August 11, 2010

Oil Prices Set to Skyrocket

 

A fellow blogger over at oilprice.com speculates that oil prices may be going as high as $100/barrel by the end of the year.

…the fundamental assumptions of the oil industry upside down, and that sharply higher oil prices were in the cards, probably $100/barrel by year end.

Major oil companies with deep pockets at risk were rushing to offload their existing offshore leases and partnerships in producing wells to avoid BP’s potential $30 billion hickey.

While we feel $100/barrel is particularly high, it’s nearly impossible to overstress the importance of potential new federal regulations on gulf oil production. Consumers and fleet managers beware.

Filed under:Fuel Price Trends, Gas price, Fuel cost, Energy, Fuel Cost Control, Fuel Budget | by Guy in a Suit @ 3:59 pm | 

July 15, 2010

Developing Nations Near Turning Point

 

An International Energy Agency report released Monday notes that not only are OPEC countries nearing their lowest ever spare capacity, but developing nations are about to reach a kind of critical mass for oil demand. According to the Dallas Blog:

Demand for oil products, especially transportation fuels, is increasing rapidly. One can place blame on all those developing nations whose populations have been approaching the crucial $3,000 per capita GDP level – that pivotal moment when, as revealed by the IEA, “a middle class emerges, eager to purchase cars, fly in airplanes, install air-conditioners and, more generally, use energy consuming products. ‘People can’t blame a lack of refinery capacity, the IEA claims in refinery upgrades is proceeding apace; and doesn’t appear likely to be a difficulty in the near future. Yet overall, supply of the raw product – gas and oil – is having a harder and harder time to keep up with demand.

This is yet another indication that peak oil is upon us, ensuring higher fuel prices at the pump in the near future.

Filed under:Fuel Price Trends, Gas price, Fuel cost, Fuel Cost Control, Fuel Budget | by Guy in a Suit @ 12:07 pm | 

July 13, 2010

AP: Oil Prices Climb on Improving Economic News

 

A combination of great earnings reports by Alcoa and CSX and increased oil demand in third world countries contributed to rising oil prices today, according to the Associated Press.

“After all the bad economic news over the last six weeks or so, good earnings reports suggest companies have money and they can spend some of that, and that makes people feel a little more ebullient about the market,” said Michael Lynch, president of Strategic Energy & Economic Research.

The International Energy Agency predicted 2011 global oil demand would increase by 1.3 million barrels a day, or 1.6 percent, to 87.8 million barrels a day, largely due to economic growth in emerging countries.

Thankfully, fuel prices at the pump are expected to remain steady at the pump throughout the summer - an opportunity to lock in that low price with fuel protection.

Filed under:Fuel Price Trends, Fuel cost, Fuel Cost Control | by Guy in a Suit @ 2:28 pm | 

July 9, 2010

Moratorium Blocked Again by Courts

 

The Obama Administration’s 6 month offshore drilling moratorium was turned down again yesterday. An appeals court in New Orleans agreed with the lower court’s decision that the ban was an unwarranted strain on the local economy. But according to the Christian Science Monitor, this may not be the last we hear of it.

Legal and oil industry experts say oil companies are unlikely to resume exploratory drilling in the Gulf anytime soon, with or without a ban, with so much uncertainly regarding new federal safety and environmental regulations and possible congressional action affecting offshore drilling.

Questioned by Judge Smith, US Attorney Gray said he did not know when Secretary Salazar might issue the new moratorium. “The secretary is looking at a new decision based on new information,” Gray said. “It is not tied to this court’s decision.”

So far the disaster in the Gulf of Mexico hasn’t done much to drive up the cost of gas prices at the pump. With this in mind, we continue looking to the long term for hints of where future prices might go.

Filed under:Fuel Price Trends, Gas price, Fuel cost, Fuel Cost Control, Fuel Budget | by Guy in a Suit @ 2:46 pm | 

July 6, 2010

Big Oil Lobbies Against Tax Increases

 

The American Petroleum Institute has begun an aggressive new advertising campaign in anticipation of new Congressional legislation. According to their press release:

“While the focus of our industry is on helping BP stop the spill and clean up the oil, we cannot ignore the fact that imposing significant new taxes on the oil and natural gas industry will have severe economic consequences and job impacts,” said Jack Gerard, president and CEO of the American Petroleum Institute.

This kind of public relations ploy is indicative of a very real threat to the industry: energy legislation, fueled by American anger over the BP oil disaster. The API is not alone in their goal, nor are they lacking representation in Congress, but the future of oil prices through the summer remains uncertain.

Filed under:Fuel Price Trends, Gas price, Fuel cost, Fuel Cost Control, Fuel Budget | by Guy in a Suit @ 4:24 pm |