughout the entire community. It's a close-knit area originally based on the oil companies. Seemingly now they've branched out and aren't so crushed when things aren't going well with their major employer. Out thoughts are with everyone in Bartlesville. It's a GREAT TOWN!!!!!!!
Welcome back, Frank...I've missed reading you. ;D ;D
Market expects OPEC to cut, $75 is goal: Algeria
Wed Mar 11, 2009 6:56am EDT
ALGIERS (Reuters) - The market expects OPEC to cut supply further, Algeria's energy minister said on Wednesday, adding that oil prices would fall if the group failed to trim output when it meets on Sunday.
"The market is expecting a reduction. If we do not reduce, prices would fall," Energy and Mining Minister Chakib Khelil said.
"I think that the consensus (within OPEC) would shape up around stabilizing the market to reach a price of $75 per barrel," he told reporters and analysts gathered at the government-newspaper El Moudjahid Forum.
"Our objective is to attain $75 per barrel. That objective is in the interests of both producers and consumers," he added.
The Organization of the Petroleum Exporting Countries (OPEC) has since September agreed to cut output by 4.2 million bpd, around 5 percent of global supply.
The group has delivered about 80 percent of the pledged reductions in February, according to a Reuters survey.
A Saudi-owned newspaper reported on Monday that the world's top exporter wanted stricter compliance with existing production cuts before considering more.
But some OPEC members, alarmed by falling demand as the economy contracts, have made the case for more cuts
Boy they sure are really interested in gambling big time with world economy. I suspect if they cut more, it will send the world into a spiral.
Oil Rises Above $50 on Speculation Fed Plan Will Spur Growth
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By Alexander Kwiatkowski
March 19 (Bloomberg) -- Crude oil rose above $50 a barrel, reaching a three-month high, after the U.S. Federal Reserve announced plans to spend $1 trillion buying back debt.
The Fed is seeking to purchase U.S. Treasuries, mortgage- backed bonds and other debt, raising expectations that moves to end the global recession will increase fuel demand. The dollar traded near a two-month low against the euro, prompting investors to purchase oil as a hedge against inflation.
"The action of the Fed yesterday put the U.S. dollar under strong pressure and revived hopes of a quick turnaround in oil demand," said Carsten Fritsch, a commodity analyst at Commerzbank AG in Frankfurt. If prices rise above $50 a barrel, the "bottoming out period can be considered over," he said.
Crude oil for April delivery rose as much as $3.51, or 7.3 percent, to $51.65 a barrel on the New York Mercantile Exchange, the highest since Dec. 1. It was at $51.34 a barrel at 12 p.m. London time.
Futures have risen 12 percent this year as record production cuts by the Organization of Petroleum Exporting Countries started to drain the crude glut caused by the worst economic crisis since World War II. Even at $50, prices remain 64 percent below July's record of $147.27 a barrel.
The April contract expires tomorrow. The more-actively traded May contract was at $51.98 a barrel, up $3.08, at 12:02 p.m. London time.
Dollar Slump
The Dollar Index may fall for an eighth day, the longest stretch in a year, against its major trading partners after falling yesterday by the most in 23 years as the Fed prepared to flood the market with dollars as part of the debt buyback.
The U.S. currency traded at $1.3551 against the euro at 11:43 a.m. in London, from a close of $1.3474.
"Today, we could see more financial flows coming into oil and commodities in general," helping support prices, said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix Gmbh.
The decline in the value of the dollar, which helped push oil to a record $147.27 a barrel in July, will not "be on the agenda" at OPEC's next meeting, the group's president, Jose Maria Botelho de Vasconcelos, said today.
The May 28 meeting will focus instead on how the oil market is reacting to OPEC's March 15 decision to hold targets steady and concentrate on complying with earlier cuts, he said in an interview in Vienna today. Botelho de Vasconcelos is also the oil minister for Angola.
Brent crude oil for May settlement rose as much as $2.89, or 6.1 percent, to $50.55 a barrel on London's ICE Futures Europe exchange. It was at $50.48 at 11:53 a.m. local time.
Stockpiles Gain
Oil prices settled lower yesterday after a government report showed that supplies of crude oil, gasoline and distillate fuel rose last week in the U.S., the world's largest energy consuming nation.
Crude stockpiles climbed 1.94 million barrels to 353.3 million last week, the Energy Department said yesterday. Inventories were forecast to rise by 1.5 million barrels, according to the median of estimates in a Bloomberg News survey.
Fuel consumption in the U.S. dropped 0.6 percent last week to 18.8 million barrels a day, the lowest since the week ended Jan. 9. Total daily fuel demand averaged over the past four weeks was 19.1 million barrels, down 3.2 percent from a year earlier.
Stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate crude oil is delivered, increased 368,000 barrels to 33.9 million barrels last week, the Energy Department said. Supplies in the week ended Feb. 6 were the highest since at least April 2004, when the department began reporting on inventories at the location.
U.S. refineries operated at 82.1 percent of capacity, down 0.6 percentage point from the prior week, the report showed.
Frank, what is brent crude?
Catwoman, it is the Marker or Main Western European crude and it trades in the European futures market just like our NYMEX WTI, West Texas Intermediate, crude trades here at Cushing Oklahoma Terminal. Brent is a premier Sweet crude and is comparative to our WTI.
How on earth did it get the name brent?
The name "Brent" comes from the naming policy of Shell UK Exploration and Production, operating on behalf of Exxon and Shell, which originally named all of its fields after birds (in this case the Brent Goose). Catwoman I had to look this up, if I ever knew this I had forgotten it.
Frank, it is so GOOD to have you back...Now, I'm learning something again! :laugh: :laugh:
Crude Oil Rises as Dollars Decline Increases Commodity Demand
By Alexander Kwiatkowski and Gavin Evans
March 23 (Bloomberg) -- Crude oil rose to the highest in almost four months as the dollar extended its losses against the euro, increasing the investment appeal of commodities.
Oil advanced for a third day as the dollars decline improved the appeal of hard assets as an inflation hedge and made commodities cheaper for non-U.S. buyers. Crude for May delivery jumped 11 percent last week as the U.S. Federal Reserve announced new initiatives to lower interest rates and speculators turned bullish for the first time in three weeks.
The recent inclination to bid up commodities as both an inflation hedge and a weak dollar play is clearly what is driving the energy market, Edward Meir, an analyst with MF Global Ltd. in Connecticut, said in a report today. This approach will ultimately prove unsustainable in the absence of a rebound in industrial demand.
Crude oil for May delivery rose as much as 83 cents, or 1.6 percent, to $52.90 a barrel in after-hours electronic trading on the New York Mercantile Exchange. That was the highest since Dec. 1. Futures were at $52.69 at 8:20 a.m. in London.
The contract rose 3 cents to $52.07 a barrel on March 20, taking its gain for the week to 11 percent. Prices surged after plans by the Federal Reserve to spend $1.15 trillion buying Treasuries and mortgage bonds sent the dollar to a 10-week low, making the commodity cheaper for buyers outside the U.S.
Theres not much out there that suggests demand is really going to pick up in the near term, said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. It will take time to flow through, and oil may prove vulnerable unless the dollar continues to push lower, he said.
Equities Advance
The dollar weakened to $1.3687 per euro from $1.3582 late in New York on March 20. The U.S. currency reached $1.3738 on March 19, the lowest level since Jan. 9.
Oil also gained as Asian and European stocks and U.S. futures rose on optimism government stimulus efforts will revive lending and ease the global economic slump.
The MSCI World increased 1.4 percent at 8:01 a.m. in London, climbing for the ninth time in 10 days.
Brent crude oil for May settlement rose as much as 98 cents, or 1.9 percent, to $52.20 a barrel on Londons ICE Futures Europe exchange, and was at $51.90 at 8:22 a.m. in London. It climbed 1.1 percent to $51.22 on March 20, taking its gain for the week to 12 percent.
Hedge-fund managers and other large speculators turned bullish on oil prices last week, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 13,507 contracts on the New York Mercantile Exchange on March 17, the Washington-based commission said last week. Traders had bet on price declines in the previous two weeks.
Crude oil for delivery in December 2012 surged $8.36 a barrel last week, more than the $4.81 gain in the April contract, Morgan Stanley said.
Investors are clearly looking beyond oils challenged short-term outlook, Morgan Stanley said in a report today
By Mark Shenk
March 25 (Bloomberg) -- Crude oil fell on speculation that a government report will show U.S. inventories gained and demand for energy tumbled.
The U.S. Energy Department is forecast to say that supplies climbed for a third week last week. The American Petroleum Institute said yesterday that stockpiles rose to the highest since 1993. Japan pared crude imports 14 percent in February from a year earlier. Total SA is cutting output at its Port Arthur, Texas, refinery in response to weakening demand.
"We have to face the reality that supplies are ample and demand is weak," said Phil Flynn, a senior trader at Alaron Trading Corp. in Chicago. "The API report yesterday showed a big build in supply and we expect the DOE to show one as well. The news about Total cutting back production and that Japanese imports are down shows just how weak demand is."
Crude oil for May delivery fell $1.16, or 2.2 percent, to $52.82 a barrel at 9:01 a.m. on the New York Mercantile Exchange. Prices are up 18 percent this year.
U.S. crude oil stockpiles increased 4.58 million barrels to 354.5 million last week, the highest since July 1993, according to a report released after the close of floor trading yesterday by the industry-funded API.
A separate report today from the DOE may show that oil stockpiles rose 1.1 million barrels in the week ended March 20 from 353.3 million the previous week, according to the median of 13 analyst estimates in a Bloomberg survey. Inventories in the week ended March 13 were the highest since June 2007.
The Energy Department is scheduled to release its weekly supply report at 10:30 a.m. in Washington.
Correlated Reports
Oil-supply totals from the API and Energy Department moved in the same direction 75 percent of the time over the past four years, according to data compiled by Bloomberg.
Japan's crude-oil imports fell for a fourth month in February as sluggish industrial output and warmer weather damped fuel demand. The world's third-biggest oil-consuming country received about 4.26 million barrels a day in shipments last month, down 14 percent from a year earlier, a finance ministry preliminary trade report released in Tokyo showed.
Total SA, Europe's third-largest oil company, is cutting output at its Port Arthur, Texas, refinery in response to weakening demand. The company said in a filing with the Texas Department of Environmental Quality yesterday that it began shutting units at the facility.
"The U.S. market has deteriorated a lot and we are adjusting to this," Total spokesman Michael Crochet-Vourey said by telephone in Paris today.
Production at the facility, which has the capacity to process 240,000 barrels of oil a day, will be stopped for weeks, United Steelworkers union members who work at the plant said.
Brent crude oil for May settlement declined $1.14, or 2.1 percent, to $52.36 a barrel on London's ICE Futures Europe exchange.
Last Updated: March 25, 2009 09:24 EDT
Below is the EIA weekly Petroleum Data Report, overall it is a mixed bag of positives and negatives, depending on which side of the fence you are on.
Summary of Weekly Petroleum Data for the Week Ending March 20, 2009
U.S. crude oil refinery inputs averaged 14.1 million barrels per day during the
week ending March 20, down 45 thousand barrels per day from the previous week's
average. Refineries operated at 82.0 percent of their operable capacity last
week. Gasoline production fell last week, averaging 8.7 million barrels per day.
Distillate fuel production decreased last week, averaging 3.7 million barrels
per day.
U.S. crude oil imports averaged nearly 9.4 million barrels per day last week, up
204 thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged nearly 9.2 million barrels per day, 413 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components) last
week averaged 1.1 million barrels per day. Distillate fuel imports averaged 449
thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased 3.3 million barrels from the previous week. At
356.6 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
decreased by 1.1 million barrels last week, and are in the upper half of the
average range. Finished gasoline inventories fell last week while gasoline
blending components inventories rose during this same time. Distillate fuel
inventories decreased by 1.6 million barrels, and are above the upper limit of
the average range for this time of year. Propane/propylene inventories increased
last week by 0.6 million barrels and are above the upper limit of the average
range. Total commercial petroleum inventories increased by 2.8 million barrels
last week and are above the upper limit of average range for this time of year.
Total products supplied over the last four-week period has averaged 19.1 million
barrels per day, down by 3.2 percent compared to the similar period last year.
Over the last four weeks, motor gasoline demand has averaged nearly 9.1 million
barrels per day, up by 0.7 percent from the same period last year. Distillate
fuel demand has averaged about 3.8 million barrels per day over the last four
weeks, down by 9.0 percent from the same period last year. Jet fuel demand is
5.1 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.
Crude Oil Rises on Indications U.S. Fuel Demand May Be Climbing
By Grant Smith and Christian Schmollinger
March 26 (Bloomberg) -- Crude oil rose on signs that fuel demand in the U.S., the worlds largest energy consumer, may be coming out of a slump.
U.S. fuel consumption rose 2.2 percent to 19.2 million barrels a day last week, and gasoline demand gained 1.6 percent to 9.1 million barrels a day, according to the Energy Department. U.S. durable goods orders increased 3.4 percent last month, a Commerce Department report showed yesterday.
Sentiment in the oil market has improved considerably in recent weeks, with the rise above $50 confirmation a bottom has been found, said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. Durable goods data was better than expected, giving some hope about the future economy and a recovery of oil demand.
Crude oil for May delivery gained as much as 95 cents, or 1.8 percent, to $53.72 a barrel on the New York Mercantile Exchange. It was at $53.57 a barrel at 10:14 a.m. London time.
Prices are up 20 percent this year on expectations that supply cuts by the Organization of Petroleum Exporting Countries would drain the crude glut created as the economic slump slashed demand. Monetary and fiscal policy to revive economic growth in the U.S. and other oil consumers may also add to demand.
Still, stockpiles in the U.S. continue to rise. Crude supplies rose 3.3 million barrels to 356.6 million last week, the Energy Department said yesterday. Inventories were forecast to increase by 1.1 million barrels, according to a Bloomberg News survey. Total daily fuel demand averaged over the past four weeks was 19.1 million barrels, down 3.2 percent from a year earlier.
Inventory Gain
The inventory gain was the 22nd in 26 weeks. The increase left supplies 13 percent higher than the five-year average for the period, the department said. Stockpiles gained 3.5 million barrels in the U.S. Gulf Coast region, known as PADD 3, where the majority of refining capacity is located.
Usually a build like that in PADD 3 means the refineries arent taking the crude, said Clarence Chu, a trader at options dealer Hudson Capital Energy in Singapore. Now is the time when the refineries are shut down for maintenance.
Other plants are closing as demand for fuels has declined. Refineries operated at 82 percent of capacity, down 0.1 percentage point from the prior week, the Energy Department said.
Total SA, Europes third-largest oil company, is shutting output at its Port Arthur, Texas, refinery in response to weakening demand. The company said in a filing with the Texas Department of Environmental Quality March 24 that it began closing units at the facility.
Production Halt
Production at the facility, which has the capacity to process 240,000 barrels of oil a day, will be stopped for weeks, according to United Steelworkers union members who work at the plant.
Gasoline stockpiles dropped 1.14 million barrels to 214.6 million last week. The decline left inventories 0.4 percent lower than the five-year average for the week, the department said. A 650,000-barrel drop was forecast, according to the median of 14 analyst responses in a Bloomberg News survey.
Distillate supplies declined 1.58 million barrels to 143.9 million, leaving stockpiles 25 percent above the five-year average for the period. A 100,000-barrel drop was forecast.
Brent crude oil for May settlement rose as much as $1.20, or 2.3 percent, to $52.95 a barrel, on Londons ICE Futures Europe exchange. It was at $52.56 a barrel at 9:33 a.m. London time.
Thanks Frank. I know prices around here are creeping up again. I think in part because our Valero refinery has been shut down.
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:
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.
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.
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.
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?
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.
I meant gasoline. I've been told nobody will seriously continue looking for new sources or work on alternatives at today's prices.
Quote from: Diane Amberg on April 04, 2009, 02:51:46 PM
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.
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! :-X :-X
Quote from: sixdogsmom on April 04, 2009, 04:58:57 PM
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! :-X :-X
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. :P
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.
Ouch! But it is indeed tempting! ;D ;D
Quote from: srkruzich on April 04, 2009, 08:34:09 PM
Quote from: sixdogsmom on April 04, 2009, 04:58:57 PM
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! :-X :-X
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. :P
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.
Could you make a couple of those for me? I would gladly pay for them
LOL Carl one is illegal but the one that silences the speakers I bought years ago at a electronics fair.
Here ya go Carl heres one company that makes something that you can cancel out all that noise :)
I dont' know how much they charge but it is really much better than my little toy. :)
http://nvhtechnologies.com/aeq.html
There are probably several companies out there that make such a device. This thing works a lot like noise cancelling headphones on a stereo.
Crude Oil Rises on Global Stimulus Efforts, OPEC Production Cut
April 6 (Bloomberg) -- Oil rose on speculation economic stimulus plans and output cuts by the Organization of Petroleum Exporting Countries may slow growth in global stockpiles.
Oil climbed above $53 a barrel after the Group of 20 nations' plan to spend $1 trillion prompted the dollar to drop for a third day, boosting the appeal of commodities priced in the U.S. currency. OPEC quota cuts imposed in December are being complied with and have helped stabilize prices, Algerian Oil Minister Chakib Khelil said yesterday.
R20;Markets are still basking in the post-G20 glow,R21; said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "Some of that pixie dust might be blown away later this week as people realize the end of the recession is not yet in sight."
Crude oil for May delivery rose as much as $1.09, or 2.1 percent, to $53.60 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $53.15 at 9:59 a.m. in London.
Prices gained for a seventh week last week, taking this year's advance to 18 percent, as leaders from the 20 of the world's largest economies agreed measures to end the global recessions and prevent future crises.
The dollar fell to a one-week low against a basket of currencies of its major trading partners today. It was at $1.3548 to the euro, from $1.3486.
Brent, Equities
Brent crude oil for May settlement rose for a third day, gaining as much as 75 cents, or 1.4 percent, to $54.22 a barrel on LondonR17;s ICE Futures Europe exchange.
European and Asian stocks advanced, sending the MSCI World Index to a two-month high, on speculation government efforts will revive the global economy. The MSCI World Index added 0.7 percent to 860.55 at 8:51 a.m. in London.
Still, Goldman Sachs Group Inc. expects that price "rallies will likely proved short-lived" until the second half of the year, when global crude inventories are likely to have tightened, the bank said in a report dated April 3.
OPECR17;s Khelil said that while OPEC has contained output, the recession will limit price gains and oil is likely to trade between $50 and $55 a barrel.
Crude oil inventories in the U.S., the world's largest energy-consuming nation, rose to 359.4 million barrels on March 27, a 15-year high. The International Energy Agency will likely lower its global demand forecast this week, given slowing world growth, Executive Director Nobuo Tanaka said April 2.
Saudi Aramco
Saudi Aramco, the world's largest state-owned oil company, cut its official selling prices for all grades for customers in the U.S., Northwestern and Mediterranean Europe for sales in May. They reduced prices for their so-called heavy grades to Asia while raising their lighter types.
Saudi Arabia slashed the price of its Arab Heavy Crude to the U.S. the most, cutting it by $5.50 a barrel to $4.85 below the price of the West Texas Intermediate grade produced in the U.S., the state oil company said in a faxed statement yesterday. That wiped out its April price premium of 65 cents more than WTI, the first time Saudi heavy oil traded for more than the U.S. benchmark in at least 10 years.
Hedge-fund managers and other large speculators decreased their net-long positions in New York crude-oil futures in the week ended March 31, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 6,546 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report on April 3. Net-long positions fell by 11,091 contracts, or 63 percent, from a week earlier.
The Saudis have always been Pro-Western, Pro-US, one they have always gotten their Military Planes and equipment from the West and two they have invested heavily in the US and Western Stock Markets, and the Dollar.
Saudi Arabia Cuts Oil Prices for U.S., Europe for May
April 5 (Bloomberg) -- Saudi Aramco, the world's largest state-owned oil company, cut its official selling prices for all grades for customers in the U.S., Northwestern and Mediterranean Europe.
Saudi Arabia slashed the U.S. price of its Arab Heavy Crude the most, cutting it by $5.50 a barrel to $4.85 below the price of the West Texas Intermediate grade made in the U.S., the state oil company said in a faxed statement today. That wiped out its April price premium of 65 cents more than WTI, the first time Saudi heavy oil traded for more than the U.S. benchmark in at least 10 years.
Crude oil supplies climbed 2.84 million barrels last week to the highest level since July 1993, the Energy Department reported April 1. The Organization of Petroleum Exporting Countries cut oil output by 1.2 percent to an average 27.395 million barrels a day last month, according to a Bloomberg News survey released on April 1.
Saudi Arab Light Crude was reduced by $4.15 a barrel in the U.S. and will sell for $2.25 less than WTI, Saudi Aramco said. Its April price was $1.90 more than WTI.
In Northwest Europe, Saudi light crude will be priced at $4.05 less than the IPE benchmark, a cut of $1.60 from a $2.45 discount last month, according to the statement. Heavy crude from Saudi Arabia for Europe declined $2.10, putting it $5.80 below the IPE equivalent.
Mediterranean, Asian Prices
Oil for Mediterranean destinations also cheapened, with Saudi light oil declining 90 cents to $3.05 below the IPE benchmark, and heavy oil falling $1.75 to $5.55 below the Brent weighted average equivalent as listed on IPE.
Saudi Arabia increased Asian prices for light grades. Saudi Arab Light Crude will sell in Asia for 80 cents more than crude from Dubai and Oman, a reduction of 10 cents from the 90 cent- per-barrel premium last month. The Saudi heavy crude price was cut $1.20 to fall $1.85 below Dubai/Oman crude.
Diane,
I have absolutely no interest in who did what during which presidential administration, but I will point out that the price of gasoline on the day President Clinton left office was $1.46 per gallon.
I found the following article from the U.S. Department of Energy 2008 to be helpful in tracking gasoline prices.
http://www1.eere.energy.gov/vehiclesandfuels/facts/2008_fotw512.html
Thanks, Rudy.
Interesting site Ruby, if you go back to the previous on that link there is all kinds of interesting information .
Oil Drops a Third Day on Forecast U.S. Supplies Rose Last Week
By Grant Smith
April 7 (Bloomberg) -- Crude oil fell for a third day before a report tomorrow that is forecast to show U.S. inventories rose from a 15-year high as the recession holds down fuel demand.
Crude oil stockpiles rose 1.25 million barrels in the week ended April 3 from 359.4 million the previous week, according to the median of 10 estimates by analysts before an Energy Department report tomorrow. European stocks pared their gains as financial and technology companies declined, removing support for crude prices.
Demand globally is weak, said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. Inventory data definitely has to come down for prices to gain. It will be hard for prices to rise to $55 without support from a strong equity market.
Crude oil for May delivery dropped as much as 93 cents, or 1.8 percent to $50.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $50.13 at 10:30 a.m. London time.
Oil has risen 13 percent this year and is down 66 percent from a record in July. Yesterday, crude dropped $1.46, or 2.8 percent, to settle at $51.05 a barrel.
The Dow Jones Stoxx 600 Index declined for a third day, dropping 1 percent to 183.1 at 9:54 a.m. in London.
The near-term direction in prices is toward the $40 level, said David Moore, a commodity strategist with Commonwealth Bank of Australia Ltd. in Sydney. The higher stockpiles have been a significant constraint on the price.
Falling Gasoline Stockpiles
The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
Gasoline stockpiles probably dropped 1.5 million barrels from 216.8 million the prior week, according to the survey. Distillate fuels, a category that includes heating oil and diesel, probably fell 350,000 barrels from 144.2 million.
Refineries probably operated at 81.7 percent of capacity, little changed from the week before, according to the median of responses in the survey.
Brent crude oil for May settlement was at $51.83 a barrel, down 41 cents, on Londons ICE Futures Europe exchange at 10:28 a.m. London time. It dropped $1.23, or 2.3 percent, yesterday to $52.24 a barrel.
The Brent contract was more than $1.50 a barrel above Nymexs May crude oil. The difference reached $1.19 yesterday, the most since Feb. 17. Brent oil is often priced at a discount to Nymex crude and traded lower for most of March.
Oil Rises After U.S. Government Shows Smaller Gain in Supply
By Grant Smith and Christian Schmollinger
April 9 (Bloomberg) -- Crude oil rose for a second day after a government report showed a smaller gain in U.S. inventories than the industry indicated a day earlier.
Supplies increased by 1.65 million barrels to 361.1 million last week, the highest since July 1993, the Energy Department said yesterday. The industry-funded American Petroleum Institute said April 7 stockpiles jumped by 6.94 million barrels to the highest since 1990. The two reports have moved in the same direction 75 percent of the time over the last four years.
The fact that the Energy Department did not show as big a stock build made the market stronger, said Christopher Bellew, senior broker at Bache Commodities in London. Buyers had waited for the data expecting lower prices, and once it came out, people were suddenly buying at the same time.
Crude oil for May delivery rose as much as $2.08, or 4.2 percent, to $51.46 a barrel on the New York Mercantile Exchange. It was at $51.10 a barrel at 11:25 a.m. in London. Prices are up 14 percent this year.
We should continue to see this push-pull between the reality of weak demand and high inventories, and the hope that things are getting better, said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. The unexpected decline in distillate fuels also helped prices, he said.
Declining Demand
Gasoline stockpiles rose 656,000 barrels to 217.4 million in the week ended April 3. Total daily fuel demand averaged over the past four weeks was 18.9 million barrels, down 4.4 percent from a year earlier, the report showed. It was the lowest consumption for a four-week period since October.
Global oil demand falls to an annual low during the second quarter as refineries close to perform maintenance after winter in the Northern Hemisphere.
Stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate crude oil is delivered, fell 878,000 barrels to 29.98 million last week, the lowest since the week ended Dec. 26. Supplies in the week ended Feb. 6 were the highest since at least April 2004, when the Energy Department began keeping records for the location.
The Cushing supplies are still above their average of 20.5 million barrels over the past five years. The excess in inventories has weighed on the May Nymex oil contract, which trades at a discount to the June future, a situation known as contango. The difference between the two is now at $2.48 a barrel, up from 69 cents a barrel a month ago.
Texas Discount
Brent crude oil for May settlement rose as much as $1.89, or 3.7 percent, to $53.48 a barrel on Londons ICE Futures Europe exchange.
Brent is now trading at a premium of more than $2 a barrel to the West Texas Intermediate contract in New York, swinging from a discount of 43 cents on March 31.
It makes sense that Brent is strengthening above WTI, Mitsubishis Nunan said. The U.S. is terrible right now. The overall demand is down and crude inventories are way too high.
Oil falls below $52 on IEA demand forecast
April 13, 2009 at 6:20 AM EDT
SINGAPORE — Oil prices fell to below $52 (U.S.) a barrel Monday in Asia after the International Energy Agency said it expects global crude demand to drop this year amid the worst worldwide recession in decades.
Benchmark crude for May delivery fell 77 cents to $51.47 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange.
The contract on Thursday rose $2.86 to settle at $52.24 a barrel. Trading was closed on Friday for the Good Friday holiday.
The Paris-based IEA, an energy policy adviser comprised of 28 countries, said on Friday that demand this year will likely fall by 2.4 million barrels a day to 83.4 million barrels, or 2.8 per cent lower than last year.
The IEA cited "a growing consensus that economic and oil demand recovery will be deferred to 2010."
R20;That's very serious demand destruction," said Victor Shum, an analyst with consultancy Pervin & Gertz in Singapore. "The macroeconomics don't look good at all for this year."
Oil prices have rallied from below $35 a barrel in February, mirroring a jump in stock markets, as investors anticipate massive global stimulus packages may spark a recovery in the second half.
R20;Investors have brushed aside near-term worries about the economy and oil demand," Mr. Shum said. "They're looking ahead to an eventual revival in the global economy."
Traders will be watching a slew of quarterly corporate results this week for signs the worst of the economic downturn is over. Banks such as Goldman Sachs Group Inc., Citigroup Inc. and JPMorgan Chase & Co. will report this week along with Intel Corp., Johnson & Johnson, Mattel Inc.
On Sunday, Iran's oil minister Gholam Hossein Nozari told state television that a price of between $75 and $80 dollars a barrel is desirable for both Tehran and oil consumers.
Iran is a member of the Organization of Petroleum Exporting Countries, which as announced production cuts of 4.2 million barrels a day since September.
R20;OPEC compliance with the cuts remains quite high, but nobody, even in OPEC, expects prices to get to $75 this year," Mr. Shum said. "In the longer-term, it will likely get there, but not this year."
In other Nymex trading, gasoline for May delivery fell 1.10 cents to $1.47 a gallon and heating oil dropped 1.35 cents to $1.42 a gallon. Natural gas for May delivery sank 4.1 cents to $3.57 per 1,000 cubic feet.
In London, Brent prices fell 38 cents to $53.68 a barrel on the ICE Futures exchange.
I thought this was an interesting twist in US Crude Supply.
OPEC Cuts Thwarted as Brazil, Russia Grab U.S. Market (Update1)
April 14 (Bloomberg) -- As OPEC nations make their biggest oil production cuts on record, Brazil, Russia and the U.S. are pumping more, sending crude back below $50 a barrel as demand slows.
U.S. imports from the Organization of Petroleum Exporting Countries fell 818,000 barrels a day, or 14 percent, to 5.02 million in January from a year earlier, according to the latest monthly report from the Energy Department. At the same time, imports from Brazil more than doubled to 397,000 and Russia's increased almost 10-fold to 157,000, a trend that continued in February and March, according to data from each country.
While the median forecast in a Bloomberg News survey of 32 analysts shows crude in New York averaging $61 a barrel in the fourth quarter, up from the second-quarter's estimate of $50, traders are increasing bets on a decline. The fastest-growing options contract on the New York Mercantile Exchange is for prices to fall below $40 a barrel by May 14.
"OPEC has done a good job keeping oil in the $50 area but they will have to cut substantially more, maybe more than they are capable of, if they want higher prices," said John Kilduff, senior vice president of energy at MF Global Inc. in New York. "You are going to hear greater calls for non-OPEC producers to cooperate and make cuts."
Imports fell by 148,000 barrels a day in January just as America's production increased by 153,000, according to data compiled by the Energy Department in Washington. More oil is flowing just as the slowing economy causes consumption to contract for the second consecutive year.
U.S. Consumption
The U.S. used an average of 18.9 million barrels a day in the four weeks ended April 3, down 4.4 percent from a year earlier, according to the Energy Department, the lowest level since October. Gross domestic product will contract by 3.8 percent in North America in 2009, the International Energy Agency said in a report April 10, dropping an earlier forecast for a recovery in the economy and oil demand in the second half of the year.
Inventories climbed 1.65 million barrels in the week ended April 3, the highest since July 1993, U.S. government data show. Supplies are 12 percent above the five-year average for the period and are the equivalent of 25.4 days of consumption, up from 22.1 days a year ago.
Open interest, or the number of outstanding contracts, on the June put option for oil to fall to $40 a barrel rose by 20 percent to 24,503 contracts in the five trading days from April 3 to April 9. A so-called put gives the owner the option to sell commodities at a predetermined price in the future. Bets that crude will drop to $45 rose by 13 percent.
Crude Below $50
Nymex futures for May delivery fell as much as 47 cents, or 0.9 percent, to $49.58 a barrel before trading at $49.62 at 10:12 a.m. in Singapore.
OPEC agreed at three meetings last year to cut output by 4.2 million barrels a day, a 14 percent reduction to 24.845 million, as prices fell from a record $147.27 on July 11. The group reduced pumping by 1.2 percent in March, according to a Bloomberg News survey of oil companies, producers and analysts. The 11 members with quotas produced 25.06 million barrels.
As shipments declined, deliveries from exporters that aren't in OPEC rose by 670,000 barrels a day in January. Russian overall exports climbed 6.3 percent in February and 2.2 percent in March, according to the Energy Ministry. Brazilian total exports more than doubled in both February and March, according to Brazil's Trade Ministry.
Russian Cooperation
Algerian Oil Minister Chakib Khelil, who held the group's rotating presidency in 2008, said March 17 that he was disappointed Russia hadn't cut production to support prices. Suppliers need prices in a $60-to-$75 range to support production of higher-cost resources, Saudi Arabian Oil Minister Ali al-Naimi said on March 16 in Geneva.
Russia also lowered export duties this month to $15 a barrel from $15.70 in March to boost exports, the IEA said in the April 10 report. Brazilian production will rise 7.2 percent in 2009 to 2.54 million barrels a day, the IEA said.
"They want to capture as much of the U.S. market as they can, as fast as they can," Robert Ebel, chairman of the energy and national security program at the Center for Strategic and International Studies in Washington, said of the non-OPEC producers. "As long as they can make some money at it, they will ship their oil here."
In January, Russia and Brazil earned $23.2 million a day in exports to the U.S., based on the $41.92 a barrel average on the Nymex that month.
U.S. Market
"Russia has been trying get a foothold in our market for a long time," said Bill O'Grady, chief markets strategist at Confluence Investment Management in St. Louis. "With both gas and oil Russia hopes to gain geopolitical leverage."
Petroleo Brasileiro SA, the state-controlled energy company, said in January that it plans to invest $174.4 billion through 2013 to boost production oil and gas production to the equivalent of 4.63 million barrels a day by 2015 from 2.40 million in 2008.
"Brazil is interesting both in the near term and long term," said Rachel Ziemba, an analyst at RGE Monitor, an economic research company in New York. "In the near term there's been a lot of production brought online. In the longer term Petrobras has one of the most aggressive investment programs in the industry."
Canceling Projects
Lower prices will hamper development of new sources. Total SA, Europe's third-largest oil company, said April 6 it may postpone an investment decision in Canadian oil sands because of costs. Chevron Corp., the world's fourth-largest energy company, delayed the start of production at three Nigerian projects and more than doubled cost estimates on some of its biggest new finds. Drilling and equipment costs remain near their 2008 peaks even as prices plunged.
The U.S. will import an average 4.57 million barrels a day from OPEC in 2009, down 7.5 percent from last year, according to the Energy Department's Annual Energy Outlook. Total imports are forecast to drop 7.3 percent this year to an average 9.02 million barrels a day.
"This is a reallocation of supply," said Francisco Blanch, head of global commodities research at Merrill Lynch & Co. in London. "The U.S. is a far off point for most of OPEC to deliver to. It's natural that with OPEC cutting back dramatically you are going to see non-OPEC pick up some market share."
Hehe, freemarket always wins out!
Oil Rises for the First Day in Three as Equities Pare Losses
By Grant Smith
April 15 (Bloomberg) -- Oil rose for the first time in three days in New York to trade above $50 a barrel as European stock indexes pared losses and drew investors to commodities.
Oil recovered earlier losses that were driven by forecasts that a U.S. government report will show crude stockpiles at their highest in more than 15 years. European stocks and U.S. index futures pared their declines as energy producers climbed. The MSCI World Index has advanced 21 percent since the start of March as crude has gained 25 percent.
R20;We are coming out of the darkest hole in the recession and we are going to see oil prices heading up towards the high $50s, low $60s level within the next six months," Francisco Blanch, head of global commodities research at Merrill Lynch & Co., said in a television interview.
Crude oil for May delivery rose as much as $1.38, or 2.8 percent, to $50.79 a barrel on the New York Mercantile Exchange, trading for $50.56 at 11:37 a.m. London time. It earlier fell as much as 49 cents, or 1 percent, to $48.92 a barrel.
The Dow Jones Stoxx 600 Index declined 0.2 percent to 190.62 as of 11:35 a.m. in London, having earlier dropped as much as 1.2 percent. Futures on the Standard & Poor's 500 Index were up 0.1 percent at 841.
R20;We still expect the U.S. stock market to be the intermediate price driver for most commodity complexes over the next few weeks," Edward Meir, an analyst with MF Global Ltd. in Connecticut, said in a report dated today.
Inventory Forecast
Crude-oil stockpiles rose 1.75 million barrels in the week ended April 10 from 361.1 million the previous week, the highest level since July 1993, according to a Bloomberg survey before today's Energy Department report.
The industry-funded American Petroleum Institute, which often reports similar data to the Energy Department, said yesterday that oil inventories rose 6.51 million barrels to 371.2 million last week, their highest since 1990.
Brent crude oil for May settlement was at $52.59 a barrel, 63 cents higher, on LondonR17;s ICE Futures Europe exchange at 11:31 a.m. London time. It declined 18 cents, or 0.3 percent, to end the session at $51.96 a barrel yesterday.
The May contract expires today. The more-active June contract was at $53.57 a barrel, 64 cents higher, at 11:36 a.m. London time.
Oil Little Changed on U.S. Supply Surge, Chinese Slowdown
By Grant Smith
April 16 (Bloomberg) -- Crude oil traded little changed, erasing earlier gains, as crude supplies in the U.S. rose to the highest in nearly 19 years and China's economic expansion decelerated to its slowest pace in almost a decade.
Oil inventories rose by 5.67 million barrels to 366.7 million last week, the highest since September 1990, the Energy Department said yesterday. China's gross domestic product grew 6.1 percent in the first quarter from a year earlier, the statistics bureau said in Beijing today.
"Inventories are so high, not only in the U.S. but in Europe and Asia, across most products," said Andy Sommer, an analyst at Elektrizitaets-Ges Laufenburg AG in Dieikon, Switzerland. "Prices should come back down until we see real signs of demand stabilizing or decreasing inventories."
Crude oil for May delivery traded for $49.38 a barrel, 13 cents higher on the New York Mercantile Exchange as of 12:34 p.m. London time. It earlier advanced as much as 2.1 percent to $50.30. Prices are up 11 percent so far this year.
Last Updated: April 16, 2009 07:37 EDT
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Oil Set for Biggest Weekly Decline Since February on Recession
April 17 (Bloomberg) -- Oil fell, poised for the biggest weekly decline since February, on concern global stockpiles are rising and as a stronger dollar dimmed commodities demand.
U.S. crude-oil inventories rose 5.67 million barrels to 366.7 million last week, the highest since September 1990, the Energy Department said April 15. The U.S. dollar gained for a fourth day against the euro, reducing the appeal of crude as a currency hedge against inflation.
We still have a picture of very low demand and a picture of stock builds, said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix Gmbh. That is why crude oil is not able to move any higher.
Crude oil for May delivery fell as much as 48 cents, or 1 percent, to $49.50 a barrel, and traded at $49.60 at 10:02 a.m. London time on the New York Mercantile Exchange. Oil has dropped 5 percent this week, set for its sharpest decline since the week ended Feb. 13.
U.S. fuel demand in the first quarter fell to the lowest for the period in 11 years, the American Petroleum Institute said in a monthly report yesterday. Deliveries of petroleum products, a measure of consumption, averaged 19.2 million barrels a day, 3.4 percent less than during the same period in 2008, the industry-funded API said.
Oil futures are up 12 percent so far this year. Crude climbed as much as 2.5 percent yesterday after the Labor Department reported that claims decreased by 53,000 to 610,000 in the week ended April 11, the fewest since January. Chinese industrial production expanded by 8.3 percent in March from a year earlier, up from 3.8 percent in the first two months.
Less Bearish
Its sort of a contest between hope and reality, said Tim Evans, an energy analyst with Citi Futures Perspective in New York. A lot of these numbers that have bounced have bounced from extremely low levels, and so it only makes the markets a little less bearish.
OPEC will load about 22.2 million barrels a day in the four weeks ending May 2, down from 22.8 million a day in the month ended April 4, Oil Movements, the Halifax, England-based tanker- tracker, said yesterday in a report.
OPEC agreed at three meetings last year that the 11 members with quotas would cut output by 4.2 million barrels a day to 24.845 million. The members with production targets, all except Iraq, pumped 25.567 million barrels a day in March, according to a monthly report the organization released April 15.
West Texas Intermediate crude oil, the U.S. benchmark, will average $45 a barrel in 2009, according to a report from Moodys Investors Service. Thats down from the rating companys previous estimate that prices would average $50 this year. WTI is forecast to average $50 in 2010, down from a previous forecast of $55.
Theres potential for oil prices to slide off the current plateau and fall back to perhaps a number like $40 a barrel, just because inventories are at such an elevated level and may not have peaked yet, Citi Futures Evans said.
Brent crude oil for June settlement was at $52.82 a barrel, down 45 cents, at 9:26 a.m. local time on Londons ICE Futures Europe exchange.
Oil Falls as U.S. Dollar Rises to 1-Month High, Stockpiles Gain
April 20 (Bloomberg) -- Crude oil fell as a stronger dollar reduced the appeal of commodities and on concern inventories will rise as the global recession saps demand for fuel.
Oil dropped as the dollar rose to a one-month higher versus the euro, making crude less attractive as a currency and inflation hedge. An Energy Department report last week showed U.S. crude oil inventories rose to the highest since September 1990 as demand drops.
R20;The fundamentals don't support a higher oil price, demand is still weak," said Thina Saltvedt, an oil analyst at Nordea Bank AB in Oslo. "Inventories need to come down before you can expect the market to balance. The oil market seems to reacting to the dollar," she said.
Crude oil for May delivery fell as much as $2.03, or 4 percent, to $48.30 a barrel in electronic trading on the New York Mercantile Exchange. It was at $48.35 a barrel at 10:16 a.m. London time. Prices are up 9 percent this year.
The May contract expires tomorrow. The more-active June futures were down $1.70 cents, or 3.2 percent, at $50.77 a barrel.
The dollar strengthened as European Central Bank policy makers disagreed on the measures needed to combat the recession. The U.S. currency rose to $1.2964 as of 10:12 a.m. in London from $1.3044 in New York on April 17.
R20;The uncertain demand outlook is going to continue to dominate the outlook for crude," said Toby Hassall, an analyst at Commodity Warrants Australia Ltd. in Sydney. "The fundamentals really haven't shown any improvement."
Oil Prices
Oil prices around $50 a barrel will help the economy recover, according to Mohamed al-Hamli, the oil minister of the United Arab Emirates. The Organization of Petroleum Exporting Countries is concerned about oil demand uncertainty and maintaining crude prices at reasonable levels is vital, he said.
U.S. fuel demand in the first quarter fell to the lowest for the period in 11 years, the American Petroleum Institute said in a monthly report last week. Deliveries of petroleum products, a measure of consumption, averaged 19.2 million barrels a day, 3.4 percent less than during the same period in 2008, the industry-funded API said.
Brent crude oil for June settlement fell as much as $1.35, or 2.5 percent, to $52.00 a barrel on LondonR17;s ICE Futures Europe exchange. It was at $52.04 at 10:13 a.m. local time.
Hedge-fund managers and other large speculators decreased their net-long positions in New York crude-oil futures in the week ended April 14, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 4,962 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 7,531 contracts
A rising dollar is a good thing? I hope?....I just don't know any more.
Oil Rises From Lowest in a Month as Dollar Drops Against Euro
April 21 (Bloomberg) -- Oil rose from its lowest in a month as the dollar dropped against the euro, spurring demand for commodities as a hedge against inflation.
An Energy Department report tomorrow is forecast to show that crude inventories climbed from the highest level since 1990. The euro, near a five-week low against the U.S. dollar, rose as German investor confidence turned positive in April for the first time in almost two years.
This latest surge in the euro-dollar is drawing investors attention away from bearish oil market fundamentals, said Andrey Kryuchenkov, an analyst at VTB Capital in London. Prices are going to yo-yo a bit, but largely trade sideways ahead of the inventory figures.
An Energy Department report tomorrow will show that crude inventories, now at their highest since 1990, rose last week, according to a Bloomberg News survey.
Crude oil for May delivery was at $46.10 a barrel, 22 cents higher in electronic trading on the New York Mercantile Exchange at 10:35 a.m. London time. It earlier fell as much as 69 cents, or 1.5 percent, to $45.19, the lowest since March 16.
Yesterday, crude futures fell $4.45, or 8.8 percent, to $45.88 a barrel, the lowest settlement since March 11. It was the biggest drop since March 2. The May contract expires today.
The more-active June futures were at $48.74 a barrel, 23 cents higher, at 10:35 a.m. in London. The futures dropped $3.96, or 7.5 percent, to $48.51 a barrel yesterday.
The ZEW Center for European Economic Research in Mannheim, Germany, said its index of investor and analyst expectations rose to 13 from minus 3.5 in March. Thats the first positive reading and the indexs highest level since June 2007. Economists expected a reading of 2, according to the median of 35 forecasts in a Bloomberg News survey.
The euro climbed as high as $1.2990 as of 10:08 a.m. in London from $1.2921 yesterday, and to 127.57 yen from 126.48.
Brent crude oil for June settlement was at $50.36, up 50 cents, on Londons ICE Futures Europe exchange at 10:35 a.m. local time. The contract yesterday fell $3.49, or 6.5 percent, to $49.86 a barrel.
Oil Little Changed on Forecast U.S. Inventories Rose Last Week
By Grant Smith
April 22 (Bloomberg) -- Oil traded little changed before a report today forecast to show inventories in the U.S., the world's largest energy consumer, rose from their highest level since 1990 as the recession reduced demand.
Crude oil stockpiles probably rose by 2.5 million barrels in the week ended April 17 from 366.7 million the previous week, the highest since September 1990, according to a Bloomberg survey before today's Energy Department report. The U.S. dollar strengthened the most in a month against the euro, limiting demand for commodities as a hedge against inflation.
R20;Crude stock levels are still historically very high,R21; said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "It would take something quite bullish in the inventory data to take us back over $50, and I don't see that happening."
Crude oil for June delivery traded at $48.67 a barrel, up 12 cents, or 0.3 percent, in electronic trading on the New York Mercantile Exchange at 10:05 a.m. London time.
JapanR17;s crude oil imports fell in March for a fifth month, declining 18.4 percent from a year earlier to about 3.68 million barrels a day, a finance ministry preliminary trade report released in Tokyo showed. South Korea used 66.6 million barrels of oil products last month, down from 68.3 million barrels a year earlier, according to data from Korea National Oil Corp.
Yesterday, the industry-funded American Petroleum Institute reported that inventories declined 1.01 million barrels to 370.2 million last week, the first drop since March 6.
Energy Department
The Energy Department will probably show that gasoline stockpiles dropped 700,000 barrels from 216.5 million the prior week, according to the Bloomberg survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably fell by 1 million barrels from 139.6 million barrels.
Oil-supply totals from the API and DOE moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.
API collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The Energy Department requires reports to be filed for its weekly supply survey.
Brent crude oil for June settlement gained as much as 50 cents, or 1 percent, to $50.32 a barrel on LondonR17;s ICE Futures Europe Exchange. It was at $49.95 a barrel at 10:05 a.m. London time.
The dollar was at $1.2917 against the euro, up from $1.2965 in New York yesterday. It earlier touched $1.2886, the strongest since March 16.
The long term future for energy prices is up. This is what happens when you have low energy prices and the Government pushing to put heavy tax burdens on the industry. The current Democrat Controlled Senate, House and White House have been pushing to tax the oil industry heavily and the results of that will cost the people.
Deepwater-Rig Use Slows on Economy, Oil Prices, Says Transocean
April 22 (Bloomberg) -- Demand for deepwater drilling equipment, led by Brazil and India, continues to grow at a slower pace amid the global recession and lower crude oil prices, said Transocean Inc., the world's largest offshore oil driller.
The Geneva-based company is still participating in bids even as the number of tenders has declined, said Deepak Munganahalli, senior vice president for the Asia-Pacific region, at a conference in Singapore today. About 25 deepwater assets will become available within the next two to three years.
R20;ThatR17;s a very small number,R21; Munganahalli said at Sea Asia 2009. "Even last month there were significant fixtures in Brazil.R21;
Oil and gas explorers are postponing or scrapping deepwater projects, potentially reducing crude supplies by as much as 2.4 million barrels a day in 2011, Morgan Stanley said in a report in March. Oil prices in New York have declined 66 percent after soaring to a record $147.27 a barrel in July last year.
Day rates for drilling and support equipment for most contractors aren't affected because the vessels were contracted before the recession for three- to five-year periods, Lionel Lee, managing director, Ezra Holdings Ltd., said at the conference. There will be pressure on pricing in the next tender, he said.
No new contracts have been awarded since August 2008 when Morgan Stanley estimated that companies needed 139 new production platforms to develop fields in deep seas. Since then, 11 orders have been canceled and 46 delayed by an average 15 months, according to last month's Morgan Stanley report.
Worldwide spending on oil and gas exploration may drop 12 percent in 2009 to $400 billion, according to a report in December by Barclays Capital Research.
yep, they are gonna get ya one way or another Larryj :'( :'(
Just out of curiosity, what would the effect be if the taxes were not raised? Extra profit or something better?
Diane, if they pay more in taxes they will have less to invest in drilling and expolration. The Oil companies have always invested heavily in drilling, Exploration, refining and research. If they don't invest there production goes down, their revenue goes down and their profits go down. The American people have always enjoyed the most plentiful supply of energy at the lowest prices, thanks to the Oil companies. The Democrat/Liberal/Left mentality has always been to tax them more so they have less to spend on energy.
With 4.7 % of the world population the US was consuming 25% of the World Oil, the US Companies developed the oil in nearly every country in the world. Who do the Democrats want to depend on for your energy needs, Iran, Venzuela, North Yemen, Russia, do we want to depend on countries that are our sworn enemies, I don't.
The US Oil Companies are some of the best managed companies in the world, their management has always kept sufficent capital to get by the good times and the bad.
Oil Gains a Third Day as Weaker Dollar Spurs Inflation Hedging
By Grant Smith
April 23 (Bloomberg) -- Crude oil rose for a third day in New York as the dollar dropped against the euro, bolstering the appeal of commodities as a currency hedge.
Oil rebounded after the U.S. Energy Department reported yesterday that crude stockpiles rose for a seventh week to the highest since September 1990. The U.S. currency dropped the most in a week against the Euro, increasing demand for crude as a defense against rising inflation.
"The market is reacting to the weaker dollar," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. "This is desperately needed after yesterday's bearish inventory data. And the market is drawing support from the fact that European equities are not down so much as they were earlier."
Crude oil for June delivery rose as much as 80 cents, or 1.6 percent, to $49.65 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $49.64 at 12:09 p.m. London time.
The euro rose against the yen and the dollar after a report showed an index of European services and manufacturing industries increased more than economists expected, adding to evidence the region's slump is easing.
The common European currency traded at $1.3024, from $1.3005, after falling as low as $1.2980.
Europe's Dow Jones Stoxx 600 Index was little changed at 192.43 as of 11:25 a.m. in London, after declining as much as 1 percent earlier.
"For now the oil market will remain buffeted between bearish fundamentals and bouts of optimism coming from the equity markets," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. "The surplus in U.S. crude inventories is quite certain."
Thanks Frank, I have learned a lot from you.
Ditto...I missed reading you. :-[
Oil Rises a Fourth Day as Dollar, Equities Trump Demand Concern
By Grant Smith
April 24 (Bloomberg) -- Crude oil rose for a fourth day as advancing European equities and a weaker dollar outweighed concern the recession will continue to cut fuel demand.
In Iraq, holder of the world's third-largest crude reserves, a double suicide bombing in Baghdad killed 25 people during a second day of violence. Oil earlier fell on signs that the Organization of Petroleum Exporting Countries isn't cutting supplies fast enough to reduce the glut in inventories. U.S. crude stockpiles are at their highest in nearly 19 years.
"While currency or equity moves are lending support to oil markets currently, a reality check will have to be made given the development of a large crude inventory overhang, and more downgrades to economic growth," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London.
Crude oil for June delivery increased as much as 52 cents, or 1.1 percent, to $50.14 a barrel on the New York Mercantile Exchange. It traded at $50 a barrel at 12:05 p.m. London time. Prices are heading for a 0.6 percent weekly drop.
Crude has declined 67 percent from a record $147.27 a barrel reached on July 11 as global demand has dropped.
"Prices are likely to trade around current levels until hard evidence emerges that the various stimulus packages are improving oil demand and that OPEC restraint is contributing to a fall in inventories," said Gareth Lewis-Davies, oil market analyst at Dresdner Kleinwort in London.
OPEC Secretary-General Abdalla El-Badri wants the group to fully implement supply cuts agreed last year before it discusses any further reductions, Dow Jones Newswires reported, citing an interview with El-Badri.
Further Action
Still, the group won't hesitate to take further action if needed at its next meeting on May 28, El-Badri said, according to Dow. OPEC isn't formally obligated to reach its output targets before announcing new cuts.
OPEC will trim crude oil shipments by 0.6 percent in the four weeks ending May 9, the smallest drop since February, tanker-tracker Oil Movements said yesterday.
Europe's Dow Jones Stoxx 600 Index added 0.4 percent to 192.24 at 10:46 a.m. in London, trimming this week's decline to 2.4 percent. The dollar dropped 1.2 percent to $1.3232 against the euro, making assets priced in the U.S. currency more attractive as a currency hedge.
U.S. crude stockpiles grew for a seventh week last week, by 3.86 million barrels to 370.6 million, an Energy Department report showed on April 22. That's the highest since September 1990.
Fuel Demand
Total daily fuel demand in the U.S., the world's largest oil consumer, averaged 18.5 million barrels a day in the four weeks ended April 17, down 6.5 percent from a year earlier, according to the department.
Nippon Oil Corp., Japan's largest refiner, will cut fuel production by about 6 percent next month from year-earlier levels as the recession in Japan weakens petroleum demand, the company said today.
Crude oil may decline next week on speculation that U.S. inventories will increase because the recession has cut consumption.
Sixteen of 35 analysts surveyed by Bloomberg News, or 46 percent, said futures will fall through May 1. Eleven respondents, or 31 percent, forecast that oil prices will be little changed, and eight said the market will rise. Last week, 52 percent of analysts expected prices to be little changed.
Brent crude oil for June settlement was at $50.35 a barrel, 24 cents higher, at 11:43 a.m. London time on London's ICE Futures Europe exchange.
Last Updated: April 24, 2009 07:07 EDT
Oil Declines Most in a Week on Concern Over Economy, Swine Flu
By Grant Smith
April 27 (Bloomberg) -- Crude oil fell the most in a week on concern the U.S. economy will keep shrinking and the swine- flu outbreak will curtail air travel.
The economy in the world's largest oil consumer will continue to contract "for some time," Lawrence Summers, director of the White House National Economic Council, said yesterday. Increased output by non-OPEC producers has left the market oversupplied by about 720,000 barrels a day, Algerian Oil Minister Chakib Khelil said.
"On the downside we have weak demand worldwide that's leading to high inventories and massive spare capacity at the OPEC," said Eugen Weinberg, analyst at Commerzbank AG in Frankfurt. "Joining these unknowns we now have the swine flu."
Crude oil for June delivery fell as much as $2.90, or 5.6 percent, to $48.65 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $49.15 a barrel at 11:49 a.m. in London.
Stocks declined around the world, Treasuries gained and the yen strengthened after the swine-flu outbreak spread beyond Mexico and the U.S. as the American government declared a public health emergency. The Dow Jones Stoxx 600 Index of European shares dropped 1.1 percent, led by airlines.
The dollar increased the most against the euro in more than a week on speculation the European Central Bank will lower interest rates at its meeting next month. The U.S. currency traded 0.9 percent higher at $1.316 per euro, limiting the appeal of dollar-priced commodities like crude used to hedge against inflation.
Swine Flu
Air China Ltd., Singapore Airlines Ltd. and Qantas Airways Ltd. led declines by Asia-Pacific carriers on speculation the swine-flu cases may limit travel. Trips on the region's airlines plummeted after the outbreak of Severe Acute Respiratory Syndrome in 2002 and 2003 in China, Singapore and Hong Kong.
"The airline stocks have all sunk," said Victor Shum, a senior principal at oil industry consultants Purvin & Gertz Inc. in Singapore. "The concern is that this gets to be like SARS and then that will impact the jet-fuel markets and global economy."
Crude prices need to be at $70 a barrel to ensure continued investment in the industry, Abdalla el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said in Algiers yesterday. Oil may reach $60 a barrel by the end of 2009, Khelil said.
OPEC Output
OPEC pumps about 40 percent of the world's oil. The group agreed last year to cut output by 4.2 million barrels and will review production again when it meets May 28.
Saudi Arabia, the biggest producer, is under pressure from the rest of OPEC to pare output further, the kingdom's former oil minister Sheikh Ahmad Zaki Yamani said in Cairo yesterday.
Crude prices gained last week as stock markets climbed amid optimism that the world is past the worst of the recession.
U.S. oil stockpiles rose for a seventh week to 370.6 million barrels on April 17, the highest since September 1990.
Hedge-fund managers and other large speculators are betting on falling New York oil futures for the first time in six weeks, according to U.S. Commodity Futures Trading Commission data.
Speculative net-short positions, or bets prices will fall, outnumbered long positions by 14,605 contracts on April 21, the Washington-based commission said April 24. A week earlier, traders were net-long 4,962 contracts.
Brent crude for June settlement fell as much as $2.66, or 5.2 percent, to $49.01 a barrel on London's ICE Futures Europe exchange.
Last Updated: April 27, 2009 07:13 EDT
Deepwater Oil Production Growth May Stagnate on Low Prices
By Dinakar Sethuraman and Ann Koh
April 28 (Bloomberg) -- Crude oil output growth from deepwater areas may stagnate because current oil prices make it unprofitable to tap new deposits and large discoveries dwindle, a consultant said.
"The pace of growth will slow and then become flat for the next few years," Michael Rodgers, a partner at PFC Energy, said in an interview at the Offshore Vessels conference in Singapore yesterday. "There were not a whole lot of large commercial discoveries in the last couple of years."
Production from deepwater blocks grew 67 percent a year between 2005 and 2008 following discoveries off Angola and Nigeria. That beat a growth of 1.3 percent in total crude oil output during the same period.
Global deepwater oil production may peak at 7.5 million barrels a day in 2013, Rodgers said.
Oilfield service providers including Schlumberger Ltd. and Transocean Ltd. and rig builders in South Korea and Singapore are counting on deepwater projects to drive earnings growth. Demand for deepwater drilling equipment, led by Brazil and India, continues to grow at a slower pace amid the global recession and lower crude oil prices, said Transocean, the world's largest offshore oil driller, on April 22.
"Falling investment in commercial deepwater development will require fewer deepwater platforms in the next five years compared to the last five years," Rodgers said. Production of oil from the deep seas accounted for 8 percent of global crude produced last year.
Large Discoveries
Output in deepwater areas, or those at water depths of more than 1,000 feet (305 meters), soared in the past five years as companies discovered large deposits in Angola, Nigeria and the Gulf of Mexico, Rodgers said.
The majority of deepwater areas have reached "maturity" and current projects are facing delays, he said.
Oil and gas explorers are postponing or scrapping deepwater projects, potentially reducing crude supplies by as much as 2.4 million barrels a day in 2011, Morgan Stanley said in a report in March. Oil prices in New York have declined more than 66 percent from a record $147.27 a barrel in July last year.
Out of a sample of 46 deepwater projects in places including Brazil, Africa, Norway, Asia and the Gulf of Mexico, about 27 may have an internal rate of return of less than 15 percent, the minimum required for international oil companies to invest in deepwater developments, according to Rodgers.
Oil must reach $50 a barrel for some developments to achieve more than 15 percent in returns, he said.
No new contracts have been awarded since August 2008 when Morgan Stanley estimated that companies needed 139 new production platforms to develop fields in deep seas. Since then, 11 orders have been canceled and 46 delayed by an average 15 months, according to last month's Morgan Stanley report.
Worldwide spending on oil and gas exploration may drop 12 percent in 2009 to $400 billion, according to a report in December by Barclays Capital Research.
Oil Falls a Second Day on Concern Swine Flu Will Curtail Travel
By Grant Smith and Christian Schmollinger
April 28 (Bloomberg) -- Crude oil fell for a second day, dropping below $50 a barrel, on concern that the swine-flu outbreak will curtail travel and delay a recovery from the global recession.
Oil, gold and copper declined as the World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the disease is not containable. A report tomorrow will probably show U.S. crude supplies rose last week by 1.8 million barrels from their highest since September 1990, according to a Bloomberg survey.
"Risk aversion has kicked in amid fears over the outbreak of swine flu," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "The sell-off will probably calm down as we get closer to the inventory data, but the data will likely be bearish and add a little more pressure."
Crude oil for June delivery fell as much as $1.59, or 3.2 percent, to $48.55 a barrel in electronic trading on the New York Mercantile Exchange. It was at $48.88 a barrel at 11:25 a.m. London time. Prices are up 9.4 percent this year.
Other commodities dropped on concern that the swine flu outbreak will exacerbate the economic slowdown. Copper fell, touching a two-week low.
Copper for three-month delivery on the London Metal Exchange lost as much as 4.2 percent to $4,163 a metric ton. Gold bullion for immediate delivery lost as much as 1.6 percent to $891.95 an ounce.
Rough Skies for Airlines
Airline stocks tumbled worldwide. U.S. carriers reported some cases of suspected flu-like symptoms to health authorities, the Air Transport Association trade group said. The U.S. Centers for Disease Control and Prevention recommended that nonessential travel to Mexico be avoided.
Airline travel in Asia fell after the outbreak of Severe Acute Respiratory Syndrome in 2003.
"There's a risk that the flu scare will hit international aviation travel, which would have a negative impact on demand for jet fuel," said Eugen Weinberg, analyst at Commerzbank AG in Frankfurt. "Oil prices should continue to fluctuate around the $50 level, with short-term risks being skewed to the downside."
The dollar increased against the euro for the first time in a week on speculation the European Central Bank will lower interest rates at its meeting next month. The U.S. currency traded at $1.3038 to the euro today after moving 1.6 percent higher yesterday, limiting the appeal of dollar-priced commodities such as crude oil as an alternative investment.
Brent crude for June settlement fell as much as $1.44, or 2.9 percent, to $48.88 a barrel on London's ICE Futures Europe exchange.
Crude Oil Rises as Dollar Decline Boosts Appeal of Commodities
By Grant Smith and Christian Schmollinger
April 29 (Bloomberg) -- Crude oil rose, reversing earlier losses, as the dollar fell against the euro, increasing the appeal of commodities as an investment to hedge against inflation.
The euro extended this week's gain versus the dollar before a U.S. report that economists said will show the world's largest economy shrank at a slower rate last quarter, spurring demand for higher-yielding assets. OPEC member nations are deepening their output cuts to support prices. An Energy Department report today will probably show U.S. stockpiles gained.
"Oil is holding around $50 despite expectations for another crude stock build today," said Christopher Bellew, senior broker at Bache Commodities Ltd. "The weaker dollar must help a bit, but I suspect that people are filling inventories because of the low cost of borrowing."
Crude oil for June delivery rose as much as $1.04, or 2.1 percent, $50.96 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $50.89 at 11:01 a.m. London time. The contract earlier fell as much as 80 cents, or 1.6 percent, to $49.12 a barrel. Prices are up 14 percent this year.
An Energy Department report later today will probably show that U.S. crude oil stockpiles rose by 1.8 million barrels last week, according to the median of 14 analyst responses in a Bloomberg News survey. Supplies climbed to 370.6 million barrels in the week ended April 17, the highest since September 1990.
The API report, released after the end of floor trading yesterday, showed supplies rose to 374.8 million last week.
OPEC Cuts
Gasoline stockpiles increased 200,000 barrels from 217.3 million the prior week, according to the Bloomberg survey. Inventories of distillate fuel, a category that includes heating oil and diesel, rose 1 million barrels from 142.3 million.
Brent crude for June settlement was at $50.71 a barrel, up 72 cents, at 10:21 a.m. London time on London's ICE Futures Europe exchange. The contract earlier fell as much as 74 cents, or 1.5 percent, to $49.25 a barrel.
Members of the Organization of Petroleum Exporting Countries are still trying to support prices through their output reductions. The group agreed to slash production by 4.2 million barrels a day from September levels.
Abu Dhabi National Oil Co., based in the United Arab Emirates, told refiners in Asia yesterday that it was cutting June supplies for its Murban, Lower Zakum and Umm Shaif grades by 18 percent, more than the 15 percent in May. Their Upper Zakum type would be slashed by 16 percent, up from 10 percent.
The dollar weakened 1 percent to $1.3236 per euro, bolstering the appeal of commodities priced in the U.S. currency that can be used to hedge against inflation.
It surprises me that the dollar is not going down faster because of all the money that is being printed by U.S.
Dale, the big reason is that our trade deficit has gone down big time, both for goods and services imported and the main reason is the import price and volume of crude has dropped.
Summary of Weekly Petroleum Data for the Week Ending April 24, 2009
U.S. crude oil refinery inputs averaged about 14.3 million barrels per day
during the week ending April 24, down 182 thousand barrels per day from the
previous week's average. Refineries operated at 82.7 percent of their operable
capacity last week. Gasoline production decreased last week, averaging
8.8 million barrels per day. Distillate fuel production increased last week,
averaging nearly 4.2 million barrels per day.
U.S. crude oil imports averaged about 9.8 million barrels per day last week,
down 31 thousand barrels per day from the previous week. Over the last four
weeks, crude oil imports have averaged 9.6 million barrels per day, 246 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 841 thousand barrels per day. Distillate fuel imports
averaged 123 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 4.1 million barrels from the previous week.
At 374.7 million barrels, U.S. crude oil inventories are above the upper
boundary of the average range for this time of year. Total motor gasoline
inventories decreased by 4.7 million barrels last week, and are in the upper
half of the average range. Finished gasoline inventories fell last week and
gasoline blending components inventories decreased during this same time.
Distillate fuel inventories increased by 1.8 million barrels, and are above the
upper boundary of the average range for this time of year. Propane/propylene
inventories increased by 1.7 million barrels last week and are above the upper
limit of the average range. Total commercial petroleum inventories increased by
5.5 million barrels last week, and are above the upper limit of the average
range for this time of year.
Total products supplied over the last four-week period has averaged 18.4 million
barrels per day, down by 6.8 percent compared to the similar period last year.
Over the last four weeks, motor gasoline demand has averaged 9.1 million barrels
per day, down by 0.5 percent from the same period last year. Distillate fuel
demand has averaged about 3.7 million barrels per day over the last four weeks,
down by 10.5 percent from the same period last year. Jet fuel demand is 11.8
percent lower over the last four weeks compared to the same four-week period
last year.
Quote from: frawin on April 29, 2009, 07:12:45 AM
Dale, the big reason is that our trade deficit has gone down big time, both for goods and services imported and the main reason is the import price and volume of crude has dropped.
Dale, probably another big reason is that every country is running their printing presses. I haven't looked at all of the exchange rates recently but my guess they all are fluctuating considerably.
Oil Rises, Set for Monthly Gain, as Recovery Optimism Grows
By Alexander Kwiatkowski
April 30 (Bloomberg) -- Crude oil rose, set for a third monthly gain, as a surge in equity markets increased optimism that the global economy and fuel demand will recover soon.
Oil advanced as stock markets gained on better-than- expected earnings and speculation that the worst of the global recession may be over. The U.S. dollar rose for a third day against the euro, making commodities more attractive to investors as a hedge against inflation.
"The dollar is sharply lower and equities are still rallying on improving sentiment," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "Oil is tracking the gains in the broader market."
Crude oil for June delivery rose as much as 97 cents, or 1.9 percent, to $51.94 a barrel. The contract traded at $51.72 at 11:10 a.m. London time in electronic trading on the New York Mercantile Exchange. Prices have gained 4.4 percent this month and 16 percent this year.
Stocks rallied around the world as earnings at companies from Credit Suisse Group AG to Siemens AG beat analysts' estimates and investors speculated the global economy may be recovering from recession.
The Dow Jones Stoxx 600 Index added 2 percent to 201.24 at 10:55 a.m. in London, extending its gain since March 31 to 14 percent, the biggest monthly rally on record. Futures on the Standard & Poor's 500 Index gained 2.2 percent.
The dollar fell 0.2 percent to $1.3292 per euro today from $1.3271 yesterday.
Economic Rebound
Crude oil in New York has traded between $43.83 and $53.90 this month as inventories climbed and equities rebounded on speculation the economy will recover later this year.
Brent crude for June settlement climbed as much as 52 cents, or 1 percent, to $51.30 a barrel on London's ICE Futures Europe.
A rise in U.S. crude oil stockpiles to the highest since September 1990, reported by the Energy Department yesterday, failed to bring oil prices lower. Crude stockpiles jumped 4.1 million barrels in the week ended April to 374.6 million barrels, the department said.
Oil prices were "unimpressed," by the U.S. stockpile data, according to Eugen Weinberg, senior analyst at Commerzbank AG in Frankfurt. "Upbeat equity market sentiment and a weak U.S. dollar had a much larger impact on the oil price."
The gain in crude stockpiles left supplies 15 percent greater than the five-year average for the period. Stockpiles were forecast to increase by 1.8 million barrels, according to the median response of 14 analysts surveyed.
U.S. gasoline stockpiles dropped as refiners cut back their output. Motor fuel supplies declined 4.7 million barrels to 212.6 million last week, the biggest reduction since September, the Energy Department said. Stockpiles were forecast to climb by 200,000 barrels, according to a Bloomberg News survey.
Refineries operated at 82.7 percent of capacity, down 0.8 percentage point from the prior week. Analysts forecast that operating rates would climb 0.2 percentage point.
Total daily fuel demand in the U.S. averaged 18.4 million barrels in the four weeks ended April 24, down 6.8 percent from a year earlier, the department said. Consumption of gasoline was down 0.5 percent and distillate use was 11 percent lower.
.
Crude Oil Falls on Speculation Price Gains Have Been Excessive
By Alexander Kwiatkowski
May 1 (Bloomberg) -- Crude fell for the first time in three days in New York on speculation that prices have risen too far, too fast as stockpiles grow.
Oil completed its third monthly gain yesterday, tracking equity markets, on optimism that the global economy will recover from a recession this year. Still, stockpiles in the U.S. remain at the highest level since 1990 and as much as 100 million barrels of oil are being held at sea.
"We have an inventory overhang which is quite impressive and an incredible build of oil at sea," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. "We may have a correction from here."
Crude oil for June delivery fell as much as 69 cents, or 1.4 percent, to $50.43 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $50.92 at 12:44 p.m. London time.
In New York trading yesterday, crude oil rose 15 cents to settle at $51.12 a barrel. Prices gained 2.9 percent in April and are up 15 percent this year.
Crude-oil supplies rose 4.05 million barrels to 374.7 million barrels last week, according to an Energy Department report earlier this week. The gain left inventories at the highest level since 1990 and 15 percent above the five-year average for the period.
"There has been a pull back from yesterday since, fundamentally, for oil nothing has changed," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "Refinery rates are very weak in the U.S. while stockpiles show no easing."
Tanker Storage
Since at least November, oil companies such as Royal Dutch Shell Plc and BP Plc have sought to profit from storing oil on tankers, benefiting from so-called contango, where crude for longer-dated contracts is more expensive than near-term supply.
Traders are storing 100 million barrels of oil at sea, enough to supply Europe for five days, Frontline Ltd., the world's largest supertanker operator, said April 23.
Brent crude for June settlement fell as much as 84 cents, or 1.7 percent, to $49.46 on London's ICE Futures Europe exchange. The contract was at $50.26 a barrel at 12:44 p.m. local time.
Analysts surveyed by Bloomberg News were split over crude oil prices next week as surging U.S. inventories coincide with signals that the global recession will end later this year.
Eleven of 31 analysts, or 35 percent, said futures will increase through May 8. Another 11 respondents forecast that oil will decline. Nine expect prices to be little changed. Last week, 46 percent said prices would fall.
Natural Gas Drops as Report Shows Sluggish Demand in Recession
April 30 (Bloomberg) -- Natural gas futures fell in New York, capping the 10th consecutive monthly decline, after a government report showed sluggish demand for the fuel during the economic slowdown.
U.S. inventories gained 82 billion cubic feet in the week ended April 24 to 1.823 trillion cubic feet, the Energy Department said. Analysts expected a gain of 81 billion. Supplies were 23 percent higher than the five-year average, unchanged from last week. The five-year average change is an increase of 69 billion.
"Until demand recovers, it's going to be difficult to look for any meaningful reversal in this market," said George Ellis, a director in the energy derivatives group at BMO Capital Markets in New York. "Demand destruction has just been tremendous. The price trend is still down."
Natural gas for June delivery fell 3 cents, or 0.9 percent, to settle at $3.373 per million British thermal units at 3:01 p.m. on the New York Mercantile Exchange. Gas dropped 11 percent this month and is down 40 percent this year.
Analyst estimates for the stockpile report ranged between gains of 70 billion and 92 billion cubic feet.
Gas consumption by factories may drop 7.4 percent this year as the recession cuts demand, the Energy Department said in a report on April 14.
Gross domestic product dropped at a 6.1 percent annual pace in the first quarter after contracting at a 6.3 percent rate in the last three months of 2008, the Commerce Department said yesterday in Washington.
July High
Natural gas futures have declined 75 percent since reaching a 2008 high of $13.694 per million Btu as the recession intensified in the U.S. The price plunge forced oil and gas companies to scale back drilling and production.
A decline in rigs looking for natural gas in the U.S. hasn't translated yet into lower supplies because wells drilled in recent years are more productive than in the past, Ellis said.
The number of gas rigs operating in the U.S. has dropped 54 percent since September as prices collapsed, data published by Baker Hughes Inc. showed.
Gas rigs fell by 18, or 2.4 percent, to 742 last week, the lowest level since the week ended Feb. 7, 2003. The count is down from a peak of 1,606 on Sept. 12.
"The optics of bumping up on a triple-digit injection in April is just not helping the cause for gas," Cameron Horwitz, an analyst at SunTrust Robinson Humphrey Inc. in Houston, said before the supply report. "We've been watching the rig count fall off a cliff and waiting to experience a supply decline and that just hasn't come."
Falling Demand
Gas production in the first two months of 2009 was 2.1 percent higher than for the same period a year earlier, the Energy Department said in a report released yesterday. Total U.S. consumption was down 4.7 percent.
Industrial use fell 169 billion cubic feet, or 13 percent, to 1.098 trillion cubic feet for January and February from a year earlier, according to the department.
"Stocks continue to build and the bottom line in this market is that it's very weak," said Peter Beutel, president of Cameron Hanover Inc., an energy consulting company in New Canaan, Connecticut. "It's very hard to construct a bullish scenario."
Frank it looks like their contango gamble is going to result in a net loss for them doesn't it? The longer they hold it the more costly that oil is going to be unless it jumps way high again.
Steve, I agree and I don't see demand and the price going up very much or very fast in the short term. The number of contracts trading is down. I don't see any reason to hedge or lock in the current prices.
Crude Oil Trades Near Five-Week High in Thin Holiday Trading
A
By Ayesha Daya
May 4 (Bloomberg) -- Crude oil was little changed near a five-week high in New York, with trading volumes limited by today's U.K. public holiday.
Crude oil for June delivery was at $53.23 a barrel, up 3 cents, in after-hours electronic trading on the New York Mercantile Exchange at 11:19 a.m. London time. London's ICE Futures exchange was closed for a U.K. holiday.
The contract jumped 4.1 percent to $53.20 a barrel on May 1, the highest settlement since March 26, after the Reuters/University of Michigan U.S. consumer sentiment index rose for a second month and an manufacturing index reached a seven-month high.
"Other than general background bullish indicators such as equity markets, nothing specific is driving prices, which is why oil is trading sideways," said Ronald Smith, chief strategist with Moscow-based Alfa Bank. "Also, volumes will be very low in the absence of London investors."
Futures earlier rose as much as 0.7 percent, or 39 cents, to $53.59 a barrel, following a report that manufacturing in China, the world's second-largest crude user, had gained for the first time in nine months.
The CLSA China Purchasing Managers' Index rose to a seasonally adjusted 50.1 in April from 44.8 in March, the bank said today in a statement. A reading above 50 indicates an expansion.
Brent crude oil for June settlement was at $52.86 a barrel, up 50 cents. The contract rose $2.05, or 4 percent, to $52.85 a barrel on May 1.
U.S. Energy Independence? Get Real, Oil Execs Say in Survey
By Edward Klump
May 4 (Bloomberg) -- Most oil-industry executives scoff at the idea that the U.S. can wean itself off foreign crude in the next couple of decades, a survey showed.
Only 16 percent of oil and natural-gas executives said that by 2030 the U.S. will be able to depend solely on its own energy supplies, according to a survey by KPMG LLP's Global Energy Institute. A majority said it will be after 2015 before it's "viable" to mass-produce alternative energy.
"The executives' perceptions of energy independence mirror their views on the viability of alternatives in the near-term," Bill Kimble, executive director of the institute, said in a statement. KPMG surveyed 382 U.S. financial executives in the oil and gas business last month.
Net imports of petroleum into the U.S. were about 57 percent of the total consumed last year, and that will fall to about 40 percent by 2030, according to the U.S. Energy Information Administration.
The U.S. government has said it wants to reduce its dependence on imports. In January 2006, then-President George W. Bush said, "America is addicted to oil, which is often imported from unstable parts of the world." Later that year, he said, "We're going to have to get off oil as much as possible to remain a competitive economy."
Under President Barack Obama, 35 percent of those surveyed view wind energy as the biggest winner among energy sources.
Global-Warming Skeptics
The executives viewed fossil fuels as the biggest losers under President Obama, with 42 percent selecting coal and 36 percent choosing oil.
On the issue of global warming, 47 percent of respondents said they agreed with the statement that "global warming, if it is occurring, is a natural weather cycle." Last year, 62 percent said they agreed.
Regarding the issue of restricting the carbon emissions that scientists say are linked to the gradual warming of the earth's atmosphere, 18 percent said they would support a cap- and-trade system, and 23 percent backed a carbon tax.
On capital spending, 65 percent of those surveyed expect reductions at their companies, KPMG said. That includes 47 percent who see a decline of more than 10 percent. Seventeen percent see an increase over last year's spending, according to the survey. A year earlier, 70 percent of respondents expected a boost in capital spending.
Sixty-three percent of those surveyed think ending deductions on so-called intangible drilling costs and depletion would lead to increased drilling outside the U.S. and some unconventional wells not being drilled, KPMG said.
Okay, you made me look! My thoughts after reading this post was about nuclear reactors. So I checked a website and found that there are 104 reactors licensed to operate in the U.S. and amazingly enough, only 20 of those are located west of the Mississippi!!! Does the Eastern part of the country require more power and does that part of the country use more petroleum products? Maybe because there is a larger population in the east. I don't know. Oh yeah, it just occurred to me that they use a lot of oil for heating, more so than the west which relies more on natural gas and electricity. Great post because it made me look!
Larryj
Thanks Larry, good observation. I market natural gas in several states, the biggest volume I handle is in Arkansas and a lot of that gas goes into the Eastern markets. Many of the Eastern Power plants are setup to run on Fuel Oil and/or Natural Gas and they switch back and forth depending on supplies/pricing.
Oil Little Changed, Paring Earlier Losses as Equities Advance
By Grant Smith
May 5 (Bloomberg) -- Crude oil traded little changed, paring earlier losses as advancing equity prices in Europe improved investor sentiment toward commodity markets.
An Energy Department report tomorrow is forecast to show that crude stockpiles climbed from the highest level since September 1990. Inventories increased 2.55 million barrels in the week ended May 1 from 374.7 million the previous week, according to a Bloomberg survey before the report.
"Equities look friendlier and the dollar has been weak, improving sentiment in the oil market," said Eugen Weinberg, analyst at Commerzbank AG in Frankfurt. "But the real driving force is the belief that the slowdown is now slowing down."
Crude oil for June delivery was at $54.46 a barrel, down 1 cent, at 11:36 a.m. London time in electronic trading on the New York Mercantile Exchange, after declining as much as 77 cents, or 1.4 percent, to $53.70 a barrel. Oil is up 21 percent this year.
The U.S. dollar fell to $1.3438 against the euro earlier, its weakest against the European currency in a month. Declines in the dollar often drive investors toward crude and gold that can be used to hedge against inflation.
The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
Refineries probably operated at 83.1 percent of capacity, up 0.4 percentage point from the week before, according to the median of responses in the survey. Refineries operated at 85 percent of capacity in the week ended May 2, 2008.
Gasoline Inventories Grow
Gasoline stockpiles probably rose 550,000 barrels from 212.6 million the prior week, according to the survey. Four analysts forecast an increase, one said there was a decline and one said supplies were unchanged.
Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 1 million barrels from 144.1 million. All six of the respondents forecast an increase.
"It weighs on prices when you have this amount of inventories weighing on the market," Ed Morse, head of economic research at LCM Commodities LLC, said in Doha, where he was attending a conference. "Commercial inventories are expected to continue to build through the second quarter."
Europe's Dow Jones Stoxx 600 Index was 1.3 percent higher at 206.48 as of 11:22 a.m. in London. Equities worldwide have gained as investors speculate the U.S. government's plan to finance the purchase of as much as $1 trillion in illiquid assets from banks will help to pull the global economy out of its first recession since World War II.
Construction Spending Rises
Yesterday, oil rose $1.27 to $54.47, the highest settlement since Nov. 24 after a report showed spending on U.S. construction unexpectedly rose in March for the first time in six months. Increases in commercial and government projects overshadowed a drop in home building.
Brent crude oil for June settlement was at $54.52 a barrel, down 6 cents, on London's ICE Futures exchange at 11:35 a.m. local time. The contract rose $1.73, or 3.3 percent, to end the session at $54.58 a barrel yesterday. U.K. financial markets were closed yesterday for a holiday.
"For as long as demand remains weak, stock levels high and economic data fails to show solid evidence of recovery, oil is likely to be trapped in a $50 to $55 range," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London.
Frank, I know this is a little off subject, but do you think trying to normalize relations with Cuba might be about oil? There is supposed to be a lot not far from Cuba.
Diane, I don't think it is off subject and no I don't think it has anything to do with oil. You won't like the rest of my answer but here it is, I think it is about our President trying to be the good guy when he doesn't know what he is doing and I think it is about two leaders, one a Communist/Socialist Leader and the other wanting to be a Communist/Socialist leader. Diane I know that you try to be a middle-of-the-road moderator, but surely you see what Obama and his Cabinet, staff and COMRADES are trying to do. Look at the comments by Tom Daschle about the elderly, look at Obama's religous back ground, enough said. Your question was a good one though.
Well, at least you didn't say Marxist too! ;D Thanks Frank
I don't see that much difference between Socialist/Communist and Marxism. I said it before and it is becoming even more evident, Carl marx is smiling down on the Whitehouse and both houses of congress.
I'll never care for the generalizations and labels. It just doesn't set well with me. But Nixon really was a crook!.... ;D
Crude and Natural Gas are both trading up this A.M., although not that much in early trading.
Oil Rises After API Says Crude, Gasoline Inventories Contracted
By Grant Smith
May 6 (Bloomberg) -- Crude oil rose after the American Petroleum Institute said stockpiles of crude and gasoline fell last week in the U.S., the world's largest energy consumer.
U.S. crude inventories dropped by 1 million barrels, and gasoline declined by 2.9 million barrels, the industry-funded API said after floor trading closed yesterday. The U.S. Energy Department will release its report on supplies later today.
"The API draws of crude and gasoline could be a driver," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. "There has to be a resolution to the large inventory overhang before the market can move durably higher. The current economic situation remains one of contraction."
Crude oil for June delivery rose as much as 1.1 percent to $54.44 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $54.02 as of 11:40 a.m. London time. Yesterday, the contract dropped 63 cents to settle at $53.84 a barrel. Oil is up 22 percent this year.
Oil's gains were capped as U.S. stock index futures retreated and the dollar advanced on speculation that government-run stress tests may show the country's largest banks need to raise more money. A stronger U.S. currency dulls demand for dollar-priced commodities used to hedge against inflation.
Futures on the Standard & Poor's 500 Index expiring in June fell 0.6 percent to 897.90, and the dollar traded at $1.3320 per euro as of 10 a.m. in London.
Regulators said Bank of America Corp. requires about $34 billion in new capital, the most among the 19 biggest U.S. banks subjected to stress tests. The Federal Reserve publishes stress test results tomorrow.
The Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington. It may show that crude-oil inventories increased by 2.5 million barrels last week from 374.7 million in the previous week, according to a Bloomberg News survey. Refiners are producing less fuel on weaker demand for gasoline and diesel.
"We have to wait and see what the data shows tonight, and if that is consistent with the API numbers, it will be a bit more supportive for the oil price," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney.
83% Capacity
Gasoline stockpiles probably rose 650,000 barrels from 212.6 million the prior week, according to the survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 1 million barrels from 144.1 million.
U.S. refineries probably operated at 83 percent of capacity last week, up 0.3 percentage point from the previous week, according to the median of responses in the survey. That would be down from 85 percent in the same week a year earlier and 89 percent in 2007.
API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Oil-supply totals from the API and Energy Department moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.
Brent crude oil for June settlement increased as much as 1.2 percent to $54.74 on London's ICE Futures exchange. It traded at $54.34 at 11:40 a.m. The contract declined 46 cents, or 0.8 percent, to end the session at $54.12 a barrel yesterday.
Crude and Natural Gas are trading higher this morning.
Crude Oil Rises Above $57 as Refineries Signal Stronger Demand
By Grant Smith
May 7 (Bloomberg) -- Crude oil rose above $57 a barrel for the first time this year after a jump in U.S. refinery demand boosted speculation that economic activity is recovering.
U.S. refineries boosted operating rates last week to their highest level since December, the Energy Department said yesterday, and crude stockpiles increased less than analysts had estimated. European and Asian equities advanced after U.S. Treasury Secretary Timothy Geithner said tests of banks' capital needs will be "reassuring."
Crude oil for June delivery rose as much as $1.59, or 2.8 percent, to $57.93 a barrel on the New York Mercantile Exchange, the highest intraday price since Nov. 17. It was at $57.73 a barrel at 10:59 a.m. London time. Prices have gained 13 percent this week, heading for the biggest weekly gain since February.
"The market is thinking the recession will end earlier than was expected a few months ago," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "It looks like prices will continue to increase, but I don't see crude above $60 in the short term."
U.S. refiners operated at 85.3 percent of capacity in the week ended May 1, up 2.7 percentage points from the week before, the Energy Department report showed. Crude inventories rose by 605,000 barrels last week, versus analysts' forecasts for a gain of 2.5 million barrels.
Gasoline supplies fell 167,000 barrels to 212.4 million in the week ended May 1, the Energy Department report showed. A 550,000-barrel gain was forecast, according to the median of 16 analyst responses in the Bloomberg News survey.
Still, the increase in U.S. crude supplies brought inventories to 375.3 million barrels last week, the highest since 1990.
'Taking Heart'
"The market is indeed shrugging the bearish fundamentals and may rather be taking heart from the reassuring comments from Treasury Secretary Geithner," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. "Demand is still weak. Before any durable move higher, the inventory overhang will need to be resolved."
Crude has broken through the $55.02 to $56.10 a barrel range that technical analysts at Barclays Capital said could trigger a move to $62. Prices may now surge to $71.55 by completing an inverted "head and shoulders" formation that started in December, according to a report by the bank.
Brent crude oil for June settlement rose as much as $1.63, or 2.9 percent, to $57.78 a barrel on London's ICE Futures Europe exchange. That's the highest intraday price since Jan. 7. It was at $57.37 a barrel at 10:58 a.m. London time.
Crude Oil Reaches Six-Month High on Speculation Demand May Rise
By Alexander Kwiatkowski
May 12 (Bloomberg) -- Oil rose to a six-month high in New York as a rebound in equity markets stoked speculation that an economic recovery will reduce a glut of fuel supplies.
Crude futures advanced after European stock markets erased losses and the U.S. dollar weakened, boosting the appeal of commodities to investors. Europe's Dow Jones Stoxx 600 Index advanced 0.7 percent to 207.97 in London. Oil's gain overrode analyst forecasts that stockpiles are still rising.
"Improving sentiment is driving equities higher and the U.S. dollar lower, which are both quite positive for oil prices," said Eugen Weinberg, senior analyst at Commerzbank AG in Frankfurt. "People are counting on economic recovery soon."
Crude oil for June delivery rose as much as $1.14, or 2 percent, to $59.63 a barrel on the New York Mercantile Exchange, the highest since Nov. 14, 2008. It traded at $59.62 as of 10:20 a.m. in London, up 34 percent this year. Yesterday, oil dropped as much as 3.2 percent before settling at $58.50, down 0.2 percent.
"Equities are still holding firm and the weakness in the U.S. dollar is supporting the oil market," said Andrey Kryuchenkov, an analyst at VTB Capital in London. The market is waiting for tomorrow's Energy Department report on U.S. stockpiles, he said.
U.S. inventories probably gained 1 million barrels last week, according to the median of 12 responses in a Bloomberg News survey. They climbed to 375.3 million barrels in the week ended May 1, the highest since September 1990, according to the Energy Department data.
The dollar dropped to $1.3670 against the euro from $1.3582 yesterday. A weaker dollar encourages investors to buy commodities such as oil as a hedge against inflation.
Brent crude oil for June settlement rose as much as 1.5 percent to $58.26 a barrel on London's ICE Futures Europe exchange after falling as low as $56.87. The contract traded at $58.26 at 10:35 a.m. local time.
Crude is trading at $59.325 up $0.825, Natural Gas is trading at $4.36 up $0.058. The outer months are trading even higher.
Oil Gains for Second Day on Drop in Stockpiles, Weaker Dollar
By Alexander Kwiatkowski and Christian Schmollinger
May 13 (Bloomberg) -- Oil rose for a second day after an industry group reported U.S. crude stockpiles dropped for the second week in a row and the dollar declined.
Oil supplies fell by 3.13 million barrels to 370.7 million last week, the American Petroleum Institute said late yesterday. The U.S. Energy Department is due to post its report on crude inventory later today.
"With more data out today, there is now a hope they will also show inventories are no longer increasing," said Sintje Diek, an analyst at HSH Nordbank in Hamburg. "People are expecting that oil demand will be stronger again and everything will recover."
Crude oil for June delivery rose as much as $1.05, or 1.8 percent, to $59.90 a barrel and traded at $59.44 on the New York Mercantile Exchange at 11:10 a.m. in London. Yesterday, it climbed as much as 2.7 percent to $60.08 a barrel before closing at $58.85, the highest settlement since Nov. 11.
Options for June-delivery Nymex crude contracts will expire tomorrow, and the majority of trading is centered on a strike price of $60 for options to buy and sell. The underlying June futures will expire on May 19.
Oil has climbed 34 percent this year, tracking global equity markets on optimism that an economic recovery will spur demand for fuel. Additional support for crude prices came from the dollar, which fell to the lowest level against the euro since March, bolstering demand for commodities as a hedge against inflation.
"The major play seems to be the weakening dollar," said Mike Sander, an investment adviser at Sander Capital Advisors Inc. in Seattle. "If the dollar continues to weaken to $1.40 euro or worse, oil will be pressured to go higher."
Weaker Dollar
The dollar fell to $1.3679 per euro at 10:20 a.m. in London from $1.3648 yesterday in New York. It earlier touched $1.3722, the weakest level since March 23.
Refiners in China, the world's second-biggest energy- consuming country, increased crude-oil processing volume by 6 percent last month, the China Mainland Marketing Research Co. said in a faxed statement today.
Gasoline output in April gained 20 percent to 5.76 million tons, while diesel production rose 0.7 percent to 10.6 million tons, it added.
The U.S. Energy Department report on inventories is expected to show a 1 million barrels gain, according to an analysts' survey. Totals from the API and the government moved in the same direction 75 percent of the time over the past four years, Bloomberg data shows.
Supplies rose to 375.3 million barrels in the week ended May 1, the highest since September 1990, the Energy Department said on May 6.
Second Weekly Drop
API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey. Crude oil inventories fell by 1 million barrels for the week ending May 1, the API said May 5.
The Organization of Petroleum Exporting Countries' monthly report on supply and demand for oil is due later today.
Analysts are split over whether gasoline stockpiles rose or fell last week. Supplies of distillate fuel, a category that includes heating oil and diesel, probably increased 1.25 million barrels, according to the Bloomberg News survey. The department is scheduled to release its weekly petroleum inventory report today at 10:30 a.m. in Washington.
U.S. travel during the Memorial Day holiday will rise about 1.5 percent from last year as lower pump prices encourage vacationers, AAA, the nation's biggest motoring organization, said yesterday.
Gasoline Futures
Gasoline futures for June delivery rose 2 cents, or 1.2 percent, to $1.6879 a gallon at 11 a.m. in London on the Nymex. The contract yesterday dropped 1.23 cents, or 0.7 percent, to settle at $1.6679 a gallon.
Brent crude oil for June settlement gained as much as $1.11, or 1.9 percent, to $59.05 a barrel on London's ICE Futures Europe exchange. It was at $58.26 a barrel at 11:10 a.m. local time. It declined 0.8 percent to end the session at $57.94 a barrel yesterday.
Below are excerpts from this week's EIA-DOE Crude and Products Inventory Report:
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 4.7 million barrels from the previous week. At
370.6 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
decreased by 4.1 million barrels last week, and are in the middle of the
average range. Both finished gasoline inventories and gasoline blending
components inventories decreased last week. Distillate fuel inventories
increased by 1.0 million barrels, and are above the upper boundary of the
average range for this time of year. Propane/propylene inventories increased by
0.7 million barrels last week and are above the upper limit of the average
range. Total commercial petroleum inventories decreased by 1.2 million barrels
last week, and are above the upper limit of the average range for this time of
year.
Total products supplied over the last four-week period has averaged nearly 18.2
million barrels per day, down by 7.9 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged 9.0 million
barrels per day, down by 1.2 percent from the same period last year. Distillate
fuel demand has averaged about 3.5 million barrels per day over the last four
weeks, down by 14.1 percent from the same period last year. Jet fuel demand is
10.3 percent lower over the last four weeks compared to the same
four-week period last year.
IEA Cuts Oil-Demand Outlook as Recession Lingers (Update1)
By Alexander Kwiatkowski
May 14 (Bloomberg) -- The International Energy Agency cut its oil-demand forecast for a ninth consecutive month, predicting consumption this year will fall the most since 1981 as the recession lingers.
The Paris-based adviser to 28 nations cut its global oil demand estimate "slightly" to 83.2 million barrels a day this year, down 3 percent from 2008, it said today in its monthly report. That is 230,000 barrels a day lower than it forecast last month. The revision comes a day after OPEC reduced its 2009 forecast, predicting oil demand of 84.03 million barrels a day.
"Demand continues to look very, very weak," David Fyfe, head of the IEA's oil industry and markets division, said in a phone interview from Paris. "Although there has been a lot of talk about the green shoots of economic recovery, we think it is still a little bit early to be flagging any start of a full blown recovery."
Oil prices have climbed 34 percent this year, trading above $60 in New York this week for the first time in six months on increasing optimism about an economic recovery and record production cuts by the Organization of Petroleum Exporting Countries. Still, U.S. crude stockpiles remain near the highest since 1990 as the recession saps fuel demand. OPEC crude production is beginning to rise as higher prices encourage members to pump more than their quotas.
'Very Weak'
Demand is weakest in the world's most developed nations, where consumption will drop by 5.1 percent this year, the IEA said. The IEA cited "very weak" demand data in April for the U.S., and to a lesser extent, Europe.
Crude inventories in the industrial economies of the Organization for Economic Cooperation and Development are at their highest since 1993, according to Fyfe. Stockpiles were equivalent to 62 days of consumption as of the first quarter of the year, according to the IEA.
Iran's OPEC governor Mohammad Ali Khatibi earlier this week said stock levels representing 52 days of consumption were a "healthy level."
"The forward demand-cover level is very high," Fyfe said. "The market structure is still supportive of a degree of stock- building. It is to do with oil for which there is scant demand at the moment."
'Sustained Weakness'
The energy adviser said it expects consumption in developing economies to contract for the first time since 1994 as China and Russia "continue to exhibit sustained weakness." Demand in these economies will average 38.1 million barrels a day this year, a decline of 0.4 percent, or 140,000 barrels a day compared with 2008.
The IEA demand estimate is based on a forecast that global GDP will shrink 1.4 percent in 2009 and the world economy won't start to markedly recover until 2010 at the earliest, it said. Should the world economy see "strong" economic recovery this year, the IEA's oil demand could be "too pessimistic," according to the group.
"If we get an economic bounce in the second half of the year, demand could be stronger than we are showing," Fyfe said.
Non-OPEC supply will fall by 300,000 barrels a day this year, a second annual decline, to about 50.3 barrels a day. The IEA increased its forecast 50,000 barrels a day compared with last month because of "stable" supply from the North Sea and higher-than-expected Russian output.
Supply from OPEC rose for the first time in eight months in April as members backtracked on production cuts, according to the IEA.
Review Production
OPEC will meet May 28 in Vienna to review production quotas. It agreed in March to keep supply unchanged as members continue to implement reductions agreed last year, totaling 4.2 million barrels a day, to stem plunging prices.
The 11 OPEC nations bound by production quotas pumped 25.8 million barrels of crude oil a day last month, the IEA said, compared with their official Jan. 1 limit of 24.845 million a day. That means the group collectively completed 78 percent of its promised reduction, compared with 83 percent in March, the IEA said.
The IEA's estimate is in line with OPEC's own figure. The producer group said yesterday the 11 members implemented 77 percent of planned output cuts in April, down from 82 percent for March. Production rose to 25.8 million barrels a day, the group said, citing secondary sources.
Compliance
"There is a little bit of leakage vis-à-vis targets from Iran and a little bit from Angola," said Fyfe. "Analysts are saying that with prices moving higher and cohesion fraying at the edges, it might be harder" for the group to reduce production again.
As global consumption weakens, OPEC needs to provide less oil to balance supply and demand. All 12 OPEC members, including Iraq, will need to supply about 27.9 million barrels of crude a day this year, the IEA report showed. That's a reduction of 300,000 barrels a day from last month's assessment.
Those same 12 OPEC members pumped 28.2 million barrels a day in April, 270,000 barrels a day more than the previous month, according to the IEA. Crude output in Saudi Arabia, OPEC's biggest producer, was 7.95 million barrels a day in April, unchanged from March, the IEA said.
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Crude Oil Futures Fall Amid Speculation Fuel Demand May Decline
By Alexander Kwiatkowski
May 15 (Bloomberg) -- Crude oil fell, retreating from a six-month high of $60 a barrel earlier this week, on concern the global economic recovery may falter, reducing demand for fuel.
Crude futures may decline next week as the global recession saps demand and bolsters U.S. supplies, a Bloomberg News survey of analysts shows. Europe's economy contracted at the fastest pace in at least 13 years in the first quarter, the European Union said today. The International Energy Agency yesterday forecast the biggest contraction in world oil use since 1981.
"It is still a pretty bad demand environment. I can't see prices can go too far up," said Thina Saltvedt, an oil analyst at Nordea Bank AB in Oslo. "The recent rise in prices has been based on optimism."
Crude oil for June delivery fell as much as 45 cents, or 0.8 percent, to $58.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $58.20 at 11:11 a.m. in London. Oil reached $60.08 on May 12, the highest intraday price since Nov. 11.
Prices fell yesterday to a four-day low of $56.55 after the IEA report. It later rebounded to close at $58.62 a barrel as U.S. stocks advanced, following news of a decline in bank borrowing and better-than-estimated company earnings.
Oil also fell today as the dollar strengthened against the euro, reducing the appeal of oil as an inflation hedge for investors. The U.S. currency traded at $1.3557 against the euro at 11:14 a.m. in London from $1.3639 yesterday.
Stock Market Influence
The oil market "is very much influenced by the stock markets and by what is happening with the dollar too," said Robert Montefusco, a broker at Sucden Financial in London.
Gross domestic product in the 16-member euro region dropped 2.5 percent from the fourth quarter, when it fell 1.6 percent, the European Union's statistics office in Luxembourg said today.
That's the biggest drop since the euro-area GDP data were first compiled in 1995, and exceeded the 2 percent decline economists expected in a Bloomberg News survey.
Six respondents to the Bloomberg news survey, or 20 percent, forecast that oil prices will rise and six said the market will be little changed. Last week, 43 percent of analysts said prices would decline.
Oil futures are little changed this week after falling on May 13 as weaker-than-expected retail data in the U.S. caused investors to sell equities. The same day, an Energy Department report showed U.S. crude-oil supplies fell 4.63 million barrels to 370.6 million in the week ended May 8, the first drop since February. Inventories are still 18 percent higher than the five- year average for the week and near the highest level since 1990.
Fuel Consumption
Total U.S. daily fuel demand averaged 18.2 million barrels in the four weeks ended May 8, down 7.9 percent from a year earlier, the Energy Department report showed. Gasoline demand averaged 9 million barrels in the same period, down 1.2 percent from a year earlier.
The IEA cut its 2009 demand estimate to 83.2 million barrels a day, down 3 percent from 2008. That's 230,000 barrels a day less than last month's forecast. OPEC and the U.S. Energy Department reduced their 2009 outlooks this week.
Brent crude oil for July settlement fell as much as 54 cents, or 0.9 percent, to $58.05 a barrel on London's ICE Futures Europe exchange at 11:16 a.m. local time. It rose 47 cents, or 0.8 percent, to $58.59 a barrel yesterday. The June contract expired yesterday and fell 65 cents, or 1.1 percent, to $56.69 a barrel.
Crude Oil Rises on Speculation Prices Fell Too Far Last Week
By Alexander Kwiatkowski
May 18 (Bloomberg) -- Crude oil rose above $57 on speculation that prices fell too far at the end of last week and may rebound as optimism about an economic recovery grows.
Prices rose today after dropping 3.9 percent on May 15, the biggest decline in almost a month, when a report showed U.S. industrial production fell for a sixth month. Crude also climbed after Nigerian militants attacked pipelines from Chevron Corp.'s Escravos terminal to domestic refineries and power stations.
"The downside potential to oil prices is limited by the fear, or hope, that the economy will go up again and oil consumption will go up again," said Gerrit Zambo, an oil trader at BayernLB in Munich. "It is too early to say we have a downtrend."
Crude oil for June delivery rose as much as 95 cents, or 1.7 percent, to $57.29 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $57.07 a barrel at 11:51 a.m. London time.
The June Nymex oil contract expires tomorrow. The more actively traded July contract was at $57.81 a barrel, up 81 cents, at 11:52 a.m. London time.
Fighting in Nigeria has escalated between government troops and the militant group since May 13 when Nigeria's Movement for the Emancipation of the Niger Delta said it responded to an army offensive by attacking military positions and hijacking a tanker.
MEND claimed responsibility yesterday for rupturing two pipelines supplying oil and natural gas from a Chevron Corp. facility to domestic refineries and power stations. The rebel group has threatened to blockade waterways in the southern region used for oil and gas exports.
Pipeline Risk
"Apart from the pipeline risk, we would not be surprised to hear that majors are currently evacuating personnel from oil installations," said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix Gmbh. "We are maintaining a Nigerian risk premium for the week."
Brent crude for July settlement rose as much as $1.24, or 2.2 percent, to $57.22 a barrel on London's ICE Futures Europe exchange. The contract was at $57.06 a barrel at 11:52 a.m. London time.
Hedge-fund managers and other large speculators switched from a net-short position to a net-long position in New York crude-oil futures in the week ended May 12, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 3,066 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Last week, traders were net-short 11,285 contracts.
Uhmm correct me if i am wrong but it sounds like their manipulating the price up again. If our supply is still high in oklahoma and we are still reducing consumption, then the prices should be dropping. And then theres those ships sitting off shore somewhere full of cheap oil they bought that they have to move onto the market before they can ship anynew oil isn't there?
Whats rediculous is i have seen a 20 cent jump in gas over the last week and a 50 cent jump in the last month.
We are headed into another holiday...Memorial Day weekend...The prices, back when I was a girl, only went up about 15-20 cents previous to each holiday and then went down again...The difference now is that the spikes are higher and the prices don't go down again after the holiday is concluded. The sad thing is that our economy was beginning to rebound because people had more money in their pockets, due to not having to be gouged on the price of fuel. This raise in the price of gas will further slow the economy's recovery.
Thought you might find this article interesting. I still think the long term cause of the high price of energy which ultimate lead to the world economic crisis, was due to the Trade Agreements that Clinton made with China, India and others. Those agreements took jobs from the US, made China the second largest consumer of Oil and created big trade deficits for the US which devalued the dollar even more and drove energy higher yet. Ten to 15 years ago China was not even a factor in the Oil markets now they are the 2nd largest consumer and will be the largest consumer someday all at the cost of of the US.
By: James Bibbings May 17, 2009
Oil and Gas Prices Should Fall, For Now
It's nearly Memorial Day and time again to kick off the 2009 summer driving season. Each year just prior to the holiday weekend, the major talking point in the media is undoubtedly "What will the cost per gallon of gasoline be over the summer?"
This driving season, holiday travelers will have something to rejoice about; lower fuel prices. Average gas and diesel prices are significantly off their all time highs reached last year on July 17th, 2008 at $4.114 and $4.845/gallon respectively. The fall in prices has been so pronounced in fact, that AAA has forecast that travel will be up 1.5% over the holiday weekend. A counterintuitive estimate, when one considers the US' staggering 8.9% unemployment rate. With average prices today around $2.26 for gas and $2.28 for diesel, off roughly 50% from last year, what should the average consumer expect for the summer? The next several months? Or even... the next several years?
How We Got Here
In an attempt to predict where fuel prices will be in the future, it would be wise to understand how we got to where we are today. The large run down in retail fuel prices, from all time highs in 2008, has been driven primarily by concerns that the global recession would be long and deep. Those same concerns have helped to increase the global strength of the US Dollar (the currency by which energy is primarily priced - bearish for oil) and spurred global crude oil demand concerns within the market. By mid July of 2008, Crude Oil traders the world over saw their fears of a long global recession begin to materialize. The dollar began to rally, and demand estimate after demand estimate indicated a dire future for oil was nearly unavoidable. As a result, crude began its decent from an all time high of $147.27 a barrel in July of 08', to a five year low of $32 a barrel in February of 2009. As you can see from the chart below, crude's fall was highly correlated to the price of retail fuel, leading per gallon costs lower until around December of 2008.
By December, although global supply remained much higher than demand, prices at the pump began to rise. This occurred largely as the factors attributed to the weakening of crude oil prices from above appeared to be unwinding. More specifically, at this time OPEC began to actively coordinate attempts to cut output and affect global supply. In addition, around that time the US Dollar rally also began to show signs that it was fizzling out. However, and perhaps most importantly, these fundamentals were changing while institutions with free storage capacity began to speculatively purchase crude. These speculators began to buy into the markets as the tide began to change on hopes that oil would be more valuable by mid to late 2009. It was this institutional involvement, in conjunction with ever so slightly improved fundamental data that was able to bring us to where we are today; crude at roughly $60/bbl and prices at the pump of around $2.25 nationwide. So now that we know how we got here, where are we going?
Over the Next Several Weeks (Early to Mid Summer)
According to the Energy Information Administration (EIA) summer fuel prices are anticipated to remain down from last year's high. They are projecting that the summer average price per gallon of regular gas should be around $2.21 per gallon; down roughly 42% from last summer. They are also anticipating the price of diesel to remain down from last summer at a cost of $2.26 a gallon. I think for the summer they will be wrong on this estimate, though only slightly.
In the short term, the crude oil rally which is currently taking place may continue up slightly higher. Over the next several weeks I expect crude prices to rise between $5 and $10 dollars to settle within the mid to upper sixty dollar/bbl level. This price increase will continue to be driven by the irrational exuberance currently plaguing both the equities and commodities markets. The hope that the economy has bottomed, although fundamentally unfounded, will likely give momentum traders more room to run with this rally. This will occur solely because the markets are willing to stay irrational for longer than most can stay solvent. As a result, although I do not buy into the view that "green shoots" are sprouting within the economy, it would be unwise to fight market sentiment in the near term.
As crude oil continues to rise, the US Dollar continues to soften, and summer demand for fuel increases, retail fuel and wholesale oil prices are likely to climb and remain correlated to the broader markets. Although I do not anticipate prices to come back in line with levels seen last year, I do expect them to be higher than the EIA's forecast. I am anticipating that the average cost per gallon of unleaded gas will be between $2.45 and $2.60 for the majority of the summer; or 10 to 15% higher than estimates. I also expect diesel prices to follow suit and move up from the current average of $2.28 to around $2.50 per gallon throughout most of the summer. I am however expecting oil to come off of my forecasted near term highs, and return to trading within the $40 to $55 dollar range by early fall. Once we get back to the $40 to $55 range what happens from there?
Medium Term Forecast (Fall through 1 ½ years)
Currently we are seeing a largely correlated, bear market rally across all financial sectors. Now, more than ever before, crude oil prices are being tied to the successes and/or failures of the equities market. This is in stark contrast to the negative market correlation seen at oil's all time high in July of 2008; which is worth considering in and of itself. Since the global economic crisis has shown few lasting signs of letting up, it is highly unlikely that oil speculators will be able to continue to support oil's current pricing.
Although the broad markets and media tend to believe the worst of the economic crisis is behind us, I do not concur. It is my feeling that the worst of the crisis will be upon us within the next three to six months and should drive fuel prices lower than they were in December of 2008. On May 12th, China released figures announcing that their exports were off 22.6% from the same period last year. On the same day, the USIA also slashed its forecast for 2009 global oil demand by 420,000 barrels per day to its lowest level since 2004. One day later, on the 13th, the US also released its April retail sales figures which indicated consumer spending had fallen .4% from the figures provided in March. This drop was in stark contrast to earlier estimates indicating that retail spending would be up .1% on the month. Lastly, on May 8th, the US indicated that another half million jobs were lost and unemployment had edged up to 8.9%. The announcement marked the 16th month in a row that net jobs were lost in the world's largest single nation economy. When considering statistics like this, it doesn't take long to realize that global demand for petroleum will continue to fall as international consumers, lead by those in the US, are forced to retrench even further.
In addition to falling global demand for oil, for the next year or so I expect the world to continue experiencing global deflationary pressure. Currently, the idea that the US is in a deflationary period is largely unrecognized. At this time the vast majority of market commentators and economists are calling for rapid US Dollar inflation. This would be a very bullish indicator for oil prices, however I think their timing on inflation is off. Deflation, when properly defined, is a net decrease in the money supply and credit, which is currently occurring. (I wrote on the net decrease in credit and money supply recently in a piece hosted at CNC titled "Hyperinflation is Not Coming Soon...Here's Why.") Furthermore, it is worth noting that deflationary periods are most commonly seen after large credit bubbles burst. As the largest credit bubble in history recently exploded, the fact that global deflationary pressure is upon us should really be no surprise.
Clear evidence for deflation can be seen within the most recent Case Shiller Consumer Price Index (CS-CPI) measurements. The CS-CPI is widely believed to be more accurate than the CPI figures presented by the US government. This is largely due to CS-CPI's inclusion of actual housing price data rather than Owners Equivalent Rent. The index through April has been negative for 6 straight months and shows no signs of going positive any time soon. Based on the CS-CPI, it is increasingly apparent that prices are not inflating, but are rather deflating; a very bearish sign for all commodities.
As deflationary pressures drive all prices lower, reduce global demand, and move traders out of commodities and towards safety, I am expecting to see the price of oil fall. I think they will fall so hard in fact, that it would not be inconceivable to see oil return to the 2004 prices of around $25/bbl within the next year to year and a half. In turn, I also expect to see the prices of both pump diesel and gasoline drop towards 2004 levels between $1.50 and $2.00 per gallon.
Long Term Forecast (2-3 years)
With oil prices below $50 dollars a barrel, increasing global pressure to reduce carbon emissions, and more stringent exploratory policies taking shape in the US, it has not been advantageous for oil companies to expand. As a result of this untenable landscape, monies that would normally be flowing into deep sea and Arctic exploration endeavors have become economically unjustifiable. This will become problematic to global supply as most major oil fields (.pdf) tend to reach their maximum capacity after forty years of operation. Since the world's largest oil fields (Mexico, the North Sea, China, and most in the Middle East) were opened nearly 40 years ago, and no new, highly accessible, major oil fields have been developed for roughly 40 years, it is logical that supply will grow tighter. In addition to this, as oil companies withdraw exploratory funds, companies which build and operate exploratory machinery are likely to face deep financial challenges. The almost immanent loss of oil capacity over the next several years will eventually create a very bullish sentiment towards oil driven by supply concerns. As a result, when the global economy emerges from the current recession, there is likely to be larger than normal pressure on fuel prices.
Certainly to this forecast, many will argue that technology should find a way to avoid this problem. However, the world has yet to find a viable cheap energy source that compares to oil. Nothing produces as much energy, in as cost effective way as oil. As a result, it is highly unlikely that a logical, global replacement will emerge to power all petroleum dependent applications within two to three years. This will be especially true, as there is no current incentive to pursue investment in new technologies and/or exploration.
Since there currently is no viable alternative to oil from a cost perspective, and nearly all industries require some form of petroleum, prices will have to rise. At this time I would expect oil prices to climb to $100/bbl or more. As we've seen in the past, when oil trades at $100 a barrel or higher, only then will it become advantageous to seek out oil alternatives. As a result, since it is unlikely we will replace our oil dependency in the near term; within the next 2 to 3 years I anticipate gasoline and diesel prices to routinely cost around $3.50 or more per gallon.
I don't anticipate anyone coming out with a gas alternative anytime soon...There's too much money to be raked in by NOT finding an alternative. It's rather akin to the race to find a cure for cancer...The cure, should there be one found, will never be allowed to be put out for general public consumption...To do so would be to tank a multi-billion dollar industry.
Crude Oil Rises to Six-Month High on Gains in Equities Market
By Christian Schmollinger and Nidaa Bakhsh
May 19 (Bloomberg) -- Crude oil rose to the highest in six months in New York as gains in the stock market increased optimism that the global economy is recovering.
Oil also advanced as analysts forecast U.S. oil inventories dropped last week, Sunoco Inc. said a fire at its refinery near Delaware forced the shutdown of the plant's main gasoline unit, and Nigerian militants threatened to block waterways used for energy exports.
"Sentiment has driven this market from its lows in the hopes of an imminent recovery," said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. "If we do see equities continue their rally, oil and a lot of other commodities are probably going to follow."
Crude oil for June delivery climbed as much as $1.45, or 2.5 percent, to $60.48 a barrel on the New York Mercantile Exchange, the highest since Nov. 11. Oil traded at $60.09 at 9:53 a.m. London time. Futures are up 30 percent this year.
The June crude contract expires today. The more-actively traded July contract gained $1.06, or 1.6 percent, to $60.65 a barrel at 9:57 a.m. in London.
The MSCI World Index climbed 1.2 percent at 9:40 a.m. in London, a second day of gains. The gauge of 23 developed nations has surged 37 percent since March 9 as investors become more optimistic about the length and depth of the first global recession since World War II.
Oil Stockpiles
Crude-oil stockpiles dropped 1.75 million barrels in the week ended May 15 from 370.6 million the previous week, according to the median of eight estimates by analysts before an Energy Department report this week.
Inventories may have fallen as oil imports to the U.S., the world's biggest crude user, decline. Supplies brought into the country fell 12 percent to 8.71 million barrels a day in the week ended May 8, the lowest since the week ended Sept. 12, the Energy Department said on May 13.
Refineries probably operated at 84.1 percent of capacity last week, up 0.4 percentage point from the previous week, according to the median of responses in the survey. Refinery operations usually climb for the peak gasoline-consumption period, which lasts from the Memorial Day weekend in late May to Labor Day in September.
The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
Brent crude for July settlement gained as much as $1.18, or 2 percent, to $59.65 a barrel on London's ICE Futures Europe exchange. The contract traded at $59.42 a barrel at 10 a.m. local time.
Nigeria Violence
The Movement for the Emancipation of the Niger Delta, or MEND, said that ships near the southern part of the country would be traveling at their own risk. Violence in Nigeria has escalated since May 13 when militants said they responded to an army offensive by attacking military positions and hijacking a tanker.
MEND claimed responsibility May 17 for rupturing two pipelines supplying oil and natural gas from a Chevron Corp. facility to domestic refineries and power stations.
Nigeria produces low-sulfur, or sweet, oil, prized by U.S. refiners because of the proportion of high-value gasoline and diesel it yields.
I had never understood why rebel groups or dissidents would destroy something that brings income to the country. I looked at it as "biting the hand that feeds them". It then occurred to me one day that the reason they destroy pipelines and put tankers in peril is that they are not getting any of the income. Still, I think it would be in their best interest to take over a pipeline operation rather than destroy it.
Larryj
Larry, the Nigerian Rebels are rebelling against the corrupt goverment and stopping the flow of oil is the Nigerian Governments Achilles heel. I have been to the terminals of the various fields and it is impossible to protect all of the pipelines and terminals, they are surrounded by thiick jungle, and the local people sympathize with the rebels, either out of fear or because they dislike the government as well. Of all the places I travelled in the world Nigeria was the most corrupt, you had to bribe everyone to get anything done, I had to pay a bribe to get a seat on a plane out, eventhou I had tickets/reservations, I had to pay bribes to get my luggage on the plane, I had to pay a bribe to get a room in Lagos that I had reservations for, everyone had their hand out. The jungle compounds we stayed in all had high fences and were guarded by the Military.
I guess I will take that one off my "must see and do" list.
In talking with my son this morning (he was calling from Thailand) I asked about their desire to visit Cambodia. They had previously expressed an interest in going there. I had cautioned them on that saying that Americans might not be welcome. In our conversation this morning, he said they had canceled the plans for Cambodia. Even in Thailand there are places that have signs saying they are anti-Israeli and anti-American. My son walks around in t-shirts saying Canada or Australia. His wife is Chinese born in Hong Kong and therefore has no problem with racial profiling.
You said about traveling the world. I would assume that was on business. Outside of going to Mexico for vacations, my one experience with other countries has been a stint with the army in Korea. I was not impressed and that is probably what has made me decide to see the USA rather than travel outside of it.
Larryj
Larry, all of my world travels were at the expense of Phillips Petroleum Company, and I have to agree with you, I was not impressed. The United States of America is by far the best country on Earth to live in, the Food, Travel, Communications , everything was way better in the US than all of the other places I travelled.
I knew then and even more so now why everyone in India, Mexico and all of the other countries were pouring into the US. Their countries were all screwed up and they didn't want to stay there and try to improve them. Now we have let them pour in here and start the process of taking us down next. Enough of that. Hope your son and his wife have safe travels and arrive back home safely.
Oil Rises to Six-Month High on Forecasts U.S. Stockpiles Shrank
May 20 (Bloomberg) -- Oil rose to its highest in six months before a report forecast to show that U.S. crude inventories dropped from their highest level in nearly 19 years.
Crude-oil stockpiles probably dropped 1.15 million barrels in the week ended May 15 from 370.6 million the previous week, according to the median of 12 estimates by analysts before an Energy Department report today. Yesterday, the industry-funded American Petroleum Institute reported a decline of 4.47 million barrels for the period. Gasoline advanced after a fire at a Texas refinery curbed fuel production.
"Data from the Energy Department might be supportive today after yesterday's positive surprise from the API," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. "But the real issue is that world financial markets are not afraid of anything, and oil prices are rising with them."
Crude oil for July delivery rose as much as 65 cents, or 1.1 percent, to $60.75 a barrel on the New York Mercantile Exchange. That's the highest price for the contract nearest to expiry since Nov. 28. It traded at $60.71 a barrel at 10:40 a.m. London time. Prices are up 36 percent this year.
Yesterday, the June contract gained 1.1 percent to $59.65 in its final day before expiry.
The catalytic cracker caught fire at Flint Hills Resources LLC's Corpus Christi plant, according to preliminary reports from the Texas environmental agency. A catalytic cracker is used to make higher-value products such as gasoline and diesel.
The API collects inventory data on a voluntary basis from refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department.
Lower Imports
Crude-oil stockpiles probably dropped 1.15 million barrels in the week ended May 15 from 370.6 million the previous week, according to the median of 12 estimates by analysts before an Energy Department report today. The Energy Department is scheduled to release its weekly report on supplies at 10:30 a.m. in Washington.
The American Petroleum Institute said yesterday that U.S. crude inventories dropped 4.47 million barrels to 366.2 million barrels last week.
Oil-supply totals from the API and DOE moved in the same direction 75 percent of the time over the past four years, according to data compiled by Bloomberg.
Inventories may fall as oil imports to the U.S., the world's biggest crude user, decline. Supplies brought into the country fell 12 percent to 8.71 million barrels a day in the week ended May 8, the lowest since the week ended Sept. 12, the Energy Department said on May 13.
Crude oil supplies climbed to 375.3 million barrels during the week ended May 1, the highest since September 1990, according to the department.
U.S. gasoline inventories dropped 5.4 million barrels to 206.2 million barrels, the API said.
Refinery Rates
The Energy Department report will probably show U.S. refineries operated at 84.1 percent of capacity last week, up 0.4 percentage point from the previous week, according to the median of responses in the survey. Refinery operations usually climb for the peak gasoline-consumption period, which lasts from the Memorial Day weekend in late May to Labor Day in September.
Sunoco Inc. shut a gasoline-making unit at its Marcus Hook, Pennsylvania, plant following a fire. Valero Energy Corp's Delaware City, Delaware, plant released sulfur dioxide from its fluid catalytic cracking unit yesterday, according to a filing with Delaware state regulators.
Gasoline for June delivery gained 3.5 cents to $1.8475 a gallon in New York on the Nymex at 10:17 a.m. London time. Yesterday it rose 3.1 percent to $1.8125, the highest settlement since Oct. 14.
Brent crude for July settlement was at $59.26 a barrel, up 34 cents, on London's ICE Futures Europe exchange at 10:16 a.m. London time. It rose 45 cents, or 0.8 percent, yesterday to $58.92, the highest settlement since Nov. 10.
Thanks for the good wishes for the kids. As of now they have been staying on an island near Thailand and will travel shortly to Bankock to visit some friends. I am finding out that my daughter-in-law has friends and relatives all over the world. Relatives because she is Chinese and friends because her job took her all over the world on business.
As for other countries, my distaste was from seeing a different cultures way of living. Seeing meat hanging in the store window without refrigeration covered by insects and people "doing their bodily fluid disposal" in the gutters and people laying drunk in the middle of the road really turned me off. You are so right in that we have the best there is and I hope and pray we can keep it that way.
Larryj
Larry my sentiments exactly. On my first trip to India, I worked in South India, I noticed all of the people , men included , wearing their dress type coverings, I asked the driver that picked me up at the airport why , he said you will see. Well I did, people, men and women just squatted whereever they were and went to the bathroom, stood up and walked off. I had a driver that picked me up every morning and drove from the hotel to the office where I worked and people were squatted along the roads everywhere going to the bathroom. Nigeria was just as bad, in the main Airport in Lagos the bathroom was a concrete trench in the open, and people just walked up, and went to the bathroom, everyone men and women alike. The trench had water running in it to keep it somewhat clean. America is the greatest nation on earth, and as Lee Greenwood would say, "I am Proud to be an American", "GOD BLESS THE USA".
As much as I love to travel, there are places I would never go unless on a supervised tour or with friends who knew the area well. Vaccines or not, some of the sanitation issues are just too much for me.
Quote from: Diane Amberg on May 20, 2009, 09:35:10 AM
As much as I love to travel, there are places I would never go unless on a supervised tour or with friends who knew the area well. Vaccines or not, some of the sanitation issues are just too much for me.
Diane, I understand, before we went out of the states on trips, we had to go to the company medical center, they checked your shots, gave you any you needed and then gave you a medical kit that was prepared based on the country ypou were going to. I remember on one trip to Nigeria I had to take another Smallpox shot, I told the Dr that I had mine when I started to the first grade and thought that was good for life, they still made me take a booster shot, also I had to take Cholerea shots before going to Nigeria. The biggest problem was Dysentery, on one trip I lost so much weight my wife was shocked when I got home. In Nigeria I ate boiled rice, nothing else with it, and drank hot tea, with sugar, 3 times a day. I know on one trip to Mexico the Medical center told me not to eat the fresh salads, that the water and the handling carried big germs and the fresh salad was the worst thing you could eat, along with the meats.
Mexico, no fresh anything and we even had "electrocuted" water to brush our teeth, no ice either unless the water was "made" on the premises. The hotel zone on Cancun was fine, but anywhere on the mainland we had to be careful. When we went to Chitzen Itza, the local vendors had the most beautiful fruit and juices ....couldn't touch it. The same in Tiajuana and Juarez.
Oil Falls From Six-Month High After Fed Warning on U.S. Economy
May 21 (Bloomberg) -- Crude oil fell from a six-month high after the Federal Reserve said that recovery may fail to take root in the U.S., the world's largest energy consumer.
Oil and equities declined after minutes of the Federal Open Market Committee meeting on April 28 and 29 showed that policy- makers see "significant downside risks" in the economic outlook. U.S. daily fuel demand in the four weeks ended May 15 fell 7.6 percent from a year earlier, an Energy Department report showed yesterday.
"The market has been getting overheated," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "The demand picture hasn't justified the recent gains, and now that equity markets are pulling back traders are taking profits in oil."
Crude oil for July delivery dropped as much as $1.48, or 2.4 percent, to $60.56 a barrel, and was at $60.69 on the New York Mercantile Exchange at 11:07 a.m. in London.
Stocks in Europe and Asia retreated and U.S. index futures dropped. The MSCI World Index fell for the first time in four days, losing 0.6 percent at 9:47 a.m. in London, while futures on the Standard & Poor's 500 Index slipped 0.6 percent.
Crude oil may be poised to fall further, based on technical indicators used by traders. The 30-day relative strength index climbed to 60.58 today. The last time it was near this level, at 60.90 on July 14, the oil price started a 22 percent drop from $145.18 a barrel to $112.87 on Aug. 18.
No Improvement
"We really haven't seen any improvement in demand," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "I just don't think the fundamentals of the oil market can support prices up around the early $60s."
U.S. refineries operated at 81.8 percent of capacity, down 1.9 percentage points from the prior week, the Energy Department report showed.
Flint Hills Resources LLC planned to restart a gasoline- making unit at the Corpus Christi, Texas, refinery yesterday after shutting down the unit a day earlier because of a fire.
Federal Reserve officials, while noting possible signs of "stabilization" in the U.S. economy, signaled they're not convinced those improvements will persist.
Policy makers saw "significant downside risks" to the economic outlook, with the global financial system still "vulnerable to further shocks," according to minutes released yesterday of the April 28-29 session.
Yesterday, oil rose $1.94, or 3.2 percent, to settle at $62.04 a barrel, the highest closing price since Nov. 10, after the U.S. Energy Department said crude stockpiles dropped by 2.11 million barrels to 368.5 million in the week ended May 15. A 400,000-barrel decrease was forecast, according to a Bloomberg News survey.
Gasoline supplies plunged 4.34 million barrels to 204 million. A 1.2 million-barrel drop was forecast, according to the median estimate of 15 analysts surveyed by Bloomberg News.
Brent crude for July settlement fell as much as $1.44, or 2.4 percent, to $59.15 a barrel on London's ICE Futures Europe exchange.
Oil Rises as Dollar Drop Spurs Investor Demand for Commodities
May 22 (Bloomberg) -- Crude oil rose in New York and was poised for an 8.9 percent gain this week as the dollar fell to a four-month low against the euro, drawing investors to crude as an inflation hedge.
Oil was also lifted by a report showing an index of leading U.S. economic indicators increased 1 percent April, raising expectations that fuel consumption will increase. The dollar declined on speculation the U.S. government's creditworthiness is weakening, sapping demand for the currency.
"Today it's the U.S. dollar movement and risk appetite at play," said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. "The market has got ahead of fundamentals, but as long as sentiment and risk appetite remain positive, prices might go higher."
Crude oil for July delivery rose as much as 77 cents, or 1.3 percent, to $61.82 a barrel in electronic trading on the New York Mercantile Exchange. It was at $61.71 a barrel at 11 a.m. in London.
Demand for commodities as an alternative investment increases as the dollar drops because oil and gold traditionally hold their value against the falling currency. The dollar fell to $1.3955 per euro as of 8:46 a.m. in London after reaching $1.3979, the lowest since Jan. 5. Crude prices were 80 percent correlated with the decline in the dollar against the euro since the beginning of the year, according to Bloomberg data.
'Start to Panic'
"You've still got some funds that are underweight oil and as the price rallies, they start to panic, and they buy in and push the price up even more," said Jonathan Kornafel, a director at options traders Hudson Capital Energy in Singapore.
The Organization of Petroleum Exporting Countries may keep output quotas unchanged for a second time this year as recovering oil prices reduce the need for new supply cuts, according to a Bloomberg survey. The group will maintain a production target of 24.845 million barrels a day when it meets May 28, according to 25 of 27 analysts surveyed. OPEC agreed last year to three production cuts to bolster prices.
"The global economy isn't very good right now, and that is not a situation for OPEC to cut production," said Ken Hasegawa, a commodity derivative sales manager at brokers Newedge in Tokyo. "They have to keep the levels at the moment."
Nigeria's oil production has fallen to less than half its capacity as fighting against rebels in the Niger River delta escalates.
Africa's Biggest Producer
The West African nation, formerly the continent's biggest producer, now pumps about 1.6 million barrels a day, compared with capacity of 3.2 million, Petroleum Minister of State Odein Ajumogobia said yesterday.
Brent crude for July settlement rose as much as 82 cents, or 1.4 percent, to $60.75 a barrel on London's ICE Futures Europe exchange. It was at $60.49 a barrel at 11 a.m. in London.
Crude oil futures may decline as the global economic contraction reduces fuel demand in the U.S., Europe and Japan.
Fifteen of 36 analysts surveyed by Bloomberg News, or 42 percent, said futures will fall through May 29. Fourteen respondents, or 39 percent, forecast that oil prices will rise and seven said the market will be little changed. Last week, 60 percent of analysts said prices would decline.
If I remember correctly, Canada is not an OPEC country.I know you said we get as much Canadian oil as will fit in the pipes. I wonder how that affects our oil prices when mixed into the averages? Do they set their own prices separately or just do what ever OPEC does?
Canada is our most stable and secure supply. The Canadian Crudes are priced in various ways but mainly like all crudes it is based of off Nymex pricing, less agreed Quality and Location differentials .
Thanks! I always learn good things from you. :)
Don't we all, Diane! I see that with Memorial Day here the price of gas has gone up as usual. It is all supply and demand, I guess. OR, the oil companys don't anticipate that there might be an increase in usage of gasoline as there is every year. My suggestion to them is to get the money while you can before someone figures out an alternative source of power, OR, get with the program and develop their own alternate source of power. I wonder if the oil companys actually are already doing that research in a big way OR just relying on the consumers to keep on keeping on. OR, both?
Larryj
Post Script: When the newspaper industry began to see the light behind the internet providing the daily news, they wisely chose to continue printing a paper and at the same time establishing their own internet sites. While they didn't recover all the lost advertising, they didn't lose as much.
Larry the Major Oil Companys all have big research labs and ConocoPhillips has setup a special research Lab in Colorado with a select group researching alternate energy possibilities. ConocoPhillips just last week announced they would be adding 30 New Alternate Energy Research Scientists to the Main research Center which is here in Bartllesville. By the way, contrary to public opinion the Major Oil Companys do not set or control the price of Crude oil. Also as far as the service stations prices, ConocoPhillips does not own any service stations and the Margins and pricing is basically set by the Operators.
Yeah, I know. Just wanted to complain about something. Back in the dark ages when I was a senior in high school I worked in a Conoco (before Conoco-Philips) gas station. My boss was a good guy, an alcoholic, but a good guy. I had my own green and white striped uniforms complete with hat. The boss insisted that I come to work in a clean uniform so my mom was going nuts trying to keep up with the laundry. Those were the days that the gas was put in, the oil and tire pressure checked, and all the windows cleaned. When I wasn't gassing up cars I was washing them or changing the oil in them. Good memories there, too.
Larryj
July (Front Month) Crude is trading at $60.35, down $1.32 this A.M.
Oil Falls on Concern OPEC May Maintain Output as Demand Slows
May 26 (Bloomberg) -- Crude oil fell to the lowest in a week on speculation that OPEC will maintain production targets this week even as the global recession curbs fuel demand.
OPEC is unlikely to change output quotas at its May 28 meeting, and talk of overly high inventories is exaggerated, said a Persian Gulf oil official with knowledge of the matter. German exports and company spending plunged in the first quarter, dragging Europe's largest economy into its deepest slump on record.
"The fundamental situation is very weak; demand in the U.S. is just collapsing," Eliane Tanner, an analyst at Credit Suisse Group AG said in a television interview from Zurich. "The market is already pricing in a no-change scenario" with regard to OPEC.
Crude oil for July delivery fell as much as $2.14, or 3.5 percent, to $59.53 a barrel on the New York Mercantile Exchange, and was at $59.85 at 11:50 a.m. in London. The exchange will combine yesterday and today's trading for settlement purposes because U.S. floor trading was shut yesterday for Memorial Day.
The dollar rose against the euro for the first time in seven days after Britain's Telegraph newspaper cited a German banking regulator as saying debt at the nation's biggest lenders may increase. A stronger dollar limits investors' need for assets to hedge against inflation such as commodities.
The euro declined to $1.3888 as of 11:28 a.m. in London, from $1.4017 yesterday in New York.
Bearish Expectation
Crude oil inventories held by the 28 nations advised by the International Energy Agency rose to 62 days of demand in the first quarter, according to the agency's report on May 13. That is up from 54 days in the year-earlier period and from 58 days in the fourth quarter of 2008.
"The expectation that OPEC won't change its output quotas can be viewed as bearish because inventories are indeed high," said Victor Shum, a senior principal at oil industry consultants Purvin & Gertz Inc. in Singapore. "Most traders do feel that the fundamentals aren't supportive of the current level of pricing. That's adding to the downward pressure."
Still, charts suggest prices may resume their rally. Oil in New York may rise to $77 a barrel in coming months as futures contracts "correct" the decline from a record $147.27 in July, according to technical analysis from MF Global.
Oil may first climb to $71.75 a barrel, the level reached on Nov. 4, P.A. Rajan, a Singapore-based technical analyst at MF Global, said in a telephone interview yesterday. Crude could reach $77, near the so-called Fibonacci retracement of 38.2 percent of oil's decline from the July record.
Unsustainable Rally
"An overhang of inventories built up at sea and continuously poor economic data encourages selling because the rally looks unsustainable," said Harry Tchilinguirian, BNP Paribas's senior oil-market analyst in London.
Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, wants the group to "stay the course" when it reviews quotas at this week's meeting, Oil Minister Ali al-Naimi said on May 24. Saudi Arabia is producing more crude than its OPEC quota, according to data from the Joint Oil Data Initiative, citing figures submitted by the country.
OPEC, responsible for 40 percent of global crude supply, is likely to keep output quotas unchanged for a second time this year as recovering oil prices forestall the need for new cuts, according to a Bloomberg survey published on May 22.
At the last summit on March 15, the group decided to leave quotas unchanged and adhere to its commitment to restrict supply.
Brent crude for July settlement fell as much as $1.80, or 3 percent, to $58.41 a barrel and was at $58.90 a barrel at 11:30 a.m. on London's ICE Futures Europe exchange.
Oil Rises Above $63 on Gasoline Supply Forecast, Naimi Comments
By Grant Smith and Christian Schmollinger
May 27 (Bloomberg) -- Crude oil rose to a six-month high above $63 a barrel as the Saudi minister said demand has has started to recover.
A report tomorrow is forecast to show U.S. gasoline supplies fell a fifth week amid growing optimism the worst of the recession is over. Crude rose above its 200-day moving average for the first time since September, a sign that prices may rally further.
"It looks like we won't see any significant deterioration in demand anymore, hence OPEC is bullish," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "But, we still need to see improving gasoline demand in the U.S."
Crude oil for July delivery rose as much as $1, or 1.6 percent, to $63.45 a barrel in electronic trading on the New York Mercantile Exchange. That's the highest since Nov. 13. Oil was at $63.21 at 11:30 a.m. in London.
The U.S. Conference Board's sentiment index surged to 54.9, more than forecast and the biggest increase since 2003, the New York-based research group said yesterday.
OPEC, responsible for 40 percent of global crude supply, is likely to keep output quotas unchanged for a second time this year as recovering oil prices forestall the need for new cuts, according to a Bloomberg survey published on May 22.
The Organization of Petroleum Exporting Countries has "no need" to cut production because there are signs of a recovery in demand, Saudi Arabian Oil Minister Ali al-Naimi told reporters today in Vienna, where the group meets tomorrow.
Meeting Tomorrow
Saudi Arabia is the biggest and most influential member of OPEC. The producer group is likely to keep daily output quotas unchanged at 24.845 million barrels when it meets tomorrow, according to a Bloomberg News survey of 27 analysts.
"If they do keep production at current levels then it should push oil back down, at least below $60," said Mike Sander, an investment adviser at Sander Capital Advisors Inc. in Seattle.
U.S. gasoline inventories probably fell for a fifth week as fuel deliveries rose to meet holiday demand and refinery operations slowed, a Bloomberg News survey showed.
U.S. crude oil supplies probably rose 50,000 barrels in the week ended May 22 from 368.5 million the previous week, according to the median of 10 estimates by analysts before an Energy Department report tomorrow.
Total U.S. daily fuel consumption averaged 18.3 million barrels in the four weeks ended May 15, down 7.6 percent from a year earlier, the department said last week.
Crude Stockpiles
Crude oil stockpiles held by the 28 nations advised by the International Energy Agency rose to 62 days of demand in the first quarter, according to the agency's report earlier this month. That is up from 54 days in the year-earlier period and 58 days in the fourth quarter of 2008.
Stockpiles of gasoline probably dropped 1.65 million barrels from 204 million the prior week, according to the median of 10 estimates by analysts. Wholesalers and retailers increase motor fuel deliveries before the summer, when Americans take to the highways for vacations.
Brent crude for July settlement rose as much as $1.05, or 1.7 percent, to $62.29 a barrel on London's ICE Futures Europe exchange. It was at $62.05 a barrel at 11:30 a.m. London time. Yesterday it gained $1.03, or 1.7 percent, to end at $61.24 a barrel, the highest settlement since Nov. 5.
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OPEC Keeps Production Unchanged, Sees Demand Recovery (Update1)
By Ayesha Daya and Fred Pals
May 28 (Bloomberg) -- OPEC decided to keep production quotas unchanged at today's meeting in Vienna, banking on a recovery in oil demand toward the end of the year.
The Organization of Petroleum Exporting Countries, responsible for 40 percent of global crude supply, agreed to maintain production quotas, Saudi Oil Minister Ali al-Naimi said. It's the second time this year the 12-member group has met without revising that total.
OPEC's resolve not to cut further comes even as U.S. inventories reached their highest level in two decades earlier this month and after a forecast from the International Energy Agency that global demand is falling the most since 1981.
Crude oil for July delivery traded up 1 cents at $63.46 a barrel on the New York Mercantile Exchange at 11:20 a.m. London time. Prices have gained 36 percent since the group's last meeting in March.
OPEC's choice not to cut further may have been influenced by its failure to complete previous reductions that came into effect at the start of the year.
The 11 nations bound by quotas, which exclude Iraq, pumped 25.81 million barrels a day in April, an increase of about 225,000 from March and the first increase in nine months, according to OPEC's latest monthly report. The countries have a total target of 24.845 million barrels. That means the group has completed 77 percent of its cuts, down from a revised 82 percent for March.
The outcome of today's gathering is in keeping with a Bloomberg survey, in which 25 of 27 analysts said they expected existing quotas to be upheld.
Oil Heads for Biggest Monthly Gain Since 1999 as Asia Rebounds
By Grant Smith and Ann Koh
May 29 (Bloomberg) -- Oil headed for its biggest monthly gain in a decade as economic indicators from Asia and shrinking crude inventories in the U.S. pointed to a global recovery.
Oil rose to a six-month high above $66 a barrel after India's economy grew more than expected in the last quarter, while Japan said today that its industrial output climbed the most in at least six years in April. The Organization of Petroleum Exporting Countries predicted stronger demand as it decided yesterday to keep output quotas unchanged.
"While the real economy remains in the deepest part of the recession, people see some hope of things getter better," said Gerrit Zambo, an oil trader at BayernLB in Munich. "Money from financial investors who don't want to miss these low prices is coming back into the oil market."
Crude oil for July delivery rose as much as $1.09, or 1.7 percent, to $66.17 a barrel on the New York Mercantile Exchange. That's the highest since Nov. 10. It was at $66.16 at 11:58 a.m. in London. Oil has advanced 29 percent in May, the biggest monthly increase since March 1999, when Asia was recovering from the 1997-1998 financial crisis.
U.S. crude inventories declined 5.41 million barrels to 363.1 million last week, the Energy Department said yesterday. It was the biggest drop since September, when hurricanes hit the Gulf of Mexico coast. Analysts expected a drop of 150,000 barrels, according to the median estimate of 12 analysts surveyed by Bloomberg News.
Fragile Fundamentals
The decline left inventories 27 percent higher than the five-year average, up from a 23 percent surplus a week earlier. Stockpiles were the highest since 1990 in the week ended May 1.
"Oil market fundamentals still remain relatively fragile, notwithstanding the gains in the oil price," said David Moore, a Sydney-based strategist at Commonwealth Bank of Australia.
Refineries operated at 85.1 percent of capacity, up 3.3 percentage points from the previous week, the biggest gain since October, the report showed. Gasoline stockpiles dropped 537,000 barrels to 203.4 million, the lowest since the week ended Dec. 5, according to the report.
Saudi Arabian Oil Minister Ali al-Naimi said OPEC opted not to alter its output targets because "prices are good, the market is in good shape."
Oil's rally is driven by improving sentiment about the global economy and isn't supported by demand, OPEC Secretary General Abdalla el-Badri said today.
Global crude stockpiles remain very high, El-Badri told reporters at a briefing in Vienna. Still, prices may reach $70 to $75 a barrel by the end of the year, partly because speculators are returning to commodity markets, he said.
Asia Recovery
Japan's factory production climbed 5.2 percent from March, when it gained 1.6 percent, the Trade Ministry said today in Tokyo. The increase was faster than the 3.3 percent expected by economists. Companies said they planned to increase output in May and June as well, the report showed.
India, Asia's third-largest economy, expanded 5.8 percent in the three months to March 31, led by government spending and construction, the statistics office in New Delhi said today. Economists were expecting a 5 percent increase.
Brent crude for July settlement was $1.04 higher at $65.43 a barrel on London's ICE Futures Europe exchange at 11:58 a.m. London time.
Thanks again.
Oil Rises to Seven-Month High on China Manufacturing Expansion
By Grant Smith and Ben Sharples
June 1 (Bloomberg) -- Crude oil rose to the highest since November as China's manufacturing expanded for a third month, signaling that fuel demand in the world's second-biggest energy consumer will increase.
Oil climbed as much as 1.8 percent after the U.S. dollar fell to its lowest against the euro since December, heightening the need for commodities to hedge against inflation. China increased prices of gasoline and diesel by as much as 8 percent, a move that may prompt refiners to boost crude purchases.
"All the attention is on the weaker dollar and macroeconomic sentiment," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "The market has advanced a long way on flimsy fundamentals and may pause for breath or see a setback now."
Crude oil for July delivery rose as much as $1.98, or 3 percent, to $68.29 a barrel on the New York Mercantile Exchange. That's the highest since Nov. 10. The contract traded at $67.90 at 9:49 a.m. London time.
Crude had its biggest monthly gain in a decade in May, surging 30 percent, after OPEC left output unchanged on signs the global economy is recovering and fuel demand will increase.
Manufacturers preparing for an economic rebound are rebuilding inventories of everything from benzene to plywood, sparking a commodities rally that Goldman Sachs Group Inc. says will produce 19 percent returns in a year.
The Journal of Commerce index that tracks prices of 18 industrial materials gained 9.5 percent in May, the most in a month since the measure began in 1985.
Alternative Investments
Oil climbed last week as the dollar fell beyond $1.41 against the euro for the first time this year, making raw materials such as oil and gold attractive alternative investments.
China is raising prices for the second time this year, allowing the nation's refiners to pass on climbing crude oil costs. China Petroleum & Chemical Corp., the nation's biggest refiner, said on May 22 it will lose money turning oil into fuels should crude trade above $60 a barrel and the government prevent it from increasing prices.
"The big moves upwards coincided with a sharp decline in the dollar," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "Commodities across the board have been boosted by the dollar."
The dollar last traded at $1.4237 per euro, having weakened 6.3 percent in May, the biggest drop since December's 9.2 percent decline. The dollar traded at $1.4146 per euro from $1.4158.
Naimi Speaks
Saudi Arabian Oil Minister Ali al-Naimi said last week that the Organization of Petroleum Exporting Countries opted not to alter its output targets because "prices are good, the market is in good shape."
Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended May 26, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 40,122 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report on May 29. Net-long positions gained by 4,885 contracts, or 14 percent, from a week earlier.
Brent crude for July settlement rose as much as $2.17, or 3.3 percent, to $67.69 a barrel on London's ICE Futures Europe exchange, and traded at $67.23 a barrel at 9:50 a.m. London time.
Oil Falls From Seven-Month High on Signs OPEC Output Climbing
June 2 (Bloomberg) -- Crude oil retreated from a seven- month high in New York on signs OPEC's output is climbing and as traders who bet on rising prices sold futures to lock in gains.
Oil fell for the first time in seven days after the Organization of Petroleum Exporting Countries raised production by 1.5 percent in May, according to a Bloomberg News survey. The U.S. Energy Department will publish its weekly supply report tomorrow. Crude jumped as much as 3.6 percent yesterday after the U.S. and China reported increases in manufacturing activity.
"The market has hit resistance after getting well ahead of fundamentals," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "OPEC compliance is a concern. For now we expect the rally to slow down before the next set of U.S. inventory data."
Crude oil for July delivery fell as much as 99 cents, or 1.4 percent, to $67.59 a barrel on the New York Mercantile Exchange. It was at $67.85 a barrel at 10:57 a.m. London time. Yesterday, oil closed at $68.58 a barrel, the highest settlement since Nov. 4. Prices are up 52 percent this year.
Futures climbed yesterday on expectation that fuel demand will increase as the economy improves later this year. The Institute for Supply Management's U.S. factory index rose to 42.8 from 40.1 in April and China's Purchasing Manager's Index showed manufacturing in May gained for a third month.
The global oversupply of crude oil will clear by the end of the year as an economic recovery spurs demand, said OPEC Director of Energy Research Hasan Qabazard.
Excess Oil
There are more than 200 million barrels of excess oil in the market in addition to 130 million barrels held on tankers at sea, Qabazard said today at a conference in Abu Dhabi. This "overhang" of oil is above the five-year average, he said.
Economists expected the ISM's U.S. manufacturing index to climb to 42.3, according to the median of responses in a Bloomberg News survey. Readings of less than 50 on the Tempe, Arizona-based group's gauge, signal a contraction.
The U.S. and China are the biggest oil-consuming countries, responsible for 33 percent of global demand in 2007, according to BP Plc, which publishes its BP Annual Statistical Review of World Energy each June.
OPEC's oil production averaged 28.15 million barrels a day last month, up 405,000 barrels a day from April, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 25.76 million barrels a day, 915,000 more than their target.
U.S. Stockpiles
U.S. crude-oil stockpiles probably dropped 1.75 million barrels in the week ended May 29 from 363.1 million the previous week, according to the median of eight estimates by analysts before an Energy Department report this week. Inventories are likely to have fallen as refiners increased operations to meet demand during the summer driving season.
Refineries probably operated at 85.5 percent of capacity last week, up 0.4 percentage point from the previous week, according to the median of responses in the survey. Plant rates climbed 3.3 percentage points in the week ended May 22, the biggest gain since October, according to the Energy Department. Operating rates increased during the last week in May in every year but one since 2000.
Brent crude for July settlement fell as much as 92 cents, or 1.4 percent, to $67.05 a barrel and was at $67.26 on London's ICE Futures Europe exchange at 10:30 a.m. London time.
Oil Falls as Dollar Gains, Reducing Hedge Appeal of Commodities
By Grant Smith
June 3 (Bloomberg) -- Crude oil fell in New York as the dollar strengthened from a five-month low versus the euro, limiting the need for alternative investments to hedge against inflation.
A government report later today will probably show U.S. crude-oil stockpiles dropped 1.5 million barrels last week, according to a Bloomberg survey. Gasoline consumption in the U.S. rose 2.2 percent last week from a year ago as cheaper fuel encouraged more driving during the Memorial Day holiday, a MasterCard Inc. report showed.
"We're seeing the very first signs of the oversupply easing, but there's still a large overhang out there," said Andy Sommer, analyst at Elektrizitaets-Ges Laufenburg AG in Dietikon, Switzerland. "The fundamentals don't support the recent rally, it's driven by macro sentiment and dollar moves."
Crude oil for July delivery fell as much as 72 cents, or 1.1 percent, to $67.83 a barrel on the New York Mercantile Exchange. It traded for $67.92 at 12:15 p.m. London time. Futures reached $69.05 a barrel yesterday, the highest since Nov. 5. Prices are up 54 percent this year.
The dollar snapped three days of losses against the euro. The U.S. currency was at $1.4222 per euro today after falling as low as $1.4339 earlier, the weakest level since Dec. 29.
U.S. motorists bought an average 9.244 million barrels of gasoline a day in the week ended May 29, up from 9.043 million the prior year, MasterCard, the second-biggest credit-card company, said in a SpendingPulse report yesterday.
U.S. crude-oil stockpiles fell 1.5 million barrels from 363.1 million the previous week in the week ended May 29, according to the median of 15 estimates by analysts before an Energy Department report tomorrow. Inventories are likely to have fallen as refiners increased operations to meet demand during the summer driving season.
The industry-funded American Petroleum Institute said yesterday that U.S. crude oil stockpiles fell 828,000 barrels to 363.9 million last week.
"The oil price wouldn't be where it is if people didn't have a view that the international economic situation has improved somewhat," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. "The API data showed a moderate fall in supplies and that's helpful for prices."
Stockpiles of gasoline probably rose 650,000 barrels from 203.4 million the prior week, according to the survey. Supplies of distillate fuel, a category that includes diesel and heating oil, increased 900,000 barrels from 148.4 million.
Brent crude for July was at $67.88 a barrel, 29 cents lower on London's ICE Futures Europe exchange at 11:37 a.m. local time.
Crude Oil Climbs as Goldman Forecasts Rally to $85 by Year End
By Grant Smith
June 4 (Bloomberg) -- Crude oil rose after Goldman Sachs Group Inc. said prices may reach $85 by the end of the year and extend gains in 2010 as demand recovers and supplies shrink.
The New York-based bank raised its year-end forecast from $65 a barrel and withdrew its prediction that prices will dip prior to a rally. Yesterday, crude declined after a U.S. government report showed fuel demand fell the most since January last week as rising prices and the recession hurt consumers.
"Partly today's gains are due to the higher prediction from Goldman Sachs," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. "There's a lot of optimism priced in. But demand is in a very fragile position, and I expect there will be considerable correction."
Crude oil for July delivery gained as much as $1.26, or 1.9 percent, to $67.38 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $67.19 as of 11:54 a.m. London time. Oil reached a seven-month high of $69.05 on June 2.
"As the financial crisis eases, an energy shortage lies ahead," Goldman analysts Jeffrey Currie in London and David Greely in New York wrote in a research report e-mailed today. The bank set a 12-month price target of $90 a barrel, up from $70, and introduced a forecast of $95 for the end of 2010.
Fuel demand in the U.S., the world's largest energy user, fell 900,000 barrels to 17.7 million barrels a day last week, the biggest drop since Jan. 9, the government report showed. Gasoline consumption slipped 518,000 barrels to 9.02 million, the biggest decline since January 2005.
Crude Inventories
Crude inventories climbed 2.9 million barrels to 366 million in the week ended May 29, according to the Energy Department. The gain occurred as imports jumped 9.9 percent and refineries increased operating rates to the highest in six months. Fuel demand fell to the lowest since May 1999.
The Energy Department report was forecast to show that crude-oil stockpiles lost 1.5 million barrels, according to the median of 15 estimates from analysts surveyed by Bloomberg News.
Refineries operated at 86.3 percent of capacity, up 1.2 percentage points from the previous week and the highest since the week ended Dec. 5, the report showed.
Brent crude for July delivery was at $67.17 a barrel, up $1.29, on London's ICE Futures Europe exchange at 11:56 a.m. local time. It dropped $2.29, or 3.4 percent, to end yesterday's session at $65.88, the biggest decline since April 20.
Crude Oil May Fall as U.S. Fuel Demand Declines, Survey Shows
June 5 (Bloomberg) -- Crude oil futures may fall from a seven-month high on speculation U.S. stockpiles will increase as consumption tumbles.
Twenty-three of 34 analysts surveyed by Bloomberg News, or 68 percent, said futures will fall through June 12. It's the most bearish response since February 2008. Seven respondents, or 21 percent, forecast that oil prices will rise and four said the market will be little changed. Last week, 50 percent of analysts said prices would decline.
Crude-oil supplies climbed 2.9 million barrels to 366 million last week, according to an Energy Department report on June 3. The gain occurred as imports jumped 9.9 percent and refineries increased operating rates to the highest in six months. Fuel demand fell 900,000 barrels to 17.7 million barrels a day last week, the lowest since May 1999.
Prices jumped 54 percent this year as the stock market rebounded and the dollar weakened. A falling U.S. currency bolsters the appeal of commodities as an alternative investment.
"I really think you are going to see a reconsideration of this move higher," said Tim Evans, an energy analyst with Citi Futures Perspective in New York. "It's probably not wise to load up on futures at these price levels given the supply and demand picture. The flow of buying may soon be exhausted."
Crude oil for July delivery rose $2.50, or 3.8 percent, to $68.81 a barrel so far this week on the New York Mercantile Exchange. Yesterday's settlement was the highest since Nov. 4. Prices have dropped 53 percent from the record $147.27 a barrel reached on July 11.
The oil survey has correctly predicted the direction of futures 47 percent of the time since its start in April 2004.
its getting rediculous that price of gas is rising overnight again now at 2.50 a gallon when consumption declines. Their trying to squeeze blood out of us when were dry as a bone.
ALl this "conservation" bru haha that they have been ranting about all these years makes no difference, all it does is raise the prices.
Oil Follows Equities Lower as Stronger Dollar Limits Hedging
June 8 (Bloomberg) -- Crude oil fell for a second day, tracking a decline in European and Asian equity markets, while a stronger dollar reduced the investment appeal of commodities.
Oil declined as the U.S. currency strengthened against the euro for a second day to its highest in more than a week. The stronger currency undermines demand for dollar-priced assets such as oil used to hedge against inflation. The relative strength index for crude rose to 67.41 today from 51.12 at the end of April, indicating prices may be poised to fall.
"The rally has stalled after Brent failed to break $70 a barrel," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "While the worst is behind us economically, we shouldn't be too optimistic as the demand recovery will take some time."
Crude oil for July delivery fell as much as $1.66, or 2.4 percent, to $66.78 a barrel on the New York Mercantile Exchange. It was at $67.44 at 11:41 a.m. in London. Oil jumped 38 percent in the past two months and 51 percent this year as rising equity markets lifted investor confidence and the falling U.S. dollar boosted interest in oil, metals and other commodities.
Oil futures touched a seven-month high of $70.32 on June 5 after the Labor Department's May report showed the fewest job losses in eight months. Crude is poised for a "spike" amid a lack of new investments, Jeroen van der Veer, chief executive officer of Royal Dutch Shell Plc, said today.
Readings above 70 on the relative strength index, which show how rapidly prices have advanced or dropped during a specified time period, indicate prices may be poised to fall. Readings below 30 indicate it may be poised to rise.
The dollar strengthened to $1.3874 per euro as of 9:50 a.m. in London from $1.3968 in New York at the end of last week.
'Significant Implications'
"The dollar's rally has pretty significant implications or consequences for the commodity sector overall," said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. Inventories remain high, and "it's not surprising to see oil off a little today," he said.
Stocks fell in Europe and Asia amid speculation that share prices have outpaced the prospects for earnings growth after a three-month rally. Europe's Dow Jones Stoxx 600 Index slipped 1.2 percent at 11:20 a.m. in London. U.S. futures slid.
Brent crude for July delivery declined as much as $1.46, or 2.1 percent, to $66.88 a barrel on London's ICE Futures Europe exchange and was at $67.40 at 11:41 a.m. local time.
Kirkuk Output
Oil was also hurt by increasing output, adding to stockpiles. Daily production from the Kirkuk region of Iraq, OPEC's third-largest producer, climbed 16 percent to 670,000 barrels on new wells and improved security, news agency Aswat al-Iraq reported yesterday.
Crude oil prices may average $65 a barrel by the end of 2009 as the global economy begins to rebound, according to Lawrence Eagles, global head of commodities research at JPMorgan Chase & Co.
Based on a study of consumption patterns over the past 15 years, demand could climb as much as 3 million barrels a day through December under the best-case scenario, Eagles told reporters at the Asia Oil and Gas Conference in Kuala Lumpur today.
Natural Gas Cheapest to Oil Since 1992 Signals Gain (Update1)
By Margot Habiby
June 8 (Bloomberg) -- This year's 31 percent decline in natural gas made it the worst performing commodity and the cheapest next to oil since the fall of the Soviet Union. That's about to change, if history is any guide.
Natural gas lost 72 percent in 11 months as the U.S. fell into the deepest recession in 50 years and drillers failed to idle rigs fast enough to control inventories. Stockpiles are 22 percent larger than the five-year average, the Energy Department said. Oil costs 18 times more than gas, the biggest gap since 1992, when the collapse of communism cut supplies from Russia, according to data compiled by Bloomberg.
Now, gas drillers are tightening their grip on production just as the economy shows signs of improving. The number of U.S. rigs plunged 56 percent in nine months, the steepest drop in two decades, Baker Hughes Inc. said. Gas may rise 38 percent in the second half, while oil will gain 22 percent, according to Bloomberg analyst surveys.
"The scope for gas to rally before the end of the year is bigger than for oil," said Ben P. Dell, an energy analyst with Bernstein Research in New York. "The gas market is playing out as expected. Supplies are getting drastically reduced because of falling rig counts, and demand is showing some signs of stabilization."
Gas for July delivery was trading at $3.858 per million British thermal units, down 0.3 percent, on the New York Mercantile Exchange at 12:24 p.m. in Singapore. It closed at $3.868 on June 5, its 31 percent drop this year the most in the 24-member S&P GSCI Commodity Index.
Oil vs. Gas
Futures may rise this week, a Bloomberg News survey of 16 analysts showed. Oil cost 8.4 times more than gas on average during the past decade, according to data compiled by Bloomberg.
Prices are likely to climb to an average $6.50 per million Btu in the fourth quarter from an average $3.90 in the second, Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt, forecast last month. The price has averaged $3.766 so far this quarter and is up 10 percent in two weeks.
The number of U.S. gas rigs declined to 700 last week, the lowest since 2002, according to Houston-based Baker Hughes, the world's third-largest oilfield-services supplier.
OPEC's decision to cut production by 3.46 million barrels a day, or about 12 percent, helped crude rally 54 percent this year, to $68.44 a barrel on June 5 in New York.
The Organization of Petroleum Exporting Countries pumped close to capacity as the economy expanded and crude almost tripled between January 2007 and July 2008 to a record $147.27 on July 11. Natural gas followed, more than doubling to a 2008 high of $13.694 per million Btu on July 2.
Collapsing Demand
As the economy slowed, demand from factories and power plants, the users of 58 percent of all natural gas, declined. By April, prices touched a six-year low of $3.155.
"Fundamentals are holding gas down, and crude oil is trading less on fundamentals and more on consumer sentiment and perception," said Steven Schork, president of Schork Group Inc. of Villanova, Pennsylvania, an energy-trading consultant. "We have a disconnect between the two, and there is no expectation in the near term to see these two re-link."
Dell at Bernstein Research said gas needs to reach $7.50 to spur enough production to meet demand, known in the industry as the marginal cost of supply. He forecasts gas will more than double to $9 to $10 by the end of the year, while oil will rise to $70 or $80 a barrel from $68.44 as of June 5.
If he proves right, a speculator who bought 10 gas contracts and sold an equal number of crude futures would earn a return of about 46 percent.
Price Ratios
Dell's fourth-quarter gas price would lower the ratio to about 8-to-1. The median estimate of analysts in the Bloomberg survey for $5.50 represents 11-to-1, based on the fourth-quarter forecasts at $61 a barrel.
Oil reached 18.1 times the price of gas on June 4, the highest since January 1992. The ratio fell to 8-to-1 by September that year as Hurricane Andrew halted daily output of 13 billion cubic feet of gas and the economy recovered from a recession.
Bill O'Grady, the chief markets strategist at St. Louis- based Confluence Investment Management LLC, an investment advisory and management firm, said the ratio may reach 20 to 1 or greater as natural gas inventories increase as do risks to oil supplies. Oil production in Nigeria, Africa's biggest producer, fell to less than half the country's capacity last month as fighting escalated in the Niger River delta.
"We have made tremendous strides in improving" the gas supply situation, he said. "When the technology improved to the point where you can capture shale gas, we found out we've got all kinds of supply here in the Lower 48."
Gas Shales
Gas producers started tapping so-called shale gas formations after technology to exploit the reserves was perfected in the 1990s. Gas in shale deposits is locked into nonporous rocks. Gas found in more traditional locations is often under enough pressure to rise to the surface on its own.
While home resale data and forecasts for a strengthening gross domestic product show the economy is stabilizing from the recession that started in December 2007, it's premature to say the contraction is over, according to the National Bureau of Economic Research, which calls the nation's financial cycles.
Gross domestic product estimated on a monthly basis "had a trough earlier this year, but it is way too early to say that it is a true trough rather than a pause in a longer decline," said Robert Hall, who heads the NBER's Business Cycle Dating Committee.
Economists expect the economy to grow 0.5 percent in the next quarter and then expand further, according to 61 responses to a Bloomberg News survey.
Houston-based ConocoPhillips, the third-largest U.S. oil company, expects natural gas will rise to $6 to $8 as early as next year as demand recovers, said John Wright, president for gas and power marketing.
"I don't think the levels that we're at now will provide the supply needed to meet demand, and that says prices will go up from here," he said in a June 4 interview in Houston.
Oil Rises for the First Time in Three Days on Demand Optimism
By Grant Smith
June 9 (Bloomberg) -- Crude oil rose for the first time in three days on growing optimism that the world economy is emerging from recession and fuel demand is set to recover.
The U.S. Energy Department will probably say in a report tomorrow that refiners boosted operating rates to meet summer consumption, according to a Bloomberg survey. Chinese vehicle sales surged 34 percent last month, reinforcing speculation that the global recession is ending.
"Lately both the oil price and the dollar have been signaling that the recovery is around the corner," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. "European equity markets trading in positive territory, a weaker dollar and the upbeat economic outlook are keeping us near the $70 target."
Crude oil for July delivery gained as much as $1.28, or 1.9 percent, to $69.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $68.70 at 10:44 a.m. in London. Prices have gained 55 percent this year and touched a seven-month high of $70.32 on June 5.
Europe's Dow Jones Stoxx 600 Index of equities added 0.6 percent at 10:30 a.m. in London. The dollar fell against the euro, spurring demand for commodities priced in the U.S. currency that can be used to hedge against inflation.
The dollar fell in the past three months against all of the 16 most-traded currencies tracked by Bloomberg except the yen on speculation the Fed's purchase of up to $300 billion in Treasuries to support the economy will undermine currency. The dollar traded at $1.3907 per euro as of 10:29 a.m. in London.
'Behind the Wheel'
"Depending on which way the dollar moves, we'll find out if the bulls are still behind the wheel or if they've finally been thrown under them," Stephen Schork of the Pennsylvania- based Schork Group Inc. said in a report today.
Chinese drivers bought 1.12 million vehicles last month, the China Association of Automobile Manufacturers said in a statement today, extending the country's lead over the U.S. as the world's largest auto market this year.
The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
Gasoline supplies probably rose 1.15 million barrels in the week ended June 5 from 203.2 million the previous week, the survey showed. Stockpiles of distillate fuel, a category that includes heating oil and diesel, probably increased 1.05 million barrels from 150 million.
Analysts were split over whether crude-oil stockpiles rose or declined last week. Supplies were probably unchanged at 366 million barrels, according to the median of eight respondents in a Bloomberg News survey. Four analysts forecast a decline and four said there was an increase.
"Demand remains quite weak," Commerzbank's Weinberg added. "We remain skeptical on the prospects of oil trading already so high in this early stage of a possible economic recovery."
Brent crude for July delivery rose as much as $1.29, or 1.9 percent, to $69.17 a barrel on London's ICE Futures Europe exchange. It was at $68.74 at 10:21 a.m. London time. Futures touched $69.91 on June 5, the highest since Oct. 21.
Last Updated: June 9, 2009 05:46 ED
Crude Oil Rises Over $71 on API Stockpile Drop, Weaker Dollar
By Grant Smith
June 10 (Bloomberg) -- Crude oil rose to a seven-month high after an industry group reported U.S. stockpiles dropped and the dollar weakened against the euro, bolstering the appeal of energy as an alternative investment.
Crude climbed past $71 a barrel on expectations the dollar may extend its decline as investors turn from treasuries to other asset classes including commodities. Yesterday, the American Petroleum Institute said crude oil supplies fell 5.96 million barrels to 357.9 million last week, the lowest since March. The Department of Energy will report their data today.
"Sentiment for oil is buoyant," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "Investors are seeing more green shoots as macro data gradually improves, and with the weaker dollar stoking long-term concerns about inflation they're opting for commodities."
Crude oil for July delivery rose as much as $1.64, or 2.3 percent, to $71.65 a barrel in electronic trading on the New York Mercantile Exchange, the highest since Nov. 4. It was at $71.06 a barrel at 11:24 a.m. London time.
Oil peaked at $147.27 a barrel on July 11 before slumping to $32.40 on Dec. 19 as the global recession curbed energy use.
The Organization of Petroleum Exporting Countries will only consider increasing output when the price of crude rises to $100 a barrel, according to Kuwaiti Oil Minister Sheikh Ahmed al- Abdullah al-Sabah. OPEC, supplier of 40 percent of the world's oil, is next due to meet on Sept. 9.
Dollar Weakness
The euro may gain for a second day today after Goldman Sachs Group Inc. recommended clients buy the currency. The dollar traded 0.3 percent lower at $1.4027 against the euro at 11:24 a.m. in London.
"The oil market is rallying due to weakness in the dollar and more liquidity in the marketplace," said Mike Sander, an investment adviser at Sander Capital Advisors Inc. in Seattle. "There is clearly more money moving into the commodities markets with the sharp rises in agriculture, softs, metals, and energy."
The U.S. Energy Department will probably report today that refiners boosted operating rates to meet summer gasoline demand, according to a Bloomberg News survey.
Refineries probably operated at 86.5 percent of capacity in the week ended June 5, up 0.2 percentage point from the previous week, according to the median of 13 analyst responses.
"There are signs that the refineries are starting to tweak up capacity and that means stronger demand for gasoline," said Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne, in a Bloomberg Television interview. "You're seeing a very preemptive market that is buying on any sort of positive news."
'Killing Zone'
Gasoline supplies probably increased 750,000 barrels, the first gain in seven weeks, according to the survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, probably climbed 1.5 million barrels.
"It's really a killing zone on fundamentals for oil." Johannes Benigni, chief executive officer of JBC Energy GmbH in Vienna, said in a Bloomberg Television interview. "On the gasoline front demand is not picking up. Refinery margins are horrifying. In July, we would see potential to go close to $50 or even slightly below $50."
Analysts surveyed by Bloomberg News were split over whether crude-oil stockpiles rose or declined last week. The Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Oil-supply totals from the API and DOE moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.
Brent crude for July delivery rose as much as $1.38, or 2 percent, to $71 a barrel on London's ICE Futures Europe exchange, the highest since Nov. 5. It was at $70.57 at 11:23 a.m. London time. The contract rose yesterday $1.74, or 2.6 percent, to end the session at $69.62 a barrel.
Last Updated: June 10, 2009 07:00 EDT
World Oil Reserves Fell for First Time in 10 Years, BP Says
By Rachel Graham and Alexander Kwiatkowski
June 10 (Bloomberg) -- Global proved oil reserves fell last year, the first drop since 1998, led by declines in Russia, Norway and China, according to BP Plc.
Oil reserves totaled 1.258 trillion barrels at the end of 2008, compared with a revised 1.261 trillion barrels a year earlier, BP said in its annual Statistical Review of World Energy posted on its Web Site today. The world has enough reserves for 42 years at current production rates, BP said.
BP and other oil companies are struggling to replace reserves as access to deposits becomes harder and older fields in places like the U.K. and Mexico are depleted. Russia passed a law last year that limits foreign ownership in some of the country's biggest energy and metals deposits. Middle East countries, which hold 60 percent of global reserves, restrict access for international companies.
"Our data confirms the world has enough reserves of oil, natural gas and coal to meet the world's needs for decades to come," BP Chief Executive Officer Tony Hayward said in his introduction to the report. "The Challenges the world faces in growing supplies to meet future demand are not below ground, they are above ground. They are human, not geological."
Saudi Arabia's reserves, the world's largest, stood at 264.1 billion barrels, little changed from 264.2 billion a year earlier, BP said. The Middle East as a whole holds 754.1 billion barrels, compared with 755 billion barrels last year.
"Declines in Russia, Norway, China and other countries offset increases in Vietnam, India and Egypt," BP said on its Web site.
Canadian Oil Sands
Including Canadian oil sands deposits of 150.7 billion barrels, total global reserves stood at 1.409 trillion barrels, the review said.
BP made an upward revision to 2007's global oil reserves of 23.1 billion barrels, with the largest increases in OPEC members Venezuela and Angola.
None of the biggest international oil companies have replaced output through new discoveries or extending fields in the past six years, Sanford C. Bernstein & Co. said in an April 2 report. Companies such as Royal Dutch Shell Plc, Europe's largest oil company by market capitalization, are looking at acquisitions to boost reserves, Bernstein said.
BP said the estimates in today's report are a combination of official sources, OPEC data and other third-party estimates. Oil reserves include gas condensates and natural gas liquids, as well as crude oil.
Last Updated: June 10, 2009 04:06 EDT
OPEC Will Wait for $100 Oil Before Raising Output
By Fiona MacDonald
June 10 (Bloomberg) -- OPEC, the supplier of 40 percent of the world's oil, will only consider increasing output when the price of crude rises to $100 a barrel, according to Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah.
The Organization of Petroleum Exporting Countries, due to meet in September, wouldn't raise production with oil at $75, "but if it reaches $100, maybe," al-Sabah said today in Kuwait.
Crude oil traded in New York has climbed almost 60 percent this year, after plunging more than $100 in five months at the end of 2008 as the global recession curbed demand for fuel.
Oil prices have increased because investors have bought crude as a hedge against a weakening U.S. dollar, not because demand is rising, al-Sabah said.
R20;The numbers, in terms of economic recovery, are not in correlation with the rise of oil," he said.
Oil futures rose above $70 a barrel yesterday for the first time since November, and traded at $71.14 as of 8:38 a.m. London time today.
Oil Trades Near Seven-Month High as IEA Raises Demand Forecast
June 11 (Bloomberg) -- Crude oil rose for a third day, climbing above $72 a barrel for the first time in seven months as the International Energy Agency raised its demand forecast and China's net imports jumped to a 14-month high.
The Paris-based adviser to 28 nations increased its global consumption outlook for the first time since August amid signs the recession is "bottoming out." China boosted net crude purchases to 3.9 million barrels a day in May, according to data released on the Web today. Oil also got support from last week's drop of 4.38 million barrel in U.S. stockpiles.
"The IEA report is positive since it confirms that sentiment is changing for the best," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "Still, the rally is losing momentum and there's a good chance of a small pull-back as people take profits."
Crude oil for July delivery gained as much as 96 cents, or 1.4 percent, to $72.29 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since Oct. 21 The contract was at $72.29 at 10:09 a.m. London time.
The IEA increased its global estimate for daily oil demand by 120,000 barrels to 83.3 million barrels in its monthly report. The increase was driven by the U.S. and China. Still, consumption worldwide will contract by 2.9 percent from last year, the biggest drop since 1981, the adviser said.
U.S. oil stockpiles dropped to 361.6 million in the week ended June 5, the Energy Department said yesterday. Analysts surveyed by Bloomberg News said supplies would rise by 100,000 barrels. Gasoline inventories slipped for a seventh week.
China's increase in net crude-oil imports in May was second only to a record of 16.9 million tons in March. Imports rose by 5 percent to 17.09 million tons from a year earlier and exports stood at 470,000 tons, up from 150,000 tons last year.
China Investment
China's spending on factories, property and roads surged a more-than-estimated 33 percent from a year earlier, the statistics bureau said today, helping to drive a recovery in the world's third-largest economy and drive up demand for fuel.
U.S. fuel demand in the past four weeks averaged 18.3 million barrels a day, down 6.9 percent from a year earlier, the Energy Department said. There was a 7.7 percent deficit in the week ended May 29. Gasoline use averaged 9.2 million barrels a day during the period, up 0.4 percent from a year ago.
Fuel imports to the U.S. dropped 379,000 barrels a day to 2.55 million, the department said. Crude-oil imports slipped 676,000 barrels to 8.97 million.
Gasoline Stockpiles
Stockpiles of gasoline fell 1.55 million barrels to 201.6 million, the Energy Department report showed. A 750,000-barrel increase was forecast, according to the median of 14 estimates by analysts surveyed before today's report.
"The big news last night was the bigger than expected decline in stockpiles," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "That's somewhat of a fundamental justification for this rally continuing in the short term."
Gasoline supplies last week were 3.9 percent below the five-year average for the period, according to the department. There was a 13 percent surplus in the week ended May 22.
Brent crude for July delivery rose as much as 85 cents, or 1.2 percent, to $71.65 on London's ICE Futures Europe exchange. The contract was at $71.52 a barrel at 10:10 a.m. in London. Yesterday, it settled at $70.80, the highest since Oct. 20.
I suppose this is the reason they raised the gasoline price up 12 cents to 2.69.
Oil Is Little Changed Near 7-Month High on China Growth, IEA
By Ben Sharples
June 12 (Bloomberg) -- Crude oil traded near a seven-month high, poised for a fourth week of gains, after China's industrial output accelerated and the International Energy Agency raised its global demand forecast.
China's industrial production grew 8.9 percent in May, adding to signs that the world's third-biggest economy is recovering from its worst slump in almost a decade. The IEA, adviser to 28 nations, increased its consumption outlook for the first time since August.
"I think the overall picture is certainly stronger for longer and higher over the next couple of months," said Peter McGuire, managing director of Commodity Warrants Australia Pty in Sydney. "I would say $80 to $81 would be the new target."
Crude oil for July delivery was at $72.31 a barrel, down 38 cents, in after-hours trading on the New York Mercantile Exchange at 1:56 p.m. Singapore time. Yesterday, the contract rose $1.35, or 1.9 percent, to $72.68 a barrel, the highest settlement since Oct. 20. Oil is up 5.6 percent this week.
The Paris-based IEA increased its global estimate for daily oil demand by 120,000 barrels to 83.3 million barrels in its monthly report yesterday. The gain was driven by the U.S. and China. Consumption worldwide will contract by 2.9 percent from last year, the biggest drop since 1981, the adviser said.
China's industrial output rose 8.9 percent from a year earlier, the statistics bureau said today, after gaining 7.3 percent in April. That was more than the 7.7 percent median estimate of 16 economists surveyed by Bloomberg News.
'Smart Money'
"The smart money has been in crude for probably the best part of six weeks and longer considering where it has risen since February," McGuire said.
Asian stocks rose for a third day as improved economic indicators pointed to an easing of the U.S. recession and metal prices jumped the most in 10 days. The MSCI Asia Pacific Index gained 0.4 percent to 105.44 as of 9:42 a.m. in Tokyo, bringing its three-day climb to 3 percent.
The Reuters/Jefferies CRB Index of 19 raw materials rose 2 percent to 266.17, the highest since Nov. 5.
The dollar declined against most of its major counterparts after the gain in U.S. retail sales and drop in initial jobless claims encouraged investors to buy higher-yielding assets such as commodities. The dollar traded at $1.4106 versus the euro at 11:45 a.m. in Tokyo, from $1.4108 yesterday in New York, set for a 1 percent decline this week.
Jobless Claims
The number of Americans filing claims for unemployment insurance fell to 601,000, lower than economists had forecast. The number of jobless continuing to collect payments rose to a record for the 19th consecutive time, to 6.82 million, the Labor Department report showed. Retail sales climbed in May for the first time in three months, a separate report showed yesterday.
Gasoline for July delivery dropped 0.74 cents to $2.0575 a gallon at 1:11 p.m. in Singapore. Yesterday, it gained 4.96 cents, or 2.5 percent, to end the session at $2.0649 a gallon in New York. It was the highest settlement since Oct. 3.
China, the world's second-biggest energy consumer, reduced its oil output by 1.1 percent in May as the economy slows, government data showed. Crude production fell to 16.03 million metric tons last month, the National Bureau of Statistics said in an e-mailed statement today.
The IEA's forecast change in demand was countered by expectations for higher output from outside the Organization of Petroleum Exporting Countries. The IEA raised its 2009 estimate for non-OPEC supply by 170,000 barrels a day from May's report because of production growth in Russia and Colombia and improved North Sea performance.
Oil touched a record $147.27 a barrel on July 11 as investors purchased commodities as the dollar dropped and on concern that demand would outpace production.
Brent crude for July delivery was at $71.36 a barrel, down 43 cents, at 1:56 p.m. Singapore. Yesterday, the contract rose 99 cents, or 1.4 percent, to $71.79 on London's ICE Futures Europe exchange, the highest settlement since Oct. 20.
All of the indications are for higher oil as the world economies improve, Clinton created the Chinese energy consuming monster and there is not enough world oil production to feed the ever increasing demand.
Oil Drops After Record Plunge in European Industrial Production
By Grant Smith
June 12 (Bloomberg) -- Oil fell for the first day in four as a record plunge in European industrial production prompted speculation that hopes for an economic recovery are premature.
Oil declined as the U.S. dollar strengthened, undermining investors' need to use commodities as an inflation hedge. The relative strength index for New York oil futures, a measure of how rapidly prices have advanced or dropped during a specific period, indicates prices may fall. U.S. crude inventories remain 11 percent above their five-year average, according to the Energy Department.
R20;The market has excessively priced in the idea that a demand recovery is imminent," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. "Upbeat sentiment might drive prices higher in the short term, but later in the summer fundamentals will play a larger role and a massive price correction is likely."
Crude oil for July delivery fell as much as $1.20, or 1.7 percent, to $71.48 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.50 a barrel at 10:52 a.m. London time.
Yesterday, the contract rose $1.35, or 1.9 percent, to $72.68 a barrel, the highest settlement since Oct. 20. Oil is up 5.6 percent this week.
European industrial production dropped by the most on record in April as the worldwide recession ravaged demand for goods. Production in the euro region plunged 21.6 percent from a year earlier, the most since the data series started in 1986, the European Union's statistics office said today. Economists expected a 19.8 percent decline, according to a Bloomberg News survey. From March, output declined 1.9 percent.
R16;Commodities OverboughtR17;
R20;Most commodity markets are still quite overbought, and could be subject to a modest sell-off next week," said Edward Meir, analyst with MF Global Ltd. in Connecticut.
The 14-day relative strength index, or RSI, was at 73.55 today after rising to 76.23 yesterday. Readings above 70 typically warn a price may decline and those below 30 indicate it may rise.
Treasuries rose for a second day and the dollar gained after Japanese Finance Minister Kaoru Yosano said his nation's confidence in U.S. debt is "unshakable" and that the currency's global status is safe. The dollar gained to $1.4043 per euro as of 10:50 a.m. in London.
The Paris-based IEA increased its global estimate for daily oil demand by 120,000 barrels to 83.3 million barrels in its monthly report yesterday. The gain was driven by the U.S. and China. Consumption worldwide will contract by 2.9 percent from last year, the biggest drop since 1981, the adviser said.
China Quickens
ChinaR17;s industrial production growth quickened in May, adding to signs that the world's third-biggest economy is recovering from its worst slump in almost a decade.
ChinaR17;s industrial output rose 8.9 percent from a year earlier, the statistics bureau said today, after gaining 7.3 percent in April. That was more than the 7.7 percent median estimate of 16 economists surveyed by Bloomberg News.
Brent crude for July delivery was at $70.57 a barrel, down $1.22, at 10:53 a.m. London time. Yesterday, the contract rose 99 cents, or 1.4 percent, to $71.79 on LondonR17;s ICE
Oil Falls a Second Day as Stronger Dollar Dulls Hedge Appeal
By Grant Smith
June 15 (Bloomberg) -- Oil fell as the dollar rose the most in a week against the euro, limiting investors' need to use commodities as an inflation hedge.
Crude declined for a second day before a report forecast to show that manufacturing in New York state contracted for a 14th month and as European and Asian equities retreated, compounding speculation that the economic recovery has yet to take hold. Nigerian militants said they destroyed a facility run by Chevron Corp. in the Niger delta area.
"Speculative money has increased oil's sensitivity to dollar movements, and if the dollar continues to strengthen this will weigh on prices," said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. "Unless we see a significant improvement in the fundamentals, we continue to expect a correction from current levels."
Crude oil for July delivery dropped as much as $1.33, or 1.9 percent, to $70.71 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.06 a barrel at 11:12 a.m. in London. Oil reached $73.23 on June 11, the highest in seven months.
"Some of these commodities really have put on some pretty solid gains without really much fundamental basis," said Toby Hassall, research analyst at Commodity Warrants Pty in Sydney. Oil "is vulnerable to some corrective action, especially if we see further strength in the dollar."
Oil Rally, Dollar
New York oil futures have gained 46 percent in the past two months, as the dollar fell 5.6 percent against a basket of six major currencies.
The dollar rose for a second day today, trading 1.2 percent higher at $1.3856 to the euro at 10:46 a.m. London time, from $1.4016 late in New York last week. Russia's Finance Minister Alexei Kudrin said the nation has full confidence in the currency.
The Federal Reserve Bank of New York's general economic index was at minus 4.6, the bank said on May 15. Readings below zero for the Empire State index signal manufacturing activity is shrinking. The U.S. unemployment rate hit a 25-year high of 9.4 percent as of May.
Brent crude for July delivery fell as much as $1.17, or 1.7 percent, to $69.75 a barrel on London's ICE Futures Europe exchange. The contract expires today.
The more actively traded August contract declined as much as $1.17, or 1.6 percent, to $70.63 a barrel.
Nigeria Rebels
Rebels in Nigeria, Africa's biggest oil producer and the sixth-largest in OPEC, blew up two oil wells and pipelines at the Chevron Corp.-operated Makaraba field, the Movement for the Emancipation of the Niger Delta said yesterday.
Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended June 9, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 47,883 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose 8,196 contracts, or 21 percent, from a week earlier.
Last Updated: June 15, 2009 06:14 EDT
Crude Oil Advances in New York Before U.S. Inventory Report
By Grant Smith
June 16 (Bloomberg) -- Crude oil rose for the first time in three days as the dollar weakened against the euro and before a report on stockpiles in the U.S.
The U.S. Energy Department will probably say tomorrow that crude stockpiles dropped 2 million barrels last week, according to a Bloomberg survey. Oil lost 2 percent yesterday, extending its decline from last week's seven-month high of $73.23 a barrel as a stronger dollar made commodities less appealing as a currency hedge.
"The pullback in the dollar is supporting all commodities," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "Sentiment remains positive, but it's likely the market will consolidate ahead of the U.S. inventory data tomorrow."
Crude oil for July delivery rose as much as $1.50, or 2.1 percent, to $72.12 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $72.06 as of 11:37 a.m. London time.
U.S. Crude oil supplies probably dropped as refiners ramped up production and boosted stockpiles of gasoline and heating oil, a Bloomberg News survey showed. Inventories are 11 percent above the five-year average for this time of year.
Gasoline supplies probably rose 550,000 barrels in the week ended June 12 from 201.6 million the previous week. All of those surveyed said supplies climbed. Stockpiles during the same week last year fell 1.2 million barrels amid the peak motor fuel demand season in the U.S.
Brent Crude
Brent crude for August delivery rose as much as $1.34, or 1.9 percent, to $71.58 a barrel on London's ICE Futures Europe exchange. Yesterday the contract lost $1.56, or 2.2 percent, to $70.24 a barrel.
Iranian opposition supporters plan a fourth day of protests in Tehran against President Mahmoud Ahmadinejad's re-election, after seven people were killed in violence at a rally in the capital yesterday. Iran is the world's fourth-largest crude oil producer.
"For the time being, the Iranian situation seems to be neutral," said Edward Meir, analyst with MF Global Ltd. in Connecticut. "Although the oil markets were unimpressed by the frenzied weekend developments," events seem "to have picked up a gear over the past 24 hours, in that the size of the opposition protests have become significantly larger."
The U.S. dollar dropped for the first day in three against the single European currency, losing 0.7 percent to $1.3875 as of 11:06 a.m. London time. Declines in the U.S. currency heighten the appeal of dollar-priced assets that can be used to hedge against inflation, such as crude.
Last Updated: June 16, 2009 06:39 EDT
Oil Falls as Equity Drop Sparks Concern Over Economic Recovery
By Grant Smith
June 17 (Bloomberg) -- Crude oil fell for a fourth day, its longest losing streak since February, as prices tracked declines in global equities on speculation that an economic recovery has yet to take hold.
Oil fell as the dollar pared losses, dimming the usefulness of commodities as an inflation hedge. Royal Dutch Shell Plc said Nigerian shipments will be disrupted for a fifth month in July as violence escalates in Africa's largest oil producer. U.S. crude stockpiles dropped 2 million barrels last week, according to a survey before the Energy Department weekly report today.
"The market is being driven by the dollar yet again, and we're seeing a pullback in equities today that is reducing some of the risk appetite behind the recent rally," said Andrey Kryuchenkov, analyst at VTGB Capital in London. "Prices are likely to hold until we get the inventory data."
Crude oil for July delivery traded for $70.14 a barrel, 33 cents lower, on the New York Mercantile Exchange at 10:40 a.m. London time, after falling as low as $69.91. The contract rose to a seven-month high of $73.23 on June 11.
Shell suspended export obligations on crude exports from the Forcados terminal in Nigeria to cover the remaining loading program for June and July, company spokesman Precious Okolobo said by phone from Lagos today. Militant attacks have cut Nigeria's oil exports by more than 20 percent since 2006.
Yesterday the industry-funded American Petroleum Institute said U.S. crude inventories fell 1.26 million barrels to 356.6 million barrels last week.
Growing Gasoline Stockpiles
Oil-supply totals from the API and DOE moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.
The U.S. Energy Department is scheduled to release its weekly report at 10:30 a.m. today in Washington.
Gasoline supplies probably rose 550,000 barrels in the week ended June 12 from 201.6 million the previous week. Nine of 11 analysts surveyed said supplies climbed. Stockpiles during the same week last year fell 1.2 million barrels amid the peak motor-fuel demand season in the U.S.
"Investors may be sensing that many markets have done enough on the upside in recent months," said Edward Meir, an analyst with MF Global Ltd. in Connecticut. "Of course, hanging over the markets is the unsettled Iranian situation."
A disputed result in last week's presidential elections has prompted the largest anti-government demonstrations since the 1979 revolution in Iran, second-largest producer in the Organization of Petroleum Exporting Countries, to recover from the recession.
The Dow Jones Stoxx 600 Index of European shares slid 1.1 percent at 10 a.m. in London after a three-month, 36 percent rally that drove price-earnings valuations to the highest levels in five years.
The dollar was 0.2 percent weaker against the euro at $1.3873 as of 11:01 a.m. London time, recovering from an earlier low of $1.3928. Declines in the U.S. currency make dollar-priced commodities such as crude more useful as a hedge against inflation.
Brent crude for August settlement was at $70.15 a barrel, 9 cents lower, on London's ICE Futures Europe exchange at 11:05 a.m. London time.
Oil Rises a Second Day After Nigerian Militants Attack Pipeline
By Grant Smith
June 18 (Bloomberg) -- Crude oil rose for a second day in New York after militants attacked a pipeline in Nigeria, Africa's largest producer.
A "major" delivery line to Royal Dutch Shell Plc's Forcados terminal was breached using high explosives yesterday, the Movement for the Emancipation of the Niger Delta said in a statement. U.S. crude stockpiles fell a more than-estimated 3.87 million barrels last week to 357.7 million, the Energy Department said yesterday.
"The supply side will become more important in the next few months as fundamentals improve, and things like Nigeria will be important again," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna.
Crude oil for July delivery climbed as much as 70 cents, or 1 percent, to $71.73 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $71.38 at 11:24 a.m. London time. Prices are up 60 percent this year, having reached a seven-month high of $73.23 on June 11.
Oil may decline to as low as $50 a barrel in two months because there are no signs that world demand is recovering, according to Societe Generale SA's Paris-based head of commodities research.
"Down the road, it is likely that we see a sharp downward correction in the market because recent rallies look very fragile," Frederic Lasserre, an oil analyst at France's second- largest bank, told reporters in Tokyo.
While there is some short-term "liquidation risk" in oil markets, Goldman Sachs Group Inc. analysts said they expect "an improvement in fundamentals to begin to take hold in the next several months," pushing prices to $85 a barrel before the end of the year.
Improving Outlook
"The rise in long-dated prices has largely been driven by an improving forward fundamental outlook, in line with better global leading economic indicators," Goldman analysts including London-based Jeff Currie wrote in a report dated yesterday.
Nigerian militants blew up a delivery line that carries crude oil from the Tunu, Opukusu and Ugbotubu flow stations in Bayelsa state at 8:30 p.m. local time, according to the statement from Jomo Gbomo, a spokesman for MEND. Shell said it's investigating the claims.
"If there is a significant enough disruption, that could flow through to the fundamentals and support the price," said Toby Hassall, an analyst with Commodity Warrants Australia Ltd. in Sydney.
Brent crude for August settlement gained as much as 64 cents, or 0.9 percent, to $71.49 a barrel on London's ICE Futures Europe exchange.
U.S. gasoline inventories climbed 3.39 million barrels to 205 million last week, the biggest gain since January, the Energy Department's report showed. Gasoline use increased 213,000 barrels a day to 9.35 million.
--
Oil May Fall on Fuel Supply Gain, Lower Demand, Survey Shows
By Mark Shenk
June 19 (Bloomberg) -- Crude oil futures may fall on speculation U.S. fuel stockpiles will increase as the recession and rising prices sap consumption.
Fourteen of 32 analysts surveyed by Bloomberg News, or 44 percent, said futures will decline through June 26. Thirteen respondents, or 41 percent, forecast that the market will be little changed and five said prices will climb. Last week, 49 percent of analysts said oil would increase.
Gasoline inventories climbed 3.39 million barrels to 205 million last week, the biggest gain since January, an Energy Department report on June 17 showed. Total U.S. daily fuel demand averaged 18.5 million barrels in the four weeks ended June 12, down 6 percent from a year earlier, the report showed.
"The crude oil market has become well overvalued given the high level of inventory and relatively weak recessionary demand," said Tim Evans, an energy analyst with Citi Futures Perspective in New York. "It may be vulnerable to any downward correction in the equity markets or any sustained recovery in the U.S. dollar as well."
Oil futures have climbed 60 percent this year as the U.S. stock market rebounded and the dollar dropped against most of its major counterparts, spurring investors to purchase energy futures and other commodities.
Crude oil for July delivery fell 67 cents, or 0.9 percent, to $71.37 a barrel so far this week on the New York Mercantile Exchange. Prices have dropped 52 percent from the record $147.27 a barrel reached on July 11.
The oil survey has correctly predicted the direction of futures 47 percent of the time since its start in April 2004.
Bloomberg's survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:
RISE NEUTRAL FALL
5 13 14
Last Updated: June 19, 2009 00:00 EDT
Crude Oil Declines as World Bank Predicts a Deeper Recession
By Grant Smith and Christian Schmollinger
June 22 (Bloomberg) -- Crude oil fell for a second day after the World Bank said the global recession will be deeper than expected, stoking concerns that fuel demand will remain depressed.
Oil was also hurt by the strengthening dollar, dulling the need for investors to buy commodities as an inflation hedge. The World Bank projects the global economy will contract 2.9 percent this year, more than its previously forecast decline of 1.7 percent. Nigeria's main rebel group said yesterday it attacked Royal Dutch Shell Plc's Ofirma offshore oil fields.
"It seems like the correction is under way," said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. "Demand is not really recovering, and despite all the geopolitical noise, we still have over-production."
Crude oil for July delivery fell as much as $1.66, or 2.4 percent, to $67.89 a barrel in electronic trading on the New York Mercantile Exchange. It was at $68.47 a barrel at 11:37 a.m. London time. The contract expires today. Oil for August delivery, the more-actively traded contract, was at $68.75 a barrel, down $1.27.
The Movement for the Emancipation of the Niger Delta said it attacked the "jacket A" structure of Shell's offshore fields at about 4 a.m. local time today, according to an e- mailed statement from the group, also known as MEND.
'Bearish Sign'
Last week's increase in U.S. gasoline inventories to 205 million barrels was the biggest jump since January. Motor fuel demand averaged 9.26 million barrels a day for the four weeks ended June 12, the Energy Department said. That's down 0.3 percent from the previous year.
"If we should stay below $70 for the August contract, that should be a bearish sign," said Tetsu Emori, a commodity fund manager at Astmax Co. in Tokyo. "Gasoline demand has improved somewhat due to seasonal factors, but I'm not sure how realistic that will be."
Total daily fuel demand in the four weeks ended June 12 was down 6 percent from a year earlier, the department said.
Brent crude for August settlement was at $68.24 a barrel, down 92 cents, at 12:35 p.m. London time on London's ICE Futures Europe exchange.
Hedge-fund managers and other large speculators decreased their net-long position in New York crude-oil futures in the week ended June 16, according to U.S. Commodity Futures Trading Commission data.
Speculative Positions
Speculative long positions, or bets prices will rise, outnumbered short positions by 26,430 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 21,453 contracts, or 45 percent, from a week earlier.
Unrest continued this weekend in Tehran over the results of elections in Iran, the Organization of Petroleum Exporting Countries' second-largest producer.
Still, it is unlikely that either side in the political dispute would disrupt the country's exports of 2.2 million barrels a day, Michael Wittner, head of oil research at Societe Generale, said in a June 19 note.
"Even if there is violent regime change in Iran, we would not at all jump to the conclusion that crude production and exports would be shut down," the report said. "Any new government would know that the Iranian economy is highly dependent on revenue from crude exports."
Last Updated: June 22, 2009 06:39 EDT
Oil Drops as Equities Decline on Concern About Deeper Recession
By Alexander Kwiatkowski and Nidaa Bakhsh
June 23 (Bloomberg) -- Crude oil fell for a third day in New York, following equity markets lower amid concerns that the global economic recovery will be slower than some forecasts.
Oil traded below $67 a barrel as equities in developing nations fell, dragging the MSCI Emerging Markets Index down 10 percent from its 2009 peak. Oil is down more than $6 from this year's high of $73.23, approaching the 10 percent decline that analysts including Stephen Schork consider to be a correction.
"Exuberance in the crude oil market is waning," Schork, president of the Schork Group in Villanova, Pennsylvania, told clients today in a note. "Telltales appear that a correction in crude oil is imminent. As far as today goes, we have changed our daily technical bias to bearish."
Crude oil for August delivery declined as much as $1.13, or 1.7 percent, to $66.37 a barrel on the New York Mercantile Exchange. It traded at $67.06 at 11:03 a.m. in London. The July contract expired yesterday at $66.93.
The MSCI Emerging Markets Index of 22 countries lost 2 percent, the most in four days, as of 10:34 a.m. in London. U.S. and European stocks fell yesterday after the World Bank projected the global economy will contract 2.9 percent this year, more than an earlier projection of 1.7 percent.
"What's behind the movement is a change in sentiment," Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said by phone. "Before, we were expecting a real demand recovery. Now, we're pricing in a slowdown of the slowdown."
Falling Demand
Total U.S. daily fuel demand in the four weeks ended June 12 was down 6 percent from a year earlier, the Energy Department said last week. Gasoline inventories rose 3.39 million barrels to 205 million in the week ended June 12, the biggest increase since January, the department said.
Gasoline supplies rose 1 million barrels last week, according to the median of 10 estimates by analysts surveyed by Bloomberg News. The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
Brent crude oil for August settlement dropped as much as $1.08, or 1.6 percent, to $65.90 a barrel on London's ICE Futures Europe exchange. It traded at $66.65 at 11:03 a.m. London time.
"Oil prices had run ahead of fundamentals. A pretty big disconnect had opened up," said Mike Wittner, head of oil market research at Societe Generale SA in London. "We are seeing some closure of that disconnect."
Iran Impact
Oil analysts said continuing civil unrest in Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, isn't helping oil prices.
Iran's Revolutionary Guards vowed to "put an end to the chaos" of street protests against the re-election of President Mahmoud Ahmadinejad. State-run Press TV yesterday cited the country's OPEC governor, Mohammad Ali Khatibi, as telling the Iran Daily newspaper there's been no impact on crude exports.
"The bullish trend in crude oil has failed to perpetuate despite the introduction of bullish headlines from Iran," said Schork. "Crude oil's rapid rise has stalled. A market that cannot move higher on news like that appears ripe for a further selloff."
Oil Falls Below $69 on Japan Exports Drop, U.S. Gasoline Supply
By Rachel Graham and Ben Sharples
June 24 (Bloomberg) -- Crude oil fell below $69 in New York as Japanese exports dropped and an industry report showed an increase in U.S. gasoline inventories, raising concern the global recession will sap fuel demand.
The amount of goods sold from Japan, the world's third- largest oil consumer, accelerated a decline in May, casting doubt on the economy's growth prospects. Gasoline supplies increased 3.7 million barrels last week, the industry-funded American Petroleum Institute said yesterday.
"It's still a dark picture," Gerrit Zambo, an oil trader at BayernLB, said by phone from Munich. "The economic numbers of the past weeks don't back up the recent rise in the oil price."
Crude oil for August delivery fell as much as $1.18, or 1.7 percent, to $68.06 a barrel in electronic trading on the New York Mercantile Exchange. It was at $68.65 a barrel at 11:10 a.m. London time. Prices rose to a seven-month high of $73.23 on June 11.
Brent crude for August settlement declined as much as $1.22, or 1.8 percent, to $67.58 a barrel on London's ICE Futures Europe exchange. It last traded at $68.45 a barrel.
Japanese exports fell 40.9 percent from a year earlier, more than the 39.1 percent drop in April, the Finance Ministry said today in Tokyo.
"Unless we start to see sequential GDP growth, it's going to be very hard to sustain these high prices," Francisco Blanch, head of global commodity research at Banc of America Securities-Merrill Lynch, said in a Bloomberg Television interview. "We've run out way too far."
'Mid-Cycle Price'
"Seventy-dollars a barrel is a mid-cycle price," he said. "It's not a price we should have at a time when the recovery isn't yet being seen through."
The U.S. Energy Department is expected to report that supplies of crude oil dropped 950,000 barrels, according to the median of 14 analyst responses in the Bloomberg News survey. Stockpiles fell 3.87 million barrels in the week ended June 12, the department said last week.
Inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, increased, according to the respondents. The department is scheduled to release its weekly report today at 10:30 a.m. in Washington.
"A rise in gasoline inventories and a lower than expected drop in crude supplies will help suppress the price of crude oil," Mike Sander, an investment adviser with Sander Capital in Seattle, said in an e-mail.
Gasoline Stockpiles
Gasoline stockpiles increased to 211.4 million barrels in the week ended June 19, while crude supplies fell 72,000 barrels to 356.6 million, according to the API report. Distillate fuel stockpiles rose 2.3 million barrels to 153.9 million, the reports said.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the energy Department for its weekly survey.
Gasoline for July delivery dropped as much as 4.32 cents, or 2.3 percent, to $1.85 a gallon.
OPEC won't reduce crude oil production when it meets in September and will ask for more compliance with existing quotas, Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah said yesterday.
The group plans to meet on Sept. 9 in Vienna. The Organization of Petroleum Exporting Countries agreed at three meetings last year that the 11 members with production targets would cut output by 4.2 million barrels a day.
Iraq Opens Oilfields as Exxon, Shell Seek $16 Billion Foothold
By Anthony DiPaola
June 25 (Bloomberg) -- Iraq is set to welcome back foreign oil companies into the war-torn nation to develop the world's third-largest crude reserves three decades after expelling them.
Eight of the world's top 10 non-state oil producers, including Exxon Mobil Corp. and Royal Dutch Shell Plc, are vying for the right to help Iraq develop six oilfields and two natural-gas deposits. More than 30 companies in total are bidding for $16 billion worth of technical service contracts for producing fields that will be awarded in Baghdad on June 29-30.
"Iraq is the big prize in the region," said Raja Kiwan, a Dubai-based analyst at consultants PFC Energy. "It is one of the only remaining areas that provide the level of upside for companies who want to access reserves."
The OPEC producer is struggling to increase output and revenue from crude sales after six years of conflict and prior sanctions destroyed the country's economy and infrastructure. The government, also running a second bidding round for 11 oil and gas fields, aims to boost production to about 6 million barrels a day by 2015, from 2.4 million barrels in May. Saudi Arabia, the world's biggest oil exporter, produces 8 million barrels a day.
Companies investing in Iraq are looking to take a stake in the long-term potential that the country's 115 billion barrels of reserves hold after gaining a foothold through the service contracts for operational fields. Iraq may offer foreign companies direct stakes in deposits and allow them to sign production-sharing agreements for future fields, according to Oil Minister Hussain al-Shahristani.
Iraqi Benefits, Security
Iraq will earn 100 times more than the foreign companies it hires to develop the deposits, the minister told parliament in Baghdad on June 23. The deposits being offered in the first licensing round may yield $1.7 trillion in profit for the country, based on an oil price of $50 a barrel, while oil companies seeking service contracts will gain $16 billion over the 20-year life of the contracts, he said.
Winning the oil contracts may be easier for foreign companies than contending with security threats in Iraq and objections to the bid-round by some lawmakers. Irving, Texas- based Exxon is still deciding whether to bid, Chief Executive Officer Rex Tillerson said June 16, while The Hague-based Shell was in talks with Chinese companies on bidding jointly for the contracts, CEO Jeroen van der Veer said April 14.
U.S. troops are due to pull out of Iraq's cities by June 30 and the entire country by the end of 2011, and Iraqi officials have said the nation's security forces will be able to cope alone. Iraq and Britain signed a draft agreement on June 3 for some U.K. troops to remain in the country to help Iraqi naval forces protect oil platforms.
Government Criticized
Prime Minister Nuri al-Maliki's government has been criticized by lawmakers for its failure to raise oil production faster and they want the licensing round scrapped because of concerns the deals won't benefit Iraq.
Al-Shahristani defended government policy in parliament this week, saying foreign investment will raise production and profit while overseas oil companies will get a fee for developing deposits without taking stakes in any fields.
Iraq's reserves are so large and so little developed that foreign companies are willing to take the risk, said Tariq Shafiq, an adviser with London-based Petrolog & Associates and a former Iraqi Oil Ministry official who helped write the nation's draft oil law. The country's parliament has not approved the oil law due to disagreements between the government and lawmakers.
Vast Reserves
Oil companies are seeking access to new reserves as production declines at aging fields in the North Sea and resources like those in Saudi Arabia and Iran are restricted for foreign firms. The new Iraqi contracts may also increase demand for drilling and engineering equipment as companies compete for equipment to develop fields in Saudi Arabia, Kuwait and other Gulf countries.
"There's a huge amount of pressure on all international oil companies looking at Iraq to make sure they have the first foot in," said PFC Energy's Kiwan.
Saudi Arabia is the world's largest holder of reserves with 264 billion barrels, followed by Iran with almost 138 billion barrels. Iraq may be a more attractive long-term development for international investors since it has produced only about 8 percent of its oil compared with more than 20 percent by Saudi Arabia and Iran, Shafiq said.
To supplement income from the contracts, the government is also asking winning bidders to provide a total of $2.6 billion in loans, which will later be repaid. Iraq needs cash to build infrastructure, and the government plans to sell about $5 billion in bonds to help pay for power and water projects. This month it proposed a $70 billion spending plan for housing, agriculture and transport.
ConocoPhillips, Lukoil, Total
ConocoPhillips, based in Houston, was in talks about preparing joint bids with Russia's OAO Lukoil and other potential partners, Chief Executive Jim Mulva said in a June 5 interview in St. Petersburg. Total SA, France's largest energy company, will bid for the contracts, the Iraqi prime minister's office said in a June 10 statement. StatoilHydro ASA, Norway's biggest oil and natural-gas producer, was also preparing a bid, Peter Mellbye, vice president for international exploration and production, said June 16. In 1972, Iraq nationalized concessions owned by companies now known as BP Plc, Shell and Exxon.
Last Updated: June 24, 2009 19:01 EDT
I have been to the Bonny Terminal and it would be impossible to protect the lines coming in. It is surrounded by Jungle.
Oil Rises Above $69 After Attacks on Shell Pipeline in Nigeria
By Nidaa Bakhsh
June 25 (Bloomberg) -- Crude oil rose above $69 after militants attacked a Royal Dutch Shell Plc pipeline supplying an export terminal in Nigeria, Africa's largest producer.
The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria's southern oil region, said it attacked a "major" crude oil pipeline supplying Shell's Bonny export terminal. The militant group has stepped up a sabotage campaign since a military offensive began last month in the Niger River delta oil producing region.
The oil market is "starting to price in the Nigerian disruption," Olivier Jakob, managing director at Petromatrix GmbH, said by phone today from Zug, Switzerland. "It's definitely starting to add up."
Crude oil for August delivery advanced rose as much as 62 cents, or 0.9 percent, to $69.29 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $69.15 at 10:22 a.m. London time. Prices are up 55 percent this year.
Nigeria may currently be producing as little as 1.3 to 1.4 million barrels a day of crude, compared to 1.8 million barrels a day in the first quarter, Jakob said.
Fighters from the Nigerian group, known as MEND, damaged the Bille-Krakrama pipeline overnight, cutting supplies from Shell's Cawthorne 1, 2 and 3 oil-pumping stations, MEND spokesman Jomo Gbomo said in an e-mail. A Shell spokeswoman confirmed an attack on a manifold on the pipeline and couldn't say whether any production was halted by the incident.
U.S. total oil inventories fell for a third week, down 3.87 million barrels to 353.9 million barrels last week, the lowest since March, the Energy Department said yesterday.
Brent Crude
Brent crude for August settlement was up 55 cents to $68.88 a barrel on London's ICE Futures Europe exchange at 10:22 a.m. London time.
U.S. supplies of distillate fuel, a category that includes heating oil and diesel, rose 2.08 million barrels to 152.1 million, the highest since January 1999. A 850,000-barrel gain was forecast, according to the median of 15 analysts surveyed.
Gasoline inventories rose 3.87 million barrels to 208.9 million last week, the Department of Energy said. Stockpiles were forecast to increase by 1 million barrels, according to a Bloomberg News survey. Refineries operated at the highest rates this year and fuel demand fell 5.5 percent, the biggest drop since January.
Refineries operated at 87.1 percent of capacity in the week ended June 19, up 1.2 percentage points from the previous week and the highest since the week ended Dec. 5, the Energy Department report showed.
Last Updated: June 25, 2009 05:24 EDT
This could cause higher prices as the US gets a lot of its crude from Nigeria. The Nigerian Crudes are of good quality and are high gasoline/diesel yield crudes. Many of our refineries cannot run the lower quality Persian Gulf area crudes due to the gravity and high H2s content.
Oil Rises a Second Day on Nigeria Field Attack, Weaker Dollar
By Nidaa Bakhsh
June 26 (Bloomberg) -- Crude oil rose for a second day as Nigerian militants continued attacks on oil installations in Africa's largest crude producer and the dollar weakened.
Militants in Nigeria said today they attacked the second well head at Royal Dutch Shell Plc's Afremo offshore oil field. The Movement for the Emancipation of the Niger Delta said yesterday they attacked a Shell pipeline supplying an export terminal.
"For oil, it's largely the dollar and persistent attacks in Nigeria," Andrey Kryuchenkov, a VTB Capital commodity analyst in London, said by phone. "I don't think it'll go higher from here. It'll sit here below $72."
Crude oil for August delivery rose as much as $1.06, or 1.5 percent, to $71.29 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $70.68 a barrel at 12:17 a.m. London time.
Shell's offshore facility was blown up at about 11 p.m. yesterday, hours after an offer of an amnesty by President Umaru Yar'Adua. The attack was in response to "a punitive" raid by the military on the Agbeti community in the Delta state, the main oil-producing region.
The platform had been shut since Feb. 28 following an attack on Shell's Trans Escravos Pipeline, Precious Okolobo, Shell's spokesman in Nigeria, said by phone. Military spokesman Colonel Rabe Abubakar said troops didn't carry out any raids yesterday.
Dollar Weakness
"With a lot of oil removed from the market, weakness in the dollar has a greater influence in determining the short-term trend," said Harry Tchilinguirian, a senior oil analyst at BNP Paribas SA, by phone.
Brent crude oil for August settlement rose as much as $1.03, or 1.5 percent, to $70.81 a barrel on London's ICE Futures Europe exchange. It traded at $70.19 a barrel at 12:17 a.m. in London.
A falling dollar makes commodities such as oil and gold an attractive alternative investment. The dollar traded at $1.4099 versus the euro at 12:12 a.m. in London from $1.3988 yesterday.
Oil prices have been supported and supply curbed since the re-emergence of militant activity in the Niger River delta, Nigeria's main oil-producing region, in December 2005. MEND has stepped up a sabotage campaign in the area since a military offensive began last month.
Fighters from the Nigerian group damaged the Bille-Krakrama pipeline, cutting supplies from Shell's Cawthorne 1, 2 and 3 oil-pumping stations, MEND spokesman Jomo Gbomo said in an e- mail yesterday. A Shell spokeswoman confirmed an attack on a manifold on the pipeline and couldn't say whether production was halted by the incident.
Nigeria produces so-called sweet, or low-sulfur, crude oil that is prized by refiners because it yields a large amount of gasoline and diesel fuel when processed.
WE have been on the road for three days s, just got back in, so I am late in posting .
Oil Little Changed as IEA Cuts Forecast, Nigeria Rebels Attack
By Grant Smith and Yee Kai Pin
June 29 (Bloomberg) -- Crude oil traded little changed after Nigerian militants said they attacked a Royal Dutch Shell Plc oil platform, while the International Energy Agency downplayed concerns of a supply crunch.
The Movement for the Emancipation of the Niger Delta rebel group said they attacked Shell's Forcados offshore oil facility at 3:30 a.m. local time today. The IEA, an adviser to 28 oil- consuming nations, cut five-year forecasts for global crude demand because of the economic slump.
"Bullish participants are seizing on the latest attacks in Nigeria to take another run at $70," said Christopher Bellew, senior broker at Bache Commodities Ltd. "We may get to $70 a barrel but unless demand improves it will be very difficult to stay there."
Crude oil for August delivery traded for $69.20, 4 cents higher, in after-hours electronic trading on the New York Mercantile Exchange as of 9:48 a.m. London time. Oil is poised for a quarterly gain of 39 percent, the biggest in a decade.
The IEA cut its oil demand estimates for every year through 2013 by about 3 million barrels a day, it said in its Medium- Term Oil Market Report today. Consumption will average 86.76 million barrels a day in 2012, the first year demand will rise above 2008's level of 85.76 million barrels a day, according to the Paris-based agency.
"The deep economic recession that has spread worldwide in the past year has taken a severe toll on oil demand," the IEA said in the report, updating estimates made in December. "This marks a break after several years of strong oil demand growth."
Estuary Field Closed
Royal Dutch Shell Plc also closed Nigeria's Estuary oil field after attacks on production wells, spokesman Tony Okenodo said by phone from Lagos today. Nigeria, vying with Angola to be Africa's largest producer, has been losing about 20 percent of its production since 2006 because of militant violence.
New York oil futures have gained 55 percent this year, as the recent rise in world equity markets and a weaker dollar encouraged investors to buy the commodity as a hedge against inflation and to profit if demand recovered. Futures are headed for their strongest first-half finish since 1999, when prices rose 60.1 percent in six months.
Brent crude oil for August settlement traded for $69.01 a barrel, 9 cents higher, on London's ICE Futures Europe exchange.
Oil Rises to Eight-Month High on Weaker Dollar, Nigeria Attacks
By Alexander Kwiatkowski
June 30 (Bloomberg) -- Crude oil rose to the highest in eight months, set for its biggest quarterly gain since 1990, as the U.S. dollar declined and militant attacks in Nigeria curbed supply from Africa's largest producer.
Oil jumped as much as 2.6 percent in New York, adding to yesterday's 3.4 percent gain, as investors sought commodities as a hedge against inflation. The dollar fell for a fourth day against the euro. Royal Dutch Shell Plc shut a field yesterday after an assault by Nigerian rebels.
"Nigeria is still driving prices and the weaker dollar is also contributing to higher oil," said Andy Sommer, an oil analyst at Elektrizitaets-Ges Laufenburg AG in Dietikon, Switzerland. "There is a natural link between the dollar currency and the oil price."
Crude oil for August delivery gained as much as $1.89 to $73.38 a barrel on the New York Mercantile Exchange, the highest since Oct. 21. It was at $72.65 a barrel at 11:19 a.m. in London.
Oil futures have gained 46 percent this quarter on optimism that the global economic recession is easing. That's the biggest gain since the third quarter of 1990, when they more doubled after Iraq's invasion of Kuwait.
China, the world's second-biggest energy consumer, raised domestic fuel prices today by as much as 11 percent to encourage refiners to produce more fuels amid higher crude costs.
Traders may have been forced to buy contracts to close off their positions for the quarter, pushing prices higher. About 1,667 contracts were traded in the five minutes around the time when crude prices reached an intraday high of $73.38 today. In comparison, 60 contracts changed hands at about the same time a day earlier.
'Technical Buying'
"There is some technical buying interest from people covering there short positions," said Sommer of Elektrizitaets- Ges Laufenburg.
Shell, Europe's biggest oil company, shut its Estuary oil field in Nigeria's southern delta region after a militant attack. The strike targeted two well clusters in the western Niger River delta, Tony Okonedo, a Shell spokesman, said by phone from Lagos yesterday. The Movement for the Emancipation of the Niger Delta, or MEND, said it attacked the oil field near Shell's Forcados oil export terminal and set it ablaze.
MEND, which says it's fighting on behalf of the region's poor, has stepped up sabotage campaign against Nigeria's oil industry since a military offensive against its positions in the delta began last month. The attacks have shut facilities operated by Shell, Chevron Corp. and Eni SpA, curbing production of the light, sweet variety of oil favored by U.S. refiners.
'Brushed Aside'
"After the financial crisis that we went through, too much focus has been put on the demand side of the equation, while the supply side has been brushed aside," said Olivier Jakob, managing director at Petromatrix GmbH. "It is however the supply side in Nigeria that is currently supporting the crude markets."
A U.S. government report released tomorrow may show crude oil inventories falling for the seventh time in eight weeks, as refineries ramp up operation rates in anticipation of higher fuel demand during the Independence Day holiday.
Supplies probably fell 1.6 million barrels in the week ended June 26, according to the median of nine estimates by analysts surveyed by Bloomberg News. The Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington.
Brent crude oil for August settlement rose as much as $2.51, or 3.5 percent, to $73.50 a barrel on London's ICE Futures Europe exchange and traded at $71.63 at 10:33 a.m. local time. Yesterday, it climbed $2.07, or 3 percent, to $70.99 a barrel, the biggest gain since June 4.
Last Updated: June 30, 2009 06:22 EDT
Oil Rises Before Report Forecast to Show U.S. Supplies Shrank
By Grant Smith and Christian Schmollinger
July 1 (Bloomberg) -- Oil rose above $70 a barrel before the release of a report forecast to show that U.S. crude inventories declined for a fourth week, stoking hopes for a recovery in demand as the recession abates.
The Energy Department report today will show crude-oil stockpiles dropped 2 million barrels last week, according to a Bloomberg survey. Yesterday the industry-funded American Petroleum Institute said crude supplies fell by 6.8 million barrels. Oil was also helped as European equities rose.
"It was an extremely huge stock draw," said Hannes Loacker, a Raiffeisen Zentralbank Oesterreich analyst in Vienna. "If we get confirmation of that data in the Energy Department, that will help prices."
Oil for August delivery gained as much as $1.39, or 2 percent, to $71.28 a barrel on the New York Mercantile Exchange, and was at $71.14 at 11:15 a.m. London time. Oil dropped from an eight-month high yesterday after U.S. consumer confidence declined in June.
"A fall in crude inventories will cause the market to move higher," said Mike Sander, an investment adviser with Sander Capital in Seattle. Should the government report also show a decline, "it will reinforce crude to stay at or go above current levels," he said.
New York oil jumped 41 percent in the second quarter, the biggest since 1990. Prices have rallied as rebounding world equity markets and a weaker dollar encouraged investors to buy crude as an alternative investment.
The U.S. currency traded at $1.4068 versus the euro at 11:06 a.m. in London, 0.1 percent weaker.
Fuel Supply
The Energy Department report, due at 10:30 a.m. in Washington, will probably show that gasoline supplies climbed by 2 million barrels, according to the Bloomberg survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, likely increased 1.5 million barrels.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Oil-supply totals from the API and Energy Department moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.
Brent crude oil for August settlement rose as much as $1.39, or 2 percent, to $70.69 a barrel on London's ICE Futures Europe exchange. It was at $70.53 a barrel at 11:15 a.m. in London.
European stocks rose, extending the Dow Jones Stoxx 600 Index's best quarterly gain this decade. Marks & Spencer Group Plc reported its smallest quarterly sales decline in almost two years, and manufacturing in China rose a fourth straight month.
The Purchasing Managers' Index increased to a seasonally adjusted 53.2 in June from 53.1 in May, the Federation of Logistics and Purchasing said today in Beijing. A reading above 50 indicates an expansion. China is the largest crude oil user after the U.S.
Oil to Rise After Averting Slide: Technical Analysis (Update1)
By Yee Kai Pin
July 1 (Bloomberg) -- Crude oil is set to extend gains amid this week's volatility and may reach the $76 a barrel level last traded in mid-October, said the head of Cameron Hanover Inc.
The market's ability today to stay close to the psychologically important $70-a-barrel mark is keeping prices from slipping into a technical downtrend channel on the daily continuation chart, said Peter Beutel, president of the New Canaan, Connecticut, trading advisory firm. Oil rose 41 percent between April and June, the biggest quarterly climb since 1990.
"The rally has given the bulls a new lease on life and it now gives them the chance to take a run at buy-stops above $73.23," Beutel said. "That level is acting like a magnet."
Oil yesterday spiked above $73.23 a barrel, which stood as the June high for more than two weeks, as the dollar declined and escalating militant attacks in Nigeria raised concern supplies may be disrupted.
Other technical readings also hint at upside momentum. The weekly Moving Average Convergence-Divergence oscillator continues to hold firm above its signal line, indicating support.
"Momentum is a two-edged sword," said Beutel. "It can show strength, or it can show overbought pressures."
Further resistance is marked by the upper Bollinger Band, a moving objective around $74.64 a barrel today, before $76.28. That's the 38.2 percent Fibonacci retracement of the rise to $147.27, the all-time high registered July 11 last year, from the December 19 low of $32.40. Oil last traded at $76.28 on October 15.
"If prices fail below the Fibonacci figure, after triggering buy-stops, it could be a sign of a possible top," he said. "If they sail up through that $76.28 figure, it would be bullish."
Front-month crude oil futures for August delivery on the New York Mercantile Exchange, up 56.7 percent in 2009, traded at $70.96 a barrel at 3:20 p.m. Singapore time.
Last Updated: July 1, 2009 03:25 EDT
Crude Oil Falls a Third Day on Forecast U.S. Shed More Jobs
By Grant Smith
July 2 (Bloomberg) -- Crude oil fell for a third day before a report forecast to show the U.S. unemployment increased last month, signaling the world's largest energy user remains mired in recession.
U.S. fuel demand in the four weeks ended June 26 fell 5.8 percent from a year earlier, while demand for distillate fuel including heating oil and diesel, fell 9.4 percent, according to a Department of Energy report yesterday. The Labor Department will likely report the U.S. shed an additional 365,000 jobs in June, a Bloomberg survey showed.
"Fundamentals are still pretty bad and what's really weighing on the market is inventories of middle distillates," said Johannes Benigni, chief executive officer of Vienna-based JBC Energy GmbH. "I believe in a correction to somewhere around to $50 a barrel mark."
Crude oil for August delivery fell as much as $1.14, or $1.64, to $68.17 a barrel in electronic trading on the New York Mercantile Exchange. It traded $68.23 at 10:41 a.m. London time. Prices are up 53 percent this year.
Supply from the Organization of Petroleum Exporting Countries increased for a third month in June, a Bloomberg News survey showed yesterday.
Oil output averaged 28.23 million barrels a day last month, up 55,000 from May, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 25.86 million barrels a day, 1.015 million more than their target.
Brent crude oil for August settlement declined as much as $1.09, or 1.6 percent, to $67.70 a barrel on London's ICE Futures Europe exchange. It was at $67.97 a barrel at 10:38 a.m. in London.
Crude Inventories
Crude oil supplies fell 3.66 million barrels to 350.2 million, the Department of Energy said yesterday. Inventories have dropped 15.8 million barrels in the past four weeks, the biggest four-week decline in a year. Stockpiles last week were 8 percent higher than the five-year average for the period, the department said.
Stockpiles of distillate fuel in the U.S. gained 2.9 million barrels to 155 million, the highest since 1987.
Gasoline stockpiles increased 2.33 million barrels to 211.2 million in the week ended June 26, the Energy Department said in a report yesterday. Inventories were forecast to rise by 2 million barrels, according to a Bloomberg News survey.
Refineries operated at 87.1 percent of capacity in the week ended June 26, down 0.6 percentage point from the previous week, according to the DOE report. Gasoline consumption averaged 9.17 million barrels a day, rising 0.9 percent on better demand in the driving season.
Last Updated: July 2, 2009 05:42 EDT
Falls as Equities Slide, Dollar Rises on Economy Concerns
By Alexander Kwiatkowski
July 6 (Bloomberg) -- Crude oil fell to a five-week low as equities dropped on growing concern that the global economic recovery will falter, hurting fuel demand.
Oil dropped for a fifth day in London, the longest losing streak since September, as the dollar strengthened against the euro, limiting investor appetite for commodities as a hedge against inflation. European and Asia stock markets fell and U.S futures dropped.
"There was too much optimism in the market," said Eugen Weinberg, senior analyst at Commerzbank AG in Frankfurt. "Some of the optimism is flowing out of the market and with weaker equities and a stronger dollar, the combination of this is pushing prices lower."
Brent crude oil for August settlement fell as much as $1.96, or 3 percent, to $63.65 a barrel on London's ICE Futures Europe exchange. It was at $63.77 a barrel at 12:12 p.m. local time.
Prices have fallen 13 percent from a year-to-date high of $73.50 last week as a U.S. government report showed the world's largest economy lost more jobs than expected in March.
In New York, crude oil for August delivery fell as much as $2.98 to $63.75 a barrel on the New York Mercantile Exchange, the lowest intraday price since May 28. Oil was at $63.90 at 12:23 p.m. London time. Electronic trades from July 3 are counted as part of today's session because of the U.S. Independence Day holiday.
The Dow Jones Stoxx 600 Index sank 1.8 percent to 200.34 at 11:53 a.m. in London. Standard & Poor's 500 Index futures dropped 1.2 percent. The dollar traded at $1.3893 per euro from $1.3980. A rising dollar reduces the appeal of raw materials such as oil.
Nigerian Rebels
Prices fell even as Nigerian rebels said they attacked oil installations operated by Chevron Corp. and Royal Dutch Shell Plc. Armed attacks in the Niger River delta have cut more than 20 percent of the country's oil exports since 2006. Nigeria is Africa's leading oil producer and the fifth-biggest source of U.S. oil imports.
The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria, said today that it blew up a pipeline operated by Chevron Nigeria Ltd. The bomb destroyed the "strategic Okan manifold" that controls the flow for about 80 percent of the company's offshore crude oil, according to an e- mail from Jomo Gbomo, a group spokesman.
Facility Attacked
MEND said yesterday it attacked an oil facility run by Royal Dutch Shell Plc in the country's southern region.
"We had this growing disconnect between prices and current fundamentals and we are now seeing that gap start to close," said Mike Wittner, head of oil market research at Societe Generale SA in London. "Nigeria has been priced in for now. There is not much supportive in the current fundamentals."
Gasoline for August delivery on the New York Mercantile Exchange declined as much as 6.42 cents, or 3.6 percent, to $1.7266 a gallon.
Kuwait, the sixth-biggest producer of the Organization of Petroleum Exporting Countries, wants to see oil prices stay above $60 a barrel and will watch the market closely before deciding on its output at OPEC's meeting in September, the country's oil minister said yesterday.
"We'd like to see the price not go below a certain level, at least to meet our budgetary target," Sheikh Ahmed al- Abdullah al-Sabah told reporters yesterday in Kuwait City. That certain level for Kuwait is $60 a barrel, he said.
Saudi Aramco, the world's largest state-owned oil company, lowered its official selling prices for exports of all crude oil grades to the U.S. in August. The producer raised the level of its Super Light, Extra Light and Light types for sale to Asia and reduced its Medium and Heavy prices, according to an e-mail sent to Bloomberg News.
Last Updated: July 6, 2009 07:25 EDT
Oil Rises for First Time in a Week as Dollar Stimulates Buying
By Grant Smith
July 7 (Bloomberg) -- Crude oil rose for the first day in a week as the U.S. dollar declined against the euro, spurring demand for the commodity as a hedge against inflation.
The U.S. Energy Department will probably say crude inventories fell and gasoline stockpiles grew last week, according to a Bloomberg survey before the department's weekly report tomorrow. Morgan Stanley said oil prices may average $65 next year, compared with a projection of $48 for this year, as government spending stimulates demand.
"A weaker U.S. dollar and firmer equity markets are lending temporary support to crude oil prices," said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. "But with demand still weak, the correction could continue, especially if inventory data is bearish tomorrow."
Oil for August delivery rose as much as 84 cents, or 1.3 percent, to $64.89 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $64.74 a barrel at 12:22 p.m. London time. Yesterday, it fell to $64.05, the lowest settlement since May 27.
Brent crude for August rose as much as 84 cents, or 1.3 percent, to $64.89 a barrel on London's ICE Futures Europe exchange. It was at $64.78 a barrel at 12:22 p.m. local time.
The Energy Department is scheduled to release its Weekly Petroleum Status Report tomorrow at 10:30 a.m. in Washington and will put out its Short-Term Energy Outlook monthly report today.
U.S. gasoline inventories probably rose 1 million barrels last week from 211.2 million, indicating consumption during the country's peak driving season remained lackluster, a Bloomberg News survey showed.
OPEC Reports
Crude supplies in the U.S. fell 2.9 million barrels in the week ended July 3 from 350.2 million a week earlier, based on the median of 12 estimates by analysts before tomorrow's report. Supplies of distillate fuel, which includes heating oil and diesel, probably rose 1.83 million barrels from 155 million.
The Merrill Lynch Argentina unit of Bank of America Corp. raised its 2009 average forecast for New York-traded crude to $58.50 a barrel from $52, to reflect an improving economy.
A weaker dollar bolsters the attraction of raw materials such as oil and gold to investors. The dollar was at $1.4021 a euro at 12:23 p.m. in London, compared with $1.3904 earlier.
The Organization of Petroleum Exporting Countries releases its annual oil market outlook and yearly energy statistics tomorrow afternoon, and the Paris-based International Energy Agency will issue its monthly report on world oil demand and supply on July 10.
Last Updated: July 7, 2009 07:51 EDT
Oil Falls for Sixth Day on Forecasts U.S. Gasoline Stocks Grew
By Grant Smith and Christian Schmollinger
July 8 (Bloomberg) -- Crude oil fell, poised for the longest losing streak since December, before a report forecast to show U.S. fuel inventories increased in the world's largest energy consumer.
Gasoline inventories probably rose 900,000 barrels last week, according to a Bloomberg News survey conducted before today's Energy Department report. Yesterday, the industry-funded American Petroleum Institute said supplies of the motor fuel rose 767,000 barrels to 212.4 million. Nigerian rebels said they sabotaged crude pipelines run by Royal Dutch Shell Plc and Eni SpA subsidiary Agip.
"It was only a matter of time before the oil market woke up to bearish fundamentals," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "If we get yesterday's gasoline stock build confirmed by the Energy Department today, it will show how the recession is still eating away at demand."
Crude oil for August delivery fell as much as $1.06, or 1.7 percent, to $61.87 a barrel on the New York Mercantile Exchange, the lowest intraday price since May 26. Oil was at $62.18 a barrel as of 9:48 a.m. London time.
The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria's oil region, said it attacked crude trunk likes in Bayelsa state at about 2 a.m. local time.
A pipeline feeding Eni's Brass terminal was sabotaged at Nembe Creek, while Shell's Nembe Creek line was damaged at the village of Asawo, MEND spokesman Jomo Gbomo said.
Slow Recovery
Oil has declined 15 percent from an eight-month intraday high of $73.38 on June 30 as higher U.S. unemployment raised concern that the economy of the world's biggest energy-consuming country will be slow to recover.
"Given the data from the U.S., the market has become cautious on the outlook for an economic recovery and that's tempered the oil price," David Moore, a commodity strategist with Commonwealth Bank of Australia Ltd., said in an interview with Bloomberg Television.
Machinery orders in Japan, the world's third-largest oil consumer, fell unexpectedly for a third month in May, dropping 3 percent from April, the Cabinet Office said today. The decline is adding to signs that the recession isn't moderating for the second-largest economy.
Crude oil inventories dropped 1.4 million barrels to 348.3 million, according to the API report. Stockpiles of distillate fuel, a category that includes heating oil and diesel, climbed 3.42 million barrels to 158 million, the highest since 1985.
Energy Department Report
The Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington.
Gasoline inventories probably rose 900,000 barrels last week, according to a Bloomberg News survey conducted before today's Energy Department report.
Oil also fell as the dollar advanced against the euro, reducing the appeal of commodities as an inflation hedge. The greenback strengthened to $1.3892 per euro as of 9:19 a.m. London time from $1.3924 yesterday and $1.4142 on July 1.
Brent crude for August settlement declined as much as 93 cents, or 1.5 percent, to $62.30 a barrel on London's ICE Futures Europe exchange. It was at $62.62 a barrel at 9:48 a.m. London time. Yesterday, the contract fell 1.3 percent to $63.23, the lowest settlement price since May 27.
Last Updated: July 8, 2009 04:50 EDT
Oil Rebounds From 7-Week Low as Traders Cite 'Oversold' Market
By Grant Smith
July 9 (Bloomberg) -- Crude oil rebounded from a seven-week low as some traders said its 15 percent decline from last month's peak, the longest losing streak this year, is overdone.
Oil snapped a six-day slump as the U.S. dollar weakened against the euro, spurring investors' demand for dollar-priced assets to hedge against inflation. Crude's drop below $62.55 a barrel yesterday, the lower resistance level of the Bollinger Band, was an indication it may be oversold.
"Technically the market is oversold and we should consolidate near these levels," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "Crude fundamentals are not ideal at the moment, but they aren't apocalyptic, and demand is stabilizing."
Crude oil for August delivery gained as much as $1.33, or 2.2 percent, to $61.47 a barrel on the New York Mercantile Exchange, and traded at $61.15 at 12:25 p.m. London time. Futures dropped 4.4 percent to $60.14 yesterday, the lowest close since May 19. Crude has fallen 15 percent since June 29.
Futures also gained as China's passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, after government stimulus spending spurred a revival in the world's third-largest economy.
"We see significant upward pressure building on global energy demand as world economic growth gets back on track," said Francisco Blanch, head of global commodity research at Bank of America-Merrill Lynch in London. "Medium-term, large fiscal and monetary policy stimuli will have a significant impact on economic activity, particularly in Asia."
Gasoline Supplies
Saudi Aramco, the world's largest state-owned oil company, deepened cuts in supplies of its Arab Heavy and Medium oil grades sold under term contracts to Asia in August, refinery officials said.
The oil company will reduce overall supplies, which include the Light and Extra Light grades, by as much as 20 percent from contractual volumes, according to a survey of officials at refineries in Japan, Singapore and South Korea.
U.S. oil inventories dropped 2.9 million barrels to 347.3 million last week, the lowest since January, an Energy Department report showed yesterday. Refineries operated at 86.8 percent of capacity, down 0.2 percentage point from the previous week, the department said.
Gasoline stockpiles climbed 1.9 million barrels to 213.1 million in the week ended July 3, more than twice the increase forecast in a Bloomberg News survey, the Energy Department said. Motor fuel inventories were forecast to increase 900,000 barrels last week, according to the median of 16 responses in a Bloomberg News survey.
Distillate Fuel
Inventories of distillate fuel, a category that includes heating oil and diesel, rose to the highest since 1985 as consumption dropped to a 10-year low. Distillate fuel inventories rose 3.74 million barrels to 158.7 million, the biggest gain since January, the report showed.
Brent crude for August settlement rose as much as $1.45, or 2.4 percent, to $61.88 a barrel on London's ICE Futures Europe exchange and was at $61.55 at 12:25 a.m. in London. Yesterday, it declined $2.80, or 4.4 percent, to $60.43, the lowest settlement since May 25.
The U.S. dollar weakened to $1.3966 per euro at 11:41 a.m. London time from $1.3850 yesterday, drawing investors to oil as a currency hedge.
Last Updated: July 9, 2009 07:26 EDT
Oil May Fall as Global Consumption Declines, Survey Shows
By Jenny Gross
July 10 (Bloomberg) -- Crude oil may fall on speculation that the global recession and payroll cuts will sap demand and bolster U.S. supply, a Bloomberg News survey of analysts showed.
Nineteen of 41 analysts surveyed by Bloomberg News, or 46 percent, said futures will decline through July 17. Nine respondents, or 22 percent, expect the market will be little changed and 13, or 32 percent, forecast that oil prices will rise. Last week, 49 percent of analysts said prices would drop.
U.S. gasoline supplies climbed 1.9 million barrels to 213.1 million last week, an Energy Department report on July 8 showed. Inventories of distillate fuel, a category that includes diesel and heating oil, climbed 3.74 million barrels to 158.7 million, the biggest increase since January. The gain left distillate stockpiles 30 percent higher than the five-year average.
"I think that distillate and gasoline prices will continue to fall as inventories rise for yet another week," said Andy Lipow, president of Lipow Oil Associates LLC in Houston. "This will then pressure crude oil price down a bit more to between $55 and $58" a barrel.
The unemployment rate reached 9.5 percent in June, the highest since 1983, the Labor Department said last week.
Total U.S. daily fuel demand over the four weeks ended July 3 averaged 18.4 million barrels, down 5.9 percent from a year earlier, the Energy Department said. Distillate demand over the four-week period fell 12 percent to 3.27 million barrels a day.
Crude oil for August delivery fell $6.32, or 9.5 percent, to $60.41 a barrel so far this week on the New York Mercantile Exchange. Prices are up 35 percent this year.
The oil survey has correctly predicted the direction of futures 47 percent of the time since its start in April 2004.
Crude Oil Futures Pare Losses, Trade Little Changed in New York
By John Buckley
July 13 (Bloomberg) -- Crude oil traded little changed in New York, after falling amid lower equity prices and speculation that the global recession would sap demand for fuel and increase stockpiles.
Oil for August delivery traded at $59.75 a barrel, down 14 cetns in after-hours electronic trading on the New York Mercantile Exchange at 10:49 a.m. London time. It earler fell as low as $58.88 a barrel.
Last Updated: July 13, 2009 05:51 EDT
Gas has fallen to 2.17/gal here in Wichita...Yea!!!!!!! :laugh:
Oil Rises From Eight-Week Low on Economic Recovery Optimism
By Grant Smith and Alexander Kwiatkowski
July 14 (Bloomberg) -- Crude oil rose for the first time in three days on expectations that the Chinese economy expanded in the second quarter and that earnings from Goldman Sachs Group Inc. will signal that the worst of the financial crisis is over.
Oil climbed from an eight-week low as equities advanced worldwide. Singapore raised its economic growth forecast. U.S. crude-oil supplies probably fell a fifth week last week, according to a Bloomberg survey.
"Economic data has not been as bad as feared, so in our view the recession may have reached a bottom," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "Oil fundamentals will likely get better in the second half of the year and should take prices up to $70 a barrel."
Crude oil for August delivery gained as much as $1.01, or 1.9 percent, to $60.80 a barrel on the New York Mercantile Exchange. The contract was at $60.46 at 11:34 a.m. London time. Yesterday, it fell 20 cents to $59.69 a barrel, the lowest settlement since May 19.
China's economy may have expanded 7.8 percent in the second quarter as record lending and surging investment drove a rebound, according to a Bloomberg News survey. Singapore's gross domestic product will shrink between 4 percent and 6 percent this year, less than an earlier forecast for a contraction of as much as 9 percent, the Trade Ministry said.
Goldman Sachs will post the largest profit since 2007 when it reports second-quarter earnings today, according to analysts' estimates compiled by Bloomberg.
U.S. Inventories
The MSCI World Index advanced 0.8 percent at 10:12 a.m. in London, posting a two-day gain for the first time this month. Futures on the Standard & Poor's 500 Index rose 0.3 percent. The S&P 500 gained 2.5 percent to 901.05 in New York yesterday, its biggest advance since June 1.
Crude-oil supplies in the U.S. probably fell 1.8 million barrels in the week ended July 10 from 347.3 million the previous week, according to a Bloomberg News survey of analysts before an Energy Department report tomorrow. Stockpiles in the week ended July 3 were 18 percent higher than a year earlier.
The report is forecast to show that U.S. gasoline inventories increased 750,000 barrels last week, according to a Bloomberg News survey of analysts. It would be the fifth straight gain.
Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 2 million barrels, according to the median of 11 analyst responses in the survey. Stockpiles in the week ended July 3 were the highest since January 1985.
Brent crude oil for August settlement rose as much as $1.26, or 2.1 percent, to $61.95 on London's ICE Futures Europe Exchange, and traded at $61.47 at 11:35 a.m.
Oil may fall below $45 a barrel by the end of August, as the $787 billion U.S. stimulus program hasn't restored demand, said Harry Tchilinguirian, senior oil analyst at BNP Paribas SA.
The Organization of Petroleum Exporting Countries will issue a monthly report later today outlining its expectations for a possible rebound in oil demand next year.
Last Updated: July 14, 2009 07:14 EDT
Aug-09 Crude settled down $0.17 at $59.52, Aug Natural Gas settled at $3.429 up $0.166 on the day. Natural gas contracts are gaining volume due to traders buying the winter months at the lower prices and anticipating the price will be much higher later due to the reduced drilling resulting in declining storage gas.
Crude and Natural Gas are both trading higher this morning, crude has traded a larger than usual volume over night.
Oil Rises for First Day in Four on Forecast of U.S. Supply Drop
By Grant Smith and Yee Kai Pin
July 15 (Bloomberg) -- Crude oil rose for the first day in four before a report forecast to show that U.S. crude-oil inventories contracted for a fifth week.
Oil climbed from an eight-week low as equity markets in Asia and Europe advanced, raising optimism about an economic rebound. The U.S. Energy Department will probably say crude supplies fell 2.1 million barrels last week, according to a Bloomberg survey. Yesterday, the industry-funded American Petroleum Institute said gasoline inventories fell for the first time in six weeks.
"People are pricing in a positive result from this afternoon's data after the API," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. "We also have the combination of equities being higher today, and the dollar weaker."
Crude oil for August delivery gained as much as $1.17, or 2 percent, to $60.69 a barrel on the New York Mercantile Exchange. The contract traded at $60.44 at 1:09 a.m. London time. Yesterday, it declined to $59.52, the lowest settlement since May 18.
Nigeria's main rebel group, the Movement for the Emancipation of the Niger Delta, declared a 60-day cease-fire in its local campaign targeting oil and gas installations after authorities freed leader Henry Okah. The cease-fire came into force at midnight local time.
The MSCI World Index climbed 0.9 percent at 12:23 p.m. in London, its third day of gains. Futures on the Standard & Poor's 500 Index increased 1 percent.
Demand Growth
"We are starting to see index-fund buying on the loose connection between higher equities and an assumption that oil demand will grow," Peter Beutel, president of Cameron Hanover in New Canaan, Connecticut, said in a note to clients.
A report today from the Energy Department may show that crude supplies fell 2.1 million barrels in the week ended July 10 from 347.3 million the previous week, according to the median of 14 estimates by analysts.
The report will probably show gasoline inventories rose 875,000 barrels in the week ended July 10. The department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington.
"The expectation is that U.S. gasoline demand has been weak post-July 4," said Victor Shum, a senior principal at consultant Purvin & Gertz Inc. in Singapore. "Traders would treat the API report with some caution."
Distillate Stocks
Stocks of distillate fuel, a category that includes diesel and heating oil, probably rose 2 million barrels last week, the survey showed. Distillate fuel inventories increased 3.74 million barrels to 158.7 million in the week ended July 3, the highest since January 1985, according to the department.
Yesterday, the API said that crude inventories fell 1.6 million barrels to 346.8 million last week. The API collects stockpile data on a voluntary basis from operators of refineries, bulk terminals and pipelines.
Brent crude for August settlement rose as much as $1.26, or 2.1 percent, to $62.12 on London's ICE Futures Europe Exchange, and traded at $62.05 at 1:10 p.m. London time. The contract expires tomorrow.
Cease fires are good as long they stick to the agreement. Hopefully they will and production will improve in Nigeria.
Larryj
I agree Larry, but these factions have been fighting each other a longtime. Nigeria is a very important factor in our Sweet "Gasoline" Crude supply. I am hoping that the Nigerian Government will work with the rebels some to keep all of the pipelines and terminals open. I have been to all of the Nigerian main terminals and there is no way to keep the Rebels from sabotaging the lines coming in.
Crude Oil Declines From Highest in a Week as Equities Retreat
By Grant Smith
July 16 (Bloomberg) -- Crude oil fell from its highest in a week as equity markets in Europe pared earlier gains, reinforcing concerns that the economic recovery remains elusive.
Oil dropped as stocks slid after commercial lender CIT Group Inc. said it won't get a federal bailout. U.S. gasoline and heating oil supplies increased last week as the recession stifles demand, a government report showed yesterday. China's gross domestic product grew 7.9 percent in the second quarter.
"The market doesn't know which direction it should go," said Andy Sommer, an analyst at Elektrizitaets-Gesellschaft Laufenburg in Dietikon, Switzerland. "The Asian countries are coming out of the worst. But warning voices persist that growth is not stable yet."
Crude oil for August delivery fell as much as 79 cents, or 1.3 percent, to $60.75 a barrel on the New York Mercantile Exchange, trading for $60.87 at 10:40 a.m. in London.
Prices, which have increased 37 percent this year, jumped 3.4 percent yesterday to $61.54, the highest close since July 7.
China overtook Japan as the world's second-largest stock market by value for the first time in 18 months, as government spending and record bank lending boosted share prices. China's industrial production increased 10.7 percent in June from a year earlier, the largest gain in nine months excluding seasonal distortions. Retail sales climbed 15 percent.
'Revive Demand'
"This will revive demand growth we saw in China last year, especially with better-than-expected automobile sales in the first half of this year," said Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong.
U.S. crude inventories fell 2.81 million barrels to 344.5 million last week, the Energy Department said yesterday.
"The huge rally across the board in equities helped boost crude oil," said Mike Sander, an investment adviser with Sander Capital in Seattle. "The weekly EIA report showed a drop in crude oil inventories by 2.8 million barrels, which lent support to higher crude prices as well."
Crude stockpiles were forecast to decline 2.1 million barrels, according to analysts surveyed by Bloomberg News. Refineries operated at 87.9 percent of capacity, the highest since August.
Gasoline inventories climbed 1.44 million barrels to 214.6 million, the highest since April, the Energy Department report showed. Supplies were forecast to increase 875,000 barrels.
Distillate Fuel
Supplies of distillate fuel increased 553,000 barrels to 159.3 million in the week ended July 10, the highest since January 1985, the report showed.
Brent crude for August settlement was at $62.18 a barrel, down 91 cents, on London's ICE Futures Europe Exchange at 10:44 a.m. in London. The more-actively traded contract for September, which becomes the front month tomorrow, slipped 78 cents to $62.74.
Oil will collapse to $20 a barrel this year as the recession takes a deeper toll on fuel demand, according to academic and former U.S. government adviser Philip Verleger.
A crude surplus of 100 million barrels will accumulate by the end of the year, straining global storage capacity and sending prices to a seven-year low, said Verleger, who correctly predicted in 2007 that prices were set to exceed $100. Supply is outpacing demand by about 1 million barrels a day, he said.
Last Updated: July 16, 2009 05:50 EDT
Crude Oil Falls as Stronger Dollar Limits Commodity Investments
By Grant Smith and Christian Schmollinger
July 17 (Bloomberg) -- Crude oil fell in New York for the first time in three days as the dollar rose against the euro, limiting the appeal of commodities as an investment.
The dollar climbed as investors sought safer assets amid speculation that CIT Group Inc. will file for bankruptcy, and after two explosions killed at least nine people at hotels in the Indonesian capital of Jakarta. Fuel demand in the U.S., the world's largest oil user, fell the most in the first six months to an 11-year low as the global recession curbed shipping and air traffic, the American Petroleum Institute said yesterday.
"Oil is on shaky ground," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "Fundamentals are bearish in the near term, with demand in the product market depressed. It's going to take dollar weakness and better macro data to restart the uptrend."
Crude oil for August delivery fell as much as 52 cents, or 0.8 percent, to $61.50 a barrel on the New York Mercantile Exchange. It was at $61.81 a barrel at 9:31 a.m. London time. It rose as much as 0.5 percent to $62.35 a barrel.
Crude is up 2.8 percent this week, set for its first weekly gain since June 12.
Bombs tore through the Ritz Carlton and JW Marriott hotels in Jakarta, killing at least nine people and injuring 42 others in Indonesia's first terrorist attack since 2005.
Investors sought safer assets after the blasts including the dollar and the yen. The U.S. currency gained to $1.4089 per euro from $1.4148.
Product Deliveries Fall
Deliveries of petroleum products, a measure of consumption, declined 5.8 percent to an average 18.7 million barrels a day from January through June, the API said yesterday in a report. Demand is down 9.6 percent from a record 20.75 million barrels a day in the first half of 2005.
Gasoline inventories climbed 1.44 million barrels to 214.6 million, the Energy Department report showed. Supplies were forecast to increase 875,000 barrels.
"We saw yet another increase in gasoline stockpiles, which is obviously pretty concerning," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "There's not too much of a bullish story out there."
Brent crude for September settlement fell as much as 58 cents, or 0.9 percent, to $63.17 a barrel on London's ICE Futures Europe Exchange. It was at $63.37 a barrel at 9:30 a.m. London time.
The August future expired yesterday, ending the day down 34 cents, or 0.5 percent, at $62.75 a barrel.
China, OPEC
China, the largest energy user after the U.S., processed a record volume of crude oil in June as faster economic growth boosted fuel demand and refining profits encouraged production.
Oil processing rose for a fifth month to 31.9 million metric tons last month, or about 7.76 million barrels a day, China Mainland Marketing Research Co., which compiles data for the government, said in a statement today.
The country reported yesterday that its second quarter gross domestic product increased 7.9 percent.
OPEC will trim shipments by 0.8 percent in the four weeks ending Aug. 1, while still failing to meet its supply quotas seven months after they were set, according to consultant Oil Movements.
The Organization of Petroleum Exporting Countries will reduce exports in the four-week period to 22.55 million barrels a day from 22.74 million a day in the month ended July 4, the tanker-tracker said today. It's the fifth consecutive monthly drop reported in Oil Movements' weekly reports.
Last Updated: July 17, 2009 05:03 EDT
Oil Rises to Two-Week High as Chinese Refiners Signal Rebound
By Grant Smith and Christian Schmollinger
July 20 (Bloomberg) -- Crude oil rose to its highest in nearly two weeks, buoyed by equity markets and signs that energy demand in China is rebounding.
Oil advanced for a fourth day as European and Asian stock markets gained, led by commodity and technology shares. Refiners in China, the world's second-largest oil user, raised their operating rates for an eighth week to 85.1 percent on July 16, said CBI China, a Shanghai-based commodities researcher.
"China has been one of the few bright spots in the outlook for oil demand lately," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "I think we could see funds return to the market and take another run at $70 a barrel."
Crude oil for August delivery rose as much as $1.34, or 2.1 percent, to $64.90 a barrel in electronic trading on the New York Mercantile Exchange. Prices were at $64.75 at 11:54 a.m. London time. Oil has gained 45 percent this year.
The August contract expires tomorrow. The more-widely held September contract climbed as much as $1.32, or 2 percent, to $65.83 a barrel at 11:44 a.m. in London.
Oil prices gained 6.1 percent last week, helped by rising equity markets and a rebound in U.S. housing starts.
The MSCI World Index advanced 0.2 percent as of 11:45 a.m. in London. The gauge of 23 developed nations surged 6.6 percent last week, the biggest rally in four months, after U.S. companies from Goldman Sachs Group Inc. to Johnson & Johnson reported earnings that beat analysts' estimates.
Weaker Dollar
Oil was also supported as the U.S. currency weakened, boosting the investment appeal of dollar-denominated commodities. The dollar fell as low as $1.4229 to the euro, the weakest since June 5.
"This is all related to investors' risk appetite," said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore. "When that increases, stocks and commodities tend to do well and the dollar gets weaker."
Brent crude for September settlement gained as much as $1.32, or 2 percent, to $66.70 a barrel on London's ICE Futures Europe Exchange. The contract traded at $66.55 a barrel at 11:46 a.m.
Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended July 14, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 16,157 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 800 contracts, or 5 percent, from a week earlier.
Last Updated: July 20, 2009 06:56 EDT
Oil Is Little Changed on Forecast for Rising Gasoline Supplies
By Grant Smith
July 21 (Bloomberg) -- Crude oil traded little changed around $64 a barrel in New York before a report forecast to show that gasoline supplies expanded in the U.S.
Gasoline inventories in the world's largest energy market probably rose by 850,000 barrels from 214.6 million barrels, a Bloomberg survey showed. That would be the sixth week of gains during what is typically peak time for demand. Stockpiles of crude likely fell for a 10th week out of 11, the survey showed.
"We haven't yet seen the optimism materialize in increased consumption of oil," said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. "Better than expected macro indicators are keeping hopes up, but we need to see some improvement in demand."
Crude oil for August delivery was at $64.21 a barrel, 36 cents higher on the New York Mercantile Exchange at 11:18 a.m. London time. Oil has fallen 12 percent from an eight-month closing high of $72.68 on June 11.
The August contract expires today. The more-active September contract fell as much as 76 cents, or 1.2 percent, to $64.53 a barrel.
U.S. crude oil stockpiles probably declined by 2.25 million barrels in the week ended July 17, according to the median of 12 estimates by analysts before an Energy Department report scheduled for 10:30 a.m. tomorrow in Washington.
Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose by 1.5 million barrels from 159.3 million.
Equity-Driven Rally
"We may be recovering and we may have sequential changes that are positive, but year-on-year levels of activity are showing wide output gaps," Harry Tchilinguirian, a senior oil markets analyst at BNP Paribas, said in a Bloomberg Television interview. "You have to stop and think if the rally we've been having, of course equity-driven, is going to be sustainable."
Refiners in China, the world's largest energy consumer after the U.S., increased operating rates for an eighth week to 85.1 percent of capacity on July 16, said CBI China, a Shanghai- based commodities researcher.
Brent crude for September settlement rose 0.3 percent to $66.61 a barrel on London's ICE Futures Europe Exchange at 11:18 a.m. local time.
Oil Falls After Industry Report Shows Gain in Crude Inventories
By Grant Smith and Christian Schmollinger
July 22 (Bloomberg) -- Oil fell for the first time in six days after an industry report showed crude supplies gained in the U.S., the largest energy user.
U.S. stockpiles rose last week for the first time since April, the American Petroleum Institute reported late yesterday. The Energy Department will release its own supply report later today. Oil imports by China, the world's second-largest consumer, fell 2.8 percent in June from May, customs data showed.
"The market is showing anxiety about U.S. inventories of crude and products today," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "With a lack of support from the dollar or new rally in equities, we think a short-term pullback is the most likely direction."
Crude oil for September delivery dropped as much as $1.19, or 1.8 percent, to $64.42 a barrel on the New York Mercantile Exchange, and was at $64.81 at 11:13 a.m. London time. The August contract expired at $64.72 a barrel yesterday.
Crude prices climbed 8.7 percent from July 14 to July 21 as investors bought futures on expectations of higher fuel demand. Optimism that the worst of the global recession is over followed gains in U.S. leading economic indicators and improved earnings among financial service companies.
China's crude imports in June fell to 16.6 million tons, or about 4.1 million barrels a day, from 17.1 million tons in May, the customs data showed.
'Weak Fundamentals'
U.S. crude supplies climbed 3.1 million barrels to 349.9 million barrels in the week ending July 17, the API said. Inventories of gasoline rose 1.3 million barrels to 213.6 million, the API report said. The group also reported that refinery utilization fell to 84 percent of capacity from 86 percent.
The Energy Department is scheduled to release its Weekly Petroleum Status Report today at 10:30 a.m. in Washington. Oil- supply figures from the institute and the Energy Department moved in the same direction for the past six weeks and 76 percent of the time in the past four years, according to data compiled by Bloomberg.
Crude inventories declined 2.1 million barrels in the week ended July 17, according to the median of 15 estimates by analysts before the report. The Energy Department is expected to say supplies increased by 650,000 barrels, according to the analyst survey.
U.S. stockpiles of distillate fuel, a category that includes diesel and heating oil, probably rose 1.5 million barrels, according to the analyst survey.
Brent crude for September settlement fell as much as 89 cents, or 1.3 percent, to $65.98 a barrel, on London's ICE Futures Europe Exchange. It was at $66.40 a barrel at 11:14 a.m. London time.
Last Updated: July 22, 2009 06:16 EDT
Crude Oil Is Little Changed as U.S. Fuel Inventories Increase
By Grant Smith and Yee Kai Pin
July 23 (Bloomberg) -- Crude oil was little changed around $65 a barrel in New York as rising U.S. fuel inventories dampened optimism in a swift rebound in demand.
Gasoline and distillate fuel inventories in the U.S. gained for a sixth week in the week to July 17, while crude supplies fell, according to an Energy Department report yesterday. Japan's oil imports fell for an eighth month in June. The MSCI World Index of equities rose for a ninth day, its longest winning streak since 2003.
"Demand is weak, and spare capacity is the largest it's ever been," said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. "The market is pricing in a demand recovery round the corner, but I don't see it. We see more of an L-shaped recovery, with more job losses to come."
Crude oil for September delivery on the New York Mercantile Exchange traded up 5 cents at $65.45 a barrel at 10:14 a.m. in London. Prices are down 11 percent from an eight-month high of $73.38 a barrel reached on June 30.
Japan's oil imports fell 19.1 percent in June, according to a preliminary finance ministry trade report. The country's refiners and power utilities maintained output cuts amid the recession, which has reduced demand from the world's second- largest economy.
"We do have more supply than demand given what's happening with the global economy," Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, said in a Bloomberg Television interview. "It's going to be a little bit difficult for oil to trade onwards and upwards for the time being."
Asian Equities Gain
The MSCI World rose 0.1 percent as of 8:18 a.m. in London, a ninth straight day of gains. The gauge of 23 developed nations has climbed 9.2 percent since July 10 after better-than- estimated results from companies including Goldman Sachs Group Inc., Johnson & Johnson and Apple Inc.
U.S. crude stockpiles dropped 1.8 million barrels to 342.7 million, the Energy Department also said in its Weekly Petroleum Status Report. This was less than a median 2.1 million-barrel decrease forecast by 15 estimates in a Bloomberg News survey. Gasoline supplies climbed 813,000 barrels to 215.4 million barrels, the highest since mid-April.
"Supplies are more than adequate given the lack of apparent demand," Stephen Schork, president of Villanova, Pennsylvania-based consultant Schork Group Inc., said in a note to clients. "Current draws are not demand driven, but rather a function of lower domestic production and fewer imports."
Brent crude for September settlement on London's ICE Futures Europe exchange traded at $67.34 a barrel, up 13 cents, at 9:26 a.m. in London.
Last Updated: July 23, 2009 05:20 EDT
Oil Set for Second Weekly Gain as Equities Boost Recovery Hopes
By Grant Smith
July 24 (Bloomberg) -- Crude oil traded little changed, heading for its second weekly gain, as advancing equity markets restored faith in the prospect of an economic recovery.
Oil is set for a 5.2 percent gain this week. The Standard & Poor's 500 Index has recovered 50 percent of the losses suffered after the September collapse of Lehman Brothers Holdings Inc. as a record number of companies beat analysts' earnings estimates. German business confidence rose for a fourth month July.
"If the global destruction of the economy has indeed bottomed then so should the oil markets," said Olivier Jakob, managing director of consultants Petromatrix GmbH in Zug, Switzerland. "The green shoots in macro inputs have not been invalidated by earnings reports."
Crude oil for September delivery traded for $67.01 a barrel, 15 cents lower in electronic trading on the New York Mercantile Exchange as of 1:07 p.m. London time.
Oil has increasingly moved in tandem with benchmark stock indexes. The Dow Jones Industrial Average and U.S. crude futures showed a correlation of 0.7 the past month, up from 0.06 in December, according to data compiled by Bloomberg. A correlation of 1 means the two moved in lockstep.
"The surge in oil prices has certainly been driven by equities," said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. "Some of the corporate earnings from the U.S. were pretty good. There are still many to come."
Weak Fundamentals
Fuel consumption is still weak in the oil market, analysts said. U.S. gasoline and distillate fuel inventories climbed for a sixth week, the Energy Department said July 22, signaling demand in the world's largest energy user has been slow to rebound.
"With oil prices close to $70 but products inventories in the U.S. growing week on week, the risk of a price correction, as what we saw at the start of July, is growing," Shum said.
The Organization of Petroleum Exporting Countries will trim crude shipments by 1.7 percent in the four weeks ending Aug. 8, according to consultant Oil Movements, as refinery maintenance and faltering demand encourage members to implement supply cuts.
OPEC, a 12-member group that pumps 40 percent of the world's oil, will reduce seaborne exports in the four-week period to 22.39 million barrels a day from 22.78 million a day in the month ended July 11, the tanker-tracker said today. It's the sixth consecutive drop reported in Oil Movements' weekly reports.
Brent crude for September settlement on London's ICE Futures Europe exchange traded 21 cents lower at $69.04 a barrel at 1:08 p.m. London time.
Last Updated: July 24, 2009 08:18 EDT
Oil Rises to 3-Week High as Equities Signal Economic Recovery
By Grant Smith and Christian Schmollinger
July 27 (Bloomberg) -- Crude oil rose to the highest in more than three weeks on expectations that equity markets are signaling a global economic recovery that will spur fuel demand.
Oil was also lifted as the dollar traded near a seven-week low against the euro, increasing commodities' appeal as a hedge against inflation. The MSCI World Index of equities advanced for an 11th day, the longest winning streak since June 2003.
"The key influences for crude right now are equities, technical buying and support from the dollar," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "Oil has been riding a wave of positive sentiment, but after all these gains, it's time to consolidate."
Crude oil for September delivery gained as much as 94 cents, or 1.4 percent, to $68.99 a barrel in electronic trading on the New York Mercantile Exchange. That's the highest intraday price since July 2. Futures were at $68.70 a barrel at 10:30 a.m. in London.
Oil last week posted its biggest weekly gain since May and followed a 6.1 percent increase the week before, when U.S. equities climbed 7 percent.
The dollar traded at $1.4245 per euro as of 9:48 a.m. in London, weakening from $1.4202 in New York on July 24. It touched $1.4291 on July 23, the lowest level since June 3.
Oil has moved in tandem with benchmark stock indexes. The MSCI Asia-Pacific Index and U.S. crude futures showed a correlation of 0.5 in the past month, compared with -0.1 a month earlier, according to data compiled by Bloomberg. A correlation of 1 means the two moved in lockstep.
Limited Gains
Crude's gains may be limited as inventories of gasoline and diesel fuel in the U.S., the world's biggest oil user, have climbed, said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne.
Gasoline inventories climbed 813,000 barrels to 215.4 million in the week to July 17, the sixth straight gain, according to an Energy Department report on July 22. Stockpiles of distillate fuel rose 1.22 million barrels to 160.5 million, the highest since January 1985.
"Although crude inventories are falling, it's just going into gasoline supplies, and we haven't seen much evidence of the summer driving season," said Westmore. "Eventually these fundamentals will correct and you see that in these gasoline and distillate inventories getting drawn down."
Brent crude oil for September settlement rose as much as 96 cents, or 1.4 percent, to $71.28 a barrel, and traded at $70.98 on London's ICE Futures Europe exchange at 9:50 a.m. London time. The contract rose 1.6 percent to $70.32 on July 24, the highest settlement since June 29.
Speculators' net-long positions in New York oil, the difference between contracts to buy and sell the commodity, plunged 86 percent in the week ended July 21, the U.S. Commodity Futures Trading Commission reported.
Last Updated: July 27, 2009 05:34 EDT
Oil Is Little Changed Near Three-Week High as Dollar Weakens
By Grant Smith and Christian Schmollinger
July 28 (Bloomberg) -- Crude oil traded little changed near a three-week high in New York as the dollar fell to its lowest level this year, making oil more attractive as a currency hedge.
The U.S. Energy Department will probably say that crude inventories declined for an eighth week, according to a Bloomberg survey before the department's report tomorrow. The Commerce Department yesterday reported U.S. new-home sales climbed the most in eight years in June, a sign the deepest housing slump since the Great Depression is starting to stabilize.
"If there's a weaker dollar, there's more risk appetite," said Amrita Sen, analyst at Barclays Capital in London. "But the move back up in prices has been about a lot of macro optimism, and demand looking better in the non-OECD."
Crude oil for September delivery traded at $68.45 a barrel, up 7 cents, in electronic trading on the New York Mercantile Exchange at 10:35 a.m. London time. Yesterday, it rose as high as $68.99, the highest since July 2. Oil has gained 54 percent this year.
Brent crude oil for September settlement traded at $71.11 a barrel, up 30 cents, on London's ICE Futures Europe exchange.
European and Asian stocks rose, advancing the MSCI World Index for a 12th day, after earnings beat analysts' estimates. The Dollar Index, tracking the dollar against currencies including the yen, pound and Swedish krona, fell to 78.315 today, the lowest level since Dec. 18.
Equities Rise
"The surge in equities over the last two weeks has been the prime driver for the move in crude from $58 to $68 over the same time period," said Mike Sander, an investment adviser with Sander Capital in Seattle.
China's oil consumption will rebound "gradually" in the second half of this year along with an economic recovery, the China Petroleum and Chemical Industry Association said today.
U.S. crude oil supplies probably fell 1.6 million barrels last week from 342.7 million, according to the median of seven estimates by analysts before an Energy Department report tomorrow. Four of those surveyed said supplies dropped, and three forecast an increase.
Gasoline inventories probably declined 650,000 barrels from 215.4 million, according to the median forecast in the survey.
Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 1 million barrels from 160.5 million. Six out of the seven respondents forecast a gain.
The Energy Department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. tomorrow in Washington.
"It's still a sideways market right now," said Clarence Chu, a trader with crude oil options dealer Hudson Capital Energy in Singapore. "The fundamentals don't support oil at $70. It looks like we're heading there but very slowly."
Last Updated: July 28, 2009 05:47 EDT
Front month September crude settled at $67.23, down $1.15 on the day, the crude inventories come out tomorrow and the market is anticipating demand being off again. Front month August Natural Gas settled at $3.535 down $0.069 on the day.
September crude is trading down this morning at $65.775, down $1.455, September Natural Gas is trading at $3.66 down $0.027.
Oil Declines a Second Day as API Report Shows Rising Stockpiles
By Grant Smith
July 29 (Bloomberg) -- Oil fell for a second day after an industry report showed increasing crude supplies in the U.S., the world's biggest energy consumer.
Crude inventories rose 4.07 million barrels last week, the industry-funded American Petroleum Institute reported late yesterday. The Energy Department will release its report later today. Oil extended losses as Asian and U.S. stocks declined after a measure of consumer confidence fell short of projections.
"The build in crude stocks is a reminder of how poor the demand fundamentals are," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "It's unlikely the market will hold above $70 a barrel in the near future, especially as this would undermine the fragile economic recovery."
Crude oil for September delivery fell as much as $1.85, or 2.8 percent, to $65.38 a barrel on the New York Mercantile Exchange, and traded at $65.62 at 11:06 a.m. in London. Oil is poised for its biggest daily decline since July 8 after gaining 48 percent this year.
U.S. crude oil inventories climbed to 352.4 million last week, according to the API. Gasoline inventories were little changed at 213.6 million barrels, the data showed.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires reports be filed with the U.S. Department of Energy for its weekly survey.
The Energy Department report today will probably show crude oil inventories dropped 1.5 million barrels last week, according to a Bloomberg News survey.
Getting Expensive
Asian stocks dropped for the first time in 12 days as lower commodity prices and disappointing profit reports raised concern that equities have become expensive relative to earnings prospects. China's Shanghai Composite slumped 5 percent from its highest level in 17 months.
The Standard & Poor's 500 Index dropped 0.3 percent in New York from an eight-month high. The Conference Board's confidence index tumbled to 46.6 from 49.3 in June, a report from the New York-based group showed yesterday.
"The disappointing consumer confidence reading was a bit of a setback for oil," said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. "The strength we've seen lately has really been built on economic optimism and sentiment, rather than fundamentals."
Brent crude oil for September settlement on London's ICE Futures Europe exchange declined as much as $1.71, or 2.5 percent, to $68.17 a barrel, and traded at $68.65 at 11:05 a.m. London time.
Last Updated: July 29, 2009 06:19 EDT
September Front Month crude closed at $63.35 down $3.88 on the day, August Front Month Natural Gas closed at $3.379, down $0.156 on the day. Below is the Weekly Doe/EIA inventory report for Crude and products, the US continues to reduce consumption, which is good.
Summary of Weekly Petroleum Data for the Week Ending July 24, 2009
U.S. crude oil refinery inputs averaged 14.6 million barrels per day during the
week ending July 24, 171 thousand barrels per day below the previous week's
average. Refineries operated at 84.6 percent of their operable capacity last
week. Gasoline production fell last week, averaging nearly 9.0 million barrels
per day. Distillate fuel production decreased last week, averaging about 4.0
million barrels per day.
U.S. crude oil imports averaged 10.0 million barrels per day last week, up 821
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.5 million barrels per day, 586 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged nearly 1.0 million barrels per day. Distillate fuel imports
averaged 254 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 5.1 million barrels from the previous week. At
347.8 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
decreased by 2.3 million barrels last week, and are in the upper half of the
average range. Both finished gasoline inventories and gasoline blending
components decreased last week. Distillate fuel inventories increased by 2.1
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories increased by 2.0 million
barrels last week and are above the upper limit of the average range. Total
commercial petroleum inventories increased by 5.5 million barrels last week,
and are above the upper limit of the average range for this time of year.
Total products supplied over the last four-week period has averaged 18.7
million barrels per day, down by 4.1 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged 9.2
million barrels per day, up by 0.8 percent from the same period last year.
Distillate fuel demand has averaged about 3.3 million barrels per day over the
last four weeks, down by 10.7 percent from the same period last year. Jet fuel
demand is 13.3 percent lower over the last four weeks compared to the same
four-week period last year.
Oil Climbs Above $70 as Manufacturing Spurs Recovery Optimism
By Grant Smith
Aug. 3 (Bloomberg) -- Crude oil traded above $70 a barrel for the first time in a month on signs that industrial activity is picking up and may trigger a recovery in fuel demand.
Oil gained as factory output in China rose to the highest in almost a year, while a U.S. manufacturing index due today may show conditions in July were the best in almost a year. Oil may rise more than other commodities as demand rebounds, said Nouriel Roubini, the New York University economist who predicted the credit crisis.
"Asia will come out of the recession sooner and help the rest of the world," said Sintje Diek, an analyst with HSH Nordbank in Hamburg. "With commodities, risk aversion is lower. We have had economic indicators that were better than expected. The overall data is pointing to better developments in the coming weeks and months."
Crude oil for September delivery rose as much as $1.50, or 2.2 percent, to $70.95 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $70.70 a barrel at 11:30 a.m. in London. Crude reached $71.85 a barrel on July 1.
The Organization of Petroleum Exporting Countries increased oil output for a fourth month in July, with quota compliance slipping as some members took advantage of strong prices, a Bloomberg News survey showed.
OPEC oil output averaged 28.39 million barrels a day last month, up 45,000 from June, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 26.035 million barrels a day, 1.19 million more than their target.
U.S. Manufacturing
The Institute for Supply Management may report today its U.S. manufacturing index climbed to 46.5 in July, the highest level in almost year, according to a Bloomberg survey of economists. Readings below 50 signal contraction.
"The implication is that there's going to be a pretty solid demand recovery later this year," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "It's definitely sentiment-driven at the moment rather than fundamentally driven."
China's official Purchasing Managers' Index rose for a fifth month to a seasonally adjusted 53.3 in July from 53.2 in June, the Federation of Logistics and Purchasing said Aug. 1. A survey today by CLSA Asia-Pacific markets showed manufacturing rose to a one-year high as stimulus spending stoked domestic demand. China accounts for about 45 percent of Asia's oil use.
'Least Resistance'
"Over the short term, it seems that the path of least resistance is higher," said Edward Meir, an analyst with MF Global Ltd. in Connecticut. "Investors are apparently still enthralled by the recovery trade, murky as its final outcome seems to be at this stage."
Brent crude oil for September settlement gained as much as $1.19, or 1.7 percent, to $72.89 a barrel on London's ICE Futures Europe exchange. It traded at $72.66 a barrel at 11:30 a.m. London time.
Hedge-fund managers and other large speculators increased their bets on oil prices to rise, according to weekly data from the U.S. Commodity Futures Trading Commission. Net long positions in New York oil futures, or the difference between orders to buy and sell oil, doubled to 4,576 contracts in the week to July 28.
Last Updated: August 3, 2009 06:32 EDT
Frank; I drove through Bartlesville last week and saw that gas was again about $0.15-20 lower in OK than in KS.
Tobina. Myrna and I notice that everytime we drive to Howard and other areas in Kansas. On a State Tax basis Kansas State Taxes are approximately 8 cents higher than Oklahoma. I would guess some of the dfferences is Jobber and Dealer higher margins and transportation.
September Crude Oil settled at $71.58, up $2.13 on the day, September Natural Gas settled at $4.03, up $0.378 on the day. The 10% move up in Natural Gas is pretty significant.
Oil Falls From Seven-Week High on Concern Recent Gains Overdone
By Grant Smith
Aug. 4 (Bloomberg) -- Crude oil fell from a seven-week high on speculation that gains of 13 percent in the past three days weren't supported by an improvement in demand.
Crude stockpiles in the U.S., the world's biggest energy consumer, probably increased for a second week, according to a Bloomberg News survey before tomorrow's Energy Department report. Oil futures declined as equity indexes slipped in Europe, where the Stoxx 600 dropped 0.7 percent.
"The actual situation in the oil market doesn't justify levels about $70," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "Inventories are high, demand is still really weak, the risk is increasing we see a bigger correction towards $60."
Crude oil for September delivery fell as much as $1.30, or 1.8 percent, to $70.28 a barrel on the New York Mercantile Exchange. It was at $70.74 a barrel at 12:36 p.m. London time.
Yesterday, futures rose $2.13, or 3.1 percent, to $71.58, the highest settlement since June 12. Prices have climbed 58 percent this year.
Kuwait expects oil prices to stay between $70 and $80 a barrel until the end of this year on optimism about a global economic recovery, state-run KUNA news agency cited the country's oil minister as saying.
Crude prices reflect optimism about financial markets and the return of many companies to profitability, Sheikh Ahmed Abdullah al-Sabah said in Rome, according to KUNA.
Crude Inventories
U.S. crude inventories probably rose 1.15 million barrels in the week ended July 31, according to the median of 12 estimates by analysts surveyed by Bloomberg News. Nine of those surveyed said stockpiles rose and three forecast a drop.
Gasoline supplies probably fell 1.25 million barrels from 213.1 million the week before, according to the survey.
"Investors seem to be betting on a V-shaped recovery without giving much thought to a scenario where the economy bumps along the bottom for months at a time," said Edward Meir, an analyst at MF Global Ltd. in Connecticut. "These worries will inevitably resurface."
Oil gained 13 percent in the three trading sessions between July 30 and Aug. 3. The Institute for Supply Management said yesterday its manufacturing index climbed to 48.9 last month from 44.8 in June and CLSA Asia-Pacific Markets said its index of China's manufacturing rose to a one-year high. China accounts for about 45 percent of Asia's oil use.
The Standard & Poor's 500 Index climbed above 1,000 for the first time since November, prompting speculation raw-material demand and prices will increase. The index added 1.5 percent to 1,002.63 in New York, the highest level since President Barack Obama was elected on Nov. 4.
Brent crude oil for September settlement dropped as much as $1.31, or 1.8 percent, to $72.24 a barrel on London's ICE Futures Europe Exchange. It was at $72.86 a barrel at 12:24 p.m. in London.
Last Updated: August 4, 2009 07:39 EDT
Crude Oil Falls for a Second Day on Forecast Stockpiles Gained
By Grant Smith
Aug. 5 (Bloomberg) -- Oil fell for a second day before a government report that's forecast to show U.S. crude inventories increased.
An Energy Department report today will probably show crude stockpiles gained 600,000 barrels, analysts surveyed by Bloomberg said, compared with the 1.52 million-barrel decline posted by the industry-funded American Petroleum Institute yesterday. API data have moved in step with official figures 76 percent of the time in the past four years, Bloomberg data show.
"The economy is only bottoming out and the recovery to pre-recession activity levels will take time," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. "With more inventory builds, prices could stand to correct from recent gains."
Crude oil for September delivery fell as much as 57 cents, or 0.8 percent, to $70.85 a barrel in electronic trading on the New York Mercantile Exchange and traded for $71.10 as of 11:14 a.m. London time.
Yesterday, oil dropped 16 cents, or 0.2 percent, to settle at $71.42 a barrel. Oil has fallen 0.4 percent from its close on Aug. 3, when it reached $71.58 a barrel, the highest settlement since June 12.
The U.K.'s Financial Services Authority will hold discussions with oil traders and producers in London today on the impact of speculation in the energy market. The meeting follows a U.S. Commodity and Futures Trading Commission hearing on whether to put limits on oil trades, something the FSA doesn't do.
Gasoline Inventories
Brent crude oil for September settlement was at $74.13 a barrel on London's ICE Futures Europe Exchange at 11:14 a.m. in London. The contract is trading about $3 above its equivalent in New York.
The Energy Department is scheduled to release its report on crude stockpiles for the week ended July 31 at 10:30 a.m. in Washington.
U.S. gasoline inventories increased 2.1 million barrels to 215.7 million in the week ended July 31, the API report showed. The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines.
"I would zero in on the increased gasoline inventories in the API report that points to continuing weak product demand," said Victor Shum, a senior principal at consultant Purvin & Gertz Inc. in Singapore.
Last Updated: August 5, 2009 06:45 EDT
Oil Little Changed After Rising to Five-Week High on Equities
By Grant Smith
Aug. 6 (Bloomberg) -- Oil traded little changed in New York after rising equity markets pushed prices to a five-week high while a report showed crude inventories swelled in the U.S., the world's largest energy user.
Oil in New York advanced earlier today to its highest since June 30, and Brent crude in London reached a high for this year as stock markets in Europe and Asia rose on better-than-expected earnings. The U.S. Energy Department reported that crude stockpiles grew more than forecast last week as refinery utilization fell to its lowest in more than two months.
"The market doesn't care about fundamentals," said Eugen Weinberg, an analyst a Commerzbank AG in Frankfurt. "Equities, the dollar, low risk aversion and strong price momentum are enough to push prices higher. We might see a spike to $80 and a massive fall in the direction of $50 thereafter."
Crude oil for September delivery rose as much as 45 cents, or 0.6 percent, to $72.42 a barrel on the New York Mercantile Exchange, and traded at $71.76 at 10:49 a.m. London time. Prices have gained 61 percent this year.
Brent crude oil for September settlement traded for $75.31 a barrel at 10:48 a.m. local time on London's ICE Futures Europe exchange. It peaked earlier at $76 a barrel, the highest since Oct. 14.
Brent is trading at a premium of more than $3 to the West Texas Intermediate oil contract traded on Nymex. Crude stockpiles at Cushing, Oklahoma, the delivery point for New York futures, climbed to 33.3 million barrels, the highest since the week of March 13, according to the Energy Department.
Stockpiles Depressing WTI
"Cushing inventories are depressing WTI relative to Brent," analysts from Barclays Capital said in a report yesterday. "The market sees the slack narrowing consistently and is pricing the WTI curve accordingly."
The West Texas future for September delivery is trading at a discount of $2.01 a barrel to October. That's the largest spread, or price difference, between the front-month and second- month contract since April 21.
Crude-oil stockpiles climbed 1.67 million barrels to 349.5 million last week, according to the Energy Department report. A 600,000-barrel gain was forecast, according to analysts in a Bloomberg News survey conducted before the report's release.
U.S. supplies of distillate fuel, a category that includes heating oil and diesel, fell by 1.14 million barrels to 161.5 million, the Energy Department report said. Inventories were projected to increase 1.23 million barrels, according to the median of 16 responses by analysts in the Bloomberg survey.
Highest Since February
Fuel demand climbed 3.1 percent to 19.3 million barrels a day last week, the highest since February. About four-fifths of that gain came under the "other oils" category that includes natural gas liquids such as butane and liquefied refinery gases.
Gasoline inventories declined 218,000 barrels to 212.9 million last week, the report showed. An 800,000-barrel drop was forecast in the survey.
The Organization of Petroleum Exporting Countries may decide to maintain current output levels when it meets next month in Vienna, Kuwaiti Oil Minister Sheikh Ahmed Abdullah al- Sabah was cited as saying by state-run KUNA news agency today.
OPEC agreed at three meetings last year that members with quotas would cut output by a combined 4.2 million barrels a day to 24.845 million in a bid to bolster prices. The group is scheduled to discuss production levels in Vienna on Sept. 9 after leaving output unchanged at two meetings this year.
Last Updated: August 6, 2009 06:32 EDT
Oil Falls a Third Day After Unexpected Increase in U.S. Supply
By Grant Smith
Aug. 27 (Bloomberg) -- Crude oil declined for a third day after a report showed that inventories unexpectedly rose last week in the U.S., the world's largest energy user.
Oil traded below $72 a barrel after the Energy Department said yesterday that crude stockpiles rose 128,000 barrels last week, compared with forecasts for a 1.15 million-barrel reduction. The increase in supplies was still lower than that reported the previous day by the American Petroleum Institute.
"It was an unexpected build nevertheless, and obviously enough to send crude prices lower," said Edward Meir, an analyst with MF Global Ltd. in Connecticut. "We could even see further weakness in energy before the current selling runs its course."
Crude oil for October delivery dropped as much as 62 cents, or 0.9 percent, to $70.81 a barrel in electronic trading on the New York Mercantile Exchange, and was at $70.93 as of 11:53 a.m. London time. Yesterday, the contract dropped 0.9 percent to settle at $71.43. Futures have gained 59 percent this year.
Oil also fell after China said it was studying curbs on overcapacity in industries including steel and cement. The Chinese government announced yesterday that it will also increase "guidance" over parts of the coal, glass and power industries, the State Council said on its Web site.
"There is the risk of commodities demand slowing down in China," said Daniel Liu, an energy strategist at futures broker MF Global Pte in Singapore. "China is a big commodities consumer, so commodities are very sensitive to the Chinese economy."
Refinery Runs Decline
Brent crude for October fell as much as 55 cents, or 0.8 percent, to $71.10 a barrel on the London ICE Futures Europe Exchange, trading for $71.23 at 11:52 a.m. local time.
U.S. crude inventories rose 128,000 barrels last week, the department said yesterday in a report. Refinery runs fell 21,000 barrels to 14.5 million, while utilization rates were unchanged at 84 percent, the Department of Energy said. Supplies were forecast to drop by 1.15 million barrels, according to the median of 14 analyst estimates in a Bloomberg News survey.
The industry-funded American Petroleum Institute reported Aug. 25 that crude stockpiles rose 4.35 million barrels last week. The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Pre-emptive Market
"The API numbers and then the EIA numbers took a bit of the strength out of the market," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "Oil demand hasn't really shown too much improvement and that will always provide some downside risk to a market that really has been pre-emptive in the past six to nine months."
U.S. travel during the Labor Day weekend will fall 13 percent from last year because the holiday ends later than usual, the Automobile Association of America, the country's biggest motoring organization, said yesterday. Labor Day falls on Sept. 7. Last year it was on Sept. 1.
Nigerian oil production has risen to 1.7 million barrels a day from 1.2 million following an improvement in security in the oil-producing Niger Delta region, Petroleum Minister Rilwanu Lukman said yesterday.
Nigeria is content with oil prices between about $70 and $80 a barrel, he said. Lukman declined to say what action he will recommend the Organization of Petroleum Exporting Countries take when the group meets Sept. 9 to discuss production quotas.
Last Updated: August 27, 2009 07:27 EDT
I've been meaning to ask where this thread went, but didn't. Glad it is back, Thanks.
Larryj
Thanks Larry, I have been traveling some and wasn't sure if many were reading the daily posts on this and also there wasn't much happening in the Oil and Gas markets.
Hopefully I'm still allowed to thank you for posting these. I find them very interesting.
Thanks, Frank for keeping this thread up to date. I read it every time you post an update, trying to time my gas buying to what I think will be the lower price, now or in the near future. :P
Thanks Diane, I appreciate that. Part of the travelling we did was to your part of the world. We flew in to Laguardia, drove over to Lords Valley PA, in the mountains and spent a few days with friends, beautiful area and the weather was great. The worst part about the trip was that American lost our luggage, then they found it and said they would deliver it to us, then they company delivering it lost it and we finally got our luggage when we got back to Tulsa. We did buy some clothes, toiletries, etc, American allows $200.00 for what you have to buy, when I got to Tulsa, I collected my $192.00 for items purchased, they offered me a $275.00 travel voucher instead of the $192.00, I told the young lady I didn't plan to treavel American again unless I just had to. We normally travel Southwest and I will be even more likely to travel Southwest than ever.
I will post to this thread anytime there are big market changes or something big is happening.
We fly American quite a lot and their record is indeed very spotty as far as service and luggage is concerned. They do try to make it right, but I'm sorry you were so inconvenienced. Of course we usually fly out of Philly, which is a teeny bit smaller than NY. I'm glad you had some nice mountain weather. No afternoon thunderstorms? Now we are watching Danny, but again I think it will be far enough off the coast to just give rough surf, rips and some rain for us tomorrow night and maybe into Sat. It still bears watching though. New England may get the worst of it again.
Yes, there were afternoon showers but the mountain home that we were at had a big screened in porch and we sat on the porch and watched the showers, deer and visited. In my early days at Phillips I traveled all over the world and the biggest problems I had with losing my luggage were during travel in the US. The two worst airlines then were American and Braniff. Braniff folded and American still can't turn a profit.
Ah, that mountain home sounds delightful.
I don't understand why American can't get themselves straightened out. Did you have any problems with security? Were they rude or anything? We've been lucky I guess and have never had a problem. They wand check Al and wipe down his leg braces for explosives residue and all, but have been very polite about it.
Myrna and I both have to be had patted down, Myrna has a pacemaker, I have one metal knee joint, have had 2 back surgeries and have a Titanium plate 2 12inch steel rods and a bunch of screws in my back. Most of the time the security people are very good. I generally tell them I would prefer to be patted down by a female TSA worker and that starts the mood off good. There were lots of wild turkeys in the mountains and also Bears but we didn't see any Bears.
Crude Advances a Second Day as Rising Equities Signal Recovery
By Grant Smith and Christian Schmollinger
Aug. 28 (Bloomberg) -- Crude oil gained for a second day, rising above $72 a barrel as advancing equity indexes boosted confidence that the global economy will rebound and revive fuel demand.
Oil rose in New York as the MSCI World Index of stocks headed for a seventh weekly gain, while a weaker dollar spurred demand for crude as a currency hedge. Oil is nonetheless poised for a weekly decline after the Energy Department two days ago reported an unexpected gain in U.S. crude stockpiles.
"It's only a question of time before the economic situation gets better and demand grows again," said Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich. "I don't think oil is overvalued. Around $70 is a fair price for the time being."
Crude oil for October delivery climbed as much as 58 cents, or 0.8 percent, to $73.07 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $72.93 as of 9:48 a.m. London time. So far this week, futures have fallen 1.4 percent this week.
October Brent crude was up 44 cents at $72.93 a barrel on London's ICE Futures Europe exchange. Brent and Nymex crude prices both gained yesterday.
U.S. gross domestic product shrank at a 1 percent annual rate from April to June, less than the 1.5 percent decline projected by economists in a Bloomberg News survey, a Commerce Department report showed yesterday. Corporate earnings rose by the most in four years, the department said.
Recovering Economies
The total number of people collecting unemployment insurance in the U.S. fell to the lowest level since April, adding to signs that the economy is emerging from recession. In Europe, the economies of Germany and France returned to growth last quarter, government reports showed earlier this month.
The MSCI World Index of 23 developed countries gained 0.6 percent at 8:10 a.m. in London, bringing its weekly advance to 1.1 percent. The euro rose to $1.4352 as of 7:30 a.m. in London from $1.4341 in New York yesterday.
U.S. crude inventories rose 128,000 barrels last week to 343.8 million, the Energy Department said Aug. 26. Supplies were forecast to drop by 1.15 million barrels, according to the median of 14 analysts in a Bloomberg News survey.
U.S. total daily fuel use averaged 19.2 million barrels in the past four weeks, down 0.9 percent from a year earlier, the Energy Department said.
Crude oil reached a 10-month intraday high of $75 a barrel on Aug. 25 and has fallen 3.3 percent since then.
"The market found very good resistance at $75 and it will be very difficult to get past that level at the moment," said Ken Hasegawa, a commodity derivatives sales manager at Newedge brokerage in Tokyo. "There are a lot inventories at the moment that no one can use. There is still a lot of oversupply."
OPEC Shipments
OPEC will reduce shipments by 0.6 percent in the month to Sept. 12, according to consultant Oil Movements, as the group prepares to discuss the impact of record production cuts announced last year.
The Organization of Petroleum Exporting Countries will export 22.53 million barrels a day by sea in the four-week period, down from an average of 22.67 million barrels a day in the month to Aug. 15, Oil Movements said in a report e-mailed yesterday.
OPEC members, due to meet on Sept. 9, have implemented about 72 percent of a promised 4.2 million barrel-a-day supply cut they agreed on last year, according to Bloomberg data.
Crude oil futures may fall next week on speculation that demand will be slow to rebound and the dollar will strengthen, a survey of analysts showed.
Twenty-three of 39 analysts surveyed by Bloomberg News, or 59 percent, said futures will decline through Sept. 4. Six respondents, or 15 percent, forecast that the market will rise, and 10 said prices will be little changed. Last week, 55 percent of analysts said oil would drop.
Last Updated: August 28, 2009 04:50 EDT
Oil Falls Below $72 as Chinese Stocks Slump, Dollar Strengthens
By Ayesha Daya and Yee Kai Pin
Aug. 31 (Bloomberg) -- Crude oil fell for the first time in three days in New York as the dollar strengthened and equities in China plunged on concern a slowdown in lending growth may derail a recovery in the world's second-largest oil consumer.
China's benchmark index fell 6.7 percent, the most since June 2008, after the Beijing-based Caijing magazine reported mainland banks' new lending this month may be almost half that of July. The dollar gained against the pound and the euro.
"As the unusually strong reaction of the Chinese economy to that government's stimulus earlier this year has driven commodities up, the fall in equities there today may be lending weakness to the oil markets," said Ronald Smith, chief strategist with Alfa Bank. "Oil market weakness also coincides with a stronger dollar versus the euro and the pound."
Crude oil for October delivery fell as much as $1.65, or 2.3 percent, to $71.09 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $71.23 at 10:40 a.m. in London. Oil is down 0.8 percent in August, poised for the second consecutive drop in seven months.
China's Shanghai Composite Index, which has dropped 23 percent from its 15-month high on Aug. 4, reversed a rally that boosted the index up 103 percent from a November low on prospects the government's 4 trillion-yuan ($586 billion) stimulus program and a record amount of new loans will ensure the economy grows at least 8 percent this year.
Stronger Dollar
Hong Kong's Hang Seng Index lost 1.9 percent, led by China Petroleum & Chemical Corp., which fell 3.9 percent on concern the government will keep fuel prices unchanged to support the economy as crude climbs, squeezing margins.
The pound declined 0.4 percent against the dollar to $1.6219, the lowest since July 12, while the euro fell 0.1 percent to $1.429 against the U.S. currency.
Oil also fell amid signs a recovery in Japan, Asia's second-largest oil consumer, may be fading. Japanese manufacturers increased output in July at the slowest pace in four months as the effects of the global stimulus and inventory restocking started to dissipate. Production climbed 1.9 percent from June, when it rose 2.3 percent, the Trade Ministry said.
"A lot of countries used stimulus to help their economies rebound, but those campaigns are almost ended," said Hasegawa at Newedge. "After that, I think consumption all over the world will decrease again and demand for oil will also decrease."
Brent crude for October fell as much as $1.79, or 2.5 percent, to $71 a barrel on the London-based ICE Futures Europe exchange and traded at $71.15 at 10:39 a.m. local time.
Last Updated: August 31, 2009 05:42 EDT
October Crude settled at $69.96 down $2.78 on the day, the back months are in the $72.00 t0 $73.00 range. October Natural Gas settled at $2.977, down $0.056 on the day, Jan,Feb,March gas is in the $5.19 range.
Crude Oil Rises Above $70 as China's Manufacturing Quickens
By Grant Smith
Sept. 1 (Bloomberg) -- Crude oil rose above $70 a barrel after a report showed that Chinese manufacturing grew at the fastest pace in more than a year.
Oil rebounded from the biggest decline in two weeks yesterday after China's Purchasing Manager's Index for July rose at the fastest rate in 16 months. U.S. crude inventories probably declined last week, according to a Bloomberg survey before a government report tomorrow.
"The market's been saved by the Chinese PMI data after yesterday's collapse," said Robert Montefusco, a broker at Sucden Financial in London. "Demand is there and will offer support for the time being, but until we see recovery in the rest of the world the markets will stay fragile."
Crude oil for October delivery rose as much as 68 cents, or 1 percent, to $70.64 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $70.35 at 10:54 a.m. in London.
Yesterday, crude declined 3.8 percent to $69.96 a barrel, the biggest drop since Aug. 14. Prices have increased 58 percent this year.
Algeria will call upon OPEC members to comply more strictly with oil production quotas as global stockpiles climb, Oil Minister Chakib Khelil told El Watan. The Organization of Petroleum Exporting Countries, due to meet in Vienna on Sept. 9, has faltered in implementing record supply cuts announced last year.
Crude inventories are above the normal level of 61 days' worth of demand, which may drag prices down, the Algiers-based newspaper said, citing Khelil.
'Picking Up'
The U.S. Institute for Supply Management may report at 10 a.m. New York time its manufacturing index climbed to 50.5 in August, according to a Bloomberg News survey median. Readings above 50 signal expansion.
Orders placed at factories likely jumped 2.2 percent in July, the most in two years, economists said before a U.S. Commerce Department report due tomorrow.
"The European Union and the U.S. are past the worst point and their economies are picking up," said Daniel Liu, an energy strategist at brokers MF Global Ltd. in Singapore. "So the export economy of China will be reviving to supply these markets and that's good for oil demand."
An Energy Department report tomorrow will probably show U.S. crude oil stockpiles declined last week, another Bloomberg survey showed. Supplies likely dropped 500,000 barrels from 343.8 million the prior week, according to the median of responses from eight analysts.
Gasoline inventories probably fell 1.05 million barrels, a sixth weekly drawdown. Stockpiles of distillate fuel, including heating oil and diesel, probably increased 675,000 barrels, according to the survey. Inventories are near their highest since 1983.
South Korea, Asia's third-largest oil buyer, imported more crude in August for the first in four months as drivers used more gasoline amid signs of an economic recovery.
Imports rose 2.4 percent to 72 million barrels last month from 70.2 million barrels a year earlier, the Ministry of Knowledge Economy said in an e-mailed statement.
Brent crude oil for October settlement rose as much as 79 cents, or 1.1 percent, to $70.44 a barrel on the London-based ICE Futures Europe exchange. It traded at $70.29 at 10:56 a.m. London time. Yesterday, the contract declined 4.3 percent to end the session at $69.65.
Last Updated: September 1, 2009 06:21 EDT
I thought this article was very interesting and worth posting. This type of project is encouraging, the World needs to be working on every possible source of renewable energy for the future.
Mitsubishi, IHI to Join $21 Bln Space Solar Project (Update1)
By Shigeru Sato and Yuji Okada
Sept. 1 (Bloomberg) -- Mitsubishi Electric Corp. and IHI Corp. will join a 2 trillion yen ($21 billion) Japanese project intending to build a giant solar-power generator in space within three decades and beam electricity to earth.
A research group representing 16 companies, including Mitsubishi Heavy Industries Ltd., will spend four years developing technology to send electricity without cables in the form of microwaves, according to a statement on the trade ministry's Web site today.
"It sounds like a science-fiction cartoon, but solar power generation in space may be a significant alternative energy source in the century ahead as fossil fuel disappears," said Kensuke Kanekiyo, managing director of the Institute of Energy Economics, a government research body.
Japan is developing the technology for the 1-gigawatt solar station, fitted with four square kilometers of solar panels, and hopes to have it running in three decades, according to a 15- page background document prepared by the trade ministry in August. Being in space it will generate power from the sun regardless of weather conditions, unlike earth-based solar generators, according to the document. One gigawatt is enough to supply about 294,000 average Tokyo homes.
Takashi Imai, a spokesman for the Institute of Unmanned Space Experiment Free Flyer, which represents the 16 companies, confirmed the selection when reached by phone in Tokyo.
Mitsubishi Electric gained 0.1 percent to 693 yen at the morning break in Tokyo trading, while IHI fell 0.5 percent to 189 yen and Mitsubishi Heavy slipped 0.3 percent to 384 yen. The benchmark Topix index rose 0.3 percent.
Far, Far Away
Transporting panels to the solar station 36,000 kilometers above the earth's surface will be prohibitively costly, so Japan has to figure out a way to slash expenses to make the solar station commercially viable, said Hiroshi Yoshida, Chief Executive Officer of Excalibur KK, a Tokyo-based space and defense-policy consulting company.
"These expenses need to be lowered to a hundredth of current estimates," Yoshida said by phone from Tokyo.
The project to generate electricity in space and transmit it to earth may cost at least 2 trillion yen, said Koji Umehara, deputy director of space development and utilization at the science ministry. Launching a single rocket costs about 10 billion yen, he said.
"Humankind will some day need this technology, but it will take a long time before we use it," Yoshida said.
The trade ministry and the Japan Aerospace Exploration Agency, which are leading the project, plan to launch a small satellite fitted with solar panels in 2015, and test beaming the electricity from space through the ionosphere, the outermost layer of the earth's atmosphere, according to the trade ministry document. The government hopes to have the solar station fully operational in the 2030s, it said.
In the U.S., the National Aeronautics and Space Administration and the energy department have spent $80 million over three decades in sporadic efforts to study solar generation in space, according to a 2007 report by the U.S. National Security Space Office.
Last Updated: August 31, 2009 23:19 EDT
You are right. That is a very interesting article. My curiosity gets to me sometimes, however. I am pretty sure this idea of generating electricity from space is not new. I think it hasn't been done because the technology wasn't there to make it worthwhile. Even as mentioned in the article, the costs could be prohibitive. But, I can understand that as the technology changes and improves, those costs could come down enough to make it happen. Then again, four square kilometers seems big for electricity for 294,000 homes.
On a second curiosity note, how come the crude oil stockpile goes up and down? I guess I think of it as something you just keep adding into and not withdrawing from unless there is a national emergency of sorts. Is it because there is a certain amount of storage space or does the government take some out to supplement the imports and help regulate the price?
Thanks again for your posts and especially the one today about solar power from space.
Larryj
PG&E makes deal for space solar power
Utility to buy orbit-generated electricity from Solaren in 2016, at no risk.
http://www.msnbc.msn.com/id/30198977/
By Alan Boyle
Science editor
msnbc.com
updated 7:41 p.m. PT, Mon., April 13, 2009
California's biggest energy utility announced a deal Monday to purchase 200 megawatts of electricity from a startup company that plans to beam the power down to Earth from outer space, beginning in 2016.
San Francisco-based Pacific Gas & Electric said it was seeking approval from state regulators for an agreement to purchase power over a 15-year period from Solaren Corp., an 8-year-old company based in Manhattan Beach, Calif. The agreement was first reported in a posting to Next100, a Weblog produced by PG&E.
Solaren would generate the power using solar panels in Earth orbit and convert it to radio-frequency transmissions that would be beamed down to a receiving station in Fresno, PG&E said. From there, the energy would be converted into electricity and fed into PG&E's power grid.
Larry , the reference to crude inventories in the article does not refer to the SPR "Stategic Petroleum Reserve", it refers to crude oil working inventories, i.e, pipelines tankage, etc and goes up and down daily. Every Wednesday the DOE/EIA reports what the working crude inventories and product supplies are. The working inventories go up and down based on refinerey runs, crude/product imports and product usage.
Thanks for clearing that up for me. I wasn't thinking "strategic petroleum reserve" and forgot that part. I sure am glad you are around to keep me aware of the world around me.
Larryj
October Crude settled at $68.05, down $1.95 on the day, October Natural Gas settled at $2.821, down $0.156 on the day.
The Doe-EIA report comes out later today, it will be interesting to see how it compares to the API Report from yesterday.
Oil Rises Before Report Forecast to Show Drop in U.S. Supplies
By Grant Smith
Sept. 2 (Bloomberg) -- Crude oil rose for the first time in three days on signs that excess U.S. inventories are contracting as demand for winter fuels starts to pick up.
The U.S. Energy Department will probably say crude stockpiles dropped last week, according to a Bloomberg survey. Supplies are 12 percent higher than a year ago after the recession cut demand, which normally accelerates in the fourth quarter. The American Petroleum Institute said yesterday that crude supplies declined by 3.19 million barrels.
"All the indicators point that the worst of the crisis is behind us," said Andy Sommer, an analyst at Elektrizitaets- Gesellschaft in Dietikon, Switzerland. "Demand is slightly picking up, and with time the huge inventory overhang will draw down."
Crude oil for October delivery rose as much as 75 cents, or 1,1 percent, to $68.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $68.61 at 11:55 a.m. London time. Oil in New York has traded between $65 and $75 a barrel since July 31.
Yesterday, the contract fell 2.7 percent to $68.05, the lowest settlement since Aug. 17. Prices climbed as much as $1.41 a barrel yesterday after reports showed that manufacturing in the U.S. and China, the two biggest energy users, expanded in August. The two countries consume more than 30 percent of global crude-oil output.
'Turning Around'
"The broader economy has shown signs it's turning around," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney.
U.S. crude oil inventories dropped to 343.5 million barrels in the week ended Aug. 28, the API report showed.
A U.S. Energy Information Administration today is likely to show stockpiles declined, according to a Bloomberg News survey. The data may show supplies fell 900,000 barrels from 343.8 million, according to the median of responses from 11 analysts.
Distillate fuel inventories, including diesel and heating oil, climbed 920,000 barrels to their highest level since 1983, according to the API. The Energy Department report will probably show supplies rose 775,000 barrels from 162.4 million the prior week.
Gasoline supplies fell by 2.81 million barrels to 206.9 million last week, the API report showed. Inventories probably fell 900,000 barrels, a sixth weekly decline, according to the Bloomberg survey.
OPEC Targets
OPEC is likely to leave oil production targets unchanged when it meets next week in Vienna, an official from a Persian Gulf member of the group said.
The Organization of Petroleum Exporting Countries expects oil demand to recover and is unlikely to change production quotas to avoid derailing the global economic recovery, said an official who declined to be identified because a final decision hasn't been made. OPEC meets next on Sept. 9 in Vienna.
OPEC output averaged 28.445 million barrels a day last month, down 40,000 from July, according to a Bloomberg News survey of oil companies, producers and analysts. The 11 members with quotas, all except Iraq, pumped 26.055 million barrels a day, up 20,000 barrels from the previous month and 1.21 million more than their target.
Brent crude oil for October settlement was at $68.35 a barrel on the London-based ICE Futures Europe Exchange at 11:55 a.m. local time.
Last Updated: September 2, 2009 07:11 EDT
BP Makes 'Giant' Oil Discovery in Gulf of Mexico (Update1)
By Eduard Gismatullin
Sept. 2 (Bloomberg) -- BP Plc, Europe's second-largest oil company, reported a "giant" discovery at the Tiber Prospect in the U.S. Gulf of Mexico that may contain more than 3 billion barrels, sending its shares higher.
The well is located in Keathley Canyon block 102, about 250 miles (400 kilometers) south east of Houston, the London-based company said today in a statement. The Tiber well was drilled to a total depth of approximately 35,055 feet (10,685 meters), greater than the height of Mount Everest.
The latest discovery will help BP, already the biggest producer in the Gulf of Mexico, boost output in the region by 50 percent to 600,000 barrels of oil equivalent a day beyond 2020. It will also allay concerns over BP's reluctance to invest heavily in unconventional projects, such as oil sands in Canada, to replenish reserves as maturing fields age.
"It will take a while to develop, the second half of next decade, but it's very important," Jonathan Rigby, an analyst at UBS AG, said in a telephone interview.
BP is developing nine projects in the Gulf of Mexico and in 2007 overtook Royal Dutch Shell Plc's output in the region.
Kaskida Find
"It will be bigger than the 3 billion barrels" of oil equivalent discovered at the nearby Kaskida field, said Robert Wine, a London-based spokesman at BP. "This is a whole new geological play we've got here."
BP gained as much as 20.4 pence, or 3.9 percent, to 539.9 pence in London after the announcement and traded 17.5 pence higher at 537 pence at 11:41 a.m. local time.
"Tiber represents BP's second material discovery in the emerging Lower Tertiary play in the Gulf of Mexico, following our earlier Kaskida discovery," Andy Inglis, chief executive for exploration and production at BP, said in the statement.
BP is operator of the project with a stake of 62 percent, while Petroleo Brasileiro SA, Brazil's state-controlled oil company, holds 20 percent and ConocoPhillips 18 percent.
Last Updated: September 2, 2009 06:50 EDT
October Crude settled at $68.05, unchanged on the day, October Natural Gas Settled at $2.715, down $0.106 on the day.
Oil Rises Along With Equities After U.S. Gasoline Supply Drops
By Grant Smith
Sept. 3 (Bloomberg) -- Oil rose and traded near $69 a barrel in New York as Chinese equities advanced the most in six months, spurring speculation that the country's economic growth will lead to a rebound in fuel consumption.
U.S. gasoline stockpiles fell to an 11-week low even as refinery output increased, according to an Energy Department report yesterday. The drop was more than three times analysts' estimates in a Bloomberg survey. The Shanghai Composite Index climbed 4.8 percent, the most since March 4.
"The market has probably found a bottom," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "Today we're seeing a rebound from the recent correction, helped by the growth in positive sentiment across markets generally and optimism in China."
Crude oil for October delivery increased as much as $1.34, or 2 percent, to $69.39 a barrel on the New York Mercantile Exchange, and traded at $69.13 at 12:01 a.m. in London. Yesterday, the contract settled unchanged at $68.05, the first time this has happened since Nov. 24, 2006. Prices have gained 55 percent this year.
U.S. fuel consumption averaged 19.3 million barrels a day in the four weeks ended Aug. 28, up 0.1 percent from a year earlier, the Energy Department said. Gasoline inventories tumbled 2.97 million barrels from a week earlier to 205.1 million. Refineries produced 9.2 million barrels a day of the motor fuel, the highest in six weeks.
Market Cue
"U.S. oil demand has reached a turning point, with demand indications now likely to turn increasingly positive over the rest of the year," commodities analysts at Barclays Capital, led by Paul Horsnell, said in a report. "Gasoline demand patterns seem to have been a reasonably good indicator, almost a leading indicator, as to the timing of the U.S. recession."
The Organization of Petroleum Exporting Countries will probably maintain its output targets at a Sept. 9 policy meeting in Vienna, according to the group's president and a Bloomberg survey of analysts.
All of the 26 analysts surveyed by Bloomberg News before OPEC's summit predicted the organization will maintain its target at 24.845 million barrels a day.
"The world economy is recovering," Jose Maria Botelho de Vasconcelos, OPEC president and Angola's oil minister, said in an interview in Luanda yesterday. "Everything shows that they will keep output unchanged."
OPEC Output
The 12-member group, which pumps 40 percent of the world's oil, hasn't officially increased output since pledging a series of reductions up to December.
Masoud Mir-Kazemi won approval from Iran's parliament today as oil minister, overcoming objections that he lacked the experience to run energy policy in OPEC's second-largest producer. He will replace Gholamhossein Nozari, who was oil minister from 2007.
Brent crude oil for October settlement traded at $68.24 a barrel, up 58 cents, on the London-based ICE Futures Europe exchange at 11:34 a.m. London time. Yesterday, the contract declined 7 cents to $67.66, the lowest settlement since July 29.
Last Updated: September 3, 2009 07:02 EDT
Oil Rises Before OPEC Meeting as Weak Dollar Boosts Commodities
By Alexander Kwiatkowski
Sept. 8 (Bloomberg) -- Oil rose, gaining the most in three weeks in London after the dollar dropped against the euro, spurring demand for commodities as OPEC ministers gathered in Vienna to decide crude output levels.
The global oil market is in "good shape," Saudi Arabian Oil Minister Ali al-Naimi said in Vienna before tomorrow's OPEC meeting, signaling the group is unlikely to change its production quotas. Prices increased as the U.S. currency dropped to the lowest in almost a year against the euro and equity markets climbed.
"We are still seeing a rather weak U.S. dollar, which is supporting commodities," Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich, said by phone from Vienna. "It is pretty sure that there won't be an increase or decrease in production by OPEC."
In New York, oil for October delivery rose as much as $1.72, or 2.5 percent, from the Sept. 4 close to $69.74 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $69.41 a barrel at 12:07 p.m. London time.
Floor trading was shut yesterday for the Labor Day holiday in the U.S. Electronic trades yesterday will be booked today for settlement purposes.
Brent crude oil for October settlement rose as much as $1.68, or 2.5 percent, to $68.21 a barrel on the London-based ICE Futures exchange. That's the biggest increase since Aug. 19. It was at $67.99 a barrel at 12:06 p.m. local time. The contract fell 29 cents, or 0.4 percent, to $66.53 a barrel yesterday.
Weaker Dollar
The dollar traded at $1.4489 against the euro, weakening from $1.4332 yesterday. A weak dollar bolsters the appeal of commodities priced in the U.S. currency that can be used to hedge against inflation. Europe's Dow Jones Stoxx 600 Index added 0.5 percent to 238.39 at 12:10 p.m. in London.
Several members of the Organization of Petroleum Exporting Countries have said the group should keep its production target unchanged at 24.845 million barrels a day when it meets tomorrow. All of the 26 analysts surveyed by Bloomberg News predicted the organization will keep quotas steady.
"The market is in a very good shape, very well supplied," Saudi Arabia's Al-Naimi said before the conference. "The price is good for everybody, consumers, producers."
The group, which pumps about 40 percent of the world's oil, cut quotas by 4.2 million barrels a day between September and December to prevent a glut amid the global recession. Oil prices are within a "satisfactory range," OPEC President and Angolan Oil Minister Jose Maria Botelho de Vasconcelos said in Luanda today before leaving for the group's meeting.
"The OPEC meeting will be a non-event for the market," said Tobias Merath, head of commodity research at Credit Suisse Group AG in Zurich. "I don't think anybody really expects a change."
Last Updated: September 8, 2009 07:37 EDT
October, Front Month Crude settled at $71.10, up $3.08 on the day, October front month Natural Gas settled at $2.87, $0.079 on the day.
Crude Oil Trades Near $71 as Dollar Pares Losses, Equities Drop
By Alexander Kwiatkowski
Sept. 9 (Bloomberg) -- Crude oil traded little changed near $71 a barrel as the dollar pared losses against the euro, reducing the appeal of commodities while OPEC ministers gathered in Vienna to decide crude output levels.
Oil gained as much as 5.5 percent yesterday as the U.S. currency dropped to the lowest level this year and on speculation that inflation will accelerate. The Organization of Petroleum Exporting Countries should maintain existing output quotas and improve compliance when it meets today, the group's production-monitoring committee recommended late yesterday.
"The market is consolidating after yesterday's dollar sell-off," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "Oil is range-bound as the dollar has pulled back a little. The market will sit quiet ahead of the OPEC meeting."
Crude oil for October delivery was at $71.07 a barrel, down 3 cents in electronic trading on the New York Mercantile Exchange at 9:50 a.m. in London. Yesterday, the contract rose $3.08, or 4.5 percent, to $71.10, the biggest gain since Aug. 19. Prices are up 60 percent this year.
The U.S. currency traded little changed at $1.4474 per euro, after weakening to $1.4518. A strengthening dollar reduces the appeal of commodities as a hedge against inflation.
Europe's Dow Jones Stoxx 600 Index slipped 0.5 percent at 9.14 a.m. in London, retreating from an 11-month high. The MSCI Asia Pacific Index also declined.
OPEC members have said the 12-member group should keep its output target unchanged at 24.845 million barrels a day when it gathers today in Vienna.
'More Compliance'
"We need more compliance" with existing production targets, Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah told reporters today in Vienna. "I don't foresee any cut," he said, when asked at what price level the group might consider a further supply reduction.
All of the 26 analysts surveyed by Bloomberg News predicted the organization will keep quotas steady.
OPEC's Ministerial Monitoring Committee met for an hour yesterday evening at the group's Vienna headquarters to review data on OPEC oil supply and demand. The MMC, comprising officials from Iran, Nigeria and Kuwait, often recommends a course of action for the full meeting of OPEC ministers, which convenes at 9:30 p.m. local time, after dark because the summit falls in the Muslim holy month of Ramadan.
"It's very unlikely that they're going to change production quotas," Tobias Merath, head of commodity research at Credit Suisse Group AG in Zurich, said in a Bloomberg Television interview. "The market is basically where they want it to be. It's around the $70 mark."
U.S. Inventories
Brent crude oil for October settlement traded at $69.35 a barrel, down 7 cents on the London-based ICE Futures Europe exchange at 9:50 a.m. in London. Yesterday, it rose $2.89, or 4.3 percent, to settle at $69.42, the first gain in seven days.
U.S. crude oil inventories probably declined 1.6 million barrels from 343.4 million in the week to Sept. 4, according to the median of 12 estimates by analysts before an Energy Department report this week.
Refineries operated at 86.8 percent of capacity last week, down 0.4 percentage point from the previous week, according to the median of survey responses.
Gasoline inventories probably fell 1.5 million barrels from 205.1 million the week before, the survey showed. Supplies of distillate fuel rose 875,000 barrels from 163.6 million the prior week. Stockpiles in the week ended Aug. 28 were at the highest level since October 1983.
The department is scheduled to release its Weekly Petroleum Status Report in Washington tomorrow, a day later than usual because of the Labor Day holiday.
Last Updated: September 9, 2009 04:54 EDT
OPEC Agrees to Keep Oil Production Quotas Unchanged (Update3)
By Fred Pals and Ayesha Daya
Sept. 10 (Bloomberg) -- OPEC said it will keep oil production quotas unchanged, banking on a recovery in the world economy to maintain prices near today's $72 a barrel.
The Organization of Petroleum Exporting Countries agreed to maintain total production quotas at 24.845 million barrels a day, and will urge members to adhere to their targets, OPEC Secretary-General Abdalla El-Badri said at a press briefing. It's the third time in 2009 the group has met without changing output.
"Holding production was the prudent thing to do," Jason Schenker, president of Texas-based consultants Prestige Economics LLC, said in an interview in Vienna.
The producer group, which accounts for about 40 percent of global crude supply, had been expected by analysts and most ministers to keep output unchanged after prices rallied. Oil has gained 61 percent this year, last month reaching the $75 level identified by Saudi King Abdullah as satisfactory for consumers and producers.
Crude oil advanced for a fourth day with contract for October delivery climbing as much as $1.13, or 1.6 percent, to $72.44 a barrel on the New York Mercantile Exchange today.
"This $65 to $75 range seems amenable to both producers and consumers," Schenker said. "If they'd cut when production is above quotas, and prices are amenable, it may not have been received well."
Three-Hour Talks
Algerian Oil Minister Chakib Khelil and Qatari Energy Minister Abdullah bin Hamad al-Attiyah confirmed the decision as they left OPEC's headquarters at about 1 a.m. Vienna time today, after closed door talks lasting three hours.
"OPEC has played its cards very well," considering that there has been a significant economic slowdown in some of the major consuming nations and regions, said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. "They were probably correct in not cutting output further at the beginning of this year. They have to be relatively happy with where prices are"
OPEC agreed late last year to cut production targets by 4.2 million barrels a day after prices crashed more than $100 a barrel from a record set in July 2008. Oil dipped to $32.40 in December before recovering this year. In the past five months, production has risen from the 11 OPEC members bound by quotas.
The 11 members bound by quotas pumped 26.055 million barrels a day in August, according to estimates in a Bloomberg survey, which indicates quota compliance of about 71 percent.
Compliance Improving
Compliance with existing production quotas is improving and prices may rise further by the end of the year, Algeria's Khelil said. Late yesterday, Ali al-Naimi, the oil minister for Saudi Arabia, OPEC's biggest producer, told reporters "we are enjoying a good, fair price" for oil, so any slippage in compliance with production quotas is not a concern while prices are "perfect."
Ministers from several OPEC member states including Kuwait and Venezuela had said this week they didn't expect any change in allowed production volumes. Quotas were last changed in December. All 26 analysts surveyed by Bloomberg News last week also forecast no change in quotas.
Only Saudi Arabia, Kuwait and Qatar pumped less than their target last month, according to Bloomberg estimates. Iran, Angola and Venezuela were the biggest quota busters. Iraq is the only OPEC member which does not have production limits.
"Everybody should adhere to his production allocation," OPEC's el-Badri said. There are "positive signs" oil demand will pick up in 2010, he added.
Oil Demand Rising
World oil demand is expected to rise 1.6 percent next year to 85.25 million barrels a day, according to a report last month by the Paris-based International Energy Agency, led mainly by gains in developing nations.
OPEC members will make $559 billion in net sales from crude exports this year, down 42 percent from 2008, the U.S. Energy Department reported. The figure was little changed from last month's forecast of $555 billion. OPEC made $971 billion last year and is forecast to make $675 billion in 2010.
OPEC will meet next in Luanda, Angola, on Dec. 22, and again in Vienna on March 17 next year, the group said.
Oil Set for Weekly Gain, Helped by Weak Dollar, Chinese Demand
By Alexander Kwiatkowski
Sept. 11 (Bloomberg) -- Oil is poised for its first weekly gain in three weeks after the dollar fell to a nine-month low and industrial production in China, the world's second-biggest energy user, increased at a faster pace than forecast.
Oil, which rose each day earlier this week, was little changed in New York today as the dollar stabilized after its longest losing streak since March. China's factory output gained, and net oil imports in August rose to the second-highest level on record. U.S. crude supplies fell 5.91 million barrels to 337.5 million last week, the lowest level since mid-January.
"The dollar is clearly the main driver at the moment," said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. "The stock market was until a couple of weeks ago, and now the dollar has taken over. China has been the first to start the drive for commodities again."
Crude oil for October delivery traded at $71.78 a barrel, down 16 cents, on the New York Mercantile Exchange at 10:36 a.m. in London. It earlier rose as much as 44 cents, or 0.6 percent, to $72.38 a barrel. Futures have gained 5.5 percent this week and 61 percent in 2009.
The dollar pared it losses after a five-day decline against the euro. The U.S. currency traded at $1.4586 at 10:20 a.m. in London from $1.4582 yesterday. The euro has gained 4 percent against the dollar so far this year.
Output at China's factories increased 12.3 percent from a year earlier, the statistics bureau said in Beijing. That exceeded the 11.8 percent growth forecast by economists surveyed by Bloomberg News.
Economic Recovery
China's net crude oil imports increased 18 percent last month to 17.92 million metric tons, the General Administration of Customs said. That's the most since the record 19.2 million tons in July, according to Bloomberg calculations.
Power generation in the country rose to a record after the domestic economic recovery spurred demand from businesses and factories. Output increased for a third month, climbing 9.3 percent, the statistics bureau said.
Oil futures may fall next week as fuel stockpiles rise, a Bloomberg survey showed. Fourteen of 31 analysts surveyed, or 45 percent, predicted oil will fall through Sept. 18. Ten respondents, or 32 percent, forecast the market will rise and seven said prices will be little changed. Last week, 50 percent of analysts said oil would fall.
Lower Stockpiles
U.S. stockpiles of crude oil fell 5.91 million barrels to 337.5 million last week, the lowest level since mid-January, an Energy Department report showed yesterday. Supplies were estimated to decline 1.85 million barrels, according to the median of 16 responses from analysts in a Bloomberg survey.
"Oil stocks are still very high, but improving demand amid continued supply tightness should accelerate the pace of erosion of the inventory overhang, lending support to prices," analysts at Barclays Capital, led by Gayle Berry, said in a report.
Gasoline inventories rose 2.07 million barrels to 207.2 million, the first gain in seven weeks, the department said. Stockpiles of distillate fuel, which includes heating oil and diesel, climbed 1.99 million barrels to 165.6 million, the highest since January 1983.
Brent crude oil for October settlement traded at $69.85 a barrel, down 1 cent, on the London-based ICE Futures Europe exchange. Yesterday, the contract settled 3 cents higher at $69.86.
-- With assistance from Ann Koh in Singapore. Editors: John Buckley, Rob Verdonck
Last Updated: September 11, 2009 05:50 EDT
Oil falls for second day on doubts over pace of demand recovery
September 14, 2009 -
Oil fell for a second day as US fuel stockpiles gained and crude's rally to more than $US72 a barrel last week outpaced the recovery in the global economy.
Oil fell below $US69 a barrel before a report tomorrow in the US, the world's largest oil consumer, which may show retail spending, excluding gasoline and autos, barely changed in August, according to a Bloomberg survey of economists. Oil dropped the most in two weeks September 11, ending a four-day climb.
"WeR17;re still waiting to see if the fundamentals can catch up with the sentiment in the oil market," said Toby Hassall, a research analyst at CWA Global Markets in Sydney. "There definitely seems to be a bit of significant resistance being encountered once we get into the $(US)70s."
Crude oil for October delivery dropped as much as $US1.24, or 1.8 per cent, to $US68.05 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $US68.14 this morning in Singapore.
The contract fell 3.7 per cent to $US69.29 a barrel on September 11. Prices reached $US72.90 that day, the highest intraday price since August 31.
US oil inventories are more than 13 per cent higher than a year ago, the Energy Department said in a weekly report on September 10. Distillate stockpiles, including heating oil and diesel, are at their highest since 1983.
Crude was down again today, with October settling at $68.86, down $0.43 on the day. Natural Gas was a different story with October settling at $3.297, up $0.337 on the day, (10% is a big move for Natural Gas).
Crude Oil Rises for First Time in Three Days as Dollar Weakens
By Grant Smith
Sept. 15 (Bloomberg) -- Crude oil rose for the first time in three days as the dollar traded near its lowest level against the euro in a year, spurring demand for crude as an inflation hedge.
The U.S. Energy Department will probably say tomorrow that supplies of distillate fuel, which includes diesel and heating oil, rose for a fourth week from their highest level since 1983, according to a Bloomberg News survey. U.S. crude oil inventories are likely to have fallen last week as refineries bought fewer cargoes before idling plants for upgrades and repairs.
"The U.S. currency continues to set the trend for oil in the absence of any major fundamental developments," said Andrey Kryuchenkov, a VTB Capital analyst in London. "We'll probably see more sideways trading ahead of the inventory numbers."
Crude oil for October delivery rose as much as 56 cents, or 0.8 percent, to $69.42 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $69.17 a barrel as of 12:19 p.m. London time. Yesterday, the contract fell to $68.86, the lowest settlement since Sept. 4. Futures have gained 55 percent this year.
Fuel stockpiles in the world's biggest energy users, including the U.S. and Japan, have risen as the global recession crimped demand. Refiners are cutting output to boost processing profit as consumption slows with the end of the peak U.S. driving period last week.
"As soon as the gasoline demand season is over, we should be looking at higher inventories," said Tetsu Emori, a commodity fund manager at Astmax Co. in Tokyo. "That's quite a bearish factor for the crude oil market."
Rising Stockpiles
Crude oil tumbled to $32.40 a barrel in December, the lowest in more than four years, after the collapse of Lehman Brothers Holdings Inc. on Sept. 15, 2008, triggered a global financial crisis that sapped energy demand.
"In the sense that the collapse of Lehman precipitated a further deepening of the financial crisis, it has certainly affected oil pricing," said Victor Shum, a senior principal at Purvin & Gertz Inc. in Singapore. "And the collapse also affected trading at other banks."
U.S. stockpiles of distillate may have increased 1.5 million barrels from 165.6 million in the week to Sept. 11, according to the median of 11 estimates from analysts.
Gasoline inventories probably climbed 700,000 barrels from 207.2 million previously, the survey showed. Refineries are expected to have operated at 86.7 percent of capacity last week, a drop of 0.5 percentage point. Commercially held U.S. crude oil inventories declined 2.5 million barrels from 337.5 million, according to the median of survey responses.
Refinery Shutdowns
The Energy Department is scheduled to release its Weekly Petroleum Status Report in Washington tomorrow. The industry- funded American Petroleum Institute will put out its own data later today.
"The gasoline season is over and refineries are ramping up maintenance schedules," Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania, said in a note. "As such, demand for crude oil is about to dip. If we are ever going to get a correction lower in oil, the time is now."
The main militant group in Nigeria said it will end its 60- day cease-fire today as it threatened to resume sabotage attacks "with utmost zeal."
The Movement for the Emancipation of the Niger Delta, or MEND, which seeks more local control of the delta's oil wealth, declared a unilateral cease-fire July 15 after the government freed its leader, Henry Okah, who was on trial for treason. MEND rejected a government amnesty program, saying it failed to address its political demands.
Brent Stable
MEND spokesman Jomo Gbomo said in an e-mail he wouldn't "speculate" when attacks may resume. Armed attacks targeting the oil industry have cut more than 20 percent of Nigeria's oil exports since 2006 and deterred new investments. The country vies with Angola as Africa's top oil producer and is the fifth- largest source of U.S. oil imports.
Brent crude oil for October settlement on the London-based ICE Futures Europe exchange traded at $67.42 a barrel, down 2 cents, at 12:20 p.m. in London. Yesterday, it fell 0.4 percent to settle at $68.37.
The October contract expires today. The more active November future was at $68.34 a barrel, down 3 cents.
The Organization of Petroleum Exporting Countries releases its month report on global oil markets later today.
Last Updated: September 15, 2009 07:23 EDT
October Crude settled at $70.93, up $2.07 on the day, October Natural Gas settled at $3.32, up $0.023 on the day.
Oil Little Changed Before U.S. Energy Report as Dollar Declines
By Grant Smith
Sept. 16 (Bloomberg) -- Oil was little changed near $71 a barrel before a weekly government report that may show U.S. supplies of distillate fuel rose for a fourth week.
The American Petroleum Institute reported yesterday that distillate inventories in the U.S., rose to a 26-year high. A report later today from the U.S. Energy Department may also show stockpiles of the fuel increased, according to analysts surveyed by Bloomberg. Oil pared larger losses earlier in the day as the dollar dropped to the weakest level this year against the euro, spurring interest in commodities as an inflation hedge.
"Inventories of distillates are at very high levels, and this could dampen demand for crude oil from refineries in the U.S.," said Eliane Tanner, a commodity strategist at Credit Suisse Group AG in Zurich. "Prices are going to stay in a consolidation phase, with the range between $68 and $74.50 holding quite firmly."
Crude oil for October delivery was at $70.77 a barrel, down 16 cents, in electronic trading on the New York Mercantile Exchange as of 11:45 a.m. London time. The contract earlier fell 1.1 percent. Oil has gained 58 percent this year.
"When the API numbers came out, the market just dumped, so it's pretty significant. But the big number is still the EIA," the Energy Information Administration, said Clarence Chu, a trader with options seller Hudson Capital Energy in Singapore. "We're highly dependent on the stockpile numbers, but crude is still trading in a range."
Oil Inventories
The Energy Department, scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. today in Washington, may say U.S. crude oil stockpiles fell by 2.5 million barrels in the week to Sept. 11 from 337.5 million, according to the median of 15 analyst estimates collected by Bloomberg News. The API posted an increase of 631,000 barrels.
Distillate fuel inventories surged to 170.3 million barrels last week, the API said. That's the highest level since January 1983. The Energy Department report will probably show stockpiles climbed 1.25 million barrels from 165.6 million the previous week, according to the survey.
Gasoline stockpiles increased 1.35 million barrels to 208.8 million last week, according to the API. The government report may show an increase of 700,000 barrels from 207.2 million the week before, the Bloomberg survey showed.
The dollar dropped to a 2009 low against the euro before a report forecast to show U.S. manufacturers boosted output, reducing demand for the relative safety of the greenback. The dollar dropped to $1.4686 per euro as of 11:11 a.m. in London from $1.4658 yesterday in New York.
Gasoline Demand
Gasoline consumption was at an eight-month low for a second week as the U.S. Labor Day holiday on Sept. 7 failed to ignite demand before the end of the summer driving season, according to a MasterCard Inc. report.
Motorists bought an average 8.97 million barrels a day of gasoline in the week to Sept. 11, MasterCard, the second-biggest credit card company, said in its SpendingPulse report yesterday. That's little changed from the prior week, when demand was the weakest since Jan. 9. It was the fourth time this year that demand fell short of 9 million barrels.
Brent crude oil for November settlement on the London-based ICE Futures Europe exchange was at $69.63 a barrel, down 23 cents, at 11:10 a.m. London time. The October contract expired yesterday at $67.35 a barrel, down 9 cents.
Nigeria's main rebel group extended its cease-fire by 30 days and warned that its campaign targeting oil and gas installations will continue if the government doesn't engage in meaningful talks.
"The government should use this extension of time to do the right thing instead of pretending to talk peace, while arming the military for a war it cannot win," Jomo Gbomo, a spokesman for the Movement for the Emancipation of the Niger Delta, said in an e-mailed statement.
Last Updated: September 16, 2009 06:52 EDT
I have been travelling all day and just got to where I could post the Energy Prices on the Forum. Crude Oil settled at $72.51, up $1.58 on the day. Natural Gas took another big move and settled at $3.76. up $0.44 on the day. On a BTU basis compared to Oil prices Natural Gas should be in the $9.00+ range.
Oil Trades Near $72 After Supplies Drop to Lowest Since January
By Grant Smith
Sept. 17 (Bloomberg) -- Oil traded little changed near $72 a barrel in New York after the Energy Department reported that U.S. crude stockpiles dropped to the lowest level since January.
The inventories fell by 4.73 million barrels, the weekly report showed yesterday, more than the 2.5 million-barrel decline forecast by analysts in a Bloomberg News survey. Crude prices were also helped by the dollar, which extended declines to the weakest level in almost a year. Global equities advanced, spurring expectations of an increase in fuel demand.
"Fundamentals are improving a bit and now they're better able to justify the actual oil price level," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "Inventories are coming down week by week, but it's still going to be hard for crude to pass $75."
Crude oil for October delivery was at $72.53 a barrel, up 2 cents, in electronic trading on the New York Mercantile Exchange at 11:13 a.m. in London. Yesterday, the contract rose $1.58, or 2.2 percent, to $72.51. Futures are up 63 percent this year.
The dollar fell as low as $1.4768 per euro from $1.4709 yesterday in New York, the weakest level since Sept. 25, 2008. A lower dollar increases the appeal of commodities as an alternative investment and hedge against inflation.
"The dollar continues to hit new lows and equities markets are rallying, giving support to the renewed global economy, which will consume more oil," said Mike Sander, an investment adviser at Sander Capital in Seattle. "There are not a lot of reasons to bet against oil at this point."
Fuel Supplies
Crude stockpiles in the U.S., the biggest energy-consuming nation, fell to 332.8 million barrels, the Energy Department said. Stockpiles of distillate fuel climbed 2.24 million barrels to 167.8 million, the highest since January 1983. Gasoline inventories rose 547,000 barrels to 207.7 million last week, the department said.
Refineries operated at a three-week low of 86.9 percent of capacity in the week ended Sept. 11, down 0.3 percentage point from the previous week, according to the department.
Refiner's profit margins have collapsed in the past month on expectations of falling fuel demand with the end of the peak summer demand season for gasoline. The profit from turning three barrels of crude into two barrels of gasoline and one barrel of heating oil has dropped to $4.72 a barrel today from $13.46 a month earlier.
"The crack spread and refining margins and the distillate inventories are all troubling," said Victor Shum, a senior principal at consultant Purvin & Gertz Inc. in Singapore. "It points to the fact that U.S. refiners are likely to cut runs in the coming weeks."
European and Asian stocks advanced, pushing the MSCI World Index higher for a third day, as Ireland detailed its plan to purge banks of toxic assets and gains in metal prices boosted earnings prospects for mining companies.
Brent crude oil for November settlement was at $71.56 a barrel, down 11 cents, on the London-based ICE Futures Europe exchange at 11:12 a.m. London time. Yesterday, the contract jumped 2.6 percent to $71.67, the highest since Aug. 28.
Last Updated: September 17, 2009 06:39 EDT
Looks like oil has kinda settled around $70 for a while.
Wonder when it will move further and which direction?
Crude Oil Declines for a Second Day on Stronger U.S. Dollar
By Grant Smith and Christian Schmollinger
Sept. 18 (Bloomberg) -- Crude oil fell for a second day, paring its weekly gain, as the dollar strengthened against the euro and dimmed the hedging appeal of commodities.
Crude is nonetheless heading for a 3.7 percent increase this week, a second straight weekly gain, after data showed an expansion in housing starts and industrial capacity utilization in the U.S. The country's supplies of distillate fuel are at their highest in 26 years, according to the Energy Department.
R20;We have the dollar consolidating after its losses and that's causing the reversal of gains in oil," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "The market is pausing, as we've yet to see seasonal demand kick in the product market."
Crude oil for October delivery fell as much as 85 cents, or 1.2 percent, to $71.62 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.73 a barrel at 9:09 a.m. in London. Futures have risen 62 percent this year.
The dollar traded for $1.4671 per euro at 9:07 a.m. London time, rising from near a one-year low, after the European Union said yesterday "restructuring of the banking sector must take place," in proposals to be put forward at next week's Group of 20 nations meeting in Pittsburgh.
Housing starts in the U.S. rose in August to the highest level in nine months, led by construction of multifamily dwellings, a Commerce Department report yesterday showed.
R20;What weR17;ve had recently is a lot of relatively good U.S. economic data," said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. "Housing starts were slightly positive, building permits a little more so, and initial jobless claims were down."
Stockpiles Still Ample
The number of Americans filing first-time claims for jobless benefits fell unexpectedly last week, a sign the labor market is deteriorating at a slower pace. Applications dropped by 12,000 to 545,000 in the week ended Sept. 12, from a revised 557,000 the week before, Labor Department data showed yesterday.
Gains in oil prices this week have been tempered by still- ample U.S. inventories.
Stockpiles of crude oil in the U.S. dropped 4.73 million barrels to 332.8 million last week, the Energy Department said Sept. 16. Those inventories are still "above the upper boundary of the average range for this time of year," its report showed.
Supplies of distillate fuel climbed 2.24 million barrels to 167.8 million, the highest since January 1983 and 24 percent more than the five-year average. Gasoline inventories rose 547,000 barrels to 207.7 million last week, the department said.
Brent crude oil for November settlement traded at $70.85 a barrel on the London-based ICE Futures Europe exchange, down 70 cents, at 9:08 a.m. London time.
Crude Oil settled at $72.04, down $0.43 on the day. Natural Gas continued it's climb and settled at $3.778, up $0.32 on the day. If you are looking at locking in a ceiling on your Natural Gas or Home Propane for the Winter, you better get it done or better yet I hope you have it done.
Crude Oil Falls a Third Day as Equities Sag, Dollar Strengthens
By Grant Smith
Sept. 21 (Bloomberg) -- Crude oil fell for a third day in New York as a stronger U.S. dollar and slipping equity markets weakened investor demand for crude.
Oil declined as the dollar rose against the yen and euro on speculation the U.S. may withdraw economic stimulus measures. A stronger U.S. currency diminishes the appeal of dollar-priced commodities that can be used to hedge against inflation. Traders are paying more than ever in the options market to protect against a steeper plunge in crude prices.
"Demand isn't yet strong enough to lift crude out of its $69 to $72 range," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "A move toward $80 would likely founder as that sort of price level would have a negative impact on equity markets."
Crude oil for October delivery fell as much as $1.01, or 1.5 percent, to $70.93 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.03 at 9:42 a.m. in London.
The October contract expires tomorrow. The more-widely held November contract fell as much as 1.4 percent to $71.51 a barrel today.
Oil options markets show investors are insuring themselves against further price losses. The gap between prices of options betting on a decline and those that would profit from a rise in oil widened to a record 10 percentage points, according to five years of data compiled by Banc of America Securities-Merrill Lynch.
$65 a barrel
"The fundamentals say squarely we should be going lower," Jonathan Barratt, managing director at Commodity Broking Services Pty, said in an interview with Bloomberg Television today. "I think it can get as low as $65 a barrel."
New York oil futures climbed 38 percent the past six months as equity market gains increased investor confidence in the global economic prospects and the weaker dollar funneled funds into commodities. The rally stalled the past month as U.S. gasoline inventories posted two weeks of gains and distillate supplies reached their highest since January 1983.
Brent crude oil for November settlement fell as much as $1.01 cents, or 1.5 percent, to $70.25 a barrel on the London- based ICE Futures Europe exchange. It was at $70.27 at 9:39 a.m. in London.
U.S. refineries usually shut units for maintenance in September and October as summer gasoline demand wanes and before winter weather increases heating oil consumption. Refining runs fell in September in nine of the past 10 years and extended declines through October in four of them, according to Energy Department data.
The dollar strengthened to $1.4649 per euro as of 8:55 a.m. in London from $1.4712 in New York on Sept. 18. It fell to $1.4768 on Sept. 17, the weakest level since Sept. 25, 2008. The MCSI World Index slipped 0.3 percent at 8:22 a.m. in London.
Japan, India and Singapore, Asia's major oil trading hub, are closed today for holidays.
Crude is trading at $70.25, down $1.515 and Natural Gas is trading at $3.73, down $0.048, this A.M.
Gasoline at our neighborhood station is $2.15.
WOW!! The average in the SoCal area is $3.10! Of course, they tell us that it is because they have to formulate the gas for the summer season which makes it more expensive. Now that summer is over, the price will go down a little, but they will tell us that now is the time for the refineries to do their major maintenance and shut down slowing the production of gasoline.
I am glad I am retired and don't have to make that commute into LA.
Larryj
October -09 Crude settled at $69.71, down $2.33 on the day, October 09 Natural Gas settled at $3.576, down $0.202 on the day.
Oil Rises for First Time in Four Days on Dollar, U.S. Supplies
By Grant Smith
Sept. 22 (Bloomberg) -- Crude oil rose for the first time in four days before a report forecast to show U.S. crude supplies contracting, while a weaker dollar boosted the investment appeal of commodities.
U.S. crude oil inventories declined a fourth week, according to analysts surveyed by Bloomberg News before an Energy Department report tomorrow. Official data showed net crude oil imports by China, Asia's largest consumer, rose 18 percent to 17.92 million metric tons in August, the second highest on record.
"Sentiment about the economy is better than it was a few months ago," said Sintje Diek, an analyst with HSH Nordbank in Hamburg. "I can imagine $70 or a bit above will persist for the next few weeks. The correlation between oil and the dollar is not as strong as a few weeks ago, but we see it again in play today."
Crude oil for October delivery rose as much as $1.12, or 1.6 percent, to $70.83 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $70.78 at 11:16 a.m. London time. The contract expires today. The more widely traded November futures advanced $1.12 to $71.05.
Prices have gained 59 percent this year on speculation global fuel demand will recover as economies emerge from the recession, while a weakening dollar encouraged investors to buy commodities. Gold snapped a three-day decline, staying above $1,000 an ounce.
The dollar dropped to as low as $1.4822 per euro, its weakest against the single European currency in a year. The U.S. Federal Reserve is forecast to keep its benchmark interest rate unchanged, according to a Bloomberg survey of economists.
Crude Supplies
China's net crude oil imports in August were second only to the record 19.2 million tons in July.
A weekly U.S. Energy Department report tomorrow may show crude oil inventories declined a fourth week, according to analysts surveyed by Bloomberg News.
Crude oil inventories fell 1.5 million barrels in the week to Sept. 18, from 332.8 million, according to the median of 11 estimates in a Bloomberg survey ahead of the Energy Department's weekly report. Nine of the analysts polled said stockpiles dropped and two forecast an increase.
Distillate fuel inventories probably increased 1.2 million barrels, the survey showed. Stockpiles, which include heating oil and diesel, were previously at 167.8 million barrels, the most since January 1983.
Gasoline Supply
Gasoline supplies are expected to have gained 200,000 barrels from 207.7 million the week before, which would be a third weekly increase, according to the median of responses.
Refineries operated at 85.9 percent of capacity last week, down 1 percentage point from the prior week, based on the median of survey responses. U.S. refineries usually shut processing units for maintenance in September and October as summer gasoline demand wanes and before heating oil usage rises in the winter.
The Energy Department is scheduled to release its Weekly Petroleum Status Report in Washington tomorrow. The industry- funded American Petroleum Institute will put out its own data later today.
Brent crude oil for November settlement rose as much as $1.08, or 1.6 percent, to $69.77 a barrel on the London-based ICE Futures Europe exchange. It traded at $69.70 a barrel, up $1.01, at 11:18 a.m. in London.
"Yesterday, in the absence of positive new economic news, we saw the oil prices were a bit lower," said David Moore, commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. "Also, the fact that equity markets were off, that was also a negative for the oil price as well."
The October Crude Contracts expired yesterday and November is the front month this A.M., Nov crude is trading at $71.05, up $1.12, October Natural Gas is trading at $3.655, up $0.079.
November -09 Crude Oil settled at $71.76, up $1.83 on the day, October-09 Natural Gas Settled at $3.609, up $0.033 on the day. November Natural Gas is trading in the $4.52 Range, December -09 is trading in the $5.22 range and Jan-09 forward in the $5.50 range.
November Crude Oil is trading at $71.55, down $0.21 and October Natural Gas is trading at $3.665, up $0.056.
Gasoline at our Neighborhood station is $2.15
Oil Is Little Changed Before Data on U.S. Winter Fuel Supplies
By Grant Smith
Sept. 23 (Bloomberg) -- Crude oil was little changed in New York before a report forecast to show that U.S. inventories of heating oil and other distillate fuels rose from their highest in 26 years.
The Energy Department may report a 1.45 million-barrel increase in U.S. distillate fuel inventories in the week to Sept. 18, according to the median of estimates in a Bloomberg survey. Stockpiles, which also include diesel, were previously at 167.8 million barrels, the most since January 1983.
R20;The market seems well supplied,R21; said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. "Fundamentals don't justify $70 a barrel. It's too high. We expect a sharp decline in crude-oil prices towards the end of the year."
Crude oil for November delivery traded at $71.40 a barrel, down 36 cents, in electronic trading on the New York Mercantile Exchange at 11:08 a.m. London time, after falling as low as $71.13 a barrel. The contract for October expired yesterday, settling at $71.55 a barrel, up $1.84.
Futures have gained 60 percent this year on speculation global fuel consumption may recover as economies emerge from recession.
Yesterday, the industry-funded American Petroleum Institute said that U.S. gasoline supplies increased 3.8 million barrels to 212.6 million last week.
No Decisive Break
Crude stockpiles rose 276,000 barrels to 337.2 million last week, the highest in three weeks. Distillate inventories fell 1.9 million barrels to 168.4 million, the API's report showed.
R20;Macroeconomic conditions are improving, but in fundamental data specific to oil, we haven't really seen a decisive break to the upside," said Yingxi Yu, a commodities analyst at Barclays Capital in Singapore.
R20;Until we see positive data coming through into the market, particularly on the demand side, it's very hard to see oil breaking through the range that has held so well for the whole of the third quarter, which is around $65 to $75," Yu said.
The dollar extended its losses amid speculation the Federal Reserve will keep interest rates low, which makes it attractive for investors to buy commodities including oil and gold.
The U.S. currency traded at $1.4783 per euro at 10:50 a.m. in London, after falling as low as $1.4843, the weakest level since Sept. 22, 2008.
R20;The plunge in the dollar has been very supportive not just for oil but also for a lot of other commodities across the complex," Yu said.
Supply-Demand Fundamentals
Brent crude oil for November settlement dropped as much as 63 cents, or 0.9 percent, to $69.90 a barrel on the London-based ICE Futures Europe exchange. The contract traded at $70.24, down 29 cents, at 10:50 a.m. London time.
Gasoline supplies probably gained 500,000 barrels from 207.7 million a week earlier, which would be a third weekly climb, the survey showed.
Commercially held crude oil inventories probably dropped 1.4 million barrels from 332.8 million, based on the median of 17 responses. Thirteen of the analysts polled said stockpiles declined and four forecast an increase.
The Energy Department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington. Oil-supply totals from the API and DOE moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.
R20;WeR17;ve been expecting a demand recovery but we still haven't seen much of a justification in the supply-demand fundamentals," said Toby Hassall, a research analyst with CWA Global Markets Pty in Sydney. "The underlying supply-demand profile still suggests the market could be vulnerable to a pullback."
I thought some of you might find the weekly eia-doe inventory report of interest. We have to reduce our petroleum demands significantly more before the World economy improves or we are going to face significantly higher energy prices . Through the Clinton trade agreements,(Talk about waking a sleeping giant) we made China and India petroleum gobbling monsters. China has now replaced Japan as the 2nd largest consumer of oil in the world, and China is continuing to build automobiles at a high rate.
Summary of Weekly Petroleum Data for the Week Ending September 18, 2009
U.S. crude oil refinery inputs averaged 14.7 million barrels per day during the
week ending September 18, 316 thousand barrels per day below the previous
week's average. Refineries operated at 85.6 percent of their operable capacity
last week. Gasoline production decreased last week, averaging 8.9 million
barrels per day. Distillate fuel production increased last week, averaging 4.2
million barrels per day.
U.S. crude oil imports averaged 9.8 million barrels per day last week, up 891
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.3 million barrels per day, 157 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 185 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 2.8 million barrels from the previous week. At
335.6 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
increased by 5.4 million barrels last week, and are above the upper limit of
the average range. Both finished gasoline inventories and blending components
inventories increased last week. Distillate fuel inventories increased by 3.0
million barrels, and are above the upper boundary of the average range for this
time of year. Propane/propylene inventories increased by 1.3 million barrels
last week and are above the upper limit of the average range. Total commercial
petroleum inventories increased by 8.0 million barrels last week, and are
above the upper limit of the average range for this time of year.
Total products supplied over the last four-week period has averaged 19.2
million barrels per day, up by 4.4 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged about 9.1
million barrels per day, up by 4.5 percent from the same period last year.
Distillate fuel demand has averaged 3.4 million barrels per day over the last
four weeks, down by 8.1 percent from the same period last year. Jet fuel demand
is 5.8 percent lower over the last four weeks compared to the same four-week
period last year.
November-09 Crude oil settled at $68.97, down $2.79 on the day, October-09 Natural Gas settled at $3.86, up $0.251 on the day.
November-09 Crude is trading at $68.55, down $0.42, October-09 Natural Gas is trading at $3.85, down $0.01.
Our area Gasoline price is $2.15.
November-09 Crude is trading at $67.30, down $1.67, October-09 Natural Gas is trading at $3.76, down $0.10.
I look for Gasoline at the pump to drop today, in this area.
There is a lot of volume in November crude futures this A.M.
November-09 Crude oil settled at $65.89, down $3.08 on the day, October-09 Natural Gas settled at $3.955, up $0.095 on the day.
November-09 Crude is trading at $66.275, up $0.385, October-09 Natural Gas is trading at $3.965, up $0.010.
Our area Gasoline price is $2.13.
Oil Rises as Traders Buy In After Biggest Drop in Two Months
By Grant Smith and Christian Schmollinger
Sept. 25 (Bloomberg) -- Oil rose as some traders viewed this weeks slump as excessive, providing an opportunity to buy contracts before rising demand triggers a rebound.
Crude oil is nonetheless heading for its biggest weekly drop since July after plunging 4.5 percent yesterday on signs that the economic recovery is failing to draw down brimming U.S. fuel stockpiles. U.S. inventories of heating oil and other distillate fuels are at their highest in 26 years.
The fundamentals support prices in a $67 to $73 range, and since were now below that, I wouldnt expect it to drop much further, said Andy Sommer, an analyst at Elektrizitaets- Gesellschaft in Dietikon, Switzerland. Thats the range we would expect for the rest of the year.
Crude oil for November delivery rose as much as 81 cents, or 1.2 percent, to $66.70 a barrel on the New York Mercantile Exchange, and traded at $66.29 at 10:25 a.m. in London. Futures are down 8 percent this week, headed for the biggest decline since July 10.
Goldman Sachs Group Inc. raised its 2010 global crude oil demand forecast by 1.9 percent on expectations an economic expansion has begun, bolstering fuel consumption.
Global crude usage next year will average 86.405 million barrels a day, up 1.6 million barrels a day from its previous outlook, Goldman Sachs analysts led by Jeffrey Currie said in a report today. The bank increased its oil demand forecast for the fourth quarter of 2009 by 1.2 million barrels a day to 85.106 million barrels a day.
Dollar Snap
The dollar is set to snap a two-week decline against the euro. A stronger dollar reduces the attractiveness of commodities as a hedge against inflation. The dollar was trading at $1.4691 per euro from $1.4666 yesterday in New York and from $1.4712 a week earlier.
Supplies of crude oil rose 2.86 million barrels, to 335.6 million, the biggest increase since the week ended July 24, according to the Energy Department report released Sept. 23. Analysts had expected a 1.4 million-barrel decrease. The gain left stockpiles 9.1 percent above the five-year average.
U.S. gasoline stockpiles surged 5.41 million barrels last week, more than 10 times the gain forecast by analysts in a Bloomberg News survey. Inventories of distillate fuel, a category that includes heating oil and diesel, rose 2.96 million barrels, almost double analyst estimates.
Brent crude for November settlement climbed as much as 83 cents, or 1.3 percent, to $65.65 a barrel on the London-based ICE Futures Europe exchange, and was at $65.40 at 10:26 a.m. London time. Yesterday, the contract dropped $3.17, or 4.7 percent, to $64.82.
Contango Narrows
The premium between later-dated New York oil futures and near-month contracts has narrowed, causing traders to remove crude from storage.
Crude for later delivery that is worth more than prompt supplies is a situation known as contango. The price difference between the first-month New York oil future and the second-month future narrowed to 47 cents a barrel today from $1.41 on Aug. 19. That reduces the incentive to hold oil in storage.
As the contango starts to come in youll see some of that floating storage start to come in and thats just going to depress the price even more, said Jonathan Kornafel, a director for Asia at options traders Hudson Capital Energy in Singapore. There is some pessimism that well be able to eat into these inventories.
The Organization of Petroleum Exporting Countries will increase shipments by 0.7 percent to 22.49 million barrels a day by sea in the four weeks to Oct. 10, up from an average of 22.33 million barrels a day in the month to Sept. 12, tracking consultant Oil Movements said in a report yesterday.
OPEC agreed at its Sept. 9 meeting in Vienna to maintain production quotas at 24.845 million barrels a day. Compliance is around 65 percent, according to the group. Official data showed net crude oil imports by China, Asias largest consumer, rose 18 percent to 17.92 million metric tons in August.
November-09 Crude oil settled at $66.02, up $0.13 on the day, October-09 Natural Gas settled at $3.985, up $0.03 on the day.
Our neighborhood pump price for Regular gas is $2.12
I just noticed that this thread has had over 40,000 views.
Everyone have a safe and fun weekend.
I notice that Gasoline dropped another 1cent to $2.11 this afternoon. Crude oil is pulling back in the back months as well as the front month.
Yea, the gas in Independence is down to 2.45, it dropped 3 cents this week.
Dale, we just came by our neighborhood station and Regular was $2.09.
It's 2.28/gal here...
$2.43 here in Newark.
Still $3:09 - $3:19 here is SoCal-------------- :'(
Larryj
When we came back into town last night , Regular Gas was $2.04
I think cheap gasoline is the best stimulus in America. It encourages travel which results in spending at convenience stores, retail shops, malls, hotels, etc. I can't believe we're seeing $2.04 prices!
QuoteI think cheap gasoline is the best stimulus in America. It encourages travel which results in spending at convenience stores, retail shops, malls, hotels, etc.
What a lovely progression. Thanks! :D
November-09 Crude is trading at $66.05, up $0.03, November Natural Gas is trading at $4.93, down $0.018. This is the first day of November Natural Gas trading as the front month.
Regular Gas here was $2.03 last night.
Crude Oil Falls Below $66 as Dollar Strengthens, Equities Slide
By Alexander Kwiatkowski and Yee Kai Pin
Sept. 28 (Bloomberg) -- Crude oil slipped below $66 a barrel as a stronger dollar reduced the appeal of commodities and declines in equities raised concern a recovery in fuel demand may stall.
Crude slumped more than 8 percent last week, the biggest weekly drop since the week ending July 10, as U.S. stockpiles unexpectedly rose. Oil fell today as the dollar gained, limiting the commodity's appeal to investors as an inflation hedge. Stock markets in Europe and Asia traded lower.
R20;With rather weak equities and a strengthening dollar, we see the result with $65 a barrel now," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "Last week's inventory data in the U.S. was really bad. It will be interesting if we see the same this week."
Crude oil for November delivery fell as much as 61 cents, or 0.9 percent, to $65.41 a barrel in electronic trading on the New York Mercantile Exchange. It was at $65.65 at 10:50 a.m. in London. Futures have gained 47 percent this year.
European stocks retreated for a third day. The Dow Jones Stoxx 600 Index dropped 0.2 percent to 238.55 as of 10:23 a.m. in London, having earlier gained as much as 0.2 percent. In Asia, the MSCI Asia Pacific Index dropped as much as 1.7 percent to 116.57. The dollar traded at $1.4632 against the euro in London, strengthening from $1.4689 on Sept. 25.
OilR17;s drop was tempered by concerns that tensions with Iran may put supplies at risk. The world's fourth-largest oil producer carried out missile tests days before meeting with Western officials over a previously secret nuclear facility.
No Iran Rally
R20;There is quite a bit of spare capacity in the system, so there is no screaming need for IranR17;s oil,R21; said Edward Meir, an analyst with MF Global Ltd. in Connecticut. "It seems the markets are not that unnerved and seem to be implying that the tensions will not be enough to generate any meaningful rally."
Officials from the U.S., China, France, Germany, Russia and the U.K. will meet Iranian counterparts Oct. 1 in Geneva. Extra sanctions are being prepared after Iran secretly began building a pilot fuel-enrichment plant, according to officials.
The international community has a "rich list" of economic, banking, and technology sanctions it can apply to get Iran to end its nuclear research, U.S. Defense Secretary Robert Gates said yesterday.
R20;There is no military option that does anything but buy time," Gates said in an interview on CNN.
Crude tumbled last week as mixed economic data pulled U.S. equity prices lower and the country's crude oil and fuel stockpiles increased.
Brent crude oil for November settlement fell as much as 62 cents, or 1 percent, to $64.49 a barrel on the London-based ICE Futures Europe exchange. It traded at $64.69 at 10:40 a.m. local time. The contract dropped 8.7 percent last week, the biggest weekly decline this year.
A Conference Board report tomorrow in the U.S., the world's largest oil user, may show consumer confidence is at its highest in a year, according to economists surveyed by Bloomberg News.
November-09 Crude settled at $66.84, up $0.82 0n the day, November-09 Natural Gas settled at $4.83, down $0.118 on the day.
This forecast will put some upward pressure on the Fuel Oil, Natural Gas and Crude Oil Market.
U.S. Northeast May Have Coldest Winter in a Decade (Update2)
By Todd Zeranski and Erik Schatzker
Sept. 28 (Bloomberg) -- The U.S. Northeast may have the coldest winter in a decade because of a weak El Nino, a warming current in the Pacific Ocean, according to Matt Rogers, a forecaster at Commodity Weather Group.
"Weak El Ninos are notorious for cold and snowy weather on the Eastern seaboard," Rogers said in a Bloomberg Television interview from Washington. "About 70 percent to 75 percent of the time a weak El Nino will deliver the goods in terms of above-normal heating demand and cold weather. It's pretty good odds."
Warming in the Pacific often means fewer Atlantic hurricanes and higher temperatures in the U.S. Northeast during January, February and March, according to the National Weather Service. El Nino occurs every two to five years, on average, and lasts about 12 months, according to the service.
Hedge-fund managers and other large speculators increased their net-long positions, or bets prices will rise, in New York heating oil futures in the week ended Sep. 22, according to U.S. Commodity Futures Trading Commission data Sept. 25.
"It could be one of the coldest winters, or the coldest, winter of the decade," Rogers said.
U.S. inventories of distillate fuels, which include heating oil, are at their highest since January 1983, the U.S. Energy Department said Sept. 23. Stockpiles of 170.8 million barrels in the week ended Sept. 18 are 28 percent above the five-year average.
Heating oil for October delivery rose 1.38 cents, or 0.8 percent, to settle at $1.6909 a gallon on the New York Mercantile Exchange.
Last Updated: September 28, 2009 15:52 EDT
November-09 Crude is trading at $66.65, down $0.19, November-09 Natural Gas is trading at $4.745, down $0.085.
Crude Declines on Forecast of Growing U.S. Oil, Fuel Supplies
U.S. Natural Gas Imports & Exports: 2008
Crude Declines on Forecast of Growing U.S. Oil, Fuel Supplies
By Grant Smith and Alexander Kwiatkowski
Sept. 29 (Bloomberg) -- Oil fell before a report forecast to show that U.S. supplies of crude and refined oil products accumulated because of a sluggish economic recovery.
An Energy Department report due tomorrow will probably show crude stockpiles rose by 1 million barrels last week, according to the median estimate of nine analysts surveyed by Bloomberg News. Gasoline and distillate fuel inventories also increased, the survey said. Oil prices have gained 50 percent this year as a weaker dollar boosts the appeal of crude as a currency hedge. "With energy fundamentals still uninspiring, prices should remain confined to the $65-$75 trading range for some time to come," said Edward Meir, an analyst with MF Global Ltd. in Darien, Connecticut. "The dollar's decline seems to have stalled" and "that could remove some of the upside momentum." Crude oil for November delivery dropped as much as 87 cents, or 1.3 percent, to $65.97 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $66.11 at 1:43 p.m. in London. Yesterday, the contract rose 82 cents, or 1.2 percent, to settle at $66.84 a barrel. The December contract is about 35 cents a barrel more expensive than November's. The difference between the two front- month contracts has shrunk from more than $2 a barrel in August in tandem with U.S. crude stockpiles at the Cushing, Oklahoma, delivery point.
Cold Winter
The U.S. northeast, the country's largest market for heating oil, may have the coldest winter in a decade because of a weak El Nino, a warming current in the Pacific Ocean, according to Matt Rogers, a forecaster at Commodity Weather Group, in a Bloomberg Television interview from Washington. Refineries in the U.S. operated at 85.3 percent of capacity last week, down 0.3 percentage point from the previous week, according to the median of survey responses. "Refineries are trying to support the market. Run rates are being decreased," said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo. "Demand is very bad, but with refineries limiting supply, the market will be well balanced."
The industry-funded American Petroleum Institute will release its own inventories data in Washington today.
Brent crude oil for November settlement traded at $64.79 a barrel, down 46 cents, on the London-based ICE Futures Europe exchange at 1:42 p.m. in London. Yesterday, the contract gained 43 cents, or 0.7 percent, to settle at $65.54 a barrel.
Missile Tests
Iran, the world's fourth-largest oil producer, yesterday carried out missile tests before a scheduled meeting with U.S. and European officials over a previously secret nuclear site.
President Barack Obama and the leaders of the U.K. and France said Sept. 25 Iran is secretly building a second plant for enriching uranium, in violation of the nuclear non- proliferation treaty.
"With the spare capacity we've got in the oil market at the moment, it's obviously not going to be the same reaction we would have got 18 months ago," said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney.
The permanent members of the United Nations Security Council -- the U.S., China, France, Russia and the U.K. -- will meet Iranian officials on Oct. 1 in Geneva. Iran's Foreign Ministry denied any link between the missile tests and the Geneva talks.
U.S. Natural Gas Imports & Exports: 2008
This report provides an overview of U.S. international natural gas trade in 2008. Natural gas import and export data, including liquefied natural gas (LNG) data, are provided through the year 2008
2008 Overview
In 2008, increased U.S. natural gas production led to reduced demand for natural gas imports. The drop in total imports occurred despite a 2007-to-2008 increase in domestic consumption—a factor that typically requires higher levels of imports to meet consumer demand. Total exports to Mexico and Canada via pipeline and Japan via LNG tanker were higher in 2008. Consequently, net imports to the United States fell more than 20 percent from 2007 totals to the lowest level since 1997. The decline in U.S. natural gas imports had a larger impact on LNG imports than Canadian pipeline imports. Given the ease of transporting gas to alternative markets, some LNG that historically landed in the United States went elsewhere in 2008.
2008 Highlights
With the large drop in total imports, net imports only accounted for around 13 percent of U.S. consumption in 2008. In recent years, net imports have represented around 16 percent of domestic consumption.
Consistent with domestically produced natural gas traded in the U.S. marketplace, annual import and export prices were both about 25 percent higher in 2008. Monthly prices peaked in July. A run-up on natural gas prices began in the spring before a weakened economy drove prices below 2007 levels by the end of the year.
In 2008 there was a 9 percent decrease in net imports from Canada. Despite this decrease Canadian pipeline imports continued to account for the vast majority of U.S. natural gas imports. In 2008 Canadian imports accounted for 90 percent of total U.S. natural gas imports.
Net exports via pipeline to Mexico were up 35 percent from 2007. The 2008 total is the third highest volume on record. Only in 2003 and 2004 were net Mexican exports higher.
Net LNG imports were down 58 percent from the record totals of 2007. Although LNG makes up a small percentage of the total U.S. imports, that share fell from 17 percent in 2007 to 9 percent this year.
Even with lower levels of LNG imports, 2008 saw three new LNG facilities come on line. The three new facilities were Sabine Pass in Louisiana, Freeport LNG in Texas, and Northeast Gateway offshore of Massachusetts. As the Gulf of Mexico terminal didn't receive any deliveries in 2008, a total of seven LNG terminals supplied natural gas to U.S. markets.
For the first time, the United States imported a small proportion of LNG from Norway in 2008. However, the number of countries supplying LNG to the United States declined with imports ceasing from Algeria and Equatorial Guinea. In 2008 LNG exports went primarily to Japan, after a small amount went to Russia in 2007.
The markets were pretty quiet today with November Crude settling at $66.71, down $0.13 on the day and Natural Gas settling at $4.875, up $0.045 on the day.
November Crude is trading at $67.875, up $1.165, November Natural Gas is trading at $4.88, up $0.005.
Crude Oil Rises as Growth in China, Japan Buoys Demand Outlook
By Grant Smith
Sept. 30 (Bloomberg) -- Crude oil rose above $67 a barrel in New York as manufacturing expanded in China and Japan, buoying hopes for a rebound in fuel demand.
Oil is nonetheless heading for its first quarterly decline this year amid swelling fuel inventories in the U.S. The Energy Department will probably report that supplies of crude and fuel increased last week, according to a Bloomberg survey. Chinese manufacturing rose for a sixth month in September and Japanese industrial output climbed for a sixth time in August.
R20;Emerging markets have definitely been driving the demand recovery," said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. "Industrial production has increased. We will see a gradual improvement in the economy, but prices have got ahead of the physical fundamentals."
Crude oil for November delivery rose as much as $1.28, or 1.9 percent, to $67.99 a barrel in electronic trading on the New York Mercantile Exchange. It was at $67.89 a barrel at 11:14 a.m. London time.
Oil is poised for a 2.9 percent decline for the three months ending today, the first drop in three quarters.
Chinese manufacturing expanded on government stimulus spending and record bank lending, a purchasing managers' index released by HSBC Holdings Plc showed. The index dropped to a seasonally adjusted 55 from 55.1 in August, HSBC said today. A reading above 50 indicates an expansion.
Japanese factory output rose 1.8 percent last month after climbing 2.1 percent in July, the Trade Ministry said today in Tokyo, as emergency spending by governments worldwide rekindled global trade.
U.S. Stockpiles
U.S. crude inventories rose to 340 million barrels last week, according to an American Petroleum Institute report yesterday. Gasoline supplies decreased 1.72 million barrels to 212.5 million, it said.
R20;There is still this feeling that the worst is over so eventually the economy is going to pull us out of this," said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. "The fundamentals don't look good but we'll see fund buying interest at this level."
A weekly Energy Department report scheduled for release at 10:30 a.m. in Washington will probably show crude stockpiles rose 2 million barrels last week, according to the median estimate of 17 analysts surveyed by Bloomberg News. Gasoline and distillate fuel inventories also increased, the survey showed.
Consumer Confidence
Gasoline inventories probably gained 1 million barrels from 213.1 million the week before, according to the responses. Supplies of distillate fuel, a category that includes heating oil and diesel, likely increased 1.2 million barrels from a 26- year high of 170.8 million the prior week.
Confidence among U.S. consumers unexpectedly fell in September as a rising unemployment rate weighed on households, the New York-based Conference Board said yesterday. The group's confidence measures of present conditions and its expectations for six months from now declined.
Brent crude oil for November settlement rose as much as $1.18, or 1.8 percent, to $66.67 a barrel on the London-based ICE Futures Europe exchange. It was at $66.60 at 11:14 a.m. local time.
November Crude settled at $70.61, up $3.90 on the day, November-09 Natural Gas settled at $4.841, down $0.034 on the day.
Our local pump price is $2.00 as the lowest and most at $2.01, but I would say it is going up, Dale you better fill up.
That is what I'm thinking, our local price is down to 2.39. My pickup needs fuel and we need 15 gallons of gas for the lawn mowers.
We saw some today for $2.23, but of course I filled up LAST week! ;D
November Crude is trading at $69.70, down $0.91, November Natural Gas is trading at $4.685, down $0.156.
Our neighborhood station is at $1.99 on regular this morning. Given yesterday's eia/doe inventory report, crude should go down more.
The Natural Gas Storage report comes out today.
Oil Falls as Supplies Cast Doubt on Biggest Surge Since April
By Grant Smith and Yee Kai Pin
Oct. 1 (Bloomberg) -- Crude fell on speculation that the 6 percent rally yesterday wasn't justified because U.S. oil stockpiles are 10 percent above their five-year average.
Oil surged the most since April yesterday after the U.S. Energy Department reported a surprise decline in inventories of gasoline. Crude supplies climbed by 2.8 million barrels to 338.4 million, the report showed, more than analysts were expecting. Oil prices gained 1 percent between July and September, the third straight quarterly gain.
R20;Demand is weak and inventories are very high, so I think prices are relatively high compared to the fundamentals," said Sintje Diek, an analyst with HSH Nordbank in Hamburg. "It was strange we saw higher prices yesterday. Sixty-five is the level that is justified by fundamentals rather than $75."
Crude oil for November delivery fell as much as 81 cents, or 1.2 percent, to $69.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $69.85 a barrel at 9:47 a.m. in London. Futures have gained 57 percent this year.
R20;Yesterday seemed like a rather disproportionate rise," said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. "There's a lot of data out in the next couple of days in the U.S. that would really affect perceptions of the outlook and have a bearing on the movement in oil prices."
The Institute for Supply Management-Chicago Inc.'s business barometer slid to 46.1, trailing the most pessimistic estimate from economists. Companies in the U.S. cut September payrolls by a larger-than-forecast 254,000 jobs, a report from ADP Employer Services showed, indicating the labor market may be slow to recover.
R16;Dire ShapeR17;
R20;The poor economic news suggests oil should not go too much higher in price because the U.S. economy is not improving as quickly as hoped," Mike Sander, an investment adviser at Sander Capital in Seattle, said in an e-mail. "The economy is still in dire shape."
U.S. gasoline inventories fell by 1.7 million barrels to 211.5 million in the week to Sept. 25, the Energy Department said yesterday. Stockpiles were forecast to rise 1 million barrels, based on the median of estimates in a Bloomberg News survey of analysts.
Distillate stockpiles, which include heating oil and diesel, rose 323,000 barrels to 171.1 million. That's a sixth weekly increase even as refinery output and imports dropped.
R20;While gasoline demand looks fine, distillate demand remains very weak, with an 11.6 percent year-on-year decline for September-to-date," analysts at Barclays Capital led by Paul Horsnell said in an overnight report.
Forecast of $76
The investment bank maintained its forecast that oil in New York will average $76 a barrel in the fourth quarter.
South Korea, AsiaR17;s third-biggest oil importer, bought less crude oil in September as refiners cut output in response to reduced profits. Imports fell to 67.4 million barrels, 2.5 percent less than the same month last year, according to the Ministry of Knowledge Economy.
Brent crude oil for November settlement fell as much as 73 cents, or 1.1 percent, to $68.34 a barrel on the London-based ICE Futures Europe exchange. The contract traded at $68.48 a barrel at 9:51 a.m. London time. Yesterday, it rose 5.5 percent, the steepest increase since Sept. 16, to settle at $69.07 a barrel.
YesterdayR17;s rally R20;had a lot to do with some end-of- quarter window-dressing," Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania, said in a note to clients. "Today we wipe the slate clean as we begin a new quarter. Let's see if the bulls can keep the pressure on."
November Crude settled at $70.82, up $0.21 on the day, November-09 Natural Gas settled at $4.466, down $0.375 on the day.
November-09 Crude is trading at $69.70, down $1.12, November-09 Natural Gas is trading at $4.385, down $0.081.
Crude Oil Declines as Stocks Drop Before Unemployment Report
By Alexander Kwiatkowski and Christian Schmollinger
Oct. 2 (Bloomberg) -- Crude oil dropped, tracking global equity markets, before a report forecast to show the jobless rate in America climbed to a 26-year high in September.
Oil snapped two days of increases as European and Asian stocks fell and U.S. index futures retreated. The U.S. jobless rate probably rose as employers kept cutting staff, according to a Bloomberg News economist survey, raising concern that consumer spending won't increase fuel demand. Crude is still set for a weekly increase after gasoline supplies dropped unexpectedly.
R20;Economic indicators are very important and there is still a lot of speculation on what oil demand will be next year," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "Equity markets are declining and the crude market is declining as well."
Crude oil for November delivery dropped as much as $1.20, or 1.7 percent, to $69.62 a barrel in electronic trading on the New York Mercantile Exchange, and was at $69.82 at 10:53 a.m. London time. Prices are set to rise 5.8 percent this week.
U.S. unemployment likely climbed to 9.8 percent, the highest since 1983, from 9.7 percent in August, according to the median estimate of 81 economists surveyed by Bloomberg News. The Labor Department's report is due at 8:30 a.m. in Washington.
R20;We are transitioning away from the green shoot environment which was confirmation of a bottoming of prices to an environment where a confirmation of growth needs to be shown," said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix GmbH. "There is no clear evidence of that yet."
Stock Indexes
EuropeR17;s Dow Jones Stoxx 600 Index slid 1.1 percent to 235.9 at 9:55 a.m. in London, extending its second straight weekly drop to 1.3 percent. The MSCI Asia Pacific Index sank 2.1 percent, bringing its slump since Sept. 25 to 2.9 percent. Futures on the Standard & Poor's 500 Index lost 0.2 percent.
Oil is still set for a weekly rise, paring last week's 8.4 percent loss, after gasoline supplies unexpectedly dropped. Inventories of the motor fuel declined by 1.66 million barrels, or 0.8 percent, last week, the Energy Department said in a Sept. 30 report. Stockpiles were forecast to rise 1 million barrels.
Russia increased oil output 1.7 percent to a post-Soviet high in September from a year earlier after OAO Rosneft brought a new field on line in August. Russian oil production rose to 10.01 million barrels a day from 9.84 million barrels a day in September last year, the Energy Ministry's CDU-TEK unit said in an e-mailed statement today.
Brent crude oil for November settlement dropped as much as $1.24, or 1.8 percent, to $67.95 a barrel on the London-based ICE Futures Europe exchange. It traded at $68.27 at 10:53 a.m. local time.
Crude oil futures may decline next week as refineries slow operations and demand decreases before the North American heating season begins, a Bloomberg News survey showed.
November Crude settled at $69.95, down $0.87 on the day, November-09 Natural Gas settled at $4.718, up $0.252 on the day.
November-09 Crude is trading at $69.20, down $0.75, November-09 Natural Gas is trading at $4.725, up $0.007.
Our local pump price ranges from $1.99 to $2.09.
Crude Oil Falls on Concern Global Demand Recovery Will Be Slow
http://www.bloomberg.com/apps/news\?pid=20601207&sid=apU.ubHdoyc0
By Yee Kai Pin and Ben Sharples
Oct. 5 (Bloomberg) -- Crude oil fell for a second day in New York on concern demand in the U.S., the biggest energy user, will be slow to rebound as the nation's jobless rate increased.
Oil extended losses from Oct. 2, when prices tumbled as much as 3.5 percent after a Labor Department report showed the U.S. lost more jobs than estimated in September. Economist Nouriel Roubini, the New York University professor who predicted the financial crisis, said Oct. 3 equity and commodity markets may decline in coming months as the gradual pace of the economic recovery disappoints investors.
"Everyone wants to believe the economy will rebound slowly, will not lose ground, but I have no confidence," said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo. "Any support will be psychological."
Crude oil for November delivery fell as much as 67 cents, or 1 percent, to $69.28 a barrel, in electronic trading on the New York Mercantile Exchange. The contract was at $69.76 a barrel at 4:05 p.m. Singapore time. Futures have gained 56 percent this year.
Oil lost 1.2 percent on Oct. 2, the biggest decline since Sept. 24, to settle at $69.95 a barrel. U.S. unemployment climbed to 9.8 percent, the highest since 1983, from 9.7 percent in August, according to the Labor Department.
"We continue to expect this volatility in the data to persist until the oil market emerges from the shoulder-month period and the economic recovery gains more solid footing," analysts at Goldman Sachs Group Inc., led by Allison Nathan, said in a report today.
'Easy Money'
Governments around the world have injected $2 trillion in stimulus while central banks have cut interest rates to close to zero in efforts to revive growth. This "easy money" has created asset bubbles, causing markets to rise too quickly, Roubini said in an interview in Istanbul.
Asian shares extended last week's losses, with the MSCI Asia Pacific Index pulling back 0.8 percent to 113.60 as of 3:56 p.m. in Tokyo. On Oct. 3, the Standard & Poor's 500 Index retreated 1.8 percent to close at 1,025.21, posting its first two-week drop since July. The Dow Jones Industrial Average was down 1.8 percent at 9,487.67. European equities fluctuated between gains and losses.
"The equity markets are starting to realize that things may have run too hard, too quickly," said Mark Pervan, senior commodity strategist at ANZ Banking Group Ltd. in Melbourne. "It's all pointing downward."
Brent crude oil for November settlement fell to as low as $67.28 a barrel on the London-based ICE Futures Europe exchange, down 79 cents, or 1.2 percent. It was at $67.79 a barrel at 4:05 p.m. Singapore time. The contract lost 1.6 percent on Oct. 2, the biggest decline since Sept. 24.
"Traders are trying to get a handle on which factors are moving this market right now, and prices have been moving erratically in response to a number of conflicting signals," Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut, said in a note.
Surpassing Saudis
Russia surpassed Saudi Arabia as the world's largest oil producer last month. Russia increased its output 1.7 percent to a post-Soviet high in September from a year earlier, after OAO Rosneft starting pumping from a new field in August. Production rose to 10.01 million barrels a day from 9.84 million barrels, the Energy Ministry's CDU-TEK unit said Oct. 2.
"Russia again saw record production levels, so that'll hang on the market," Pervan said.
Saudi Arabia was the world's largest oil producer in 2008, according to U.S. Energy Department data and estimates from Bloomberg News.
The kingdom pumped 8.015 million barrels a day last month, based on a Bloomberg survey. It has cut output by 17 percent from 9.6 million barrels a day in July 2008 as part of an effort by the Organization of Petroleum Exporting Countries to support prices by curtailing shipments.
November Crude settled at $70.41, up $0.46 on the day, November-09 Natural Gas settled at $4.987, up $0.269 on the day.
November-09 Crude is trading at $71.05, up $0.64, November-09 Natural Gas is trading at $5.02, up $0.033.
Oil Rises a Second Day as Weak Dollar Boosts Investment Appeal
By Grant Smith and Yee Kai Pin
Oct. 6 (Bloomberg) -- Crude oil rose for a second day in New York as the dollar's decline bolstered the appeal of commodities as a hedge against inflation.
Crude traded near $71 a barrel as the dollar weakened following a report that Arab states held talks on replacing the U.S. currency in oil trades. Saudi Arabia's central bank Governor Muhammad al-Jasser denied the report. Prices climbed yesterday after data showed U.S. service industries returned to growth following 11 months of contraction.
R20;The weaker dollar is always supportive for all commodities," said Tobias Merath, a commodity analyst at Credit Suisse Group in Singapore. "We could see another couple of dollars upside for oil from the dollar, but it won't be decisive. We'd need some change in the fundamentals to break out of this $68 to $74 range."
Crude oil for November delivery rose as much as 90 cents, or 1.3 percent, to $71.31 a barrel in electronic trading on the New York Mercantile Exchange. It was at $70.88 a barrel at 9:35 a.m. London time. Prices have gained 59 percent this year.
Australia became the first G-20 country to raise interest rates since the start the start of the financial crisis when the central bank unexpectedly increased its benchmark from a 49-year low today and signaled further increases in coming months amid signs the economy is strengthening.
The Institute for Supply Management's index of non- manufacturing businesses, which make up almost 90 percent of the U.S. economy, rose to 50.9, higher than forecast, from 48.4 in August, according to the Tempe, Arizona-based group. Fifty is the dividing line between expansion and contraction.
R16;Tentative SignsR17;
R20;WeR17;re seeing some tentative signs that consumption is picking back up," said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne. "It continues to look like the recovery is on track."
The dollar fell to $1.4723 per euro at 9:01 a.m. in London, from $1.4648 yesterday in New York, after the U.K.-based Independent newspaper reported Arab states are seeking to move to a basket of currencies, including the yen, the yuan, the euro and gold to settle oil transactions. Commodities including gold and copper advanced.
U.S. crude oil inventories probably rose last week as refineries performed seasonal maintenance, a Bloomberg News survey showed. Commercially held stockpiles increased 2 million barrels from 338.4 million in the week ended Oct. 2, according to the median of estimates from 11 analysts.
Distillate Fuel
Distillate fuel inventories, which include heating oil and diesel, are expected to have declined 400,000 barrels, the survey showed. Stockpiles previously rose a sixth week to 171.1 million barrels, the highest since 1983.
The Energy Department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. tomorrow in Washington. The industry-funded American Petroleum Institute will put out its own data today.
November Crude settled at $70.88, up $0.46 on the day, November-09 Natural Gas settled at $4.88, down $0.107 on the day.
November-09 Crude is trading at $71.175, up $0.295, November-09 Natural Gas is trading at $4.935, up $0.055.
The API (Industry) Products and OIl Inventory report came out yesterday, the EIA/DOE inventory report comes out today
Oil Rises After Industry Report Shows Decline in Stockpiles
By Grant Smith and Ben Sharples
Oct. 7 (Bloomberg) -- Oil rose for a third day in New York after an industry report showed a decline in fuel and crude stockpiles in the U.S., the biggest energy-consuming nation.
Crude traded above $71 a barrel after the American Petroleum Institute said yesterday that distillate fuel inventories fell by 2.91 million barrels last week and crude supplies dropped by 254,000 barrels. The U.S. Energy Department will report government supply figures today.
R20;The unexpected drawdown in inventories has helped anchor prices around $71 in New York, but concerns about the rate of recovery are inhibiting a break higher," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London.
Crude oil for November delivery rose as much as 88 cents, or 1.2 percent, to $71.76 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.19 at 9:55 a.m. London time.
Yesterday, the contract gained 47 cents to settle at $70.88. The API released its data at 4:30 p.m. New York time. Prices have climbed 60 percent this year.
The dollar index, which compares the greenback with a basket of six major currencies, dropped to 76.17 today from 78.01 a month ago, prompting investors to buy commodities as an inflation hedge.
U.S. crude oil inventories reported by the Energy Department's Energy Information Administration probably rose last week as refineries performed seasonal maintenance, a Bloomberg News survey showed. Stockpiles increased 2 million barrels in the week ended Oct. 2 from 338.4 million the week before, according to the median of estimates from 14 analysts.
Five-Year Average
Supplies of crude, gasoline and distillate fuel, a category that includes heating oil and diesel, were above the five-year average in the week ended Sept. 25, the department said on Sept. 30. The department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. today in Washington.
Oil-supply totals from the API and EIA moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.
R20;If the API numbers are replicated in the EIA data, that would be quite supportive to the oil price," David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney, said by telephone. "The fragility of the U.S. dollar is also supportive to the oil price."
Demand Increase
The EIA increased its forecast for global oil consumption in the fourth quarter and next year, citing "sustained economic growth" in China and a recovery in other Asian countries.
Global crude demand may reach 84.7 million barrels a day in the fourth quarter and climb to 84.77 million barrels a day in 2010, the EIA said yesterday in its Short-Term Energy Outlook.
U.S. gasoline consumption jumped as pump prices dropped below $2.50 and less rain fell in the Midwest and Gulf Coast, according to a MasterCard Inc. report.
Motorists bought an average 9.23 million barrels of gasoline a day in the week ended Oct. 2, MasterCard, the second- biggest credit-card company, said in its report yesterday. That's the most since the week ended Aug. 21.
Front month Crude is trading at $69.50, down $1.38, Front Month natural Gas is trading at $4.99, up $0.11.
The Weekly EIA/DOE Crude and Products Inventory report came out today showing a build in products inventories and that is putting downward pressure on the market.
Below is a summary paragraph from today's report:
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 1.0 million barrels from the previous week.
At 337.4 million barrels, U.S. crude oil inventories are above the upper
boundary of the average range for this time of year. Total motor gasoline
inventories increased by 2.9 million barrels last week, and are above the upper
limit of the average range. Both finished gasoline inventories and blending
components inventories increased last week. Distillate fuel inventories
increased by 0.7 million barrels, and are above the upper boundary of the
average range for this time of year. Propane/propylene inventories increased
by 0.1 million barrels last week and are above the upper limit of the average
range. Total commercial petroleum inventories increased by 3.8 million barrels
last week, and are above the upper limit of the average range for this time of
year.
November Crude settled at $69.57, down $1.31 on the day, November-09 Natural Gas settled at $4.904, up $0.024 on the day.
Gasoline is still $1 more a gallon here in SoCal than in Elk County. Aren't we lucky!
Larryj
Larry, your gasoline is higher to pay for Queen Nancy's Jet and expenses. Our Members of Congress from Oklahoma travel by Horseback and Oats are cheaper than Jet fuel.
November-09 Crude is trading at $70.175, up $0.605, November-09 Natural Gas is trading at $4.95, up $0.046.
This is not good news for the US crude supply and pricing. Nigeria has long been one of our major suppliers of "Sweet" crude. Several refineries have to run the higher quality, low Sulfur sweet crude and it also has a better Gasoline yield.
Nigerian Rebels Say They'll Resume Attacks After Cease-fire
By Mark Tannenbaum
Oct. 7 (Bloomberg) -- A Nigerian rebel group said it plans to resume attacks against the country's oil industry when a three-month-old cease-fire expires next week.
The Movement for the Emancipation of the Niger Delta, in an e-mailed statement through a spokesman, Jomo Gbomo, rejected a government amnesty offer and said it wouldn't send a representative to a meeting with the government scheduled for Oct. 9.
The government earlier this week called the country's amnesty program for fighters in the southern oil region "a huge success" and said rebel leader Government Ekpemupolo had agreed to lay down his weapons.
"Oil companies are warned as always to disregard this propaganda by the Nigerian government," MEND said in the statement, which couldn't be immediately verified.
"MEND considers this next phase of our struggle as the most critical as we intend to end 50 years of slavery of the people of the Niger Delta by the Nigerian government, a few individuals and the western oil companies once and for all."
Ekpemupolo, also known as Tompolo, met President Umaru Yar'Adua in Abuja on Oct. 3 and agreed to give up his weapons the next day at his camp near the southern city of Warri, a major base for the country's oil industry, Timiebi Koripamo- Agary, a spokeswoman for the Presidential Amnesty Committee, said in a telephone interview on Oct. 4.
Clashes between Nigerian troops and Tompolo's fighters in May prompted a government offensive against insurgents in the oil region. While troops destroyed several militant camps, rebel fighters attacked oil facilities, helping reduce Nigeria's oil production to the lowest level in 20 years, according to the International Energy Agency.
MEND has said the amnesty program failed to address demands for redistribution of oil wealth to the region's inhabitants, who are among Nigeria's poorest. MEND extended a 60-day cease- fire that ended last month until Oct. 15 to give the government time to discuss "the root issues."
November Crude settled at $71.69, up $2.12 on the day, November-09 Natural Gas settled at $4.963, up $0.059 on the day.
November-09 Crude is trading at $71.425, down $0.265, November-09 Natural Gas is trading at $4.97, up $0.007.
Oil Pares Weekly Gain After Fed Says Money Policy May Tighten
By Grant Smith and Yee Kai Pin
Oct. 9 (Bloomberg) -- Crude oil fell in New York as the dollar climbed after Federal Reserve Chairman Ben S. Bernanke said monetary policy may be tightened once the economic outlook has "improved sufficiently."
Oil pared its gains for the week, trading near $71 a barrel as the U.S. currency rose against the yen and the euro, damping the investment appeal of commodities including gold. The International Energy Agency increased its forecast for 2010 global oil demand for a third month, citing a stronger outlook for the world economy.
R20;Over the next two, three weeks, I think we will see a slump in oil, but for this it is necessary that the dollar doesn't become any weaker," said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. "If you look at inventories, we're still in an oversupplied situation."
Crude oil for November delivery fell as much as 74 cents, or 1 percent, to $70.95 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $71.23 at 10 a.m. London time.
Yesterday, oil touched $72.55 a barrel, the highest in almost three weeks, after Labor Department data showed initial unemployment benefit applications fell to the lowest since January. This fanned optimism about a recovery in energy consumption. Futures are poised to gain 2 percent this week.
Global oil consumption is likely to average 86.1 million barrels a day next year, 350,000 barrels a day more than the IEA previously estimated, the adviser to 28 nations said today in its monthly report. The IEA also raised its estimate for consumption this year to 84.6 million barrels a day.
R16;SubduedR17;
R20;The overall consumption picture in the U.S. remains subdued," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. Oil's "pullback this morning is pretty marginal. Coming off the jump last night, I wouldn't read too much into that."
The Fed chairman, in prepared remarks at a Board of Governors conference late yesterday in Washington, didn't give any indication when the central bank may tighten monetary policy.
The Federal Open Market Committee reiterated its pledge last month to keep the benchmark lending rate near zero "for an extended period" to boost a weak recovery that has yet to create jobs. U.S. unemployment rose to 9.8 percent last month, the highest rate since 1983.
The dollar rose to $1.4722 per euro from $1.4794 in New York yesterday after Bernanke's comments.
Fuel Stockpiles
U.S. distillate fuel inventories rose 679,000 barrels to 171.8 million last week, an Energy Department report showed Oct. 7. Stockpiles are at their highest since January 1983. Gasoline inventories climbed 2.94 million barrels to 214.4 million as refinery output increased.
Oil may decline next week as supply climbs and demand slips, a Bloomberg survey showed. Eleven of 29 analysts and traders, or 38 percent, said futures will drop through Oct. 16. Ten respondents, or 34 percent, forecast the market will rise and eight said prices will be little changed.
Brent crude oil for November settlement dropped as much as 77 cents, or 1.1 percent, to $69 a barrel on the London-based ICE Futures Europe exchange. The contract was at $69.34 at 10 a.m. in London. Yesterday, it rose 3.8 percent to end the session at $69.77, the biggest gain since Sept. 30.
Hmm, so why is Sun Oil closing a NJ refinery?
To artificially keep the prices high, of course, despite what other disinformation they'll put out there.
I doubt that Sun is closing a refinery to keep prices high.
We have been travelling for 4 days and I left my laptop at home so I didn't check the markets untill we got home late today.
November Crude settled at $73.27, up $1.50 on the day, November-09 Natural Gas settled at $4.88, up $0.11on the day. The back months in natural Gas traded higher and are in the $6.00 range.
Sun probably closed it as it was not profitable. The Marcus Hook refinery is old, out dated and uses high cost sweet crude. The refineries in the US are not making much if any margin as demand continues to fall and we are only running our refineries at 80% capacity.
Sun has been divesting their refineries, they recently sold their Tulsa refinery to Holly Corp.
Valero in Delaware City may be sold too, AGAIN.
November-09 Crude is trading at $73.825, up $0.555, November-09 Natural Gas is trading at $4.65, down $0.23.
Our neighborhood pump price is $2.14
November-09 Crude settled at $74.15, up $0.88 on the day, November-09 Natural Gas settled at $4.588, down $0.292 on the day.
November-09 Crude is trading at $74.90, up $0.75, November-09 Natural Gas is trading at $4.60, up $0.012.
November crude traded above $75.00 overnite, $75.00 was/is a technical barrier.
Oil Jumps Above $75 to One-Year High on Optimism About Demand
By Grant Smith and Yee Kai Pin
Oct. 14 (Bloomberg) -- Crude oil topped $75 a barrel in New York, its highest price in a year, on growing confidence that the global economic recovery is taking shape.
Oil climbed for a fifth day as the dollar declined and equities advanced around the world. Crude imports by China, the fastest-growing energy user, were 15 percent higher in September than a year ago, data showed today. The Organization of Petroleum Exporting Countries raised its 2010 global demand forecast yesterday on expansion in emerging economies.
R20;People are now getting a semblance that the recovery they've been talking about is actually taking place," said Amrita Sen, an analyst with Barclays Capital in London. "It's very much a demand-led rally. ChinaR17;s crude imports have been very strong, and it's positive on a macro level as well."
Crude oil for November delivery rose as much as $1, or 1.4 percent, to $75.15 a barrel in electronic trading on the New York Mercantile Exchange. That's the highest since Oct. 21, 2008. The contract traded at $74.71 at 9:37 a.m. London time.
Futures have gained 68 percent this year as the dollar's decline bolsters the investment appeal of commodities including crude and gold, which hit a record for a second day. The U.S. currency touched $1.4905 per euro, the weakest since August 2008. Gold for immediate delivery gained as much as 0.6 percent to $1,070.90 an ounce.
R20;This rally today really was prompted by two things: one, the revised demand forecast from OPEC, and the other, the continued weakening of the U.S. dollar," said Victor Shum, a senior principal at energy consultants Purvin & Gertz Inc. in Singapore. "The world is simply getting less negative in terms of demand growth."
Oil Stockpiles
European and Asian shares gained and U.S. stock-index futures advanced after Intel Corp.'s sales forecast beat analysts' estimates and the decline in ChinaR17;s exports slowed.
ChinaR17;s crude-oil imports climbed 15 percent to 17.2 million tons last month from a year earlier, while exports reached 390,000 tons, according to the customs bureau. Imports gained 8.2 percent to 146 million tons in the first nine months.
Oil rallied even as stockpiles in the U.S., the world's largest energy consumer, likely increased. Commercially held crude oil inventories rose by 1.15 million barrels in the week to Oct. 2, according to the median of estimates from 12 analysts polled by Bloomberg News. Gasoline stockpiles probably climbed 1 million barrels, the survey showed.
The Energy Department will release its weekly report tomorrow at 11 a.m. in Washington, a day later than usual because of the Columbus Day holiday on Oct. 12. The industry- funded American Petroleum Institute will put out its data today.
Demand Upgrades
OPEC, which pumps 40 percent of the world's oil, raised its forecast yesterday for global demand for a second month. The 12- member group predicted consumption next year will rise 0.8 percent to 84.93 million barrels a day, led by emerging markets. The International Energy Agency increased its demand projection on Oct. 9 for a third month.
R20;ThereR17;s a lot of concern about OPEC compliance, but their production is still down about 3 million barrels a day year-on- year," said Barclays's Sen. "Countries that have spare capacity are the policy stalwarts, so we're not going to see uncontrolled slippage."
Brent crude oil for November settlement rose as much as $1.05, or 1.5 percent, to $73.45 a barrel on the London-based ICE Futures Europe exchange. It was at $72.89 a barrel at 9:37 a.m. in London. The more actively traded contract for December, which moves to the front month on Oct. 16, was at $73.70 a barrel.
November-09 Crude settled at $75.18, up $1.03 on the day, November-09 Natural Gas settled at $4.436, down $0.152 on the day.
November-09 Crude is trading at $75.05, down $0.13, November-09 Natural Gas is trading at $4.395, down $0.041.
Oil Little Changed Near One-Year High Before Report on Supplies
By Grant Smith
Oct. 15 (Bloomberg) -- Crude oil was little changed near a one-year high in New York before a report forecast to show that U.S. crude inventories rose.
Oil earlier climbed to $75.96 a barrel, its highest since October 2008. Crude stockpiles probably expanded by 1 million barrels last week, while distillates, a category that includes heating oil, fell by 100,000 barrels, according to a Bloomberg survey before today's report from the Energy Department.
R20;On the fundamental side nothing points to higher prices," said Gerrit Zambo, a trader with Bayerische Landesbank in Munich. "I don't think demand is going to pick up to the extent that we'll get any physical shortages. Overall market sentiment is driving oil.
Crude oil for November delivery traded 10 cents higher at $75.28 a barrel in electronic trading on the New York Mercantile Exchange as of 11:21 a.m. London time. Prices have gained 5 percent this week.
TodayR17;s peak of $75.96 a barrel, the highest intraday price since Oct. 20, 2008, was driven by a decline in the dollar and a worldwide advance in equity markets. Yesterday, the American Petroleum Institute reported that U.S. crude oil and gasoline stockpiles dropped last week.
The Dow Jones Industrial Average broke 10,000 yesterday for the first time in a year on better-than-estimated earnings at JPMorgan Chase & Co. and Intel Corp.
Crude Stockpiles
U.S. crude oil stockpiles fell 172,000 barrels to 339.2 million last week, according to the industry-funded American Petroleum Institute. Gasoline inventories declined 2.66 million barrels to 210.4 million, its report showed.
The Energy Department will release its Weekly Petroleum Status Report at 11 a.m. in Washington, a day later than usual because of the Columbus Day holiday Oct. 12.
The Energy Department will post a 100,000-barrel drop in distillate fuel stockpiles in the week to Oct. 9, according to the median estimate from 14 analysts surveyed by Bloomberg News. Inventories including diesel and heating oil have risen seven weeks to 171.8 million barrels, the highest since January 1983.
Crude oil stockpiles probably rebounded 1 million barrels from the previous week's decline, based on the survey. Nine analysts predicted an increase while four said there was a drawdown. Gasoline inventories climbed 1.13 million barrels, the survey showed.
Oil-supply totals from the API and Energy Department moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.
U.S. Dollar
The dollar was at $1.4916 per euro as of 11:01 a.m. London time after falling as low as $1.4968 per euro, the weakest since August 2008.
R20;The U.S. dollar knows only one direction and that is helping the oil price," said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. "It may have also got a boost from the API data."
Brent crude oil for November settlement rose as much as 76 cents, or 1 percent, to $73.86 a barrel on the London-based ICE Futures Europe exchange. The contract, which expires today, was unchanged at $73.10 a barrel at 11:04 a.m. local time. December futures were at $73.93 a barrel.
November-09 Crude settled at $77.58, up $2.40 on the day, November-09 Natural Gas settled at $4.48s, up $0.046 on the day.
The Eia/Doe Inventory report came out today and product Inventories were down considerably more than expected. This is an excerpt from the report:
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 0.4 million barrels from the previous week. At
337.8 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
decreased by 5.2 million barrels last week, and are just above the upper limit
of the average range. Finished gasoline inventories decreased but blending
components remained unchanged last week. Distillate fuel inventories decreased
by 1.1 million barrels, and are above the upper boundary of the average range
for this time of year. Propane/propylene inventories increased by 0.1 million
barrels last week and are above the upper limit of the average range. Total
commercial petroleum inventories decreased by 5.8 million barrels last week,
and are above the upper limit of the average range for this time of year.
Nov-09 settled at $78.53, up $0.95 on the day, the back months traded in the $80.00+ range, Nov-09 Natural Gas settled at $4.781, up $0.299 on the day, the back months traded in the $6.00+ range.
Dale, I hope you filled up earlier in the week.
I have been on the road all day and just got to where I could post today's market.
I got $75 worth of gas last week when the price was 2.34 and it is now at 2.53 and going up. I glad the lawn mowing is about over for the year.
Nov-09 Crude is trading at $78.20, down $0.33, Nov-09 Natural Gas is trading at $4.81, up $0.029.
I noticed when we got back to Bartlesville last night, gas prices were $2.28 and $2.29.
Crude Is Little Changed After Reaching One-Year High Above $79
By Grant Smith and Ann Koh
Oct. 19 (Bloomberg) -- Crude oil was little changed after reaching a one-year high as rising equity markets stoked confidence that energy consumption will rebound.
Oil advanced for an eighth day, its longest winning streak since July, as the dollar weakened against the euro, attracting investors seeking an inflation hedge to crude. U.S. supplies of distillates fuels such as diesel and heating oil fell from a 26- year high in the week ended Oct. 9, the Energy Department reported last week.
Optimism from equities still seems to be channeling into the oil market, said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. There has been an increase in petrol demand, the macro figures have been coming out okay, and the colder winter should help with heating demand.
Crude oil for November delivery was at $78.70 a barrel, up 17 cents, in after-hours electronic trading on the New York Mercantile Exchange at 10 a.m. London time. Prices earlier rose as much as 52 cents, or 0.7 percent, to $79.05, the highest since Oct. 15, 2008.
The contract, expiring tomorrow, rose 1.2 percent to $78.53 a barrel on Oct. 16 after a report showed U.S. industrial production last month climbed more than economists forecast. The more widely held December contract was at $79.29 a barrel, up 27 cents.
Europes Dow Jones Stoxx 600 Index added 0.8 percent at 9:18 a.m. in London. The U.S. currency traded at $1.4926 against the euro, compared with $1.4828 earlier.
Last week, oil futures posted their biggest weekly gain in almost two months after the U.S. Energy Department said gasoline stockpiles fell by 5.2 million barrels.
U.S. Inventories
Oil prices have increased 23 percent in the past three months even as U.S. fuel stockpiles climbed. Prices rose as a recovery in equity markets emboldened investors, and the sliding U.S. dollar prompted buying of commodities.
U.S. distillates supplies, including diesel and heating oil, fell from a 26-year high in the week ended Oct. 9, the Energy Department reported last week. At 170.7 million barrels, they were 30 percent above the five-year average for the period.
Inventory levels are still relatively high, said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. Ultimately well see oil prices drifting lower again, maybe even under $70 a barrel, because the market is relatively well supplied.
Brent crude oil for December settlement rose as much as 47 cents, or 0.6 percent, to $77.46 a barrel on the London-based ICE Futures Europe exchange, and was at $77.19 at 9:35 a.m. London time.
Bounce Back
Reports from the U.S. Department of Energy have had mixed results for refined products, Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut, said in a note to clients. If this week follows historical trends, we should see a bounce back up in both crude oil imports and in refinery utilization.
Hedge-fund managers and other large speculators increased their bets on rising oil futures to a nine-month high last week, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 68,836 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 18,830 contracts, or 38 percent, from a week earlier.
The market is pricing in a very big upturn in demand in order to draw down all that product, and I just think its a little optimistic at this point, said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne.
Frank: What, in your opinion, is the bottom range for oil companies to make sufficient profit and still allow gasoline prices to remain low, as they are today?
Can they make it with $75 oil? Or does it need to be more like $100? Even higher?
We consumers are enjoying the lower pump prices, but we also want ConocoPhillips and other entities to stay in business, create jobs and help lower our dependence upon foreign energy.
Rudy there are so many variables to consider when addressing that question and subject.
One of the biggest threats to the industry is the current powers in control in Washington. The industry faces lots of new challenges with new legislation being proposed in Washington which calls for Billions of dollars of new taxes and fees on the Oil and gas industry. Those added taxes will be passed on to the consumer and will no doubt reduce investment by the industry. Rudy, also bear in mind that we are currently importing over half of our energy needs and we have no control over the price we pay for imported energy.
Another big factor in the Oil and Gas Indusrty that dictates oil company successes is the cost of driliing and tubular goods. In the past China was buying up all of the excess tubular goods and our domestic oil industry was paying 200-300% more for tubulars than what we were in the past. The biggest obstacle facing the US and the cost and availability is the increased demand that China and India are experiencing. In addition the huge trade deficits that we are experiencing cause the dollar to be devalued more which raises the price of imported goods including oil. Unfortunately our dollar has lost all of it's respect in the world currency markets.
Increased drilling of our reserves would help, but if we started now developing our biggest known reserves it would be 5-10 years before we would see an increase in domestic production.
Rudy, I know this probably didn't satisfy your question but there are so many factors to consider it is difficult to give a short answer.
The US consumes almost 7.5 Billion barrels of oil annually, we have to reduce that considerably or we will face serious economic consequencrs in the future.
Nov-09 crude settled at $79.61, up $1.08 on the day, Nov-09 Natural Gas settled at $4.835, up $0.054 on the day.
Thanks, Frank.
You know if this administration keeps on with its taxing the hell out of everyone, its going to sink us. I understand that it is obama administration's intent to tax every mile that is driven and tying that to the gas pumps. I know one thing i'll be doing is making my own fuel if this comes about. It's bad enough to have to pay higher gas prices. This taxing has gotten out of hand.
I am probably going to get me a hho generator and look into building a woodgas generator.
Be sure to let the fire company know where you live. ;D ;D ;D ;D
Quote from: Diane Amberg on October 19, 2009, 09:10:21 PM
Be sure to let the fire company know where you live. ;D ;D ;D ;D
Fire???
Well woodgas is a pretty safe method of fueling :D!! :) And you get a mile per pound of wood. The kool thing about it is you can fuel up anywhere theres dead trees and branches and such. :D OR if you happen to see a woodchipper behind a power company truck, you can fill up quite fast that way too
November-09 Crude settled at $79.09, down $0.52 on the day, today is the last day for Novembers futures business in the crude side, Dec-09, which will be the front month tomorrow closed at $79.12, down $0.84, November-09 Natural Gas settled at $5.161, up $0.326, on the day.
Dec-09 Crude is trading at $77.675, down $1.445, Nov-09 Natural Gas is trading at $5.125, down $0.036.
The EIA/Doe Crude and Products inventory report comes out today and it is expected to show a build .
Crude Oil Drops Before U.S. Report Expected to Show Supply Gain
By Rachel Graham
Oct. 21 (Bloomberg) -- Oil declined for a second day, falling below $78 a barrel, before a U.S. government report expected to show crude inventories rose last week.
Crude stocks rose 1.5 million barrels in the week ended Oct. 16, according to a survey of 15 analysts before the U.S. Department of Energy report later today. The industry-funded American Petroleum Institute yesterday said U.S. crude inventories increased.
"The API data seems to have halted the market's gallop with a surprising stock build," Paul Harris, head of natural resources risk management at the Bank of Ireland, said from Dublin. The market is now looking to the Department of Energy report, he said.
Crude oil for December delivery fell as much as $1.45, or 1.8 percent, to $77.64 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $77.79 a barrel at 12:43 a.m. London time.
Crude prices have gained about 9 percent this month, tracking rising global equity markets and a weakening dollar.
Futures traded at over $80 a barrel yesterday for the first time in over a year as the dollar index, which measures the U.S. currency against six peers, fell to its lowest since August 2008. Some investors buy dollar-priced commodities to hedge against a weaker U.S. currency.
"We've come up quite quickly in the past couple of weeks," Frank Schallenberger, head of commodities research at Landesbank Baden-Wuerttemberg, said by phone from Stuttgart, Germany. "The U.S. report should give the market new direction."
API Report
Brent crude oil for December settlement declined as much as $1.20, or 1.6 percent, to $76.04 a barrel on the London-based ICE Futures Europe exchange.
The API report yesterday showed crude inventories in the U.S. added 3.85 million barrels last week.
The Department of Energy report may show inventories of crude oil rose 1.5 million barrels in the week ended Oct. 16 from 337.8 million the prior week, according to the median of 15 estimates by analysts. Twelve of those surveyed forecast that stockpiles gained and three said there was a decline.
Crude stocks in the U.S. are currently about 10 percent above last year's level.
The report, scheduled to be released at 10 a.m. in Washington, may show gasoline inventories fell 850,000 barrels from 209.2 million the week before, the survey showed.
Supplies of distillate fuel, a category that includes heating oil and diesel, declined 1 million barrels from 170.7 million the prior week, according to the survey. Stocks in the week ended Oct. 2 were at the highest level since January 1983.
I noticed when I was out this morning that pump prices for Regular ranged from $2.27 to $2.45. My guess is that range will narrow down by this evening.
I see another long time refiner is disposing of refineries, Sinclair sold their Tulsa refinery to Holly Corp, Sunoco sold their Tulsa Refinery to Holly corp recently. The largest refiner in the US now, is not even an Oil and Gas producer, Valero has been buying up refineries all over the US and in some of the Islands like Aruba and others, and Valero is now the Largest US refiner.
Dec-09 Crude settled at $81.37, up $2.25 on the day, November-09 Natural Gas settled at $5.10, down $0.061.
Oil Surges to One-Year High on U.S. Gasoline Supply Decline
By Mark Shenk
Oct. 21 (Bloomberg) -- Crude oil rose above $81 a barrel in New York for the first time in a year and gasoline surged after a U.S. Energy Department report showed a greater-than-forecast drop in supplies of the motor fuel.
Gasoline stockpiles fell 2.21 million barrels, more than twice the median of analyst forecasts, to 206.9 million barrels in the week ended Oct. 16, according to the department's report. Oil also advanced as U.S. equities increased and the dollar slipped against the euro, bolstering the appeal of commodities.
"The gasoline number has clearly changed the landscape," said John Kilduff, senior vice president of energy at MF Global in New York. "The industry is seen constraining fuel supply, which is underpinning the market."
Crude oil for December delivery climbed $2.52, or 3.2 percent, to $81.64 a barrel at 12:59 p.m. on the New York Mercantile Exchange. Futures touched $81.73, the highest since Oct. 14, 2008. Prices are up 82 percent this year.
Oil traded at $78.76 a barrel before the release of the report at 10:30 a.m. in Washington.
Gasoline for November delivery climbed 5.78 cents, or 2.9 percent, to $2.0455 a gallon in New York. Futures touched $2.0534, the highest since Aug. 31. Prices are up for an eighth day, the longest stretch since July.
Gasoline stockpiles were forecast to drop by 850,000 barrels, according to the median of 16 analyst estimates in a Bloomberg News survey.
Declining Consumption
Demand for the motor fuel declined 3.3 percent to an average 8.95 million barrels a day, the biggest one-week drop since May, the report showed.
Supplies of distillate fuel, a category that includes heating oil and diesel, fell 784,000 barrels to 169.9 million, according to the department. Stockpiles climbed to 171.6 million barrels in the week ended Oct. 2, the highest level since January 1983.
Inventories of crude oil rose 1.31 million barrels to 339.1 million, the highest level since August, the report showed. Supplies were forecast to climb by 1.5 million barrels. The gain left stockpiles 9.4 percent above the five-year average for the period, the department said.
"There's still plenty of oil on the market," said Richard Ilczyszyn, a senior market strategist with Lind-Waldock in Chicago. "The main driver right now is distillate because of the time of year, followed by gasoline and only then by oil."
Equities and Dollar
The euro climbed above $1.50 for the first time in 14 months as optimism that the economic recovery is gathering momentum increased demand for riskier assets. The 16-nation euro increased 0.4 percent to $1.5006 from $1.4945 yesterday. It touched $1.5023, the highest level since August 2008.
"Oil is moving higher because the dollar is going lower," said Sean Brodrick, natural resource analyst with Weiss Research in Jupiter, Florida. "The dollar's drop is telling people who buy the dollar as an alternate currency that oil prices are going to continue to rise. It's also giving energy stocks a boost."
Exxon Mobil Corp., the largest U.S. oil company, rose 1.3 percent to $73.97. Chevron Corp., the second-biggest, climbed 1.2 percent to $77.97.
U.S. equities gained as better-than-estimated earnings at Yahoo! Inc. and Morgan Stanley bolstered optimism in the market's seven-month rally. Yahoo, the owner of the No. 2 U.S. search engine, rose as much as 5 percent after earnings were helped by increased spending from some advertisers. Morgan Stanley rallied after posting its first profit in a year.
$100 Oil
Crude oil is poised to top $100 a barrel after breaking out of a five-month range, according to technical analysis by Auerbach Grayson, a brokerage in New York. Futures traded between $56 and $75 a barrel from May 8 to Oct. 13.
"We broke out strongly from a five-month period of consolidation," Richard Ross, a technical analyst at Auerbach Grayson, said in a telephone interview. "The longer the period that we break out of, the stronger the following move will be."
Brent crude oil for December settlement climbed $2.61, or 3.4 percent, to $79.85 a barrel on the London-based ICE Futures Europe exchange. The contract touched $79.98, the highest since Oct. 14, 2008.
Last Updated: October 21, 2009 13:12 EDT
Dec-09 Crude is trading at $80.35, down $1.02, Nov-09 Natural Gas is trading at $5.045, down $0.055.
Dec-09 Crude settled at $81.19,down $0.18 on the day, November-09 Natural Gas settled at $4.947, down $0.153 on the day.
Dec-09 Crude is trading at $81.30, up $0.11, Nov-09 Natural Gas is trading at $5.015, up $0.068.
Crude Oil Poised for Fourth Week of Gains on Economic Recovery
By Rachel Graham
Oct. 23 (Bloomberg) -- Crude oil headed for a fourth straight week of gains as the dollar weakened and rising global equity markets spurred investor confidence.
Oil has advanced 3.5 percent this week as the dollar index, a measure of the U.S. currency against six peers, fell to its lowest level since August 2008. The MSCI World Index, which comprises 10 industry groups, is set for a third weekly gain.
R20;Dollar weakness has been pushing the crude market up," Sentje Diek, an energy analyst at HSH Nordbank AG, said by phone from Hamburg. "We've had some better-than-expected earnings reports this week."
Crude for December delivery advanced 0.1 percent to $81.28 a barrel on the New York Mercantile Exchange as of 10:43 a.m. in London. Oil has risen 82 percent this year and traded at a one- year high of $82 a barrel on Oct. 21.
R20;Prices have decisively broken out of their $65-$75 band and have made a gentle transition toward the $70-$80 range," Gayle Berry, a London-based analyst at Barclays Capital, wrote in a report dated yesterday. "On the macroeconomic front, so far the path of recovery has surprised to the upside."
Crude futures may fall next week on concern that U.S. inventories are sufficient to meet weakening demand, according to a Bloomberg News survey of 36 analysts.
Eighteen analysts, or 50 percent, forecast oil will drop through Oct. 30. Twelve respondents, or 33 percent, said the market will rise and six said prices will be little changed.
Brent crude oil for December settlement rose 0.2 percent to $79.69 a barrel at 10:42 a.m. on the ICE Futures Europe exchange in London.
The Dow Jones Stoxx 600 Index added 0.5 percent as of 10:43 a.m. in London, heading for its third weekly advance. Dow Chemical Co. and AT&T Inc. beat earnings expectations this week.
Dec-09 Crude settled at $80.50,down $0.69 on the day, November-09 Natural Gas settled at $4.787, down $0.16 on the day.
Have a safe and fun weekend.
Dec-09 Crude is trading at $80.25, down $0.25, Nov-09 Natural Gas is trading at $4.645, down $0.142.
Dec-09 Crude settled at $78.68,down $1.82 on the day, November-09 Natural Gas settled at $4.513, down $0.274 on the day.
Dec-09 Crude is trading at $79.15, up $0.47, Nov-09 Natural Gas is trading at $4.515, up $0.002.
Oil Little Changed Around $78 on Forecast U.S. Supplies Grew
By Grant Smith and Ann Koh
Oct. 27 (Bloomberg) -- Crude oil was little changed around $78 a barrel in New York before a report forecast to show that U.S. crude inventories expanded for a third week.
An Energy Department report due tomorrow will probably show that U.S. stockpiles of crude oil rose 1.5 million barrels last week, according to a Bloomberg News survey. Analysts forecast that supplies of gasoline and distillate fuel, a category that includes heating oil and diesel, declined last week.
R20;ItR17;s overvalued and it may be time for a correction," said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. "The fundamental picture is bearish. Demand outside China is still weak and global stockpiles are ample."
Crude oil for December delivery was at $78.55 a barrel, down 13 cents, at 8:49 a.m. London time. Yesterday, it dropped 2.3 percent to close at $78.68 a barrel on the New York Mercantile Exchange, the biggest decline since Sept. 24 and the lowest settlement since Oct. 16.
Prices have gained 76 percent this year and reached a one- year high of $82 a barrel on Oct. 21.
R20;The upper limit is at $82 at the moment," said Ken Hasegawa, a commodity derivatives sales manager at brokers Newedge in Tokyo. "Unless there is a collapse in the economy, this market would be supported at around $75 a barrel."
U.S. Stockpiles
An Energy Department report due tomorrow will show that U.S. inventories of crude oil rose 1.5 million barrels last week, according to the median of nine estimates by analysts in a Bloomberg News survey. Supplies in the week ended Oct. 16 climbed 1.3 million barrels to 339.1 million, leaving stockpiles 9.4 percent above the five-year average for the period.
The Organization of Petroleum Exporting Countries, which accounts for 40 percent of global oil output, will meet Dec. 22 in Luanda, Angola, to review production quotas.
The group may boost production targets at the December meeting, OPEC President and Angolan Oil Minister Jose Maria Botelho de Vasconcelos said in an interview on Oct. 25.
R20;The price of oil was pushed back below the $80 mark by the thought of OPEC increasing production at their next meeting in December and increased concerns over banking sector liquidity," said Mike Sander, an investment adviser with Sander Capital in Seattle.
Brent crude oil for December settlement was at $77.27 a barrel, up 1 cent, on the London-based ICE Futures Europe exchange at 8:42 a.m. London time. Yesterday it declined $1.66, or 2.1 percent, to end the session at $77.26 a barrel.
The dollar dropped to $1.4880 per euro as of 8:42 a.m. in London from $1.4876 yesterday in New York. The U.S. currency reached $1.5063 against the euro yesterday, the weakest level since August 2008.
Dec-09 Crude settled at $79.55,up $0.87 on the day, November-09 Natural Gas settled at $4.557, up $0.044 on the day.
Dec-09 Crude is trading at $78.775, down $0.775, Dec-09 Natural Gas is trading at $5.23, down $0.052. Today is last day trading for Nov-09 Natural Gas.
Oil Falls, Trading Around $79 Before Report on U.S. Inventories
By Grant Smith and Ann Koh
Oct. 28 (Bloomberg) -- Oil fell, trading around $79 a barrel in New York before a report forecast to show that U.S. crude-oil inventories expanded last week.
Oil slipped as European and Asian shares declined, sending the MSCI World Index lower for a seventh straight day. Crude oil stockpiles rose 1.91 million barrels in the week ended Oct. 23 from 339.1 million the prior week, according to a Bloomberg survey before today's Energy Department report.
R20;Oil is losing ground before the U.S. fuel inventories report," said Andrey Kryuchenkov, an analyst with VTB Capital in London. "The huge inventory overhang we have makes a modest pull-back towards the low $70s likely in coming weeks, before heating oil demand takes the market back up again."
Crude oil for December delivery fell as much as 56 cents, or 0.7 percent, to $78.99 a barrel on the New York Mercantile Exchange and traded for $79.06 a barrel as of 8:57 a.m. London time. Prices have gained 78 percent this year and reached a one- year high of $82 a barrel on Oct. 21.
Crude oil advanced 1.1 percent yesterday after the industry-funded American Petroleum Institute reported that crude stockpiles fell 1 percent to 339.5 million last week. The S&P/Case-Shiller home-price index also showed prices increased from the prior month.
R20;We do see the global economy continue on its recovery path, and we could see more dollar weakness, which has a positive effect for dollar-denominated commodities," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "As much as underlying fundamentals, we haven't really seen a huge degree of improvement."
OPEC Output
The Organization of Petroleum Exporting Countries will raise oil output if there's a "real" shortage of supply, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said yesterday in Ras Laffan, Qatar. The 12-member group is scheduled to meet Dec. 22 in Luanda, Angola, to review production targets.
R20;Sometimes the price of oil has no correlation to demand and supply," al-Attiyah said. "Now what we are seeing is that oil has a strong correlation with the dollar."
Oil fell 2.3 percent on Oct. 26 when the dollar climbed, reducing investor demand for commodities. The U.S. currency was at $1.48302 per euro as of 8:49 a.m. in London from $1.4787 yesterday. It also touched $1.4770 yesterday, the strongest level since Oct. 13.
The dollar has weakened so far this year versus all but one of its 16 major counterparts, including a 5.7 percent drop against the euro.
An Energy Department report today will probably show that U.S. crude-oil supplies rose 1.91 million barrels in the week ended Oct. 23 from 339.1 million the prior week, according to the median of 16 estimates by analysts before the department's report. All respondents forecast a gain.
Supplies of distillate fuel, a category that includes heating oil and diesel, declined 1 million barrels from 169.9 million the prior week, according to the survey.
Brent crude oil for December settlement was at $77.35 a barrel, down 57 cents, at 8:48 a.m. London time. It increased 66 cents, or 0.9 percent, to end the session at $77.92 a barrel on the London-based ICE Futures Europe exchange yesterday.
Dec-09 Crude is trading at $78.00, up $1.00, Dec-09 Natural Gas is trading at $5.o4, down $0.005.
Our neighborhood pump price for Regular is $2.27
Oil Rises From a Two-Week Low as ChinaR17;s Manufacturing Expands
By Grant Smith
Nov. 2 (Bloomberg) -- Crude rose from a two-week low after manufacturing in China, the world's second-biggest oil user, expanded at the fastest pace in 18 months.
A purchasing managers' index released by HSBC Holdings Plc today and a government-backed PMI issued yesterday showed that ChinaR17;s manufacturing grew in October. In the same month, output from the Organization of Petroleum Exporting Countries expanded to its highest in 10 months, a Bloomberg survey showed.
R20;Everything coming out of Asia shows they are developing better than other countries," said Sintje Diek, an analyst with HSH Nordbank in Hamburg. "Elsewhere, demand is still weak, and it's going to take a long time to lower the oversupply in crude and product inventories."
Crude oil for December delivery rose as much as $1, or 1.3 percent, to $78 a barrel in electronic trading on the New York Mercantile Exchange. It was at $77.87 a barrel at 10:45 a.m. London time. Earlier it fell to $76.56, the lowest price since Oct. 15.
Futures lost 4.4 percent last week, the first pullback in a month, after U.S. crude oil and gasoline stockpiles rose, equities declined and the dollar's rebound reduced the investment appeal of commodities. Prices were down 3.6 percent Oct. 30 after a report showed U.S. consumer spending in September fell for the first time in five months.
OPEC output averaged 28.76 million barrels a day in October, up 80,000 barrels from September, according to a Bloomberg survey of oil companies, producers and analysts. The entire gain came from the OPEC members with quotas, all except Iraq. The 11 countries pumped 26.31 million barrels a day, 1.465 million barrels above their target. Iraqi output was unchanged.
Demand 'Not Robust'
R20;It doesnR17;t help OPECR17;s cause if, as reports indicate, they decide to increase production at a time when demand is still not very robust," said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. "It may be some time before there's another test of $80."
Hedge-fund managers and other large speculators increased their bets on rising oil prices to a 19-month high last week, according to U.S. Commodity Futures Trading Commission data.
Speculative net-long positions, the difference between orders to buy and sell the commodity, climbed 47 percent to 109,619 contracts in the week ended Oct. 27, the commission said Oct. 30. That's the highest since March 14, 2008.
Brent crude for December settlement climbed as much as $1.18, or 1.6 percent, to $76.38 a barrel on the London-based ICE Futures Europe exchange. The contract was at $76.26 at 10:44 a.m. in London.
Dec-09 Crude settled at $78.13,up $1.13 on the day, December-09 Natural Gas settled at $4.824,down $0.221 on the day.
Dec-09 Crude is trading at $77.15, down $0.98, Dec-09 Natural Gas is trading at $4.79, down $0.034.
Crude Oil Futures Decline Before Data on U.S. Fuel Inventories
By Grant Smith and Alexander Kwiatkowski
Nov. 3 (Bloomberg) -- Crude oil fell in New York before a report forecast to show that crude-oil inventories increased for a fourth week.
The industry-funded American Petroleum Institute publishes its weekly inventory figures today. Tomorrow's U.S. Department of Energy report may show crude stockpiles rose 1.5 million barrels last week from 339.9 million the prior week, according to a Bloomberg survey. Prices also fell as the dollar gained against the euro, reducing commodities' appeal for investors.
R20;The conditions are there for a slide back to $75," said Rob Montefusco, a broker at Sucden Financial in London. "Demand for products is still weak, while the stronger dollar and worries about the financial sector are weighing on sentiment."
Crude oil for December delivery fell as much as $1.10, or 1.4 percent, to $77.03 a barrel and was at $77.08 a barrel on the New York Mercantile Exchange at 10:05 a.m. London time. Crude has risen 75 percent this year.
The contract yesterday gained $1.13, or 1.5 percent, to settle at $78.13 a barrel after the Institute for Supply Management said its U.S. factory index rose to a three-year high in October.
The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington. All 10 analysts surveyed by Bloomberg forecast a gain in crude stockpiles.
U.S. supplies of distillate fuel, a category that includes heating oil and diesel, declined 850,000 barrels last week from 167.8 million the prior week, according to the survey. Stockpiles in the week ended Oct. 2 were at the highest level since January 1983. Refineries operated at 82.1 percent of capacity, up 0.3 percentage point from the previous week.
R16;Fits and StartsR17;
Brent crude for December settlement fell as much as $1.01, or 1.3 percent, to $75.54 a barrel and was at $75.58 a barrel on the London-based ICE Futures Europe exchange at 10:06 a.m. local time. The contract yesterday climbed $1.35, or 1.8 percent, to $76.55 a barrel.
R20;Despite its fits and starts, the dollar is in the throes of a mini-correction that could see it strengthen somewhat further from here and likely exert continued downward pressure on energy," Edward Meir, an analyst with MF Global Ltd. in Darien, Connecticut, said in a report today.
The U.S. currency traded at $1.4646 against the euro, the strongest in four weeks. It was at $1.4658 per euro at 10:11 a.m. in London, from $1.4775 yesterday.
More backlash coming from the lack of respect and confidence in the dollar. It has been my feeling for several months that world markets are going to disconnect their trade from the Dollar.
Saudi Arabia and the Price of Crude Oil
by: Tim Iacono November 02, 2009
Here's an interesting report from over the weekend out of Saudi Arabia via The Telegraph. It appears that the Kingdom is unhappy with using West Texas Intermediate crude oil as traded on the New York Mercantile Exchange as a basis for its oil sales.
Who could blame them after what's happened over the last year?
That is, when huge spreads between WTI crude and brent crude developed and then, like clockwork every month when the near-month futures contract was about to expire, the price of that expiring contract would plunge - to as low as $32 a barrel at one point - as the next front-month contract was trading $10 or $15 higher.
The Saudis have dropped a key US benchmark for crude oil – but why?
For Saudi Arabia, it is a philosophical issue that the black gold pouring out of its deserts should be treated as a tangible, physical commodity – not the paper plaything of traders on Wall Street hedging against the weak dollar. This thinking is at the heart of the Middle Eastern country's decision last week to abandon its long alliance with West Texas Intermediate crude – the famous oil used by most global producers to price their exports to the US.
The decision is loaded with symbolism, but not likely much more than that.
It's not like they're selling the oil for yuan or rubles or some other far-away currency, though that may happen soon enough - that would be much more than symbolism.
Some details on how the Saudi oil export market works and what this change might mean...
Saudi Arabia exports around 1.5m barrels per day of oil to the US, making it the second largest supplier after Canada, but its physical crude output is not actually traded on the exchange. This is done separately through contracts between countries and oil companies – but Saudi Arabia still bases its prices on the dominant benchmark, WTI.
For several years now, Saudi Arabia has argued that it has not been well-served by the New York Mercantile Exchange's faith in this oil. Saudi Aramco, the national oil company, is fed up with being given a price for WTI crude that it claims fails to represent the global picture of supply and demand.
This year, the dominant crude oil's volatility and disconnection from the fundamentals of the physical market went one step too far.
...
The question now is: how much clout does Saudi Arabia have to destroy the dominance of NYMEX and who could be next to follow its rebellion?
The exchange moved quickly to assure its customers that it would launch two products linked to the new Argus sour crudes index. But the new benchmark will not be so inextricably wedded to the famous Wall Street exchange.
In practice, the shift may not after all make an immediate difference. But all oil market observers will wait to see whether the Saudis really do get a better, more stable price for their oil with the benchmark of sour crudes. Brazil, Venezuela and even Canada could all follow suit if they see that Saudi Aramco has made a smart move.
This is just one more, albeit quite small, step away from U.S. hegemony in global financial markets and part of the blame must surely lie with some Wall Street firms who, for years now, have profited from increased volatility in energy markets, everyone's favorite whipping boy Goldman Sachs topping that list.
Dec-09 Crude settled at $79.60,up $1.47 on the day, December-09 Natural Gas settled at $4.922,up $0.098 on the day.
Dec-09 Crude is trading at $80.425, up $0.825, Dec-09 Natural Gas is trading at $4.985, up $0.063.
Crude Rises a Third Day on Economic Data, Weaker U.S. Dollar
Nov. 4 (Bloomberg) -- Crude oil rose a third day as a weaker U.S. dollar heightened the hedging appeal of commodities and economic data reinforced confidence in the global recovery.
Crude inventories fell 3.28 million barrels last week to 336.2 million, the industry-funded American Petroleum Institute said yesterday. The U.S. Energy Department will release its own weekly supply report later today. Factory orders in the U.S., the world's biggest oil consumer, rose for the fifth time in six months in September, the Commerce Department said yesterday.
"If you look at the pure data we've received, these have been positive," said Tobias Merath, a commodity analyst at Credit Suisse Group in Zurich. "The dollar has been weaker, and sentiment across commodities has improved, so we're testing the upper end of the $75 to $80 range."
Crude oil for December delivery rose as much as $1.10, or 1.4 percent, to $80.70 a barrel in electronic trading on the New York Mercantile Exchange. It was at $80.66 a barrel at 1:30 p.m. London time. Oil has gained 80 percent this year. Futures climbed 1.9 percent yesterday after India's central bank bought 200 metric tons of gold from the International Monetary Fund.
"Commodities overall last night seemed to take the lead from the strong move in gold prices," Toby Hassall, a research analyst with CWA Global Markets in Sydney, said by phone. "Oil probably tapped some strength from the economic data as well."
Inventory Forecasts
The U.S. Energy Department is scheduled to release its supply report for the week ended Oct. 30 today at 10:30 a.m. in Washington. Analysts forecast that stockpiles increased by 1.5 million barrels, according to the median of 16 responses in a survey conducted by Bloomberg News.
Oil-supply totals from the API and Energy Department moved in the same direction 75 percent of the time in the past four years, according to data compiled by Bloomberg.
Today's report is expected to show that distillate fuel inventories, including heating oil and diesel, probably declined 1 million barrels. Gasoline supplies probably increased 400,000 barrels, the survey showed.
Brent crude for December settlement was at $79 a barrel, up 89 cents, on the London-based ICE Futures Europe exchange at 1:29 p.m. London time. The contract increased $1.56, or 2 percent, to end yesterday's session at $78.11 a barrel.
The Federal Open Market Committee may indicate there's no need to raise interest rates when it concludes a two-day meeting later today, economists said. The dollar weakened to $1.4793 per euro from $1.4724 yesterday.
Last Updated: November 4, 2009 08:39 EST
Dec-09 Crude settled at $80.40,up $0.80 on the day, December-09 Natural Gas settled at $4.725,down $0.197 on the day.
Dec-09 Crude is trading at $80.20, down $0.20, Dec-09 Natural Gas is trading at $4.695, down $0.03.
Oil Snaps Three Days of Gains Before U.S. Unemployment Report
By Grant Smith and Ann Koh
Nov. 5 (Bloomberg) -- Crude oil declined, snapping three days of gains, before a report forecast to show that U.S. unemployment rose in October.
Oil dropped from a one-week high as concern about financial company earnings sent European stocks lower, with the Dow Jones Stoxx 600 Index losing 0.9 percent. U.S. supplies of middle distillates such as heating oil and diesel were 29 percent above their five-year average after falling less than expected last week, Energy Department data showed.
R20;Fundamentals are dire, and nothing is likely to help too much in the medium-term" said Johannes Benigni, chief executive officer of JBC Energy GmbH in Vienna. "It's very difficult to see a sufficiently cold winter that would bring middle distillate stocks down. I see the market oscillating till the end of the year around $70."
Crude oil for December delivery fell as much as 82 cents, or 1 percent, to $79.58 a barrel on the New York Mercantile Exchange. It was at $79.78 a barrel at 9:10 a.m. London time. Futures have gained 79 percent this year.
Yesterday, the contract rose to $81.06, the highest since Oct. 26, after an Energy Department report showed total crude supplies unexpectedly declined. Inventories fell 3.94 million barrels last week, the report said, compared with a 1.5 million- barrel increase forecast by a Bloomberg News survey.
Stockpiles of middle distillates are 29 percent above their five-year seasonal norm even after declining 378,000 barrels to 167.4 million barrels, the Energy Department said. A decline of 1 millions barrels was forecast by analysts.
Unemployment Data
The Labor Department on Nov. 6 will report that the unemployment rate rose to 9.9 percent in October, from 9.8 percent the previous month, as companies cut another 175,000 jobs, according to the median forecasts in a Bloomberg News survey of economists.
R20;Based on fundamentals, we should be in the $50s for oil, not $80s," said Clarence Chu, a trader at options dealer Hudson Capital Energy in Singapore. "Until the U.S. starts creating jobs, I wouldn't say the economy is on the road to recovery, because jobs change how people spend money on goods."
Brent crude oil for December settlement declined as much as 86 cents, or 1.1 percent, to $78.03 a barrel on the London-based ICE Futures Europe exchange. The contract traded at $78.21 at 9:09 a.m. London time.
Dec-09 Crude settled at $79.62,down $0.78 on the day, December-09 Natural Gas settled at $4.782,up $0.057 on the day.
Dec-09 Crude is trading at $79.60, down $0.02, Dec-09 Natural Gas is trading at $4.725, down $0.057.
Our neighborhood station has Regular at $2.38.
Dec-09 Crude is trading at $78.45, up $1.02, Dec-09 Natural Gas is trading at $4.585, down $0.010.
Crude Oil Rises as Hurricane Ida Disrupts Output, Dollar Drops
By Alexander Kwiatkowski
Nov. 9 (Bloomberg) -- Crude oil rose from a one-week low as Hurricane Ida entered the Gulf of Mexico, forcing BP Plc and Chevron Corp. to cut output.
Crude climbed above $78 a barrel as companies evacuated workers in the Gulf of Mexico, an area that accounts for 27 percent of U.S. crude production and 15 percent of natural gas output. The dollar declined against 14 of its 16 major counterparts, making commodities more attractive as alternative investments.
R20;After wreaking havoc in Nicaragua and Costa Rica, Hurricane Ida is now threatening oil and gas production and oil refineries in the U.S. Gulf," said Christopher Bellew, senior broker at Bache Commodities in London. "That and a weak dollar is behind the higher prices."
Crude oil for December delivery rose as much as $1.52, or 2 percent, to $78.95 a barrel in electronic trading on the New York Mercantile Exchange. It was at $78.57 at 10:30 a.m. in London.
The contract dropped $2.19, or 2.8 percent, to $77.43 on Nov. 6, the lowest settlement since Oct. 30, after a report showed unemployment in the U.S., the world's biggest oil user, climbed to 10.2 percent, the highest in 26 years.
Oil also gained after the EFE news service reported Petroleos Mexicanos, MexicoR17;s state oil company, shut 90 wells at onshore fields in the western states of Veracruz and Tabasco because of storms and flooding.
Ida, Gulf Production
Oil reached a one-year high of $82 on Oct. 21, as rising equities boosted investor confidence and a falling dollar encouraged buying of physical assets.
The dollar fell against the euro today after the Group of 20 governments agreed to keep stimulus measures and remained silent on the currency's decline this year. Investors purchase commodities including crude as an inflation hedge as the currency drops.
R20;People are nervous about the dollar, it is trading close to $1.50," versus the euro, said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. "It is the main reason for the move in commodities today."
The dollar fell to $1.4995 per euro as of 10:12 a.m. in London from $1.4847 on Nov. 6.
IdaR17;s maximum sustained winds increased to about 105 miles (169 kilometers) per hour, from 100 mph today, the U.S. National Hurricane Center said in its latest advisory. Ida's center was located about 340 miles east-southeast of the mouth of the Mississippi River at 12 a.m. and moving north-northwest at 15 mph, the center said.
LOOP Halted
The Louisiana Offshore Oil Port, or LOOP, stopped taking loadings from tankers at about noon yesterday because of rough seas, said Barb Hestermann, a spokeswoman. Deliveries to refiners are being met through crude stored onshore. The system can off-take 1 million barrels a day, or about 12 percent of U.S. imports.
Chevron, the second-largest U.S. oil company, said it has shut some of its Gulf output and moved away some "non-essential personnel."
BP has started "some precautionary curtailment of production," according to a recorded statement on its hotline.
Exxon Mobil Corp., the world's biggest oil company, said its operations in the Gulf of Mexico are normal and it's monitoring the weather, according to an e-mail from spokesman David Eglinton. Royal Dutch Shell Plc said it's "securing" offshore facilities though drilling isn't affected.
Brent crude for December settlement rose as much as $1.50, or 2 percent, to $77.37 a barrel on the London-based ICE Futures Europe exchange. It was at $76.90 at 10:30 a.m. local time.
Saudi Increases
Saudi Arabian Oil Co. will supply full contracted oil shipments to several refiners in Asia for the first time in more than a year, refinery officials said today.
The company, also known as Saudi Aramco, will provide the cargoes in December under long-term contracts, according to a Bloomberg News survey of refinery officials in Japan, South Korea, China and Thailand, who asked not to be identified because of confidential agreements. The refiners had been receiving cuts of between 10 percent
December-09 Crude settled at $79.43,up $2.00 on the day, December-09 Natural Gas settled at $4.67,up $0.075 on the day.
Dec-09 Crude is trading at $79.175, down $0.25, Dec-09 Natural Gas is trading at $4.57, down $0.010.
Crude Oil Falls as Tropical Storm Ida Weakens in Gulf of Mexico
By Christian Schmollinger and Ayesha Daya
Nov. 10 (Bloomberg) -- Crude oil fell after Tropical Storm Ida weakened in the Gulf of Mexico as it headed for the U.S. coast, reducing the potential of further supply disruptions.
IdaR17;s sustained winds have dropped to 60 miles (97 kilometers) per hour from 65 mph earlier, the National Hurricane Center said on its Web site. Producers have begun preparations to resume operations.
R20;Most people feel that the storm isn't going to be that severe," said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. "This is the last hurrah for the hurricane season."
Oil for December delivery declined as much as 88 cents, or 1.1 percent, to $78.55 a barrel in electronic trading on the New York Mercantile Exchange. It was at $79.94 a barrel at 10:05 a.m. London time. Yesterday, the contract rose $2, or 2.6 percent, to $79.43. Prices have gained 77 percent this year.
Oil also declined after an official from the Organization of Petroleum Exporting Countries said the group is unlikely to change production levels because stocks are high.
Ida was centered 100 miles south-southwest of Mobile, Alabama, at 9 p.m. local time and was moving north at 13 mph, the center said. Workers were evacuated in the Gulf of Mexico and companies idled 29.6 percent of oil and 27.5 percent of natural gas output, according to government data.
Marathon Oil Corp. said it may start work on bringing output back tomorrow. The company had evacuated and shut in production at a platform located at Ewing Bank 873, which can produce the equivalent of about 12,000 barrels of oil a day, Lee Warren, a company spokesman, said in an e-mail.
Stockpile 'Worry'
OPEC won't need to raise oil production levels when it meets next month in Angola because stockpiles are "a worry" and will rise early next year, the group's head of research Hasan Qabazard said in an interview in Doha, Qatar today.
R20;Oil is still trading below $80 a barrel because the fundamentals are very weak and we have an oversupply in the market," said Sintje Diek, an analyst with HSH Nordbank in Hamburg. "Crude oil and oil product inventories are well below the five-year average."
U.S. crude-oil inventories probably rose 1 million barrels in the week ended Nov. 6, according to the median of 10 estimates by analysts before an Energy Department report.
Supplies of distillate fuel, a category that includes heating oil and diesel, declined 700,000 barrels from 167.4 million the prior week, according to the survey. Gasoline stockpiles probably dropped 400,000 barrels from 208.3 million in the week before, the survey showed.
Weekly Report
The department is scheduled to release its weekly report on Nov. 12 at 11 a.m. in Washington, a day later than usual because of the Veterans' Day holiday on Nov. 11.
Brent crude for December settlement fell as much as 87 cents, or 1.1 percent, to $76.90 on the London-based ICE Futures Europe exchange. It was at $77.38 a barrel at 10:05 a.m. London time. Prices rose $1.90, or 2.5 percent, to $77.77 a barrel yesterday.
World oil reserves are more depleted than official estimates state, the Guardian reported, citing a whistleblower at the International Energy Agency.
The IEA has been underplaying a future oil shortage while overplaying the chances of finding new reserves under pressure from the U.S. amid a fear of triggering panic buying, the newspaper reported, citing an unidentified senior official at the IEA.
Critics have often wrongly questioned the accuracy of its figures, the IEA said last night, ahead of the publication of its World Energy Outlook report today, the newspaper said.
December-09 Crude settled at $79.05,down $0.38 on the day, December-09 Natural Gas settled at $4.467,down $0.203 on the day.
Dec-09 Crude is trading at $79.55, up $0.50, Dec-09 Natural Gas is trading at $4.535, up.07.
December-09 Crude settled at $79.28,up $0.23 on the day, December-09 Natural Gas settled at $4.503,up $0.036 on the day.
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Dec-09 Crude is trading at $78.375, down $0.905, Dec-09 Natural Gas is trading at $4.44, down $0.063.
OPEC Output Is Highest Since January; Quota May Rise, IEA Says
By Ayesha Daya
Nov. 12 (Bloomberg) -- OPEC crude oil production rose in October to the highest level since January and the group may increase it further at a meeting next month in Angola if oil prices keep rising, the International Energy Agency said.
Production from 11 members excluding Iraq rose by 150,000 barrels a day from September, to 26.48 million barrels a day, as Gulf members allowed more oil to flow to Asia. Compliance with output cutbacks agreed late last year by the Organization of Petroleum Exporting Countries slipped to 61 percent in October, from 64 percent in September, the Paris-based IEA estimated in its monthly report today.
There appears to be a "quasi-consensus" among some OPEC members "that an increase in output targets may be in the offing at the next meeting if prices move significantly above current levels," the IEA report said. "OPEC members, especially in the Middle East Gulf, are worried that higher oil prices could threaten the global economic recovery and further strain relationships with consuming nations ahead of climate change talks in Copenhagen."
Crude oil has gained 78 percent this year, trading at $79.22 a barrel on the New York Mercantile Exchange today. Saudi Arabia's King Abdullah has previously targeted $75 oil as a fair price for consumers and producers.
OPEC, responsible for 40 percent of the world's crude supplies, will meet on Dec. 22 in Luanda, Angola, to discuss production targets after agreeing to leave quotas unchanged at its past three ministerial conferences.
The groups 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
Texas oil baron sees gas as game changer
North America The 'Saudi Arabia Of Natural Gas,' Says Pickens; He proposes switching semis' fuel as first step
By Shaun Polczer, Calgary HeraldNovember 11, 2009
CALGARY - North Americans need to embrace natural gas as the clean-burning solution to North America's energy and environmental security, one of the world's leading oilmen told the Calgary Herald's editorial board Tuesday.
T. Boone Pickens, one of the world's foremost oil barons, is hoping to convert more than seven million heavy trucks and vehicles over to the cleaner-burning fuel in an attempt to reduce U.S. reliance on imported oil.
In a meeting with the Herald, Pickens described North America as the "Saudi Arabia" of natural gas, with more than 100 years of potential supplies.
"We have more gas than anyone else in the world," he said. "America is the Saudi Arabia of natural gas. It's time for us to use this abundant resource to end the cycle of foreign oil dependency and addiction that is making us less safe and more economically insecure."
Pickens was in Calgary to promote his latest venture, the BP Energy Fund, which is to begin trading on the Toronto Stock Exchange.
In addition to oil and gas, Pickens said the fund would promote new and renewable energy sources such as wind and solar.
But he's also busy promoting the Nat Gas Bill of 2009 in the U.S. Senate. Pickens said he's hoping to have a law passed by next year which will mandate the use of natural gas in federal vehicles.
By doing so, he's hoping to reduce the amount of oil the U.S. imports from countries such as Saudi Arabia by some two million barrels a day, money which he said could in turn be used to help fund health care and education stateside.
The Texas oilman, who began his long career in Calgary, said natural gas is the only fuel that can immediately displace conventional oil in the North American transportation fleet and reduce the half a million dollars a minute the U.S. currently sends foreign governments to buy oil supplies.
According to the Pickens sponsored Pickensplan.comwebsite, since January 2009, the U.S. has imported more than 3.6 billion barrels of oil, which Pickens describes as the largest transfer of wealth to potentially hostile foreign governments in history.
A study released in June by the Potential Gas Committee, a group of academics and industry specialists supported by the Colorado School of Mines, estimates that the Lower 48 states hold more than 2,000 trillion cubic feet of natural gas reserves, or more than a century of supply.
However, much of it is locked in unconventional rocks like shale that require specialized drilling techniques to bring it out.
According to the International Energy Agency, which released its 2009 World Energy Outlook on Tuesday, unconventional gas--notably shale gas--in North America has transformed the gas market outlook.
"Unconventional gas is unquestionably a game-changer in North America with potentially significant implications for the rest of the world," said IEA executive director Nobuo Tanaka.
December-09 Crude settled at $76.94, down $2.34 on the day, December-09 Natural Gas settled at $4.37,down $0.133 on the day.
Dec-09 Crude is trading at $76.60, down $0.35, Dec-09 Natural Gas is trading at $4.355, down $0.015.
Dec-09 Crude settled at $76.35, down $0.59 on the day, Dec-09 Natural Gas settled at $4.392, up $0.022 on the day.
Sorry I am late but had to take Grandma Claus to Tulsa Christmas shopping, and we just got home..
Dec-09 Crude is trading at $77.925, up $1.575, Dec-09 Natural Gas is trading at $4.535, up $0.145.
Oil Rises From One-Month Low on Weaker Dollar, Japans Economy
By Alexander Kwiatkowski
Nov. 16 (Bloomberg) -- Oil rose from a one-month low as the dollar weakened and Japans economy expanded at the fastest pace in more than two years, boosting confidence about the strength of the global recovery.
Oil rose as the dollar fell, increasing the investments in commodities and pushing up the price producers must seek to maintain purchasing power. Japans gross domestic product rose at an annual 4.8 percent pace, more than the forecasts of all 20 economists in a Bloomberg News survey, after a 2.7 percent gain in the second quarter, government data showed today.
For oil and the commodities, the dollar is still one of the driving factors, said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. This financial market news is why oil is up at the moment. We are seeing a technical rebound from sharp losses last week.
Crude oil for December delivery rose as much as $1.21, or 1.6 percent, to $77.56 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $77.25 at 11:18 a.m. in London.
The contract fell 59 cents to $76.35 a barrel on Nov. 13, the lowest settlement since Oct. 14, after an unexpected decline in U.S. consumer confidence. Prices fell 1.4 percent last week as jobless claims in the worlds largest economy increased, fuel stockpiles rose and the nations refiners reduced operating rates to a 13-month low.
Weak Dollar
There is going to be continued downward pressure on the dollar which will be supportive of prices, said Mike Wittner, head of oil research at Societe Generale SA in London. We are still in this range that we have been in for three weeks. There are still question marks about demand and inventories.
Crude has gained 73 percent this year and reached a 12- month high of $82 on Oct. 21. The euro has gained about 6.4 percent over the same period, and climbed to as much as $1.4994 today from $1.4903 late in New York last week.
Brent crude for January settlement rose as much as $1.28, or 1.7 percent, to $77.59 a barrel on the London-based ICE Futures Europe exchange. It fell 46 cents, or 0.6 percent, to $76.31 a barrel on Nov. 13. The December contract expired the same day, falling 47 cents, or 0.6 percent, to $75.55.
OPEC Meeting
The Organization of Petroleum Exporting Countries wont increase its output quotas when it meets in December, Qatars Energy Minister Abdullah bin Hamad al-Attiyah told Bloomberg News in Tokyo today.
OPEC, producer of more than 40 percent of the worlds crude oil, will meet on Dec. 22 in Luanda, Angola, to discuss output targets after agreeing to leave them unchanged at the last three meetings. The groups compliance with the production cuts slipped to 60 percent in October from 62 percent in September, it said in a report on Nov. 11.
The producer group is happy with prices at current levels, according to OPECs president, Angolan Oil Minister Jose Maria Botelho de Vasconcelos.e
Oil is at a good level, he said today at a conference in Abu Dhabi. I think that the economy can recover at this price. Even $80 a barrel is not too high, he said.
Production from the 11 members excluding Iraq that are bound by the targets rose by 50,000 barrels a day to 26.31 million barrels a day in October from September, according to Bloomberg data.
I dont think they will have any reason to change quotas, said Wittner of Societe Generale. They would like to keep prices where they are, thats the bottom line.
Hedge-fund managers and other large speculators decreased their net-long position in New York crude-oil futures in the week ended Nov. 10, according to U.S. Commodity Futures Trading Commission data.
Net-long positions fell by 15,772 contracts, or 15 percent, from a week earlier. Overall speculative long positions, or bets prices will rise, still outnumbered short positions by 88,045 contracts on NYMEX, the Washington-based commission said in its Commitments of Traders report.
The energy markets were very active today with lots of contracts done.
Dec-09 Crude settled at $78.90, up $2.55 on the day, Dec-09 Natural Gas settled at $4.614, up $0.222 on the day.
Dec-09 Crude is trading at $78.175, down $0.725, Dec-09 Natural Gas is trading at $4.56, down $0.055.
Crude Oil Drops as Rising Dollar Curbs Demand for Commodities
By Rachel Graham
Nov. 17 (Bloomberg) -- Crude oil declined as the dollar rose, curbing demand for commodities, and before a report expected to show stockpiles rose in the U.S.
Oil prices eased today as traders sold futures to lock in yesterday's 3.3 percent gain. U.S. crude stockpiles probably rose last week, according to a survey before the U.S. Department of Energy's weekly report tomorrow.
R20;Until the DOE report comes out the market will look for cues from external factors like macro releases and the dollar," said Amrita Sen, a London-based oil analyst at Barclays Capital.
Crude oil for December delivery fell as much as 50 cents, or 0.6 percent, to $78.40 a barrel in electronic trading on the New York Mercantile Exchange and traded at $78.61 a barrel at 10:01 a.m. London time. Crude closed up 3.3 percent yesterday to settle at $78.90 a barrel, the biggest gain since Sept. 30.
The dollar strengthened to $1.4946 against the euro, from a close of $1.4970 yesterday.
The Organization of Petroleum Exporting Countries will leave its crude production target "as is" at a December meeting and will ask members for better adherence to quotas, KuwaitR17;s oil minister said.
R20;We will ask for more compliance, that's all," Sheikh Ahmed al-Abdullah al-Sabah said in Kuwait City today. The group's average compliance with its goal of cutting output should be more than 65 percent, he said.
R20;OPEC is signaling it wonR17;t let prices run up too quickly," Sen said.
Angola Meeting
OPEC will meet on Dec. 22 in Luanda, Angola, to discuss output targets after agreeing to leave them unchanged at the past three meetings.
Brent crude oil for January settlement fell as much as 45 cents, or 0.6 percent, to $78.31 a barrel, on the London-based ICE Futures Europe exchange. It was at $78.50 a barrel at 10:01 a.m. London time. The contract closed up 3.2 percent yesterday.
A Bloomberg survey of analysts showed stockpiles of crude climbed 1.2 million barrels in the week ended Nov. 13 from 337.7 million the prior week.
Refineries operated at 79.9 percent of capacity, unchanged from the previous week, according to the median of 11 estimates by analysts. Gasoline inventories probably climbed 820,000 barrels from 210.8 million the week before, the survey showed. Supplies of distillate fuel, a category that includes heating oil and diesel, declined 750,000 barrels from 167.4 million the prior week, according to the survey.
The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
Dec-09 Crude settled at $79.14, up $$0.24 on the day, Dec-09 Natural Gas settled at $4.53, down $0.084 on the day.
Dec-09 Crude is trading at $79.50, up $0.35, Dec-09 Natural Gas is trading at $4.56, up $0.03.
Yesterday"s Close:
Dec-09 Crude settled at $79.58, up $$0.44 on the day, Dec-09 Natural Gas settled at $4.254, down $0.276 on the day.
Today:
Dec-09 crude is trading at $79.25, down $0.325, Dec-09 Natural Gas is trading at $4.235, down $0.02.
Yesterday"s Close:
Dec-09 Crude settled at $77.46, down $2.12 on the day, Dec-09 Natural Gas settled at $4.342, up $0.088 on the day.
Today:
Jan-10 crude is trading at $77.00, down $1.05, Dec-09 Natural Gas is trading at $4.275, down $0.065.
Jan-10 Crude settled at $77.47, down $0.58 on the day, Dec-09 Natural Gas settled at $4.424, up $0.082 on the day.
Our Neighborhood pump price is $2.37, we drove from Bartlesville to Fredonia today and the highest price we saw was $2.69
SoCal is at $2.95 as of today.
Larryj
Jan-10 crude is trading at $78.375, up $0.90, Dec-09 Natural Gas is trading at $4.495, up $0.07
Our area pump price ranges from $2.31 to $2.35 this morning.
Crude Oil Rises on Iranian Military Test, Weaker U.S. Dollar
By Grant Smith and Gavin Evans
Nov. 23 (Bloomberg) -- Crude oil rose from a one-week low after an Iranian military exercise renewed concerns over Middle Eastern supply, while the weaker dollar heightened oil's appeal as an inflation hedge.
Iran is testing an air defense system this week, in the largest military exercises the country has conducted to assess the vulnerability of its nuclear plants. The most accurate dollar forecasters predict the world's reserve currency will continue sliding even when the Federal Reserve begins to raise interest rates.
"The Iranian test is supportive psychologically," said Eugen Weinberg, senior analyst at Commerzbank AG in Frankfurt. "The market will only focus on positive news for as long as the dollar is weak, the Fed is generous with liquidity and the wall of money keeps pouring into commodities."
Crude oil for January delivery rose as much as $1.05, or 1.4 percent, to $78.52 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $78.42 at 9:53 a.m. London time.
The December contract expired on Nov. 20 down 74 cents, or 1 percent, to $76.72 a barrel. Oil traded between $74.79 and $82 the past five weeks after surging in early October.
The January contract slipped 58 cents, or 0.7 percent, to $77.47 on Nov. 20, its lowest settlement in a week. Gains by the dollar and declining equity prices eroded investor confidence in the outlook for commodity demand and trimmed the contract's gain to 44 cents for the week.
Investment Inflows
"We are seeing the oil price higher today and a lot of that has to do with the fact the U.S. dollar is a bit softer," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. "You get investment inflows into commodities as a hedge against dollar weakness."
Iran, the world's fourth-largest oil producer, is under three sets of United Nations Security Council sanctions, the first imposed in December 2006, for its refusal to halt uranium enrichment for its nuclear program.
The U.S. and its European allies suspect Iran of using the program to develop atomic weapons. The government in Tehran says the technology is for domestic power generation.
The U.S. Dollar Index, a measure of the currency against its six major counterparts, dropped 0.8 percent today to 75.08 after posting its first weekly advance this month.
Standard Chartered Plc, Aletti Gestielle SGR, HSBC Holdings Plc and Scotia Capital Inc. say the dollar will depreciate as much as 7.1 percent versus the euro.
Hedge-fund managers and other large speculators decreased their bets on rising oil prices for a third week, according to U.S. Commodity Futures Trading Commission data.
Speculative net-long positions, the difference between orders to buy and sell the commodity, fell 1.9 percent to 86,348 contracts in the week ended Nov. 17, the Washington-based commission reported last week.
Brent crude oil for January settlement rose as much as $1.12, or 1.5 percent, to $78.32 a barrel on London's ICE Futures Europe exchange. It was at 78.26 a barrel at 9:53 a.m. London time. It fell 0.6 percent to $77.20 on Nov. 20.
Jan-10 Crude settled at $77.56, up $0.09 on the day, Dec-09 Natural Gas settled at $4.473, up $0.049 on the day.
Jan-10 crude is trading at $77.025, down $0.525, Jan-10 Natural Gas is trading at $4.81, up $0.02.
Oil Little Changed Before Report Forecast to Show Supply Gain
By Grant Smith and Ann Koh
Nov. 24 (Bloomberg) -- Crude oil traded little changed around $77 a barrel before a report forecast to show that higher-than-normal crude inventories grew last week in the U.S.
The U.S. Energy Department will probably report tomorrow that stockpiles grew by 1.5 million barrels in the week ended Nov. 20, according to a Bloomberg survey. Analysts were split over the change in supplies of distillate fuels such as heating oil and diesel, which are 28 percent above the seasonal average.
R20;At least until the end of the year we see $80 as the top of the range," said Tobias Merath, a commodity analyst at Credit Suisse Group in Zurich. "What's limiting the potential in the short term is the supply glut in the distillate market."
Crude oil for January delivery traded for $77.18 a barrel on the New York Mercantile Exchange, 38 cents lower, as of 9:51 a.m. London time. Oil, which rose as high as $79.92 yesterday, has failed to close above $80 since Nov. 4. Futures have gained 73 percent this year.
Oil was capped by strengthening in the U.S. dollar, which often limits the appeal of commodities for hedging inflation. The dollar traded at $1.4927 per euro at 9:13 a.m. in London, from $1.4961 yesterday in New York.
R20;The floor has been set by the weaker dollar, higher inflation theme, while the ceiling has been set by weak refining margins, and a global recovery that is expected to be sluggish," said Mike Wittner, head of oil market research at Societe Generale SA in London.
Commercially held crude stockpiles in the U.S. climbed 1.5 million barrels in the week ended Nov. 20, from 336.8 million in the prior week, according to the median of 13 estimates from analysts polled. Eleven respondents forecast a gain and two said there would be a decline.
Distillate Supplies
Analysts were split over whether U.S. distillate supplies, a category that includes heating oil and diesel, rose or fell last week. Stockpiles probably dropped 100,000 barrels from 167.4 million the prior week, according to the survey. Seven respondents forecast a decline and six said supplies increased.
Gasoline inventories probably climbed 300,000 barrels from 209.1 million the week before, the survey showed. Refineries operated at 79.7 percent of capacity, up 0.3 percentage point from the previous week, according to the median of responses.
Oil declined for the third time in four days as the dollar strengthened against the euro, prompting traders to close trading positions before the long U.S. holiday weekend. The Energy Department report tomorrow may show the country's crude oil stockpiles had risen, possibly reaching a four-week high, bolstering concern fuel demand may have yet to recover.
R20;In coming months, oil products are expected to be drawn down as the U.S. winter starts up," said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne. "The market's already factored in a drawdown in prices, and now we're waiting to see if it happens."
Brent crude oil for January delivery on LondonR17;s ICE Futures Europe exchange fell as much as 49 cents, or 0.6 percent, to $76.97 a barrel. The contract was at $77.34 a barrel at 9:53 a.m. London time.
Jan-10 Crude settled at $76.02, down $1.54 on the day, Jan-10 Natural Gas settled at $4.766, down $0.025 on the day.
Jan-10 crude is trading at $76.20, up $0.175, Jan-10 Natural Gas is trading at $4.80, up $0.035.
Walmart pump price was $2.31 last night.
Oil Little Changed, Ceding Gains Before Report on U.S. Supplies
By Grant Smith
Nov. 25 (Bloomberg) -- Oil traded little changed, giving up earlier gains, before a report forecast to show that crude inventories accumulated last week in the U.S., the world's biggest energy user.
The U.S. Energy Department will probably say crude-oil inventories grew by 1.5 million barrels last week, according to a Bloomberg survey before the department's report later today. Analysts were split over whether stockpiles of distillate fuel, a category that includes heating oil and diesel, rose or fell.
"Today, all attention will be on the weekly U.S. fuel inventories report," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "Demand concerns will be resurfacing. Investor attention will gradually switch to abundant supplies from OPEC as the exporting group continues to pump above agreed targets."
Crude for January delivery traded for $75.99 a barrel, 3 cents lower in electronic trading on the New York Mercantile Exchange as of 11:12 a.m. London time. It earlier rose as high as $76.60.
Yesterday, it fell $1.54, or 2 percent, to $76.02 a barrel, the lowest settlement since Oct. 14. Prices have gained 71 percent this year.
Jan-10 Crude settled at $77.96, up $1.94 on the day, Jan-10 Natural Gas settled at $$5.163, up $0.397 on the day.
Very active day in the energy sector with lots of contracts done.
Bloombergenergy.com
"Crude Oil Tumbles Most in Seven Months as Dubai Seeks to Reschedule Debt Crude oil fell the most in seven months as Dubai's attempt to reschedule its debt bolstered the dollar and prompted investors to sell commodities."
Jan-10 Crude oil is trading at $74.425, down $3.525, Jan-10 Natural Gas is trading at $4.95, down $0.215.
Jan-10 Crude settled at $76.05, down $1.91 on the day, Jan-10 Natural Gas settled at $$5.192, up $0.029 on the day.
The EIA Weekly Natural Gas Storage Report came out with a 2 BCF Build , as follows:
Summary
Working gas in storage was 3,835 Bcf as of Friday, November 20, 2009, according to EIA estimates. This represents a net increase of 2 Bcf from the previous week. Stocks were 404 Bcf higher than last year at this time and 442 Bcf above the 5-year average of 3,393 Bcf. In the East Region, stocks were 145 Bcf above the 5-year average following net withdrawals of 2 Bcf. Stocks in the Producing Region were 229 Bcf above the 5-year average of 982 Bcf after a net injection of 3 Bcf. Stocks in the West Region were 69 Bcf above the 5-year average after a net addition of 1 Bcf. At 3,835 Bcf, total working gas is above the 5-year historical range.
Jan-10 Crude oil is trading at $76.125, up $0.075, Jan-10 Natural Gas is trading at $5.005, down $0.187.
Oil Rises Above $76 as U.A.E. Backs Dubai, Tanker Is Seized
By Alexander Kwiatkowski and Christian Schmollinger
Nov. 30 (Bloomberg) -- Crude oil rose above $76 a barrel in New York after the United Arab Emirates central bank said it would back the country's lenders against a possible default by Dubai World.
Oil gained as much as 1.1 percent today after the Abu Dhabi-based central bank said yesterday that financial institutions will be able to use a borrowing facility. Somali pirates seized a supertanker carrying crude oil from Saudi Arabia to the U.S., and the dollar weakened, bolstering the appeal of crude as an alternative investment.
R20;It looks like the oil market is able to ignore the negative news from Dubai and price in the positive news," said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. "The dollar is helping a lot too."
Crude oil for January delivery climbed as much as 80 cents to $76.85 a barrel on the New York Mercantile Exchange. Prices were up 60 cents to $76.65 a barrel at 9:32 a.m. in London.
The contract declined 2.5 percent to settle at $76.05 a barrel on Nov. 27. Prices have gained 72 percent this year. Oil is set for a monthly decline of 0.4 percent, its first drop in four months.
R20;The market has run out of steam after spending most the year in an upward trajectory," said Toby Hassall, a research analyst with CWA Global Markets Pty in Sydney. "The market is still coming to terms with the implications of the Dubai debt scare for oil." The move by the U.A.E central bank could be a positive sign, he said.
Dubai World
Markets from Asia to the U.S. fell last week after Dubai World announced Nov. 25 it was seeking to delay loan repayments. DubaiR17;s stock markets will trade today for the first time since the news.
Dubai World, a state-owned holding company struggling with $59 billion of debt and other liabilities, said it would seek a standstill agreement with creditors and an extension of loan maturities until at least May 30, 2010. That raised the prospects of rising loan losses for U.A.E. and foreign banks.
Brent crude oil for January settlement on the London-based ICE Futures Europe exchange traded at $77.77 a barrel, up 59 cents, at 9:25 a.m. in London. The contract earlier rose as much as 77 cents, or 1 percent, to $77.95 a barrel.
The dollar traded at $1.5034 a euro at 8:56 a.m. in London, weakening from $1.4988 on Nov. 27. The European currency last week gained 0.9 percent against the greenback, its biggest climb in three weeks.
Iran Defiance
Iran announced an expansion of its nuclear program in defiance of United Nations demands, a move that the Obama administration said will further isolate the Islamic Republic from the international community.
President Mahmoud Ahmadinejad's Cabinet ordered the Atomic Energy Organization of Iran to begin building 10 uranium enrichment sites within two months, the Islamic Republic News Agency reported. All would be at the same scale as IranR17;s Natanz site, producing fuel for power plants to generate 20,000 megawatts of electricity, the state news agency said.
Iran is a member of the Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's oil.
--------------------------------------------------------------------------------
Jan-10 Crude settled at $77.28, up $1.23 on the day, Jan-10 Natural Gas settled at $$4.848, down $0.344 on the day.
Jan-10 Crude oil is trading at $78.025, up $0.75, Jan-10 Natural Gas is trading at $4.76, down $0.09.
Crude Oil Rises for a Second Day as Chinese Manufacturing Grows
By Grant Smith
Dec. 1 (Bloomberg) -- Crude oil rose for a second day after a report showed Chinese manufacturing expanded at the fastest pace in five years, spurring hopes that the world's second- biggest oil user will buoy consumption.
Oil advanced in tandem with equities, and as a weaker dollar enhanced the appeal of commodities for hedging inflation. The purchasing managers' index for China, released today by HSBC Holdings Plc, rose to a seasonally adjusted 55.7 from 55.4. The government's PMI, also released today, held at an 18-month high, aiding the rebound of the world's third-largest economy.
R20;Chinese oil demand should increase by 5 percent this year, 4 percent next year," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "While the rate of growth is slowing down a bit, it means there is still growth there in one of the most important regions."
Oil for January delivery gained as much as $1.16, or 1.5 percent, to $78.44 a barrel in electronic trading on the New York Mercantile Exchange. That's the highest in a week. The contract traded at $78.15 a barrel at 11:23 a.m. London time.
Oil traded near $78 a barrel on Nov. 25 before Dubai World, one of the emirate's three largest state-linked holding companies, sought to delay payments on its debt and other liabilities. The company has since begun what it described as "constructive" talks with banks to restructure $26 billion, less than half of its $59 billion in obligations.
R16;China Busy'
R20;Dubai is being resolved and China is as busy as ever," said Rob Montefusco, a broker at Sucden Financial in London. "The market is coming back quickly after finding support at $75."
Iranian Oil Minister Masoud Mir-Kazemi said the Organization of Petroleum Exporting Countries won't increase production targets when it meets later this month, Agence France-Presse reported.
The 12 OPEC states will assemble in Luanda, Angola, on Dec. 22 to review their output targets and the impact of supply reductions announced last year, the largest in the group's history. Ministers from Kuwait and Nigeria have also indicated they expect quotas to be left unchanged.
OPEC output rose to the highest level in 11 months in November, averaging 28.9 million barrels a day, a Bloomberg News survey showed. Countries with quotas pumped 26.5 million barrels a day, 1.655 million above their target.
U.S. crude-oil inventories probably fell as refineries increased operating rates and imports declined, a Bloomberg News survey of analysts showed.
Crude Stockpiles
Stockpiles of crude oil dropped 850,000 barrels in the week ended Nov. 27 from 337.8 million the prior week, according to the median of eight estimates by analysts before an Energy Department report this week. Five respondents forecast a decrease, and three said there would be an increase.
Brent crude oil for January settlement on the London-based ICE Futures Europe exchange traded at $79.26 a barrel, up 79 cents, at 11:12 a.m. in London. Yesterday, the contract rose 1.7 percent to $78.47 barrel, the highest since Nov. 18.
The U.S. currency weakened to $1.507 per euro from $1.4976 yesterday, making dollar-priced assets such as crude appear less expensive to foreign investors, and more useful for hedging against inflation.
Jan-10 Crude settled at $78.37, up $1.09 on the day, Jan-10 Natural Gas settled at $$4.762, down $0.086 on the day.
Jan-10 Crude oil is trading at $78.00, down $0.375, Jan-10 Natural Gas is trading at $4.71, down $0.05.
Crude Oil Falls as Growing Supply Dampens Recovery Outlook
By Grant Smith and Ben Sharples
Dec. 2 (Bloomberg) -- Crude oil fell after an industry report showing an increase in U.S. supplies reinforced speculation that fuel demand will be slow to recover.
The American Petroleum Institute reported crude inventories rose 2.89 million barrels last week, while gasoline and distillate fuel stockpiles also climbed. The U.S. Energy Department will release its report today. Ministers from Iran, Nigeria and Kuwait have indicated the Organization of Petroleum Exporting Countries will keep supply quotas unchanged at their Dec. 22 meeting.
"Eighty-dollars is proving a tough nut to crack, and last night's stats put paid to any further testing of the resistance there," said Christopher Bellew, senior broker at Bache Commodities Ltd. "There doesn't seem any shadow of doubt that OPEC will leave quotas unchanged, and that'll keep prices range- bound until the meeting."
Crude oil for January delivery declined as much as 56 cents, or 0.7 percent, to $77.81 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $78.02 at 10:16 a.m. London time. Prices have gained 74 percent this year.
Crude gained yesterday after reports yesterday showed signs of increased manufacturing output in the U.S. and China, responsible for about 32 percent of global oil consumption.
The U.S. Energy Department will release its weekly supply report today in Washington. Inventories are forecast to decline, according to a Bloomberg News survey.
Energy Department
The Energy Department report is forecast to show that crude inventories fell 450,000 barrels, according to the survey. Oil- supply totals from the API and Energy Department moved in the same direction 75 percent of the time in the past four years, according to data compiled by Bloomberg.
"What is really important now is for industrial production in the U.S. to come back online," Ben Westmore, an analyst with National Australia Bank in Melbourne, said by telephone. "Compared to the last 20 years, distillate stocks are still pretty much the highest they've been."
Inventories of distillate fuels, which include heating oil and diesel, rose 1.06 million barrels to 168 million, the API report showed. The Energy Department will probably say stockpiles fell 350,000 barrels last week, according to the Bloomberg News survey. Supplies are at 166.9 million barrels, the highest since January 1983.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Yachtsmen Released
Five British yachtsmen detained by the Iranian navy in the Persian Gulf last week were released today, state-run media reported. Oil prices dropped about 50 cents a barrel after the news of the release.
Iran's Revolutionary Guards Corps said that on questioning the sailors, it was clear they had entered Iranian waters by mistake, the Fars news agency reported.
Brent crude oil for January settlement was at $79.14 a barrel, down 21 cents, on the London-based ICE Futures Europe exchange at 10:17 a.m. London time.
I thought this might be of interest to some of you. This is the weekly DOE/EIA Petroleum Inventory report. It is easy to see from this why more refineries are shutting down.
Summary of Weekly Petroleum Data for the Week Ending November 27, 2009
U.S. crude oil refinery inputs averaged 13.8 million barrels per day during the
week ending November 27, 127 thousand barrels per day below the previous week's
average. Refineries operated at 79.7 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 9.0 million barrels
per day. Distillate fuel production decreased last week, averaging 3.9 million
barrels per day.
U.S. crude oil imports averaged 8.4 million barrels per day last week, down 549
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 8.6 million barrels per day, 1.3 million
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 1.1 million barrels per day. Distillate fuel imports
averaged 136 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 2.1 million barrels from the previous week. At
339.9 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
increased by 4.0 million barrels last week, and are above the upper limit of
the average range. Both finished gasoline inventories and blending components
inventories increased last week. Distillate fuel inventories decreased by 1.2
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories decreased by 0.9 million
barrels last week and are in the lower half of the average range. Total
commercial petroleum inventories increased by 5.5 million barrels last week,
and are above the upper limit of the average range for this time of year.
Total products supplied over the last four-week period has averaged 18.5
million barrels per day, down by 3.2 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged 9.0
million barrels per day, up by 0.7 percent from the same period last year.
Distillate fuel demand has averaged 3.6 million barrels per day over the last
four weeks, down by 7.7 percent from the same period last year. Jet fuel
demand is 0.1 percent higher over the last four weeks compared to the same
four-week period last year.
Jan-10 Crude settled at $76.60, down $1.77 on the day, Jan-10 Natural Gas settled at $$4.53 down $0.232 on the day.
Jan-10 Crude oil is trading at $77.10, up $0.50, Jan-10 Natural Gas is trading at $4.545, up $0.015.
Natural Gas Storage Report comes out today, it will be interersting to see if we have the first draw down of the 2009-2010 winter season.
Oil Rises Above $77 as Hedging Demand Overrides Supply Concern
By Grant Smith
Dec. 3 (Bloomberg) -- Crude oil rose above $77 a barrel in New York as the dollar weakened, spurring investor demand for commodities to hedge against inflation.
Oil rebounded after losing 2.3 percent yesterday as the U.S. Energy Department reported that crude stockpiles swelled to their highest level since August. The dollar slipped as indications the global economy is recovering stimulated demand for higher-yielding assets.
"The dollar is the single most important factor in the market," said Eugen Weinberg, senior commodities analyst at Commerzbank AG in Frankfurt. "It's not the fundamentals. The weaker dollar is a really big concern for many investors and they try to protect themselves by buying into commodities."
Crude oil for January delivery rose as much as 90 cents, or 1.2 percent, to $77.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $77.16 a barrel at 11:13 a.m. in London. Prices have gained 73 percent this year.
An Institute for Supply Management index of non- manufacturing businesses, which make up the largest part of the U.S. economy, will rise to 51.5 in November from 50.6 in October, according to a Bloomberg News survey before today's report. The U.S. currency dropped to $1.5123 per euro at 10:51 a.m. in London, from $1.5044 yesterday in New York. Gold hit a record for a third day, touching $1,226.56 an ounce.
Crude Stockpiles
Commercially held U.S. crude oil inventories rose 2.09 million barrels to 339.9 million, the highest level since August, the Energy Department report showed. Stockpiles were forecast to decline by 400,000 barrels, according to the median estimate from analysts surveyed by Bloomberg News.
Gasoline supplies climbed 4 million barrels to 214.1 million as imports hit a 14-week high, the Energy Department said. Distillate fuel inventories fell 1.17 million barrels to 165.7 million, 29.9 percent above the five-year average level.
"Demand indications for November-to-date remain firm for gasoline, greatly improved for jet, but are still very sluggish for other distillates," analysts at Barclays Capital, led by Paul Horsnell, said in a report after the Energy Department data.
Total U.S. daily fuel demand averaged 18.5 million barrels in the four weeks ended Nov. 27, down 3.2 percent from a year earlier, the Energy Department said. Consumption slipped by 497,000 barrels a day last week.
Rising consumption outside the U.S., particularly in China and India, may push oil prices to an average of $90 a barrel next year, compared with $61 this year, UBS AG's wealth management group told reporters today in Singapore.
Brent crude oil for January settlement rose as much as $1.03, or 1.3 percent, to $78.91 a barrel on the London-based ICE Futures Europe exchange. The contract was at $78.67 a barrel at 11:13 a.m. in London.
Shutting down refineries is probably only common sense from a business standpoint. If there is not a demand for supplies, why spend the money to keep it running. I imagine it cost a lot to run a refinery and if there is no reason to keep it open, the company running the refinery could save a ton of money by shutting it down. Thanks for posting. It was an interesting article.
Larryj
Jan-10 Crude settled at $76.46, down $0.14 on the day, Jan-10 Natural Gas settled at $$4.459 down $0.071 on the day.
Jan-10 Crude oil is trading at $75.80, down $0.65, Jan-10 Natural Gas is trading at $4.545, up $0.085.
Jan-10 Crude settled at $75.47, down $0.99 on the day, Jan-10 Natural Gas settled at $$4.586 up $0.127 on the day.
Jan-10 Crude oil is trading at $74.70, down $0.775, Jan-10 Natural Gas is trading at $4.75, up $0.165.
The Dollar is trading higher this morning and the result is lower crude.
Jan-10 Crude settled at $73.93, down $1.54 on the day, Jan-10 Natural Gas settled at $$4.971 up $0.385 on the day.
Jan-10 Crude oil is trading at $73.05, down $0.875, Jan-10 Natural Gas is trading at $5.00, up $0.03.
Jan-10 Crude settled at $72.62, down $1.31 on the day, Jan-10 Natural Gas settled at $$5.114 up $0.143 on the day.
Jan-10 Crude oil is trading at $73.50, up $0.875, Jan-10 Natural Gas is trading at $5.20, up $0.085.
Eia-Doe Inventory numbers come out today, it will be interesting to see what the numbers are.
Jan-10 Crude settled at $70.67, down $1.95 on the day, Jan-10 Natural Gas settled at $$4.898 down $0.216 on the day.
Jan-10 Crude oil is trading at $71.10, up $0.425, Jan-10 Natural Gas is trading at $4.935, up $0.035.
Natural Gas Storage Report comes out today, will probably reflect the first "Draw" of the Winter Season.
Oil Rebounds From 2-Month Low on Speculation Drop Was Too Fast
Dec. 10 (Bloomberg) -- Crude oil rose, rebounding from a two month-low near $70 a barrel on speculation that this week's decline took place too rapidly.
Oil had lost almost 10 percent in six days as a stronger dollar dampened investor appetite for commodities to hedge against inflation and climbing U.S. fuel inventories undermined confidence demand is recovering. Stock Piles jumped 2.25 million barrels last week, the Energy Department said yesterday.
"The low $70s is definitely seen as a buying region for a lot of investors," Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said by telephone. "If you've got any faith in the medium-term demand outlook, then it's probably not a bad time to buy."
Crude oil for January delivery advanced as much as 58 cents, or 0.8 percent, to $71.25 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $71.21 at 11:36 a.m. London time.
Yesterday, oil fell for a sixth day, dropping 2.7 percent to $70.67 a barrel, the lowest settlement since Oct. 7, after an Energy Department report showed gasoline stockpiles rose to 216.3 million barrels, the highest since mid-April. Refineries operated at a six-week high of 81.1 percent of capacity, up 1.4 percentage points from the previous week.
"The gasoline data and refiner utilization are indicating there is a little more pumping occurring, but the consumption side of the equation is not there," said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. "The market is waiting for that consumption to kick. It just doesn't look like it's as strong as what people think."
Crude Inventories
Crude oil inventories fell 3.82 million barrels to 336.1 million in the week to Dec. 4, a five-week low, the Energy Department report showed. A 250,000-barrel gain was forecast.
The dollar traded at $1.4746 against the euro at 11:37 a.m. in London, from $1.4726 yesterday in New York. The euro rose for a second day before reports today that economists said may show industrial production in France and Italy increased. A dollar rebound damps the appeal of commodities as an alternative investment.
Saudi Arabia will supply full volumes of crude oil under term contracts to refiners in Asia, its largest market, according to a Bloomberg News survey of refinery officials in Japan, South Korea and China.
The kingdom is the biggest producer in the Organization of Petroleum Exporting Countries, a group that pumps 40 percent of the world's oil. OPEC's compliance to its output targets has slipped as prices climbed. The 11 members with quotas, all except Iraq, produced 26.5 million barrels a day last month, above their target of 24.845 million barrels a day.
Brent crude oil for January settlement on the London-based ICE Futures Europe exchange was at $73.08 a barrel, up 69 cents, at 11:36 a.m. London time. Yesterday, the contract fell 3.7 percent to $72.39 a barrel, the lowest settlement since Oct. 12.
Jan-10 Crude settled at $70.54, down $0.13 on the day, Jan-10 Natural Gas settled at $$5.298 up $0.40 on the day.
The eia Natural Gas storage report showed a draw of 64 BCF from storage. Today's report is as of December 4, 2009, so the current cold weather across much of the US is not reflected in today's report. I would anticipate a much bigger draw in next week's report.
April Crude Oil settled at $80.87, up $1.195 on the day, the back months are all trading higher with Dec 10 at $83.89.
Natural Gas settled at $4.757, up $0.047 on the day. The back months are trading higher with Dec-10 in the $5.83 range. The eia/doe Gas storage report comes out tomorrow and the projection is for another big draw.
April Crude settled at $79.80, down $1.454 on the day, April Natural Gas traded pretty flat all day and closed unchanged at $4.391.
Our Neighborhood pump price is $2.44 for regular, with Ethanol .
April Crude settled at $82.93, up $1.23 on the day. The eia/doe report came out today and showed a drop in product and crude supplies.
Natural gas for April settled at $4.303, down $0.044 0n the day.
Our Neighborhood gasoline price is $2.58, we just got back last night from California and the Gasoline price is around $0.50/gallon + higher than ours. When you look at the constant traffic on the Freeways it is easy to see why there is so much gasoline demand in America. The clock is ticking for another big Energy Shortage.
And you didn't stop by? Did you wave and I missed it?
Yeah, gas prices are running $2.99 to $3.09 in this neighborhood. As you stated, there are so many cars on the freeways and roads, can you imagine how much money is spent on gasoline in one day? Gas station owners will tell you that after the federal and state taxes are taken out and the distributor is paid, they don't see much profit. They also used to say that all the money they earned came from the garage side of the business. Do you know how hard it is to find a gas station that actually does car repair around here? Very few, because most people go back to the dealer where they bought the car. Now, the gas station owners say that most of the profit comes from the mini-mart at the gas station. I personally think they don't make a whole heck of a lot of money selling cigarettes and potato chips to stay in the black. And, now, with the coming of warm weather, our gasoline will be formulated to cut down of the emissions because of smog, giving the oil companies an excuse to raise the price because to reformulate is expensive. Combine this with one of the oil refineries shutting down for maintenance, as usually happens, or maybe one will have a fire, and the price will jump up immediately. Can't wait!
Larryj
Larry, I would like to have stopped by but was fully tied up with our Daughter's wedding. They were married in the Garden of the Long Beach Musuem, it was a really neat location and the weather was great.
Frank
NYMEX Crude for September settled at $79.30, up $2.74 on the day, NYMEX Natural Gas for August settled at $4.643, up $0.13 on the day. Demand is up, the Dollar is down and both dictate higher crude prices. In addition Iran and others want to get away from the Dollar and the EURO in crude pricing. I would say pump prices are going up in the short haul. Our neighborhood station has regular at $2.56 gallon.
I filled up at P&J's on Wednesday and it was $2.79.
Average in SoCal is $3.07
Larryj
Aurora, CO, today, at Valero.
$2.59 for 85 Octane
2.69 for 87 Octane
2.79 for 91 Octane
September Crude settled at $81.34, up $2.39 on the day. September Natural Gas settled at $4.701, down $0.222 on the day.
The volume in September crude contracts was very high, the outer months ended up in the $85.00 to $86.00 ranges.
September Crude settled at $82.55, up $1.21 on the day. September Natural Gas settled at $4.639, down $0.062 on the day.
well i know my oil stocks have about doubled since when i bought them in 2009. Hope to continue to be able to find some hidden gems in the oil market
Dec-09 Crude Oil settled at $87.06, up $0.21 on the day. Dec-09 Natural Gas Settled at $4.08, up $0.153 on the day.
Our Neighborhood Pump for Regular is $2.59/Gallon. The Dollar continues to drop in the Currency Market and that is a big factor in the rising Crude Prices.
Quote from: frawin on November 08, 2010, 02:59:46 PM
Dec-09 Crude Oil settled at $87.06, up $0.21 on the day. Dec-09 Natural Gas Settled at $4.08, up $0.153 on the day.
Our Neighborhood Pump for Regular is $2.59/Gallon. The Dollar continues to drop in the Currency Market and that is a big factor in the rising Crude Prices.
Oh lucky us. so when berneke decides to buy 800 billion in bonds and print money our fuel will double maybe even triple
Dec-09 Crude is trading higher this A.M. at $87.35, up $0.30, the outer months are trading even higher.. Dec-09 Natural Gas is trading at $4.15, up $0.06.
Dec-09 Crude Oil settled at $86.72, down $0.34 on the day. Dec-09 Natural Gas Settled at $4.21, up $0.122 on the day.
Our Neighborhood Pump price for Regular is still $2.59/Gallon.
Dec-09 Crude Oil settled at $87.81, up $1.09 on the day, the contract volume was high. Dec-09 Natural Gas Settled at $4.046, down $0.164 on the day.
Our Neighborhood Pump price for Regular is still $2.59/Gallon, I anticipate Gasoline will be up in the morning..
Dec-09 Crude is trading higher this A.M. at $87.975, up $0.175. Dec-09 Natural Gas is trading at $4.06, up $0.015.
Dec-09 Crude Oil settled at $87.81, unchanged on the day. Dec-09 Natural Gas Settled at $3.927, down $0.119 on the day.
Our Neighborhood Pump price for Regular is still $2.59/Gallon.
Dec-09 Crude Oil settled at $84.88, down $2.93 on the day. Dec-09 Natural Gas Settled at $3.799, down $0.128 on the day.
Most of the Commodities and Equity Markets pulled back on the day, if I said what I thought why, some people would be complaining that I talked politics in the Coffee Shop.
Say it! I'd like to know.
Jan-11 Crude settled at $89.38, up $0.19 on the day, crude is trading in the $90.00+ range April and further out. Jan-11 Natural Gas Settled at $4.488, up $0.139 on the day.
Jan-11 Crude is trading higher this A.M. at $90.55, up $1.175. Jan-11 Natural Gas is trading at $4.47, down $0.02.
Feb-2011 Crude is trading at $90.35, up $0.525, Jan 2011 Natural Gas is trading at $4.025. down $0.035.
Crude inventories are going down and the price is going up.
http://www.bloomberg.com/news/2010-12-22/oil-rises-for-a-fourth-day-as-u-s-economic-recovery-may-spur-fuel-demand.html
Feb-11 Crude settled at $91.51, up $1.035 on the day, Jan-11 Natural Gas Settled at $4.083, down $0.067 on the day.
Our neighborhood Quik-Trip station and Walmart have Regular at $2.69 and the area Phillips Stations are at $2.84. I think we will be close to $3.00 by next week.
The operators I market oil and gas for are not drilling, pending what happens to the tax situation in Washington.
Feb-11 Crude settled at $91.49, up $0.49 on the day, Feb-11 Natural Gas Settled at $4.288, up $0.1333 on the day. The outer months have crude oil in the $94.00 range.
Our neighborhood station has regular at $2.89.
whats with the jump. I heard the other day they are projecting oil to hit 5.00 a gallon in 2012. Jeeze their already making a fortune and profit, this is getting obscene.
March-11 Crude settled at $87.875, down $1.225 on the day. Feb-11 Natural Gas settled at $4.58, down $0.155 on the day. Our Neighborhood pump price is $2.83 for Regular.
March-11 Crude settled at $86.19, down $1.685 on the day. Feb-11 Natural Gas settled at $4.473, down $0.107 on the day. Our Neighborhood pump price is $2.83 for Regular, I anticipate regular will be lower in the morning.
March-11 Crude is trading at $87.225, up $1.575, March-11 Natural Gas is trading at $4.34, up $0.020.
Our Neighborhood pump price for Regular is $2.81, or at least that is what it was last night.
March-11 Crude is trading at $89.15, up $3.50. My bet is pump prices will be up tomorrow.
Our gas in Topeka ranges from $2.96 to $3.15 depends on what part of town you are in. ::)
Denver area gas prices at different stations are all over the place for the last 24 hours:
Regular 2.58 to 3.09
Midgrade 2.68 to 3.35
Premium 2.89 to 3.38
Diesel 3.05 to 3.52
March-11 Crude settled at $89.34, up $3.70 on the day, $89.34 was also the high for the session. March-11 Natural Gas settled at $4.323, up $0.004 on the day. Our Neighborhood pump price is $2.81 for Regular, I anticipate it will be higher tomorrow or Monday.
March Crude is trading at $91.475, up $2.125.
March-11 Crude settled at $92.19, up $2.85 on the day, March-11 Natural Gas settled at $4.42, up $0.097 on the day. Lots of factors pushing crude, increased demand by China and India, the lower Dollar against the Euro and the unrest in Egypt and spilling over in the area. We are going to be facing the threat of higher energy cost as long as we depend on others for a big portion of our energy needs. We need to have a comprehensive program to drill and develop our own reserves while we continue to develop renewable energy sources. The current powers in Washington want to keep our Oil Companies from increasing production.
NYMEX Crude settled at $90.77, down $1.43 on the day. NYMEX Natural Gas settled at $.347, down $0.073 on the day.
Front Month NYMEX Crude is trading at $90.75, down $0.025, June is trading at $97.00, up $0.475. Front Month NYMEX Natural Gas is trading at $4.39, up $0.045.
When the Shah of Iran was booted, we lost one of our best, most stable supplies of crude, while Egypt is not a big supplier of crude to the US, what happens there could have a major impact on the attitude of other oil producing countries towards the US. The US is no longer as critical to the Oil producing nations, China, India and Japan and other countries are developing so fast that they are a major market for world oil.
March NYMEX Crude settled at $90.86, up $0.09 , March NYMEX Natural Gas settled at $4.429, up $0.084. Nov-11 thru 2012 NYMEX are all in the $100.00 range.
March NYMEX Crude settled at $90.54, down $0.32, March NYMEX Natural Gas settled at $4.337, down $0.092.
March NYMEX Crude settled at $89.03, down $1.51, March NYMEX Natural Gas settled at $4.31, down $0.027.
Front Month NYMEX Crude is trading at $86.575, down $0.90. Front Month NYMEX Natural Gas is trading at $4.115, up $0.01.
On a Crude to Natural Gas Ratio, Natural Gas should be over $10.00. Storage Gas volume is down considerably, Gas drilling is way down, and given the Crude to Natural Gas price there is very little gas drilling planned by the operators I deal with.
I haven't posted to this thread for awhile, the Crude Market has several factors weighing on it that make it interesting enough to comment.
July, front month crude settled at $93.075, down $1.95 on the day. Our neighborhood station has regular at $3.43, I expect it to be down as much as 8-10cents more tomorrow.
July Crude continues to trade down, trading at $91.875, down $1.125 this morning. Our neighborhood station is at $3.42, or was last night.
Front month crude settled at $93.26, up $0.26 on the day. Our neighborhood station has regular at $3.41, down a penny from this morning.
Thank you for posting on this again...I appreciate you!! ;D
The front month for crude this morning is July, it is trading at $94.775, up $1.15.
Our neighborhood pump price is $3.41.
Front Month, August crude settled at $94.17, up $0.545 on the day. General consenus is for a draw in inventory when the data comes out tomorrow. If there is a big draw, crude will be going up. The weak dollar is also pushing crude up.
Our neighborhood station has regular at $3.38.
Crude is trading at $93.875, down $0.30 this morning.
Our neighborhood pump price is $3.38.
The weekly Petroleum Data Report is out and the draw was not as much as forecast. Crude is trading at $94.70, up $0.525.
Summary of Weekly Petroleum Data for the Week Ending June 17, 2011
U.S. crude oil refinery inputs averaged about 15.3 million barrels per day during the week ending June 17, 409 thousand barrels per day above the previous week's average. Refineries operated at 89.2 percent of their operable capacity last week. Gasoline production increased last week, averaging 9.5 million barrels per day. Distillate fuel production was almost the same as last week, averaging 4.3 million barrels per day.
U.S. crude oil imports averaged 9.1 million barrels per day last week, up by 511 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged just under 9.0 million barrels per day, 724 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 867 thousand barrels per day. Distillate fuel imports averaged 122 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.7 million barrels from the previous week. At 363.8 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 0.5 million barrels last week and are near the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories increased by 1.2 million barrels last week and are in the upper limit of the average range for this time of year. Propane/propylene inventories increased by 1.8 million barrels last week and are below the lower limit of the average range. Total commercial petroleum inventories increased by 3.1 million barrels last week.
Total products supplied over the last four-week period have averaged about 19.1 million barrels per day, down by 2.7 percent compared to the similar period last year. Over the last four weeks, motor gasoline product supplied has averaged 9.3 million barrels per day, up by 0.9 percent from the same period last year. Distillate fuel product supplied has averaged about 3.7 million barrels per day over the last four weeks, down by 5.7 percent from the same period last year. Jet fuel product supplied is 2.1 percent higher over the last four weeks compared to the same four-week period last year.
July Crude settled at $95.41, up $1.235 on the day.
Sept crude settled at $99.81, up $0.74 on the day.
Looks like I'll need that Dillons reward card discount again, won't I...:-(...Prices are headed back up.
Cat, I think they may level out in this range. One of the big factors is the low value of the dollar. Once we get the US budget problems worked out the dollar should improve some.
Man, boy howdy, I hope so... :o...With my kids being out and about continually, my gas bill is about through the roof! lol
September Crude is trading at $98.86, down $1.21. I think all of the markets are going to be volatile until the debt/budget problems are solved.
Quote from: Catwoman on July 22, 2011, 06:49:11 PM
Man, boy howdy, I hope so... :o...With my kids being out and about continually, my gas bill is about through the roof! lol
You pay for you kids gas usage? :O LOL told mine when they drove, Gas, insurance and car note is yours.IFyou don't pay for it you don't drive! LOL
My kids are at the restricted use, Steve, and most of my gas usage is taking them to and from their various extra-curricular pursuits. So, yes, Steve, I pay for the gas that goes into my car. Duh! ::)
Frank, do you really think they get the debt/budget problems solved or are they kicking the can down the road?
Red, I hope they can come to some agreement that reduces wasteful spending and doesn't raise taxes. There are some really serious problems developing in this country and they don't all pertain to poltics, budgets and taxes. We are going to face some serious food shotages and some major inflation.
In my opinion Obama is holding out in hopes he can get the votes in 2012.
Red I can tell you for sure I think we are better off in Rural America than the people will be in the Cities.
I look forward to your thoughts on this.
September Crude settled at $99.20, down $0.67 on the day.
Our neighborhood station has Regular Gas at $3.53.
The DuPont Company is soon going to build an ethanol plant in Neb.or Iowa, I'm not sure which, that will use only corn cobs, shucks and stalks, not the corn kernels. I don't know if that's good or not.
Crude is trading at $99.65, up $0.45. The contract volumes are low, my guess is that everyone is waiting on what happens with the Obama/Boehner saga.
Gas stations are up to 3.65/gal here today. Found one that is still 3.49/gal...Topped off the tank and am hoping 3.65 is it for awhile.
Our neighborhood pump price is $3.53, or at least it was yesterday.
Quote from: Diane Amberg on July 25, 2011, 06:45:35 PM
The DuPont Company is soon going to build an ethanol plant in Neb.or Iowa, I'm not sure which, that will use only corn cobs, shucks and stalks, not the corn kernels. I don't know if that's good or not.
You know what, KUDOS for them! Georgia built 3 ethanol plants a few years back, and they do not use ANY foodsource for production. What they do use is what used to be waste in the pulpwood industry. They go in with this big machine, cuts the pinetree, and strips all the limbs and a lot of the bark right off the tree as it is loaded out the back onto the truck. THen all of the limbs are pushed up into a pile and a wood crane lifts them into dump trucks and trucked off to the yard. They are then ground up into chunks and loaded on rail car and sent to the ethanol plant. ONCE the ethanol plant gets done with the processing of the wood chips and extracts the alchohol out of it it, they then utilize the wood chips as fuel for the plant to heat the stills!
Now thats smart! But building plants to use food supply? Thats nothing but greed, from the ethenol plants down to the farmer, Especially when ethanol is more expensive to produce than oil is.
Is the ethanol plant at Pratt, Ks still shut down? Seems like it went broke 2 or 3 years ago.
Looks like Maybury is thinking of $300 oil and $9 gasoline. That would be a huge increase and it might happen.
http://www.chaostan.com/
September Crude settled at $99.59, up $0.39 on the day.
Crude is trading at $98.51, down $1.08.
Below is a Bloomberg article on current Crude Oil inventory build. The Doe/EIA inventory comes out today and industry analysts are calling for a bigger build in supply.
http://bloom.bg/p2FsWC
Crude Oil settled at $97.40, down $2.19 on the day. Weekly Petroleum stats showed another build in inventory, and a drop in demand.
September Crude is trading at $97.24, down $0.16.
Crude Oil settled at $97.44, up $0.04 on the day.
September Crude is trading at $96.16, down $01.28.
September crude settled at $95.70, down $1.74 on the day. Crude is down $4.11 for the week. Pump prices should be down tomorrow.
September Crude is trading at $98.15, up $2.45.
Crude OIl had a pretty active day in the market. It traded from a high of $98.57 to a low of $93.42 and settled at $94.89 down $0.81 on the day.
Crude oil is trading at $94.25, down $0.64.
September crude settled at $93.79, down $1.10 on the day.
September, front month crude is trading at $93.67, down $0.12. The Commodity markets are not trading much in volume, I think most of the markets are in a "wait and see" mode.
Crude Oil settled at $91.93, down $1.86 on the day. The number of contracts traded was very high.
Front Month, September crude is trading at $91.00, down $0.93.
Crude is trading down at $89.29, down $2.64. Pump prices should be going down.
September Crude settled at $86.63, down $5.30 on the day.
September Crude is trading at $87.73, up $1,10.
September Crude settled at $86.88, up $0.25 on the day.
September Crude is trading at $84.05, down $2.83.
Our Neighborhood pump price is $3.39, I anticipate that will go down more today.
Our here in Indy went down 10 cents to $3.59
Crude settled at $81.31, down $5.57 on the day.
Our is at 3.48...Hope it keeps going DOWN.
September Crude is trading at $81.54, up $0.23.
Our neighborhood pump price is $3.39, I anticpate it will be down more today, based on yesterday's trading.
Crude Oil settled at $79.30, down $2.01 on the day.
Crude Oil is trading at $81.39, up $2.09. Our neighborhood pump price is $3.35.
Our pump price dropped another ten cents to 3.49 ;D
Crude oil settled at $82.89, up $3.59 on the day. The lower value of the dollar will drive crude higher.
Crude Oil settled at $85.72, up $2.83 on the day. Our neighborhood pump price is $3.34, I anticipate it will be going up .
Crude Oil is trading at $85.91, up $0.19. Not many contracts being done this A.M..
Crude Oil settled at $85.38, down $0.34 on the day. Our neighborhood pump price is $3.33 for regular.
Crude is trading at $85.02, down $0.36 Our neighborhood pump price is $3.32.
Crude has moved up, now trading at $86.89, up $1.51.
Crude is trading at $86.49, down $1,39. Our neighborhood pump price is $3.32.
Crude settled at $86.65, down $1.23 on the day.
Front Month crude is trading at $88.18, up $1.53.
Crude Oil settled at $87.58, up $0.93 on the day.
I have a question about crude oil. How many gallons are in a barrel? Had a conversation with my son about this and really need an answer. Thankyou.
Pat
Quote from: Ms Bear on August 17, 2011, 08:13:50 PM
I have a question about crude oil. How many gallons are in a barrel? Had a conversation with my son about this and really need an answer. Thankyou.
Pat
42 gallons in a barrel of which around 19.5 is refined into gas.
Thankyou. Had not really thought about how much was in a barrel until our conversation tonight and knew I could get an answer from the forum.
Crude Oil is trading at $84.95, down $2.63.
Quote from: srkruzich on August 17, 2011, 09:08:18 PM
42 gallons in a barrel of which around 19.5 is refined into gas.
The 42 Gallons is correct, the 19.5 is not, there is a very wide difference in what a barrel of oil yields. The Gravity, Sulfur, Wax, the Refinery Capabilities all have a big impact on what a barrel of crude oil will yield. Some of the Mexican crudes are very high in wax. Some Refineries yield more Diesel, or more Gasoline, more Fuel Oil, etc. The inherent vices of crudes is why there are so many price differentials in crude.
Quote from: frawin on August 18, 2011, 07:15:54 AM
The 42 Gallons is correct, the 19.5 is not, there is a very wide difference in what a barrel of oil yields. The Gravity, Sulfur, Wax, the Refinery Capabilities all have a big impact on what a barrel of crude oil will yield. Some of the Mexican crudes are very high in wax. Some Refineries yield more Diesel, or more Gasoline, more Fuel Oil, etc. The inherent vices of crudes is why there are so many price differentials in crude.
thats why i said around 19.5 it varies. It solves the problem of going through all the variations of oil out there. LOL
Frank,
You talking of the wax in oil reminds me of a story Paul Harvey had on his "and now you know the rest of the story". He told of a dude, way back when, that cashed in on the problem of wax building up on the sucker rods, which they called "rod wax" he invested his life savings into turning that rod wax into Vaseline---and now you know the rest of the story---------rod wax ?---Vaseline ?
I gotta go mow the yard Frank--you can explain it !! :angel:
Quote from: jarhead on August 18, 2011, 09:04:55 AM
Frank,
You talking of the wax in oil reminds me of a story Paul Harvey had on his "and now you know the rest of the story". He told of a dude, way back when, that cashed in on the problem of wax building up on the sucker rods, which they called "rod wax" he invested his life savings into turning that rod wax into Vaseline---and now you know the rest of the story---------rod wax ?---Vaseline ?
I gotta go mow the yard Frank--you can explain it !! :angel:
OMG! You gave me my best laugh of the mornin so far
Quote from: jarhead on August 18, 2011, 09:04:55 AM
Frank,
You talking of the wax in oil reminds me of a story Paul Harvey had on his "and now you know the rest of the story". He told of a dude, way back when, that cashed in on the problem of wax building up on the sucker rods, which they called "rod wax" he invested his life savings into turning that rod wax into Vaseline---and now you know the rest of the story---------rod wax ?---Vaseline ?
I gotta go mow the yard Frank--you can explain it !! :angel:
Ron, here is the best short version of the history of "Rod Wax" and the discovery of "Vaseline"
The Vaseline® journey started in 1859, when a 22 year old chemist from Brooklyn, New York named Robert A. Chesebrough, went to Pennsylvania to investigate an oil well. The oil industry was in its infancy, and Chesebrough, like many, was hoping to earn profit out of it.
While Chesebrough was there, he discovered a gooey substance known as 'Rod Wax' that was causing problems to the oil rig workers, as it stuck to the drilling rigs, causing them to seize up.
Chesebrough noticed that oil workers would smear their skin with the residue from their drills, as it had the property to heal their cuts and burns. He got curious and took some Rod Wax home where he started experimenting with it. After months of testing, he managed to successfully extract usable petroleum jelly out of it.
By 1870, Chesebrough was marketing his petroleum jelly product by the name of Vaseline®, and within ten years, the product's increased exposure and popularity meant that almost every household in America had a jar of Vaseline®. Chesebrough expanded his business to Canada, the United Kingdom and various British colonies all over the world.
New mothers used it as an absorbent shield for diaper rash. Professionals working in extreme cold weather used it to relieve their dry chapped skin. Even Commander Robert Peary carried a jar of Vaseline when he travelled to the North Pole; as it was the only thing that wouldn't freeze in those extreme conditions.
By the late 1880s, Chesebrough was selling Vaseline® Petroleum Jelly nationwide at the rate of one jar per minute and most medical professionals recognized Vaseline® Petroleum Jelly as the standard remedy for skin complaints.
By 1911, the company began opening operation plants and factories in Europe, Canada and Africa for manufacturing and distributing the product.
Crude Oil settled at $82.38, down $5.20 on the day. The dollar improved against the Euro and and the concern that the US is going in to a recession pushed crude down.
I sent the information about the Vaseline to my son. He was very interested in the other information you gave me.
Thankyou
Pat
Crude Oil is trading at $81.70, down $0.68. I look for pump prices to drop today. The markets are in unchartered terriotry. I don't see much confidence out there that Obama is going to do anything to help with all of the problems that are looming.
thats one of the reason i won't ever run quaker state oil in my car. It siezes up the engines. Builds up wax in the valley and just cooks the engine. Every engine i have ever worked on that ran quaker state was like this and usually they were siezed.
Al won't use Quaker State either.
Quote from: frawin on August 19, 2011, 07:17:39 AM
Crude Oil is trading at $81.70, down $0.68. I look for pump prices to drop today. The markets are in unchartered terriotry. I don't see much confidence out there that Obama is going to do anything to help with all of the problems that are looming.
I don't think so either, he's too busy off in kerry land. Uhm interesting i was hearing where the gold prices broke another record. And they were saying that the gold prices are heading for a bubble. Same thing happened in 1982. gold was over 800 a oz and overnight it dropped to 230 a oz. People lost their butts on that one! Same thing is going to happen with this.
Crude Oil settled at $82.26, down $0.12 on the day.
I know this might be a stupid question, frank... but what happens when this thread hits 99,999 views... does it start back over at one???
Quote from: Warph on August 22, 2011, 01:58:53 AM
I know this might be a stupid question, frank... but what happens when this thread hits 99,999 views... does it start back over at one???
Warph, I don't know the answer to that. If the people still want me to post to it I would just change the name and start over. Maybe label it "Better Not Fill Up Today".
Crude is trading at $83.11, up $0.85. Not much volume trading yet. Our neighborhood pump price is $3.31/gallon.
Crude Oil settled at $84.12, up $1.86 on the day.
Today is the first day for October as the front month trading month, it is trading at $85.63, up $1.21.
Crude Oil settled at $85.44, up $1.02 on the day.
Our gas price went up another .10 to 3.69 per gal. They didn't lower when crude went down but they sure raise it when crude goes up.
Crude is trading at $85.30, down $0.14.
Crude OIl settled at $85.16, down $0.28 on the day. Our neighborhood pump price is $3.31.
I was in Bartlesville today and slurped up on that 3.31 gas, it is 3.57 around here. :P
Crude is trading at $85.76, up $0.60.
Crude settled at $85.30, up $0.14 on the day.
Crude is trading at $83.95, down $1.35. Our neighborhood pump price is still at $3.31.
Crude settled at $85.37, up $0.07 on the day. Our neighborhood pump price is $3.49.
Crude is trading at $86.19, up $0.82.
Crude is trading at $87.37, up $2.00, trading volume is way up as well. Our neighborhood pump price is $3.49 and I look for that to go up.
http://bloom.bg/nVYBjI
Crude Oil settled at $87.27, up $1.90 on the day.
Crude is trading at $86.56, down $0.71.
Crude has moved from negative to positive trading at $87.60, up $0.33.
Crude continues to move up at $88.63, up $1.36, with lots of contracts trading. My guess is the pump price will be moving up more.
Naturally...............holiday weekend coming up.........thousands of people hitting the open road........still the price is a lot better than the $100 a barrel not too long ago.
Larryj
Quote from: frawin on August 30, 2011, 09:18:50 AM
Crude continues to move up at $88.63, up $1.36, with lots of contracts trading. My guess is the pump price will be moving up more.
Hell they haven't come down any.
Crude Oil settled at $88.90, up $1.63 on the day.
Crude is trading down at $87.88, off $1.02.
http://bloom.bg/pdMgPH
Crude has moved from negative to positive trading at $89.23, up $0.33.
Crude settled at $88.81, down $0.09 on the day.
Crude is trading at $88.72, down $0.09.
The crude market has moved up in volume and price both, currently trading at $89.76, up $0.95. Lots of contracts.
Frank,
I read an article in our local paper (the Arkansas Democrat Gazette) a few days ago that tried to pin the disconnect between falling oil prices and falling gasoline prices on the difference between the price for West Texas Intermediate and Brent North Sea crude prices and the glut of WTI at Cushing with not enough refining capacity to turn it into gasoline in the Midwest.
The article went on to say that the reason Arkansas gasoline prices were still high was that our gasoline comes from the Gulf Coast refineries and they use imported Brent, which is much more expensive than WTI right now.
I can't find the article, but I found this one from earlier in the year (from a better source):
http://oilprice.com/Energy/Oil-Prices/Why-are-WTI-and-Brent-Prices-so-Different.html
Question for you - Is the fact that gasoline is still high, while WTI is relatively cheap, caused by these logistics and infrastructure issues, or are they just an easy scapegoat to keep everything high?
Charlie, Arkansas has 2 refineries that are supplied by some Arkansas Crudes and some from WTI and LAsweet crudes. The article you attached is interesting, I don't know if you are aware that ConocoPhillips has divested of all of their Service Stations and will soon be divested of all of their Refineries which are being moved to a new seperate company, the Phillips Seaway Pipeline interest will probably go with the new refining company. Brent Crude has always been higher than WTI, Brent is a very High Quality Crude and Virtually all of the Refining Capacity in Europe requires Sweet Crude. In the US we have lots of Refining Capacity that can utilize the High Sulfur Low Gravity crudes which are much cheaper.
Charlie I don't think that Gasoline is so much higher as compared to crude historically.
I have seen a lot of changes in the 41 years since I started with Phillips, I think when I started WTI at the lease in West Texas was $2.67 per barrrel.
Charlie the biggest factor in higher crude prices and energy costs is all of the trade agreements that Bill Clinton made with the Chinese. We sent the Chinese jobs and now they are out bidding us for crude. China did not used to be afdactor at all in the crude oil market. Now they are the 2nd largest consumer of crude oil in the world and will soon pass us as the largest. GM built more cars in China last year than they did in America. The US has a day of reckoning coming in energy costs, we can't keep driving big V-8s for pleasure.
I probably haven't answered your question but maybe we can discuss it more later.
One additional comment, I get so tired of the KNOW NOTHINGS cussing big oil when they know nothing about it. Nearly all of the worlds original oil fields were developed by the American oil companys.
Crude settled at $88.93, up $0.12.
Crude is trading at $88.01, down $0.92.
Crude is trading at $87.15, down $1.78. If the market stays this way thru settle, I look for our neighborhood price to go down tomorrow, it is currently $3.48.
Crude settled at $86.45, down $2.48 on the day. Pump prices will be down at Quik-Trip tomorrow.
Crude is trading at $83.94, down $2.51.
Crude settled at $86.02, down $0.43 on the day.
Crude Oil is trading at $88.21, up $2.29.
Crude Oil continues to move higher with a large volume of contracts, currently trading at $89.34, up $3.32.
Crude oil settled at $89.34, up $3.32 on the day.
Crude is trading at $89.49, up $0.15.
Crude oil settled at $89.05, down $0.29 on the day.
Crude is trading at $88.07, down $0.98.
Oil looks like it's going to stay up for a awhile.
Crude is trading at $86.52, down $2.53. The weak markets are an indication of how little confidence the people have in Obama's plans to put the people back to work.
Crude settled at $87.24, down $1.81 on the day.
Crude is trading at $86.06, down $1.18.
Crude oil has moved to positive numbers, now trading at $87.79, up $0.55 on the day.
Crude settled at $88.19, up $0.95 on the day.
Crude oil is trading at $89.76, up $1.57.
Crude Oil settled at $90.21, up $2.02 on the day. The contract volume was very high, I look for crude to move up in the near term.
Crude has been up as much as $4.00 today, currently trading at $83.69, up $3.45. The contract volume is high. Our neighborhood pump price is $3.29, if today's market holds the pump price will be up tomorrow.
Ouch !!! $3.69 here in Longton
The Denver Post ran a story yesterday about a few (very few) places in the US that had gasoline for under $3.00.
I saw that too...not around here!
Waldo, here is an excerpt from an article yesterday. One of the big factors in the cheaper gas is the overall sales tax amount.
Al;so the transportation on the crude oil, Texas refineries have a ready available supply with less transportation.
Gasoline prices dip below $3
Still above $3 at local stations
September 26, 2011 6:16 AM
AP and TRIBUNE REPORTS
NEW YORK — Soaring gasoline prices are in the rearview mirror.
For the first time in months, retail gasoline prices have fallen below $3 a gallon in places, including parts of Michigan, Missouri and Texas. And the relief is likely to spread thanks to a sharp decline in crude-oil prices.
The national average for regular unleaded gasoline is $3.51 per gallon, down from a high of $3.98 in early May. Last week's plunge in oil prices could push the average to $3.25 per gallon by November, analysts say.
On Sunday, the price of a gallon of regular in Seymour generally dropped to $3.39, down from $3.43.
Crude settled at $84.65, up $4.21 0n the day.
Crude is trading at $83.42, down $1.03. Our neighborhood pump price is $3.19.
Crude settled at $81.21, down $3.24 on the day.
Crude is trading at $81.54, up $0.33. Our neighborhood pump price is $3.18.
Crude settled at $82.14, up $0.93 on the day.
Crude is trading at $81.23 this morning, down $0.91. Our neighborhood pump price is $3.18.
I was in St. Louis this week. On Wednesday morning the price was $2.91 and that afternoon it had jumped to $3.19. Hmmm.
Quote from: jpbill on September 30, 2011, 06:57:51 AM
I was in St. Louis this week. On Wednesday morning the price was $2.91 and that afternoon it had jumped to $3.19. Hmmm.
That is understandable, crude went up $4.21/barrel on Tuesday.
Crude settled at $79.20, down $2.94 on the day.
Crude is trading at $78.72 this morning, down $0.48. Our neighborhood pump price is $3.16.
Crude is down more, trading at $77.62, down $1.58. If this holds or goes down more the local pump price of $3.16 will be down even more.
Crude settled at $77.61, down $1.59 on the day. Our neighborhood pump price is $3.15 and my guess is it will be lower tomorrow.
Crude is trading at $76.04 this morning, down $1.57. Our neighborhood pump price is $3.15, or at least is was last night, it will be down more today.
Crude settled at $75.67, down $1.94 on the day. Our neighborhood pump price is $3.14 and my guess is it will be lower tomorrow.
Crude is trading at $77.66 this morning, up $1.99. . Our neighborhood pump price is $3.14, or at least is was last night. Doe inventory had a bigger than expected draw.
Below is the most recent Petroleum data report, inventories went down more than expected and crude will probably move up because of it.
Summary of Weekly Petroleum Data for the Week Ending September 30, 2011
U.S. crude oil refinery inputs averaged 15.1 million barrels per day during the week ending September 30, 73 thousand barrels per day below the previous week's average. Refineries operated at 87.7 percent of their operable capacity last week. Gasoline production increased last week, averaging nearly 9.3 million barrels per day. Distillate fuel production increased last week, averaging about 4.7 million barrels per day.
U.S. crude oil imports averaged 8.7 million barrels per day last week, down by 1.0 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.8 million barrels per day, 246 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 505 thousand barrels per day. Distillate fuel imports averaged 208 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.7 million barrels from the previous week. At 336.3 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 1.1 million barrels last week and are above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 0.7 million barrels last week and are in the upper limit of the average range for this time of year. Propane/propylene inventories increased by 1.2 million barrels last week and are below the lower limit of the average range. Total commercial petroleum inventories decreased by 4.6 million barrels last week.
Total products supplied over the last four-week period have averaged just under 19.0 million barrels per day, down by 1.3 percent compared to the similar period last year. Over the last four weeks, motor gasoline product supplied has averaged 8.9 million barrels per day, down by 1.7 percent from the same period last year. Distillate fuel product supplied has averaged about 3.9 million barrels per day over the last four weeks, up by 2.0 percent from the same period last year. Jet fuel product supplied is 2.9 percent lower over the last four weeks compared to the same four-week period last year.
Crude settled at $79.68, up $4.01 on the day. I just filled up my pickup at $3.12 a gallon. You better fill up today as it will be higher tomorrow.
I just filled Myrna's Pilot at $3.09/Gallon. It will be higher tomorrow.
Crude is trading at $80.84, up $1.16 this morning. The pump price will go up today.
Crude settled at $82.59, up $2.91 on the day.
Crude is trading at $82.24, down $0.35.
Gasoline jumped .10/gal here...It's up to 3.19/gal.
Quote from: Catwoman on October 09, 2011, 04:43:32 PM
Gasoline jumped .10/gal here...It's up to 3.19/gal.
Cat, it is $3.06 here.
Crude is trading at $84.44, up $1.46 this morning.
Crude settled at $85.41, up $2.43 on the day. Our neighborhood pump price is $3.15.
Crude is trading at $85.00, down $0.41 this morning.
Crude settled at $85.81, up $0.40 on the day.
Crude is trading at $86.05, up $0.24 this morning.
Crude settled at $85.57, down $0.24 on the day.
Crude is trading at $84.33 this morning, down $1.24. Our neighborhood pump price is $3.15.
Crude settled at $84.23, down $1.34 on the day. Neighborhood pump price is still $3.15.
$3.29 was the best here today.
Crude is trading at $85.81this morning, up $1.58.
Crude settled at $86.50, up $2.57 on the day. Our neighborhood pump price is stll $3.15, I think it will be higher tomorrow. I notice the pump price spread is from a low of $3.15 to a high of $3.34.
Crude is trading at $86.88, up $0.08 this morning.
Crude Oil settled at $86.38, down $0.42 on the day. Our neighborhood pump price is $3.25.
I was just out running an errand and the Pump price was $3.44.
gallon price paid for gas over past two weeks:
10/04, 3.57, Limon, CO
10/04, 3.29, Maplewood, KS
10/07, 3.37, Howard
10/11, 3.37, Howard
10/12, 3.16, KC
10/15, 3.57, Howard
10/15, 3.52, Colby, KS
10/17, 3.58, Buckley AFB, CO
Crude is trading at $85.88, down $0.50 this morning. Our pump price is till $3.44. CORRECTION, IT IS $3.25 at QUIK TRIP. I JUST GOT BACK FROM FILLING MY TRUCK. THEY WERE GETTING A LOAD OF GAS WHILE I WAS THERE AND I AM SURE THEY WILL BE RAISING THE PRICE TO MATCH WALMART AT $3.44.
Crude has not settled yet but it is trading at $87.89, up $1.51.
Crude settled at $88.34, up $1.96 on the day. Projections are for a draw in Inventories when they come out tomorrow.
Crude is trading at $88.40, up $0.06 this morning. I am anxious to see the Inventory report today.
Todays inventory reflects a sizable draw in Crude Inventories.
The Summary of Weekly Petroleum Data for the Week Ending October 14, 2011 can be reviewed at:
http://ir.eia.gov/wpsr/wpsrsummary.pdf
Crude Oil settled at $86.11, down $2.13 on the day.
Crude is trading at $86.70, up $0.59 in early trading.
Crude settled at $85.30, down $0.81 0n the day.
Today is the first day of trading for the new month, crude is trading at $87.23, up $1.16.
Crude settled at $87.40, up $1.33 on the day.
Crude is trading at $87.90 this morning, up $0.50.
Crude has moved up and is trading at $90.15, up $2.75.
Crude oil rose to the highest level in more than two months, exceeding $90 a barrel as data showed economic growth in China and Japan and as U.S. equities rose.
Crude is currently trading at $91.66, up $4.26.
Crude settled at $91.27, up $3.87 on the day. You better fill up today or you might pay more tomorrow.
Crude is trading at $94.40 this morning, up $3.13.
Crude settled at $93.17, up $1.90 on the day.
Crude Oil is trading at $93.57, up $0.40 this morning.
Crude Oil settled at $90.20, down $2.97 on the day. The weekly inventory report showed a bigger than anticpated build in inventory for Crude and products.
Crude is trading at $92.76, up $2.56 this morning.
Crude Oil settled at $93.96, up $3.76 on the day.
Crude Oil settled at $93.32, down $0.64 on the day.
Crude Oil is trading at $92.89 this morning, down $0.43.
Crude oil settled at $93.19, down $0.13 on the day.
Crude Oil is trading down$2.85 this morning at $90.34. The reason given is : Oil dropped for a third day in New York on speculation commodity demand will falter as Chinese manufacturing slows and European leaders struggle to contain the region's debt crisis.
..
Crude Oil settled at $92.19, down $1.00 on the day. Our neighborhood pump price is $3.14.
Crude Oil is trading at $93.52, up $1.33 this morning. Our neighborhood pump price is $3.15.
Crude Oil settled at $92.51, up $0.32 on the day.
Crude is trading at $93.32 this morning , up $0.81.
Crude settled at $94.07, up $1.56 on the day.
Crude Oil is trading at $94.44, up $0.34 this morning.
Crude Oil settled at $94.26, up $0.19 on the day.
Crude Oil settled at $95.52, up $1.26 on the day. Big contract volume.
Crude Oil is trading at $96.43, up $0.91 this morning.
Crude Oil settled at $96.80, up $1.25 on the day. Another big volume day.
Crude Oil is trading at $95.67 this morning, down $1.13.
Crude Oil settled at $95.74, down $1.06 on the day.
Crude Oil is trading at $97.26, up $1.52 this morning. Our neighborhood pump price is $3.13.
Crude Oil settled at $97.78, up $2.04 on the day. Another big volume day, refiners are locking in supplies going into the Holiday Season.
Crude Oil settled at $98.99, up $1.21 on the day. Crude traded as high as $99.20 today, we may break the $100.00 range next.
Crude Oil is trading at $98.34 this morning, down $0.65.
Crude Oil settled at $98.14, down $0.85 on the day.
Crude Oil is trading at $97.91, down $0.23 this morning.
"Oil rose after U.S. retail sales increased more than projected in October, bolstering optimism that the economy of the largest crude-consuming country will expand this quarter."
Crude is trading at $98.79, up $0.65.
..
Crude Oil traded as high as $99.84 today, it settled at $99.37, up $1.23 on the day. Our neighborhood pump price is $3.11.
Crude Oil is trading at $99.32, down $0.05 this morning.
"Oil Rises Above $100 on Reversal of Seaway Pipeline, Allowing More Outflow"
Crude oil is trading at $101.76, up $2.39.
Crude Oil traded today as high as $102.89 it settled at $102.59, up $3.22 on the day. Pump prices will be going up.
Crude Oil is trading at $101.50, down $1.54 this morning.
Crude oil settled at $98.82, down $3.77 on the day. Our Neighborhood pump price is $3.05.
Crude Oil is trading at $99.73, up $0.91 this morning.
Crude Oil settled at $97.41, down $1.41 on the day.
Crude Oil is trading at $96.58 this morning, down $1.09. Our neighborhood pump price is $3.07.
I topped off at 3.21 You are much better. Are they making "winter gas" now?
Crude Oil settled at $96.92, down $.75 on the day. I noticed the neighborhood pump price was $3.06, it will probably be down more tomorrow.
I was just out and the Neighborhood pump price was $3.04. Good to see it down some, it will help the Thanksgiving travelers.
SoCal prices running between $3.79 and $3.89 a gallon depending on which flavor you like. And, I noticed that diesel is running at $4.29 a gallon a few days ago.
Larryj
Gas is down to 2.99 here!!!!! YES!!!!! ;D
Crude oil is trading at $99.49 this morning, up $2.72.
Our neighborhood pump price is $2.98.
We were in Chicago over the Thanksgiving Holiday and in Chicago I saw Gas at $4.00, in the town West of Chicago where our daughter lives it was $3.39.
If Iran and Israel get in a serious kicking match, we could easily see $5.00 plus gasoline. We need to be drilling our own reserves NOW.
I keep both of my vehicles on full as much as possible.
Crude Oil settled at $98.21, up $1.44 on the day.
Crude Oil is trading at $98.51 this morning, up $0.30.
Crude Oil settled at $99.79, up $1.58 on the day. It traded above $100.00 during the day.
Crude is trading at $101.31, up $1.52 this morning. Our neighborhood pump price was $2.98 last night, I think it will be going up today.
We're $3.13, but that won't last long.
Crude Oil settled at $100.36, up $0.57 on the day.
Crude Oil is trading flat this morning at $100.36, unchanged from yesterday's settle.
Crude OIl settled at $100.20, down $0.16 on the day.
Crude Oil is trading at $100.97, up $0.77. Our neighborhood pump price is $2.96
Crude Oil settled at $100.96, up $0.76 on the day.
Crude is trading at $101.60, up $0.64 this morning. Bloombergs credits the continued strong crude market to concern over Iran's continued threats.
Crude Oil settled at $100.99, up $0.03 on the day. Crude traded from a low $100.24 to a high of $102.44 during the session.
Crude oil traded at a high of 101.84 and a low of 100.28, it settled at 100.74
down .17 on the day. Some of you have been asking if I would post crude oil pricing again, here it is.
I'm glad you are posting again, but I don't understand what is causing the increase at this time.
Crude oil is trading at $ 101.80 up$1.06, this morning.
Crude settled at the same as it was when I posted today's trading earlier. Crude settled at $101.80, up $1.06 on the day.
Crude oil settled at $ 102.31, up $ 0.51 on the day. Contract volume was not as high as anticipated, in light of the Iranian crisis.
Crude oil settled at $103.24, up $0.93 on the day.
Sorry I didn't post the open this morning but, I have been traveling since 6 A.M.
I filled both vehicles with gas this A.M.,the regular price was $3.21. I noticed that the are stations ranged from a low of $3.21 to a high of $3.49.
Crude is trading at $105.14, up $1.90.
Average of about $3.99 in SoCal. Some places over $4.15.
Larryj
Larry, the lowest I saw yesterday here was $3.20 and the highest was $3.49, with $3.21 to $3.29 being the most prevelant. With most of Europe now vying for some of the crudes that we use, the price will go higher. The Iranian problems are going to be costly in terms of Energy.
Crude is trading at $104.65, up $1.41. Out 2 months it is trading in the $106.00+ range.
Crude settled at $105.84, up $2.60 on the day.
Crude is trading at $105.98, down $0.27.
Crude oil settled at $106.28, up $.03 on the day.
The EIA Petroleum Status report normally comes out on Wednesday but was delayed a day due to the Federal Holiday on Monday. It will come out tomorrow and if there is a sizable draw crude will move up considerably.
Crude is trading at $106.08, down $0.20.
Crude Oil settled at $107.83, up $1.55 on the day. Our neighborhood pump price is $3.38.
Cost of Gasoline per gallon today per Yahoo news:
Asmara, Eritrea, $9.58 (in eastern Africa with coastline on the Red Sea)
Oslo, $9.33
Rome, $8.51
Copenhagen, $8.48
Monte Carlo, $8.46
London, $8.12
Paris, $8.06
Hong Kong $7.85
Berlin, $7.76
Tokyo, $6.59
Kuwait City, 82 cents
Riyadh, Saudi Arabia, 45 cents
Caracas, Venezuela, 06 cents (Government subsidized)
Rehoboth Beach Delaware $3.64
Quote from: W. Gray on February 23, 2012, 03:32:13 PM
Cost of Gasoline per gallon today per Yahoo news:
Asmara, Eritrea, $9.58 (in eastern Africa with coastline on the Red Sea)
Oslo, $9.33
Rome, $8.51
Copenhagen, $8.48
Monte Carlo, $8.46
London, $8.12
Paris, $8.06
Hong Kong $7.85
Berlin, $7.76
Tokyo, $6.59
Kuwait City, 82 cents
Riyadh, Saudi Arabia, 45 cents
Caracas, Venezuela, 06 cents (Government subsidized)
Waldo, we should all fill up in Caracas or second best in Riyadh.
Frank, you all could drive out here and fill up.
Average in Denver today is $3.06 with the lowest at $2.86.
With gas prices so high in the rest of the world, that certainly means that gas in the USA will have to more than double or even triple or quadruple before an alternative source of energy can be anywhere near cost effective to develop and probably not even then. People are pipe dreaming when they speak of an alternative energy, including electric, as being viable.
Quote from: W. Gray on February 23, 2012, 04:32:03 PM
Frank, you all could drive out here and fill up.
Average in Denver today is $3.06 with the lowest at $2.86.
With gas prices so high in the rest of the world, that certainly means that gas in the USA will have to more than double or even triple or quadruple before an alternative source of energy can be anywhere near cost effective to develop and probably not even then. People are pipe dreaming when they speak of an alternative energy, including electric, as being viable.
Waldo, I think the best alternate energy source is CNG. We have massive Natural Gas reserves in this country. We have enough oil reserves to reduce our dependence on Foreign oil substantially, we just need to develop it. Also we need to penalize people that drive big gas guzzlers. Every person on my block has a big gas guzzling V-8 pickup they drive to work, I have the only 6 cylinder pickup on the block.
A few years ago, Iceland was going big for natural gas for automobiles, but I dont know what ever became of that effort. Or, maybe it was hydrogen, I cannot recall.
Quote from: W. Gray on February 23, 2012, 04:56:35 PM
A few years ago, Iceland was going big for natural gas for automobiles, but I dont know what ever became of that effort. Or, maybe it was hydrogen, I cannot recall.
Tulsa has switched to CNG on Buses and Trash Trucks and is planning on switching more. In west Texas lots of the field people ran their pickups on CNG. CNG is cheap, plentiful, cleanburning and safe.
Quote from: frawin on February 23, 2012, 05:07:52 PM
Tulsa has switched to CNG on Buses and Trash Trucks and is planning on switching more. In west Texas lots of the field people ran their pickups on CNG. CNG is cheap, plentiful, cleanburning and safe.
Yeah it is but you can't get it out here unfortunately and the conversion kits aren't cheap
I'm looking at producer gas to burn in my truck.
Crude is trading at $108.24, up $0.41.
I saw, coming home from taking GD#1 to school, Chevron is charging $4.21 and Shell is at $4.29.
Larryj
And the national bend over without vasoline begins!
And we are remodeling the kitchen and bathroom.. and I get to go pick up supplies next week in Dereks gas loving Suburban no less... sighhhh~~~ (( better book some more massages and Keep Kjell's nose to the grindstone..)) LOL
Teresa, "I know you are not going to like this" (justy kidding)but you can blame Oboma for alot of the growing shortages in energy. Since he has been in office he has either vetoed or failed to act on anything that would increase domestic production. People blame the oil companies when the oil companies are proposing to drill some of our major reserves. The oil companies are more than willing to take half as much per barrel and produce twice as many barrels. I SAY DRILL BABY DRILL, before it is to late, China is using more of the world's oil everyday, the muslim world controls some of the worlds largest oil reserves and they are becoming more anti-American everyday, if we don't get started drilling our reserves this country is facing major problems, we will have to guard our vehicles with guns to keep the Gas/Diesel have nots from stealing our gas.
Quote from: frawin on February 24, 2012, 12:14:35 PM
Teresa, "I know you are not going to like this" (justy kidding)but you can blame Oboma for alot of the growing shortages in energy. Since he has been in office he has either vetoed or failed to act on anything that would increase domestic production. People blame the oil companies when the oil companies are proposing to drill some of our major reserves. The oil companies are more than willing to take half as much per barrel and produce twice as many barrels. I SAY DRILL BABY DRILL, before it is to late, China is using more of the world's oil everyday, the muslim world controls some of the worlds largest oil reserves and they are becoming more anti-American everyday, if we don't get started drilling our reserves this country is facing major problems, we will have to guard our vehicles with guns to keep the Gas/Diesel have nots from stealing our gas.
Hi I hope all is better with your daughter and new grandchild. I want to know what you think of the new horizontal drilling boom that is going on in OK and KS. Nancy
Quote from: K.R. on February 24, 2012, 12:29:09 PM
Hi I hope all is better with your daughter and new grandchild. I want to know what you think of the new horizontal drilling boom that is going on in OK and KS. Nancy
Thanks Nancy, our daughter is doing fine, our new Granddaughter is improving everyday. They tell us the surgery was sucessful but they can't say when they will release her. She is 2 weeks old today and today is the first day they have taken alll of the life support tubes out of her, she still has wires monitoring her vitals.. She is so pretty and precious, our daughter got to hold her for the first time day before yesterday, and she is really enjoying it. I am ready to drive back to Chicago to get to hold her.
In response to your question regarding Horizontal drilling, I like it, it really saves tearing up so much surface. You can drill one well that will produce/drain the oil and gas from a large area, for instance one well might drain an area that conventional drilling might require 10 or more wells. I have been involved in some horizintal wells, they are expensive and if they don't find/hit the pay zones it is a big loss, but if they hit thay pay off very well.
A radio talk show in Denver this morning listed a number of oil related items that Obama has reduced since he took office. Oil drilling on federal land was also mentioned as being reduced by 11% under Obama.
$2.98 per gallon today in Centennial, CO.
That is good news for all of you and our prayers will continue. What do you know about the contracts that have the pooling clause in them? There are alot of companies wanting to lease land in this area. Nancy
Crude oil has not settled yet for the day, it is currently at $109.75, up $1.92 on the day.
Quote from: K.R. on February 24, 2012, 01:09:19 PM
That is good news for all of you and our prayers will continue. What do you know about the contracts that have the pooling clause in them? There are alot of companies wanting to lease land in this area. Nancy
Nancy, I am working on two tracts of land that is for lease, I don't like any of the lease styles I have seen, but I don't want to go into detail here.
Crude OIl settled at $109.77, up $1.94 on the day. Contract volume was heavy.
Quote from: frawin on February 24, 2012, 12:14:35 PM
Teresa, "I know you are not going to like this" (justy kidding)but you can blame Oboma for alot of the growing shortages in energy. Since he has been in office he has either vetoed or failed to act on anything that would increase domestic production. People blame the oil companies when the oil companies are proposing to drill some of our major reserves. The oil companies are more than willing to take half as much per barrel and produce twice as many barrels. I SAY DRILL BABY DRILL, before it is to late, China is using more of the world's oil everyday, the muslim world controls some of the worlds largest oil reserves and they are becoming more anti-American everyday, if we don't get started drilling our reserves this country is facing major problems, we will have to guard our vehicles with guns to keep the Gas/Diesel have nots from stealing our gas.
Its already starting. I had 10 gallons stolen not too long ago. they stole my cans for my lawnmower and tiller and tossed em on the side of the road down the road.
Does anybody know how much US drilled oil is sold to outside the US buyers? I keep hearing that much of Alaska's oil is actually sold to Japan. Anything to that?
Quote from: Diane Amberg on February 25, 2012, 09:16:52 AM
Does anybody know how much US drilled oil is sold to outside the US buyers? I keep hearing that much of Alaska's oil is actually sold to Japan. Anything to that?
Yes, Diane.. the total is: A lot. There is a couple of good articles onthe Tree Hugger:
http://www.treehugger.com/energy-policy/true-cost-fossil-fuels.html
with a little more googling you should come up with an answer. Let us know. Gas here went up .10 cents for regular overnight. We are running about $3.70 for reg. gas but I paid $1.18 for a gal. of milk yesterday. And my Alaskan Amber shot up from $7.69 to $8.99 a six pack at Safeway. Trader Joe's jumped .99 cent on it. Where's the love in all of this. I'm supposed to be in my golden years. Looks like I'll be using my golf cart more and drinking milk for awhile. Yuck!
(http://thepirateeye.com/wp-content/uploads/2011/03/Gas-Prices-LOL-OMG-WTF-edited.jpeg)
OK, dumb question number 2..... Why? :P
Crude is trading at $108.75, down $1.02, this morning. Our Neighborhood pump price is $3.38.
Webb says PJs in Howard is 3.69 and Tripco in Severy 3.49 as of four hours ago.
Our local corner price is 3.02.
Crude settled at $108.56, down $1.21 on the day.
Crude is trading at $107.84, down $0.72 this morning.
Crude Oil settled at $106.55, down $2.01 on the day.
Crude Oil is trading at $106.93, up $0.38.
Yesterday, while bringing my granddaughter home from school, I was sitting in a left turn lane at a notoriously long stop light and I noticed a gas station employee changing the signs that list the prices of gas. This is an independent station, not a major gasoline company. He reached up and removed the "1" from the $4.21 sign and replaced it with a "9." In that single moment in time, the price of his gas went up 8 cents a gallon.
Larryj
Some of our gas stations here have changed over to computer operated signs, so no more changing the price by hand. It's amazing how fast and often the prices do change.
Crude Oil settled at $107.07, up $0.52 on the day.
Crude Oil is trading at $107.56, up $0.49.
Denver area average gasoline price per gallon has climbed to $3.15 with the lowest at $2.94.
Howard price was $3.69 on the 28th.
Severy price was 3.55 today.
Crude Oil settled at $108.84, up $1.77 on the day.
Contract Volume was high.
Diane, most of the stations here do have computer generated price signs. This particular one that I mentioned has both electronic and signs that have to been changed manually.
Tonight, I made a run to the local In-n-Out for cheeseburgers and passed by the Chevron where I buy gas. The price for regular was $4.35. Ouch.
Larryj
Gas in Independence, Kansas is $3.75 a gallon. Someone said that Unleaded Plus was cheaper than unleaded.
Heard on my local news this afternoon............the average price of a gallon of regular gasoline has gone up $.58 in the last 30 days.
Last month at this time the average was $3. 79 a gallon.
If you pump, say, 15 gallons, that would be an extra $8.70.
Larryj
Filled up at 3.17 today, 7 March. Average price in Denver area is 3.27 with lowest at 3.06.
Howard price was 3.69 on the third.
Severy price was 3.63, today.
Thanks Waldo, interesting price spread. I have quit posting the daily open and close crude prices. I got aggravated before and quit then several people asked me to do it again. I am done for now, I am afraid if I keep posting them, the negative team on the Forum will blame Howard or West Elk, or the County Commissioners, or Elk Connect everytime the prices go up.
When I am getting ready to travel more that an hour or so from home (like going to Moline) I use the following map to help determine my route, and where to fill up along the way. It allows me to see if there are some small town independent stations that are staying competitive with the big chain corporate ones, and then spend my gas money where it will do some good in a rural or small-town economy.
http://www.missourigasprices.com/Price_By_County.aspx?state=MO&c=usa
Just keep clicking on a spot to zoom in and then you can move the map around to the area you are traveling in. It will zoom all the way to street level and give you the address and other info on specific stations.
10 States with the cheapest gas:
http://247wallst.com/2012/03/12/the-ten-states-with-the-cheapest-gas-2/2/
Frank... gas is $3.93 at Safeway in Surprise and $3.97 at Chevron in Sun City West, today March 16.
I found that this is the best way to overcome high gas prices:
March 19:
Lowest price for regular gas in Denver, 3.32.
Regular gas price in Howard, 3.79
Regular gas price in Severy, 3.69
National average, 3.81
Quote from: W. Gray on March 19, 2012, 05:44:58 PM
March 19:
Lowest price for regular gas in Denver, 3.32.
Regular gas price in Howard, 3.79
Regular gas price in Severy, 3.69
National average, 3.81
Waldo, the lowest price in the Bartlesville area is $3.45.
API charts show the combined local, State and Federal tax in Oklahoma is $0.354/gallon and in Colorado is $0.404/gallon.
In Wichita, it's 3.63 to 3.69, depending upon where you are driving at.
Crude Oil settled at $90.36, down $1.95 on the session. Crude has fallen $18.00 in the past 60 days trading.
As previously mentioned on another thread (observations), the price had dramatically dropped from $4.35 a gallon down to $4.13. Today on the way home from #1 granddaughters school, I noted the price was back up to an average of $4.25--$4.35 in anticipation of the holiday weekend coming up.
Larryj
Larry, our neighborhood price is $3.22, I anticipate it will belower in the morning.
Gas prices in Topeka, KS are $3.32 to 3.10.
I filled up this morning here in Bartlesville for $2.94, I filled up yesterday morning in Geneva IL at $3.44. With the holiday driving on, crude is up $4.00 plus this morning.
Crude oil settled at $92.66, up $2.79 on the day. The Iranian/Isralei threats have pushed the market up 10-12$ in the past 2 weeks.
Report: Carbon emissions are at a twenty-year low, due to...
posted at 7:37 pm on August 16, 2012 by Erika Johnsen
Oh, the glorious irony! While environmentalists everywhere have long insisted that we need major government interference in order to combat the greedy capitalism ostensibly fueling the effects of man-made climate change, and that hydraulic fracturing is one of the most environmentally unfriendly, earth-raping practices in the history of ever, it's officially official: It is in fact free enterprise and fracking together that have accomplished what greenies have been lecturing us to do for decades.
In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.
Many of the world's leading climate scientists didn't see the drop coming, in large part because it happened as a result of market forces rather than direct government action against carbon dioxide, a greenhouse gas that traps heat in the atmosphere.
Michael Mann, director of the Earth System Science Center at Penn State University, said the shift away from coal is reason for "cautious optimism" about potential ways to deal with climate change. He said it demonstrates that "ultimately people follow their wallets" on global warming.
"There's a very clear lesson here. What it shows is that if you make a cleaner energy source cheaper, you will displace dirtier sources," said Roger Pielke Jr., a climate expert at the University of Colorado.
In a little-noticed technical report, the U.S. Energy Information Agency, a part of the Energy Department, said this month that total U.S. CO2 emissions for the first four months of this year fell to about 1992 levels. ... While conservation efforts, the lagging economy and greater use of renewable energy are factors in the CO2 decline, the drop-off is due mainly to low-priced natural gas, the agency said.
And it feels so good. Just look at that — the free market did something 'green' and good all on its own, no "necessarily skyrocketing" energy prices necessary! As I often argue, too many environmentalists operate under the mistaken impression that prosperity and environmental quality are mutually exclusive, but that assumption couldn't be more wrong. Not only are wealthy societies the only ones that have the luxury of worrying about their environmental impact, but a robust and thriving economy is the only thing that's ever going to bring about the efficiency and innovation that will lead to cleaner and better energy and resource usage.
Not to mention, natural gas is providing and can continue to provide a huge boost for economy, our global competitiveness, and our energy security. As John Deutch wrote for the WSJ the other day, the opportunities just keep on comin':
Two summers ago, natural gas cost $4.50 per thousand cubic feet, which was less than half what it had cost two summers earlier. Today the price is under $2.50, as unconventional natural gas production has increased to 20% of domestic supply from 5% in 2008, with 40% anticipated by 2020....
A United States hopelessly dependent on imported oil and natural gas is a thing of the past. Most energy experts now project that North America will have the capacity to be a net exporter of oil and natural gas by the end of this decade. ...
The historic ratio between the cost of natural gas and oil on an energy-equivalent basis—one to six—means that there is a tremendous economic incentive to develop new natural gas technologies for purposes including compressed natural gas vehicles, gas-to-liquid conversion, and methanol that could be used as a transportation fuel or blended into synthetic diesel fuel.
Great Post Warph, in addition to the increased use of Natural Gas, Windpower has also reduced the use of Coal and Fuel Oil. In my early days in Phillips Tanker Charting we delivered a lot of Fuel Oil to Power Plants in the Northeast.
Quote from: frawin on August 17, 2012, 11:17:15 AM
Great Post Warph, in addition to the increased use of Natural Gas, Windpower has also reduced the use of Coal and Fuel Oil. In my early days in Phillips Tanker Charting we delivered a lot of Fuel Oil to Power Plants in the Northeast.
hate to say it but its not even a drop in the bucket!
For the 12 months from June 2011 to May 2012, the electricity produced from wind power in the United States amounted to 129 terawatt-hours, or 3.17% of all generated electrical energy
http://en.wikipedia.org/wiki/Wind_power_in_the_United_States
Crude has traded over $100.0 this morning, and I think it is going higher. Thanks to BHO not allowing drilling in many opf the US reserves. If BHO had approved both Legs of the Trans-Canada, Keystone Pipeline we could be well on our way to getting large volumes of crude from Canada and not being held hostage by many of the PG producers.
Quote from: frawin on September 14, 2012, 09:23:43 AM
Crude has traded over $100.0 this morning, and I think it is going higher. Thanks to BHO not allowing drilling in many opf the US reserves. If BHO had approved both Legs of the Trans-Canada, Keystone Pipeline we could be well on our way to getting large volumes of crude from Canada and not being held hostage by many of the PG producers.
Well we can only hope it sinks his boat!
Every article I've read recently seems have slightly different, but similar %s of where our oil comes from. Apparently we produce between 38 to 40% of our own oil right here, and around 12%-15% coming from the middle east,including all the oil emirates.The rest comes from Canada, Mexico, England, South America and one or two other countries. So why do we panic every time the middle east has problems? Is it really speculators trying to take advantage of the instability? I'd like to see Keystone too, but apparently the states it will go through are scared to death and have a huge lobby.
Crude oil settled at $91.98, down $3.31 on the day. The reason in the big drop is that Petroleum inventories went up considerably more than anticipated. The Weekly Doe-Eia Petroleum Inventory report is attached for those that might be interested.
West Texas oil industry suffers case of reptile dysfunction
(http://www.aim.org/wp-content/themes/liberal-media-bias/timthumb.php?src=http://www.aim.org/wp-content/uploads/2012/04/Lizard-Oil.jpg&w=580&zc=1)
Consider this next time you pull up to the gas pump: While you wince at filling up with $4-a-gallon gas, your federal government is working hard to shut down oil production around the nation including here in Texas, the leading producer of domestic oil and gas. This folly is because of a failed energy policy that finds reasons to discourage domestic production, while promising billions to develop production in countries like Brazil.
In Texas, the latest federal shackle comes in the form of a tiny lizard. According to the U.S. Fish and Wildlife Service, the sand dune lizard — also called the dunes sagebrush lizard (Sceloporus arenicolus) — is having a rough life thanks to the booming oil and gas production in West Texas. You see, this lizard likes to live among shinnery oak shrubs on sand dunes. Problem is, there are lots of these shrubs across southeast New Mexico and West Texas, where nearly a million barrels of oil are pumped every day in an effort to secure a safe supply of domestic energy.
So, the federal government wants to list this little lizard as endangered, entitling it to regulatory protections and putting a chokehold on oil and gas exploration and production.
With so much at stake, you might think the science behind such a decision would be extensive and conclusive. Think again. Before proposing to add the dunes sagebrush lizard to the endangered species list, federal biologists visited 27 different areas among the West Texas dunes. They found the lizard in three places. If they didn't find one within an hour, they considered it rare.
Bad science leads to bad policy. And that defines the administration's domestic energy policy that seeks to close off more and more areas to oil and gas production.
Read rest of story: http://www.mysanantonio.com/opinion/commentary/article/Lizard-designation-a-threat-oil-and-gas-production-1408757.php#ixzz2ByTc72PZ
This is also happening in southern New Mexico, a blue state that voted for Obuma. The local media are doing a far better job of reporting the facts than the national media. Channel 4 in Albuquerque ran a story about the anti-lizard protest that greeted Obuma. "Not everyone at the airport in Roswell was there to give President Barack Obama a warm welcome," the station noted in a story complete with video. "A group of protesters were speaking out against federal protection for the Dunes Sagebrush Lizard. The protesters said putting the lizard on the endangered species list would make drilling in southeastern New Mexico more difficult."
Citizens in New Mexico are distributing a flyer that says a final decision to list the lizard will be at the sole discretion of U.S. Fish & Wildlife Service Director Dan Ashe, and that he may make a ruling in June.
They say the impact will be the following:
*Slowing in oil & gas production that could cost jobs in southeast New Mexico.
*Increased costs to utility companies to meet regulations, therefore higher costs to consumers.
*Restriction in sheep and cattle production, limitations on control of noxious weeds, and a threat to their agricultural way of life.
*Restrictions in recreational uses of federal lands.
*A ripple effect from all of the above on retailers, service industry and other businesses.
*Negative impact on the state budget that funds our schools and other services.
*Overall negative impact on the economy and our way of life.
They have a Facebook page "Protest the Listing: Lizard 2012."
https://www.facebook.com/LizardProtest
Our neighborhood pump price is $2.90 this morning. I am going to fill both vehicles, if the Israeli conflict escalates and Iran and others get into it crude oil will be going way up. Crude is up already this morning.
I've noticed in the past two months that the price of gas here in SoCal has dropped from $4.49, average, to $3.69. A significant decrease and it hasn't risen much in anticipation of the holiday travelers. Go figure.
Larryj
Larry,
If you can figure it out you are smarter than me ( best not say nothing smart ass, Doc ) :)
In the past this Israel/Gaza thing would have sent gas prices shooting up.
America is producing more crude everyday and at the same time we are reducing our dependence on Hydrocarbon Energy. There are more Hybrid Vehicles, more total electric vehicles, more CNG powered cars, pickups and CNG powered big tractor trailer rigs. Get OBuma out of there and we will do even better. Also, wind power, solar power, more efficient heating cooling units, better insulation, more efficient engines are all contributing to the reduction in our dependence on oil and more importantly foreign oil. The use of natural gas in generation results in a big reduction in fuel oil hence crude oil consumption.
"America's energy bonanza: U.S. crude oil production reaches 17-year high in October, net oil imports are lowest in 20 years
Mark J. Perry | October 12, 2012, 4:24 pm
U.S. field production of crude oil surged to the highest level in more than 17 years during the first week of October, when almost 6.6 million barrels per day were produced domestically according to new data released this week by the Department of Energy's Energy Information Administration. Crude oil production in the U.S. hasn't been that high since May of 1995, see chart above.
As a result of the surging domestic shale oil production this year in North Dakota and Texas, net oil imports fell to below 42% during the first nine months of this year, which is the lowest level of net oil imports for the U.S. in 20 years going back to 1992.
And several announcements this week by energy-giant Continental Resources suggest that America's energy bonanza will continue in the coming years:
1."Continental Resources Inc. says a shale-oil discovery in Oklahoma may add the equivalent of 1.8 billion barrels of crude to the company's reserves as it drills more than 2,000 wells in coming years."
2. "Continental Resources announced a new five-year growth plan to triple production and proved reserves by year-end 2017. According to its strategic growth plan, the Company plans to generate average production of 300,000 barrels of oil equivalent per day in 2017 (from the current level of 95,000 bpd)."
As I've mentioned previously, America's booming energy sector has emerged in recent years as the strongest single sector of the U.S. economy, and continues to deliver a powerful energy-driven stimulus to the nation's otherwise struggling, sub-par economy. Along with the surging domestic oil output comes energy prosperity in the form of thousands of high-paying shovel-ready direct and indirect jobs, increased construction activity for housing, millions of dollars in royalty payments to farmers and landowners, and greater energy independence."
Quote from: jarhead on November 22, 2012, 10:36:26 AM
Larry,
If you can figure it out you are smarter than me ( best not say nothing smart ass, Doc ) :)
In the past this Israel/Gaza thing would have sent gas prices shooting up.
It seems like when the stock market drops, the price of oil drops, price of gas at the pump drops.
this past quarter:
WTI Crude Oil
$88.26 ▼0.02 0.02%
0:07 AM EST - 2012.11.25 (http://oil-price.net/1q_small.gif)
Regular gas dropped to $2.99 cents a gal. here in Surprise, AZ today.
Also, speaking of gas, for those that didn't know....
On the average a gaseous fart is composed of about 59% nitrogen, 21% hydrogen, 9% carbon dioxide, 7% methane, and 4% oxygen. Less than 1% is what makes them stink. A person produces about half a liter of farts a day and they have been clocked at a speed of 10 feet per second and the temperature of a fart at time of creation is 98.6 degrees Fahrenheit. They are usually created by E. Cloli.
The word "fart" comes from the Old English "feortan" (meaning "to break wind"). Thought all of you 'gas pumpers' would like to know where you stood on this.
Wow, I just paid 3.25 on the 18th. I just viewed the highs and lows here and my station has 2.95 for regular, which is the lowest in the area. The range is up to 3.15.
It's ranginf from 2.95 to 3.05 here in NW Ark. KOTV reported today that gas was as low as 2.76 in Tulsa.
Neighborhood price is $2.76 in Bartlesville.
Is that enriched with ethanol?
If so, that's the gov't subsidized price.
Quote from: redcliffsw on December 20, 2012, 07:07:28 AM
Is that enriched with ethanol?
If so, that's the gov't subsidized price.
Radical cliff, probably most if not all of of the prices listed here are goverment subsidized. That should please you since you were obumas number one supporter and pushed to get him elected by telling people not to vote for Romney but to vote for Ron Paul.
Gas is lower in Tulsa and Bartlesville due to all of the refining capacity and competition in the area. Transportation from the refinery is cheaper. It has nothing to do with government subsidy. We have several places with ethanol free gas available at the same price as gas with ethanol. Also the gasoline tax in Oklahoma is less than Colorado, Kansas and many other states. Oklahoma is ranked 46 out of the 50 states for the lowest gasoline taxes, only 4 states have lower gasoline taxes that Oklahoma.
What am I paying for in the price of a gallon of gasoline?
by Ken Cohen
I'm asked this question a lot. And I know a lot of drivers ask themselves this question when they pull up to the pump.
(http://www.exxonmobilperspectives.com/wp-content/uploads/2012/01/EIA-December-2011-Gallon-Breakdown.png)
The answer is based on the economics of supply and demand and how products are manufactured and sold – along with what the government takes in taxes. Let's take a look, based on the U.S. Energy Information Administration's breakdown of the estimated average price of a gallon of gas in December 2011, which was $3.27.
(http://www.exxonmobilperspectives.com/wp-content/uploads/2012/01/xom_blog_gas_price_breakdown_1-225x182.png)
Raw materials = $2.62
The cost of the raw materials used to make a product has a major impact on the final product price. The raw material for gasoline is crude oil. The price of crude oil is set by global markets, where buyers and sellers constantly react to supply and demand factors. Oil is just one of many commodities traded every day in the global market. Others are the corn that affects the price of food and the cotton that affects the price of clothing.
Crude oil is by far the largest factor in the price of a gallon of gasoline – accounting for 80 percent of the $3.27 average retail price per gallon in December, according to the EIA.
To put that in another way – about $2.62 of the average gallon of gas in this example is set before a refiner even touches the raw material.
Where I find many people get confused is that they assume oil companies are producing all the oil that goes into their own refineries – and therefore can control gas prices by controlling the supply chain. That's not the case.
U.S. crude oil production in 2010 was 5.5 million barrels per day. But U.S. refineries processed 15.2 million barrels of oil per day – almost three times more oil than was produced in the U.S. That means U.S. refiners, like ExxonMobil, have to purchase millions of barrels of crude oil – at market prices – to produce gasoline and other products for American consumers. For example, in 2010, ExxonMobil spent $198 billion purchasing oil around the world for its refining operations.
(http://www.exxonmobilperspectives.com/wp-content/uploads/2012/01/xom_blog_gas_price_breakdown_2-225x182.png)
Manufacturing the product
Like any product, there are costs to manufacture it – so the manufacturer tries to recover those costs, plus make a profit, when it goes to sell the product.
The refining portion of a gallon of gasoline has, on average, accounted for about 11 percent of the price in 2011, according to the EIA data through December. That means a little less than 40 cents per gallon would be due to refiners' costs – wages, equipment, financing and others – plus their profits.
As the EIA figures show, however, refining doesn't always produce a profit. In December, the data indicate that the U.S. market price for gasoline coming out of refineries was on average about 7 cents per gallon (-2 percent) below the refiners' cost of crude oil alone, and before accounting for their costs of upgrading the crude into gasoline. In other words, refineries faced a market where domestic gasoline prices were very weak relative to global crude prices.
How does that happen? Refiners are "price takers" that operate on relatively low profit margins that are highly dependent on the market demand for petroleum products. That means at times, the value of a petroleum product coming out of the refinery isn't enough to cover the costs of obtaining and refining the crude oil.
(http://www.exxonmobilperspectives.com/wp-content/uploads/2012/01/xom_blog_gas_price_breakdown_3-225x182.png)
Distributing and marketing the product = $0.33
Products then have to get from the manufacturing site to the retail site. When gasoline leaves the refinery, it is shipped largely via pipelines to local terminals. There, distributors load their trucks and transport the gasoline to a service station. Naturally, each step in the distribution chain includes labor, capital equipment and other expenses that must be recovered by operators. Of course, these operators must also compete to sustain their profitability while also paying taxes.
Retailers then set the price at the pump, based on recovering these costs of getting gasoline to the service station and the costs of marketing it to consumers. They also have to generate enough money to pay their taxes and make a profit to keep their business running. And on top of that, they have to collect mandatory state and federal gasoline taxes from the consumer (which we'll break down in the next section).
So who are the retailers setting the prices? When consumers pull into an Exxon or Mobil station, they assume it's ExxonMobil. But we own only about 5 percent of the stations with our name on them. About 95 percent of the stations carrying the Exxon or Mobil brand are actually owned by network retailers or local business owners – not ExxonMobil.
(http://www.exxonmobilperspectives.com/wp-content/uploads/2012/01/xom_blog_gas_price_breakdown_4-225x182.png)
Taxes = $0.39
So how much does the government make on a gallon of gas?
In this example, retailers collected state and federal gasoline taxes of 39 cents per gallon on average. Total gas taxes per gallon range by state – from lows of less than 30 cents per gallon to highs of more than 60 cents per gallon in places like New York and California.
How does this compare to what a company like ExxonMobil makes on a gallon of gasoline? As we saw earlier, sometimes a company or an operation may lose money. Other times, it may make money. A competitive market just provides an opportunity, not a guaranteed profit. In the first two quarters of 2011, for example, ExxonMobil made 7 cents and 8 cents a gallon , respectively, on the gasoline, diesel and other petroleum products it refined and sold in the United States.
What actions could help lower gas prices?
Again, let's go back to the economics of supply and demand that govern the crude oil market, since it's the largest determinant of the price at the pump.
There are many global factors that affect the crude oil market. But adding more supplies of crude oil to the global marketplace can help put downward pressure on the price of a barrel of oil. The United States has abundant supplies of oil, from the deep-water regions of the Gulf of Mexico to the tight oil resources throughout North Dakota and Montana. Combined with Canada's oil resources (one of the largest in the world), North America has enormous potential to add new reliable supplies to the market. And, the U.S. has one of the largest and most advanced refinery systems in the world.
But first, the oil needs to get to market. There, we've often seen economics trumped by politics – even as the U.S. economy remains weak. The recent moratorium in the Gulf of Mexico, as well as the decision to deny the permit for the Keystone XL pipeline from Canada to U.S. refineries, are just two examples of U.S. political decisions that serve to keep supplies out of the market.
The economics behind a gallon of gas are pretty straightforward. It's the policies behind access to U.S. energy resources that are less certain – but critical to our energy future.
....And then again, this just might be a bunch of baloney. What do you think, Frank?
Crude oil is up $1.43 in early trading. Lots of contracts early and looks like crude could go higher . Our neighborhood pump price is $2.81.
Interesting thought on the Trans Canada, Keystone pipeline, today Canadian crude is trading roughly $40.00 per barrel under WTI, that's an approximately 45% reduction in price. The two main operators that I market crude and natural gas for are not going to like the price drop that the Canadian crude will bring. They are already getting low price on natural gas, the current natural gas price is 25% of what it should be on a normal gas/oil price ratio.
Our neighborhood Pump price for Regular is $3.09 this morning.
Crude oil is trading down $1.55 at $96.22 this morning. Our neighborhood pump price is $3.29. Gasoline will be down tomorrow if the current market trend holds.
In the SoCal area, gas prices have increased $.10 a gallon in the past week and more than $.55 in the last month. Spokespersons for oil companies and other folks who keep an eye on these things, i.e., the Auto Club and Gas Watchers, say the price increase is for all the usual reasons. ::) One of the usual reasons........Some refineries are shut down in preparation for switching from our usual gas to the summer blend that is mandated for smog control. ???
Hey guys! It's still February!
Sheeesh!
Larryj
We're mostly $3.69ish here, but I found some Hess today for $3.59 and filled up.
Crude oil is trading down $2.10 this morning. If this holds, the pump price should go down. Our neighborhood pump price was $2.58 yesterday. With all of the new drilling, we have crude backed up in many areas as there is not enough pipeline capacity to move it.
Crude Oil is trading down $2.23 this morning, currently at $92.99. Due to the ice and snow I haven't been out this morning to see what the neighborhood gasoline price is.
Crude Oil is trading at $90.68, this morning, down $2.83. Our neighborhood pump price is $3.23 this morning. If the market stays in the current trading range Gasoline will be lower tomorrow.
SoCal stations are selling gas from $3.89 to $4.09 per gallon depending on what flavor you like.
Larryj
Larry a big share of the price difference, CA VS OK is the state Gasoline tax rate, Tax on a Gallon in California is $0.49 in OK it is $0.17. The rest is the higher cost of refining and raw materials. California has the 2nd highest tax rate behind NY which is the highest.
I just came back from an errand and noticed the pump price for regular was $3.17.
Crude oil traded higher today, it was up $1.64, and settled at$101.24. Our local pump price is $2.97, I expect it to be higher by morning.
Crude is trading higher again today, it has traded as high as $103.13, it is currently trading at $102.89, up $1.65. With the problems in Egypt, there is concern that the main channel to move Middle East crude , the Straits Of Hormuz, could be shut down.
Crude Oil settled at $103.22, up $1.98 on the day. Gasoline will be higher tomorrow.
Frank, it already is higher here in the Wichita area. It jumped overnight.
Cat, it is going higher, crude is trading at $105.70, up $1.57 this morning.
CLEAN TECH
EV sales tracker: New record set in June; 1H13 total up 130%. U.S. sales of electric vehicles set a record in June, reaching 8,742
vehicles. (As always, our definition of EVs comprises both all-electric vehicles and plug-in hybrids.) As the Electric Drive
Transportation Association reported earlier this week, sales increased 13% sequentially and 163% y/y. The previous monthly record, 7,754 vehicles, was set in May. In 2012, sales totaled 52,835, an increase of 198%, and equating to market share of 0.4%. Our projections are for sales of 109,000 in 2013 (up 105%) and 190,000 in 2014 (up 75%). In the first half of 2013, sales totaled 41,047, up 130% y/y.
This is good news, I see there are more Windfarms on the drawing boards as well, with improved gas mileage, more Electric and Hybrid Vehicles, more Solar Power and increased Windpower we are improving the atmosphere everyday, hopefully it is not to late to clean it up. In addition all of the aforementioned power sources help to reduce our dependence on Foreign oil.
You're right in there in agreement with Al Gore and Obama.
Quote from: redcliffsw on July 10, 2013, 11:14:22 AM
You're right in there in agreement with Al Gore and Obama.
Red you are right in there with Adolph and Benito if it was up to you we would be dependent on OPEC forever, and completely destroy the atmosphere along with it.
Crude oil settled at $106.52, up $2.99 on the day.
This would be good news if it weren't paid for by tax dollars. Why can't industry do it on their nickle? OH i know its too expensive without subsidy. The public would never accept it nor will they accept it if the true costs are revealed.
8742 cars out of 67 million cars sold this year (Used cars that is) Thats a real dent in the bucket! Sadly the tech is not close to being useable in the near future. Too darned expensive. Unless they can reduce the cost without subsidy, it won't go anywhere, and unless the technology can deliver 1000 mile ranges, it won't be anything more than a local town car. we'll still use petroleum to go cross country and whats the point of having to buy 2 vehicles one for local and one for long distance. Makes no fiscal sense whatsoever.
What needs to be done is for the gooberment to get out of regulation of the industries and let the cost go down. I looked up Nat gas for vehicles and it is absolutely cost prohibitive to even retrofit any vehicle. You would NEVER recoup the cost in any gas savings. Thats a shame and a crime in itself. Why not lower the cost of the conversion to less than 1000 dollars instead of 12,000 dollars and you'd see two things. a increase in sales and conversions and a decrease in pollution.
I'll tell ya what i would love to see is someone come up with a way to capture the energy from the atmosphere, to utilize as a electric source, then take all of that research and plans and tech developed and make it public domain with no patent on it and give it to the world. Then take and start producing units to do the conversion from our existing electric grid to self contained units and sell them for a small fee over cost. they would be very rich in the end and prohibit anyone from siezing the tech and making it unavailable through high prices. The lower price would control the rest and make them all produce it at a low cost.
Quote from: frawin on July 10, 2013, 09:41:34 AM
CLEAN TECH
EV sales tracker: New record set in June; 1H13 total up 130%. U.S. sales of electric vehicles set a record in June, reaching 8,742
vehicles. (As always, our definition of EVs comprises both all-electric vehicles and plug-in hybrids.) As the Electric Drive
Transportation Association reported earlier this week, sales increased 13% sequentially and 163% y/y. The previous monthly record, 7,754 vehicles, was set in May. In 2012, sales totaled 52,835, an increase of 198%, and equating to market share of 0.4%. Our projections are for sales of 109,000 in 2013 (up 105%) and 190,000 in 2014 (up 75%). In the first half of 2013, sales totaled 41,047, up 130% y/y.
This is good news, I see there are more Windfarms on the drawing boards as well, with improved gas mileage, more Electric and Hybrid Vehicles, more Solar Power and increased Windpower we are improving the atmosphere everyday, hopefully it is not to late to clean it up. In addition all of the aforementioned power sources help to reduce our dependence on Foreign oil.
Crude oil is trading over $107.00 this morning. Crude oil inventories come out tomorrow and they are being called lower. In addition the Egyptian civil unrest is threatening more and could really cause crude oil to go much higher.
Crude oil has traded as high as $108.04 this morning, it is currently at $107.82 up $1.34 on the day. The contract volume is low.
Crude oil is trading at $109.11, up $1.07 this morning. If the Northern Leg of the Keystone Pipeline were finished crude would drop as much as $40.00 a barrel fast.
Weekly natural gas storage recap (neutral): The EIA reported an injection of 58 Bcf, below both the Raymond James forecast of an
injection of 68 Bcf and the consensus estimate of 65 Bcf. Gas-in-storage now totals 2,745 Bcf, and the y/y storage deficit of 443 Bcf decreased by 29 to a deficit of 414 Bcf. Excluding weather-related demand, there was 3.1 Bcf/d of additional natural gas added to
storage this week compared to last year, and we have averaged 4.08 Bcf/d looser over the past four weeks.
Their continues to be an increased usage of Natural Gas In Power Plants verses Coal and Fuel Oil. In addition more and more vehicles are being converted to clean Burning and cheap Natural gas. Many of the operators in West Texas that I deal with and have dealt with have converted their field vehicles to Natural Gas, their are Fillup connections at Gas plants all over West Texas.
The riots in Egypt have escalated and if this continues thru to Monday, I would anticipate that Crude oil will be up considerably and higher gasoline prices will follow. Keystone pipeline would be the fastest and and most stable way to lower our energy prices in this country.
Crude oil is trading at $109.09, up $3.17 this morning. The escalating tension in Syria is pushing crude higher. Gasoline will be considerably higher tomorrow if this market holds and/or trades higher. If we make military strikes on the Syrian Government/Military Crude will be much higher.
Crude oil continues to trade higher this morning, it has traded as high as $112.24, up $3.23, currently trading at $109.95 up $0.94. When the Bombing starts in Syria I expect crude to go over $125.00 + a barrel and Gasoline to go over $4.50 Plus a gallon.
Our neighborhood pump price for Gasoline is $2.72 this morning.
Our price here in the Aurora, CO, area for regular is 3.45, high, and 3.11, low.
The high and low stations are six miles apart.
The highest regular price in all the Denver Metro area is 3.79 right in downtown Denver and the low for the Metro area is 3.09.
Might pay me to drive to Oklahoma and fill up....................
Come on Waldo, I will buy your dinner. You can visit your cousin here.
I just came back from running an errand and our neighborhood pump price was lower at $2.69. I am going to fill my truck and Myrna's car.
Chuckle, that would be nice, thank you.
Crude oil settled at $96.77, down $1.43 on the day, our neighborhood pump price is $2.79, That will be lower tomorrow.
(http://staticd.wisegeek.com/images/gas-prices.jpg)
$3.06 for regular in Surprise, AZ.
Crude oil is trading higher today for the first time in several days. It is at $95.02 up $1.65. If this holds gasoline prices will move up.
Gasoline at our neighborhood station is $2.72 per gallon today.
Crude oil is trading down this morning at $94.70, down $0.44. Our neighborhood pump price is $2.71, if the market holds the pump price will be down tonite.
Crude oil is trading up$1.93 at 106.33 this morning. When I started with Phillips 44 years ago crude was $2.73 a barrel at the lease, when the Embargo hit it went to $39.00 a barrel. I predict that if the Keystone Pipeline is completed Crude will drop considerably. Our neighborhood pump price for Regular is $ 3.27 a gallon.
I read some thing recently that between one find and another,such as Permian Basin, we will soon be able to be completely self sufficient for oil. At what price I don't know, but it could get us out of the middle east for good. Any thoughts?i
Quote from: frawin on June 12, 2014, 06:58:21 AM
Crude oil is trading up$1.93 at 106.33 this morning. When I started with Phillips 44 years ago crude was $2.73 a barrel at the lease, when the Embargo hit it went to $39.00 a barrel. I predict that if the Keystone Pipeline is completed Crude will drop considerably. Our neighborhood pump price for Regular is $ 3.27 a gallon.
The traders are pushing crude higher because of the increasing violence in Iraq. If the Iraq production is taken out of the market it will create some shortages.
Crude oil continues to trade higher this morning, it has traded as high as $107.68 overnite. The contract volume is high. Iraq is an important supplier in the crude market and if they are left to fall to the rebels crude will go even higher. Iraq is OPECs no 2 producer.
After all of the news today about Iraq, I went out and filled up while it's still 3.39. Whatcha wanna bet it goes up by at least 10 cents in the next couple of days? Blah.
This just came out on Facebook from KAKE Ch. 10...
GAS TRACKER: "Spotting prices jumping 16 cents a gallon in parts of Wichita tonight - from $3.39 to $3.55 for regular unleaded."
That sure didn't take long!!!!! Thank God I filled up earlier this evening before that happened!!!!
Crude oil is trading at $106.66, down $0.60 this morning. Contract volume is still high. Our local pump price is $3.44. The big question is what action we will take in Iraq, and what action Iran will take and what action the Iraqi military will take.
Crude oil is trading down $0.44 at $105.94. Our. Neighborhood pump price is $3.44 for credit and $3.29 for cash.
Due to all the activity in the Middle East, Crude Oil is trading up $ 1.99 at $103.24,our local pump price is $3.24 a gallon, it will be going up later today. There is a very large Volume of contracts trading today.
Thanks for the head's up...Going to get filled up now!!!!
SoCal........$3.99 to $4.09
Larryj
Larry I think we talked about this before, California has the 2nd highest Total Gasoline tax in the nation, it is made up of 53 cents state tax and 18.4 cents federal for. A total of 71.4cents, in contrast Oklahoma gasoline tax total is 35.4 cents made up of 17 cents State and 18.4 cents Federal. In California's defense they have a lot of Super Highways that cost a lot of money to build and keep up.
I just filled up my truck and then took my wife's Acura MDX and filled it up. I use Reg Ethanol gas in my Truck and it was $3.23 a gallon. I use Non-Etanol gas in my Wife's MDX and it was $3.49 a gallon. The stations here are having little price wars, I saw one station had Ethanol gas at $3.23 on credit card and $3.13 if paid cash. We have about as many Stations that have Ethanol gas as we have that have non-Etanol gas.
Crude Oil settled at $97.35 up $1.77 0n the day. Gasoline will be up tonite and/or tomorrow.
Received this email from a friend....
I ALWAYS check the first gallon before pumping more – simply to MATCH the PRICE (advertised) against the ONE gallon pumped into my car.
I "caught" a SHELL station (here in Mesa, Arizona) that had the price 12 cents per gallon HIGHER than the advertised price on the pump AND the sign out front.
I called the local Department of Agriculture (weights and measures division) from my cell phone immediately, waiting for them to show up. They did, some 20 minutes later.
The Department taped all the pumps, stopping ALL traffic from using the pumps. They (two men) checked all 6 pumps, finding them all "rigged" at a higher price (by 12 cents) per gallon than advertised.
PS – That particular SHELL station was being operated by 2 men from India.
https://www.youtube.com/watch?v=vDen-jinRwk&index=16&list=UUvsk7gzpTPaSmNiB1SyJsMA
Reg gas is $2.59 a gallon at our neighborhood station. The markets are calling crude up.
Gas in Denver metro area at the moment:
Regular: Low, 2.82; high, 3.65
Premium: Low, 3.10; high, 3.79
Elk/Greenwood:
Regular: Howard, 3.19; Severy, 2.99, Moline, ? Longton, ?
Area:
Fredonia, 2.99
Eureka, 2.99
Winfield, 2.96
Sedan, 2.99
El Dorado 2.95
Independence, 3.09
Honolulu, 3.93
Guam, October 14:
(http://i941.photobucket.com/albums/ad256/waldoegray/guam_zps8b1bbd62.jpg) (http://s941.photobucket.com/user/waldoegray/media/guam_zps8b1bbd62.jpg.html)
SoCal prices have dropped over a dollar a gallon and is currently averaging $3.39 at major brand stations and $3.19 at some independents for regular grades.
Larryj
Price of gas around the world per gallon as of April 2014,
Highest in world, Norway, 9.79
Lowest in world, Venezuela, 4 cents
Others:
Netherlands, 9.46
Iran, 1.52
Saudi Arabia 45 cents
China, 4.73
Russia, 3.19
US, 3.69
When Hugo Chavez was alive, he use to brag about ten cents per gallon gas in his country vs the price in the US. Gas apparently dropped another six cents since his death.
http://www.statista.com/statistics/221368/gas-prices-around-the-world/
P&J gas 3.39 today
I served in Germany, '67 to '70.
My memory is getting hazy of that time and place but as I recall we--American military or American military civilian employees--could purchase gas tickets/coupons at the PX that we presented when filling up in a German gas station—one coupon per gallon. For whatever reason the coupons were only good at an Esso station.
The end result was we could buy gas at about 45 cents a gallon while the Germans were paying several times that amount.
The coupons were rationed and I recall having used my monthly allotment up and was running out of gas and had to pay for gas in Marks. I spent the equivalent of $10 and did not get much gas but it was enough that I could get back and forth to work until I was eligible to buy more coupons.
When I started with Phillips Petroleum 44 years ago WTI (sweet crude) was $2.77 a barrel at the lease. In the 70 s and early 1980S it went to $39.00 a barrel. With Ronald Reagan as President it went back to $9.00 a barrel. Then when the OPEC Embargo hit it went to $150.00 a barrel. Now it is at $81.42 a barrel. As a young boy growing up in Howard, the cheapest gas I remember was 17 cents a gallon. Our neighborhood pump price here is $2.94 a gallon.
The USA is the least dependent on Foreign that we have been in 50 to 60 years. There is so much oil coming on in West Texas that it is almost impossible to keep it all moving. The Pipelines are full and a lot of oil is being moved to Cushing via Rail cars. Additionally more use of Windpower, Solar Power, and Natural Gas are lowering our crude oil consumption.
The lowest gas price I can remember was in 1958 when it got down to 14.9 per gallon. That was during a gas war.
There was a small station on US 24, running through Independence, Mo, that was called the One Pump Oil Company. They had one pump and they only had only regular.
Independents would keep their prices two cents below the major companies.
One Pump kept its price one cent below the independents, even during a gas war. I always "filled up" there. Fact is, though, back then I could only afford $1 worth at a time.
Sometime around 1950, I was standing inside a Howard gas station on the west side of K-99 with my Uncle Johnnie Miller. We were talking to a friend of his that was working in the station. Along came a kid on one of those newly imported Vespa motor scooters from Italy. The worker went out to wait on him and the guy wanted five cents worth of gas. When the worker came back in he was laughing out loud, told my uncle what the guy got and then they both started laughing. I was too young at the time to know why they were laughing.
I was out today running errands and noticed I needed gas. I went to my usual Chevron station and began filling the tank before I noticed the price. Two days ago it was at $3.99. Today it was $2.99!
Whoopee!
Another thing I saw.....On one corner in town there used to be a Chevron which I went to on occasion. Then it changed to Shell. Across the street was an Indie. Today I had to go in that direction and noticed that now the Shell station has changed to 76..........and so has the Indie. Two 76 stations across the street from each other! Business must be good.
Larryj
(https://lh4.googleusercontent.com/-L1qP2HgD3mw/TYEWqUFlKYI/AAAAAAAAAO0/3thnm2BHu5w/s1600/Funny+Oil+Drilling+Picture+%28Santa%29.jpg)
The next great financial crash (which many have been anticipating for years) is rapidly approaching. So many of the same things that happened last time are happening again. This includes a crash in the price of oil. In the months prior to the last stock market collapse, the price of oil began plummeting dramatically in the summer of 2008. This was an "early warning signal" that something was deeply amiss in the financial world...(http://theeconomiccollapseblog.com/wp-content/uploads/2014/11/Oil-Price-2007-2008-425x282.png)
(http://www.autodriller.net/_Media/oil-man_med.jpeg)
Many people assume that a lower price for oil is good for the economy, but the exact opposite is actually true. The oil industry has become absolutely critical to the U.S. and Canadian economies. And in recent years, the "shale oil boom" has been one of the only bright spots for the United States. If the shale oil industry starts to fail because of lower prices, a lot of the boom areas all over the nation are going to go bust really quickly and a lot of the financial institutions that were backing these projects are going to feel an immense amount of pain.
Unfortunately for us, the "shale oil revolution" simply does not work at 80 dollars a barrel.
And it certainly does not work at 70 dollars a barrel.
As I write this, U.S. crude is sitting at about 66 dollars a barrel due to OPEC's recent decision to not cut output.
That is the lowest price for U.S. crude since September 2009.
So just like we saw during the summer of 2008, crude oil prices are collapsing once again. The chart below comes from the Federal Reserve, but it is a few days out of date.
Now that the price of crude is down to about 66 dollars, you have to imagine the price actually going below the bottom of this chart...(http://theeconomiccollapseblog.com/wp-content/uploads/2014/11/Oil-Price-2013-2014-425x282.png)
Needless to say, this price collapse is having a huge impact on the stock prices of oil companies. The following information about what happened in the markets on Friday comes from Business Insider...
Here were some of the biggest losers on Friday 11/28/14:
•BP (BP), down 5%
•Royal Dutch Shell (RDS.A), down 6%
•Total (TOT), down 5%
•Statoil (STO), down 14%
•Exxon Mobil (XOM), down 5%
•ConocoPhillips (COP), down 9%
•Marathon Oil (MRO), down 13%
•Occidental Petroleum (OXY), down 7%
•Anadarko Petroleum (APC), down 14%
•Linn Energy (LINE), down 13%
•Whiting Petroleum (WLL), down 28%
•Oasis Petroleum (OAS), down 32%
•Kodiak Oil & Gas (KOG), down 28%
And this list goes on.
But this could just be the beginning of the oil price declines.
The most powerful oil official in Russia believes that the price of oil could fall below $60 next year...Russia's most powerful oil official Igor Sechin said in an interview with an Austrian newspaper that oil prices could fall below $60 by mid-way through next year.
Sechin, chief executive of Rosneft, Russia's largest oil producer, also said U.S. oil production would fall after 2025 and that an oil market council should be created to monitor prices, the same day the OPEC cartel met in Vienna and left its output targets unchanged.
"We expect that a fall in the price to $60 and below is possible, but only during the first half, or rather by the end of the first half (of next year)," Sechin told the Die Presse newspaper.And one oil industry analyst just told CNBC that he believes that the price of oil could ultimately plunge as low as $35 a barrel...
"When you look at the second half of 2015, that's when you see oil beginning to dwarf demand by about a million, a million and a half barrels a day," he said. "Thirty-five dollars is a possibility if they don't get an agreement next spring because that's when the oil really starts to build and you can have a billion barrels of oil with really no place to put it."
...By Michael Snyder
These figures are supposed to be from 20 minutes ago:
P&J, Howard 1.99 gallon regular
Tripco, Severy 1.88 gallon regular
Low here in Centennial, CO is 1.87 with the highest at 2.29 for regular. For whatever reason (location, location, location, chuckle) there is always a similar large spread across town.
They are accurate, as far as I know. Went to Wichita yesterday - gas prices there were running $1.72 to $1.75 a gallon, with one place in Andover selling for $1.69 cash only.
Increase In Federal Gas Tax On The Table Instead Of A Federal Tax On Green Energy
(http://weaselzippers.us/wp-content/uploads/2015/01/Gas-Tax-550x413.jpg)
(The Feds need to release control of the purse strings for the interstate highways, let the states keep the revenue and disperse the funds as needed. The RINOs have become Jimmy Carter and his 55 MPH speed limit. Why the heck do Hawaii and Alaska have interstate highways? Quick answer, it's for the pork and returning money back to the states...)Via Washington Examiner http://www.washingtonexaminer.com/increase-in-federal-gas-tax-on-the-table/article/2558461?custom_click=rss
Lawmakers on both sides of the aisle say raising the gasoline tax for the first time in more than 20 years to shore up the insolvent federal Highway Trust Fund is possible this year.
The reasons for the interest in raising the gas tax are twofold: The Highway Trust Fund, which pays for fixing the nation's roads and bridges, is in dire shape — it took a $9.7 billion transfer from the general Treasury to keep it operating through fiscal 2014 — and plummeting oil prices have lowered pump prices to an average of $2.17 per gallon nationwide, according to the AAA motor club.
Republicans, while not explicitly endorsing an increase in the gas tax, for the first time in years have said that it's a legitimate option. The current highway funding bill expires at the end of May, and congressional leaders say they're determined to avoid another short-term patch.
"I don't think we take anything off the table at this point," Sen. John Thune, R-S.D., said last week on "Fox News Sunday," noting the fund faces a severe shortfall. The Congressional Budget Office projected the fund would be $120 billion in the hole in 2024.
Boom Goes The Dynamite:(http://theeconomiccollapseblog.com/wp-content/uploads/2015/01/Boom-Goes-The-Dynamite-Public-Domain.jpg)
The Crashing Price Of Oil Is Going To Rip The Global Economy To Shreds
By Michael Snyder, on January 12th, 2015
If you were waiting for a "black swan event" to come along and devastate the global economy, you don't have to wait any longer. As I write this, the price of U.S. oil is sitting at $45.76 a barrel. It has fallen by more than 60 dollars a barrel since June. There is only one other time in history when we have seen anything like this happen before. That was in 2008, just prior to the worst financial crisis since the Great Depression. But following the financial crisis of 2008, the price of oil rebounded fairly rapidly. As you will see below, there are very strong reasons to believe that it will not happen this time. And the longer the price of oil stays this low, the worse our problems are going to get. At a price of less than $50 a barrel, it is just a matter of time before we see a huge wave of energy company bankruptcies, massive job losses, a junk bond crash followed by a stock market crash, and a crisis in commodity derivatives unlike anything that we have ever seen before. So let's hope that a very unlikely miracle happens and the price of oil rebounds substantially in the months ahead. Because if not, the price of oil is going to absolutely rip the global economy to shreds.
What amazes me is that there are still many economic "experts" in the mainstream media that are proclaiming that the collapse in the price of oil is going to be a good thing for the U.S. economy.
The only precedent that we can compare the current crash to is the oil price collapse of 2008. You can see both crashes on the chart below...
Price Of Oil Since 2006
(http://theeconomiccollapseblog.com/wp-content/uploads/2015/01/Price-Of-Oil-Since-2006-425x282.png)
If rapidly falling oil prices are good economic news, that collapse should have pushed the U.S. economy into overdrive.
But that didn't happen, did it? Instead, we plunged into the deepest recession that we have seen since the Great Depression.
And unless there is a miracle rebound in the price of oil now, we are going to experience something similar this time.
Already, we are seeing oil rigs shut down at a staggering pace. The following is from Bloomberg...U.S. oil drillers laid down the most rigs in the fourth quarter since 2009. And things are about to get much worse.
The rig count fell by 93 in the three months through Dec. 26, and lost another 17 last week, Baker Hughes Inc. data show. About 200 more will be idled over the next quarter as U.S. oil explorers make good on their promises to curb spending, according to Moody's Corp.But that was just the beginning of the carnage.
61 more oil rigs shut down last week alone, and hundreds more are being projected to shut down in the months ahead.
For those that cannot connect the dots, that is going to translate into the loss of large numbers of good paying jobs. Just check out what is happening in Texas...A few days ago, Helmerich & Payne, announced that it would idle 50 more drilling rigs in February, after having already idled 11 rigs. Each rig accounts for about 100 jobs. This will cut its shale drilling activities by 20%. The other two large drillers, Nabors Industries and Patterson-UTI Energy are on a similar program. All three combined are "likely to cut approximately 15,000 jobs out of the 50,000 people they currently employ," said Oilpro Managing Director Joseph Triepke.Unfortunately, this crisis will not just be localized to states such as Texas. There are tens of thousands of small and mid-size firms that will be affected.
The following is from a recent CNBC report...More than 20,000 small and midsize firms drive the "hydrocarbon revolution" in the U.S. that has helped the oil and gas industry thrive in recent years, and they produce more than 75 percent of the nation's oil and gas output, according to the Manhattan Institute for Policy Research's February 2014 Power & Growth Initiative Report. The Manhattan Institute is a conservative think tank in New York City.
A sustained decline in prices could lead to layoffs at these firms, say experts. "The energy industry has been one of the job-growth areas leading us out of the recession," said Chad Mabry, a Houston-based analyst in the energy and natural resources research department of boutique investment bank MLV & Co. in New York City. "In 2015, that changes in this price environment," he said. "We're probably going to see some job losses on a fairy significant scale if this keeps up."If the price of oil makes a major comeback, the carnage will ultimately not be that bad.
But if it stays at this level or keeps going down for an extended period of time, it is inevitable that a whole bunch of those firms will go bankrupt and their debt will go bad.
That would mean a
junk bond crash unlike anything that Wall Street has ever experienced.
And as I have written about previously, a stock market crash almost always follows a junk bond crash.
These are things that happened during the last financial crisis and that are repeating again right in front of our eyes.
Another thing that happened in 2008 that is happening again is a crash in industrial commodity prices.
At this point, industrial commodity prices have hit a 12 year low. I am talking about industrial commodities such as copper, iron ore, steel and aluminum. This is a huge sign that global economic activity is slowing down and that big trouble is on the way.
So what is driving this? The following excerpt from a recent Zero Hedge article gives us a clue...Globally there are over $9 trillion worth of borrowed US Dollars in the financial system. When you borrow in US Dollars, you are effectively SHORTING the US Dollar.
Which means that when the US Dollar rallies, your returns implode regardless of where you invested the borrowed money (another currency, stocks, oil, infrastructure projects, derivatives).
Take a look at commodities. Globally, there are over $22 TRILLION worth of derivatives trades involving commodities. ALL of these were at risk of blowing up if the US Dollar rallied.
Unfortunately, starting in mid-2014, it did in a big way.
This move in the US Dollar imploded those derivatives trades. If you want an explanation for why commodities are crashing (aside from the fact the global economy is slowing) this is it.Once again, much of this could be avoided if the price of oil starts going back up substantially.
Unfortunately, that does not appear likely. In fact, many of the big banks are projecting that it could go even lower...Goldman Sachs, CitiGroup, Societe General and Commerzbank are among the latest investment banks to reduce crude oil price estimates, and without production cuts, there appears to be more room for lower prices.
"We're going to keep on going lower," says industry analyst Brian Milne of energy manager Schneider Electric. "Even with fresher new lows, there's still more downside."OPEC could stabilize global oil prices with a single announcement, but so far OPEC has refused to do this.
Many believe that the OPEC countries actually want the price of oil to fall for competitive reasons...Representatives of Saudi Arabia, the United Arab Emirates and Kuwait stressed a dozen times in the past six weeks that the group won't curb output to halt the biggest drop in crude since 2008. Qatar's estimate for the global oversupply is among the biggest of any producing country. These countries actually want — and are achieving — further price declines as part of an attempt to hasten cutbacks by U.S. shale drillers, according to Barclays Plc and Commerzbank AG.The oil producing countries in the Middle East seem to be settling in for the long haul. In fact, one prominent Saudi prince made headlines all over the world this week when he said that
"I'm sure we're never going to see $100 anymore."Never is a very strong word.
Could there be such a massive worldwide oil glut going on right now that the price of oil will never get that high again?
Well, without a doubt there is a huge amount of unsold oil floating around out there at the moment.
It has gotten so bad that some big trading companies are actually hiring supertankers to store large quantities of unsold crude oil at sea...Some of the world's largest oil traders have this week hired supertankers to store crude at sea, marking a milestone in the build-up of the global glut.
Trading firms including Vitol, Trafiguraand energy major Shell have all booked crude tankers for up to 12 months, freight brokers and shipping sources told Reuters.
They said the flurry of long-term bookings was unusual and suggested traders could use the vessels to store excess crude at sea until prices rebound, repeating a popular 2009 trading gambit when prices last crashed.The fundamentals for the price of oil are so much worse than they were back in 2008.
We could potentially be looking at
sub-$50 oil for an extended period of time.
If that is indeed the case, there will be catastrophic damage to the global economy and to the global financial system.
So hold on to your hats, because it looks like we are going to be in for quite a bumpy ride in 2015.
THE WTI CRUDE FUTURES TODAY OPENED AT $29.64, PHILLIPS POSTING FOR WTI CRUDE IS $25.66, WTS is $23.23. I filled up at Market Street, it is a Popular Grocery Chain here, if you get a Market Street Card, you save BIG on EVERYTHING. I filled up yesterday, I filled with Regular Gas, the Regular Pump Price was $1,59 at Market Street, with my Discount it was $1,39. At one of the local Valero Stations it was $1,69 that is a saving of 30 cents a gallon, I WILL TAKE THAT ANY DAY.. When Oil Prices got $50.00 to $60.00 Regular Gasoline was Twice as High as it is now, The big drop in Oil Prices is Because when Oil got so REALLY HIGH and Drilling was at a VERY FAST PACE, there was far more Oil for the refiners, than they needed. In addition, with all of the New Crude coming on, the OPEC Members, Mainly the Saudis could not sell their Crude to the US Refiners. The Saudis have made the Statement that they will hold the Price down and Drop it in the Future EVER TIME US drilling picks up and keeps them out of the Market. In the CRUDE SUPPLY WORLD, WHAT THE SAUDIS WANT THE SAUDIS GET. WE NEED RONALD REAGAN, when he was first elected I was Area Crude Oil Supply Director For Phillips Petroleum in Midland Texas, at that Time Crude Oil was $39.00 a Barrel, by 1986 it was down to $9.00 a Barrel. When I started with Phillips in 1970, Oil at the Lease was $2.70 a Barrel, since then it has been as High as $150.00 a Barrel that is a Spread of $147.00. WOW that does not seem possible, but it happened. Well I need to get to work, I still market Crude Oil and Natural Gas for some West Texas Operators. My company Name is PetroMark Services. I enjoy, the contact with Oil Operators, and besides it, KEEPS ME OUT OF MYRNA'S HAIR.
So Frank, if we have a surplus of our own oil why are we still buying from the Saudis? Why in the world buy from someone else when we do not need to.
Jane, the Major Refiners well remember the OPEC Embargo Days when they did not have enough oil to Run Their Refineries at Full Capacity. There is a Surplus of Domestic Oil now, but that can change. There are More Cars, and Tractor Trailer Rigs on the Road today that ever before in History and more being added everyday. The price of oil at the lease today was in the $30.00 range. Listed below is the YEAR, Price at the Lease and the price adjusted for inflation.
YEAR PRICE AT THE LEASE PRICE AJUSTED FOR INFLATION
1946 $1.63 $19.41
1957 $3.14 $26.38
1970 $3.39 $20.63
1980 $37.42 $107.36
2013 $91.17 $92.40
This gives you an idea how Oil Prices have Bounced around over the years. There is no doubt in my mind that Oil will go up and down as it always has, and the available supply will Fluctuate. There is a lot of talk about Vehicles that do or will burn little or no Petroleum Based Fuels, that is probably coming, but it will be a LONG TIME before there are very many on the road. My Grandchildren and Great Grandchildren will see it but not Myrna and I and Probably you and Rex won't. Stop and see us in Prosper, you can drive my 1929 Model A and my 1957 T Bird, and I will fill you up with Gas and Myrna will fill you up with Food.
Oil you buy for your vehicle doesn't seem to have gone down like the price of gas.
Frank, do you know when they put a stop to the pumpers dumping the salt water from the gun barrel out on the ground? A lot of the old tank batteries have severe erosion around them caused by it.
Bull they were still doing it when I left Howard in 1965. I went to work for Phillips in 1970 Traveled All over the World until 1980 and then Took a Job with Phillips in Midland Texas as Crude Oil Supply Director. The Texas Railroad Commission made all of the rules regarding Trucking and Transportation of all kinds Pipelines etc. It was a Big Fine on The Operator if they caught anyone Contaminating the Surface around any Tank, Pipeline Connection or anywhere on a Lease PERIOD.
Bull I should have added that there are Big Areas in West Texas that are totally Barren from Saltwater that was run out on the Ground. Those areas will be Barren until the end of Time. Fortunately the Texas RRC does a great Job of Checking the Tank Batteries and Pipelines. Being from Rural Kansas it makes me so sad to see all of the Polluntion caused by the Stupidity and Careless Pollution caused by Saltwater and Oil Leaks. I worked on Drilling Rigs in Elk County in the Early 60s and unfortunately there was a lot of Damage caused by the Slush Pits that were made for Recirculating the drilling Mud or Fluid. Some of the old timers might Remember JR Wap Fester, I was a Floor Hand on his Rig it was in terrible Condition, we had to use a long piece of Pipe to stand on to hold the Brake while we added another Joint of Drill Pipe. I also Worked on Mendenhalls Rigs and they were First Class. In fact I was Working on one of Mendenhalls Rigs in Northeren Kansas when I called My Wife of 52 GREAT YEARS and told her I was coming home to Howard and we were getting Married.
My grandfather, that I never met because he died from being exposed to mustard gas in WW1, worked in the oil fields around El Dorado. My mother always regreted that his collection of tools, mostly German made and high quality, were sold at the estate sale. She said that if she had known she would have a son with a talent for mechanic work, she would have kept them.
It truly is sad to see the land that has been exploited and ruined by those who didn't care what they did to it as long as they made money. Some of our landowners have worked to repair some of it, best done by bringing in dirt from pond digging and covering the tainted soil. Otherwise, as you say, it will never recover. Much like the effects of overgrazing, creating infestation of cedar trees that drink 30 gallons of water a day, as well as locust, buck brush, etc. It takes much work to restore the tallgrass. At least the cities haven't managed to stop us from burning, perhaps the best tool we have. Where we have gotten rid of the cedars, the springs have come back to life.
The damage to the streams and land from saltwater and sludge was going full blast back in the 1950s and 1960s. Back in about 1955 there were at least 4 oil producers that ran a LOT of saltwater down Clear Creek out 7 and 8 miles west of Howard. They ran so much down the creek that it killed the fish and some cattle. I still remember as a small boy my Dad going up the main hill that goes to the Windfarm (Killdeer Road) and stopping at the tank battery and gun barrel there. He stuck out his cupped hand under the pipe there and tasted the clear water squirting on the ground and running down the hill. It was strong saltwater. After he got done with a cussin fit, he said get in the truck and we headed for home. He had my Mom wash up a couple of already clean pint canning jars and we went back up the hill and he filled the two jars with the saltwater and dropped me off at the house and he went on to Chanute to the State agency that oversees oilfield disposal laws.
A fairly short time later he got Noel Mullendore, a Howard attorney, to file suit against Elk Petroleum Company, Denton Oil Company, Cites Service gas Company, and, I believe, the last one was Conoco Oil for cattle damage from saltwater. He and Noel won the lawsuit and the oil companies were to build him two deep ponds for water and pay for the cattle. Harold Howell took his dozer and built the ponds. Everyone paid their fair share except Billy Denton who refused to pay. Dad submitted a bill to the estate of Billy Denton and Guy Morgan Denton, estate executor, made sure the court assessment was finally paid. End of story as best I can remember. I've got another saltwater story from the Sixties that I'll put up later.
Quote from: dutch on March 01, 2016, 09:24:01 PM
The damage to the streams and land from saltwater and sludge was going full blast back in the 1950s and 1960s. Back in about 1955 there were at least 4 oil producers that ran a LOT of saltwater down Clear Creek out 7 and 8 miles west of Howard. They ran so much down the creek that it killed the fish and some cattle. I still remember as a small boy my Dad going up the main hill that goes to the Windfarm (Killdeer Road) and stopping at the tank battery and gun barrel there. He stuck out his cupped hand under the pipe there and tasted the clear water squirting on the ground and running down the hill. It was strong saltwater. After he got done with a cussin fit, he said get in the truck and we headed for home. He had my Mom wash up a couple of already clean pint canning jars and we went back up the hill and he filled the two jars with the saltwater and dropped me off at the house and he went on to Chanute to the State agency that oversees oilfield disposal laws.
A fairly short time later he got Noel Mullendore, a Howard attorney, to file suit against Elk Petroleum Company, Denton Oil Company, Cites Service gas Company, and, I believe, the last one was Conoco Oil for cattle damage from saltwater. He and Noel won the lawsuit and the oil companies were to build him two deep ponds for water and pay for the cattle. Harold Howell took his dozer and built the ponds. Everyone paid their fair share except Billy Denton who refused to pay. Dad submitted a bill to the estate of Billy Denton and Guy Morgan Denton, estate executor, made sure the court assessment was finally paid. End of story as best I can remember. I've got another saltwater story from the Sixties that I'll put up later.
There's probably a lot of saltwater recollections in eastern Kansas. Got some myself.
A saltwater spill would be front page news nowadays.
Quote from: frawin on March 01, 2016, 05:46:25 AM
Bull I should have added that there are Big Areas in West Texas that are totally Barren from Saltwater that was run out on the Ground. Those areas will be Barren until the end of Time. Fortunately the Texas RRC does a great Job of Checking the Tank Batteries and Pipelines. Being from Rural Kansas it makes me so sad to see all of the Polluntion caused by the Stupidity and Careless Pollution caused by Saltwater and Oil Leaks. I worked on Drilling Rigs in Elk County in the Early 60s and unfortunately there was a lot of Damage caused by the Slush Pits that were made for Recirculating the drilling Mud or Fluid. Some of the old timers might Remember JR Wap Fester, I was a Floor Hand on his Rig it was in terrible Condition, we had to use a long piece of Pipe to stand on to hold the Brake while we added another Joint of Drill Pipe. I also Worked on Mendenhalls Rigs and they were First Class. In fact I was Working on one of Mendenhalls Rigs in Northeren Kansas when I called My Wife of 52 GREAT YEARS and told her I was coming home to Howard and we were getting Married.
Fester - hadn't heard that name for a long time. That's going way back.