Posted on 04/06/2008 11:05:38 AM PDT by kellynla
NEW YORK — Retail gas prices surged to another milestone, rising above $3.30 a gallon Friday, and appear poised to rise further in coming weeks as supplies tighten.
Oil prices, meanwhile, supported the gas price rally by jumping more than $2 a barrel after a dismal employment report sent the dollar lower.
At the pump, gas prices rose 1.4 cents overnight to a national average of $3.303 a gallon, according to AAA and the Oil Price Information Service. That's the latest in a series of records, and about 60 cents higher than a year ago.
In Ventura County, the average price of regular unleaded hit a record $3.68 a gallon Friday, according to the Automobile Club of Southern California.
During the past week, prices in the county have been climbing by a few cents per day.
A few weeks ago, Jack Kyser, chief economist of the Los Angeles County Economic Development Corp., said he expected prices to fall as oil speculators backed off.
Now, he's not so sure.
"We could very likely see $4," he said. "It's going to be painful."
As investors are fleeing to commodities such as oil, gold, wheat and corn, people are starting to look at Washington, D.C., to curb speculation, Kyser said.
"You have speculators globally now," Kyser said.
"This is going to be a tough time for anybody who has to use an oil-based product. We've already seen chaos in the aviation industry, with Aloha and ATA going out of business."
While oil's surge above $100 over the past month has boosted gas prices so far this year, analysts now expect gas prices to continue rising regardless of what direction crude takes. The Energy Department expects prices to peak near $3.50 a gallon later in the spring, but many analysts predict that the spike could approach $4.
That's because gasoline supplies are falling, in part because producers are cutting back on output of the fuel because of the high cost of crude — the more expensive crude is, the more refiners have to pay and the lower their profits are.
They're also in the process of switching from producing winter grades of gasoline to the less polluting but more expensive grade of fuel required in the summer.
"That cuts back on some of the supply and helps to pump up the price," said Mike Pina, spokesman for AAA.
The margin between the price that refiners pay for crude and receive for selling the products they make from it is about $11 to $12 a barrel right now, according to the Oil Price Information Service.
However, that margin has occasionally slipped into negative territory in recent weeks and is well below margins of $37 a barrel that refiners earned last spring.
In futures trading, meanwhile, oil futures rose Friday after the Labor Department said employers cut payrolls by 80,000 jobs last month, much more than analysts had expected.
The unemployment rate rose to 5.1 percent.
That news sent the dollar lower and pushed light, sweet crude for May delivery up $2.40 to settle at $106.23 a barrel on the New York Mercantile Exchange.
Gasoline futures for May delivery rose 3.24 cents to settle at $2.7567 a gallon.
Gasoline futures were also boosted Friday by a fire that shut down part of a refinery in Torrance.
All we should be worried about is being able to refine and use our own oil. But due to the Democrats being hand and hand with the Environmental cooks we cannot!
All's we need is a Republican House, Senate and Presidency, and we'll be a drilling like crazy. ANWR here we come.
How true to put “leadership” in quotation marks. Sadly these days, Republican leadership is an oxymoron.
We’re an advanced, industrialized nation of over 300 million people and WE NEED ENERGY. Platitudes and feel good alternative sources projects aren’t going to cut it. Drill, drill, DRILL and that includes off the coast of my state. Those pristine beaches won’t be worth squat if tourists can’t afford the gas to come visit them.
COULD IT BE ALASKA?,, As well as mining gold, copper and many other natiral resources the world(America) needs.. Alaska could easily be the richest State of all..
It all depends on giving the Federal Goverment the Curly(Howard) salute.. And tieing up in State political court any action by the federal government.. Just dispute it ALL... Some State must be first to do this.. Then katie bar the door... Most all States will (except resouce poor Northeastern ones).. And States will form Cacuses of State politicians compounding the power..
I've not seen anything that would support your premise that developing more domestic crude oil production would lower gas prices at the pump.
Do you think a barrel of crude pumped out of the ground in Texas will be sold on the futures market for less than the currently trading spot price??? That is foolish to believe. A barrel of oil that comes out of Texas will cost just as much as that same barrel if it came from Canada, Mexico or Venezuela, assuming it's the same grade. The U.S. company that produced it will still sell it to the highest bidder at the highest contract price that it can get, it's called capitalism. Unless of course you plan on nationalizing the all of the domestic oil producing companies and mandating that oil cannot be sold for more than $20 a barrel.
Just a wee bit communist to me there comrade. You also assume that the Exxon's and Chevron's are motivated to make their products as cheap as possible. That would be like DeBeer's flooding the world diamond market. They don't, they control production and distribution and only let enough diamonds on the market to keep their profits up.
The biggest price gougers are the federal and state governments.
In the mean time our state attorney general is call for his 500th investigation on over charging by the oil companies.
Another waste of tax dollars by our illustrious A.T. Dick Blumenthal.
The third is just to tell the greens to take a flying leap and drill away everywhere. But it lacks the poetry of the others.
The second is to have the USN announce slight "carrying charges" for every oil tanker that wants to transit any sea without meeting an SSN.
The third and my personal favorite, in the turnabout as fair play category, is for the US to sit down with a few other countries like Poland, Ukraine, Brazil, Canada and Australia, and organize a food exporters collective. Announce unilateral price hikes of 800% on all forms of food. Also announce that not a single grain will be donated to anybody for any reason, humanity be damned. If the world wants to eat, it can pay our oil import bill for the last 10 years the day after tomorrow. If they don't like it, they can starve, or see how their oil tastes on toast.
The third is my favorite.
VIENNA, Austria (AP) — Crude oil futures rebounded Friday after an overnight fall with the dollar stabilizing against other currencies.
Oil prices have held above $100 a barrel for more than a month, largely on the view that crude, gold and other hard commodities are effective hedges against a falling dollar and rising prices.
As the dollar has started to recover against the yen and euro, investors have been less prone to pour money into oil for reasons unrelated to supply and demand. Still, with long term prospects bleak for the U.S. currency, oil remains attractive as an investment.
Light, sweet crude for May delivery rose 88 cents to $104.71 a barrel by noon in Europe on the New York Mercantile Exchange.
The Nymex crude contract settled $1 lower in the previous session at $103.83 a barrel.
Prices, analysts say, remain caught between those that want to buy oil as a hedge against another reversal in the dollar and those saying slowing economies worldwide will cut demand for fuel and energy.
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WASHINGTON (CNN) -- As gas prices hit another record high Thursday, senators in Washington suggested Congress may need to intervene and change how investors buy and sell oil.
The Senate Energy and Natural Resources Committee tackled the complicated but potentially critical topic of speculation, raising the possibility that Congress might make it harder for investors to buy high-risk oil contracts which some say are driving up gas prices.
"I think it's a minimum of a dollar a gallon," said Sean Cota, a regional chairman with the Petroleum Marketers Association of America. "That's very significant."
Two days earlier, oil executives told Congress that speculation might be responsible for half the current cost of oil. Leaders from five top companies agreed that current supply and demand levels should place the price near $55 a barrel, instead of the roughly $100 a barrel in recent days. Thursday, senators heard conflicting opinion on the idea, but many showed open distrust of the speculation market.
"I think there's an orgy of speculation that we ought to be deciding to do something about," said Sen. Byron Dorgan, D-North Dakota.
He and others raised the idea of changing the margin or amount investors must pay up front in order to engage in oil speculation. It would be a hugely significant change in financial markets. Dorgan said stock speculation requires a 50% margin, but commodities like oil demand a much lower threshold, just 5% or 7%. Experts say the result has been a flood of investment in oil, seen as a commodity more immune from inflation issues.
"I do think the margin requirements are low," testified Sarah Emerson, the managing director of research firm Energy Security Analysis. Emerson told senators that a change in the margin rate may be among their only short-term options to address speculation and soaring oil prices.
"I do think that's one tool that Congress has," she said. "There really aren't any other easy fixes, save drawing down the SPR (Strategic Petroleum Reserve), which I wouldn't necessarily recommend."
Other analysts insisted that global events and the weak dollar might be just as much to blame for the oil bubble.
But senators from both parties focused on speculation and a possible change in the margin rate, insisting it needs to be addressed.
"This is very confusing and everybody gets confused," said Sen. Pete Domenici, R-New Mexico, ranking Republican on the Energy Committee.
It is a great idea. All the Hillary, Obama cars will get on under their windshield.
ping it!
Worldwide???? We weren't talking about worldwide production. We were talking about domestic production. Please seek out the definition of "domestic".
No I don't think it's possible for the foreseeable future. Worldwide oil supply is exceeding the demand currently. Shortages are not driving this current run-up. And ANWR is a drop in the bucket compared to the Bakken Formation.
........................
While relatively new in Canada, Bakken exploration has been underway in the U.S. since 2000 and has increased dramatically in recent years. According to the U.S. Geological Survey, the Bakken formation could contain a mind-boggling 413 billion barrels of oil in place.
New curiosity developed in 2007 when EOG Resources out of Houston, Texas reported that a single well it had drilled into an oil-rich layer of shale below Parshall, North Dakota is anticipated to produce 700,000 barrels (111,000 m³) of oil. Estimates for ultimate oil contained in the entire Bakken play range from 271 billion to 503 billion barrels (40–80 km³), with a mean of 413 billion barrels (65 km³) of technically recoverable and irrecoverable oil.[6]
This massive estimate appears to dwarf the estimated 50–70 billion barrels (8–11 km³) of technically recoverable and irrecoverable oil in Alaska's North Slope. A conservative estimate of Bakken's technically recoverable oil would be 1% to 3%, or between 4.1 and 12.4 billion barrels (0.6–2 km³) of oil, due to the fact that Bakken's shale is so tight. However, other estimates range from 10% to as high as 50% technically recoverable reserves.[7] By comparison, recoverable oil estimates in the Alaska formation are 30% to 50%, or a mean of 26 billion barrels (4 km³).
Arctic Refuge Wildlife Reserve
A 1998 United States Geological Survey (USGS) study indicated at least 4.3 billion (95% probability) and possibly as much as 11.8 billion (5% probability) barrels (0.9 to 2.5 km³) of technically recoverable oil exists in the Arctic National Wildlife Refuge 1002 area, with a mean value of 7.7 billion barrels (1.7 km³). In addition, in the entire assessment area, which covers not only land under Federal jurisdiction, but also Native lands and adjacent State waters within three miles (5 km), technically recoverable oil is estimated to be at least 5.7 billion (95%) and as much as 16.0 billion (5%) barrels (0.7 to 1.9 km³), with a mean value of 10.4 billion barrels (1.2 km³). Economically recoverable oil within the Federal lands assuming a market price of $40/barrel (constant 1996 dollars - the highest price included in the USGS study) is estimated to be between 3.4 billion (95%) and 10.4 billion (5%) barrels (0.5 to 1.7 km³), with a mean value of 6.8 billion barrels (1.1 km³).[3]
The 10.4-billion barrels (1.65 km³) figure was used in publications by the U.S. Department of the Interior while it was headed by Gale Norton, a proponent of drilling in the Arctic Refuge.[10]
The U.S. consumes about 20 million barrels (3,200,000 m³) daily. If the Arctic National Wildlife Refuge oil reserves were used to supply 5% of the U.S. daily consumption -- most is imported from Canada (19%), Mexico (15%), Saudi Arabia (11.5%), Nigeria (10.5%) and Venezuela (10.5%)[11] -- the reserves, using the low figure of 4.3 billion barrels (680,000,000 m³), would last approximately 4300 days, or almost 12 years. Using the high estimate, the reserves would last approximately 11800 days, or 32 years. If the Arctic National Wildlife Refuge was used to meet 100% of U.S. demand, it would last for 215 days under the low estimate, and 525 days or just 1.4 years if it contained 10.4 billion barrels (1,650,000,000 m³).
I'd love to hear the republican plan also besides energy from toxic batteries, or "free" energy from hydrogen that requires petroleum to create anyway. If the GOP wasn't so scared of its own shadow they could educate people instead of rolling up into a fetal ball.
Altho basically an east coaster, I spend fair time in Oregon, business and a leased residence. As much or more than any other place, the exploding divide between Left and Right is graphic. The working folks in the towns and country are the best and most genuine I've seen. But there sure are a lot of the leftist hypocrites around.
Maybe it's the Californians moving north, ala Seattle.
You’re here spouting an agenda. Facts are not going to cloud the issues with you. Everyone arguing with you is wasting time.
Does it pay well to be a seminar poster Willie Green?
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