Posted on 05/19/2015 5:56:00 AM PDT by thackney
Oil prices declined on Tuesday, losing value as the strength of the dollar dissuaded buyers.
The dollar gained versus the euro after a senior official at the European Central Bank said the institution would " front-load" its bond-buying program, snapping up more eurozone sovereign debt in May and June to avoid having to buy large volumes during the summer lull in July and August.
A stronger dollar makes oil more expensive for buyers holding other currencies. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other major currencies, rose 0.5%.
Brent crude for July delivery traded down $0.65, or 1%, at $65.62 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June was trading down 0.9% at $59.69 a barrel.
Later Tuesday, the American Petroleum Institute will report U.S. crude inventories for the latest week.
Meanwhile, investors are once again shrugging off fears that fighting in nations across the Middle East could disrupt oil flows. Mustafa Sanallah, the chairman of Libya's National Oil Co., on Tuesday said the firm aims to produce on average 400,000 barrels a day during 2015, despite the conflict that rages on in the Middle Eastern nation.
(Excerpt) Read more at foxbusiness.com ...
If oil prices are declining, why has the price at the pump escalated so rapidly? More games!
Don’t worry, tomorrow oil prices will go up and the dollar will go down.
Price of oil was trending up, until yesterday.
I read somewhere that some could take crude oil out of the ground at $3.00 either a gallon or barrel I forgot. I suppose the price depends on how the cost of the well is accounted for. After the price of the well is paid off the oil is mostly profit. The price of oil and gas at the pump is quite manipulated.
Must be true if you read it somewhere. And if one hundredth of one percent of a fungible commodity is produced way below the market price, how do you think that effects the market price?
The price of oil and gas at the pump is quite manipulated.
If true, why would they ever go down?
It’s all a huge racket. When I worked at ExxonMobil all that they cared about was ‘upstream’ which is pumping. The refining part of the business was almost seen as a loss leader. They do get it out of the ground very cheap and then the completely manipulated market jacks it up 20, 30, 40 times.
International oil prices may be declining, but a strong dollar would presumedly have no effect on domestically produced crude oil. All the domestically produced oil enjoys a price advantage in that it need not be transported great distances, but because of shortsighted policies concerning pipeline construction, so much more of it must now be transported in specialized rail tanker cars, which are more expensive form of transportation, as well as being a greater hazard. Highly profitable for those who have invested in these specialized rail tanker cars.
The price of the REFINED products is rising because of bottlenecks in the capabilities of refineries, also kept artificially scarce because of regulatory policies now in place within that territory once known as “the United States of America”.
Gas prices tend to go up in May, have for a long time. It’s called “the summer driving season.”
It’s also kept intentionally scarce by the companies. Why flood the market with cheap gas when you have an oligopoly going on quite nicely. There was just too damn much consolidation in the oil market during the 90s.
Your presumption is incorrect. Oil is global fungible commodity and the investment for the production is global as well. Domestically produced is not going to sell at a higher price than imported less the cost of transportation. Why would a refinery pay extra?
It is also called the EPA required Summer Blend with less cheaper Butane and the like.
Winter-blend fuel has a higher RVP because the fuel must be able to evaporate at low temperatures for the engine to operate properly, especially when the engine is cold. If the RVP is too low on a frigid day, the vehicle will be hard to start and once started, will run rough.
Summer-blend gasoline has a lower RVP to prevent excessive evaporation when outside temperatures rise. Reducing the volatility of summer gas decreases emissions that can contribute to unhealthy ozone and smog levels. A lower RVP also helps prevent drivability problems such as vapor lock on hot days, especially in older vehicles.
The US Environmental Protection Agency (EPA) says conventional summer-blend gasoline contains 1.7 percent more energy than winter-blend gas, which is one reason why gas mileage is slightly better in the summer. However, the summer-blend is also more expensive to produce, and that cost is passed on to the motorist.
What is the Difference between Summer- and Winter-Blend Gasoline?
http://newsroom.aaa.com/2013/06/what-is-the-difference-between-summer-and-winter-blend-gasoline/
Now you understand, It has been a long time since there was a “level playing field” in the heavy industry component of business operations in that territory once known as “the United States of America”.
It is not just the petroleum industry, there is a great deal of “crony capitalism”, the government-controlled form of what used to be capitalistic economic theory, with preselected winners and losers.
Thanks for excellent information.
I noticed that my car gets somewhat lower mileage in winter than in summer, but I thought it was because of energy cost to heat incoming cold air during combustion (which explanation was less than satisfying because I know that intercoolers are used to improve efficiency of charged engines).
The difference is way more than 1.7%, however.
Diesel/Gasoline price differential seems to have decreased in recent years, at least in the U.S. Northeast. Do you have any idea why? Five years ago, diesel was about $0.5 more per gallon than unleaded ($4.00 vs $3.50).
Has specific energy for diesel decreased due to anti-pollution additives?
Cold air inlet actually makes it more efficient. It is not an absolute temperature that generates the expansions of gases to make the engine work, it is the difference from inlet to outlet. Starting with a cold temperature is slightly more efficient.
Diesel production cost changed significantly with the EPA Ultra-Low Sulfur Diesel.
Part of the manipulation is the market place. If they produce too much product and can not sell it they lower the price to reduce inventory. Oil in the ground is a fixed inventory which can be manipulated by say someone like Obama closing much land to production. News stories can cause panic and even boycott of product manipulating the market. The main ruler of the market is the dollar so there are thousands of schemes to manipulate products to get more dollars. Dollars and greedy
rule the market.
I read somewhere that some could take crude oil out of the ground at $3.00
So how many gallons are in a barrel of Oil is it 55 gallons? $3.00 a gallon might be quite high for oil. The article was probably a hit piece to make some point and make the writer some cash and make someone a couple million dollars.
You have a good day then.
Cheers!
It’s not what they have added, it’s what they’ve taken away...Sulphur/ULSD and Biodiesel blending mandates...
While I can still recall a time when Diesel (by then, LSD) was a few pennies cheaper than Regular Unleaded, the LSD, (from 1993) and later ULSD mandates (from 2007) did marginally decrease energy content.
Not to mention that the processes to remove Sulphur from fuel oils also cut down on their lubricity.
Add on top of that the Biodiesel mandate. It’s like Ethanol: it has a lower energy value, and tends to cause engine problems of varying severity.
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