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 truck stops. Show all posts
Showing posts with label truck stops. 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.
Monday, April 13, 2009
Highway Robbery for California Gas Station Owners
Samuel Johnson said: "Hell is paved with good intentions." It seems that saying applies to unhappy independent service station owners in California today. They made it a through a down turn in the economy and barely survived a recession that is still taking its toll.
Then along comes the bad news in the form of inaction by the California Air Resources Board (CARB) on the letter from Governor Schwarzenegger requesting a delay or holiday in the implementation date set for the Enhanced Vapor Recovery Phase II regulation.
Air Quality Management District personnel have been out in force in the field for the last 10 days. They have been writing up their Notices of Violation to any service station property owner not meeting the mandated April 1, 2009 deadline.
Collateral damage has been caused in the form of gas stations and truck stops being forced to lock up their gasoline pumps or worse yet shut down their whole facility. By CARB’s own count about 5% of the gas stations, designated as Gasoline Dispensing Facilities (GDF), have already done just that.
The number of stations being reported as being in compliance by CARB and the Air Districts are confusing at best.
In some cases stations with pulled permits are already being counted as being in compliance when in fact they have not yet been fully certified. A good faith effort apparently suffices just to make their numbers look better.
By any count almost 40% of the 11,500 California gas stations have not fully complied with the EVR Phase II regulation. Of that number about 1,000 are expected to hang up their nozzles for the last time and lock up their pumps by December 31, 2009. That is the drop dead date by which station owners will have to make the investment to install the vapor enhancement equipment or be shut down by the air districts.
Fines are being imposed based on the level of compliance and volume of gasoline pumped ranging anywhere from $1,000 to $4,000 per month for each station.
Apparently this was meant to serve as notice by the regulators to recalcitrant owners, who did not heed the warnings given out as early as 2000, that the rule would be enforced. Fact of the matter is that the regulation passed through the approval process by CARB and the California legislature without those technologies even being in place.
Major oil companies jumped on the band wagon early by insisting that the law be enforced if they were going to be making the required investment. The service station equipment manufacturers went to work and one system was approved by CARB in 2005. As late as 2008 two more systems were certified and at this writing one more is in the works to be approved by CARB.
As magic would have it each system became more economical than the one before. It was even made it possible to retrofit the nozzles being used by stations equipped with the Phase I equipment. The earlier approved system was only able to interface with its own equipment and was not adaptable to the other systems. Initially station owners had to make a choice to replace their whole system or wait it out until 2008 to retrofit their existing nozzles and install the scrubbers with the CARB certified equipment made to fit their own equipment specifications.
Up jumped the devil just as things were beginning to look up for the independent service station owners. The recession came along with the resulting financial tightening of the credit market. Station owners in the process on obtaining loans were put on hold and told to wait until the banking situation straightened itself out.
Accusations are now being made by regulators and clean air organizations such as the Sierra Club that this group of station owners is not doing their part for cleaner air in California. The station owners are citizens, who live and breathe the same air just like the rest of their fellow Californians. In the past they have made improvements to their facilities to aid in the clean air effort and have plans to continue to do so in the future.
In-Station Diagnostic (ISD) portion of the law takes affect in a year and the EVR Phase II compliance date could have easily been coincided with the implementation of that program. One program interfaces with the other when both of them installed at the same time could save the owners money.
Also starting in 1998 new automobiles in California had Onboard Refueling Vapor Recovery (ORVR) systems installed on them. The ORVR system captures the gasoline vapors that are displaced when gasoline is dispensed to the vehicle tank and stores those vapors in a canister filled with activated carbon. When the vehicle engine is started, gasoline vapors stored on the carbon are purged and burned in the engine. The ORVR system on new cars interferes with the ISD system creating false readings that throws the system into alarm at the station.
As of 2008 about 65% of the automobiles and light trucks in California are equipped with the ORVR system and about 94% of them will be so equipped in another ten years. In other words the ORVR and the EVR Phase II system will overlap each other recapturing the gasoline vapors during fill ups. California station owners will have spent a lot of money for little gain all in the name of attaining cleaner air.
Reasonable people should be making reasonable choices and this time Californians are going to get hurt right where it will hurt them the most – in their pocket book.
It’s time for each of us to open our windows and stick out our heads and yell like broadcaster Howard Beale did in the movie Network: “I’m mad as hell, and I’m not going to take this anymore”.
Then along comes the bad news in the form of inaction by the California Air Resources Board (CARB) on the letter from Governor Schwarzenegger requesting a delay or holiday in the implementation date set for the Enhanced Vapor Recovery Phase II regulation.
Air Quality Management District personnel have been out in force in the field for the last 10 days. They have been writing up their Notices of Violation to any service station property owner not meeting the mandated April 1, 2009 deadline.
Collateral damage has been caused in the form of gas stations and truck stops being forced to lock up their gasoline pumps or worse yet shut down their whole facility. By CARB’s own count about 5% of the gas stations, designated as Gasoline Dispensing Facilities (GDF), have already done just that.
The number of stations being reported as being in compliance by CARB and the Air Districts are confusing at best.
In some cases stations with pulled permits are already being counted as being in compliance when in fact they have not yet been fully certified. A good faith effort apparently suffices just to make their numbers look better.
By any count almost 40% of the 11,500 California gas stations have not fully complied with the EVR Phase II regulation. Of that number about 1,000 are expected to hang up their nozzles for the last time and lock up their pumps by December 31, 2009. That is the drop dead date by which station owners will have to make the investment to install the vapor enhancement equipment or be shut down by the air districts.
Fines are being imposed based on the level of compliance and volume of gasoline pumped ranging anywhere from $1,000 to $4,000 per month for each station.
Apparently this was meant to serve as notice by the regulators to recalcitrant owners, who did not heed the warnings given out as early as 2000, that the rule would be enforced. Fact of the matter is that the regulation passed through the approval process by CARB and the California legislature without those technologies even being in place.
Major oil companies jumped on the band wagon early by insisting that the law be enforced if they were going to be making the required investment. The service station equipment manufacturers went to work and one system was approved by CARB in 2005. As late as 2008 two more systems were certified and at this writing one more is in the works to be approved by CARB.
As magic would have it each system became more economical than the one before. It was even made it possible to retrofit the nozzles being used by stations equipped with the Phase I equipment. The earlier approved system was only able to interface with its own equipment and was not adaptable to the other systems. Initially station owners had to make a choice to replace their whole system or wait it out until 2008 to retrofit their existing nozzles and install the scrubbers with the CARB certified equipment made to fit their own equipment specifications.
Up jumped the devil just as things were beginning to look up for the independent service station owners. The recession came along with the resulting financial tightening of the credit market. Station owners in the process on obtaining loans were put on hold and told to wait until the banking situation straightened itself out.
Accusations are now being made by regulators and clean air organizations such as the Sierra Club that this group of station owners is not doing their part for cleaner air in California. The station owners are citizens, who live and breathe the same air just like the rest of their fellow Californians. In the past they have made improvements to their facilities to aid in the clean air effort and have plans to continue to do so in the future.
In-Station Diagnostic (ISD) portion of the law takes affect in a year and the EVR Phase II compliance date could have easily been coincided with the implementation of that program. One program interfaces with the other when both of them installed at the same time could save the owners money.
Also starting in 1998 new automobiles in California had Onboard Refueling Vapor Recovery (ORVR) systems installed on them. The ORVR system captures the gasoline vapors that are displaced when gasoline is dispensed to the vehicle tank and stores those vapors in a canister filled with activated carbon. When the vehicle engine is started, gasoline vapors stored on the carbon are purged and burned in the engine. The ORVR system on new cars interferes with the ISD system creating false readings that throws the system into alarm at the station.
As of 2008 about 65% of the automobiles and light trucks in California are equipped with the ORVR system and about 94% of them will be so equipped in another ten years. In other words the ORVR and the EVR Phase II system will overlap each other recapturing the gasoline vapors during fill ups. California station owners will have spent a lot of money for little gain all in the name of attaining cleaner air.
Reasonable people should be making reasonable choices and this time Californians are going to get hurt right where it will hurt them the most – in their pocket book.
It’s time for each of us to open our windows and stick out our heads and yell like broadcaster Howard Beale did in the movie Network: “I’m mad as hell, and I’m not going to take this anymore”.
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