Posted on 12/07/2005 4:53:31 AM PST by Brilliant
LONDON (AP) -- Crude oil futures edged up Wednesday amid expectations that cold weather in the U.S. Northeast will boost demand for heating fuels.
Light, sweet crude for January delivery on the New York Mercantile Exchange rose 39 cents to $60.33 a barrel in electronic trading by midday in Europe. January Brent at London's ICE Futures gained 55 cents to $58.16 a barrel.
Heating oil edged up to $1.7725 a gallon while gasoline rose more than a cent to $1.5971 a gallon. Natural gas increased nearly 23 cents to $13.718 per 1,000 cubic feet.
While cold weather in the United States is expected to raise demand for heating fuel, increased production and sufficient imports could prevent a big spike in prices for now, analysts said.
Traders were also awaiting the midweek U.S. petroleum inventory report, expected to show rises in distillate and gasoline stocks as refineries revved up production in anticipation of more wintry weather.
According to a Dow Jones survey of analysts, distillate inventories were expected to gain 1.13 million barrels in the week that ended Dec. 2, while gasoline would be up 1.16 million barrels.
Analysts also expected the boost in refinery runs to burn through more crude oil stocks, causing commercial petroleum inventories to slide for a second straight week, dropping by an estimated 950,000 barrels.
Production facilities on the U.S. Gulf Coast have partly recovered from damage earlier this year by Hurricanes Katrina and Rita, but still have a long way to go, Energy Intelligence said on its Web site.
"The recovery in production has been particularly significant in recent days and weeks, but a substantial volume of supply -- about a quarter of the gas and a third of the oil -- is still off, underscoring the severe damage from this year's hurricanes," the group said.
Do you get the impression that AP is making this up as they go along?
Do you get the impression that AP is making this up as they go along?
I am not sure what you mean: Are they making up the prices; the story; the reason for the price increase?
This is the first time it's ever been cold in December?
Must be global warming.
Every day, they have a story about whether oil prices went up or down. If they went up, the title is "Oil Prices Rise Amid Concerns for Cold Weather." If they go down, it reads "Oil Prices Ease Due to Prospect of Warmer Weather."
They have no clue why the prices go up or down, but they've gotta write a story about it, so they find some reason why the weather is to blame, unless they can find some other explanation.
If oil prices are predicated on weather forecast.......OMG!
Stay tuned!
Commodities traders are just like everyone else: They'll play on your fears to make a buck.
If the weather gets cold they have justification to drive the prices up.
I have a question: If our refineries are running at 95% capacity almost all the time why would gas prices ever fluctuate? Sure the demand might go up or down but the supply is pretty much static. I am sure there are other factors involved but it would seem that if we are running at near capacity the supply would not change hence the price would stay the same.
Darn that global warming. What I want to know is: what's being done about the drastic drop in Northern hemisphere temperatures? The average temp has fallen about 50°F in the just past three months. Based on my highly accurate computer model, if this trend continues, the temperature in New England will be about -2000° within a decade. Arrrrghh! </globaloney mode>
The refining capacity argument is a little misleading. The lack of refining capacity in the US is not really a big bottleneck at the pump. We can and do import vast quantities of refined petroleum products from overseas, where there is no shortage of refining capacity.
Basically, we've outsourced our refining operations to foreign countries, and thus, given them the opportunity to employ their people in these very good jobs, at our expense. But it doesn't have that big of an impact on the price at the pump.
Of course, it does take time to transport more refined products to the US if there is a disruption, as in the case of Katrina, but other than that, and the cost of transportation itself, the lack of refining capacity is not the big buggaboo it's made out to be, at least in terms of the cost of gas.
Demand going up against an unchanging supply is precisely what would cause prices to increase.
ZZZZZZZZZZZ......yawn.
Wake me next week when it warms for a couple of days.
Following this on a daily basis is a receipe for madness.
But this cannot be a noticable impact as we were transporting most of the crude oil to refine in the first place.
Why don't they ever post the price of propane?
Why, because only the conservative rubes in the rural areas use propane, of course!
You can follow wholesale propane here:
http://www.futuresource.com/markets/market.jsp?id=energy
Double it (at least)for retail. Closed yesterday at $1.0475, which is up 8 cents and a fraction from about 10 days ago. When this source had propane at $1, my supplier was charging $2 retail.
It's noticeable in the short run. We do have significant refining capacity in the US, even if it's not enough. If the capacity goes down, then there will be a shortage until it either comes back up, or they are able to increase our imports of refined gasoline.
Another thing to think about is that if you've got to import refined products instead of crude oil, then you are going to be putting greater pressure on the balance of trade. A lot of the value is added at the refinery level. Instead of paying $40 a barrel, you're paying $2 a gallon, and that means a bigger trade deficit. A bigger trade deficit means that the dollar declines, and you pay even more for oil. But that only happens over the long term, ie. several years.
LOL!
Thanks. I am locked in at $2.20 for the year. I had to battle with them to get that. They sent a letter, undated, with a price of $1.99/gal. Four weeks later they wouldn't honor the price. They wanted me to lock in at $2.40/gal with a .15 price cap. We went round and round and I ended up threatening to report them to state's consumer protection agency.
bas.ards
they will have a very Merry Christmas
Re: propane
can anyone post a way to calculate if it's cheaper to run resistance electric heaters instead of propane? Obviously I need to get my rate/kwh.
Thanks
That would depend where you are at. My electric utility in Illinois (69 per cent coal generating) offers a special rate of 2.5 cents per KW for residential heating if liberal requirements are meant. Off the top of my head, that is around 75 cents per therm. What is propane right now, a buck 80 a therm?
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