Don't look now, but oil is approaching $50

Tilted

Tilted

..
Oil is now trading around $48/barrel.

Opec cuts seem to be taking hold, and their latest demand outlook hints at the possibility that they will soon decide to make deeper production cuts.

Add to that the fact that, despite the global recessionary trends, the Chinese economy continues to hustle along (projected 8%+ GDP growth), and I fear that we will soon see the end of sub $2 gas.
 
kom526

kom526

They call me ... Sarcasmo
If oil goes up to $3.00 + a gal then start to listen for Maxine Watters and her "socialize the oil industry" :blahblah:. Then of course Franklin DelanObama will start speechifying about how we need to wean ourselves off foreign oil :)duh: DRILL HERE!) and green energy is he only way to be truly free. Either that or "Larry Gude needs to buy more oil for his business that I'm going to tax the crap out of."

I was just telling the wife last night that gas @ WaWa in CH has been $1.89 for about a week, maybe a bit longer. I think it is the longest I have seen one price for gas in a while.
 
Larry Gude

Larry Gude

Strung Out
It's going up because Obama didn't change the regulations that Bush shoulda changed in regards to commodity trading that would tend to keep the pure speculators out as intended in long stadning trading rules that Clinton changed in 2000.

Obama now risks the same stupid thing that Bush allowed; a devastating, specific hit to every single American and every last piece of the economy.

Oil should be at $30 or less. Right now Obama is allowing, at $50, some $500 million per day, $15 billion a month and nearly $200 billion a year to start leaving the national economy. This may be the straw that breaks Obama's back.
 
kom526

kom526

They call me ... Sarcasmo
Larry Gude said:
Oil should be at $30 or less. Right now Obama is allowing, at $50, some $500 million per day, $15 billion a month and nearly $200 billion a year to start leaving the national economy. This may be the straw that breaks Obama's back.
Click to expand...

Or the American people's back.:ohwell:
 
Tilted

Tilted

..
kom526 said:
If oil goes up to $3.00 + a gal I don't think it's headed there anytime soon, but we really need it under $2 - without cheap gas our economy would be getting much worse, much faster. then start to listen for Maxine Watters and her "socialize the oil industry" :blahblah:. Then of course Franklin DelanObama will start speechifying about how we need to wean ourselves off foreign oil :)duh: DRILL HERE!) Let me repeat that in case someone wasn't listening - DRILL! and green energy is he only way to be truly free. Either that or "Larry Gude needs to buy more oil for his business that I'm going to tax the crap out of."

I was just telling the wife last night that gas @ WaWa in CH has been $1.89 for about a week, maybe a bit longer. I think it is the longest I have seen one price for gas in a while.
Click to expand...
...
 
Tilted

Tilted

..
Larry Gude said:
It's going up because Obama didn't change the regulations that Bush shoulda changed in regards to commodity trading that would tend to keep the pure speculators out as intended in long stadning trading rules that Clinton changed in 2000. That's a pretty long discussion - but speculators can only move market prices where the other market parties are let them (i.e. those more integral parties have to be complicit in the movements), and their artificial effect on the market can only avoid reconciliation with the reality of the fundamental market conditions for so long (although, it is true that much damage can be done in the mean time).

Obama now risks the same stupid thing that Bush allowed; a devastating, specific hit to every single American and every last piece of the economy. Well, I think it is extremely unlikely that we will see something close to the peaks we saw last summer - we have a new ally in preventing that from happening now - OPEC. They learned their lesson this last time around, and they now realize that they have to be as vigilant in fighting the prices getting too high, as they are in fighting the prices getting too low. Yes, they raked in a bunch of cash very quickly, but they now understand that that hurt their long term ability to make money. Again, a long discussion - but most of the parties involved will now be fighting on the same side the next time that oil prices try to spike.

Oil should be at $30 or less. Right now Obama is allowing, at $50, some $500 million per day, $15 billion a month and nearly $200 billion a year to start leaving the national economy. This may be the straw that breaks Obama's back. I agree that this economy cannot afford to have oil be much more expensive - the huge relative savings realized from relatively low energy prices is one of the few things working in favor of the our economy right now. But, your numbers may need a little tweaking, because a good bit of that excess oil cost does stay in the national economy. Our net imports of petroleum products total about 10-11 million barrels/day. The point is still the same, and valid, though.
Click to expand...
...
 
Tilted

Tilted

..
A little more bad news for gas prices - weekly petroleum report tells us:

Gas inventories down 3.0 million barrels
Distillate inventories up 2.1 million barrels
Oil inventories up 0.7 million barrels
 
HeavyChevy75

HeavyChevy75

Podunk FL
I know that Diesel is still dropping right now. It is 1.96 in Callaway but much higher other places.

After paying 5.00 a gallon for Diesel it is nice break.
 
Tilted

Tilted

..
HeavyChevy75 said:
I know that Diesel is still dropping right now. It is 1.96 in Callaway but much higher other places.

After paying 5.00 a gallon for Diesel it is nice break.
Click to expand...

Yeah, HO/Diesel prices corrected much more slowly than Crude Oil and Gas prices did. The Heating Oil - Crude Oil spread remained very high, historically speaking, until about December, but it's been falling since then. At this point, HO/Diesel prices are actually a little lower than we would expect, relative to Crude Oil prices - so I wouldn't expect them to drop much more without a corresponding drop in Crude Oil.

This economy definitely needs Diesel prices around $2, much higher and they have a damaging effect on other consumer prices.
 
Larry Gude

Larry Gude

Strung Out
Tilted said:
Yeah, HO/Diesel prices corrected much more slowly than Crude Oil and Gas prices did. The Heating Oil - Crude Oil spread remained very high, historically speaking, until about December, but it's been falling since then. At this point, HO/Diesel prices are actually a little lower than we would expect, relative to Crude Oil prices - so I wouldn't expect them to drop much more without a corresponding drop in Crude Oil.

This economy definitely needs Diesel prices around $2, much higher and they have a damaging effect on other consumer prices.
Click to expand...

Dollar says the heating oil/crude spread continues. I have two historical trends;

One is the 'normal' heating oil trend where it goes up in the fall, peaks in January, starts dropping in February and bottoms out for the year in March/April. This is without reference to crude which, during 'normal', stays very consistent over that period. It's a 'normal' function of supply and demand.

The other is the 'abnormal' which is this recent chaos, the first Gulf War, severe hurricanes, etc. That is an all bets are off free for all.

Right now, winter is releasing it's grip and over supply, like a slinky, can't really help itself because NO ONE is willing to under produce and not be able to deliver home heating oil if winter holds on late.

Barring a late cold blast in the Northeast, I see heating oil falling below a $1, if only briefly, over the next 2-4 weeks.
 
Tilted

Tilted

..
Larry Gude said:
Dollar says the heating oil/crude spread continues. I have two historical trends;

One is the 'normal' heating oil trend where it goes up in the fall, peaks in January, starts dropping in February and bottoms out for the year in March/April. This is without reference to crude which, during 'normal', stays very consistent over that period. It's a 'normal' function of supply and demand.

The other is the 'abnormal' which is this recent chaos, the first Gulf War, severe hurricanes, etc. That is an all bets are off free for all.

Right now, winter is releasing it's grip and over supply, like a slinky, can't really help itself because NO ONE is willing to under produce and not be able to deliver home heating oil if winter holds on late.

Barring a late cold blast in the Northeast, I see heating oil falling below a $1, if only briefly, over the next 2-4 weeks.
Click to expand...

HO/Diesel prices certainly could drop a little more relative to Crude Oil - but as I said, I don't think they can drop much more. Right now the barrel spread is about $4, so a relative move of 10 cents down per gallon of HO would put the spread at zero. Can that happen for a brief period of time? Sure, but I think it is unlikely to happen. History tells us that it doesn't approach that close to zero very often.

Right now HO is trading at about $1.22 (not really fair, because it's moved up 5 cents since your post :lol: - a move that correlates well with the movement of Crude during that time), so a 10 cent move still puts it around $1.10. I doubt it can make it to $1, without a move down in Crude, even taking into account seasonal supply issues. I wouldn't rule it out, but I'd be willing to bet against it. Again - if Crude moves downward enough, it could easily reach $1 - but I'm talking about the spread.
 
Tilted

Tilted

..
The DOE's weekly petroleum report is due out in 15 minutes. Crude oil stocks are expected to build. If they don't, we could easily see Crude break through the $50 level today (right now at $48.33)
 
Tilted

Tilted

..
Bearish news for petroleum prices - weekly petroleum report tells us:

Gas inventories up 3.2 million barrels (surprise, expected draw down)
Distillate inventories up 0.1 million barrels
Oil inventories up 2.0 million barrels

Refinery utilization continues to drop - now at 82.1%. Man, demand just continues to be sluggish.

Crude down a little, to $47.77.
 
You must log in or register to reply here.
Top