There go the gas prices.....up....Up....Up!

[Lakesrider]

Wow. Back to $2.82 in Meridith. A month ago it was $2.69.

Skelly's was still at $2.72. Hope I have time to fill the gas jugs and both my cars today when I get home.....

[Shedwannabe]

The reason?

China used 22% more oil than January a year ago.

Worldwide demand is building up, exceeding supply, thus gas prices will continue to rise (baring recessions/depression). A local group is working on plans for what happens in the Lakes Region when energy prices rise substantially and supply diminishes.

[BroadHopper]

India as well. Looking at oil futures, I would bet that gas will be $3.00+ for the summer season.

[LIforrelaxin]

Ok, So everyone is always pointing the finger at China and India, and I am not saying that they aren't a contributing factor here. They are the reason the gas prices are now in the 2.50$ to 3.00$ range.

But come on folks every year at this time the price of gas goes up. Just in time for the summer tourism season. It is like clock work. The prices will peak just in time for Memorial day. Then they will drop back some before the fourth of July as the petroleum companies realize they went to far... then we stabilize until the Labor day, when the prices will come back down, as the petroleum companies realize as they always do that they over produced for the summer and are left with more in reserve then they want. It is not uncommon for the price to range over 50 cents during this time.

The bottom line is this is normal. I have come to expect it just like I have come to except that snow melts, the lake warms and eventually fall arrives.

[dpg]

Originally Posted by LIforrelaxin

Ok, So everyone is always pointing the finger at China and India, and I am not saying that they aren't a contributing factor here. They are the reason the gas prices are now in the 2.50$ to 3.00$ range.

But come on folks every year at this time the price of gas goes up. Just in time for the summer tourism season. It is like clock work. The prices will peak just in time for Memorial day. Then they will drop back some before the fourth of July as the petroleum companies realize they went to far... then we stabilize until the Labor day, when the prices will come back down, as the petroleum companies realize as they always do that they over produced for the summer and are left with more in reserve then they want. It is not uncommon for the price to range over 50 cents during this time.

The bottom line is this is normal. I have come to expect it just like I have come to except that snow melts, the lake warms and eventually fall arrives.

And don't forget the "summer blend" the summer blend is very expensive so they say. Your right, gas has been going up every summer for 15 years anyways. If you could find a christmas tree for sale right now bet it would be cheap.

[gtxrider]

Originally Posted by LIforrelaxin

Ok, So everyone is always pointing the finger at China and India, and I am not saying that they aren't a contributing factor here. They are the reason the gas prices are now in the 2.50$ to 3.00$ range.

But come on folks every year at this time the price of gas goes up. Just in time for the summer tourism season. It is like clock work. The prices will peak just in time for Memorial day. Then they will drop back some before the fourth of July as the petroleum companies realize they went to far... then we stabilize until the Labor day, when the prices will come back down, as the petroleum companies realize as they always do that they over produced for the summer and are left with more in reserve then they want. It is not uncommon for the price to range over 50 cents during this time.

The bottom line is this is normal. I have come to expect it just like I have come to except that snow melts, the lake warms and eventually fall arrives.

It is just your seasonal adjustment, just like the temperature it goes up and comes down.

[gtagrip]

However, when they raise the gas prices in the spring and summer, the price in the fall never falls back to the price as the previous fall. There is always that slight increase to the prior fall and that is how these oil companies keep raising their prices to the unsuspecting consumer. In other words, this falls lower price will be higher than last falls lower price and the game continues into the next year's seasons. And this all happens when these oil companies are making record profits.

[LIforrelaxin]

Originally Posted by gtagrip

However, when they raise the gas prices in the spring and summer, the price in the fall never falls back to the price as the previous fall. There is always that slight increase to the prior fall and that is how these oil companies keep raising their prices to the unsuspecting consumer. In other words, this falls lower price will be higher than last falls lower price and the game continues into the next year's seasons. And this all happens when these oil companies are making record profits.

I think if you follow gas prices a little more closely you will see that this isn't quite true. Indeed Gas is never going to get back down to 1$ a gallon, that ship has sailed never to return again. However I don't see it going back up past 3.00$ per gallon either, the petroleum companies have tried that it doesn't work out for them. So we float between 2.40$ and 3.00$ per gallon through out the year, and have done so now for basically about 2 years. There have been a couple of spike where people lost there marbles, I blame wall street for this, but for the most part there is a 50 to 60 cent window we ride in. As we have always ridden in.

Now as for the Oil companies and there profits well with China and India fighting for petroleum along with the US. They are indeed the winners. Capitalism at its best. We can't criticize them for doing something that is a foundation and corner stone of our economic system can we? Now if we want to point finger I believe what we need to do is look at the fact that it is still cost prohibitive for an oil company to drill for oil in the United States. With all the environmental, land rights, and labor law issue faced here in this country producing a gallon of crude and delivering it to a refinery is not cheep. It is just as expensive as buying it from somewhere else. If people want to fix the problem. We need to make drilling and pumping oil in the US viable again.

[Shedwannabe]

Originally Posted by LIforrelaxin

Indeed Gas is never going to get back down to 1$ a gallon, that ship has sailed never to return again.

Yes, I agree with you that prices will not be going down

However I don't see it going back up past 3.00$ per gallon either, the petroleum companies have tried that it doesn't work out for them.

It is not the petroleum companies who are affecting the prices. They might affect 10% of the variance in prices. Supply, and demand, are the biggest factors by far. Supply is not increasing, and at best could only be increased a little over what it is now. Demand, however, is increasing, here and around the world.

...(I)t is still cost prohibitive for an oil company to drill for oil in the United States. With all the environmental, land rights, and labor law issue faced here in this country producing a gallon of crude and delivering it to a refinery is not cheep. It is just as expensive as buying it from somewhere else. If people want to fix the problem. We need to make drilling and pumping oil in the US viable again.

One of the basic problems of oil prices is that so far, they have only factored in the price of producing and delivering the oil. They have not factored in the cost of negative effects associated with the production and use of oil. Air pollution is made (almost) immeasurably worse by car exhausts, and health problems come from the increased pollution, but neither we nor the oil companies pay for the full costs associated with oil.

There was a very good article by Paul Krugman in today's New York Times entitled "Building a Green Economy". He thoughtfully covers a lot of the pros and cons of various forms of "economic environmentalism", from carbon taxes to cap and trade to other ways governments can act to reduce emissions. The thrust of his argument is 1) we have to act and act now 9he, like I, has little tolerance for climate skeptics who are in denial) and 2) we need to extend the cost to other countries who want the economic advantage of polluting without paying the price by a carbon tariff, which he feels will quickly compel the rest of the world to comply with environmental regulations by pricing them out of the market if they pollute.

The answer is not destroying our environment by allowing drilling in more places. The answer is moving to a sustainable economy. This includes changes like - not shipping food an average of 1500 miles from production to consumption (and especially no airfreight of food), decreasing meat consumption (a diet based on "raised" meat (as opposed to "hunted meat") is much more ravaging of the environment that an vegetarian diet), stopping rewards for population growth (changing tax deduction laws), promoting renewable energy (which even in NH is cheaper than power purchased from the power company). It also strikes me that having the rich compete to have the closest to zero carbon emissions would be infinitely better for the environment that having the biggest, most polluting boat on the lake would be a positive step....

[bigpatsfan]

There is a huge difference between oil supply and the amount of oil in the ground.

You have oil in the ground and demand for oil products What determines pricing is how much oil is being refined (from ground to the customers). It is the refinery that controls inventory. So when faced with a weak demand they reduce the flow such that there is little supply.

Over the past six months the oil industry as a group reduced their production levels to the lowest level in over 40 years. It was the only way they could keep oil prices up. As a result, “oil supply” is low and refineries are working at less than capacity.

As the economy improves you can expect that oil pricing will go up. It is the goal of oil companies, like any other company, to make money. So if they believe the Market can handle a higher price they will raise it. (it is called elasticity of demand)

They have a scarce resource and it is in their best interest to sell small amounts of oil but make the same or more money. So they monitor economic trends. Keep in mind that even though the Economy sucked last year, Exxon-Mobile made $53 Million a day in profits. That was down from the $45 Billion they made in 2008 but still not a bad profit margin



As a final note:
Unless you enact a law saying that all oil pumped out of the US can only be sold in the US then it doesn’t matter how much oil we produce. Oil companies will continue to sell Oil to the highest bidder… Where do you think Japan, China and others get their oil from… yep, oil being pumped from here in the US goes abroad. Do you really think that oil companies are going to sell oil here in the US for $40 a barrel when they can sell it to China for $80.

[woodynh]

Unfortunately supply and demand has nothing to do with the cost of oil right now. Supplies are higher then they have ever been and usage is down considerabily over what it was a few years ago. I believe at the current useage there is an excess of 6 million barrels a day. So supply is at a very high level. Usage has increased slightly but very slightly. Opec has struck a deal with china and lowered their prices but raised the prices to the US.

The root of the problem is not the oil companies as you think it is speculators on wall street. They have seen how high oil has climbed and now with the economy showing some positive indicators they are betting oil prices will rise and by buying oil futures like they are it is driving the oil prices up.

Now the part that will really piss you off. Remember all the banks we just bailed out. Well they have been getting money at 0% interest from our goverment to stimulate the economy but instead of using this money for consumer loans they are buying up investments. One of there favorite investments right now is oil futures. Banks are one of the biggest investers currently in oil futures.

[bigpatsfan]

WoodyNH, I agree with most of what you said… but keep in mind that Wall Street is betting that demand will outstrip supply… they see that the oil companies have cut production and they are expecting that demand will increase. If this occurs then there will be a shortage which will lead to higher prices.

The answer is to go back to regulation. If the Government required a certain amount of inventory on hand at all times, the speculators would have nothing to speculate on. This process worked for more than fifty years…

[Irrigation Guy]

Cut and Paste from the Our Town Energy Website:

http://otchoice.com/news.asp

Energy Market News

ST PADDY'S DAY UPDATE

How do speculators disrupt the market?
Goldman Sachs made record profits this year and distributed record bonuses. In fact the percentage of net profits devoted to bonuses was almost 50%, prompting one pension fund to sue the company on behalf of shareholders who feel they too are entitled to some of that profit. Goldman, Morgan Stanley and a few other institutions "too big to fail" have made much of that money in manipulating commodities, especially oil. One manipulates the market by altering expectations of either a) supply or b) demand. In the summer of 2009, the big players rented 144 oil tankers to store almost 700 million barrels of oil (30.8 billion gallons of oil) on the high seas. This, in addition to additional storage in rented or purchased oil terminals and storage depots on land. In fact, Goldman Sachs led a consortium in 2006 that purchased 21% of all the ports and associated warehousing, etc in England. Goldman and Morgan Stanley are now big players in 'warehousing'.

Goldman was taking advantage of a situation known as "contango" where current prices (in May, 2009 for June 2009 oil futures) were cheaper than prices for futures for the winter months of 2010 (more on that later). In the summer of 2009, there was a worldwide glut of oil. By purchasing that oil and taking it off the market they actually decreased or tightened oil supply somewhat, although oil supply even today is higher than the five year average. Could the removal of 30.8 billion gallons of oil from the open market affect oil supply and pricing? "Hell, yes", my grandfather would have said.

But why was there "contango" in the first place? Why were oil futures for the winter of 2010 so much higher than oil that could be bought last May for June delivery? Remember 2008 when Goldman Sachs was touting "Buy at $150 per barrel, it's going to go up to $200 per barrel!! It took the King of Saudi Arabia to break Goldman's bubble. King Abdullah insisted that speculators were driving the price as oil supply then was more than sufficient, Goldman Sachs, Morgan Stanley and President Bush (an old oil patch hand) insisted that it was not. The gauntlet thrown, King Saud pumped an extra 2 million gallons a day for a few days and the market crashed, dropping at its low point to about $35 a barrel. Big investment firms like Goldman Sachs and Morgan Stanley have two major arms, the economic forecasting side that tells millions of small investors what Goldman thinks the price of oil will be tomorrow or next June; and the trading arm that gladly takes the money of all these small investors who follow Goldman's advice. These firms do not play on a level playing field with the rest of us. Their computers have special access to the markets and can make almost instant trades, making hundreds, perhaps thousands of trades per day in a particular area. They make money when the market goes up or down.

But how do Goldman Sachs predictions about demand a year from now, based on their 'informed' guesses about economic indicators, oil supply, the strength of the dollar actually change demand?? Fifteen years ago, the only people in the commodities market trading oil were actual producers and wholesalers/end users. Today 75% of all the trades are by banks, hedge funds, private investors and other speculators who do not want the physical oil only the ability to buy and sell the paper at 10% down for a 42,000 gallon contract. The important thing to remember is that it is no longer a market, it's a Casino! The volume of trading far exceeds the actual volume of oil available. When you buy an option for a contract for oil delivery in January 2011, you are buying it from a party like Goldman or Morgan Stanley who does not have that oil but is making a bet to deliver it to you (who have no intention of putting 42,000 gallons of oil in your basement) at that price. The other party is making a bet that he'll make a profit at that price (buying it for less) and you are making a bet that you'll make a profit at that price (be able to sell it for more). Multiply this times thousands of millions of trades. One expert figures that each physical gallon of oil is sold 20 to 25 times. Does this artificial trading demand (not related to actual physical demand for oil) drive up the price of oil? You bet!

Can anyone accurately predict prices based on physical supply and demand anymore? Not really. In the absence of financial regulation, one really has to predict what the speculators will do rather than the market. The only apparent constraint upon the speculators ability to manipulate the market is King Abdullah of Saudi Arabia. He is happy with oil in the range of $70 to $80 per barrel. He has the ability to pump 4 million barrels extra per day and flood the market if speculators drive prices much higher than that. He has telegraphed his willingness to repeat his actions of 2008 if price increases by speculators threaten world economic stability. Ironically, it seems we must rely on Saudi Arabia, a member of a cartel devoted to keeping prices high to keep speculators from driving prices higher. Unlike hedge funds and investment banks, OPEC has an interest in keeping world economies from going into the toilet.

[VtSteve]

Drill Baby Drill (unless oil gets too cheap)

These discussions are funny really. Cable bills are far worse.

[mg2107]

Remember the song "In the good old summertime". So do the oil companies.

[AB_Monterey]

What happens with oil prices actually has very little to do with actual supply and demand. Since 2000 when Clinton signed the Commodity Futures Modernization Act (Gramm and Luger sponsored), the market has been driven by speculation. Prior to 2000, commodity trading was regulated.

After passage of the bill, traders had an officially deregulated market for energy futures. Worse, that bill also deregulated many financial instruments – including the collateralized debt obligations that are at the center of today’s mortgage crisis.

Here's a great summary:

http://www.engdahl.oilgeopolitics.ne...peculation.HTM

[bigpatsfan]

AB_Monterey…. The short answer is you have to go back to the 70s to find the root cause….

And yes, speculation about how much supply will be available is what drives the market price… hence, companies that control the refineries have a lot of influence regarding if there will be enough supply to meet demand….

Slow your oil production and if the market believes that demand is going up then the price for your product will increase…

Also, since the Oil Companies are the ones reporting demand numbers and inventory levels they are in an excellent position to slant perception as they see fit..

[Heaven]

All this is giving me a headache . . .

[Rattlesnake Guy]

Every oil futures contract purchased is sold by someone else. The price that makes the seller willing to sell and the buyer willing to buy is influenced by each participants perception of the future price. Is the contract selling at a discount or at a premium. It takes two that disagree on the direction of the price for the sale to take place.

The other trigger of the sale / purchase is the desire to shed the risk of change in price of the commodity or the desire to assume the risk. If I own the oil, I might sell the future to lock in the price the oil is worth today in fear that the price might go down. If I am an airline and will need to buy the oil in July and am afraid the price will go up, I may choose to lock the price in at today's futures price. The speculators allow liquidity in the market that allows the producers and sellers to avoid the gamble they are not willing to risk. Sometimes assuming that risk makes them money, and sometimes it cost them money.

When my mother "pre buys" her oil for the winter at a given price the oil dealer purchases a future to shed the risk. She is in essence one of those speculators who want to benefit from the locking in of the price and avoid the risk of the price going up. On the other side is someone who wants to take some of the premium and is willing to assume the risk that the price will go up.

The free markets actually reduce the price swings because so many are waiting to benefit from the market inefficiencies. The price of gas going into our boats would be a lot less certain if a few oil companies and producers could set the price they want to.

[Sunbeam lodge]

Originally Posted by woodynh

Unfortunately supply and demand has nothing to do with the cost of oil right now. Supplies are higher then they have ever been and usage is down considerabily over what it was a few years ago. I believe at the current useage there is an excess of 6 million barrels a day. So supply is at a very high level. Usage has increased slightly but very slightly. Opec has struck a deal with china and lowered their prices but raised the prices to the US.

The root of the problem is not the oil companies as you think it is speculators on wall street. They have seen how high oil has climbed and now with the economy showing some positive indicators they are betting oil prices will rise and by buying oil futures like they are it is driving the oil prices up.

Now the part that will really piss you off. Remember all the banks we just bailed out. Well they have been getting money at 0% interest from our goverment to stimulate the economy but instead of using this money for consumer loans they are buying up investments. One of there favorite investments right now is oil futures. Banks are one of the biggest investers currently in oil futures.

I would agree. At the same time China is buying up the oil in Afghanistan and Iraq we are sending our troops and money to protect them and rebuild the infrastructure there. China also has an interest in Iranian oil. So we become the big Satan while other countries benefit from our attempt to protect the world from terrorism. One of the major reasons Russia is hesitant to agree to restrictions against Iran's nuclear ambitions is that there are 25 million Iranian Moslem,s in Russia and they also have an economic interest in trading with Iran.

[NoRegrets]

Originally Posted by AB_Monterey

What happens with oil prices actually has very little to do with actual supply and demand. Since 2000 when Clinton signed the Commodity Futures Modernization Act (Gramm and Luger sponsored), the market has been driven by speculation. Prior to 2000, commodity trading was regulated.

After passage of the bill, traders had an officially deregulated market for energy futures. Worse, that bill also deregulated many financial instruments – including the collateralized debt obligations that are at the center of today’s mortgage crisis.

Here's a great summary:

http://www.engdahl.oilgeopolitics.ne...peculation.HTM

AB_M. I agree with you totally and I believe this is the single biggest event that has screwed us. Before the Commodities Modernization Act of 2000 Every energy trade over $10,000 was regulated on the NYSE and fixed by a "supply and demand" price. This was to prevent speculation and wild price swings on a energy. This bill allowed the trades to first go over the counter and then in 2002 trading moved overseas with no regulation. When is the first time a storm effected the price of oil? 2002! England has made a few attempts to gain support and concensious of trying to regulate energy prices but has failed.

There was no speculation on oil before 2000 as the price was "fixed".

The crisis in the 70'ies was different. I was living in Iran as a high school student and I remember in 1971 my father being in an argument with an Iranian general about how Nixon just sold the US out. He predicted a doubling of oil prices. My father's argument was position was that could not happen because we had a check's and balance with 3 bodies of government (Legislative, Judicial, and executive). This was the first time I had ever seen my father get that upset so it did leave a big impression on me. We moved back to the US in 1973 and watched the preditions of the Iranian general come true. I can't tell you how much this impacted my father as his faith in the government was shaken.

Oh yes, I did see President Nixon and the Shah and I got one of his famous Peace Sign waves I called out "I'm and Amarican".

[VtSteve]

Originally Posted by AB_Monterey

What happens with oil prices actually has very little to do with actual supply and demand. Since 2000 when Clinton signed the Commodity Futures Modernization Act (Gramm and Luger sponsored), the market has been driven by speculation. Prior to 2000, commodity trading was regulated.

After passage of the bill, traders had an officially deregulated market for energy futures. Worse, that bill also deregulated many financial instruments – including the collateralized debt obligations that are at the center of today’s mortgage crisis.

Here's a great summary:

http://www.engdahl.oilgeopolitics.ne...peculation.HTM

Good 'ole Enron Phill He was quite useful in bringing down the financial markets as well. I think he's a financial terrorist.

[bigpatsfan]

So can we all agree that drilling for more oil is not the answer?

My major point is even if we discovered enough oil here in the US to sustain our needs, we would still be paying Market pricing. Meaning unless the US government goes back to regulating the oil industry the price of gas is going to be whatever the Worldwide Market can handle.

The US Government broke up Standard Oil due to its monopoly of oil…. Jump forward a hundred years and you will see that the modern US has allowed oil companies to consolidate (Mobil and Exxon) and removed most of the oil companies restrictions. Should we be surprised that as a result oil is as expensive as it is?

[NoRegrets]

Originally Posted by bigpatsfan

So can we all agree that drilling for more oil is not the answer?

My major point is even if we discovered enough oil here in the US to sustain our needs, we would still be paying Market pricing. Meaning unless the US government goes back to regulating the oil industry the price of gas is going to be whatever the Worldwide Market can handle.

The US Government broke up Standard Oil due to its monopoly of oil…. Jump forward a hundred years and you will see that the modern US has allowed oil companies to consolidate (Mobil and Exxon) and removed most of the oil companies restrictions. Should we be surprised that as a result oil is as expensive as it is?

The events you refer to definately were impactful. Having more oil would be a great thing and if it came from our property it would be even better (IMHO).

However, I believe the price swings are influenced more by market manipulaters or speculation and not supply and demand. The oil industry, gas refineries, and delivery companies are heavily regulated and can't do anything without fed or state interaction.

[VtSteve]

The one thing about oil and the oil business, is that very few consumers really understand it. That became abundantly clear in the last election. Supply and demand remain the controlling factors long-term. No question trading and speculation can wreak havoc, but not long term.

Drilling is very expensive, as is exploration. Technologies have been developed that aid in the discovery of oil in places that previously were off limits due to costs. But too much supply makes the price go down. If it stays low, it can have a negative impact on the business. Refiners know this, and have had a very difficult time breaking even.

For many, many years, the top suppliers of foreign oil imported into the US have been Canada and Mexico. Both countries were hurt badly when oil dropped precipitously. The areas of the US where oil is taken also were hard hit. Cheap oil is not a win-win proposition. If you drill for oil that costs $40 a bbl, and you can import oil that costs them $3 a bbl, you're considered stupid. That's been a fact of life forever.

[NoRegrets]

Good and valid points VTSteve. Do you think there is a 20% swing caused by the market where the base price is set by supply and demand?

The barrel price just increased by 10% but the supply and demand level has not changed.

[VtSteve]

Originally Posted by NoRegrets

Good and valid points VTSteve. Do you think there is a 20% swing caused by the market where the base price is set by supply and demand?

The barrel price just increased by 10% but the supply and demand level has not changed.

I think speculation, both investment speculation and economic speculation, has played a large part in this year's run. The world's economic outlook has gotten much better (although fragile), since Q3-Q4 2009. Opec has made some behind the scenes moves to increase supply a little bit, which will probably help moderate the swings.

I watch oil go up and down. People completely missed the speculative trading that drove oil to unbelievably low prices after record highs. But in large part, that drove the dive. The recession was a huge reason demand slowed so much, and continues to be moderate to low. Common stocks also followed this pattern. When any investment or commodity is viewed as too low, speculators move in to correct the market forces. They usually overshoot to the highs or lows, but they eventually stabilize. Refineries closed left and right last year as they continually lost money. My "guess" is that oil will hit a high this year of possibly $100, but only briefly. While demand is increasing from last year, it's still not near the 2007 levels.

I also think that conservation, more fuel efficient vehicles, and fear of high prices will be the dominant market force controlling demand. Opec in particular understands the risk/reward relationship between too high and too low, possibly better than anyone does. They understand full well that too high hurts global activity, which lowers demand, and causes huge fluctuations in their steady flow of capital. I think oil is already at their high comfort price, and they will further increase supply if warranted. Speculators just got burned badly, and they know full well that pigs get slaughtered

I'd be surprised if gas went much over $3 a gal this summer in our region, and very surprised if it stayed there for any length of time.

[CrawfordCentury]

Time for an outta the box solution.

NH is the 2nd most forested state in the US. There's gotta be some way to take full advantage.

Maybe one of these. I like the idea that if I'm close to empty, I can just pull over to the roadside and toss in a couple sticks of maple and be on my way. Gotta figure the emissions and the occasional chimney fire would discourage tailgaters.

Originally built for a French count, this 1884 De Dion-Bouton et Trepardoux — aka “La Marquise” — will go on the auction block this August in Pebble Beach, Calif. Surprisingly, the 123-year-old steam-powered car still runs … on coal and wood. It was raced a year before Daimler and Benz built their first gasoline-powered cars and 12 years before Henry Ford’s auto effort.

The auction company estimates La Marquise’s value at $1.5 to $2 million, but with the recent trend of over-inflated prices at exotic-car auctions, we could see the old count’s coach going for much more than that.

Gotta figure that if gas goes high enough, the ole count's jalopy could be paid for sometime around 2014.

[VtSteve]

Another, easier way to change both demand and price is this. My two vehicles get an average combined mileage of around 30 mpg. On our daily driver, mine gets 26 to 28, hers is now averaging 38 or so.

[MAXUM]

Of course they do, where do you think Iran is getting their nuclear technology from? Russia.

[gf2020]

Down 4 cents per gallon in my town over the past 2 days, just put 20 gallons in my truck at $2.679.

[VtSteve]

Originally Posted by gf2020

Down 4 cents per gallon in my town over the past 2 days, just put 20 gallons in my truck at $2.679.

And, the dollar declined. But refinery run rates are pretty high now as compared to last year, supplies are very strong, imports are up. Refineries are hurting again (still). Refining is about the worst place to be this year again, and the recent upticks in oil prices hurt them again.

One of the many, many reasons investing billions in new refineries is a futule business proposition.

[patman]

Originally Posted by VtSteve

I'd be surprised if gas went much over $3 a gal this summer in our region, and very surprised if it stayed there for any length of time.

Actually, I'd be surprised if gas stayed UNDER $3/gal, and I'm betting it'll stay well over that ($3.25+) for a looong time.

Good news: it's a sign that the economy is picking up. Bad news: the folks that corrupt the pricing for no reason other than to line their own pockets have decided that means it's safe to milk the customers at the pumps again.

[SteveA]

Originally Posted by MAXUM

Of course they do, where do you think Iran is getting their nuclear technology from? Russia.

Also funded by a number of our "Friends" ..

http://www.nytimes.com/2010/04/23/wo...ns.html?src=mv

"With friends like this, who needs...." you know the rest.

[Meredith Resident]

Originally Posted by LocalRealtor

Cut and Paste from the Our Town Energy Website:

http://otchoice.com/news.asp

Energy Market News

ST PADDY'S DAY UPDATE

How do speculators disrupt the market?
Goldman Sachs made record profits this year and distributed record bonuses. In fact the percentage of net profits devoted to bonuses was almost 50%, prompting one pension fund to sue the company on behalf of shareholders who feel they too are entitled to some of that profit. Goldman, Morgan Stanley and a few other institutions "too big to fail" have made much of that money in manipulating commodities, especially oil. One manipulates the market by altering expectations of either a) supply or b) demand. In the summer of 2009, the big players rented 144 oil tankers to store almost 700 million barrels of oil (30.8 billion gallons of oil) on the high seas. This, in addition to additional storage in rented or purchased oil terminals and storage depots on land. In fact, Goldman Sachs led a consortium in 2006 that purchased 21% of all the ports and associated warehousing, etc in England. Goldman and Morgan Stanley are now big players in 'warehousing'.

Goldman was taking advantage of a situation known as "contango" where current prices (in May, 2009 for June 2009 oil futures) were cheaper than prices for futures for the winter months of 2010 (more on that later). In the summer of 2009, there was a worldwide glut of oil. By purchasing that oil and taking it off the market they actually decreased or tightened oil supply somewhat, although oil supply even today is higher than the five year average. Could the removal of 30.8 billion gallons of oil from the open market affect oil supply and pricing? "Hell, yes", my grandfather would have said.

But why was there "contango" in the first place? Why were oil futures for the winter of 2010 so much higher than oil that could be bought last May for June delivery? Remember 2008 when Goldman Sachs was touting "Buy at $150 per barrel, it's going to go up to $200 per barrel!! It took the King of Saudi Arabia to break Goldman's bubble. King Abdullah insisted that speculators were driving the price as oil supply then was more than sufficient, Goldman Sachs, Morgan Stanley and President Bush (an old oil patch hand) insisted that it was not. The gauntlet thrown, King Saud pumped an extra 2 million gallons a day for a few days and the market crashed, dropping at its low point to about $35 a barrel. Big investment firms like Goldman Sachs and Morgan Stanley have two major arms, the economic forecasting side that tells millions of small investors what Goldman thinks the price of oil will be tomorrow or next June; and the trading arm that gladly takes the money of all these small investors who follow Goldman's advice. These firms do not play on a level playing field with the rest of us. Their computers have special access to the markets and can make almost instant trades, making hundreds, perhaps thousands of trades per day in a particular area. They make money when the market goes up or down.

But how do Goldman Sachs predictions about demand a year from now, based on their 'informed' guesses about economic indicators, oil supply, the strength of the dollar actually change demand?? Fifteen years ago, the only people in the commodities market trading oil were actual producers and wholesalers/end users. Today 75% of all the trades are by banks, hedge funds, private investors and other speculators who do not want the physical oil only the ability to buy and sell the paper at 10% down for a 42,000 gallon contract. The important thing to remember is that it is no longer a market, it's a Casino! The volume of trading far exceeds the actual volume of oil available. When you buy an option for a contract for oil delivery in January 2011, you are buying it from a party like Goldman or Morgan Stanley who does not have that oil but is making a bet to deliver it to you (who have no intention of putting 42,000 gallons of oil in your basement) at that price. The other party is making a bet that he'll make a profit at that price (buying it for less) and you are making a bet that you'll make a profit at that price (be able to sell it for more). Multiply this times thousands of millions of trades. One expert figures that each physical gallon of oil is sold 20 to 25 times. Does this artificial trading demand (not related to actual physical demand for oil) drive up the price of oil? You bet!

Can anyone accurately predict prices based on physical supply and demand anymore? Not really. In the absence of financial regulation, one really has to predict what the speculators will do rather than the market. The only apparent constraint upon the speculators ability to manipulate the market is King Abdullah of Saudi Arabia. He is happy with oil in the range of $70 to $80 per barrel. He has the ability to pump 4 million barrels extra per day and flood the market if speculators drive prices much higher than that. He has telegraphed his willingness to repeat his actions of 2008 if price increases by speculators threaten world economic stability. Ironically, it seems we must rely on Saudi Arabia, a member of a cartel devoted to keeping prices high to keep speculators from driving prices higher. Unlike hedge funds and investment banks, OPEC has an interest in keeping world economies from going into the toilet.

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