by TreebeardsUncle » Fri 18 May 2007, 14:17:53
Opened the paper this morning and saw that crude oil was up 42.31 TO $64.86.
Note these 2 adjacent articles in Friday May 18's Issues of the San Francisco Chronicle Section.
Gasoline Prices Hit New Highs
& Key Gauge Shows Economy Slowing.
Here is the first article
Gasoline Prices Hit New Highs
by John Wilen
Associated Press
New York - Gasoline prices set records at the pump again Thursday, while gas and oil futures rose on concerns that refiners aren't making enough gasoline to meet peak summer driving demand.
With the summer driving season set to begin on Memorial Day weekend in just over a week, the 1.7 million-barrel increase in gasoline inventories reported by the government on Wednesday simply wasn't enough to convince traders that supplies are catching up to demand.
And that means retail gasoline procies are likely to continue rising for at least another month, said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill.
"We might have to wait until post-Fourth of July," to see a significant decline in gasoline prices,
-> OIL: Page C3
Record Gas Prices
-> Oil
From Page C1
Ritterbusch said.
The average national price of regular gasoline rose to an all-time high of $3.114 per gallon on Thursday, according to AAA and the Oil Price Information Service. That's up almost 25 cents in a month. [Well the price of gas was coming up about 30 cents a month from late January till early May.] Prices in some parts of the country, including California, have already passed $4.
Gasoline futures for June delivery jumped 9.96 cents to settle at $2.436 per gallon on the New York Mercantile Exchange. Crude oil for June delivery climbed $2.31 to settle at $64.86 per barrel on the Nymex.
Heating oil and natural gas futures also rose after the Energy Information Administration reported a slightly lower-than-expected increase in inventories.
Oil prices also got some support on Thursday from comments by a top OPEC leader that the oil cartel will not pump more crude to meet an expected surge in summer demand.
But analysts said traders were more focused on the tight gasoline market.
"It's still 99 percent gasoline-led," Ritterbusch said. "We're still not building gasoline supplies enough."
The Energy Information Administration reported Wednesday that gasoline stocks, while increasing to 195.2 million barrels, remained well below the average for this time of year.
"Those were insignificant figures," wrote Cameron Hanover analyst Peter Beutel in a research note.
Crude oil supplies rose by 1 million barrels last week to 342.2 million barrels.
"Crude may very well become a sideshow to gasoline as we enter the critical spring and summer months," wrote Man Financial analyst Edward Meir in a research note.
The gasoline shortage is due to a number of unexpected refinery outages this spring and continued strong consumer demand despite rising prices.
"Gasoline demand remains quite strong," said Antoine Halff, an
analyst at Fimat USA.
Every day's news seems to bring a new list of refinery problems, and Thursday was not exception. BP, Conoco Phillips and Valero Energy all reported planned or unexpected shutdowns at a number of U.S. refineries, Barclays Capital analysts said in a research note.
[Here is the second article.]
Key Gauge Shows Economy Slowing
Stocks pause as investors mull mixed signals.
by Candice Choi
Associated Press
New York -- A guage of future economic activity showed the U.S. economy will slow in coming months, reversing recent gfains and suggesting higher gas prices and a sluggish construction industry are beginning to take their toll.
The Conference Board said Thursday that its index of leading economic indicators dropped 0.5 percent, higher than the 0.1 percent decline analysts were expecting. The reading is designed to forecast economic activity over the next three to six months.
The increase almost reversed an amended 0.6 percent climb in March, which analysts say should relieve pressure on the Federal Reserve to raise interest rates.
"The data may be pointing to slower economic conditions this summer. With the industrial core of the economy already slow, and housing mired in a continued slump, there are some signs that these weaknesses may be beginning to soften both consumer spending and hiring this summer," said Ken Goldstein, labor economist for the Conference Board.
The reading tracks 10 economic indicators. Two of those readings were positive in April: stock prices and real money supply.
The negative contributors, beginning with the largest, were building permits, weekly unemployment claims, manufacturs' new orders for nondefense capital goods, consumer expectations, vendor performance, average weekly manufacturing hours and interest rate spread.
With the latest decline, the cumulative change in the index over the past six months has dropped 0.2 percent.
The slowdown should ease concerns that the Federal Reserve will raise interest rates, said Mark Zandia, chief economist at Moody's Economy.com. The interest rate standstill over the past nine months has driven the Dow Jones industrial average to record highs.
The Conference Board's report came amid a batch of mixed economic data, reflecting the ongoing uncertainty over the direction of the economy.
The job market showed surprising strength Thursday, with the Labor Department reporting a drop in jobless claims for the fifth straight week to the lowest level in four months.
"The job market is holding together better than any other part of the economy. Otherwise, we might be sliding into a recession," Zandi said.
While the stock market should keep advancing as the economy keeps growing, albeit slowly, analysts say data indicating otherwise could cause a tumble.
Brian Bethune, an economist with Global Insight said the Conference Board report indicates the "economy is pretty much hovering right now."
Still, he said the positive contributors -- stock prices and real money supply -- may point toward a pickup in growth later in the year.
"Stock prices in particular are anticipating what activity is going to be like in the future," Bethune said.
Wall Street retreated modestly on Thursday, with the Dow falling 10.81, or 0.08 percent, to 13,476.72, after rising as high as 13,516.71. On Wednesday, the index reached its 23rd record close of the year.
Broader indexes also declined. The Standard & Poor's 500 index lost 1.39, or 0.09 percent, to 1,512.75, and the Nasdaq composite index fell 8.04, or 0.32 percent, to 2,539.38.