Oil jumps above $100 on refinery outage
 

This AP article is a little contradictory, but it says that oil prices have closed above $100 per barrel for the first time.

Increasing gas prices haven't had much apparent effect on driving habits in the US. Or maybe I'm just not seeing it. Have you made any changes to your lifestyle due to higher energy costs?

I think we might see gas at $4/gallon this year.

----------------------------------------------------------------
NEW YORK (AP) - Oil futures shot higher Tuesday, closing above $100 for the first time as investors bet that crude prices will keep climbing despite evidence of plentiful supplies and falling demand. At the pump, gas prices rose further above $3 a gallon.

There was no single driver behind oil's sharp price jump; investors seized on an explosion at a 67,000 barrel per day refinery in Texas, the falling dollar, the possibility that OPEC may cut production next month, the threat of new violence in Nigeria and continuing tensions between the U.S. and Venezuela.

The fact that there was no overriding reason for such a price spike could be a bad omen for consumers already bearing the burdens of high heating costs and falling real estate values. Many recent forecasts have said oil demand growth this year will be less than initially expected, yet prices continue to rise. That suggests they may continue rising as the weakening dollar attracts new investors to the futures market.

Rising oil prices mean higher gas prices.

"As the economy weakens, it's going to be met with $3.50 and $3.60 gasoline," said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm. "And that really spells trouble for the consumer."

Light, sweet crude for March delivery rose $4.51 to settle at a record $100.01 a barrel on the New York Mercantile Exchange after earlier rising to $100.10, a new trading record. It was the first time since Jan. 3 that oil had been above $100.

Oil prices are still within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

"I really think ... crude oil's going to soar through $100," Cordier said.

At the pump, meanwhile, gas prices jumped 1.8 cents to a national average price of $3.032 a gallon Tuesday, according to AAA and the Oil Price Information Service. Retail prices, which typically lag the futures market, are following oil prices higher. The Energy Department and many analysts expect gas prices to peak this spring well above last May's record of $3.227 a gallon.

Gasoline and heating oil prices appeared to lead Tuesday's wide advance in energy prices due to the explosion Monday at Alon USA's Big Spring, Texas, refinery, which could be shuttered for two months.

"The refinery fire in Texas is making people a little concerned," said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Amherst, Mass.

March gasoline jumped 10.93 cents to settle at a record $2.6031 a gallon, and March heating oil rose 11.45 cents to settle at $2.7614 a gallon, also a record.

A threat by a rebel group in Nigeria to escalate attacks on the nation's crude oil infrastructure helped boost oil prices. The rebels were acting in response to rumors that the government had killed a captured leader, whom authorities later said was safe and well. Militant attacks have cut about 20 percent of Nigeria's crude output in recent years.

For the moment, investors appear to have put aside concerns about the economy that have sent oil prices down into the mid-$80 range twice in the last month. Traders are instead focused on the Organization of Petroleum Exporting Countries, which will meet early next month to map out production plans, and Venezuela, where President Hugo Chavez made conflicting statements this weekend about the country's legal dispute with Exxon Mobil Corp.

OPEC could move to cut production in the second quarter, typically a period of low demand, though many analysts feel that's unlikely. In Venezuela, Chavez said he was not serious about an earlier threat to cut oil sales to the U.S., but also threatened to sue Exxon Mobil. The world's largest oil company is fighting Venezuela's nationalization of an oil project, and recently convinced several courts to freeze $12 billion in Venezuelan oil assets.

Other energy futures also rose Tuesday. March natural gas jumped 31.7 cents to settle at $8.977 per 1,000 cubic feet. Analysts said prices were supported by forecasts for cooler weather, but that futures were also following oil prices higher.

In London, Brent crude for April delivery rose $3.65 to settle at $98.56 a barrel on the ICE Futures exchange.


(Copyright The Associated Press. All rights reserved.)

I love my diesel jetta. It's gonna save me a billion dollars if gas keeps going up.

you know, if you pay $4/gallon, you're still paying less than we do in Australia. Consider yourselves lucky. ;)

smoothmoniker, what's your fuel mileage on the Jetta?

I've gotten as high as 45mpg on a tank, usually closer to 40. My old truck was getting 20.

I'll let you know more precisely in a few months, since I've started using this:

www.mymilemarker.com

It is probably time for some higher gas prices, it will go well with the coming inflation, recession, and foreclosure crisis. It may give those idiots in Congress the stimulus to go after the issues and get something done.

Gas went up this afternoon from $2.799 to $2.989. If it stays up, I'll go through my gas budget before the end of next week.

The Aveo is still calling me...but I'll only take a yellow one.

I heard a story yesterday about why diesel fuel is so expensive and how it will not go down any time soon. But apparently, the US is starting to warm up to it and it will become more popular by the end of the decade.

Yea, I hear they are going to put the Land Rover diesel in the F-150 in 09. It is going to raise the cost by about 8 or 10 grand but the gas mileage is expected to go to the 30's. That would be a good start. Things are going to get much more painful for the next few years.

Solution does not resided in Congress. Problems such as corporate welfare have only made the problem worse. Technology developed in GM in the 1970s, found standard in foreign models in the 1990s; and GM still could not install it in the 2000s? Engines in SUVs using 1960 technology.

Solutions are found only in one fundamental principle - do more work with less energy. Nothing in Congress can fix the problem. Although some Federal regulations did liberate car guys, how many more innovations must be stifled for 10 and 20 years by bean counters? Those are lessons from history.

Those who learn from history would than complain about ethanol - corporate welfare that solves nothing.

Let's see. The US government gave these automakers $100million to develop a hybrid. 12 years later - still no hybrid? Patriotic Americans (with Japanese citizenship) had to do it? I don't see the problem identified and blamed.

An F-150 pickup that could weight less than a Camry has lower gas mileage? Yes. They are not selling to people who meet the definition of patriotic Americans. American patriot wants, works for, and contributes to innovation. We need more work from less energy. We don't need cars that burn 10 gallons of gas while using less than 2 gallons in productive work. Vehicles are that inefficient. What will Congressman do? Pass more laws to protect GM - an anti-American auto company?

From history, gasoline had to rise to $5 per gallon before automakers conceded - started using pre-WWII technologies such as fuel injection - in cars. Costs had to increases that high before bean counters would finally concede that a decades obsolete technology - a carburetor - could finally be replaced.

Now that right there is some funny shit. :lol2:

This will be the year of the consumer diesel cars.

I would love to see gas got to $4 a gallon overnight and my truck gets 16 mpg.

One who may be so anti-American and so anti-free market as to promote "Buy American"? GM cars were so pathetic as to cost more to build than Mercedes. Required more labor. Required two extra pistons and all those other expensive parts to do same as good American cars (ie Toyota). Those are facts with numbers. TheMercenary's proof - an intelligent response? Nothing. He uses mockery to prove his point. Clearly he is not an immigrant.

And why is that Idiot? because the US workers unions made it so. The industry was fucked by the unions, hence they outsourced. Pensions, insurance, required union work conditions have all contributed.

Mercedes did substantial research in the 1990s onwards to refine a superior diesel. Other manufacturers were pioneering other technologies. In every case, it was about doing more work with less energy. Adapting better to changing loads. A 1960 technology V-8 so common in low performance American products should have and could have been cremated decades ago. That V-8 gasoline engine is a tribute to bean counters doing cost controls. Why do so many pickups and SUVs have these crappy technologies?

Mid 1970 America V-8 engines did maybe 170 Hp. That is what four cylinder engines and smallest V-6s do today where innovation existed. Why does anyone need 200 or 300 Hp engines? Ego? Confidence? Self-esteem? Who are these people? A problem.

More hate? So union workers created all that stifled innovation for 30 years in GM? Did you ever work in a GM plant? I did. How I could get work accomplished? I found a union worker who took the proper attitude (completely with an arm gesture). Problem solved immediately.

Another example: a pipe fitter probably forgot to tighten a fitting. Materials flowed through that pipe until cooling finally created a leak. The room filled with a dangerous gas. Another pipe fitter held his breath, ran in, cut off the flow, and retreated safely. (I asked him if he was crazy.)

Somehow I got called into a meeting by the plant manager. She had maybe 50 people in the room to discuss the event. Obvious from irrelevant questions was that neither she nor her assistants knew even what the material was used for - how the work gets done. She could not ask a single useful question. But a most damning observation? Neither pipe fitter was there. Nobody who knew what happened was present. No problem. She was an MBA. She conducted a meeting. Therefore she had everything under control.

So many people discussing what none knew anything about? Clearly another example of unions destroying America? Yes, where contempt replaces logic.

TheMercenary, how many more will your hate attack? When an adversarial union exists, then look years (decades) earlier for an adversarial management that too often comes from business schools, has no idea how the work gets done, and who must hire more subordinates.

Legacy costs. GM cars cost more due to legacy costs? Reality: the day that union worker requires, those pension funds should be fully funded. But 1990s GM cars had so many more pistons (were so anti-America) that GM management stopped funding those pension funds. Now GM, et al owe $7 billion to the pension funds. GM blames legacy costs. What anti-Americans let GM forget - they stopped funding those pension funds so claim profits in the 1990s. But again, this is blamed completely on the unions - according to TheMercenary. Hate trumps facts?

How was 1981 Ford saved from bankruptcy? First the MBA was removed - Henry Ford. Then Ford eliminated management. 48 layers of management were reduced to 5. No union workers had to be eliminated. Instead, Ford eliminated the only reason for their problems - management. So Ford Motor went from near bankruptcy to record profits between 1981 and 1990.

When unions get blamed as TheMercenary posts, well, the accuser is better replaced by an immigrant – to make a better America.

May you get what you wish for and may it bankrupt you Idiot.

Why not just call me niger? That is your intent.

As I have already stated. I find the term offensive and shall not call you anything but what I find you to be here. Idiot. I know nothing of your origins. Are you an illegal immigrant?

Well at least you don't consider me a niger. I was worried you might judge me by the color of my letters.

:lol2:
That was the first thing I thought of when he wrote that last night. :D

I spent yesterday at a conference on alternative transportation fuels from cellulosic materials.. Speakers included Steve Andrews (co-founder of Association for the Study of Peak Oil), some forestry people, a representative from the Colorado Governor's Energy Office, two US Senators (Salazar and Allard), and others.

They did a pretty good job of convincing me that world oil production is very near the peak, which means that production will level off, then begin to drop, even as demand is increasing.

When this happens gas will get very expensive. I'm seriously considering getting rid of my truck (which gets 18 to 20 mpg), because it won't be worth much when gas gets scarce.

But what's a realistic timeline for that? 3 years? 15 years? More specifically, let's say one is in the market to replace a vehicle in the next few months. Aside from the warm fuzzies one gets from getting a hybrid, right now it is a mathematical fact that hybrid cars do not make up their initial price difference in gas savings unless you drive a lot more than we do. Obviously there will be a tipping point where this will change, but it would be nice to have an idea roughly when that will be. We do tend to drive our cars until every last ounce of usefulness has been gotten out of them (this current replacement is only a necessity because it doesn't have enough seating,) so it's likely we'll still be driving it in ten years.

We won't know we've passed the peak until we've been past it for a while (a few years). We may have already passed it, or it could happen between now and 2015. A downturn in world economies will delay it for a time.

Alaska peaked in 1988; it is now producing at half the 1988 levels. North America, Europe and Asia have all peaked. Saudi Arabia is expected to plateau within a few years (Sadad al Husseini).

If you buy an SUV, you can make the peak come sooner.

Not counting ANWAR, right?

Based on what I've read about ANWR though, it would only put a mild bump in our supply, depending on how the oil was used.

Despite tw's crazy rants about pre-WWII fuel injection technology being so wonderful, he's right on the money about the unions and their relationship with the manufacturers.

The car company would come to the bargaining table and say, we'll give you a little bit now, but we'll take care of you when you retire. But when the contract was signed, they let the promises become the problem of the management that followed them, when they retired with millions in cash and stock options.

Most of the work rules, on which the companies had plenty of input and agreed to, are enforcement of safety procedures. Many of them are just following federal law that would be ignored without the unions. Even with them, too many people die or are disabled by unsafe work practices in pursuit of the almighty buck.

Chinese workers are cheap and they are dieing by the thousands, to keep walmart rolling in cash.

Gas prices might reach as high $4/gallon this year. I wouldn't expect any thinking person to buy a vehicle that gets less than about 27 miles per gallon, without a really good reason.

I've had my Insight for 5 years this month and have driven it about 44,000 miles. Compared to a car getting 30 miles per gallon, I've saved about 800 gallons. Compared to my Ranger, I've saved about 1800 gallons.

That's not a lot, but I don't really care if gas goes to $8 or $10 per gallon. It just doesn't affect me much anymore.

If you're getting a car that you'll drive for the next 10 years, I think a hybrid will make economic sense, with gasoline at $4/gallon.

Diesel in Scranton is already at $4.149/gal. I got 149 gallons and the price tag was over $600!

And I'm going to "waste" 12 gallons of it tonight to stay warm.

This is getting out of hand.

I read that they project people are going to finally start saying "that's enough" and drive a whole lot less. I'll believe it when I see it. That's what we can hope for. That is what I think those who say "in my country it's 5000 qwerty a ha' litre or whatever measurements they use, so you should be happy" don't understand. This IS America and we do expect that our government listen to the people who are saying "this is enough when I must choose between feeding my family and gasoline" by boycotting, cutting down, and aggressive feedback.

I don't believe gas prices are on an unavoidable upswing. I do believe that if we get a president (et al) who is (are) not in the pockets of the oil companies we could effect some changes.

Shawnee, I wish that were possible, but I don't think that this as a political issue. There is an ever declining amount of oil in the ground, constraints on extraction, shipping and refining, and an increasing world-wide demand.

The only changes that can be instituted to reduce oil prices significantly are those that result in reduction in demand. These could include: greatly improved mass transit, greatly increased vehicle fuel efficiency, rationing, massive recession, and rapid conversion and implementation of alternative fuels.

Some of these options are possible, but not immediate. Conversion to alternative fuels might be possible one day, but this will still require drastic conservation measures - we cannot meet more than 25 to 30% of our current demand using cellulosic ethanol and biodiesel.

Rationing of conventional oil would spur implementation of most of the other options on that list.

Don't bombard me with facts, Mr Jesus. ;)

Seriously, if it's not a political issue, why is no one in the government addressing this? Why don't we hear on the news, when they interview disgruntled people all the time, someone in the "know" explain to the people why they care but are powerless? Reeks of typical sweeping issues under the rug in hopes that we just go with the flow.

I still think we have an awful lot of folks in the wrong pockets.

I undertsatnd that the reason for current soaring prices is because with dollar being a turd and the financial markets in a tizzy. Investors are buying oil as a commodity. Nothing to do with supply and demand of the actual stuff, just trading to prop up portfolios and 401Ks.
So it is a political problem, if the economy was more stable, these investors wouldn't be switching to oil.

They also said this artificial price bubble could continue to inflate or burst at any time, 6 month price predictions range equally from $30-$150 :eek:

Do you mean keeping your engine running while you sleep?

If so, wouldn't it be cheaper to rent a room? (And probably more environmentally friendly too) Or do you have to keep the engine running anyway to stop the diesel freezing? Or something?

/nosy

(love the technical jargon there, beest.)

Um, because it's not a political issue? The only way a politician can affect your cost for fuel is by removing or reducing the taxes on the fuel - something they don't want to consider.
Commodities trade on future expectations of price, it is very much a supply and demand issue. Money managers buy and sell anything that is able to be held within a portfolio by their prospectus. It isn't a propping up issue, it's a "where can we make some money?" issue. That is what you pay them for - to make money where they can and hedge losses where they can.
Stable? Recession and price spikes in various asset classes are very much a normal part of the economic cycle. This isn't an accident - it is just part of life. The government shouldn't even try to interfere in markets hoping to prevent indices from dropping - it isn't there job.

Your sarcasm aside, you can't tell me the politicians aren't usually the first ones to jump up and say " WE DIDN'T DO IT. HE DID IT. LOOK OVER THERE" in response to repeated questions from the people. Or is that directly related to how much bullshit is spewing out their asses?

My point is they don't address it, even to point their pointy little fingers and say they have no control. If they don't have control they would certainly point those pointy little fingers everywhere, thereby addressing it.

lookout, if I'm reading your response correctly, the money managers aren't pushing the price up, they're anticipating that the price of oil will increase due to external factors and they're just riding that increase.

Does that mean that they expect the price to go significantly above $110/barrel?

What they are trading is the future price of oil. Those contracts have different conditions for time, price, quantity, etc. Some traders will buy at a future price of $110 and turn around and buy another at $90. They're trading options to purchase or sell at set pricepoints. It really is complex. Right now, more people think it will go higher than feel it will go lower.

S123 - Politicians don't get to decide the cost of fuel beyond the amount of tax they slap on it. They talk so that you can hear their voices and feel like they care about you. Right now there are plenty of reasons for them to worm their way into the evening news - the war, the election, peers getting hookers... Wait for the next news cycle slowdown and they'll be concerned with the price of gas again. They'll lay it at the feet of big oil robber barons and forget to mention that the government makes a bigger profit per gallon that the company selling it.

The politicians absolutely have some influence on all of this. It's called leadership, and we don't have any right now.

They control purse strings for research into areas that might spawn new technologies and alternative fuels. They pass or don't pass fuel consumption standard for vehicles. They offer or don't offer tax breaks for purchasing Hummers. They offer or don't offer tax breaks for people who spend money making their homes more energy efficient.

You can either try to increase the supply, which this administration has done by invading Iraq and pushing to open wildlife refuges to drilling.

Or you can try to decrease demand, which this administration has fought at almost every turn, going so far as to give tax breaks to purchasers of Hummers. Remember Jimmy Carter putting on that sweater and telling us he was turning the thermostat in the White House down a few degrees? The government can easily pass laws dictating fuel economy of fleets of vehicles.

Or you can pump money into research of alternative fuels in order to think outside the box. Germany, for example has done this a lot. Many farmers in Germany have planted solar panels in their fields instead of crops because of government programs that make it financially attractive. There are many ideas out there that haven't been tried yet. High altitude kites that have wind turbines on them, buoys in the ocean that harness wave power are two that come to mind. Businesses aren't going to risk trying them until the price of oil justifies it, but then it may be too late. You need governments to kick start programs like this, much like the space race.

You can point to the markets and say that it's all the markets' fault, but the truth is that the government has a hell of a lot of influence here, and they aren't using it wisely. There's no leadership.

OK, so we want the government to step up and push money into alt fuel? How? What areas? Who gets the money? How much? Who decides? What benchmark must they hit to receive the money? If something proves viable, who gets to profit? How much? If the price of oil comes down should we quit spending money on something that is more expensive and less efficient than oil? Where is the cutoff?

I'm not saying alt fuel is a pipe dream. I'm not saying it isn't a worthy goal. I'm saying it is more complicated than having a schmoe in a suit say "we need to ween ourselves from foreign oil".

As the price of fossil fuels goes up, alternative energy becomes more attractive and research and testing ramps up. It takes time for new ideas to be explored, tested, approved, and developed to the point that they can go to market with an expectation of profitability. Remember, companies aren't making products because of the warm fuzzy feeling they get. They have to harness new ideas into profitable scenarios before they can bring them to you. Part of the process is preparing for any backlash as well.
New high efficiency light bulbs? Awesome. They are more hazardous when disposed of? damn.
New hybrid cars? Love them! oh, they're more expensive and the manufacturing process vs savings takes 8+ years to offset? Hmmm.

I don't want my government to just throw money at the problem so they look concerned. I fully support a reasonable and rational expenditure that has a reasonable chance of proving effective.

ok thanks :)

I'm lucky,I'm lucky. does anyone want to buy an SUV?

When the collapse comes, you won't be able to get gas for your SUV, but at least you could live in it.

bold mine

So you want them to do things completely differently than they've done everything else? ;)

The reason oil prices are up is because the middle east is limiting the supply coming out. That is all.

If and when they remove those limits, prices will go down again unless the oil distributors think they can get away with making more profit and keeping the prices up.

Very much so. I would love to see a few of them prove to be worthy of the trust we are forced to place in them.

It'd work out at almost $6/gallon over here btw. You're still getting it cheaper than we are, and you don't have the same interest rates on your mortgages that we do.

The average Australian has had to find an extra $100/month to put on their mortgage over the last year. That's about the same amount many families spent on fuel for their car. This new hike in fuel prices is putting real pressure on families all over the world.

Understandable. We're all in a crunch. But, my point in this quoted post was we are hopeful that this government by, of, and for the people will listen, and act.

Someone who started at a $300,000 mortgage with a 5% ARM that has risen to 6.5%, interest only is now paying $375 more per month than they were before the rate increases. 7% = $500. That'll put a hitch in yer giddy'up.

Act how? What do you want them to do? Nationalize the oil companies and set the prices artificially low? Or should they leave the oil alone and simply step in and say that all mortgages should be dropped to 5.75% interest only so everyone has more cash?

I understand the economic strain that increasing mortgage costs and higher fuel expenses cause - I'm living in the same world you are - but what do you want the government to do?

ACT. Do something. Say ANYTHING.

I want the government to entertain the things glatt talked about.

I want them to look out on the people and at least have the common decency to shrug their shoulders and look stupid, rather than poo-poo'ing those who want to say something, effectively telling us "it's the economy, stupid, now shut the fuck up and like it."

I'd like them to address the first part of my statement: LISTEN. What comes after listen? Respond, rather than hiding around the corner 'cause you know your redneck cousin is there and she's pissed. ;)

Isn't investing in alternative fuels the best and possibly the only thing the government can do really?

America and other western nations are in the mess they're in because of too much government interferance in the market in the first place. Surely asking them to interfere more could only be a bad thing.

Who is saying "shut up and like it"?

Does it really make you sleep better at night when some suit gets in front of a camera, gets misty eyed and says, "we need to help the middle class get cheaper fuel"?

Do you have an easier time paying your bills after a stuffed shirt tells you that Exxon made record profits and they don't think it's fair?

Seriously, saying "anything" and doing "something" doesn't solve anything. What should they do?

What is naive about telling you what's been reported in the news? It's a fact that the middle east is limiting the supply. Google it.

If they remove those limits, there's only two things that could happen. Prices would go down a bit, or oil distributors will leave them at the levels they are now while giving the general public some bullshit story about how they have to keep the prices up.

You explain to me what's wrong with that statement.

Try just plain wrong HLJ.

Sorry Ali. I had deleted that before I saw that you responded to it. I felt bad after I posted it, but you were too quick.

They say shut the fuck up and like it by never, ever, addressing it.

I forgot I'm out of my league here when it comes to twisting and skirting. I'll go back to trying to be funny. Wish me luck.

There's no need to say sorry if that's what you really think HLJ. If it is what you really think, I'd be curious to know why you think it.