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June 15, 2012

No Change on OPEC Production Ceiling

 

OPEC met, discussed, but left the output ceiling at 30 million barrels/day. (Platts says that actual output in May was 31.75 million barrels/day)

Some members wanted to cut supply to boost the price, but worries about global growth contraction led to the status quo agreement.

We are safe for now, but is higher demand on the way?

Filed under:Energy,Fuel Price Trends,Gas price | by Pump Girl @ 4:15 pm | 

June 13, 2012

Iran Sanctions Starting to Hit

 

Reuters reports that the oil sanctions against Iran have lowered exports to 1.5 million barrels/day, a decline of 40%. While the article emphasizes the effects on Iran, it is also interesting for world oil prices. A new factor in the sanctions is support from the Chinese — still buying from Iran, but in smaller quantities.

This can only get worse. The International Energy Agency expects Iran’s exports to fall another third. Chinese state-owned refiner Sinopec surprised this week when it said it would buy 20 percent less Iranian oil this year and pointed out that it had rebuffed discounts from Tehran.

In addition to the direct effect of reduced supply (partly offset by Libya coming back on line), there is the threat of increased tension and a possible response from Iran at the Strait of Hormuz.

Filed under:Fuel Price Trends,Price Shocks | by OldProf @ 10:19 am | 

June 7, 2012

Oil Prices Lower, Now How About the Pump?

 

Oil prices traded down to $85/ barrel on Wed. and that should be good news, but why doesn’t it translate to a much lower pump price?

The US has an amply supply of crude, but apparently we just can’t refine it fast enough to drive gas prices lower. The wicked old supply/demand curve again.

Oil futures traders love this stuff, though. They will be going long when it hits the magic $75/barrel mark

Filed under:Fuel cost,Fuel Cost Control,Fuel Price Hedging,Fuel Price Trends | by Pump Girl @ 4:41 pm |