Tag: stockpiles

Temporary “hike” today shouldn’t last long

Today’s sneaky price hike was the result of a poor DOE report that showed gasoline stockpiles posting a surprising loss of 3.5mb when they were “expected” to rise marginally by 500,000 barrels.

The market yesterday was up 14-cents per gallon. It’s a weak excuse to rise prices, as only stations that bought gasoline today and late last night would be effected, but I guess they’ll try anything.

Prices on the market today are down, as I expected after a large rise Wednesday. We shouldn’t see stations that raised prices hold on long, I expect prices to drop down to the $3.70’s this weekend. I just hope the market hasn’t lost what we were enjoying… a decent size sell-off.

For now, shop around. Some stations didn’t even raise prices, perhaps because they didn’t need fuel, but even the stations that did hike shouldn’t hold out long. We’ll see prices continue their way down.

Patrick

PS- Benchmark station in Indiana just jumped 20 cents from $3.69 to $3.89…wowzers!

Another good day for consumers!

A good DOE report, good news here, good news there, congress acting… blah blah… prices are falling!

Wholesale gasoline prices, as you can see from the ticker on the left have been taking another beating this afternoon after a quiet morning.

Prices at this hour are down nearly another 11-cents… meaning nationwide price averages definitely should be going under $4 the next week or two! Grand Rapids and the Midwest could easily see $3.60’s soon, some places in Ohio should see under $3.50! This will definitely take time to reach… each day a station waits to replenish its supplies could save it hundreds, perhaps thousands of dollars!

Prices will be slow to come down, but they ARE falling!

The DOE report showed oil supplies dropping by a smaller than expected amount, and gasoline stockpiles rose AGAIN… they are now ABOVE the upper constraint of the average range for this time of year. Demand is way down, demand destruction is rampant and likely permanent. China is feeling extreme pressure to pass yet another price hike on to its gasoline consumers, which would yet another attempt to stifle increasing demand and huge losses from Chinese refiners.

Also, I’m debating making an opinion regarding any new drilling in Alaska (since everyone is making it a huge issue). If you’d be interested in hearing my opinion (from a non-partisan point of view), leave me a comment.

So again, in the mean time, I’d only put minimal amounts of gas in your tank, prices will be going down everyday!

Patrick

WAIT to fill if possible!

Wholesale gasoline and oil prices continue their fall today, with gasoline shedding ANOTHER 13 cents… making the two day total OVER a 30-cent drop! If you can wait to fill up, prices around the nation will slowly be falling the next few days and over the weekend…

Here in Grand Rapids and in the Midwest, we should see UNDER $4!

We also saw a great DOE report with a large rise in crude inventories AND a gain in gasoline stockpiles…

A great few days here folks…. wait to fill up as prices will come down! (Ideally, they should be about $4.09 today at MOST!)

Patrick

We’re in a predicament… spiraling downward

Oil is $146 a barrel today.

Want to know why U.S. supplies are OVER 50 million barrels below where they were last year? Want to know why oil prices keep rising? The two are directly connected, and its going to keep getting worse unless the dollar strengthens.

As I said, today oil hit $146- a new record. Why? Supply. OPEC wants you to think they’re supplying the market- and they are. But you see, why would oil companies want to pay $146/barrel to BUILD their inventories and risk getting stuck with a lot of expensive oil OR spend a HUGE amount of money stockpiling oil at these prices?

To get oil stockpiles where they were last year at this time… lets do the math… 53 million barrels is what it would take, multiply by today’s price- $146 and you get $7,738,000,000. It’d cost oil companies $7.7 BILLION dollars to buy 50 million barrels of oil to get stockpiles to last year’s levels. You may say “eh, that’s not that much money for them”… and perhaps you’re right. However, would you rather have oil companies spend the money on buying oil to sit around or spend it on refinery expansions? Its a waste and a HUGE risk for oil companies. If oil prices fell to $73, they’d lose HALF of what they spent on the oil.

Its a huge risk and they’d need the cash flow to be able to buy it. Then we ask WHY would they do this? It’d lower the profit from oil if supply was cushy, lowering their bottom line.

Now we come to OPEC who says supply isn’t the problem. They’re right… to an extent. While they claim they have oil ready for customers, there are no customers willing to buy at such high prices… especially for just the purpose of building oil stockpiles.

Let me just say- the only reason refiners are still producing gasoline is because refining that oil also produces heating oil/diesel, which is making a decent amount of margin for them. If diesel demand drops or if Europe’s demand lowers the refining margin, there will be TWO products that refiners make that are yielding LITTLE TO NO money. Thus refiners will shut part of their refineries resulting in… you guessed it… shorter supplies meaning higher gasoline and diesel prices.

So… we need oil! OPEC has it, but no company wants to buy it and risk storing it and losing value. We’re in a predicament… oil is there, no one wants it, prices are rising because inventories are falling!

Does that make sense?

Patrick

Try this again? Gas headed up soon!

EDITED AN EARLIER POST:
Prices are $4.25 @ benchmark in Indiana! GET GAS!

Earlier post:
While trees are coming down in Grand Rapids at this hour, I will unfortunately predict that our gas prices will rise. (I’m watching the TV… rain between 6-24″ deep in spots and people are willing to chance HYDRO-LOCKING their engines to get around town? Are people stupid?)

Let’s jump to the market: prices are rising today even with the DOE reporting gasoline stockpiles rose, however, oil inventories *DID* drop more than expected.

Look for $4.29 tomorrow, NOT because of July 4th, but because its like any other situation… prices climbed on the market, they will climb at the pump.

Gasoline prices slide on news China raising prices of fuels

Today’s market slid over 13-cents per gallon on positive news coming out of China: they’re finally lowering subsidies on oil and fuel products.

The market immediately turned south after realizing that one of the biggest developing nations was now passing on higher prices to its consumers. This has the potential to turn the whole market around as traders finally realize that sustained oil and gasoline prices at these levels will kill off demand, even in developing countries that rely on it.

With the added news that the Saudi’s are increasing oil production, the market may correct… however, I doubt any correction to bring prices down more than $1 as oil stockpiles are tens of millions of barrels lower than last year, and oil inventories remain much below average.

We still may be poised for a mid-to-late summer decline, as long as Hurricane season stays in check.

For now, wait to fill up. Prices should moderate through the weekend, with potential of $3.95’s coming out within the next 5-7 days. We also may be poised for a jump in the market tomorrow. It’ll either be a small jump or another significant decline.

Patrick

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