Changes by the barrelful

…The market is vulnerable right now because prices remain high, historically speaking, and demand shows no sign of abating, even with the recent surge in prices.

“Three dollars didn’t even faze our drivers,” said Eric Bollinger, who’s been a Nymex trader for 20 years. “We’re constantly chasing our tail on this thing.”


If that sounds like a strong argument for alternative fuels, it isn’t, at least not among the denizens of Nymex.

“Going green doesn’t do anything in this situation,” Bollinger said. “It only
makes it worse.”

Refiners already are threatening that the prospect of alternatives will discourage them from expanding refining capacity. Why invest billions if demand is going to fall years before you recoup your investment?

As a result, a push for alternative fuels may drive gasoline prices even higher during the few years, traders say.

At the same time, biofuels from sources such as corn may spur price hikes at the grocery store, too, which in turn could trigger inflation concerns.

“It’s a great, great hoax to put any reliance on biofuels,” Carbone said.

Houston Chronicle