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June 30, 2010

Alex Interrupts Regular Production

 

Bloomberg’s Businessweek reports that tropical storm Alex has further halted the production of crude oil and natural gas in the Gulf of Mexico.

Hurricane Alex has halted about 26 percent of crude-oil production in the Gulf of Mexico and 14 percent of natural-gas output, the U.S. government said.

Seeing as this is the first tropical storm of the season – and it is only June – it would not be unreasonable to expect higher oil prices over the rest of the summer as a result. The fact that a mere tropical storm headings towards Mexico caused this kind of disruption is a frightening indicator. The next tropical storm, particularly if it interferes with the clean-up efforts, may have more serious consequences.

Filed under:Fuel Budget,Fuel cost,Fuel Cost Control,Fuel Price Trends,Gas price | by Guy in a Suit @ 4:04 pm | 

June 28, 2010

Alex Heads Toward Mexico

 

To the great relief of oil rigs and refineries in the Gulf, Tropical storm Alex is heading toward Mexico, not North.

Speculators got their hopes up. Forecasts said Alex could become a hurricane within 48 hours.

But not so fast boys, time to readjust positions. Oil for Aug delivery fell 84 cents to $78.02 on the Merc. Closed even lower in London. Go long.

A break for BP here, that expects to plug its accidental 60,000 barrel-a-day gusher by August.

Filed under:Fuel cost,Fuel Price Trends,Gas price | by Pump Girl @ 1:09 pm | 

June 25, 2010

Outlook on Future Oil Prices

 

As the massive oil spill in the Gulf of Mexico continues to spew thousands of gallons a day, more and more people are wondering why they aren’t feeling an immediate price increase at the pump. The issue isn’t so much a supply shock – we are simply experiencing an artificially low demand because the American economy is still recovering from a recession. As the Washington Post puts it:

It’s a matter of markets trumping the environment. Oil and gasoline supplies in the U.S. remain well above normal and demand remains weak coming out of the Great Recession. The nationwide average retail gasoline price is about 13 cents lower than when the spill began.

Since the Obama Administration recently indicated that they would not be pressing their offshore drilling moratorium, it appears as though there will be more than enough crude in either domestic or foreign supply to meet the market demand.

Filed under:Fuel Budget,Fuel cost,Fuel Cost Control,Fuel Price Trends,Gas price | by Guy in a Suit @ 1:09 pm | 

June 23, 2010

Judge Rules Against Drilling Moratorium

 

U.S. District Judge Martin Feldman ruled against the Obama Administration’s 6 month exploratory drilling moratorium, which affected 33 deep water rigs in the Gulf of Mexico. Said Feldman:

The court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium.The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.

Secretary of the Interior Ken Salazar immediately took steps to impose that very same moratorium via the more direct jurisdiction of his department. Feldman’s decision is sure to be appealed by the Obama Administration, and until a final verdict is reached it is nearly impossible to predict the implications when it comes to fuel costs.

Filed under:Fuel Budget,Fuel cost,Fuel Cost Control,Gas price | by Guy in a Suit @ 12:20 pm | 

June 21, 2010

Prices Headed Higher at the Pump

 

Kept down by the recent debt crisis in the European Union, prices at the pump here in the United States are forecasted to increase in the near future.

Prices rose 0.3 cent to a national average of $2.737 per gallon on Monday, according to AAA, Wright Express and Oil Price Information Service. Prices have risen 3.9 cents in the past week and are 7.5 cents below levels of a month ago. Pump prices are 4.4 cents higher than a year ago.

Oil prices continued to surge Monday, after China moved to end its two-year peg to the dollar. Crude rose $1.32 to $78.50 a barrel on the New York Mercantile Exchange. Traders anticipate a stronger yuan will make dollar-based commodities such as oil cheaper in China and bolster demand in the world’s second biggest market for oil. The policy shift also suggests China officials believe their economy is growing enough to absorb any slowdown in exports that a stronger currency may cause.

Of course, these moves will put additional financial strain on average consumers and fleet managers alike.

We will keep you informed as the EIA releases its next report on retail oil pricing next week.

Filed under:Fleet Managers,Fuel Budget,Fuel cost,Fuel Cost Control,Fuel Price Trends,Gas price | by Guy in a Suit @ 1:31 pm |