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 ...
"I didn't have an exact price in mind, but the past week indicates it may be the $3.00 per gallon price. Could be lower but time will tell."
I think your right about that price. $2.25 didn't break the bank of people but $3.40 and up sure did! If the American consumer can sustain $2.25 we should move to biofuels now.
My wife decided to grocery shop twice a month instead of every week. I'm sure lots of women are making that choice. If gas goes back to about $2.75/gallon, she'll resume her old routine.
here in my neck of the woods in Illinois we have two stations that are full serve and sell gas at the same price as Caseys or BP. They even wash your windows and check your oil.
Gas prices in SE Wisconsin peaked at $3.49 and are now as low as $2.99. I'd say that's a tumble. Now it just needs to keep going.
Could happen, but if one changes driving habits, the price could remain lower.
I'm retired and have an SUV, Accord, and a Mazda Miata. Make a guess which vehicle ALWAYS remains in the garage now. Changed my driving habits and found out all the room and comfort was not a requirement in getting from point A to B.
The Miata works just fine and is great on gas. So with the Accord.
Hey! I am in the Granite State also!
I hear ya. It doesn't take a lot to decide against going for that long drive and staying home and doing other things around the house instead.
Still this is Bush's second term and we still don't have a decent energy plan. Or tort reform, what is he awaiting for?
I think they still pump it for you in New Jersey. My daughter lived there for a brief time and said it was the law I think. No self service.
Bet the fluids and air wasn't checked though. :)
You were doing pretty good until you got to that one. You must rely on the main stream media for your news.
WND Exclusive BLACK-GOLD BLUES Big Oil's secret strategy to gush profits exposed Memos purportedly show refiners sought to limit ops to spike price of gasoline Posted: September 8, 2005 1:00 a.m. Eastern
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. If you'd like to sound off on this issue, please take part in the WorldNetDaily poll. Related offer: $5 gas has arrived! Now what? Related story: Truckers strike imminent? If you would like to help victims of Hurricane Katrina, here are some of the best ways to do so. Joe Kovacs is executive news editor for WorldNetDaily.com.
I've eliminated one 70 mile RT drive pet week. While demand for gas is relatively inelastic, it may not be as inelastic as some may think, especially if there is a large increase in price over a short period of time. The elasticity curve is not a straight line.
Oh, they're definitely running. My buddy down in a suburb of New Orleans says that's really all you can hear.
Rush kept saying .. "there is no shortage of oil" .. the shortage will be in the refining of the oil into gas.
Well .. I have an idea .. why don't they take all those displaced people out of N.O. and pay them wages and give them housing - to relocate where several refineries can be built. Subsidizing the cost to the builders - will help the builders, and help the people at the same time.
FDR thought it was a great idea .. and I believe we built Hoover Dam that way - and it's still standing.
We need the refineries - the people need jobs - the people need to have some hope for their future - and we need to be able to refine more oil. Then .. when a disrepution happens in one part of the country .. the other refineries will take up the slack.
I know .. this is too logical.
Except in my Economics class, when I messed up the formula! :-)
From my understanding of an interview i saw with a guy in charge of running those pumps, they've brought in big
military "U-haul trailer" size generators to
run the pumps. Like the ones they'd use for a MASH Unit.
The free market rocks....
This is just a great lesson in basic economics. Higher prices ration supply, supply increases because the sellers have more incentive to to bring in more supply, and demand is reduced.
We don't need no stinkin govt intervention...
I am addressing those that don't believe in markets and capitalism.
MN (where I'm at in MN) is at $2.69
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