Gasoline still dirt cheap in the USA

[Slimprofits]

Re: Gasoline still dirt cheap in the USA

Bloomberg: Oil May Fall on U.S. Demand Drop, Saudi Meeting, Survey Shows

Fuel consumption averaged 20.4 million barrels a day in the past four weeks, down 1.3 percent from a year earlier, the Energy Department said June 18.

2008 U.S. consumption is looking like 2006 consumption and in '05 it was 20.8 million barrels. Not much has changed so far except for the price.

The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.

49 percent, why does Bloomberg still bother with these weekly surveys??? What a joke.

[metalman]

Re: Gasoline still dirt cheap in the USA

Bloomberg: Oil May Fall on U.S. Demand Drop, Saudi Meeting, Survey Shows

pigs might fly out of my ass, survey shows.

2008 U.S. consumption is looking like 2006 consumption and in '05 it was 20.8 million barrels. Not much has changed so far except for the price. 49 percent, why does Bloomberg still bother with these weekly surveys??? What a joke.

bingo. are we the only idiots who stayed awake in econ 101 class? it's about rates of change, right? if supply is falling faster than demand is falling, prices keep shooting up. duh.

[Andreuccio]

Re: Gasoline still dirt cheap in the USA

pigs might fly out of my ass, survey shows.



bingo. are we the only idiots who stayed awake in econ 101 class? it's about rates of change, right? if supply is falling faster than demand is falling, prices keep shooting up. duh.

Not only didn't I stay awake, I dropped it after the first week. In retrospect maybe that wasn't such a bright idea.

[c1ue]

Re: Gasoline still dirt cheap in the USA

The Airedales
We rented an apartment in a townhouse back then, 20 years ago it must be, and could see into the house, and admire the front parlor. We called the people who lived there the Airedales, because they had an Airedale improbably named Pedro, and imagined the privileged and perfect lives they led in this nice house. I remember the time the fabulous chatelaine came home on a Christmas Eve afternoon in a taxi full of bags of presents.

I looked at the listing, and now got to see inside, with the photographs, and the floor-plan, and you know what? It's a house, a very nice house, but not especially grand, not what anyone would really call a mansion or a palace. The price: $5,895,000.

Do you really think the cost of a gallon of gasoline is going to doom suburbia?

I'm trying to understand Mysak's point: that the houses in the city are so expensive that the suburbs will never die? And that this $5M+ joint on a street named for one of the Civil War era robber barons is normal? And that only people who can afford $5M+ homes live in the city?

Then there's this implication that New York and its lifestyles are representative of the rest of this nation.

Ugh.

I don't spend any time with Bloomberg, and this article isn't changing my perception why I do not.

[zoog]

Gas could fall to $2 if Congress acts, analysts say

That's right, just keep distracting the masses away from the real source of inflation.:rolleyes:

WASHINGTON (MarketWatch) -- The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday.

Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.

Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters' assessment at a hearing on proposed legislation to limit speculation in futures markets.

Krapels said that it wouldn't even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets.

"Record oil prices are inflated by speculation and not justified by market fundamentals," according to Gheit. "Based on supply and demand fundamentals, crude-oil prices should not be above $60 per barrel."

Surprisingly, Paulson hasn't jumped on this bandwagon.

However, other witnesses said that pure speculators have had little impact on energy prices, which have doubled in the past year to about $135 per barrel. Both Treasury Secretary Henry Paulson and Energy Secretary Samuel Bodman have dismissed the impact of speculators on prices paid by consumers.

Congress, however, has grown increasingly concerned over speculative investors' role in the energy market in comparison with those buying futures contracts to hedge against risk from price changes. Lawmakers are expected to consider legislation to set strict limits -- or in some cases, an outright ban -- on speculative trading in energy futures in some markets.

Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.
- Mark Twain, a Biography

[Wild Style]

Re: Gasoline still dirt cheap in the USA

I'm trying to understand Mysak's point: that the houses in the city are so expensive that the suburbs will never die? And that this $5M+ joint on a street named for one of the Civil War era robber barons is normal? And that only people who can afford $5M+ homes live in the city?

Then there's this implication that New York and its lifestyles are representative of the rest of this nation.

Ugh.

I don't spend any time with Bloomberg, and this article isn't changing my perception why I do not.

Not to mention home prices in the outer boroughs are down by 15% and falling. These expensive homes will not be so for long. People act as if places like NYC did not succumb to the same housing bubble just about every other metro area in the states saw.

[bill]

Re: Gasoline still dirt cheap in the USA

[wrapright]
AntiSpin: According to Energy Information Administration of the US Dept. of Energy, here are the prices of a gallon of petrol in five European countries and the UK:

• Belgium: $9.20
• France: $8.80
• Germany: $8.93
• Italy: $8.93
• Netherlands: $9.89
• United Kingdom: $8.74

How do they do it?

1. They own one not two cars per household
2. Their cars are smaller
3. They don't drive as far or as often
4. They use public transportation
5. They walk and ride bikes

It's not rocket science.

Unfortunately for most US citizens, there are hardly any alternatives to frequent long distance driving. Worst hit is the rural US where rising fuel costs are adding to housing bubble collapse woes.

http://blogs.wsj.com/environmentalca...us-of-us-cars/

June 26, 2008, 11:12 am
Oil Shock: Analyst Predicts $7 Gas, “Mass Exodus” of U.S. Cars

Posted by Keith Johnson
Oil at $135? That was just the opening skirmish in the “peak oil” wars. The latest smart money? $200 oil in 2010, with gasoline at $7 a gallon. And that is going to turn Americans into car-shunning Europeans once and for all—poor Americans, at least.
That’s the latest gloomy forecast from Jeff Rubin at Canadian brokerage CIBC World Markets, who just a few months ago figured $200 oil would be a thing of the distant future—like 2012.


Attention-grabber (CIBC)


Mr. Rubin laughs off recent attempts to take the steam out of global oil markets. Saudi production promises of 200,000 barrels a day doesn’t dent the 4 million barrel-per-day decline from aging fields every year, for starters. And it will just be “gobbled up” by increasing domestic consumption in Saudi Arabia, like other oil-producing countries that subsidize fuel.
So what about China’s flirtation with market reality by unwinding some fuel subsidies? No luck in curbing demand or prices, either. Not only does China’s recent move translate into $3.25 a gallon gas—still a steal, relatively speaking—it’s given fresh legs to beleaguered Chinese refiners who’ve been operating in the red, thanks to Chinese price controls. So now they are producing even more gasoline and fueling even more cars than they were before. The upshot?

Over the next four years, we are likely to witness the greatest mass exodus of vehicles off America’s highways in history. By 2012, there should be some 10 million fewer vehicles on American roadways than there are today—a decline that dwarfs all previous adjustments including those during the two OPEC oil shocks.

And who will be parking their cars? The 57 million American households that have both cars and access to something resembling public transit. Gasoline at $7 begins to approach prices Europeans have paid for years, meaning that chunk of America “will start to act more and more like Europeans,” Mr. Rubin says. Not soccer moms in a minivan—soccer fans, searching for tokens:

Our analysis suggests that about half of the number of cars coming off the road in the next four years will be from low income households who have access to public transit. At their current driving habits, filling up the tank will have risen from about 7% of their income to 20%, an increase that will see many start taking the bus.

Gas prices already appear to be reshaping suburbia. But what Mr. Rubin is predicting is a far bigger shock to the American system. Europe has had decades to develop a society based on expensive energy. What will happen if Americans suddenly are forced to shoulder European-style energy prices — but without the European-style society to cope with them?

[idianov]

Re: Gasoline still dirt cheap in the USA

http://research.cibcwm.com/economic_...oad/sjun08.pdf

Heading for the Exit Lane
by Jeff Rubin

Recent announcements from OPEC and
China won’t be sufficient to hold oil prices
in check. The additional 200,000 barrels per
day pledged from Saudi Arabia is a pittance
compared to the four million barrels per day
that depletion will hive off world production
this year. What little increase in production
Saudi is capable of will probably all be
gobbled up by that country’s own voracious
appetite for energy. Nor is the $145 per
tonne cut (48 cents per gallon) in Chinese
fuel subsidies likely to dent demand much.
Most North Americans would gladly line up
at the pumps for China’s now $3.25 a gallon
gas, particularly those of us who live north
of the border.
With half of the world’s population never
having to pay world oil prices, it shouldn’t
come as a great surprise that $130 per
barrel crude prices have yet to quash world
demand. And the only supply response to
date has been yet another round of cost
overruns and lengthy project delays running
the gamut from Canadian oil sands to
deepwater Gulf of Mexico wells.
With the basic laws of supply and demand
no longer operative in crude oil markets, we
are compelled to once again raise our target
prices for oil. We are lifting our target for
West Texas Intermediate by $20 per barrel
to an average price of $150 next year and
by $50 per barrel to an average price of
$200 per barrel by 2010. Under prevailing
refinery margins, that should translate into
a near-$7 per gallon pump price within two
years, a 70% increase from today’s already
record levels.
Higher oil prices spell stagflation for the US
economy next year, and we have marked
down our GDP growth forecast to barely
over 1% for 2009 (pages 9-11). The biggest
impacts will be in transport and none greater
than the adjustments on the road. After all,
America is the quintessential land of the
car.
As gasoline prices climb inexorably, American
driving habits are going to have to undergo
a massive change, mimicking the driving
habits long adopted by Europeans who have
faced much higher gas prices. Average miles
driven will likely fall by as much as 15%,
while the market share of light trucks, SUVs
and vans will be literally halved, reversing
the trend of the last fifteen years. But the
most fundamental, and unprecedented
change will be in the number of vehicles on
the road.
Over the next four years, we are likely to
witness the greatest mass exodus of vehicles
off America’s highways in history. By 2012,
there should be some 10 million fewer
vehicles on American roadways than there
are today—a decline that dwarfs all previous
adjustments including those during the two
OPEC oil shocks (see pages 4-8). Many of
those in the exit lane will be low income
Americans from households earning less
than $25,000 per year. Incredibly, over 10
million of those American households own
more than one car.
Soon they won’t own any.

[Guest]

Re: Gasoline still dirt cheap in the USA

Hard to argue with this:

"Nothing has been a more reliable indicator for an upcoming recession as the price of Oil. Every major bear market, every major economic decline has been preceded by a large spike in oil prices. The 73-74 recession, recession of beginning 80's and the recession of 2000. Oil prices jumped 80% between 1999 and 2000. Oil prices have been the most important indicator of major economic disasters. Whenever Oil prices rise about 80% from year ago levels, a fair chance does exist that a recession/bear market will follow."

Stephen Leeb