usair_begins_with_u
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Thats just like saying cheerleaders at NFL games make a difference between winning and losing..
$70 Oil Business Plan
- Thread starter Winglet
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Thats just like saying cheerleaders at NFL games make a difference between winning and losing..
ClueByFour
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700UW said:
Which won't do a thing to solve the refining capacity problem.
USA320Pilot
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BoeingBoy
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If one looks at the impact on the total ecomony, as the White House statements do, the impact will be minor. Any short-term hit to the economy will be offset by the longer-term effects of all the government/insurance money flowing into reconstruction.
That said, the effect on individuals and individual businesses can and will be catastrophic.....
Jim
That said, the effect on individuals and individual businesses can and will be catastrophic.....
Jim
RowUnderDCA
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I'm not sure... I'm wondering if these images of catastrophe on U.S. soil combined with the recent stats of increased poverty and stagnating incomes and high fuel prices and horrible news in Iraq will cause consumers to put huge brakes on consumer spending.... totally psychological... Also I'm not sure now that reconstruction is going to go forward very quickly.
USA320Pilot
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In after hour electronic trading, NYMEX Crude Oil Futures for the December contract are trading down 87 cents to $68.94 per barrel. Interesting...
Regards,
USA320Pilot
Regards,
USA320Pilot
BoeingBoy
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Well, bear, the EIA's latest monthly short-term forecast (issued 8/8/05) calls for crude (West Texas intermediate or WTI to be exact) to remain above $59/bbl through 2006.
That said, however, every revision to the forecast price this year has been upward......
Latest EIA Short-term Forecast
Jim
That said, however, every revision to the forecast price this year has been upward......
Latest EIA Short-term Forecast
Jim
USA320Pilot
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Bear:
My earlier thoughts where based on fundamental, technical, and sentiment analysis. People like the chairman of the board at Exxon/mobile believed speculation was driving prices too, according to an interview on CNBC, when I thought $45 per barrel was an appropriate price. Hurricane Katrina's impact has yet to be totally understood and is a fundamental shift due to about 30% of the U.S. refining capacity now disrupted.
Nonetheless, traders seem to be locking in profits and selling their contracts, both during regular trading hours on the shores of the Hudson River and through after hours electronic trading.
See Story
See Story
Regards,
USA320Pilot
My earlier thoughts where based on fundamental, technical, and sentiment analysis. People like the chairman of the board at Exxon/mobile believed speculation was driving prices too, according to an interview on CNBC, when I thought $45 per barrel was an appropriate price. Hurricane Katrina's impact has yet to be totally understood and is a fundamental shift due to about 30% of the U.S. refining capacity now disrupted.
Nonetheless, traders seem to be locking in profits and selling their contracts, both during regular trading hours on the shores of the Hudson River and through after hours electronic trading.
See Story
See Story
Regards,
USA320Pilot
BoeingBoy
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I suspect that we're at one of those rare times where crude prices move opposite refined product prices. The problem isn't crude supplies, especially with the decision to loan crude from the SPR. The problem is strictly refining capacity, plus the capability to move refined products from operating refineries in the Gulf region.
I notice that while crude is trading down in after-market, gasoline and heating oil are still up - an indication of jet fuel prices, perhaps???
Jim
I notice that while crude is trading down in after-market, gasoline and heating oil are still up - an indication of jet fuel prices, perhaps???
Jim
usair_begins_with_u
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BB, you are one of few here who's opinion I usually hold in higher regards, but I do have to take issue with the point you make that the problem is strictly refining capacity.. I think we are dealing with with a duel issue of lack of refining capacity as well as supply & demand imbalances.. You can see this clearly in the market, crude oil price increases have generally been preceedent to increases in gasoline prices. In this most recent and tragic event (katrina) now we see gasoline prices increase ahead of movements in crude. This suggests to me that their are two definite components, refining and demand, that are driving current processed fuel prices upward. I will also conceed there is a bit of speculation fueling the higher prices as well, but I am almost certian that the speculative portion is certainly not the main driver here... Unless of course you want to make the arguement that these "speculators" can predict natural disasters, and are willing to gamble fortunes on it.
BoeingBoy
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I certainly don't disagree with you, a least in the longer term past recovering from Katrina. I was strictly talking about the immediate term with the damage from Katrina limiting refining/pipeline capacity, but didn't make that clear. During this period, it may be that we'll see crude and refined product prices follow divergent paths, with crude dropping somewhat (with not enough refining capacity to use the available crude) while refined product prices continue to climb (with not enough refining/transportation capacity to provide product). Sorry for the confusion.
FWIW, the EIA is forecasting 2006 world crude supply and demand to be exactly in balance so any change in production or demand could cause even more turmoil in the market than we've seen this year.
FWIW #2 - I saw a report that some airports were flying in fuel supplies - that can't be cheap....
Jim
FWIW, the EIA is forecasting 2006 world crude supply and demand to be exactly in balance so any change in production or demand could cause even more turmoil in the market than we've seen this year.
FWIW #2 - I saw a report that some airports were flying in fuel supplies - that can't be cheap....
Jim
totally psychological
Row,
If the average consumer drives a 20 MPG car 1500 miles a month, gas going from $2.00 to $3.00 will raise his monthly fuel expense from $150 to $225, or $75. Fuel is a significantly lower expense as a percent of income in the U.S. than it was in the late 70's/ early 80's, but you are 100% correct, it's the perception. It takes a while for habits to change. Folks don't go trade the Hummer in for a Prius on a day gas goes up 5 cents. But BIG swings make changes happen. In taliking to folks over the last couple days, I've seen a VERY wealthy friend say he's now likely going to go out and get the new toyota Hylander Hybrid SUV. I overheard subordinates taliking about buying a bus pass that same days to ride the bus instead of drive to work. This could very well be the turning point that sends oil plummeting in 6 months.
but I do have to take issue with the point you make that the problem is strictly refining capacity.. I think we are dealing with with a duel issue of lack of refining capacity as well as supply & demand imbalances.. You can see this clearly in the market, crude oil price increases have generally been preceedent to increases in gasoline prices.
UBWU,
Somewhat correct, but I'd say even more that it's a problem with the supply of "good" oil and the lack of adequate refining capability of "bad" oil. The oft quoted WTI oil price is for a pretty darn good grade of oil that is easily refined. The U.S. refiners have specialized in refining the cheaper 'bad' oils due to the higher margins. When oil was plentiful, the spread in price between light sweet oil and heavy sours was relatively small, now that spread has grown large, meaning domestically refined oil brings HUGE profits for the refinery because of the high cost of the light oils, and the inability of others countries to efficiently refine the heavy oils.
Row,
If the average consumer drives a 20 MPG car 1500 miles a month, gas going from $2.00 to $3.00 will raise his monthly fuel expense from $150 to $225, or $75. Fuel is a significantly lower expense as a percent of income in the U.S. than it was in the late 70's/ early 80's, but you are 100% correct, it's the perception. It takes a while for habits to change. Folks don't go trade the Hummer in for a Prius on a day gas goes up 5 cents. But BIG swings make changes happen. In taliking to folks over the last couple days, I've seen a VERY wealthy friend say he's now likely going to go out and get the new toyota Hylander Hybrid SUV. I overheard subordinates taliking about buying a bus pass that same days to ride the bus instead of drive to work. This could very well be the turning point that sends oil plummeting in 6 months.
but I do have to take issue with the point you make that the problem is strictly refining capacity.. I think we are dealing with with a duel issue of lack of refining capacity as well as supply & demand imbalances.. You can see this clearly in the market, crude oil price increases have generally been preceedent to increases in gasoline prices.
UBWU,
Somewhat correct, but I'd say even more that it's a problem with the supply of "good" oil and the lack of adequate refining capability of "bad" oil. The oft quoted WTI oil price is for a pretty darn good grade of oil that is easily refined. The U.S. refiners have specialized in refining the cheaper 'bad' oils due to the higher margins. When oil was plentiful, the spread in price between light sweet oil and heavy sours was relatively small, now that spread has grown large, meaning domestically refined oil brings HUGE profits for the refinery because of the high cost of the light oils, and the inability of others countries to efficiently refine the heavy oils.
GeezLouis said:
Cut them off, or do what China did and DEMAND
that they provide oil to us at a reasonable cost.
They're greedy, but when you take away their
crack, they'll go along with just about any plan
to keep their product moving and prevent a
total collapse of the world oil market. Why
doesn't G.W. have the balls to draw a line in
the sand?
