Skip to comments.Oil Tumbles After Inventory Report
Posted on 09/08/2005 8:01:19 AM PDT by kellynla
NEW YORK (CNN/Money) - Oil futures fell below $64 a barrel Thursday after a report showed a smaller-than-expected drop in petroleum stockpiles following major disruptions in the wake of Hurricane Katrina.
Crude stocks fell by 6.4 million barrels, gasoline stocks fell by 4.3 million barrels and stocks of distillates decreased by 800,000 barrels, according to the The Energy Information Administration.
Analysts were looking for a drop of 6.4 million barrels of crude, 6.2 million barrels of gasoline and 2.6 million barrels of distillates, according to Reuters.
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U.S. light crude for October delivery slipped $1.27 a barrel to $63.10 on the New York Mercantile Exchange.
(Excerpt) Read more at money.cnn.com ...
any news on any new refineries besides the one in AZ ???
$2,75 on my way to work.
the 93 octane is below $3 a gallon now at $2.95
I've got 8 contracts shorted so far,5 of them just before the tumble in the last 2 days ... now the interesting thing is that oct 06 is at $64.50 but spring oil futures are at $67+.
You forgot about the free tumblers and dishes - all for $0.28 per gallon!
Light Crude Oil for October is @$64.83, up 0.34 as of this posting.
Are you kidding or are you a Troll?
Over the months and years ahead, the cost of oil will continue to rise as 100s of millions more new drivers begin to use fuel in third world countries.
oil has not tumbled... actually it is higher than it was before the report was released-
Here are some numbers for you all from the DOE website:
Date Percent of GOM Oil Shut-in
September 7 57.37
September 8 60.12
An almost 3% of the total jump from Wednesday to Thursday. Which means that either something interesting is going on, or the numbers thus far aren't exactly reliable. (And about 2% jump from Tuesday).
Ohhh yeahhhh :o)
They were pretty cheesey..But what could one expect.
I wouldn't hold your breath.
Steve Forbes, just this morning, said he sees the "bubble bursting" within the next ten to twelve months and per barrel prices being half of what they are today, meaning $1.50/gal gas again.
Think of it this way... I make or obtain a product for $2.00 and sell it on the market for $3.00. Nice little profit. If production costs cause me to raise the price I'm offering to the market to $4.00, I'll make a large profit on the goods I went to market with $2.00.
For a while at least. Reality will catch up. It has always been that way in commodity markets.
Now, with people cutting back on their consumption of oil by driving less, keeping their cars tuned up, and the correct air pressure in their tires, the oil market is not sustainable and the prospective traders are going to get hurt pretty bad because of it.
Right before Katrina, production was significantly outpacing demand, yet prices were remaining high.
No, oils going to pop, just like the tech bubble did.
That could be pipeline work. They get the platform up and start to pump, but then take it back down to work on the line. Looks like my analyst's 57% was a pretty good number...
I assumed my statements were outlandish enough that it would be obvious that I was joking.
I guess I should have known better and included a sarcasm tag.
What's that equate to in terms of the price of gasoline?
I'm not the person to ask.
I don't know.
There may not be a significant drop in the price and I am planning on the price being between two and three dollars for quite some time.
No matter how much oil we produce or import, the refineries even before Katrina were operating at maximum capacity and with no new refineries being built since 1976, I don't expect the price to fall very much.
Realistically, I think our days of gas under 2 dollars a gallon are history.
How fast things change..........
September 5th. $3.19/gallon
September 9th. $2.99/gallon and plunging.
Actually, gasoline tends to be sluggishly elastic. Demand DOES change, it just changes slowly. And similarly with supply. People can reduce a certain amount of gasoline consumption quickly -- avoiding unnecessary trips, walking (very) short distances, combining trips, carpooling, etc.. But the physical construction of our cities demands a commute. Cities these days are largely suburbs. Without a commute, we don't do business. And that's not a parameter that's easily or quickly modifiable.
Same with gas-miserly cars. Sure, given time the automakers can retool and start cranking out econoboxes again. But that takes years and a sustained demand for them before the manufacturers are willing to take the risk.
On the supply side, it takes years to drill new wells and build new refineries, to say nothing of developing alternate fuel technologies such as shale extraction or polymerization.
The money is made in the short haul, where the supply/demand curve goes grossly out of whack for a brief period of time because of some disaster (real or invented). In this last round of gouging, supply went short overnight, and the speculators and profiteers jumped on futures, which drove the price through the roof. The gougers made their money -- driven by hysteria they themselves helped create -- then bailed before the bottom fell out.
Classic amoral capitalism.
Developed over a half century ago & carefully shelved in favor of catalytic converters( a horror story in itself).
H P F I allows each fuel molecule to be completely surrounded by air for complete combustion (more bang for the buck), and no unburned fuel components that need a cat. to burn them after the fact.
For as long as we've had cat. converters all that wasted fuel burned in them could have been used to power our vehicles down the road( a 20~30% MPG improvement).
Just imagine if we had been able to use 20~30% less Towelhead juice since 1965!
A true vapor carburetor would provide far more energy per intake cycle than one that atomized fuel. The inventor claimed that the resulting explosion could not be contained by a gas engine's cylinder head. He was forced to tool a diesel engine head to keep the thing from blowing apart.
I was skeptical (that was back in the days when journalists were.) So I consulted a physics professor at the University of Colorado. He verified (in general terms) the results I had been given.
That sounds a lot like what you're describing.
So, you really get the same bang for less bucks.
Not only do you not need stronger heads, but they last longer (no carbon buildup).
That "lasting longer" bit is why we went with cats.( God forbid, who would want that!).
By putting some in a balloon.
Hope Soro's and his pals lost a bundle.
#6 for your home page:
Calvinism vs Armenianism
Exactly what I am doing but I am going once a month because I have to drive 50 miles to get to a decent grocery store.
By Joe Kovacs
© 2005 WorldNetDaily.com
A consumer group is publicizing a series of memos marked "highly confidential" alleging major oil companies including Mobil, Chevron and Texaco intentionally limited their refining capacity in order to raise gasoline prices and increase profits.
Map shows path of Hurricane Katrina. Oil rigs are marked in black, with refineries as colored barrels (courtesy iMap Data Inc.)
The revelation comes as Americans have seen a major spike in prices at the pump in the immediate aftermath of Hurricane Katrina, while "the oil industry blames environmental regulation for limiting number of U.S. refineries."
The Foundation for Taxpayer and Consumer Rights released three memos that purportedly demonstrate a nationwide effort by the American Petroleum Institute to encourage major refiners to close refineries in the 1990s.
"Large oil companies have for a decade artificially shorted the gasoline market to drive up prices," said Jamie Court, president of the FTCR, who successfully fought to keep Shell Oil from needlessly closing its Bakersfield, Calif., refinery this year. "Oil companies know they can make more money by making less gasoline. Katrina should be a wakeup call to America that the refiners profit widely when they keep the system running on empty."
The internal memoranda themselves have been made public before, in a 2001 investigative report by Sen. Ron Wyden, D-Ore., who this week said the primary reason for sky-high prices is that "the government isn't in the consumer-protection business anymore."
Much of U.S. paying at least $3 per gallon in wake of Hurricane Katrina
The memo from Chevron states: "A senior energy analyst at the recent API convention warned that if the U.S. petroleum industry doesn't reduce its refining capacity it will never see any substantial increase in refinery margins. ... However, refining utilization has been rising, sustaining high levels of operations, thereby keeping prices low."
It continued to discuss how major refiners were shutting down their refineries.
The Texaco memo disclosed how the industry believed in the mid-1990s that "the most critical factor facing the refining industry on the West Coast is the surplus of refining capacity, and the surplus gasoline production capacity. (The same situation exists for the entire U.S. refining industry.) Supply significantly exceeds demand year-round. This results in very poor refinery margins and very poor refinery financial results. Significant events need to occur to assist in reducing supplies and/or increasing the demand for gasoline. One example of a significant event would be the elimination of mandates for oxygenate addition to gasoline. Given a choice, oxygenate usage would go down, and gasoline supplies would go down accordingly. (Much effort is being exerted to see this happen in the Pacific Northwest.)"
The state of Washington subsequently did away with its ethanol mandate, requiring greater quantities of refined fuel to fill the gasoline volume occupied by ethanol.
FTRC says the Mobil memorandum from 1996 evinces the company's successful plan to keep smaller refiner Powerine from reopening its California refinery. It notes much of the hardships created by California's refinery rules came at the urging of the major oil companies, not the environmental groups blamed by the industry. The other alternative plan discussed in the event Powerine did open the refinery was "... buying all their avails and marketing it ourselves" to insure the lower price fuel didn't get into the market.
Meanwhile, the API is urging Americans to adjust their driving habits to consume less fuel.
"We know that Hurricane Katrina's effects on our industry are having a nationwide impact through skyrocketing prices for gasoline and other fuels," API president Red Cavaney told the House Energy and Commerce Committee yesterday.
But he warned, "Congress should not repeat the mistakes of some past energy policies by trampling the structures of the free marketplace by imposing new controls, allocation schemes, or other obstacles, which will only serve to make a bad situation much worse."
U.S. refineries were thrust into the spotlight after Hurricane Katrina plowed through the Gulf of Mexico last week, impacting operations for at least four refineries.
"Those four that appear to have suffered major damage, it will be a matter of months [for repairs]," said Guy Caruso, head of the U.S. Energy Information Administration.
Bob Slaughter, president of the National Petrochemical & Refiners Association, is hoping the refineries can return to service as soon as possible, but he told the Senate Energy and Natural Resources Committee, "Employee safety and overall safe startup and operation concerns are paramount. Significant flooding and damage still affects some facilities.
"However, some refiners with operating facilities have indicated that they will be able to ramp up production from currently reduced levels at refineries near the affected areas, which should have a positive impact on product supplies."
Regarding reports of price gouging, Slaughter said, "Each alleged situation should be thoroughly investigated by the appropriate state and federal authorities and prosecuted when the law has been broken."
According to the Minerals Management Service, oil output from the Gulf of Mexico has been cut by 861,000 barrels per day, a 57 percent reduction from before Katrina's arrival Aug. 29.