Oil slips below $36 ($35) as rising US crude inventories fuel demand concerns

Minneapolis Star Ttribune ^ | February 12, 2009 - 8:04 AM | JAKE NEUBACHER

[TLI]

VIENNA - Surging crude inventories and investor skepticism over the U.S. stimulus package dragged oil prices below $36 ($35) per barrel Thursday.

Investors seemed more wary than relieved after U.S. lawmakers finally agreed overnight to a $790 billion stimulus bill designed to pull the economy out of recession.

[TLI]

Nymex Crude Future 34.57 -1.37

Nymex RBOB Gasoline Future 128.90 1.92

Here in Texas you add about .39 cents to the 1.28 to get the retail price not including station profit and transportation cost.

When Crude was at or below 40.00 brl a few months ago the Futures price of gasoline was in the .90 cent a gallon range.

Someone, somewhere is making a nice piece of "change."

[fellowgeek]

Then I wonder why the price at the pump has not gone down in recent days ... as a matter of fact, it has gone up 10-15 cents recently.

Someone is getting screwed here ... the consumer!

[SoldierDad]

Yet, the price of gas at the pumps keeps going up - facinating!!!

[Danae]

The 08 Oil Spike was a deliberate attack IMHO. Oil Speculators did a MASSIVE wealth distribution scam and the people who paid for it were the same ones that lost their houses because of it, the Poor and the VERY poor who could not afford their Fannie Mae loans.

Why isn’t anyone investigating that?

[ontap]

Why does rising inventories fuel demand concerns?

[TLI]

Nymex RBOB Gasoline Future 128.90 . +1.92

[castowell]

You’re on to something. Crude demand continues to fall, yet the price at the pump where I live (Northern Virginia) has risen 40 cents/gal in the last 6 weeks. Are the refineries reducing output because of maintenance all at the same time? I don’t think the fuel blend switches over until the spring. What gives?

[John W]

Northeast Indiana went up 20 cents a gallon the day the offshore drilling news came out. I understand there can be no connection based on my re-education by oil experts here, but, FYI.

[Sacajaweau]

Okay....We cut back like they told us...and Voila...

At $140 a barrel...we were paying $4. At $36...we're paying $2.

Taxes don't go down!!

[thackney]

To Add to the discussion on this thread:

Diesel price may drop below gasoline
http://www.freerepublic.com/focus/f-news/2183116/posts

There is ongoing correction from the relative low gasoline prices of late last year compared to crude. In Oct, Nov & Dec the average spot market for Gasoline sold for less than crude oil, not a sustainable position.

Cushing, OK WTI Monthly Spot Price
http://tonto.eia.doe.gov/dnav/pet/hist/rwtcm.htm

U.S. Gulf Coast Conventional Gasoline Regular Monthly Spot Price
http://tonto.eia.doe.gov/dnav/pet/hist/rruusgm.htm

[meyer]

Gold’s up, DOW’s down, Oil’s down. People are not betting on productivity for the future.

[sonrise57]

from Market Watch today:

"Crude inventories excluding those in the Strategic Petroleum Reserve increased by 4.7 million barrels, more than analysts' expectations, to 350.8 million barrels in the week ended Feb. 6, the Energy Information Administration reported.

Gasoline stockpiles fell by 2.6 million barrels while distillate fuels, which include diesel and heating oil, declined by 1 million barrels, the EIA said."

Refineries have reduced capacity around the country in order to reduce gasoline and distillate stockpiles with the result that pump prices are up.

[Tarpon]

Obama intends to ration energy, drive up prices, by the simple act of constraining supply -- Both transport fuel and electricity.

[PSYCHO-FREEP]

The money that is left on the Doe is rapidly going into securities and under people's mattresses. (Gold)

I will be surprised if it levels off at 6,000. I see it going down under 5,000 before the year is out. The indicator was when Obama announced the passing of his Porkulus miracle “rescue” plan. And the market reaction was pure justice.

[TLI]

Gold’s up, DOW’s down, Oil’s down. People are not betting on productivity for the future.

Bull’s-eye. The Presidency of Øbama Hussein The Magnificent is well on it's way to being the utter disaster 47% of u.S. Citizens knew it would be.

[TLI]

Refineries have reduced capacity around the country in order to reduce gasoline and distillate stockpiles with the result that pump prices are up.

" U.S. refineries ran at 81.6 percent of total capacity on average, a drop of 1.9 percent from the prior week. Analysts expected capacity to slip to 83 percent. Refiners took in 214,000 fewer barrels of crude last week and gasoline production fell, the EIA reported."

http://www.startribune.com/business/39489562.html?page=2&c=y (second page)

[NavyCanDo]

Sure would like to see it reflected at the pumps. Here in the Puget Sound it went down to the S 1.80’s average several weeks ago, but then bounced back to an average of 2.17 over the last couple of weeks. yet the price per barrel is lower now that when we were in the $ 1.80’s.

[tatsinfla]

gas has risen from approx 1.57 a gal to just over 2.00 a gal here in fla on average despite oil being below 40.00 a barrel........

[PugetSoundSoldier]

That price is only WTI. Brent and ME crude are still at $42-$44.

I think this price drop of WTI reflects the strength of the USD relative to the rest of the world more than a big drop in demand... We still import 65% of our oil needs.

[Eva]

I’m beginning to think that the low barrel price is as artificial as the high barrel price, intended to narrow the competition with a new round of take overs, leaving only two big oil companies, who are willing to work with the government regulations, rather against them, in exchange for a noncompetitive market. EXXON and BP.

We already ready read that EXXON was looking around for a company to take over, probably another large one.

[Turbo Pig]

Obama intends to ration energy, drive up prices, by the simple act of constraining supply -- Both transport fuel and electricity.

Didn't Uncle Joe do that with food, in order to take care of that pesky kulaks problem?

[thackney]

in order to reduce gasoline and distillate stockpiles

Gasoline and distillate stocks are far from low.

This Week In Petroleum
http://tonto.eia.doe.gov/oog/info/twip/twip.asp

Demand has fallen off. It should be no surprise if there are cut backs in production.

[Sacajaweau]

He’s going to tax the supply. Our world operates on utilities...there is no “cure”...that’s how it is.

[Red in Blue PA]

You forgot ammo.....that’s way up!

Currency of the future.

[thackney]

The following months, including WTI, are all showing traders expect prices to climb but there is currently too much oil in US storage relative to immediate demand.

[TLI]

Brent is primarily refined in Northwest Europe. Typical price difference per barrel is about $1 less than WTI, and $1 more than OPEC Basket. However, in 2007 Brent Crude futures have been trading at a premium to WTI of approximately $1 to $3 (NOT $9 to $10) per barrel. The depletion of the North Sea oil fields is one explanation for the divergence in prices.

Nymex Crude Future 34.90 -1.04
Dated Brent Spot 44.23 +.35
WTI Cushing Spot 35.05 -.89

So, the NYMX and WTI are a closer match for the situation here in the u.S. And right now they are at $35.

While gasoline is still going up and refining is about 14% lower than normal (95%)

[thackney]

Also the very high crude stock levels in the US affect this pricing spread. We are not in a normal situation at this time.

[TLI]

You would think the refineries would be blowing and going at $35 a brl and storing it in bathtubs if necessary.

Perhaps they know somthing about crude prices in the near future we don’t?

[thackney]

It didn’t reach $35 until today.

And demand for products is down. The amounts in storage is high.

With predictions of an economy to continue to decline they probably expect demand to continue to decline.

[TLI]

With predictions of an economy to continue to decline they probably expect demand to continue to decline.

So we can expect gas prices to fall?

Nymex RBOB Gasoline Future, 02-09-12, 129.78 / +2.80 / % change +2.21 / Time=11:09 am

[Tarpon]

Yep, communism is like one of those old records that just keeps going around and around, spreading misery everywhere, never going anywhere.

About 125 million worldwide were killed by the Marxists, Communists, Fascists, Socialists during th 20th century, and now here come the Obammunists. All in the name of the common good.

[thackney]

Crude oil is predicted to rise (at least by the traders). Crude oil remains the biggest price component in the breakdown of cost of gasoline.

[NCC-1701]

“...Yet, the price of gas at the pumps keeps going up - facinating!!!...”

It’s called price gouging. And this time nobody can convince me otherwise.

[OB1kNOb]

Gasoline prices have been screwy for the past few weeks here. Two stations, same Company, five miles apart on the interstate I drive every morning have been bouncing back and forth between $1.89 and $1.75. The curious thing is that both won’t have the same price on the same day. One day one will be $1.85 and the other $1.79 and the next day they are just reverse. I’d like someone explain those price fluctuations.

[meyer]

You forgot ammo.....that’s way up!

Indeed - I'm long on brass, lead, and copper.

[SoldierDad]

No one convinced me it wasn’t price gouging before.

[sonrise57]

So what is the explanation for higher prices at the pump? Laymen’s explanation if possible.

[thackney]

http://www.freerepublic.com/focus/chat/2184077/posts?page=10#10

[sonrise57]

Thanks. One more dumb question. I’m trying to understand this stuff. Why did the spot price of gasoline fall below the price of crude last year and why is their what seems me a large spread now?