Better Fill up today

[Rudy Taylor]

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.

[frawin]

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.

[frawin]

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.

[Rudy Taylor]

Thanks, Frank.

[srkruzich]

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. 

[Diane Amberg]

Be sure to let the fire company know where you live.

[srkruzich]

Be sure to let the fire company know where you live.

Fire???

Well woodgas is a pretty safe method of fueling !!    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.   OR if you happen to see a woodchipper behind a power company truck, you can fill up quite fast that way too

[frawin]

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.

[frawin]

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 .

[frawin]

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.