Oil Rises on Drop in Gasoline Inventory

AP Online via COMTEX ^ | August 17th, 2005 | Edith Balazs & En-Lai Yeoh AP

[M. Espinola]

As the end of summer Labor Day weekend approaches gasoline prices shall continue rising.

[netmilsmom]

Thank God we are camping only 30 miles from home this Labor Day!

[SAJ]

Not exactly good timing by Asinine Press. NYMEX front crude is down 2.38/bbl as I type this. Front unleaded is down 6.66 cts/gal (''it's an omen, I tell ya, an omen...''), and front heat is down 5.40 cts/gal.

The price 'rise' this joker is talking about lasted for about 10 whole minutes, and then....WHAMBO! There are some longs that really got smacked today. These mkts are in for a heavy correction at some point, for sure.

[philsfan24]

oil is down $2.00 today.

http://chart.bigcharts.com/custom/usatoday-com/marketwatch-ss-ii.img?symb=CRUDE

[netmilsmom]

But I think that the original poster is right. We will see gas prices rise before Labor Day.
My daughters and I walked to Salvation Army today in hopes of getting school clothes. We will walk the little one to Kindergarten. If the prices stay high for the winter, it's a good excuse to homeschool her!

[SAJ]

Which is exactly why you're apt to see a correction; demand destruction is starting to occur. Millions of people will walk for short trips and combine trips. Happened in the 1970s, it's happening again.

That said, I do think crude is going to find a long-term plateau above $50.00, possibly the $53-58 range. Depending on the refinery situation (how many are taken down for maintenance, either scheduled or not, in Sep-Oct), motor gasoline should find a level 40-odd cents lower, possibly a bit more. However, an outright crash just isn't in cards; too many geopolitical balls are in the air. Suggest using this upcoming correction, whether this week, next week, or whenever, to write way-out-of-the-money energy puts. Ought to be just money for jam.

[M. Espinola]

There's always the subway, trolley or bus.

[M Kehoe]

U.S. refiners operated at 93.5 percent of capacity last week, a slight decline from 95 percent the week before.

You know, the Sierra Club, Green Peace, etc. are so damn smart. They have prevented a refinery from being built since 1976. Same with nuclear. MAN, these people are smart...

So damn smart, that if I hear one of them complain about the price of gas I'll deck 'em.

5.56mm

[RightWhale]

When you're up you're up, when you're down you're down.
When you're up against our team you're upside down!

Rah!

[RockinRight]

Actually, I think at some point there will be a crash. So much of the rise is speculative. Just like the "tech boom" and resultant bust. I'm thinking oil in the $30s within a year.

[M. Espinola]

September is @$63.69 Down $2.39. Fund profit taking was inevitable.

[netmilsmom]

>>There's always the subway, trolley or bus<<

No thanks!
Dad is pushing the Kindergarten thing. She is doing second grade work and is going for some time without her sister. About the time winter comes, I'll be dying to bring her back home!

[M. Espinola]

"I'm thinking oil in the $30s within a year."

In order for oil to drop 45%, back into the $30's the refinery situation would need to be seriously addressed, demand somehow reduced, plus the Iranian nuclear weapons problem, along with the rouge jihadist régime, would also have to be 'resolved' just to name a few energy trending related topics.

[SAJ]

Love to see it, but that's a pipe dream. The rise in world demand is quite real, and substitution isn't going to occur to nearly the level it did in the 1970s -- too many people got badly burnt when we tossed out the peanut man and Reagan deregulated energy prices.

It's all very well to say, even truthfully, that coal oil is viable @ crude=$32.00, and tar sands are viable @ crude=$35-38.00, but as long as there's any measurable chance that the price of crude can pull another 1980s swan dive, investors are going to balk at putting up the capital for these substitutes.

Sure, they're doing the tar sands in Alberta right this minute...and that segment of the industry has been the poor stepchild for decades. It's VERY high-cap, high-intensity, and was almost wrecked for the second time in 25 years in the 1998 oil crash.

[M. Espinola]

"You know, the Sierra Club, Green Peace, etc. are so damn smart. They have prevented a refinery from being built since 1976. Same with nuclear. MAN, these people are smart..."

When those tree loving rodents fill up, just like everyone else, their not happy, even though they will not admit it.

[SAJ]

The weekly supply figs weren't bullish at all, imnnho. The unleaded draw was right at average for this week, we've got #2 coming out of our ears (107% of the 5-year average), and the crude figs were ho-hum.

[M. Espinola]

Thanks for linking the chart.

The longer term ingredients still remain on the bullish side. Contingent on various geostrategic factors in the Gulf area I would not rule out another major leap in prices before Christmas.

[American Vet Repairman]

The libs will start demanding domestic drilling when they can no longer afford the vices. Cigarettes, liquor, drugs, overpriced clothes....

[M. Espinola]

"The libs will start demanding domestic drilling when they can no longer afford the vices. Cigarettes, liquor, drugs, overpriced clothes...."

The most effective method in really hurting the hippie libs is drive up the prices of their illegal narcotics, since that's about the only thing they really care about.

[SAJ]

Sis-boom-smoke-'em-if-ya-got-'em.

Both the yield curve and the energy markets' pricing are skewed right now. They will deskew over time. Problem is, of course, in the practical sense, that citizens require these mkts, especially the energy mkts, to be accessible at a reasonable cost every day.

That ain't gonna happen for a while, sad to say. When a mkt and/or its related mkts are, effectively, running on 100-octane fear, it's apt to be quite some time before said mkt(s) begin behaving ''normally'' again. For mkts, fear is a poison, and it only leaves the system slowly.