Month: January 2008

Housekeeping: Refinery Status Updated, DOE Report

I’ve taken some time to update the Refinery Status page with the latest knowledge of refinery issues, make sure to check it out by clicking the link at the top of the page “Refinery and U.S. Pricing Status”

Now, on to the DOE report, which was good, except for a few things.

The bad-
Refineries utilized just 85% of their capacity- the lowest in nearly two years… BUT gasoline inventories still gained by nearly 4 million barrels. We’re sitting just under last year in terms of gasoline stockpiles… still room for improvement before the spring run up!

The good-
Oil inventories rose, again… gasoline inventories rose, again.

Look for prices to fall back under $3 with ease. No concern for a price hike for some time.

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Same set up as a week ago: price hike coming

Comment on Sunday’s prediction: Right on the mark and CORRECT, as prices rose to $3.05 in honor of Dr. Martin Luther King.

Sunday, January 27, 2008, 7:40 PM: Although the stock market troubles early last week also knocked down energy wholesale prices, the market recovered … and so did energy wholesale prices! We seem to be in the same spot we were a week ago, with retail prices as low as $2.80 in town and wholesale prices such that we could get a price hike back to as much as $3.12. So, I predict a price hike on Monday or Tuesday in the neighborhood of $3.09.

Florida Gas Prices- similar… slow falls expected

Good afternoon from Orlando, Florida!

Thanks to Ed for writing his predictions this week as I took a short respite from things.

I noticed in Florida, a state with NO refineries, prices similar/lower than Michigan. They also have higher demand while Michigan has lower demand due to the Winter weather… so what gives? Florida is not a “Speedway State”. They have zero Speedways, and therefore, no brute force raising prices.

I saw a low of 2.85 near Tampa, FL, and a almost incorrectly priced high of 3.29 in Pompano Beach, FL (I say almost incorrect due to the fact that 3 stations had that price and two blocks away, the price was 3.09… ODD!)

Anyway, the time off was nice, and Wednesday’s DOE report was equally nice, with a good gain in gasoline stockpiles (now above the average range for this time this year).

In other news, could Shell be artificially inflating prices in Australia? More on that later! I’ll see you in Grand Rapids soon!

Patrick

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Price Hike Monday or Tuesday to $3.09

Comment on previous prediction: There was no price hike last week, and prices keep falling, so the prediction was CORRECT.

Sunday, January 20, 2008, 11:30AM: By my calculations, wholesale prices correspond to retail prices in a range between $2.87 and $3.09. With prices as low as $2.80 in the area, we’ve got a price hike coming either Monday or Tuesday, to ask much as $3.09, but, if the retailers feel generous, then just to $2.99.

Price hike or price collapse?

Wednesday, January 16, 2008, 4:30 PM:  At the beginning of the month, oil hit $100 a barrel and the S&P 500 was trading at 1468.  Today, oil is down 10%, and the S&P is about 100 points lower, with recession fears among traders of both oil and stocks.  So, wholesale gas prices have been dropping nicely, and based on the close today, we have a retail range of $2.85 to $3.05.  Given this, Speedway might hike tomorrow to $3.05, but I doubt it.  Price hikes usually don’t occur during quick wholesale drops.  So, the prediction is no price hike until at least Monday.

DOE Report: Much more balanced this week, good gains!

Highlights from today’s weekly release of the DOE Petroleum Stockpile Data:

>Refineries operated at 87.1% of capacity… a huge decrease from the week previous!
>Gasoline production dropped roughly 200,000bpd compared to last week
>Crude oil imports seem on a rebound: they averaged 10 million barrels per day, about 220,000bpd higher than the same period last year

The GOOD news:
>Crude oil inventories rose by 4.3 million barrels (first gain in months- this is a large gain as well!)
>Gasoline inventories rose by 2.2 million barrels last week to put us in the upper constraints of the average range
>Distillate inventories rose by 1.1 million barrels, but continue to be outside the lower limit of the average range

The not-so-hot news:
>Total petroleum demand is up by 2.2% over the same period last year (even with high prices!)
>Gasoline demand for last week was up 1.2% over the same period last year (again- WITH the higher prices)

Other news:
The SPR (Strategic Petroleum Reserve) added a whopping 1.5 million barrels to its reserves, the largest increase I’ve ever seen (usually very small “injections” like 50,000-200,000 barrels). The U.S. is now sitting on 698.1 million barrels in its SP Reserve. This is the highest ever, and is sure to continue to grow as we inject as much oil as possible (capacity is somewhere north of 700 million barrels)

Look for oil and gasoline to drop today as continued worries about recession and news of large gains feed the bears…
There is still concern of a hike- not because of market conditions, but because of a loss of profit margin from local retailers that have dropped prices “too fast”. Watch for a reset to 2.99-3.05!

Patrick

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