A Horrible EIA Oil Inventory Report

[FM2436]

Michael Boyd's Monday Morning Hot Flash isn't very encouraging on the future of oil cost either. Click on the link below and scroll down to $75 Oil - A Whole New Dimension. Interesting picture of parked US Airways 727's in shown in the article.

http://www.aviationplanning.com/asrc1.htm

 

[RowUnderDCA]

Michael Boyd's Monday Morning Hot Flash isn't very encouraging on the future of oil cost either. Click on the link below and scroll down to $75 Oil - A Whole New Dimension. Interesting picture of parked US Airways 727's in shown in the article.

http://www.aviationplanning.com/asrc1.htm

Boyd is reading my mind. I wonder too, if high fuel prices will result in the avoidance of congested airports, or if the reduction of demand will take enough congestion out of the system so that operating two hubs at ORD does not burn SO much fuel.

I mean to say, if fuel is high,

would the hub and spoke system remain the same with marginal hubs eliminated at a lower level of activity?

would it go away entirely to focus on point to point?

would it gravitate back to fortress hubs at medium size efficient airports controlled by one carrier?

or something else?

Might we see AA move away from ORD to STL, or in a merger to DTW, MSP or CVG? Or even more radically, consolidate at ORD with UAL? If fuel is the driver, is it all possible?

 

[FWAAA]

doesn't quite work that way.....logistics....

would be cool trick shipping gasoline 12,000 miles without any major incidents....could be done but on occasion would be some neat pyrotechnics from time to time.

Most astute readers of posts 16 and 17 would realize that I already know that. Apparently, it was a little too subtle for you.

I assuming the product you are speaking of is the gasoline? Theres a hell of a lot more we get from oil other than gasoline........

You know what happens when you assume . . .

Duh!! The term "refined product" in my post refers to all refined product, including gasoline, diesel, heating oil, JetA, asphalt, tar, etc.

 

[ClueByFour]

Boyd is kind of misleading (rarer for him than some other airline talking heads). He postulates that carriers with "static fleets" will have an easier time of it. Problem there is that CO, UA, AA (save the MD-80s) and DL (save their RJ lift) have everything hocked to the gills--you cannot park an aircraft without continuing to pay the rent on it unless you own it outright. CO, UA, US, DL don't own any significant chunk of their metal outright. AA owns the MD-80s, NW owns the DC-9s and maybe the -10s.

He then postulates that "accessing flows from places like Tupelo to international" is where the money'll be if oil goes nuts. He then talks about parking RJs in the same breath, basically. Really gonna run 737s out of Tupelo?

He's also making the fatal flaw in thinking that all LCC traffic is leisure related and all legacy traffic is business related.

That said, it's going to be interesting if oil really does go to $75+/bbl and stay there. The fittest will be the people with incredibly strong hubs. Look for places like SLC, MEM, MSP, CLT, CVG, CLE to dissapear in a hurry.

 

[TheWatcher]

Most astute readers of posts 16 and 17 would realize that I already know that. Apparently, it was a little too subtle for you.
You know what happens when you assume . . .

Duh!! The term "refined product" in my post refers to all refined product, including gasoline, diesel, heating oil, JetA, asphalt, tar, etc.

Sorry, didnt realize you were so clever, now i can retire again for the 3rd time and you take my place 🙂🙂🙂🙂🙂

 

[SpinDoc]

😀 😀 😀

Hilarious!

Ok, I'll play along. A fair market price for a walkup transcon in coach is $200 roud trip. And a walkup First Class transcon RT should not cost more than $400.

Why? Because I declared it so, that's why. B)

It takes all kinds to have a discussion, and you certainly make it colorful.

Laugh. Let it out at my expense. My point may be a bit absurd, but it is accurate.

I have three questions that the elitist media should be hammering the President, Congress, and the oil company executives with, but strangely, they are not.

1. The changeover from MTBE to ethanol as an oxygenator was known by the oil companies for more than 6 months. Why did they not plan accordingly and stockpile ethanol while they had the opportunity? There have been reports of gasoline shortages along the Eastern Seaboard because ehtanol supplies were not available for the cutover.
The person(s) responsible for assuring a seamless transition to ethanol should be fired and hung from the nearest suitable tree.

2. Why did the oil companies close down a number of perfectly good refineries in the 1990's, after all of the mergers? There is only one answer, and it is greed, pure and simple.

3. Why have we not put major political and economic pressure on OPEC to deliver oil at a much lower cost? After all, the US is the largest consumer of OPEC oil in the world, and if we threatened to boycott them, they would crap their sandy pants.

There are reasons why these hard questions are not being asked, and I think I know why. There are too many people in powerful positions that would rather these questions NOT be asked, because they are profiting in the billions and keeping the politicians in the US on their leash, while the majority of common Americans pay for their inaction.

Where is the outrage that should be occurring right now? Why are common Americans not rising up and demanding that something be done about the cost of oil and refined products? The entire economy of the US will surely fall into the crapper if the current situation remains unchecked.

Last point, conserving fuel may be a viable alternative and may work in the long run, but it will not help the immediate situation.

 

[TheWatcher]

Laugh. Let it out at my expense. My point may be a bit absurd, but it is accurate.

I have three questions that the elitist media should be hammering the President, Congress, and the oil company executives with, but strangely, they are not.

1. The changeover from MTBE to ethanol as an oxygenator was known by the oil companies for more than 6 months. Why did they not plan accordingly and stockpile ethanol while they had the opportunity? There have been reports of gasoline shortages along the Eastern Seaboard because ehtanol supplies were not available for the cutover.
The person(s) responsible for assuring a seamless transition to ethanol should be fired and hung from the nearest suitable tree.

2. Why did the oil companies close down a number of perfectly good refineries in the 1990's, after all of the mergers? There is only one answer, and it is greed, pure and simple.

3. Why have we not put major political and economic pressure on OPEC to deliver oil at a much lower cost? After all, the US is the largest consumer of OPEC oil in the world, and if we threatened to boycott them, they would crap their sandy pants.

There are reasons why these hard questions are not being asked, and I think I know why. There are too many people in powerful positions that would rather these questions NOT be asked, because they are profiting in the billions and keeping the politicians in the US on their leash, while the majority of common Americans pay for their inaction.

Where is the outrage that should be occurring right now? Why are common Americans not rising up and demanding that something be done about the cost of oil and refined products? The entire economy of the US will surely fall into the crapper if the current situation remains unchecked.

Last point, conserving fuel may be a viable alternative and may work in the long run, but it will not help the immediate situation.

You're funny 😀 😀 😀

 

[SoftLanding]

Laugh. Let it out at my expense. My point may be a bit absurd, but it is accurate.

I have three questions that the elitist media should be hammering the President, Congress, and the oil company executives with, but strangely, they are not.

1.
2.
3.

Last point, conserving fuel may be a viable alternative and may work in the long run, but it will not help the immediate situation.

The answer to all your points are...drumroll 😉 ...market-based economy/politicians on the take...

Close down refineries: With mergers in the oil industry, what else can we expect?

But the biggest point: We're consuming too much. Fuel at the pump of $4-5 ought to take care of that...and a few politicians to boot 🙂

 

[JS]

Laugh. Let it out at my expense. My point may be a bit absurd, but it is accurate.

I have three questions that the elitist media should be hammering the President, Congress, and the oil company executives with, but strangely, they are not.

1. The changeover from MTBE to ethanol as an oxygenator was known by the oil companies for more than 6 months. Why did they not plan accordingly and stockpile ethanol while they had the opportunity? There have been reports of gasoline shortages along the Eastern Seaboard because ehtanol supplies were not available for the cutover.
The person(s) responsible for assuring a seamless transition to ethanol should be fired and hung from the nearest suitable tree.

dunno

2. Why did the oil companies close down a number of perfectly good refineries in the 1990's, after all of the mergers? There is only one answer, and it is greed, pure and simple.

naturally

3. Why have we not put major political and economic pressure on OPEC to deliver oil at a much lower cost? After all, the US is the largest consumer of OPEC oil in the world, and if we threatened to boycott them, they would crap their sandy pants.

OPEC does not set the price. The world oil market sets the price. OPEC has quotas, but most OPEC members exceed their quotas (yes, market economics, aka profit seeking, does influence OPEC members). From what I have read, there isn't much spare production capacity currently available in the Middle East. The capacity does exist but it would require billions of dollars of investment and that takes time before we see it at the pump. Besides, if you pump more cheap oil now, it means less cheap oil in the future (if anyone cares about the future any more).

Something else I read is that Saudi Arabia has been pumping oil too quickly from the Gandahar reservior (the world's largest oil reserve), and as a result the reservior may have been permanently damaged, reducing the supply of oil that can be pumped from it in the future.

Information like this is hard to come by since we are dealing with nutty countries, and petroleum engineering involves a lot of guesswork.

There are reasons why these hard questions are not being asked, and I think I know why. There are too many people in powerful positions that would rather these questions NOT be asked, because they are profiting in the billions and keeping the politicians in the US on their leash, while the majority of common Americans pay for their inaction.

Where is the outrage that should be occurring right now? Why are common Americans not rising up and demanding that something be done about the cost of oil and refined products? The entire economy of the US will surely fall into the crapper if the current situation remains unchecked.

Last point, conserving fuel may be a viable alternative and may work in the long run, but it will not help the immediate situation.

Wrong-O! Conserving fuel will reduce prices immediately. Conservation is the only viable option for both the short and long term.

 

[SpinDoc]

dunno
naturally
OPEC does not set the price. The world oil market sets the price.

Wrong-O! Conserving fuel will reduce prices immediately. Conservation is the only viable option for both the short and long term.

Two points:

JS:

Not entirely correct. The NYMEX is the predominant barometer for world oil prices, and right now, there are a lot of greedy SOB's manipulating prices to keep their profits coming in. The analysts are being paid to report on unproven fears that terrorists and terrorist nations are somehow going to cause a worldwide supply shortage, when this is a very remote possibility. Further, the tap is not going to run out any time soon, and by the time it does (2100 or so), alternatives will be available and plentiful. It's all fraudulent reporting that is being perpetrated by a few wealthy investors who are raking in money at the expense of the majority of hard working Americans. Oil at the tap in Saudi Arabia is being purchased at $20/bbl by the major oil companies. Where is the other $55.00 if it is not going into the pockets of the wealthy investors?

Conservation will take a long time to make serious inroads in the U.S., and will probably have to be legislated to force it to work. Do you have 5 to 10 years to continue paying $3.00 to $4.00/gallon for gas while conservation measures take hold? I surely don't have that kind of stockpile. We need short-term solutions NOW, no YESTERDAY, that will bring the cost of oil and refined product back to rational levels.

 

[PITbull]

The answer to all your points are...drumroll 😉 ...market-based economy/politicians on the take...

Close down refineries: With mergers in the oil industry, what else can we expect?

But the biggest point: We're consuming too much. Fuel at the pump of $4-5 ought to take care of that...and a few politicians to boot 🙂

It doesn't matter if fuel goes up to $5 or higher. For the consumer, they have to get to work. Otherwise, they can't pay for their cars or homes or food on the table.

There is no incentive for oil companies to look for alternative energy sources as they are making billions by just doing what they do best...gouge!

All Bush does in the media is state the problem over and over again. We know we have a problem with high, and unaffordable fuel prices and the only thing holding the consumer is buying time with charging fuel on credit cards.

The reprecussions of these high fuel prices will manifest next year when folks can no longer pay the interest on credit cards. That's when you see a crushing blow in the stock market, housing, and consumer purchases and confidence.

I see in my crystal ball a MAJOR correction in the market in 2007 if not by end of the year, and an economy being thrusted into recession.

The only thing that needs to change... for starters is Congress.

I also believe that the oil comanies need regulated. The current dependency that our economy and nation has on fuel consumption is the reason. Otherwise, there just maybe a total collapse.

 

[FWAAA]

Oil at the tap in Saudi Arabia is being purchased at $20/bbl by the major oil companies. Where is the other $55.00 if it is not going into the pockets of the wealthy investors?

We need short-term solutions NOW, no YESTERDAY, that will bring the cost of oil and refined product back to rational levels.

Not even close to accurate. A review of http://www.saudiaramco.com/bvsm/JSP/home.jsp should correct your mistaken impressions. Regardless of how the world's oil prices are determined, rest assured that the Saudis aren't selling it at $20/bbl to anyone in the west.

As to the "rational levels" of price: Some of us honestly believe that the market prices reflect that "rational level." Will they go up? Maybe. Will they go down? Probably.

 

[RowUnderDCA]

I'd suspect that $3.00 to $3.50 per gallon of gasoline at the pump for the rest of the decade might be the best thing for our children's future in the U.S.

 

[TheWatcher]

😀 😀 😀

 

[PITbull]

I'd suspect that $3.00 to $3.50 per gallon of gasoline at the pump for the rest of the decade might be the best thing for our children's future in the U.S.

You must own oil stocks. Statement makes no rational sense.