Oil Slick Stuff

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This is surprising???? More carpoolers, people selling gas-guzzlers and buying cars that give better gas mileage, buying cycles, etc. Of course the gasoline inventory is going to grow....people are using less. DUH!:blink::nuts:
 
luv2read said:
This is surprising???? More carpoolers, people selling gas-guzzlers and buying cars that give better gas mileage, buying cycles, etc. Of course the gasoline inventory is going to grow....people are using less. DUH!:blink::nuts:
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Good thought, maybe it's working? What happened last week? :cool:
 
LOL and the market tanks on news that oil and gasoline supplies are bigger than expected! Confirms my theory that oil stocks are supporting the market right now.
 
nnuut said:
Good thought, maybe it's working? What happened last week? :cool:
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I dunno...what happened last week? ;)

I was at a City Council meeting last night where they decided to raise fees on all services because fuel prices for the city equipment are eating up the budget. Also talk of raising sales and property taxes.
 
You know I don't mind at all if they raise taxes when forced to do it because of higher prices, BUT most of the time they don't lower TAXES when prices go back down!!:nuts:
 
"We got a little boost off the crude inventory numbers - there is not a crude shortage right now, it's a refinery issue, there is no point in refining if they can't sell it at a profit, so it's backing up and going into inventory," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
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Remember an article last month where they decided to shut in refineries for "maintenance" because the price of oil was so high it wasn't profitable to refine it so "this is a good time to do maintenance"? Right before the summer driving season when they should be building gasoline inventory to meet demand! See why price controls on gasoline are the first step to fixing this? Market speculation and price-fixing by oil companies are driving prices up, not supply/demand. People are buying less gasoline so companies are going to stop refining it until the demand grows and they can raise prices some more. The surplus oil won't remain in inventory, either. They will just sell it to China, Japan and India, then they will claim an oil "shortage" in US inventory so they can raise the price of oil. Crooks!
 
You hit the nail on the head Luv2read!! Crooks!!:nuts:
Looks like we were being jerked around a little this morning?:suspicious:
AP
Oil waffles on mixed government inventory report
Wednesday May 7, 11:58 am ET
By John Wilen, AP Business Writer

Oil prices waffle after Energy Department reports rising gasoline supplies and demand


NEW YORK (AP) -- Oil futures rose to a new record Wednesday, then seesawed after the Energy Department offered a mixed picture of the nation's petroleum supplies. At the pump, gas prices rose for the first time since last week.
The department's Energy Information Administration said in a weekly report that gasoline demand rose slightly last week while supplies of distillate fuels fell unexpectedly. However, the EIA also said crude inventories rose much more than analysts predicted, and gasoline supplies increased when analysts forecast a decline.
The result was a market that waffled as traders were torn between relief that oil and gasoline supplies are rising and worries about rising demand and falling distillate stockpiles.
In the minutes after the report was released, light, sweet crude for June delivery fell by more than a dollar, then shot to a new trading record of $122.81 on the New York Mercantile Exchange. In later trading, futures fell 27 cents to $121.57 a barrel.
"It shows you that this market ... at times just ignores bearish news," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. Flynn said gasoline demand should be rising much faster this time of year, and argued that the energy market should be more focused on rising crude and gasoline supplies.
At the pump, meanwhile, the average national price of a gallon of regular gas rose Wednesday for the first time since last week, adding 0.8 cent to $3.618, according to a survey of stations by AAA and the Oil Price Information Service. Gas prices are back within a cent of the record $3.623 a gallon set last week, and are expected to rise to a monthly average of $3.73 a gallon next month, according to the latest Energy Department forecast.
Some analysts predict prices will rise to a national average of $4 in coming weeks; prices are already that high in some areas, including parts of Hawaii and California.
Diesel fuel also rose Wednesday, adding half a cent to a national average of $4.242 a gallon, within a penny of the record of $4.251 set May 1. While high gas prices are hitting consumers at the pump, high diesel prices are hurting them in grocery and retail stores.
"We must pass some of these costs through to our customers, which ultimately translate(s) into higher prices on the store shelves," said Mike Card, president of trucking firm Combined Transport Inc., of Central Point, Ore., in Senate testimony on Wednesday.
Gas prices tend to lag the futures market, and fell slightly in recent days due to a nearly $10 decline in oil prices last week. But crude futures have rebounded sharply since then, and gas prices are responding by also rising. Analysts and the EIA expect gas prices to decline over the summer after peaking in late May or June; that's the pattern gas prices follow most years. Of course, this is anything but a normal year -- crude oil prices have nearly doubled in the past 12 months.
"All bets are off if oil keeps going up," Flynn said. "Gas prices could keep rising."
Oil prices have risen in recent months on a mixture of concerns about supply disruptions in Nigeria and the Middle East amid growing demand in fast-growing nations such as China and India. But the dollar's protracted decline against the euro and other foreign currencies has also played a major role in oil's rise by attracting investors looking for a hedge against inflation. The dollar gained ground Wednesday.
Oil's rise over the course of this decade has led to record spending on drilling and equipping wells in the U.S. A new American Petroleum Institute survey says industry spending on wells jumped 44 percent in 2006 to nearly $110 billion.
In other Nymex trading Wednesday, June gasoline futures fell 1.5 cents to $3.0905 a gallon, while June heating oil futures rose 2.78 to $3.3813 a gallon. June natural gas futures rose 15 cents to $11.30 per 1,000 cubic feet. In London, June Brent crude futures rose 37 cents to $120.68 a barrel on the ICE Futures exchange.
http://biz.yahoo.com/ap/080507/oil_prices.html
 
Crude futures climb past $123 to another record
By Myra P. Saefong
Last update: 1:24 p.m. EDT May 7, 2008
SAN FRANCISCO (MarketWatch) -- June crude traded as high as $123.35 a barrel in New York and $123.56 in electronic trading Wednesday -- both fresh record levels for crude futures. A U.S. government report said crude supplies rose a third week, but refinery activity declined. June crude was last up $1.16 at $123
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SPECULATORS!!!!:mad:

And the administration is doing what industry tells it to do ....whatever will maximize profit. Bogus numbers!

Why would price go UP if supply is UP?
 
Hey James,
DOE says gas will "peak" at $3.73/gal next month. You're ahead of the curve.:blink:

Oh, bigger and better news! Who knew! SURPRISE, YOU CROOKS!

http://www.smartmoney.com/breaking-news/index.cfm?story=20080507085605

James48843 said:
gas locally jumped 15 cents this afternoon, to a local average of 3.89 in my area.
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They didn't pay $123 a gallon for what's being pumped so there's no reason for that increase...it's pure gouging based on today's news. Doing whatever the government will let them get away with. Report them to your state regulator.
 
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Retail gas prices soar to fresh record

With nationwide prices at an all-time high of $3.645 a gallon, drivers now pay 20% more than they did last year.

Last Updated: May 8, 2008: 6:28 AM EDT

Retail gas prices have hit a new record at $3.645 a gallon, according to AAA.

NEW YORK (CNNMoney.com) -- Retail gasoline prices have jumped to new record high, auto group AAA's Web site showed Thursday.
The national average price for a gallon of regular unleaded gasoline rose to $3.645, surpassing the previous record set May 1.
Gas prices have been marching steadily higher since the start of the year.
Drivers now pay 20% more than they did a year ago, when a gallon of gas cost on average $3.034.
The price of gas has been pushed up by record high crude prices. Crude futures closed at an all-time settlement high of $123.53 a barrel Wednesday.
http://money.cnn.com/2008/05/08/news/economy/gas_prices/index.htm?postversion=2008050806
 
Expect a Jolt When Opening the Electric Bill

by Rebecca Smith
Thursday, May 1, 2008provided by
Surging fuel costs are about to inflict more pain on consumers, this time in the form of rapidly rising electricity bills.
Power prices are being pushed up across the U.S., with increases sometimes soaring into double digits, due to costlier coal and natural gas, the fuels used to make 70% of the nation's electricity.

It usually takes awhile for fuel-price swings to show up in electricity bills because utilities typically buy most of what they need under long-term arrangements. As older contracts expire, though, utilities are facing the reality of higher costs.
Proposed electricity-rate increases are cropping up all over the country. Potomac Edison Co., a unit of Allegheny Energy Inc., is asking Virginia regulators for permission to raise rates in July by 29%. In its rate request, the utility cited higher fuel and purchased-power costs.[more, but not for less]
http://finance.yahoo.com/family-home/article/105023/Expect-a-Jolt-When-Opening-the-Electric-Bill
 
Well the crooks lied again. They said they were shutting in refineries last month for "maintenance" because the price of oil was so high they couldn't produce gasoline at a profit, so "it's a good time to do maintenance." Right before summer driving season when they should be building stocks. Here's what they were really up to.

http://www.marketwatch.com/news/story/diesel-prices-full-throttle-push/story.aspx?guid=%7bA9A6465F-F30F-4466-91C7-ABFD1FCB57DE%7d&print=true&dist=printTop

Refiners amp up diesel output, limit gasoline flows
Diesel prices outpace gasoline as demand increases from Europe, elsewhere

By Moming Zhou, MarketWatch
Last update: 6:12 p.m. EDT May 7, 2008
SAN FRANCISCO (MarketWatch) -- U.S. refiners have been increasing their diesel production in recent weeks while limiting gasoline output, responding to an unusual price gap between the two fuels. But more diesel output can hardly dampen record-high diesel prices in the short term, analysts said.

Data from the Department of Energy showed Wednesday that motor gasoline production fell last week from a month ago, while distillates production, which is made up mostly of diesel and heating oil, increased.

Driving diesel output higher, retail diesel prices have climbed to more than 60 cents higher than gasoline prices, stoked by strong global demand, especially from Europe, where diesel use for autos is more common than in the U.S. While the production costs are almost the same, diesel prices are typically cheaper than gasoline due to less demand.

Higher prices for diesel and heating oil have encouraged refiners to produce more of these distillate fuels. A barrel of crude yields a certain amount of petroleum products, and refiners can replace some of their gasoline output with diesel, although in a limited range.

"Currently underway in the United States and around the globe refiners are investing to maximize diesel capacity...for obvious economic reasons," said Ryan Todd, an analyst at Deutsche Bank, in testimony prepared for a Tuesday House hearing. Lawmakers are ramping up scrutiny on the oil industry after higher diesel prices triggered outcries from U.S. truck drivers.

In the wholesale spot markets, regular gasoline traded at $2.84 a gallon in the Gulf Coast in the week ended May 2, or 25% higher than a year ago, while diesel surged nearly 70% from a year ago to $3.28 a gallon, according to the Energy Information Administration, the statistics arm of the Energy Department. Crude wholesale prices at Cushing, Okla., a key crude-oil delivery point, were at $115.42 a barrel.

The spread between wholesale crude and diesel prices, or the profit margin refiners can expect to make from producing one gallon of diesel, has widened to 54 cents a gallon in the week ended May 2. For gasoline, it's narrowed to about 9 cents. A barrel of crude yields 42 gallons of petroleum products, most of them gasoline, diesel and heating oil. The huge spread difference has encouraged refiners to reduce gasoline production and increase diesel output.

In the week ended May 2, U.S. refiners produced 4.23 million barrels a day of distillates, or 250,000 barrels a day more compared with a month ago, EIA reported Wednesday. Gasoline output fell to 8.68 million barrels a day, or 220,000 barrels less than a month ago.

While rising diesel production should in theory reduce prices, it may fail to offset strong demand and tight inventories.

"Gasoline refinery margins are very weak," said Linda Rafield, an analyst at energy information provider Platts. "Therefore refiners will choose instead to increase distillates production rather than gasoline."

Still, "while refining margins favor distillate production over gasoline output, prices are not apt to retreat unless there is a major shift in supply/demand balances," she added.

European demand
Demand from Europe, China and India has been pushing up diesel prices, encouraging U.S. refiners to export more. That trend is likely to continue for the foreseeable future.

Europe's demand for diesel climbed 3% in the past year to 4.3 million barrels per day in February, compared with gasoline consumption of 2.3 million, according to the Paris-based International Energy Agency, an energy adviser to 27 developed countries.

And it's still expected to rise, thanks to efforts to build more cars with diesel engines that are usually more fuel-efficient.

High demand and prices in Europe have encouraged U.S. exports, furthering tightening domestic markets. In February, U.S. distillate fuel exports averaged more than 400,000 barrels a day, or nearly 10% of the country's production. Gasoline exports in the same month only accounted for about 2% of the output.

These exports have contributed to tight domestic supplies. Distillate stocks are near the bottom of the five-year range, according to EIA data. Gasoline inventories, though have recently fallen sharply, are still in the upper half of their five-year average range.

Meanwhile, diesel demand in China and India has also seen fast increases as the countries expand their economic growth, putting more diesel-power trucks on the road.

"Strong world demand is expected to maintain tight distillate supply-demand balances, thereby limiting U.S. imports and potentially encouraging more exports," EIA said in a recent report. "Hence, distillate prices may remain high due to both high crude oil prices and high wholesale prices relative to crude oil."

Diesel fuel retail prices are likely to average $3.94 per gallon this year, the EIA said in a monthly report released Tuesday. For gasoline, EIA projected regular-grade motor gasoline retail prices to average $3.52 per gallon this year.

On Wednesday, retail diesel prices touched $4.242 a gallon, while regular gasoline stood at $3.618, according to AAA's Daily Fuel Gauge Report.

Silver lining for refiners
Higher prices for diesel and expanded production are helping cushion refiners, which have seen profit margins evaporate as crude-oil prices pushed into record territory, outpacing the rise in gasoline prices. Valero Energy Corp., the nation's largest refiner, reported at the end of April its net income tumbled 77% in the first quarter. But the company said higher margins on diesel partially offset weaker margins on gasoline. "We continue to benefit from a very solid on-road diesel market," Valero said in a news release.

While it's difficult to expand diesel production in the short term, oil companies are investing to raise diesel capacity past the end of this decade. U.S. refiners "will respond [to higher diesel prices] with additional capital investment," said Deutsche Bank's Todd. "But it will take time."
Marathon Oil Corp., a Houston-based refiner, will continue to expand its diesel production capacity over the next few years, its chief executive said, according to media reports. "In recent years we have been growing our diesel capacity at a higher rate than that of our peers and we will continue to through 2011," Clarence Cazalot Jr. said, according to Reuters last month. In the past, diesel, named after its inventor Rudolf Diesel, contained higher quantities of sulfur. But Europe's new emission standards forced oil refineries to dramatically reduce the sulfur level. The European Commission also encourages lower taxes on diesel to expand diesel use from trucks to cars.
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So if the demand for gasoline has dropped, and the inventory has consequently increased (this week's numbers) even though they are refining less, why did the price jump 15 cents yesterday?
 
This might help some?:o

GARYVILLE REFINERY EXPANSION

garyville_faciltiy_story2.jpg

Marathon's estimated $3.2 billion Garyville, Louisiana, refinery expansion project will increase the crude oil refining capacity by 180,000 barrels per day. Completed in 1976, the Garyville refinery is the last grassroots refinery constructed in the United States and has consistently been ranked as one of the most efficient refineries in the nation.
The Garyville expansion is an example of Marathon's commitment to making superior investment decisions for shareholders, while building energy infrastructure that will supply the growing needs of U.S. consumers. The expansion will provide an additional 7.5 million gallons of clean transportation fuels to the market each day.
In addition to adding substantial supply to the nation's marketplace, the expansion investment will also provide significant benefits to St. John the Baptist Parish and Louisiana. It is anticipated that the completed expansion will add approximately 75 to 80 new full-time contract employees and approximately 200 new full-time employees.
The construction phase will require an average of 2,000 workers, with up to 4,000 workers at peak period. Startup of the refinery is expected for the fourth quarter of 2009. http://www.marathon.com/News/Features/Spotlight_Series/Garyville_Refinery_Expansion/
 
Maybe, and maybe not. They are increasing diesel production more than gasoline production. "Clean transportation fuels" doesn't mean 100% gasoline.

Marathon Increasing Diesel Output in Refinery Expansion
7 April 2007
Marathon is embarking on a $3.2-billion project to expand the refining capacity of its Garyville, La., refinery by 180,000 barrels per day to a total of 425,000 bpd.
In addition to increasing its capability for additional heavy crude processing, the expansion will also result in an increased percentage of diesel in the product mix, according to a report in the Chicago Tribune.

Output at the 31-year-old plant, the last refinery built in the US, will be evenly split between diesel and gasoline after plant capacity almost doubles, to 425,000 barrels a day, by the end of 2009. The standard configuration for complex refineries calls for gasoline and gasoline components to account for two-thirds of output, with diesel and other fuels making up the balance.

Although gasoline demand in the US is triple that of diesel, diesel demand is growing at twice the rate of gasoline.
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At what cost to the environment and residents? This part of Louisiana along the Mississippi River is known as "Cancer Alley."

The expansion, which is expected to create about 200 full-time jobs and generate between $40 million and $50 million in sales taxes for St. John the Baptist Parish during construction, is subject to state Department of Environmental Quality permission to significantly increase emissions at the refinery of several air pollutants, including a projected five-fold increase in the release of carbon monoxide.
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News flash- Oil jumps again in overnight trading.

Check this out: $124.81. I touched $125 before falling back.

$124.81 is up over a dollar.

Another day, another jump in the price of a barrel of oil.

Expect another dime to 15 cents on the price of gasoline tomorrow.

P.S.- everything here jumped 15 more cents yesterday- I saw $3.99 in several places yesterday. Should hit $4.10-$4.15 tomorrow - based on overnight barrel of oil price today.
 
This chart- from gasbuddy.com, shows that, based on last night's boost to $125 a barrel, we should expect $4.25 a gallon for gasoline in the next few days:



That should throttle the economy pretty hard....
 
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