Don't look now, but the price of crude oil has been moving sharply higher over the last couple of weeks That is now up 80 per cent over the last 3 months with the price of WTI crude oil increasing from $32 to $58 a barrel in just a short thee months. The price of was up another 85 cents per barrel early Friday heading towards the $60 a barrel mark by the end of the day. Fuel prices for gasoline and diesel are going up in lockstep with another 2-3 cents per gallon increase today.
At the same time the national gasoline price per the AAA fuelgauge report from went from $1.56 to $2.16 per gallon as of today. This would normally set off alarm bells in the media with articles about suspected gas price gouging. These would then be followed up with the usual threats of investigation by head line grabbing politicians and divergent government agencies.
Reporters have been quick to report that at $2.16 we are still paying almost a buck and a half per gallon less than we did before Memorial Day last year. Their question of the day remains: “Why are prices now heading back up to $2.50 on the West Coast and the national average to $2.25 per gallon?”
In plain and simple terms the refineries have finished making their switch to summer gas and it reduces supplies by 10% per cent. This year, however, as gasoline prices have been going back up the price of crude oil has been dragged up along with it.
Along with that President Obama's current budget proposal, which must be approved by Congress, includes ending "unjustified tax loopholes" for oil companies. That will raise $26 billion over the next 10 years for alternative energy development.
The White House rejected as "unfounded" industry claims that by ending the tax breaks it would take a significant toll on US domestic oil and gas production. It said oil and, to a large extent, gas are internationally traded commodities whose prices are determined on the world market. "The oil and gas subsidies are costly to the American taxpayer and do little to incentivize production or reduce energy prices," the administration said in its budget package submitted to the Congress.
The budget also includes increasing federal road taxes on gasoline and diesel with 10 and 14 cents per gallon being added to the 18.4 and 24.4 cents respectively.
Price of gasoline is not going to going back down any time soon perhaps not until the fall of this year. But that will be another story for another day.
Showing posts with label Gasoline Pump Crude Oil. Show all posts
Showing posts with label Gasoline Pump Crude Oil. Show all posts
Friday, May 8, 2009
Tuesday, April 28, 2009
Flu Bug Bites Oil Market
Petroleum traders have been keeping a weary eye on the news about the swine flu spreading to other parts of the world. But by now they are used to having the least amount of bad news effect crude oil and in turn fuel prices.
However, the current scare may be short lived as the real story behind the headlines is just beginning to develop. Another medical authority in the field, Dr. Jay Gordon from Santa Monica, CA, has been sending out Twitter messages in the last few day to let people know that the World Health Organization has only able to confirm 7 deaths in Mexico, from the new H1N1 swine flu virus strain, not the 20 being reported far and wide by various media outlets.
Dr. Gordon says that the reason the swine flu pandemic being hyped by the media is to get people to obtain unnecessary vaccinations with Tamiflu to prevent from getting this disease.
The WTI crude oil price is went another 22 cents to 49.92 a barrel on fears that this new flu strain is going to further depress already bleak oil demand. Gasoline and diesel spot market prices on the West Coast dropped 1 - 3 cents per gallon. Pump prices will follow and the average price may even get back down below $2.30 per gallon for regular unleaded gasoline by the end of this week in California. The average price of $2.05 per gallon for gasoline will dip by about the same amount to $2.02 per gallon for the whole of the US.
Oil prices tumbled yesterday under a sea of panic as "swine" flu fever gripped the world's media and the worlds oil markets. Although the probabilities of this evolving into a world wide killer pandemic are still small, the fears of such an occurrence happening are enough to spark short selling in the energy markets. Air travel has already been affected, with the current media hype exaggerating the outbreak of this new strain, as people avoid areas with outbreaks of the flu.
The other shoe will drop on diesel and jet fuel prices if this havoc continues any longer. Jet fuel will start backing up into the distillate stream of the refineries and cause a free fall in both jet and diesel fuel prices.
In other news the Shell refinery in Anacortes, Washington is still struggling to get back up into full operation and is now expected to be up as soon as tomorrow. The Shell and the Tesoro refineries in Anacortes went down on Friday, April 24th due to an unexpected power outage. That will keep fuel prices up and supplies tight in the Northwest US.
However, the current scare may be short lived as the real story behind the headlines is just beginning to develop. Another medical authority in the field, Dr. Jay Gordon from Santa Monica, CA, has been sending out Twitter messages in the last few day to let people know that the World Health Organization has only able to confirm 7 deaths in Mexico, from the new H1N1 swine flu virus strain, not the 20 being reported far and wide by various media outlets.
Dr. Gordon says that the reason the swine flu pandemic being hyped by the media is to get people to obtain unnecessary vaccinations with Tamiflu to prevent from getting this disease.
The WTI crude oil price is went another 22 cents to 49.92 a barrel on fears that this new flu strain is going to further depress already bleak oil demand. Gasoline and diesel spot market prices on the West Coast dropped 1 - 3 cents per gallon. Pump prices will follow and the average price may even get back down below $2.30 per gallon for regular unleaded gasoline by the end of this week in California. The average price of $2.05 per gallon for gasoline will dip by about the same amount to $2.02 per gallon for the whole of the US.
Oil prices tumbled yesterday under a sea of panic as "swine" flu fever gripped the world's media and the worlds oil markets. Although the probabilities of this evolving into a world wide killer pandemic are still small, the fears of such an occurrence happening are enough to spark short selling in the energy markets. Air travel has already been affected, with the current media hype exaggerating the outbreak of this new strain, as people avoid areas with outbreaks of the flu.
The other shoe will drop on diesel and jet fuel prices if this havoc continues any longer. Jet fuel will start backing up into the distillate stream of the refineries and cause a free fall in both jet and diesel fuel prices.
In other news the Shell refinery in Anacortes, Washington is still struggling to get back up into full operation and is now expected to be up as soon as tomorrow. The Shell and the Tesoro refineries in Anacortes went down on Friday, April 24th due to an unexpected power outage. That will keep fuel prices up and supplies tight in the Northwest US.
Friday, April 17, 2009
Another Day - Same Old Story for Crude Oil and Gasoline Prices
The van der Valk Gas Price Advisory for 4-17-09
Dateline: Issaquah, Washington
April 17, 2009 12:30 PM PST
By: Bob van der Valk
The May WTI crude oil price is up 35 cents to $50.33 a barrel at the close today. The wholesale spot market price for gasoline and diesel went up about a penny per gallon almost in concert with the crude oil price
It's another day - same old story in the petroleum markets.
First - The US Federal Reserve announced a 1.5% month on month decline in industrial production and capacity yesterday. Crude oil prices reacted the other way of expectations by going up this morning in reaction to that bad news
Second - Last week the International Energy Agency, headquartered in Paris, lowered its forecast for global oil demand for this year by 1 million barrels a day down to 83.4 million barrels, which is 2.4 million barrels a day below the 2008 level.
Third - US crude oil inventory levels are now at a 20-year high and refineries are running at just 75% of their current capacity. Fuel conservation has forced the oil companies to reevaluate their 2009 game plan in view of the uncertainties in our economy.
Fourth - Gasoline prices went up some more this week. It's no wonder the average motorist cannot figure out what will be happening to fuel prices in the next month or for that matter the rest of the year. The US average price for gasoline is hovering around $2.05 per gallon today per the AAA fuelgaugereport. The price on the West Coast is still around $2.32 per gallon.
Crude oil will continue to hover around the $50 per barrel mark when at the same time gasoline and diesel prices will be increasing steadily upward. On the West Coast the average price for gasoline is predicted to be $2.50 by Memorial Day and $3.00 by the middle of summer if the current trend continues but... you never know what may be around the corner when a world crisis, weather or refinery problems causes prices to go haywire again. Retail diesel prices will stay about 10 cents per gallon above gasoline prices. The remainder of the country will follow suit and their average price for gasoline will be around $2.50 per gallon by mid-summer.
Refiners have been successful in putting their foot firmly on the hose to constrict the flow of fuel to the market. They have reduced utilization below capacity before their usual planned, maintenance-related springtime reductions. Some shut production down completely earlier this year in order to perform spring maintenance known as turn-a-rounds. The combination of planned and unplanned reductions put 2009 refinery use at its lowest level in the last four years.
The US petroleum industry understands one thing very well and that is that you have to continue to make a profit in order to stay in business. It's either that or going broke and then they will be out of a job.
Go aplusk!
Dateline: Issaquah, Washington
April 17, 2009 12:30 PM PST
By: Bob van der Valk
The May WTI crude oil price is up 35 cents to $50.33 a barrel at the close today. The wholesale spot market price for gasoline and diesel went up about a penny per gallon almost in concert with the crude oil price
It's another day - same old story in the petroleum markets.
First - The US Federal Reserve announced a 1.5% month on month decline in industrial production and capacity yesterday. Crude oil prices reacted the other way of expectations by going up this morning in reaction to that bad news
Second - Last week the International Energy Agency, headquartered in Paris, lowered its forecast for global oil demand for this year by 1 million barrels a day down to 83.4 million barrels, which is 2.4 million barrels a day below the 2008 level.
Third - US crude oil inventory levels are now at a 20-year high and refineries are running at just 75% of their current capacity. Fuel conservation has forced the oil companies to reevaluate their 2009 game plan in view of the uncertainties in our economy.
Fourth - Gasoline prices went up some more this week. It's no wonder the average motorist cannot figure out what will be happening to fuel prices in the next month or for that matter the rest of the year. The US average price for gasoline is hovering around $2.05 per gallon today per the AAA fuelgaugereport. The price on the West Coast is still around $2.32 per gallon.
Crude oil will continue to hover around the $50 per barrel mark when at the same time gasoline and diesel prices will be increasing steadily upward. On the West Coast the average price for gasoline is predicted to be $2.50 by Memorial Day and $3.00 by the middle of summer if the current trend continues but... you never know what may be around the corner when a world crisis, weather or refinery problems causes prices to go haywire again. Retail diesel prices will stay about 10 cents per gallon above gasoline prices. The remainder of the country will follow suit and their average price for gasoline will be around $2.50 per gallon by mid-summer.
Refiners have been successful in putting their foot firmly on the hose to constrict the flow of fuel to the market. They have reduced utilization below capacity before their usual planned, maintenance-related springtime reductions. Some shut production down completely earlier this year in order to perform spring maintenance known as turn-a-rounds. The combination of planned and unplanned reductions put 2009 refinery use at its lowest level in the last four years.
The US petroleum industry understands one thing very well and that is that you have to continue to make a profit in order to stay in business. It's either that or going broke and then they will be out of a job.
Go aplusk!
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