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April 16, 2010

Never Fear, OPEC Will Be Here


If the price of oil reaches $100, OPEC will turn the spigots back on.

Kuwaiti Oil Minister al-Sabah said that OPEC will step in to alter crude prices go over $100/barrel. The decision will depend supply & demand and the prevailing market situation.

No worries.

Filed under:Fuel Price Trends | by Pump Girl @ 6:28 pm | 

April 14, 2010

Surprise Drop In Oil Supplies


The EIA said that oil supplies dropped by 2.2 million barrels for the week ending Apr. 9. The surprise is that analysts predicted an increase of 1.6 million barrels!

Gasoline supplies also went down. More driver consumption is the explanation for that.

This is no surprise. Oil prices jumped 2% Wed. as this information was reported.

The good news is that the oil inventory is unlikely to keep falling. This is the time of year when supply usually grows as refineries slow to convert to summer grade.

The price at the pump hasn’t changed much to speak of. The national average is $2.857/gal.

Filed under:Fuel Price Trends | by Pump Girl @ 4:33 pm | 

April 13, 2010

Not Too Early To Worry About 2010 Hurricanes


The US got off lucky last year, with only Bill, Fred and Ida threatening us. None of which made landfall. Phew!

For 2010 the Colorado State University Researchers are forecasting 8 hurricanes in the Atlantic Basin, 4 of which could be Category 3 or higher. 58% chance one of them will enter the Gulf of Mexico. 44% it will hit the Gulf Coast – FL Panhandle to Brownsville, TX. This might not sound so bad, but for the past 100 years, the probability has been 30%.

Of course you realize what’s in the ocean along the Panhandle to Brownsville. Oil platforms and lots of them – 3,500 active. Don’t forget about the gathering systems and pipelines that go along with them.

Thunder Horse, the largest semi-submersible platform in the world, 150 miles off the coast of New Orleans, got the double whammy in 2008. It got hit by Dennis causing it to list. No sooner was it righted, then it got hit full on by Katrina (no damage that time and was not in operation). Start-up was delayed until June 2008.

Refineries along the coast shut down as a preventative measure when hurricanes threaten. That would be about 2 weeks to get them running at capacity again.

If the Colorado State forecasters are correct the price of oil might go right through the roof.

Be afraid. Be very afraid.

Filed under:Fuel cost,Fuel Price Trends,Price Shocks | by Pump Girl @ 5:44 pm | 

April 12, 2010

Bulls vs. Bears Game On!


Crude was pretty much unchanged for last week, but that doesn’t stop both Bulls & Bears from hoping for a favorable scenario.

Bears observe that oil can’t seem to stay above $87/barrel. Bulls see the glass half full; prices tested $84 and found resistance.

Contango for oil increased indicating short term pressure. The crack spread declined indicating a softening in demand.

Crude inventories are high, and so are gasoline inventories.

Here’s the thing: Either demand will start reducing inventories and we will head toward $100/barrel oil. OR inventories will stay at above normal levels and prices could go back toward $75/barrel.

Filed under:Fuel Price Trends | by Pump Girl @ 12:32 pm | 

April 9, 2010

Prices Finally Fall Down


Oil settled below $85/barrel Friday. Traders for some reason think Americans aren’t burning enough of it. The old supply/demand thing again.

Experts are still expecting that $3 price tag this summer, though.

Economy is improving. More jobs, more people driving to work. Simple math to us.

Filed under:Fuel Price Trends | by Pump Girl @ 7:41 pm |