September 20, 2009 5:30 PM MDT
You will soon be paying under $2 per gallon again for gasoline and diesel fuel and crude oil will go back down into the 40's. So you can make plans for that trip to see the grandparents for the holidays as well as give the economy a much needed boost. Demand for gasoline in the United States typically falls after Labor Day due to vacation season ending. For the week ending September 4, 2009 demand for gasoline was at its lowest point since January 9, 2008 according to MasterCard Advisors LLC.
Inversion of diesel fuel versus gasoline prices has not been the case in the United States since the Rita and Katrina hurricanes hit the Gulf Coast in August 2005. That event had a major long term impact on inventories of gasoline, distillates and lube stocks on both side of the border. About 25% of the U.S. refinery capacity is located on the Gulf and was severely affected by the weather phenomenon.
Money has been poured into the commodities markets recently as the U.S. dollar fell against the Euro. Crude oil prices have risen from a low of $33 to $72 a barrel last week.
For month investors months have used crude oil as their hedge against inflation, betting that oil prices will likely increase as the economy improves and global supplies start to shrink.
So far 2009 has turned into the first normal year for the petroleum markets since 2004 due to the absence of the high roller speculators and adverse weather conditions. Those investors were burned in the big oil price freefall during the second half of 2008 by following bad advice from their investment brokers.
In August 2009 the U.S. Security and Exchange Commission took initial steps to enforce the strict limitations on dealings between bankers and stock analysts. The law requires investment firms to engage in “fair dealings with customers” and prohibits in-house analysts from issuing opinions and research reports that are at odds with their true beliefs about the market. These opinions are spread fast, far and wide utilizing today’s high tech communications.
The market is also very nervous after news that the Chicago Mercantile Exchange (CME) Group, which runs the New York Mercantile Exchange (NYMEX), notified traders and brokers of tighter enforcement of existing position limits on NYMEX, CME, and other exchanges as of September 14, 2009.
US oil refiners, who were producing diesel in record numbers last year, reversed course earlier this year and made their refining stream fall in line with the flat demand for gasoline and the ever shrinking demand for diesel fuel. Refinery runs have drifted down to 86.94% of capacity from the previous week's 87.2%. Inventories of crude oil and its finished products are at all time high.
That will have the affect of starting the downward slide for gasoline and diesel fuel prices with the price of crude oil following right along.
Bob van der Valk is the Director of US Branded Licensing and Fuel-Pricing Analyst with 4Refuel Inc. in Lynnwood, Washington and can be contacted at (425) 216-9072 or by email at bvan@4refuel.com and web site: http://www.4refuel.com/
Bob’s professional web site is: www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
Showing posts with label 4refuel. Show all posts
Showing posts with label 4refuel. Show all posts
Monday, September 21, 2009
Monday, August 31, 2009
The lull before the storm for gasoline prices
The van der Valk Gas Price Advisory for August 28, 2009
Dateline: Issaquah, Washington
By: Bob van der Valk
August 28, 2009 9:00 AM PDT
Right now there is a tropical depression named Terry (after my hometown in Montana) but it is slowly becoming a storm and will then turn into a full fledged hurricane. Of course, I am referring to what is happening with gasoline pump prices. The average price of gasoline over the last seven days has not changed precipitously but that is quickly changing on the oil market weather map. The AAA fuelgauge report shows the national average price of self-serve regular gas is $2.613 per gallon on Friday, down just over a penny from a week ago. The national average price of diesel fuel is $2.697 a gallon, up just over a penny.
For much of 2009, crude oil prices have gone steadily upward from the low 30's to the middle 70's. Meanwhile pump prices have increased nationwide from $1.50 to $2.60 per gallon. At 42 gallons to a barrel of crude each $10 represents about 25 cents per gallon increase or decrease for gasoline. But the market has reacted to the current recession just the opposite of traditional supply and demand dynamics. Instead of gasoline prices staying steady, they went up while the US and Canadian economies were going through their doldrums.
About 50% of the trades on the Nymex and ICE exchanges represent entities who will not take the delivery of one wet barrel of crude oil or fuel when their contracts expire. That is down from 55% at the same time last year before the crude oil price bubble burst. However, it is still higher than the 20% of traders holding paper barrels in 2000. That year is significant because that is when the CTFC took volume requirement off traders dealing on international exchanges. Speculators did what speculators do best and figured out a way to game the system in order to make money.
The big boys are now investing huge amounts of money on the US dollar as a hedge against inflation as well as flow money into the commodities markets, which has served as the primary driver of oil prices.
Gasoline prices are highest in Hawaii, at $3.297 a gallon, and cheapest in South Carolina, at $2.38 a gallon. California meanwhile has remained stable during the week, averaging $3.046 a gallon. The highest price for gasoline is San Francisco, where the average cost is $3.133 a gallon. The cheapest market is Yuba City, with an average price of $2.948 a gallon.
The Labor Day weekend is just a week away and the spot market prices for gasoline have already firmed up. That will translate into higher prices at the gas pump at least until the middle of September. By then the hurricane season for gasoline prices will come to an end when oil companies start switching to refining winter grade gasoline. The supply of gasoline and diesel will increase by 10% and pump prices will ease back down to $2 per gallon by Thanksgiving and crude oil to the 40's.
Dateline: Issaquah, Washington
By: Bob van der Valk
August 28, 2009 9:00 AM PDT
Right now there is a tropical depression named Terry (after my hometown in Montana) but it is slowly becoming a storm and will then turn into a full fledged hurricane. Of course, I am referring to what is happening with gasoline pump prices. The average price of gasoline over the last seven days has not changed precipitously but that is quickly changing on the oil market weather map. The AAA fuelgauge report shows the national average price of self-serve regular gas is $2.613 per gallon on Friday, down just over a penny from a week ago. The national average price of diesel fuel is $2.697 a gallon, up just over a penny.
For much of 2009, crude oil prices have gone steadily upward from the low 30's to the middle 70's. Meanwhile pump prices have increased nationwide from $1.50 to $2.60 per gallon. At 42 gallons to a barrel of crude each $10 represents about 25 cents per gallon increase or decrease for gasoline. But the market has reacted to the current recession just the opposite of traditional supply and demand dynamics. Instead of gasoline prices staying steady, they went up while the US and Canadian economies were going through their doldrums.
About 50% of the trades on the Nymex and ICE exchanges represent entities who will not take the delivery of one wet barrel of crude oil or fuel when their contracts expire. That is down from 55% at the same time last year before the crude oil price bubble burst. However, it is still higher than the 20% of traders holding paper barrels in 2000. That year is significant because that is when the CTFC took volume requirement off traders dealing on international exchanges. Speculators did what speculators do best and figured out a way to game the system in order to make money.
The big boys are now investing huge amounts of money on the US dollar as a hedge against inflation as well as flow money into the commodities markets, which has served as the primary driver of oil prices.
Gasoline prices are highest in Hawaii, at $3.297 a gallon, and cheapest in South Carolina, at $2.38 a gallon. California meanwhile has remained stable during the week, averaging $3.046 a gallon. The highest price for gasoline is San Francisco, where the average cost is $3.133 a gallon. The cheapest market is Yuba City, with an average price of $2.948 a gallon.
The Labor Day weekend is just a week away and the spot market prices for gasoline have already firmed up. That will translate into higher prices at the gas pump at least until the middle of September. By then the hurricane season for gasoline prices will come to an end when oil companies start switching to refining winter grade gasoline. The supply of gasoline and diesel will increase by 10% and pump prices will ease back down to $2 per gallon by Thanksgiving and crude oil to the 40's.
Monday, July 13, 2009
Crude oil – A bridge to our renewable energy future
The real story behind the Bakken Oil Formation
Dateline: Terry, Montana
July 13, 2009 1:00 PM MDT
By: Bob van der Valk
Dateline: Terry, Montana
July 13, 2009 1:00 PM MDT
By: Bob van der Valk
President Obama is being invited to spend some of his time in his own back yard to rub shoulders with the oil workers of Montana and North Dakota to check on their progress for increasing domestic crude oil production.
The President would be able to obtain greater insight on how to solve this country’s energy needs for the immediate future. Brett Smelser, owner of Border Steel and Recycling, who is the mayor of Sidney, Montana as well, would like to have a chance to speak to him directly about the local effort in making our nation energy independent. He is actively involved in his state’s effort about getting the message out on how to best develop the Bakken’s rich mineral deposits
Exploration for crude oil in the Bakken Oil Formation is rapidly being expanded and its output is expected to expand exponentially as long as oil prices remain above $60 a barrel. The U.S. Geological Survey (USGS) figures it could yield up to 3.65 billion barrels of recoverable oil with additional reserves possible using even more sophisticated and as yet not invented methods. It is the largest oil field in the continental U.S. but it does not come close to the roughly 60 billion barrels of existing proven reserves discovered in the North Slope of Alaska.
The President will learn that oil is the “Life-blood of America” and a national energy policy, not based on politics as usual, is urgently required. What would happen if we had another energy crisis occurs and the Organization of the Petroleum Exporting Countries (OPEC) decides to cut us off again? Our generation still remembers the days of gasoline allocation, even and odd days buying of gasoline and pulling up to the gas station behind the “last car in line” during two energy crises of the 1970’s.
The following map shows how much of the area the Bakken Oil Formation covers:
In addition to having been the mayor of Sidney since 2002, Mr. Smelser was appointed to the Montana Board of Oil and Gas Conservation by Governor Brian Schweitzer in 2007 and serves in his current term until 2011. He spoke to me about the need for cooperation between the different state and federal governmental entities involved in oil production since the area in which he lives and works, which straddles all the way from Eastern Montana to Western North Dakota.
The catch with President Obama’s current energy plans, to increase energy conservation as well as fuel efficiency gains, is that he has decided to pair that up with government intervention. This will reduce demand by installing a cap-and-trade, fuel tax or carbon tax, thereby any savings from efficiency gains will be taxed away or otherwise removed from further economic circulation and therein lies the rub. Crude oil will be more expensive to explore for and produce in North America, especially when compared to the Canadian oil sands.
We need to build a bridge to a renewable energy future in the U.S. Further exploration for domestic crude oil will be a crucial step in filling that gap. Some alternative energy projects may be as far as twenty years of away of getting on-line. By then we may be able to rely on wind, solar and hydro-power as a way to energy independence.
Mr. Smelser said that the first step should be to expand the capacity of crude oil shipping pipelines as well build at least one new refinery in the area. The local sweet crude oil is now trading at $10 discount from the West Texas Intermediate crude oil posted price, and more investments will be required to take full advantage of this domestic oil production.
The USGS estimates the Bakken possesses 3.0 to 4.3 billion barrels of yet "undiscovered, technically recoverable" crude oil and 1.85 Trillion Cubic Feet (Tcf) of natural gas. The formation is also estimated to hold 148 million barrels of natural gas liquids.
The current pipeline is overbooked and some oil wells have already been slowed down or shut down pumping completely until the infrastructure catches up to handling the overabundance of crude oil still in the ground.
This is the part of our country where the real work gets done to keep the oil flowing. The slogan “Get ‘R Done” is seen far and wide in what is commonly known as the Bad Lands. But that slogan will become a household word in the country and soon may be called “Persia on the Prairie”. The locals in Williston, North Dakota are more prone to using their own slogan, “Rockin the Bakken”; in showing enthusiasm for their new found buried treasure.
In between very modest homes and farms we are sitting on top of one the largest reserve of crude oil The underground Bakken Oil Formation stretches from Eastern Montana through North Dakota north to Saskatchewan and Manitoba, Canada and it is just now receiving the national attention it so well deserves.
The heart of the Bakken oil field, which contains three layers of shale, was formed when the area was covered with a relatively deep ocean. It is about two miles down with about two-thirds of the acreage located in western North Dakota. In the year 2000, the Elm Coulee oil field was discovered in the Williston Basin of Richland County, Montana and draws its oil from the Bakken Oil Formation.
This massive rock of shale was initially discovered as an oil source in the mid-1950s, but with extremely low porosity and permeability, it was almost impossible to exploit fully with conventional drilling techniques. At that time crude oil was going for less than $10 a barrel. Other methods were cost prohibitive with more sophisticated but more expensive and not yet invented methods being required.
A joint venture, of Exxon, Unocal and Tosco in Colorado first explored and developed crude oil from shale oil deposits in Colorado during the two energy crises in the 1970’s, quickly dissipated when the Reagan era of hands off policy on government controls on energy took hold.
Their site was located in Parachute, Colorado but was eventually shut down when the U.S. government decided to withdraw the subsidies being paid to the oil companies. The major difference between the Parachute and Bakken operation is the first used a “retort” and the latter “in situ" (meaning in its original form, undisturbed) for their oil shale recovery systems. In situ uses slanted drilling and “fractionation” extraction techniques to bring “Black Gold” up to the surface instead using the standard horizontal drilling.
By itself and without government support the development of oil shale into crude oil was uneconomical especially when the price of a barrel crude oil took another dive in the early 1980’s. But we are now in the affordability range once again with West Texas Intermediate crude oil around $60 a barrel.
The cost of exploring and producing crude oil from shale is still relativity higher compared than that of exploring for conventional crude oil, which can be brought up from underground for about $40 a barrel in even the most far away places in the world.
Perhaps in the year 2109 our future generation of kids will be shaking their heads in disbelief at our futile attempts to stay ahead of running out of energy while watching repeats on television of “Black Gold", "Deadliest Catch" and "Ice Road Truckers”. In their American History classes they will have to listen to lectures about how we used to transport our oil from the Middle East instead of exploring for it in our own backyard.
They will be shocked and awed just as we were when reading about our early pioneers, who actually churned their own butter and had milk delivered to their doors each morning.
Bob van der Valk resides in Terry, Montana and is the Director of US Branded Licensing with 4Refuel Inc. in Lynnwood, Washington and can be contacted at (425) 216-9072 or by email at bvan@4refuel.com and web site: www.4refuel.com.
Bob’s personal web page address is: www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
Saturday, July 4, 2009
What can be done about diesel fuel prices?
Dateline: Terry, Montana, U.S.
July 4, 2009
The big holiday and vacation season is once again upon us. Canada and the U.S. just celebrated their respective national birthdays and all eyes in our industry are being kept on whether consumer confidence has re-instilled itself.
Diesel fuel is one of the most critical commodities in keeping the Canadian and U.S. economies rolling. In our transportation and construction industries almost all aspects of operations are fueled by diesel engines. Rising diesel fuel prices can translate to increasing costs of products and services. In order to know what can be done to slow down this increase, you as a consumer need to be aware of its causes and find creative ways to save money on your fuel usage.
There are several basic elements that determine the worth of a gallon of diesel. About fifty-five percent of the cost of diesel reflects the price of crude oil, which is raw material for diesel production. Crude oil is brought from the oil fields to the refineries where the ultra-low sulfur diesel, among other petroleum products, is extracted.
Given a barrel of crude is 42 gallons; the average refinery is able to produce about 8 gallons of diesel and jet fuel or 20 % of the total. About half of the barrel is made into gasoline with the remainder in low end bunker fuel oils and other petroleum products. Refining accounts for nearly fifteen percent of diesel fuel cost.
The remaining elements of the cost of diesel fuel are government taxes and the expense of advertising and delivery. A ten percent excise tax is levied onto all fuel products that are refined in Canada. Although foreign fuel can avoid this tax, it is generally cheaper to buy locally refined fuel as import taxes generally are passed along to the consumer. Marketing and distribution make up about five percent of total diesel fuel cost, but this can often be the most volatile factor affecting the value of diesel fuel.
This is where the diesel fuel consumers may have a sure fire way to save money on their cost for operating their diesel trucks and equipment. They can make arrangements with an on-site fueling company like 4Refuel headquartered in Langley BC, Canada. They currently service most of the Canadian market and recently expanded into the U.S. West Coast market by opening an office in Lynnwood, Washington serving the Greater Seattle area.
Saving fuel and lowering consumption is not only good for the environment; it decreases demand, and ultimately your cost. The factors that affect diesel fuel prices seem complex, but an understanding of the basic principles can empower the individual consumer to make the right decisions.
Bob van der Valk resides in Terry, Montana and is the Fuel-pricing Analyst with 4Refuel LLC in Lynnwood, Washington. He can be contacted at (971) 678-2975 or e-mail him at: bvan@4refuel.com
July 4, 2009
The big holiday and vacation season is once again upon us. Canada and the U.S. just celebrated their respective national birthdays and all eyes in our industry are being kept on whether consumer confidence has re-instilled itself.
Diesel fuel is one of the most critical commodities in keeping the Canadian and U.S. economies rolling. In our transportation and construction industries almost all aspects of operations are fueled by diesel engines. Rising diesel fuel prices can translate to increasing costs of products and services. In order to know what can be done to slow down this increase, you as a consumer need to be aware of its causes and find creative ways to save money on your fuel usage.
There are several basic elements that determine the worth of a gallon of diesel. About fifty-five percent of the cost of diesel reflects the price of crude oil, which is raw material for diesel production. Crude oil is brought from the oil fields to the refineries where the ultra-low sulfur diesel, among other petroleum products, is extracted.
Given a barrel of crude is 42 gallons; the average refinery is able to produce about 8 gallons of diesel and jet fuel or 20 % of the total. About half of the barrel is made into gasoline with the remainder in low end bunker fuel oils and other petroleum products. Refining accounts for nearly fifteen percent of diesel fuel cost.
The remaining elements of the cost of diesel fuel are government taxes and the expense of advertising and delivery. A ten percent excise tax is levied onto all fuel products that are refined in Canada. Although foreign fuel can avoid this tax, it is generally cheaper to buy locally refined fuel as import taxes generally are passed along to the consumer. Marketing and distribution make up about five percent of total diesel fuel cost, but this can often be the most volatile factor affecting the value of diesel fuel.
This is where the diesel fuel consumers may have a sure fire way to save money on their cost for operating their diesel trucks and equipment. They can make arrangements with an on-site fueling company like 4Refuel headquartered in Langley BC, Canada. They currently service most of the Canadian market and recently expanded into the U.S. West Coast market by opening an office in Lynnwood, Washington serving the Greater Seattle area.
Saving fuel and lowering consumption is not only good for the environment; it decreases demand, and ultimately your cost. The factors that affect diesel fuel prices seem complex, but an understanding of the basic principles can empower the individual consumer to make the right decisions.
Bob van der Valk resides in Terry, Montana and is the Fuel-pricing Analyst with 4Refuel LLC in Lynnwood, Washington. He can be contacted at (971) 678-2975 or e-mail him at: bvan@4refuel.com
Wednesday, July 1, 2009
Good news: Prices are up for crude oil but down for gasoline
Dateline: Terry, Montana
July 1, 2009
The price of crude oil has been hovering around $70 a barrel for the last week meanwhile gasoline pump prices in the U.S. and Canada are down by about a nickel a gallon or 1 cent per litre during that same time. The average price for a gallon of gasoline is $2.63 today per the AAA fuelguage report. Montana’s gasoline prices are averaging $2.71 barely nudging down from a week ago price.
If there seems to be no correlation between the two, it is because U.S. and Canadian refineries are just now running crude oil they purchased earlier this year. The typical shelf time in shipping from the well to the refinery is about six weeks and crude oil in the tank at the refineries is still at around $40 a barrel. So who do we blame? The greedy oil companies, those evil Wall Street speculators or is it just plain simple Gasoline Marketing 101?
Crude oil accounts for 55 percent of the cost of gasoline. The other big chunk is the federal, state and local taxes, which make up 24 percent of the cost. Then we add refining costs and profits of 15 percent to the cost of gasoline. Distribution and marketing costs made up the final 6 percent of the cost.
The Petroleum Marketers Association reports the profit margin at each local gas station of between 3 and 15 cents per gallon of gasoline.
This morning we wait for the release of the weekly Department of Energy's inventory statistics, which will give some direction to the market. Other factors may be at work as well with a myriad of glitches at U.S. refineries spooking the traders into shoring up their deals before the July 4th weekend. With just three trading days left in the week no one would knowingly get caught at the end of a short stick in keeping physical product flowing into their tanks.
Armed conflicts and threats around the world are receiving the usual buzz by the paper traders and one that is having an immediate affect is in Nigeria. That has resulted in almost 1 million barrels per day of crude oil being cut off from being shipped to the U.S.
The Shell Oil platform and shipping terminal in the Niger Delta was blown up by militants last weekend interrupting vitally needed crude oil from being loaded. The Nigerian government has desperately been trying to deal with the situation and has even offered amnesty to the dissidents if they lay down their arms.
Speculators are hard at work trying to make money by betting on any outcome. But the adage that “For every winner, there is a loser” applies to the investment business just like it does in sports.
Bob van der Valk resides in Terry, Montana and is the fuel-pricing analyst with 4Refuel Inc. in Lynnwood, Washington. He can be contacted at (971) 678-2975 or e-mail to: tridemoil@aol.com
His viewpoints and previous articles about the petroleum industry can be found at web site address: http://www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
July 1, 2009
The price of crude oil has been hovering around $70 a barrel for the last week meanwhile gasoline pump prices in the U.S. and Canada are down by about a nickel a gallon or 1 cent per litre during that same time. The average price for a gallon of gasoline is $2.63 today per the AAA fuelguage report. Montana’s gasoline prices are averaging $2.71 barely nudging down from a week ago price.
If there seems to be no correlation between the two, it is because U.S. and Canadian refineries are just now running crude oil they purchased earlier this year. The typical shelf time in shipping from the well to the refinery is about six weeks and crude oil in the tank at the refineries is still at around $40 a barrel. So who do we blame? The greedy oil companies, those evil Wall Street speculators or is it just plain simple Gasoline Marketing 101?
Crude oil accounts for 55 percent of the cost of gasoline. The other big chunk is the federal, state and local taxes, which make up 24 percent of the cost. Then we add refining costs and profits of 15 percent to the cost of gasoline. Distribution and marketing costs made up the final 6 percent of the cost.
The Petroleum Marketers Association reports the profit margin at each local gas station of between 3 and 15 cents per gallon of gasoline.
This morning we wait for the release of the weekly Department of Energy's inventory statistics, which will give some direction to the market. Other factors may be at work as well with a myriad of glitches at U.S. refineries spooking the traders into shoring up their deals before the July 4th weekend. With just three trading days left in the week no one would knowingly get caught at the end of a short stick in keeping physical product flowing into their tanks.
Armed conflicts and threats around the world are receiving the usual buzz by the paper traders and one that is having an immediate affect is in Nigeria. That has resulted in almost 1 million barrels per day of crude oil being cut off from being shipped to the U.S.
The Shell Oil platform and shipping terminal in the Niger Delta was blown up by militants last weekend interrupting vitally needed crude oil from being loaded. The Nigerian government has desperately been trying to deal with the situation and has even offered amnesty to the dissidents if they lay down their arms.
Speculators are hard at work trying to make money by betting on any outcome. But the adage that “For every winner, there is a loser” applies to the investment business just like it does in sports.
Bob van der Valk resides in Terry, Montana and is the fuel-pricing analyst with 4Refuel Inc. in Lynnwood, Washington. He can be contacted at (971) 678-2975 or e-mail to: tridemoil@aol.com
His viewpoints and previous articles about the petroleum industry can be found at web site address: http://www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
Saturday, June 27, 2009
Oklahoma Attorney General says BP/Arco manipulates gasoline prices
Dateline: Terry, Montana
June 27, 2009 6:00 AM MDT
Nationally the average price for regular unleaded gasoline is $2.658 down about 3 cents per gallon from a week ago. Montana's gasoline prices have leveled off at $2.72 with California staying high at $3.01 per gallon. Hawaii gets the prize for the highest cost for gasoline at $3.09 per gallon in the AAA fuelgauge.report. The gasoline spot market price meanwhile has dropped by 20 cents per gallon in the last two weeks but retail pump prices have not reacted in kind and are not expected to drop much more before the end of next week.
Pump prices have barely budged with the spot market gasoline and diesel prices going down another 2-3 cents per gallon at the end of this week. The August WTI crude oil price decreased $1.07 to just above $69.16 a barrel on Friday
Big industry news was published in the Oklahoma Daily Journal on Friday that State Attorney General Drew Edmondson had filed a lawsuit against BP/Arco (BPL). He is accusing them of gaming the price of gasoline and crude oil since 2002. This alleged scheme had previously been brought to the attention of the Federal Trade Commission but Edmondson claims to have found fresh evidence that BP was able to manipulate gas prices by hoarding short-term motor fuel and crude oil supplies.
The Federal Trade Commission (FTC) investigated those same allegations in 2006. At that time, BP/Arco was suspected of manipulating the petroleum market by controlling the physical West Texas Intermediate (WTI) crude oil inventory at the Cushing, Oklahoma terminal. They have since divested some of those assets but they are still dominant in trading WTI at the Cushing terminal.
The initial investigation into trading practices between oil companies was called for by Congress in the wake of the huge gasoline and fuel price spikes, which occurred in the aftermath of the Rita and Katrina hurricanes. Those storms ended up hitting refinery complex located on the U.S. Gulf Coast in August and September of 2005. Extensive damage was incurred to those refineries and interrupted the supply of crude oil, finished fuels and lubricating oils to the market.
The oil companies were absolved of any wrong doing by the FTC in the "Investigation of Gasoline Price Manipulation and Post-Katrina Gasoline Price Increases” published in the spring of 2006. That report concluded that normal supply and demand market forces were the reasons for the price variances in the petroleum markets.
AG Drew Edmondson has announced his intentions to be a candidate for Governor in Oklahoma in 2010. That announcement and the filing of the lawsuit against BP/Arco were coincidentally made on June 10, 2009. Any outcome of this lawsuit will definitely also have an effect on the upcoming election in crude oil rich Oklahoma.
Bob van der Valk is the Director of US Branded Licensing with 4Refuel Inc. in Lynnwood, Washington and can be contacted at (971) 678-2975 or by email at: tridemoil@aol.com
Bob’s web site address is: www.4vqp.com/ourconsultants/thegasguy.html
June 27, 2009 6:00 AM MDT
Nationally the average price for regular unleaded gasoline is $2.658 down about 3 cents per gallon from a week ago. Montana's gasoline prices have leveled off at $2.72 with California staying high at $3.01 per gallon. Hawaii gets the prize for the highest cost for gasoline at $3.09 per gallon in the AAA fuelgauge.report. The gasoline spot market price meanwhile has dropped by 20 cents per gallon in the last two weeks but retail pump prices have not reacted in kind and are not expected to drop much more before the end of next week.
Pump prices have barely budged with the spot market gasoline and diesel prices going down another 2-3 cents per gallon at the end of this week. The August WTI crude oil price decreased $1.07 to just above $69.16 a barrel on Friday
Big industry news was published in the Oklahoma Daily Journal on Friday that State Attorney General Drew Edmondson had filed a lawsuit against BP/Arco (BPL). He is accusing them of gaming the price of gasoline and crude oil since 2002. This alleged scheme had previously been brought to the attention of the Federal Trade Commission but Edmondson claims to have found fresh evidence that BP was able to manipulate gas prices by hoarding short-term motor fuel and crude oil supplies.
The Federal Trade Commission (FTC) investigated those same allegations in 2006. At that time, BP/Arco was suspected of manipulating the petroleum market by controlling the physical West Texas Intermediate (WTI) crude oil inventory at the Cushing, Oklahoma terminal. They have since divested some of those assets but they are still dominant in trading WTI at the Cushing terminal.
The initial investigation into trading practices between oil companies was called for by Congress in the wake of the huge gasoline and fuel price spikes, which occurred in the aftermath of the Rita and Katrina hurricanes. Those storms ended up hitting refinery complex located on the U.S. Gulf Coast in August and September of 2005. Extensive damage was incurred to those refineries and interrupted the supply of crude oil, finished fuels and lubricating oils to the market.
The oil companies were absolved of any wrong doing by the FTC in the "Investigation of Gasoline Price Manipulation and Post-Katrina Gasoline Price Increases” published in the spring of 2006. That report concluded that normal supply and demand market forces were the reasons for the price variances in the petroleum markets.
AG Drew Edmondson has announced his intentions to be a candidate for Governor in Oklahoma in 2010. That announcement and the filing of the lawsuit against BP/Arco were coincidentally made on June 10, 2009. Any outcome of this lawsuit will definitely also have an effect on the upcoming election in crude oil rich Oklahoma.
Bob van der Valk is the Director of US Branded Licensing with 4Refuel Inc. in Lynnwood, Washington and can be contacted at (971) 678-2975 or by email at: tridemoil@aol.com
Bob’s web site address is: www.4vqp.com/ourconsultants/thegasguy.html
Tuesday, June 23, 2009
Dateline: Terry, Montana
June 23, 2009 2:30 PM MDT
By: Bob van der Valk
April showers may bring May flowers but this year it also brought forth a spring time renewal for oil refiner’s profits. This was in the form of increased demand for gasoline after dismal first quarter results in 2009. But now the June swoon has come too soon and the oil companies are looking forward to those summer breezes peeking just around the corner
I was waxing somewhat poetic while reading a flood of news reports this week about gasoline prices in the U.S. and Canada dropping for the first time in over seven weeks. The average price for gasoline in both countries has dropped a whopping seven tenth of a cent of a gallon or liter this week. Motorists have been practically been dancing in the streets celebrating their new found fortune according to on the spot media reports from many parts of the country. Some are even quoting some experts about gasoline prices having peaked and to be going down for the remainder of this year.
But wait just a minute! How come the price of crude oil dropped $5 to around $69 a barrel in the last two weeks but gas prices have only gone down by a fraction of a cent during that same time? Haven’t we been told by some of the pundits that gas prices always move in lock step with crude oil prices? That for every dollar a barrel change in the price of crude oil we are supposed to see gasoline move up or down 2.5 cents per gallon at the pump?
The answer my friend is blowing in the wind. This time around the major oil companies are not matching the independent unbranded gasoline rack prices down as fast as you were expecting. The difference between the major branded dealer tank wagon and independent unbranded gasoline prices is now over 20 cents per gallon in the U.S. and 5 cents per liter in Canada. This phenomenon is known in our industry as: “Gas prices shoot up like a rocket, and drift down like a feather”.
In this case the oil companies are stocking up to be prepared in case those summer breezes change into hurricanes. Gasoline demand has increased with April being the latest month on record showing an increase over the same month last year. So with Canada Day on July 1st and the U.S. July 4th weekend just around the corner do not expect to see pump prices coming down a lot this week.
Different average gas prices have been bandied about by various agencies of the government and private companies with the motoring public somewhat confused about which number to believe. For instance on June 22nd the Energy Information Agency (EIA) showed the average price for a gallon of regular gasoline in the U.S. to be at $2.691 while the AAA fuelgauge reported it at $2.69. Those two seem to be in sync but on the other hand the gasbuddy.com web site reported the average U.S. price at $2.663 per gallon.
The difference in the two reports is that the EIA and AAA uses information provided through credit card purchases. The gasbuddy.com web site has price spotters, who log in and report pump prices from their local gas stations for both cash and credit cards.
For instance Arco stations do not accept anything other than cash or debit cards at their pumps and are usually the lowest price in their neighborhood. That tends to skew the average price per gallon by about 3 cents per gallon. This is due to dealers, who do accept all types of credit cards, having to price their gasoline higher by having to pay a merchant fee for each transaction to their banks.
In the short term prices will continue to go up another 25 cents per gallon between now and middle of August. After Labor Day gasoline prices will ebb down slowly and by Thanksgiving go back down to about where they were last year at the same time. That means you can start looking forward to $2 per gallon gasoline at a gas station near you by Christmas this year.
Now you know what is going to be happening in the refining and marketing end of the oil industry, you should go fill up your tank by this weekend before gas prices are raised. In the Badlands of Eastern Montana we believe in the moral behind the fable of the “Milkmaid and Her Pail”, which goes: “Do not count your chickens before they are hatched!”
Bob van der Valk resides in Terry, Montana and is the Director of US Branded Licensing with 4Refuel Inc. in Lynnwood, Washington. He can be contacted at (971) 678-2975 or by email at: tridemoil@aol.com
Bob’s web site address is: www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
June 23, 2009 2:30 PM MDT
By: Bob van der Valk
April showers may bring May flowers but this year it also brought forth a spring time renewal for oil refiner’s profits. This was in the form of increased demand for gasoline after dismal first quarter results in 2009. But now the June swoon has come too soon and the oil companies are looking forward to those summer breezes peeking just around the corner
I was waxing somewhat poetic while reading a flood of news reports this week about gasoline prices in the U.S. and Canada dropping for the first time in over seven weeks. The average price for gasoline in both countries has dropped a whopping seven tenth of a cent of a gallon or liter this week. Motorists have been practically been dancing in the streets celebrating their new found fortune according to on the spot media reports from many parts of the country. Some are even quoting some experts about gasoline prices having peaked and to be going down for the remainder of this year.
But wait just a minute! How come the price of crude oil dropped $5 to around $69 a barrel in the last two weeks but gas prices have only gone down by a fraction of a cent during that same time? Haven’t we been told by some of the pundits that gas prices always move in lock step with crude oil prices? That for every dollar a barrel change in the price of crude oil we are supposed to see gasoline move up or down 2.5 cents per gallon at the pump?
The answer my friend is blowing in the wind. This time around the major oil companies are not matching the independent unbranded gasoline rack prices down as fast as you were expecting. The difference between the major branded dealer tank wagon and independent unbranded gasoline prices is now over 20 cents per gallon in the U.S. and 5 cents per liter in Canada. This phenomenon is known in our industry as: “Gas prices shoot up like a rocket, and drift down like a feather”.
In this case the oil companies are stocking up to be prepared in case those summer breezes change into hurricanes. Gasoline demand has increased with April being the latest month on record showing an increase over the same month last year. So with Canada Day on July 1st and the U.S. July 4th weekend just around the corner do not expect to see pump prices coming down a lot this week.
Different average gas prices have been bandied about by various agencies of the government and private companies with the motoring public somewhat confused about which number to believe. For instance on June 22nd the Energy Information Agency (EIA) showed the average price for a gallon of regular gasoline in the U.S. to be at $2.691 while the AAA fuelgauge reported it at $2.69. Those two seem to be in sync but on the other hand the gasbuddy.com web site reported the average U.S. price at $2.663 per gallon.
The difference in the two reports is that the EIA and AAA uses information provided through credit card purchases. The gasbuddy.com web site has price spotters, who log in and report pump prices from their local gas stations for both cash and credit cards.
For instance Arco stations do not accept anything other than cash or debit cards at their pumps and are usually the lowest price in their neighborhood. That tends to skew the average price per gallon by about 3 cents per gallon. This is due to dealers, who do accept all types of credit cards, having to price their gasoline higher by having to pay a merchant fee for each transaction to their banks.
In the short term prices will continue to go up another 25 cents per gallon between now and middle of August. After Labor Day gasoline prices will ebb down slowly and by Thanksgiving go back down to about where they were last year at the same time. That means you can start looking forward to $2 per gallon gasoline at a gas station near you by Christmas this year.
Now you know what is going to be happening in the refining and marketing end of the oil industry, you should go fill up your tank by this weekend before gas prices are raised. In the Badlands of Eastern Montana we believe in the moral behind the fable of the “Milkmaid and Her Pail”, which goes: “Do not count your chickens before they are hatched!”
Bob van der Valk resides in Terry, Montana and is the Director of US Branded Licensing with 4Refuel Inc. in Lynnwood, Washington. He can be contacted at (971) 678-2975 or by email at: tridemoil@aol.com
Bob’s web site address is: www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
Thursday, June 18, 2009
The insider’s secret on how gasoline is priced
Dateline: Terry, Montana
June 18, 2009 11:00 AM MDT
By: Bob van der Valk
After emigrating to the U.S. from Holland, at the young age of 15, I learned to speak English by watching Saturday morning cartoons and listening to Elvis Presley songs on the radio.
English was a mysterious language to me and it took a while before I caught on to the finer nuances of speaking English. The kids at North Miami High School in Florida thought that my Bugs Bunny and Elvis Presley voice impressions were a riot and I l quickly was able some good friends.
The U.S. and Canadian motoring public learn much about the cause of the wild gas price gyrations from the same type of sources.
Crude oil prices are usually made out to be the culprit and blamed by the media for the gas price roller coaster rides. But is not the only factor in the current round of fuel price spikes. Today gas prices tend to influence and support crude oil prices. That opinion runs counter to the conventional view that crude oil drives gasoline prices.
It is the inverse of what occurred with fuel prices in 2007 and early 2008 in the petroleum industry. Since August last year, fuel prices have been driving crude oil prices up and down.
It is my prediction that crude oil may hit $85 in the near term and then ebb back down to $40 by the fall of this year. By Christmas 2009 the price of gasoline in the U.S. should be around $2 per gallon with Canada at 90 cents per liter.
In early August 2008, I made a forecast, published in the Pasadena (CA) Star News, that crude oil and gasoline prices would go down in the last part of 2008. In August, crude oil was still hovering around $140 a barrel and gasoline was over $4 a gallon in the U.S.
By December 2008 the average price of crude oil was $33 a barrel and gasoline was at $1.60 per gallon. That severe drop was aggravated by the economy’s plunge into its recession along with the financial crisis.
I made a prediction in the January 2009 that gas prices would hit $3 per gallon again by the summer as quoted in the following article:
http://www.insidesocal.com/news247/2009/01/gas-prices-could-reach-3-by-su.html
I have been in the petroleum industry for almost 50 years with all that time spent in the refining and marketing (R & M) end of the business. In my early career I worked in the retail and wholesale departments for Union Oil Company of California a.k.a. Unocal in Los Angeles. This should qualify me as the ultimate insider and expert on the way the petroleum industry prices gasoline.
The U.S. petroleum industry has returned to the basics of refining crude oil into gasoline. Major oil companies have the ability to explore and produce for crude oil and bring it up out of the ground for around $40 a barrel. Any amount over that price is pure profit to the oil companies.
The competitive battle between Exploration & Production (E &P) and R & M managers at the oil companies is back on. Each cannot stand to see the other make all the profits for their company.
In the days before the price of crude oil became paper driven, the R & M department used to have knockdown-drag out fights with the E & P department about the price of crude oil delivered to our refinery gate. In those days, they would price crude oil based on price posted at the well plus transportation costs. R & M would then add the cost to refine the crude into fuels and add the marketing cost to determine the wholesale or dealer tank wagon prices.
Today, they take the easy way out and relate their refinery gate crude oil price to the West Texas Intermediate (WTI) crude oil price plus or minus a discount for quality and location. For instance, the posted price for Elm Coulee crude oil in Richland, Montana is currently fetching the WTI daily posted price less $10 a barrel at the well head. R & M still has to add their costs to that price and relate that to the current wholesale and retail prices in order to stay competitive.
In March of 2001 Tom O’Malley, then CEO of Tosco, got tired of losing money for part of the year then trying to make it back during the spring time and summer driving seasons. He announced to his refining and marketing management team at a company meeting in their Phoenix headquarters, that they would tie their retail prices to the wholesale spot market price for gasoline and diesel.
The petroleum market is driven by trades in paper barrels for crude oil and finished products on the New York Mercantile Exchange (NYMEX). That in turn gives indications to the spot market and it has become a case of the tail wagging the dog.
The other major oil companies soon followed suit and since then the pipeline spot market has been driving fuel prices up and down. Today’s gasoline prices are based on a “What the market will bear” strategy by the major oil companies. In the 4th quarter of 2008 and 1st quarter of 2009 refineries lost big time money. Some of them, including the Big West refinery in Bakersfield, were forced to close down due to poor economics. This trend will continue as long as the big money investors stay on the sidelines and cause more havoc in the petroleum markets.
Goldman Sachs & Co., Morgan Stanley and other large investors are able to sidestep regulations that limit investments in commodities such as crude oil. They are investing on behalf of pension funds, endowments, hedge funds and other big institutional investors, in part as a hedge against rising inflation. Crude oil investment is used to offset the weaker dollar with the money going back and forth as the world economy continues its slow recovery
A stream of financial deregulation under the Clinton administration, culminated in the Commodity Futures Modernization Act of 2000. These over-the-counter markets are 10 times larger than the futures market with no position limits and almost no regulations to control their investments.
I have now revealed my secrets on the mystery of fuel pricing to you. I hope that the answer is as simple as watching those Saturday morning cartoons in order to learn to speak English.
Bob van der Valk is the Director of US Branded Licensing with 4Refuel Inc. in Lynnwood, Washington and can be contacted at (971) 678-2975 or by email at: tridemoil@aol.com
Bob’s web site address is: www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
June 18, 2009 11:00 AM MDT
By: Bob van der Valk
After emigrating to the U.S. from Holland, at the young age of 15, I learned to speak English by watching Saturday morning cartoons and listening to Elvis Presley songs on the radio.
English was a mysterious language to me and it took a while before I caught on to the finer nuances of speaking English. The kids at North Miami High School in Florida thought that my Bugs Bunny and Elvis Presley voice impressions were a riot and I l quickly was able some good friends.
The U.S. and Canadian motoring public learn much about the cause of the wild gas price gyrations from the same type of sources.
Crude oil prices are usually made out to be the culprit and blamed by the media for the gas price roller coaster rides. But is not the only factor in the current round of fuel price spikes. Today gas prices tend to influence and support crude oil prices. That opinion runs counter to the conventional view that crude oil drives gasoline prices.
It is the inverse of what occurred with fuel prices in 2007 and early 2008 in the petroleum industry. Since August last year, fuel prices have been driving crude oil prices up and down.
It is my prediction that crude oil may hit $85 in the near term and then ebb back down to $40 by the fall of this year. By Christmas 2009 the price of gasoline in the U.S. should be around $2 per gallon with Canada at 90 cents per liter.
In early August 2008, I made a forecast, published in the Pasadena (CA) Star News, that crude oil and gasoline prices would go down in the last part of 2008. In August, crude oil was still hovering around $140 a barrel and gasoline was over $4 a gallon in the U.S.
By December 2008 the average price of crude oil was $33 a barrel and gasoline was at $1.60 per gallon. That severe drop was aggravated by the economy’s plunge into its recession along with the financial crisis.
I made a prediction in the January 2009 that gas prices would hit $3 per gallon again by the summer as quoted in the following article:
http://www.insidesocal.com/news247/2009/01/gas-prices-could-reach-3-by-su.html
I have been in the petroleum industry for almost 50 years with all that time spent in the refining and marketing (R & M) end of the business. In my early career I worked in the retail and wholesale departments for Union Oil Company of California a.k.a. Unocal in Los Angeles. This should qualify me as the ultimate insider and expert on the way the petroleum industry prices gasoline.
The U.S. petroleum industry has returned to the basics of refining crude oil into gasoline. Major oil companies have the ability to explore and produce for crude oil and bring it up out of the ground for around $40 a barrel. Any amount over that price is pure profit to the oil companies.
The competitive battle between Exploration & Production (E &P) and R & M managers at the oil companies is back on. Each cannot stand to see the other make all the profits for their company.
In the days before the price of crude oil became paper driven, the R & M department used to have knockdown-drag out fights with the E & P department about the price of crude oil delivered to our refinery gate. In those days, they would price crude oil based on price posted at the well plus transportation costs. R & M would then add the cost to refine the crude into fuels and add the marketing cost to determine the wholesale or dealer tank wagon prices.
Today, they take the easy way out and relate their refinery gate crude oil price to the West Texas Intermediate (WTI) crude oil price plus or minus a discount for quality and location. For instance, the posted price for Elm Coulee crude oil in Richland, Montana is currently fetching the WTI daily posted price less $10 a barrel at the well head. R & M still has to add their costs to that price and relate that to the current wholesale and retail prices in order to stay competitive.
In March of 2001 Tom O’Malley, then CEO of Tosco, got tired of losing money for part of the year then trying to make it back during the spring time and summer driving seasons. He announced to his refining and marketing management team at a company meeting in their Phoenix headquarters, that they would tie their retail prices to the wholesale spot market price for gasoline and diesel.
The petroleum market is driven by trades in paper barrels for crude oil and finished products on the New York Mercantile Exchange (NYMEX). That in turn gives indications to the spot market and it has become a case of the tail wagging the dog.
The other major oil companies soon followed suit and since then the pipeline spot market has been driving fuel prices up and down. Today’s gasoline prices are based on a “What the market will bear” strategy by the major oil companies. In the 4th quarter of 2008 and 1st quarter of 2009 refineries lost big time money. Some of them, including the Big West refinery in Bakersfield, were forced to close down due to poor economics. This trend will continue as long as the big money investors stay on the sidelines and cause more havoc in the petroleum markets.
Goldman Sachs & Co., Morgan Stanley and other large investors are able to sidestep regulations that limit investments in commodities such as crude oil. They are investing on behalf of pension funds, endowments, hedge funds and other big institutional investors, in part as a hedge against rising inflation. Crude oil investment is used to offset the weaker dollar with the money going back and forth as the world economy continues its slow recovery
A stream of financial deregulation under the Clinton administration, culminated in the Commodity Futures Modernization Act of 2000. These over-the-counter markets are 10 times larger than the futures market with no position limits and almost no regulations to control their investments.
I have now revealed my secrets on the mystery of fuel pricing to you. I hope that the answer is as simple as watching those Saturday morning cartoons in order to learn to speak English.
Bob van der Valk is the Director of US Branded Licensing with 4Refuel Inc. in Lynnwood, Washington and can be contacted at (971) 678-2975 or by email at: tridemoil@aol.com
Bob’s web site address is: www.4vqp.com/ourconsultants/thegasguy.html
Any views expressed in this newsletter are those of the writer, except where the writer specifically states them to be the views of the 4Refuel group of companies.
Thursday, June 4, 2009
All We Need to Survive: Water, Food and …….Gasoline!
Dateline: Terry, Montana
June 3, 2009 - 11:30 MST
By: Bob van der Valk
While the market sorted itself out yesterday, I was busy trying to keep from running out of water at the Bob's Big Boy Ranch in Terry, Montana. At one point we not only had our artesian well down but our hard water well had shut down as well. Unexpectedly, we had to make a quick trip and run out to the Terry Super Valu grocery store to stock up on bottled water. We may well be having a similar problem happening right now in the refining and petroleum business.
With crude oil being pumped out of the ground like water, any interruption will cause consumers to look for options to maintain some sense of normalcy. In our case, we almost decided to move back in with our daughter Inger and her family while the repairs were being made. But, what do we do when we run out gasoline? We can't do anything especially when living out in the country where long distances have to be covered by car or truck every day.
The Department of Energy statistics were bearish for diesel and neutral for gasoline today. The wholesale spot market price is down 4 cents per gallon for diesel and no change for gasoline, so far. So far the July WTI crude oil price is down $2.21 to $66.34 a barrel. The Nymex is off for now but there is doubt it will stay down that much at the close of business today with buyers perched to jump in as soon as they sense the low has been reached.
This year it's all about oil refineries being able to keep up with the expected increase in demand of gasoline for the upcoming summer driving season. Petroleum traders will be concentrating on the supply issues with the biggest focus on refinery gasoline output.
This morning's Department of Energy report is the tale of the tape for an upcoming fight between the bulls and the bears in the petroleum market. There are plenty of points to go around supporting both sides of the arguments to reach conclusions that crude prices and therefore gasoline prices may either shoot like a rocket or go back down with a bullet.
President Obama was greeted by Saudi King Abdullah upon landing in the Middle East today. He also received the news that the Saudi Arabian Oil Company Aramco had raised their crude oil prices from $1.05 to $3.25 a barrel for shipments in July 2009. The heavy crude oil is the one at the lowest with the light crude oil selling at the highest price. All of their crude oil prices are ratcheted up or down from the posted Brent crude oil price.
Our water situation will be resolved within a day or two but the current market situation for gasoline prices will continue to play itself out throughout the summer months. Right now the Four Corners gas station in Terry still has plenty of gasoline in the tank but it us 10 cents per gallon more today then it was a week ago.
We better keep the horses saddled up and ready just in case we will need them for back up. There may come a time when I will have start reporting the prices of hay and alfalfa instead of gasoline.
June 3, 2009 - 11:30 MST
By: Bob van der Valk
While the market sorted itself out yesterday, I was busy trying to keep from running out of water at the Bob's Big Boy Ranch in Terry, Montana. At one point we not only had our artesian well down but our hard water well had shut down as well. Unexpectedly, we had to make a quick trip and run out to the Terry Super Valu grocery store to stock up on bottled water. We may well be having a similar problem happening right now in the refining and petroleum business.
With crude oil being pumped out of the ground like water, any interruption will cause consumers to look for options to maintain some sense of normalcy. In our case, we almost decided to move back in with our daughter Inger and her family while the repairs were being made. But, what do we do when we run out gasoline? We can't do anything especially when living out in the country where long distances have to be covered by car or truck every day.
The Department of Energy statistics were bearish for diesel and neutral for gasoline today. The wholesale spot market price is down 4 cents per gallon for diesel and no change for gasoline, so far. So far the July WTI crude oil price is down $2.21 to $66.34 a barrel. The Nymex is off for now but there is doubt it will stay down that much at the close of business today with buyers perched to jump in as soon as they sense the low has been reached.
This year it's all about oil refineries being able to keep up with the expected increase in demand of gasoline for the upcoming summer driving season. Petroleum traders will be concentrating on the supply issues with the biggest focus on refinery gasoline output.
This morning's Department of Energy report is the tale of the tape for an upcoming fight between the bulls and the bears in the petroleum market. There are plenty of points to go around supporting both sides of the arguments to reach conclusions that crude prices and therefore gasoline prices may either shoot like a rocket or go back down with a bullet.
President Obama was greeted by Saudi King Abdullah upon landing in the Middle East today. He also received the news that the Saudi Arabian Oil Company Aramco had raised their crude oil prices from $1.05 to $3.25 a barrel for shipments in July 2009. The heavy crude oil is the one at the lowest with the light crude oil selling at the highest price. All of their crude oil prices are ratcheted up or down from the posted Brent crude oil price.
Our water situation will be resolved within a day or two but the current market situation for gasoline prices will continue to play itself out throughout the summer months. Right now the Four Corners gas station in Terry still has plenty of gasoline in the tank but it us 10 cents per gallon more today then it was a week ago.
We better keep the horses saddled up and ready just in case we will need them for back up. There may come a time when I will have start reporting the prices of hay and alfalfa instead of gasoline.
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