1. Japan is boosting oil and gas imports as their nuclear program melts down
In the past few months, the tsunami and nuclear disaster in Japan have slowed the need for energy. But in the coming weeks, oil imports are set to surge as the rebuilding gets underway and industrial production ramps up to meet demand.
2. On April 28th, Russia put a 44% tariff on oil exports
The people in Russia and their leaders have pointed fingers at the evil “Wall Street market speculator” and “oil price gougers” as the scapegoats responsible for high gasoline prices.
The political solution was to institute price controls. It has worked as well as expected...
Domestic prices that were now below the cost to produce oil caused sellers of energy to export their wares out of the country so that they could get a higher price. This in turn led to shortages within Russia. Buses and trucks stopped running due to lack of gasoline.
The politicians reacted by supplying even more government. The export tariff was raised to 44% to encourage domestic supply. This plan has failed; the gasoline producers would still be selling at a loss.
They are now sitting on their gas and waiting for better days.
3. Rolling blackouts in China
China is attempting to stop inflation by setting low prices for oil. This has created rolling blackouts in key industrial provinces that will take half a percent off of GDP.
4. India is paying billions in subsidized prices
India is in a similar boat as China. The country imports 73% of their fuel. Inflation is inching towards the double digits.
Do they allow the fuel prices to float — and feel the inflation and suffer the corresponding riots... Or do they continue to spend billions they can’t afford to keep prices low?
5. Sudan rescue workers can't move food because they have no gasoline
In war-torn Sudan, a border village was attacked last weekend by the North. Doctors Without Borders and other aid workers can’t get in to move food and shelter, due to the lack of gasoline for the trucks.
6. The Mongolian stock market lost 30%
Mongolia imports the vast majority of its gasoline from Russia — or did before April 28th...
The stock market fell in the past month because miners can't run their gear without diesel. I was scheduled to speak at an investment conference in UB that may be canceled due to lack of transport.
That said, Mongolian-based oil companies are doing very well.
7. Kenya is rationing gasoline
Two weeks ago, I was in Kenya. Many gas stations didn’t have any more fuel to sell. The shortage lead the news for the entire week I was there.
The U.S. has an effective ban on offshore drilling. There have been no new offshore oil drilling permits issued by the Federal Government since the BP spill last summer.
8. Libya is in chaos
Our newest war in the Middle East has entered its fourth month. More infrastructure is destroyed daily.
9. Chavez nationalized failure
Venezuela oil production continues to slide due to corruption and poor management. From UPI:
State-run oil corporation PDVSA sacked half of the directors on its board after the energy giant's pension fund was found to have lost $453 million in a Ponzi scheme linked to an investor in Connecticut. It was the latest of financial woes to strike the troubled oil company. The fraud apparently took place in 2004 but was discovered only recently.
10. No nukes
Germany is halting all nuclear power production by 2020; seven older plants have already been closed.
Nuclear energy is now supplying 25% of Germany’s energy needs.
Despite what you hear out of the green party, the majority of this power will be replaced by oil or natural gas — not by wind and solar.
11. Global oil production is flat and falling
oil june 2
12. Exports are expected to decline
exports june 2
13. The U.S. dollar keeps falling
dollar june 2
14. The Saudis can’t help
A senior Saudi oil official recently said the Kingdom “expects oil production to hold steady at an average of 8.7 million barrels per day to 2015.”
Domestic Saudi oil demand is increasing 10% per year. So expect a net decline in exports from our “friend” in Arabia.
And the final reason that oil stocks are going up...
15. Energy stocks have found support
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Showing posts with label $5 a gallon gasoline. Show all posts
Showing posts with label $5 a gallon gasoline. Show all posts
Thursday, June 2, 2011
Tuesday, March 22, 2011
The Price Of Oil
Most people believe that the U.S. dollar is the currency of the world, but really it is oil. Without oil, the global economy that we have constructed simply could not function.
That is why it was so alarming when the price of oil went above $100 a barrel earlier this year for the first time since 2008. Virtually everyone agrees that if the price of oil stays high for an extended period of time it will have a highly negative impact on the world economy.
In particular, the U.S. economy is highly, highly dependent on cheap oil. This country is really spread out and we transport goods and services over vast distances. That is why the following facts are so alarming....
*The average price of a gallon of gasoline in the United States is now 75 cents higher than it was a year ago.
*In San Francisco, California, the average price of a gallon of gasoline is now $3.97.
*According to the Oil Price Information Service, U.S. drivers spent an average of $347 on gasoline during the month of February, which was 30 percent more than a year earlier.
*According to the U.S. Energy Department, the average U.S. household will spend approximately $700 more on gasoline in 2011 than it did during 2010.
Rising prices of gas at the pump can be a real budget killer. While we can't do anything about the world events affecting oil, we can take charge of our family budget. Learn how to save $0.40 to $0.90 per gallon of gas with XP3 from Fuel Direct!
That is why it was so alarming when the price of oil went above $100 a barrel earlier this year for the first time since 2008. Virtually everyone agrees that if the price of oil stays high for an extended period of time it will have a highly negative impact on the world economy.
In particular, the U.S. economy is highly, highly dependent on cheap oil. This country is really spread out and we transport goods and services over vast distances. That is why the following facts are so alarming....
*The average price of a gallon of gasoline in the United States is now 75 cents higher than it was a year ago.
*In San Francisco, California, the average price of a gallon of gasoline is now $3.97.
*According to the Oil Price Information Service, U.S. drivers spent an average of $347 on gasoline during the month of February, which was 30 percent more than a year earlier.
*According to the U.S. Energy Department, the average U.S. household will spend approximately $700 more on gasoline in 2011 than it did during 2010.
Rising prices of gas at the pump can be a real budget killer. While we can't do anything about the world events affecting oil, we can take charge of our family budget. Learn how to save $0.40 to $0.90 per gallon of gas with XP3 from Fuel Direct!
Sunday, February 27, 2011
Gas Prices May Hit $5 Per Gallon By Memorial Day
Earlier this week, market analysts warned that the price of gas may reach $5 by the end of summer. Now they are saying we could see that price by Memorial Day as the situation in Libya deteriorates.
On the S&P 500 today, the price of Brent Crude breached $119 a barrel during a period of frantic trading. Brent Crude is used to price two thirds of the world’s internationally traded crude oil supplies. The price was below $100 yesterday afternoon.
The world’s oil benchmark jumped almost $17 this week and it appears there is no end in sight as the situation in the Middle East heats up.
Saudi Arabia is under pressure to boost output as the prospect of a Libya production cutoff looms.
Oil traders said Saudi talks with Europe signal that the oil kingdom understands that the political crisis in Libya is now an oil supply crisis.
On Thursday, the Italian oil company Eni, the most active company in Libya, said oil production from the North African country has dropped to just a quarter of normal levels.
“You can only expect the price to go up. It is fear of the unknown. The risks are all to the upside,” a senior oil trader told the Financial Times. “Saudi Arabia needs to respond.”
Popular uprisings spanning the Middle East have yet to seriously affect Saudi Arabia. In an effort to stave off rebellion, earlier in the week Saudi Arabia’s ailing King Abdullah promised to lavish around $37 billion on his subjects. The money will go for housing, education, social security, and other benefits.
In neighboring Bahrain, a similar pay-out scheme failed to stem protests that turned violent. King Hamad had offered to pay $2,650 to every Bahraini family. The protests calling for political change have seriously damaged the small nation’s economy and tourism industry. Standard and Poor’s lowered its credit rating this week and Bahraini authorities canceled next month’s Bahrain Grand Prix Formula One race, the pride of the royal family.
According to Saudi rights activist Hassan al-Mustafa, Abdullah’s spending won’t solve anything. The Saudi people want “real change,” such as an elected parliament and more rights for women. That sort of evolution “will be the only guarantee of security of the kingdom,” explained al-Mustafa.
Hundreds of people have backed a Facebook campaign for a Saudi “day of rage” in March in response to the lack of political change in the kingdom and it solidarity with other popular rebellions sweeping the region.
In response to the unprecedented rise in oil prices, analysts are predicting the price of gasoline will shoot up ten to fifteen cents per gallon over the next few days.
Analytics economist Chris Lafakis put the number even higher. Oil prices have already jumped $12 this week, which means that drivers can “expect gas prices to be 37 cents higher” in the coming days, he told CNN.
The national average price of a gallon of gasoline rose 3.4 cents overnight to $3.228, according to AAA.
The answer to high gas prices: Xp3 Through Fuel Direct saves between $0.40 to $0.90 per gallon.
On the S&P 500 today, the price of Brent Crude breached $119 a barrel during a period of frantic trading. Brent Crude is used to price two thirds of the world’s internationally traded crude oil supplies. The price was below $100 yesterday afternoon.
The world’s oil benchmark jumped almost $17 this week and it appears there is no end in sight as the situation in the Middle East heats up.
Saudi Arabia is under pressure to boost output as the prospect of a Libya production cutoff looms.
Oil traders said Saudi talks with Europe signal that the oil kingdom understands that the political crisis in Libya is now an oil supply crisis.
On Thursday, the Italian oil company Eni, the most active company in Libya, said oil production from the North African country has dropped to just a quarter of normal levels.
“You can only expect the price to go up. It is fear of the unknown. The risks are all to the upside,” a senior oil trader told the Financial Times. “Saudi Arabia needs to respond.”
Popular uprisings spanning the Middle East have yet to seriously affect Saudi Arabia. In an effort to stave off rebellion, earlier in the week Saudi Arabia’s ailing King Abdullah promised to lavish around $37 billion on his subjects. The money will go for housing, education, social security, and other benefits.
In neighboring Bahrain, a similar pay-out scheme failed to stem protests that turned violent. King Hamad had offered to pay $2,650 to every Bahraini family. The protests calling for political change have seriously damaged the small nation’s economy and tourism industry. Standard and Poor’s lowered its credit rating this week and Bahraini authorities canceled next month’s Bahrain Grand Prix Formula One race, the pride of the royal family.
According to Saudi rights activist Hassan al-Mustafa, Abdullah’s spending won’t solve anything. The Saudi people want “real change,” such as an elected parliament and more rights for women. That sort of evolution “will be the only guarantee of security of the kingdom,” explained al-Mustafa.
Hundreds of people have backed a Facebook campaign for a Saudi “day of rage” in March in response to the lack of political change in the kingdom and it solidarity with other popular rebellions sweeping the region.
In response to the unprecedented rise in oil prices, analysts are predicting the price of gasoline will shoot up ten to fifteen cents per gallon over the next few days.
Analytics economist Chris Lafakis put the number even higher. Oil prices have already jumped $12 this week, which means that drivers can “expect gas prices to be 37 cents higher” in the coming days, he told CNN.
The national average price of a gallon of gasoline rose 3.4 cents overnight to $3.228, according to AAA.
The answer to high gas prices: Xp3 Through Fuel Direct saves between $0.40 to $0.90 per gallon.
Wednesday, January 26, 2011
The State Of the Union
U.S. government strategies like the ones that President Barack Obama outlined in last night's State of the Union address virtually guarantee that we'll see $150-a-barrel oil - perhaps as soon as mid-summer. A price increase of that magnitude could result in $5 a gallon gasoline. But here's the thing ...
You don't have to be a victim! The average driver at today's gas prices ($3.19) is saving $0.77 per gallon As gas goes up the savings go up as well.
So we all have a choice, be a victim of the economy and let the high gas prices eat your budget up or join Fuel Direct and start saving on your next tank of gas today!
You don't have to be a victim! The average driver at today's gas prices ($3.19) is saving $0.77 per gallon As gas goes up the savings go up as well.
So we all have a choice, be a victim of the economy and let the high gas prices eat your budget up or join Fuel Direct and start saving on your next tank of gas today!
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