[Armageddon]

with all the damage katrina and rita did, im very suprised at these prices we are seeing. it doesnt make sense to me. demand cant be down that much. ( im speaking of gasoline, not nat. gas )

[sol]

I'm a little confused myself I'd hate to see when it gets real tight

[gego]

There are rumors that the Refco scandal, and resulting bankruptcy has resulted in the dumping of futures contracts by them now. They were supposedly heavily long in many of the oil related markets.

If this is the case (coupled with temporary large imports of gas products from European stockpiles) the drop will be temporary.

[KevO]

$this->bbcode_second_pass_quote('armegeddon', 'w')ith all the damage katrina and rita did, im very suprised at these prices we are seeing. it doesnt make sense to me. demand cant be down that much. ( im speaking of gasoline, not nat. gas )

[Doly]

$this->bbcode_second_pass_quote('KevO', '
')it's because of the bird flu.
the markets know what's coming. Oil is no longer that important, breathing is

[BabyPeanut]

$this->bbcode_second_pass_quote('', '[')url=http://www.bloomberg.com/apps/news?pid=10000103&sid=aa.4xnDAU4Go&refer=us]
``We're still in shoulder season,'' Sieminski said. ``Gasoline season is over and heating demand has yet to pick up.'' (link)[/url]

[BabyPeanut]

$this->bbcode_second_pass_quote('', '[')url=http://www.resourceinvestor.com/pebble.asp?relid=13704]Oil in Confusion as "Demand Destruction" Claims Questioned (link)[/url]
By Adam Porter
14 Oct 2005 at 11:22 AM EDT

...skip...

“The main explanation for the fall in the price [of crude] is the idea of ‘demand destruction’ in the USA,” he explained. “But it is really very difficult to say that, it is way too early to assess whether or not that is happening.”

...skip...

“You can say that in the period after the hurricanes struck there was a kind of physical rationing in the USA. There was an actual physical problem for some American consumers to get hold of gas for their cars that appears as a cut in demand. IN fact in reality it was a serious plunge in deliveries that consumers could access,” said Lasserre.

...snip...

[TT]

$this->bbcode_second_pass_quote('KevO', '
')it's because of the bird flu.
the markets know what's coming. Oil is no longer that important, breathing is

[No-Oil]

The last report I read last week, said that US demand for gasoline had fallen by 2Mbpd, plus the IEA countries (inc USA) have released 60M barrels from there strategic reserves. Add to this the call by GWB for good Americans to avoid unnecessary driving, plus the fact that those countries releasing crude from reserves would not be buying replacement crude at the same time (mainly the USA here for there SPR) & hey presto, you have a serious drop in demand for gas in the USA & a surplus of crude on the market. This has led to a small decrease & temporary stabilisation of the crude oil price.

Unfortunately, that reserve stock will have to be replaced soon & when those countries that have suspended purchasing whilst releasing reserves start to buy again, I bet you will see $80-$90 in very short order. So don't join the idiot financial community & think that everything is rosy. This is a temporary respite from the onslaught of high oil prices. Unless those consuming countries start changing their habits soon, then as the price drops demand will increase & the price will yo-yo up & down. The peaks will keep getting higher each time & the troughs will not be as low, until serious & permanent demand destruction is achieved. Assuming that is the western economic system does not collapse under the strain before the demand destruction becomes permanent.

Just my 2p worth.


PS; China is still building its SPR infrastructure & has not started to fill it yet, when they do, that will also add to the demand & thus price for crude !

[BabyPeanut]

$this->bbcode_second_pass_quote('No-Oil', 'U')nfortunately, that reserve stock will have to be replaced soon

[sameu]

I thought it had something to do with the NG reserves who swell with 75 billion cubic or something like that, don't know the full story
which caused a drop in ng prices and crude

[Leanan]

The Oil Drum has this graph:



Imports are replacing our lost production. Not sure if this the gas Europe promised us, or if ships all over the world are rushing to the U.S., assuming they'll get a great price for their gas.

[nocar]

Are you discussing US gasoline prices or crude oil on the world market?

I do not understand why world market crude should drop in price just because the USA imports more than usual. Would it not be a shortness some other place?

nocar

[Permanently_Baffled]

$this->bbcode_second_pass_quote('Leanan', 'T')he Oil Drum has this graph:



Imports are replacing our lost production. Not sure if this the gas Europe promised us, or if ships all over the world are rushing to the U.S., assuming they'll get a great price for their gas.

[Leanan]

$this->bbcode_second_pass_quote('', 'w')hy isn't there shortages in other parts of the world?

[MrBill]

If you divide an oil barrel into its component parts you get 35% light ends which is used to make unleaded gasoline and you get another 35% of middle distillates used to make heating oil and diesel. The other 30% is LPG and the heavy residuals and by-products. Europe uses more diesel and less gasoline. They therefore generate a surplus of gasoline when they refine and they export that surplus to the USA. It was going on before Katerina/Rita and has since increased.

Unleaded gasoline futures peaked at $2.9200 after Katerina and they dipped to $1.5800 today. They are down 45% from their post-hurrican peaks. Analysts are expecting further price erosion to $1.3750-1.5000 by year-end.

I do not expect the market to take out the highs of $70.85 in crude this year again. More likely we will drift down to the $55 area as bulls go into hybernation.

The heating oil depends on the nat gas situation and what happens this winter. If it is cold and the US has trouble to import heating oil from Europe then the price may still spike higher. However, nat gas prices have also come off their highs and are looking very soft at the moment.

[thorn]

Energy futures URL:

http://www.bloomberg.com/energy/index.html

[khebab]

Remember last year:
$this->bbcode_second_pass_code('', 'Oct 26, 2004 $55.17 (new record)
...
Dec 10, 2004 $40.71
')
The price spiked at 55.17 on October, 26 establishing a new record and then crashed down soon after Bush was reelected on November, 1st. Prices went down for almost 40 days until December, 10 reaching 40.71 (-26% from the previous record!).

My guess is that this a transition period between the driving season and the winter where heating oil demand should pick up in mid December. I'm expecting a -30% fall in oil prices reaching maybe the lower $50 if last year scenario repeat itself.

[fossilnut2]

$this->bbcode_second_pass_quote('nocar', 'A')re you discussing US gasoline prices or crude oil on the world market?

I do not understand why world market crude should drop in price just because the USA imports more than usual. Would it not be a shortness some other place?

nocar

[No-Oil]

$this->bbcode_second_pass_quote('BabyPeanut', '')$this->bbcode_second_pass_quote('No-Oil', 'U')nfortunately, that reserve stock will have to be replaced soon