Gas prices are getting rediculous y'all
- Thread starter QueEx
- Start date
I can't speak for the corporations.
Last time I checked, most oil companies push safety as much as possible. I wouldn't think any company would want to have that PR hit.
We do not have an oil shortage. We can drill till the cows come home. That is not a long term solution. We need to stop giving oil companies that make billions in profits tax breaks and use that money to step up getting use off of oil.
BTW, just because we have more oil wells on American territory, doesn't mean the speculators are not going to stop bidding up the price of oil.
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What the hell does that mean?
True, companies make a public face of safety, however it is all about the bottom line. If they can get away with it and the penalty is less than implementing safety procedures they will take chances. See Externalities
BP Has a History of Blasts and Oil Spills - NYTimes.com
<H3 class=r>Feds cite Massey mines for dozens of violations - National News ...
Union Carbide Bhopal India Disaster
</H3>
I would argue that it is a long-term solution. I've bought off into the theory that oil IS abiotic, in nature. It's just the "accepted" thinking that oil is a fossil fuel but I no longer buy into this belief, only because "Big Oil" can keep the prices high by promoting a shortage.
Speculators only exist as long as Bernanke keeps interest rates artificially low. The investment banks speculate with cheap money handed out by the Fed! if interest rates were determined in the "free market", speculators must carefully weigh the risk vs return. Higher interest rates introduce more risk Playboy!
Pres Obama needs to stop following Dubya's reckless monetary policies (0% interest rates)
Do you really believe President Obama directs montetary policy?
The President of the United States directs fiscal policy (with Congress).
The Federal Reserve directs monetary policy.
All policy flows from monetary policy so everyone (the government, the corporations, the workers, the military, etc.) follows the lead of the Federal Reserve.
The President (of the United States) can make suggestions to the Governors (of the Federal Reserve) as to what he would like, but the President does not have final say.
I believe that is why the Federal Reserve calls themselves Governors, because that title is above President in terms of power and authority (sort of like CEO is above President).
Obama, Bush, Clinton are just order takers. We both know oil prices are high because Bernanke has been printing the dollar into oblivion.
I agree, the dollar, is almost at a full collapse...>>>^^^
Are gas prices on the up and up?
New federal task force to probe industry practices
Houston Chronicle
Friday, April 22, 2011
As gasoline prices hover near $4 nationwide, federal law enforcement officials
have created a task force to focus on fraud in energy markets.
The Oil and Gas Price Fraud Working Group will tap the expertise of a wide range
of agencies and groups to monitor oil and gas markets for potential violations of
criminal or civil laws, U.S. Attorney General Eric Holder said Thursday.
“Rapidly rising gasoline prices are pinching the pockets of consumers across the
country,” Holder said in a prepared statement.
“We will be vigilant in monitoring the oil and gas markets for any wrongdoing so
that consumers can be confident they are not paying higher prices as a result of
illegal activity.”
State attorneys general, the Federal Trade Commission and others already have
oversight authority for gasoline markets, while the Commodity Futures Trading
Commission monitors energy futures markets. But there are regular calls for
additional investigations into “price gouging” whenever gas prices stay high for
extended periods.
The national average for a gallon of regular gasoline was $3.840 on Thursday,
compared with $2.856 a year ago. The Texas average was $3.759, compared
with $2.743 in 2010.
After the oil price spikes of 2008, the FTC issued new rules to prevent oil market
manipulation, including the power to levy fines of up to $1 million per violation
per day for market players who make misleading statements or intentionally omit
information that could affect prices.
The CFTC is rolling out rules that limit how many futures contracts companies
can trade at a time.
According to a memo Holder sent this week to the agencies involved in the working
group, it will look into “evidence of manipulation of oil and gas prices, collusion,
fraud, or misrepresentations at the retail or wholesale levels” that may be harmful
to buyers.
It also will examine activity in oil markets, taking a look at investor practices,
supply and demand, and the role of speculators and index traders.
This appears to be a nod to growing anger over the role speculators play in oil
markets, which President Obama referred to this week as a primary driver behind
higher oil prices.
Craig Pirrong, a finance professor at the University of Houston who specializes in
commodity pricing, said the task force is hardly needed, since the agencies already
have the tools to monitor for fraud and take action.
“This is a transparently political fishing expedition that insinuates that fraud or
manipulation is distorting oil prices without providing even the flimsiest factual basis
for such a suspicion,” Pirrong said. “This is part of a broad effort by the administration
to deflect criticism with regard to gasoline prices.”
Holder’s office has yet to find evidence of price gouging, according to the memo,
which notes that gas prices differ from region to region.
“It is also clear that there are lawful reasons for increases in gas prices, given supply
and demand,” the attorney general wrote. “Nonetheless, where consumers are harmed
by unlawful conduct that has the effect of increasing gas prices, state and federal
authorities should take swift action.”
The working group will be made up of representatives from the departments of Justice,
Energy, Treasury and Agriculture, as well as the FTC, the CFTC, the Federal Reserve
Board, the Securities and Exchange Commission and the National Association of
Attorneys General.
http://www.mysanantonio.com/business/article/Are-gas-prices-on-the-up-and-up-1347907.php
this must be a very bad joke, I'm seriously shakin my head!
Where are the speculators getting the money from?
Obama/Bernanke needs to look at the monetary policy first, as that is the root cause. They want to stimulate the economy by pumping (inflating) money, It has unintended consequences (I explained all this February 8, 2009, in Post 96). Anyways, it hits oil in two ways:
- It creates price inflation, which effects oil and gasoline.
- The money he creates goes straight into the hands of the very people he blames for speculating. They take his money and invest in oil. Duh!
Unfortunately, Obama/Bernanke probably have very little understanding of this issue, and takes advise from the very people they claim are causing the problem.
Sad, Sad, Sad
Speculation explains more
about oil prices than anything else
McClatchy Newspapers
By Kevin G. Hall
and Robert A. Rankin
Friday, May 13, 2011
WASHINGTON — Feel like you're being robbed every time you fill the gas tank? Not sure who to blame? Try Wall Street.
That's not the conventional explanation, but it's the one the facts point to. Usually analysts say today's high prices stem simply from "supply and demand." They mean demand for oil and gas is rising and supplies aren't keeping up, so people bid up their price. But global and U.S. supplies are plentiful and demand is stable, so that's not it.
Then the analysts say it's because the market's afraid Middle East turmoil will interrupt oil supplies, so nervous buyers are bidding up prices to ensure they lock in a contract for oil now, just in case it's scarce later. There's probably some truth to that, but after five months of turmoil, there's been no significant impact on Middle East oil supplies, even as prices have see-sawed, so that's not credible either.
Here's what's credible: Some 70 percent of contracts for future oil delivery are now bought by financial speculators — largely big investment banks and hedge funds — who never take control of the oil. They just flip the contract for a quick profit.
Only about 30 percent of oil contracts are bought by a purchaser that actually intends to use the oil, such as an airline. That's according to the Commodity Futures Trading Commission, which regulates trade in those contracts.
"I'm convinced ... that speculators are actively manipulating (prices)," said Michael Greenberger, a University of Maryland law professor who in the 1990s headed the CFTC's trading division.
"It's harder and harder for any reasonable observer to dismiss the role of excessive speculation in this market," said Michael Masters, a professional Wall Street investor who knows how this game works. He's testified before Congress repeatedly that speculators are pushing prices up well beyond what supply and demand would warrant.
They both point to a $15 weekly swing in oil prices in early May and $5 a barrel moves on oil prices in a single day — with no obvious change to supply or demand.
Exxon Mobil Chief Executive Rex Tillerson noted Thursday in testimony before the Senate Finance Committee that this year's oil prices don't make any economic sense, though that's not quite how he put it. He said that current fundamentals and production costs would dictate oil in the range of $60 to $70 a barrel. That's at least $43 cheaper than this year's highs of $113 a barrel reached on April 29 and May 2.
But Tillerson declined to opine about the role of speculators, saying only that the price of oil "will be wherever it will be."
Hundreds of billions of dollars are being made through this speculation — both in the regulated futures market and on the larger unregulated over-the-counter swaps market, where private bets about the movement of oil prices take place. It's producing lots of new billionaires on Wall Street and driving oil company profits through the roof.
And it's punishing everyone who drives.
"The sheer volume of new capital coming from hedge funds, financial traders and other long-term passive investors — interests that mostly buy oil futures to turn a quick profit — is creating artificial demand and driving up the price for consumers," said Sen. Maria Cantwell, D-Wash., in a statement accompanying a letter she and 16 other U.S. senators issued Thursday. They, like Greenberger and Masters, urge the CFTC to impose rules limiting speculators' ability to do this.
Masters and Greenberger advocate a return to limits that prevailed for much of the past century. Those limits effectively reined in speculation to about 30 percent of the oil market.
"We need some speculation. We need enough to provide grease for the wheels of the hedgers, but not so much that they drive price formation," Masters said.
A McClatchy review of two decades of data compiled by the CFTC documents the boom in speculative trading amid rising prices. In the 1990s, the ratio of speculative trades to trades made by commercial users of oil was tilted heavily toward users of crude. But from 1991 forward, the big financial players such as Goldman Sachs and J.P. Morgan Chase won exemptions that freed them from limits on how much they could speculate in futures markets.
They became classified as commercial traders, as if they were an airline hedging price risks in jet fuel. The big banks needed to invest in futures contracts to hedge bets they made in the unregulated swaps market. And the government, in the tenth year of Reagan Republicanism, was happy to reduce regulations on markets. Oil "swaps" increased from $13 billion in the 1990s to more than $313 billion in July 2008 at oil's peak price, Greenberger said .
In mid-2006, CFTC data began distinguishing Wall Street's trades from industrial users, calling the strictly financial ones "non-commercial." Suddenly, the record shows that speculative trades raced past commercial trades.
Prior to the 1990s, speculators made up about 30 percent of the futures market. In the latest reporting period, the ratio on May 3 stood at 68 percent speculators to 32 percent users of oil. Meanwhile, the volume of total reported trades has grown five-fold since 1995, underscoring the impact of speculation on futures markets.
"It tells me that there are more speculative positions than there has ever been in history, particularly in the energy sector, I don't mean only crude oil," said Bart Chilton, a CFTC commissioner who thinks excessive speculation is at least part of the cause of soaring oil prices. "In all of the energy sector, we've seen a 64 percent increase in speculative positions since the (oil price) high of 2008."
While those numbers are stark, the numbers on supply and demand make it clear that the high prices aren't coming from there. There is no shortage of oil stocks by historical standards. There's an estimated 3 million to 4 million barrels per day (bpd) of excess oil production capacity in the world today. That's much more than when supplies were tight in 2008.
U.S. oil production, too, continues to grow. It rose from 4.95 million bpd in 2008 to 5.36 million bpd in 2009, followed by 5.5 million bpd last year — even with the BP disaster in the Gulf of Mexico. The Energy Information Administration forecasts U.S. production to hold at that level this year and rise again next year, to 5.54 million bpd.
U.S. crude oil stocks on April 29, the date oil peaked this year above $113 a barrel, stood at 1.768 billion barrels, according to the EIA. That's about 700,000 barrels more than in July 2008, when oil prices hit all-time highs.
And that's plenty to meet U.S. needs, because consumption isn't growing.
The U.S. consumed 20.68 million barrels per day in 2007. Then came the financial crisis, and consumption dipped to 19.5 million bpd in 2008. Last year the number was 19.5 million bpd. This year's projection is 19.28 million bpd.
So if supplies are plentiful and consumer demand isn't rising, why are prices?
Could it be that refineries aren't able to produce enough gasoline? No. Refiners are running their plants at below cruising speed, and they've got lots of room to produce more if consumers need it. The latest data from EIA on the rate at which refineries are utilized showed a rate of 79.8 percent in February. That's 20 percent below full-blown production, and it hasn't been that low since 1986. If demand for gasoline were soaring, these plants would be cranking at a higher rate.
The American Petroleum Institute, the oil industry lobby, disputes this last example, noting that gasoline production continues at near record levels despite the low refinery utilization rates.
"The amount they're squeezing out of the barrel (of oil) has gone up significantly," said John Felmy, the group's chief economist.
Asked if excessive speculation is to blame for high prices, Felmy said no. He said growing economies such as China and India are gobbling up oil and that global energy data shows the price is "pretty consistent with fundamentals," and that "it really tells the tale of a tight market."
That's not what the Paris-based International Energy Agency said Thursday. It forecast flat global oil demand this year. It dialed back its projection for growth in consumption to 1.3 million bpd, less than half last year's growth of 2.8 million bpd.
The report said, "Our own estimates for global oil demand show a marked slowdown, with preliminary March data suggesting near zero annual growth for the first time since summer 2009."
All that leads a growing number of analysts to one conclusion: This year's high prices for oil and gasoline, and their plunges of late, are driven largely by financial speculators making trillions by trading in oil futures while ordinary consumers feel burned.
While the evidence of speculation is increasingly obvious, the facts haven't yet been acknowledged enough to force corrective regulatory action.
"The history of this is there is always something going on in an opaque fashion that you only find out about after an investigation has been launched," Greenberger noted.
President Barack Obama last month ordered the creation of an interagency task force led by Attorney General Eric Holder to determine if price gouging or market manipulation is occurring. But he stopped short of ordering a full-blown investigation with additional government resources.
"My view is that the Justice Department should be actively organizing and driving an investigation that will strain the resources of some of these agencies," said Greenberger, himself a former Justice official. "Just playing 'footsy' with this investigation is a tragic waste of resources."
Justice Department spokeswoman Alisa Finelli insisted that by bringing together state and federal authorities, the task force "enhances our ability to take a comprehensive approach in monitoring and sharing information about the oil and gas markets to determine whether or not there is evidence of illegal activity. "
Meanwhile, 17 U.S. senators, led by Cantwell, say the CFTC should act now.
"American consumers are getting gouged at the pump while speculation on Wall Street runs rampant. Today the CFTC must ... crack down on excessive speculation and provide relief to American consumers," she said.
http://www.mcclatchydc.com/2011/05/13/114190/speculation-explains-more-about.html
You believe in the most interesting myths.
I suppose if the government or the state-run media told you gas prices were high because of terr-ur-ists, or pedophiles, or drug dealers, or Moozlems, you would believe that too.
Of course, we all know the gub-mint, the military, and the Federal Reserve could never be responsible for high gas prices. It would just be too UN-patriotic for you and your types to accept.
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source: Huffington Post
Oil falls to near $98 on Saudi crude output boost
Oil prices fell to near $98 a barrel Monday, extending a big loss from Friday after a report said Saudi Arabia plans to boost its crude production.
By early afternoon in Europe, benchmark oil for July delivery was down $1.13 to $98.16 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $2.64 to settle at $99.29 on Friday.
In London, Brent crude for July delivery was up 20 cents to $118.98 a barrel on the ICE Futures exchange.
Saudi newspaper al-Hayat reported Friday that the country will increase production by 13 percent, or about 1.14 million barrels per day, to boost global supplies and help lower prices. Earlier last week, the Organization of Petroleum Exporting Countries failed to reach consensus to raise output and left the cartel's production quotas unchanged.
"We suspect that oil prices will continue to move lower over the weeks ahead as the ramifications of the Saudi production increase works itself through the supply chain," said Edward Meir at MF Global in New York, noting that the Saudis "are intent on bringing prices down in order to avoid getting OPEC blamed for an energy-induced recession."
Fighting in Libya since February has shrunk global crude output by shutting down the OPEC nation's 1.6 million barrels a day of production. Political violence and upheaval in the Middle East and North Africa this year has probably added about $15 to the price of oil, said Paul Sheard, global chief economist at Nomura.
"There's quite a substantial risk premium built into the oil markets at the moment," Sheard said. "Oil is one of the wild cards of the global economy."
Nomura expects Brent to average $109 this year and $107 next year.
Analysts are concerned an escalation of violence and instability in the Middle East would send oil prices higher and undermine global economic growth.
"If Brent goes to $140, for sure you're going to have a double-dip recession in most advanced economies," said Nouriel Roubini, the New York University economics professor known for predicting the financial crisis. "Demand is growing fast and supply is not growing fast enough."
This week, investors will be eyeing the latest economic data from the U.S. and China. Some analysts expect Chinese crude consumption to remain robust despite signs economic growth may be weakening.
"Chinese oil demand growth has shown no signs of a slowdown this year, despite economic activity moderating," Barclays Capital said in a report. "The growth path is unlikely to be altered significantly by moderating overall economic activity."
U.S. retail sales and Chinese inflation and industrial production figures are scheduled to be released Tuesday.
In other Nymex trading in July contracts, heating oil rose moved up 0.01 cent to $3.1061 a gallon while gasoline added 0.14 cent to $3.0191 a gallon. Natural gas futures gained 5 cents to $4.807 per 1,000 cubic feet.
Oil falls to near $98 on Saudi crude output boost
Oil prices fell to near $98 a barrel Monday, extending a big loss from Friday after a report said Saudi Arabia plans to boost its crude production.
By early afternoon in Europe, benchmark oil for July delivery was down $1.13 to $98.16 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $2.64 to settle at $99.29 on Friday.
In London, Brent crude for July delivery was up 20 cents to $118.98 a barrel on the ICE Futures exchange.
Saudi newspaper al-Hayat reported Friday that the country will increase production by 13 percent, or about 1.14 million barrels per day, to boost global supplies and help lower prices. Earlier last week, the Organization of Petroleum Exporting Countries failed to reach consensus to raise output and left the cartel's production quotas unchanged.
"We suspect that oil prices will continue to move lower over the weeks ahead as the ramifications of the Saudi production increase works itself through the supply chain," said Edward Meir at MF Global in New York, noting that the Saudis "are intent on bringing prices down in order to avoid getting OPEC blamed for an energy-induced recession."
Fighting in Libya since February has shrunk global crude output by shutting down the OPEC nation's 1.6 million barrels a day of production. Political violence and upheaval in the Middle East and North Africa this year has probably added about $15 to the price of oil, said Paul Sheard, global chief economist at Nomura.
"There's quite a substantial risk premium built into the oil markets at the moment," Sheard said. "Oil is one of the wild cards of the global economy."
Nomura expects Brent to average $109 this year and $107 next year.
Analysts are concerned an escalation of violence and instability in the Middle East would send oil prices higher and undermine global economic growth.
"If Brent goes to $140, for sure you're going to have a double-dip recession in most advanced economies," said Nouriel Roubini, the New York University economics professor known for predicting the financial crisis. "Demand is growing fast and supply is not growing fast enough."
This week, investors will be eyeing the latest economic data from the U.S. and China. Some analysts expect Chinese crude consumption to remain robust despite signs economic growth may be weakening.
"Chinese oil demand growth has shown no signs of a slowdown this year, despite economic activity moderating," Barclays Capital said in a report. "The growth path is unlikely to be altered significantly by moderating overall economic activity."
U.S. retail sales and Chinese inflation and industrial production figures are scheduled to be released Tuesday.
In other Nymex trading in July contracts, heating oil rose moved up 0.01 cent to $3.1061 a gallon while gasoline added 0.14 cent to $3.0191 a gallon. Natural gas futures gained 5 cents to $4.807 per 1,000 cubic feet.
this must be a very bad joke, I'm seriously shakin my head!
Where are the speculators getting the money from?
Obama/Bernanke needs to look at the monetary policy first, as that is the root cause. They want to stimulate the economy by pumping (inflating) money, It has unintended consequences (I explained all this February 8, 2009, in Post 96). Anyways, it hits oil in two ways:
- It creates price inflation, which effects oil and gasoline.
- The money he creates goes straight into the hands of the very people he blames for speculating. They take his money and invest in oil. Duh!
Unfortunately, Obama/Bernanke probably have very little understanding of this issue, and takes advise from the very people they claim are causing the problem.
Sad, Sad, Sad
damn, I'm vindicated by a single audit of the Fed. Ive been sayin this for a while now.
Why are gas prices so high?
Before the US financial system collapsed in 2008, 4 HUGE oil fields had passed or hit maximum production and begun terminal decline...
Now, add in China creating a huge real estate/financial bubble, Dubai building everything imaginable, and India trying to satisfy its developing economy, while the United States/Europe/Canada/Australia were in the midst of a big, easy-credit party...
and all this was happening at the same time. In 2008, any disruption in oil supply was going to lead to a huge collapse.
And, it did, in 2008. Gas prices hit $4, and the whites realized their ponzi-scheme financial system cannot ignore the reality of scarce oil.
The whites and Bush learned the American way-of-life IS negotiable.
With 4 HUGE oil fields continung to decline in production, all of the oil economies have been steadily shrinking.
To answer this shrinking of the oil economies, every single one of them has decided to print, print, print away to mask the increasing poverty.
Unfortunately, you cannot print oil, so, the average Joe sees the increasing poverty, whether the government wants to lie about it or not. This is especially true in the marginal economies, like Spain, Greece, Iceland, and Portugal.
But, others are just as affected, like Britain, France, Italy, India, China, and the United States.
In the oil-exporting nations, the people are getting restless. They see that they are basically propping up the oil economies and getting almost nothing in return. It's as if Africa and the Middle East are propping up China, India, Europe, and the United States, and all they get in return is a "war on terror" and a lot of attitude of why they are so inferior.
So, you get the Arab Spring. Gas prices shoot up and they are not coming back down.
Blame the speculators, blame the Federal Reserve, blame the military, blame the corporations, but the basic problem is that the oil is disappearing.
The honkeys refuse to adjust to the new realities fast enough to stabilize their economies, so expect a lot of unrest and political upheaval for the rest of our lives. And, I don't mean in some far-off place. This time, it is going to happen here, in the United States.
Before the US financial system collapsed in 2008, 4 HUGE oil fields had passed or hit maximum production and begun terminal decline...
- Ghawar (Saudi Arabia)
- North Sea (Britain/Norway/Sweden)
- Cantarell (Mexico)
- Prudhoe Bay (Alaska/United States)
Now, add in China creating a huge real estate/financial bubble, Dubai building everything imaginable, and India trying to satisfy its developing economy, while the United States/Europe/Canada/Australia were in the midst of a big, easy-credit party...
and all this was happening at the same time. In 2008, any disruption in oil supply was going to lead to a huge collapse.
And, it did, in 2008. Gas prices hit $4, and the whites realized their ponzi-scheme financial system cannot ignore the reality of scarce oil.
The whites and Bush learned the American way-of-life IS negotiable.
With 4 HUGE oil fields continung to decline in production, all of the oil economies have been steadily shrinking.
To answer this shrinking of the oil economies, every single one of them has decided to print, print, print away to mask the increasing poverty.
Unfortunately, you cannot print oil, so, the average Joe sees the increasing poverty, whether the government wants to lie about it or not. This is especially true in the marginal economies, like Spain, Greece, Iceland, and Portugal.
But, others are just as affected, like Britain, France, Italy, India, China, and the United States.
In the oil-exporting nations, the people are getting restless. They see that they are basically propping up the oil economies and getting almost nothing in return. It's as if Africa and the Middle East are propping up China, India, Europe, and the United States, and all they get in return is a "war on terror" and a lot of attitude of why they are so inferior.
So, you get the Arab Spring. Gas prices shoot up and they are not coming back down.
Blame the speculators, blame the Federal Reserve, blame the military, blame the corporations, but the basic problem is that the oil is disappearing.
The honkeys refuse to adjust to the new realities fast enough to stabilize their economies, so expect a lot of unrest and political upheaval for the rest of our lives. And, I don't mean in some far-off place. This time, it is going to happen here, in the United States.
The Real Reason for NATO Attacking Libya - the gold dinar currency
Rising Gas Prices: Not Demand Driven
The national average for gas prices is above $3.50. Yet demand in the U.S. is at its lowest point since 1997. So what's driving this run-up?
Gas prices are off to a fast start in 2012. The national average for a gallon of regular gasoline is up more than 8 percent since the end of 2011, rising from $3.25 per gallon to $3.52, according to new data released by the U.S. Energy Information Administration.
While gas prices tend to rise through the first half of the year, this is the earliest the average price per gallon has breached the $3.50 mark. If this pace continues, the national average should hit $4 a gallon by May, if not sooner. The last time the average price did so in the U.S. was summer 2008, when the price of oil hit $140 a barrel. Last year gas prices approached $4, hitting an average of $3.98 in April, before falling.
Higher gas prices could pose a serious threat to the fledgling economic recovery, which has shown signs of strength recently. Typically, $4 a gallon tends to be the point at which the price of gas starts to eat into economic growth.
“Anytime the economy spends 4 to 5 percent of GDP on oil, then you’re getting close to stall speed,” says Jason Stevens, an equity analyst at Morningstar. “We saw this last year when Libya and Japan blew up, and prices went through the roof. Demand pulled back a bit, but growth certainly slowed.”
Strangely, the current run-up in prices comes despite sinking demand in the U.S. “Petrol demand is as low as it’s been since April 1997,” says Tom Kloza, chief oil analyst for the Oil Price Information Service. “People are properly puzzled by the fact that we’re using less gas than we have in years, yet we’re paying more.”
Kloza believes much of the increase is due to speculative money that’s flowed into gasoline futures contracts since the beginning of the year, mostly from hedge funds and large money managers. “We’ve seen about $11 billion of speculative money come in on the long side of gas futures,” he says. “Each of the last three weeks we’ve seen a record net long position being taken.”
Refineries have also been getting squeezed by higher crude prices over the past several months, forcing some of them to shut down rather than operate at a loss, says Stevens. “The price that refineries have been paying for crude was roughly flat, while the price they were getting for gasoline was lower than what they needed to make their crack spread,” he says. A crack spread refers to oil refineries’ profit margins and is roughly the difference between what they pay for crude oil, and what they make by “cracking” crude into petroleum products such as refined gasoline. As the U.S. refining capacity has decreased, prices have begun to rise.
But prices aren’t high everywhere. For example, the average price of gas in Wyoming is $2.90 right now, nearly a dollar cheaper than the average price in California. That’s largely due to the relatively cheap amount of crude that’s coming into the upper Midwest from Canada. “There is more diversity between crude prices now than I’ve ever seen in my career,” says Kloza. “It’s extraordinary.”
The national average for gas prices is above $3.50. Yet demand in the U.S. is at its lowest point since 1997. So what's driving this run-up?
Gas prices are off to a fast start in 2012. The national average for a gallon of regular gasoline is up more than 8 percent since the end of 2011, rising from $3.25 per gallon to $3.52, according to new data released by the U.S. Energy Information Administration.
While gas prices tend to rise through the first half of the year, this is the earliest the average price per gallon has breached the $3.50 mark. If this pace continues, the national average should hit $4 a gallon by May, if not sooner. The last time the average price did so in the U.S. was summer 2008, when the price of oil hit $140 a barrel. Last year gas prices approached $4, hitting an average of $3.98 in April, before falling.
Higher gas prices could pose a serious threat to the fledgling economic recovery, which has shown signs of strength recently. Typically, $4 a gallon tends to be the point at which the price of gas starts to eat into economic growth.
“Anytime the economy spends 4 to 5 percent of GDP on oil, then you’re getting close to stall speed,” says Jason Stevens, an equity analyst at Morningstar. “We saw this last year when Libya and Japan blew up, and prices went through the roof. Demand pulled back a bit, but growth certainly slowed.”
Strangely, the current run-up in prices comes despite sinking demand in the U.S. “Petrol demand is as low as it’s been since April 1997,” says Tom Kloza, chief oil analyst for the Oil Price Information Service. “People are properly puzzled by the fact that we’re using less gas than we have in years, yet we’re paying more.”
Kloza believes much of the increase is due to speculative money that’s flowed into gasoline futures contracts since the beginning of the year, mostly from hedge funds and large money managers. “We’ve seen about $11 billion of speculative money come in on the long side of gas futures,” he says. “Each of the last three weeks we’ve seen a record net long position being taken.”
Refineries have also been getting squeezed by higher crude prices over the past several months, forcing some of them to shut down rather than operate at a loss, says Stevens. “The price that refineries have been paying for crude was roughly flat, while the price they were getting for gasoline was lower than what they needed to make their crack spread,” he says. A crack spread refers to oil refineries’ profit margins and is roughly the difference between what they pay for crude oil, and what they make by “cracking” crude into petroleum products such as refined gasoline. As the U.S. refining capacity has decreased, prices have begun to rise.
But prices aren’t high everywhere. For example, the average price of gas in Wyoming is $2.90 right now, nearly a dollar cheaper than the average price in California. That’s largely due to the relatively cheap amount of crude that’s coming into the upper Midwest from Canada. “There is more diversity between crude prices now than I’ve ever seen in my career,” says Kloza. “It’s extraordinary.”
Fox Snooze Admits Prudent Can't Lower Gas Prices
Fox Snooze is advocating government mass transit spending? They can't even be consistent on there political attack jobs!
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Fox Snooze is advocating government mass transit spending? They can't even be consistent on there political attack jobs!
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Fox Snooze on oil prices in 2008
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source: CNN
Gas prices seen headed lower at the pump
NEW YORK (CNNMoney) -- A surge in gasoline prices earlier this year sparked talk of $5 a gallon by this summer, but prices at the pump have been ticking lower in April, and it appears they'll continue falling asthe driving season approaches.
This rosy scenario is prompted by the fact that the price for one of the most common types of gasoline futures traded in New York has dropped 30 cents, going from over $3.40 a gallon at the beginning of April to $3.10 a gallon Wednesday.
Futures contracts are financial instruments that buyers and sellers of large amounts of gasoline -- or any commodity -- use to set prices. Analysts say the current drop in gas price futures should begin to appear in gas prices at the service station over the next few weeks.
"We're certainly going to see prices move lower at this point," said Stephen Schork, publisher of the industry newsletter the Schork Report. While retail prices are expected to move lower, Schork said the decline might not be as steep those seen in the futures markets.
The main reason for lower gasoline futures prices is the declining cost of Brent crude and other crude oil that gasoline is made from.
Brent crude has dropped from over $125 a barrel in early April to under $120 currently, largely a a result of tensions easing with Iran over its nuclear program. Recent signs of a slowing global economy have also helped push down prices.
Why gas prices may have peaked
Gasoline prices at the pump have begun a similar decline. While much hype was made earlier this about how gas had run up further and faster than any time before and may even reach a new all-time high of over $4.11 gallon, prices have been slowly declining since touching $3.95 a gallon at the beginning of April. Gas prices currently sit at $3.84, according to AAA.
"If we don't have any supply issues or refinery outages, we've seen the highs for the summer," said Schork.
Of course, the first part of that sentence is a major caveat, as Schork and other analysts point out.
Gasoline stockpiles remain low in Europe and along the East Coast of the United States. Demand from the developing world, meanwhile, remains strong.
Furthermore, analysts are watching for potential supply disruptions that could arise if more refineries close on the U.S. East Coast.
Several East Coast refineries have been idled over that last several months. They are having a hard time making money because they can only processlight, sweet -- and expensive -- crude from Europe and Africa.
There's a chance that some of these refineries could close permanently, talking roughly 50% of the East Coast's refining capacity offline.
That could potentially cause a shortfall in gasoline supplies at the wholesale level, at least until transportation logistics to bring gasoline up from the Gulf Coast or elsewhere are ironed out.
"Unplanned refinery outages and a further improvement in the US economy could still create further upside risks to gasoline in May and June," Merrill Lynch analysts wrote in a recent research note.
Gas prices seen headed lower at the pump
NEW YORK (CNNMoney) -- A surge in gasoline prices earlier this year sparked talk of $5 a gallon by this summer, but prices at the pump have been ticking lower in April, and it appears they'll continue falling asthe driving season approaches.
This rosy scenario is prompted by the fact that the price for one of the most common types of gasoline futures traded in New York has dropped 30 cents, going from over $3.40 a gallon at the beginning of April to $3.10 a gallon Wednesday.
Futures contracts are financial instruments that buyers and sellers of large amounts of gasoline -- or any commodity -- use to set prices. Analysts say the current drop in gas price futures should begin to appear in gas prices at the service station over the next few weeks.
"We're certainly going to see prices move lower at this point," said Stephen Schork, publisher of the industry newsletter the Schork Report. While retail prices are expected to move lower, Schork said the decline might not be as steep those seen in the futures markets.
The main reason for lower gasoline futures prices is the declining cost of Brent crude and other crude oil that gasoline is made from.
Brent crude has dropped from over $125 a barrel in early April to under $120 currently, largely a a result of tensions easing with Iran over its nuclear program. Recent signs of a slowing global economy have also helped push down prices.
Why gas prices may have peaked
Gasoline prices at the pump have begun a similar decline. While much hype was made earlier this about how gas had run up further and faster than any time before and may even reach a new all-time high of over $4.11 gallon, prices have been slowly declining since touching $3.95 a gallon at the beginning of April. Gas prices currently sit at $3.84, according to AAA.
"If we don't have any supply issues or refinery outages, we've seen the highs for the summer," said Schork.
Of course, the first part of that sentence is a major caveat, as Schork and other analysts point out.
Gasoline stockpiles remain low in Europe and along the East Coast of the United States. Demand from the developing world, meanwhile, remains strong.
Furthermore, analysts are watching for potential supply disruptions that could arise if more refineries close on the U.S. East Coast.
Several East Coast refineries have been idled over that last several months. They are having a hard time making money because they can only processlight, sweet -- and expensive -- crude from Europe and Africa.
There's a chance that some of these refineries could close permanently, talking roughly 50% of the East Coast's refining capacity offline.
That could potentially cause a shortfall in gasoline supplies at the wholesale level, at least until transportation logistics to bring gasoline up from the Gulf Coast or elsewhere are ironed out.
"Unplanned refinery outages and a further improvement in the US economy could still create further upside risks to gasoline in May and June," Merrill Lynch analysts wrote in a recent research note.
Gas Prices Surge To Highest Ever On This Day At Fastest Pace In Four Years
Despite being weeks away from the start of the driving season proper, gas prices - at the pump - have been surging recently. With premium now over $4 nationwide (over $5 in SoCal - up 25 days in a row), this is the most expensive gas has ever been for the second week in February despite gasoline being relatively well supplied. Gasoline futures have ripped higher as unplanned maintenance, refinery closings, and rising crude oil prices (seemingly more central bank liquidity-driven than middle-east tensions) have impacted wholesale price expectations (and thus retail). The 44c rise is the fastest in four years and the year-to-date surge over 12% (outpacing stocks) is almost four times faster than average. What is more worrisome is the fact that seasonally the next month or two are when the biggest price spikes occur - which coupled with the tax-hike drag, will inevitably eat into people's spending habits and sentiment.
Gas Prices at the pump are the highest on record for this time of year...
Despite being weeks away from the start of the driving season proper, gas prices - at the pump - have been surging recently. With premium now over $4 nationwide (over $5 in SoCal - up 25 days in a row), this is the most expensive gas has ever been for the second week in February despite gasoline being relatively well supplied. Gasoline futures have ripped higher as unplanned maintenance, refinery closings, and rising crude oil prices (seemingly more central bank liquidity-driven than middle-east tensions) have impacted wholesale price expectations (and thus retail). The 44c rise is the fastest in four years and the year-to-date surge over 12% (outpacing stocks) is almost four times faster than average. What is more worrisome is the fact that seasonally the next month or two are when the biggest price spikes occur - which coupled with the tax-hike drag, will inevitably eat into people's spending habits and sentiment.
Gas Prices at the pump are the highest on record for this time of year...
They’re drilling, baby, drilling – and gas prices still going up
Filling the gas tank is costing more | Scott Strazzante/Chicago Tribune/MCT
McClatchy Newspapers
By Kevin G. Hall
February 19, 2013
WASHINGTON — They’re baaaacccck. Like locusts ravaging fertile crops, gasoline prices are soaring again and eating away at the purchasing power of ordinary Americans. And again, financial speculators appear to be a big part of the story.
The national average pump price hit $3.74 for a gallon of unleaded gasoline Tuesday, up a sharp 44 cents per gallon from just a month ago, according to the AAA Motor Club’s Fuel Gauge Report.
“It’s the 33rd day in a row that we’ve seen a consecutive increase” in gasoline prices, said Nancy White, a spokeswoman for AAA, who said there are several explanations but that none seem overly convincing.
The rising gasoline prices come even as the United States now produces more than half the oil it consumes. In fact, the nearly 800,000 barrel per day increase in U.S. production output from 2011 to 2012 reflected the largest one-year jump since oil drilling began in 1859.
The U.S. Energy Information Administration projects that U.S. oil production will rise from 6.89 million barrels per day in November 2012 to 8.15 million by December 2014. At the same time, the International Energy Agency has lowered its estimates for global demand for oil. Lacking demand, OPEC, the oil-exporters cartel, has reduced production.
It all argues for lower oil prices, or at least less volatility in the price of oil and thus gasoline.
More than a passing pain, rising gasoline prices act like a tax on consumers, harming the economy by whittling away at the amount of money the consumer can spend on other things. Gasoline expenditures as a percentage of U.S. household income hit three-decade highs in 2012, and the recent spike suggests 2013 might not be much better.
Enter financial speculation. Commercial end-users of oil such as airlines and trucking companies who once dominated 70 percent of the market for market for future deliveries of oil now represent just 30 percent. Non-commercial financial speculators now dominate 70 percent of the market. The trading is dominated by Wall Street banks, hedge funds and other financial institutions that have no intention to take delivery of the oil needed to make gasoline.
“It’s speculators who are moving markets,” said Bart Chilton, a commissioner at the Commodity Futures Trading Commission. “They are almost exclusively the entire market at certain periods of time.”
Chilton led the charge in seeking limits that reduced how much of the market for crude oil any single trader or company could control. Armed with the 2010 revamp of financial regulation, the commission sought to establish hard limits, but that effort is now bogged down in the courts.
“The more textured view would show you that at certain times it is not a question to whether or not speculators are moving the market. Speculators are the market,” he said.
Other forces are at work as well.
Nearly 1 million barrels a day of capacity has been turned off with eight refinery closures or announced closures on the U.S. East Coast and the Caribbean over the past year.
“What the market is really pricing in is potentially a new era of tighter gasoline supplies that are heavily reliant on imports,” said John Kilduff, a partner in the energy trading firm Again Capital in New York. “We might not ever turn back from these high prices. This isn’t episodic.”
Another factor is that refiners that turn oil into gasoline have chosen to switch to their summer blends much earlier than normal. This switch, which stops or slows production for a period of time, usually happens closer to the Spring Break driving season in mid- to late March.
Last year, gasoline prices peaked on April 5 and 6, so AAA is hoping that an early switchover may also mean an early peak to gasoline prices and that they may tumble later in the year.
The trade association for refiners, the American Fuel & Petrochemical Manufacturers, is unaware of any large-scale early switch away from winter fuels, said Joanne Shore, the group’s chief industry analyst.
“We don’t have information on that explicitly,” she said, noting that the association doesn’t keep real-time production data. California, Shore said, switches to summer fuels earlier than the rest of the nation, adding that some California refiners are undergoing maintenance and it’s been “one of the factors that has tightened (up) the Southern California market a bit.”
The national average pump price hit $3.74 for a gallon of unleaded gasoline Tuesday, up a sharp 44 cents per gallon from just a month ago, according to the AAA Motor Club’s Fuel Gauge Report.
“It’s the 33rd day in a row that we’ve seen a consecutive increase” in gasoline prices, said Nancy White, a spokeswoman for AAA, who said there are several explanations but that none seem overly convincing.
The rising gasoline prices come even as the United States now produces more than half the oil it consumes. In fact, the nearly 800,000 barrel per day increase in U.S. production output from 2011 to 2012 reflected the largest one-year jump since oil drilling began in 1859.
The U.S. Energy Information Administration projects that U.S. oil production will rise from 6.89 million barrels per day in November 2012 to 8.15 million by December 2014. At the same time, the International Energy Agency has lowered its estimates for global demand for oil. Lacking demand, OPEC, the oil-exporters cartel, has reduced production.
It all argues for lower oil prices, or at least less volatility in the price of oil and thus gasoline.
More than a passing pain, rising gasoline prices act like a tax on consumers, harming the economy by whittling away at the amount of money the consumer can spend on other things. Gasoline expenditures as a percentage of U.S. household income hit three-decade highs in 2012, and the recent spike suggests 2013 might not be much better.
Enter financial speculation. Commercial end-users of oil such as airlines and trucking companies who once dominated 70 percent of the market for market for future deliveries of oil now represent just 30 percent. Non-commercial financial speculators now dominate 70 percent of the market. The trading is dominated by Wall Street banks, hedge funds and other financial institutions that have no intention to take delivery of the oil needed to make gasoline.
“It’s speculators who are moving markets,” said Bart Chilton, a commissioner at the Commodity Futures Trading Commission. “They are almost exclusively the entire market at certain periods of time.”
Chilton led the charge in seeking limits that reduced how much of the market for crude oil any single trader or company could control. Armed with the 2010 revamp of financial regulation, the commission sought to establish hard limits, but that effort is now bogged down in the courts.
“The more textured view would show you that at certain times it is not a question to whether or not speculators are moving the market. Speculators are the market,” he said.
Other forces are at work as well.
Nearly 1 million barrels a day of capacity has been turned off with eight refinery closures or announced closures on the U.S. East Coast and the Caribbean over the past year.
“What the market is really pricing in is potentially a new era of tighter gasoline supplies that are heavily reliant on imports,” said John Kilduff, a partner in the energy trading firm Again Capital in New York. “We might not ever turn back from these high prices. This isn’t episodic.”
Another factor is that refiners that turn oil into gasoline have chosen to switch to their summer blends much earlier than normal. This switch, which stops or slows production for a period of time, usually happens closer to the Spring Break driving season in mid- to late March.
Last year, gasoline prices peaked on April 5 and 6, so AAA is hoping that an early switchover may also mean an early peak to gasoline prices and that they may tumble later in the year.
The trade association for refiners, the American Fuel & Petrochemical Manufacturers, is unaware of any large-scale early switch away from winter fuels, said Joanne Shore, the group’s chief industry analyst.
“We don’t have information on that explicitly,” she said, noting that the association doesn’t keep real-time production data. California, Shore said, switches to summer fuels earlier than the rest of the nation, adding that some California refiners are undergoing maintenance and it’s been “one of the factors that has tightened (up) the Southern California market a bit.”
Email: khall@mcclatchydc.com; Twitter: @KevinGHall
Read more here: http://www.mcclatchydc.com/2013/02/19/183571/theyre-drilling-baby-drilling.html#storylink=cpy
The idiocy continues!<iframe width="420" height="315" src="http://www.youtube.com/embed/-tPePpMxJaA" frameborder="0" allowfullscreen></iframe>
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With all this overwhelming evidence, most still do not realize that the fundamental way of American life ended back in 2009.... which not by coincidence, was the year Obama got elected.
The days of white (basically American) supremacy ended.
It amazes me when I hear people talk about getting a "NEW" car, or the latest I-toy, or the latest story on TV, or getting a mortgage, or saving for retirement.
From here on out, everyone will be getting poorer by the year. Or, a more positive way is the end of the artifical/technical/man-made lifestyle. Time to get back into touch with our environment again.
Products we take for granted today, just will not exist, in the future. Things we can buy easily today, will disappear, or take tremendous savings (not debt) to afford.
The days of the upwardly mobile are finished.
It is PEAK OIL, the end of growth, and the start of de-growth or de-industrialization.
The days of white (basically American) supremacy ended.
It amazes me when I hear people talk about getting a "NEW" car, or the latest I-toy, or the latest story on TV, or getting a mortgage, or saving for retirement.
From here on out, everyone will be getting poorer by the year. Or, a more positive way is the end of the artifical/technical/man-made lifestyle. Time to get back into touch with our environment again.
Products we take for granted today, just will not exist, in the future. Things we can buy easily today, will disappear, or take tremendous savings (not debt) to afford.
The days of the upwardly mobile are finished.
It is PEAK OIL, the end of growth, and the start of de-growth or de-industrialization.
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