Crude Oil closed at almost $130 dollars a barrel today, and just in time for Memorial Day, $4 dollar per gallon gasoline coming to a pump near you! You better hope that diesel VW you ordered gets the mileage promised, because diesel went up 2 pennies overnight and is now selling at a record $4.54 a gallon. Whoopee!
Now comes the brain storm from some “experts” in Washington suggesting since we have now stopped pumping oil into the Strategic Petroleum Reserve, the government ought to start selling off some of our stockpile to lower the price of oil. What a fraud! The idea is more smoke and mirrors, emotional knee jerk in hopes of fooling people into believing Washington is coming to the rescue of their straining pocket books.
The oil industry experts I have consulted tell me if the government pumped out the same 70- thousand barrels a day it was pumping into the Strategic Reserve, the amount would barely register as a drop in the refinery stream. Translation? Selling off our oil stockpile will not have any impact at all on gasoline or diesel prices.
What will lower gasoline prices? Read here, my blog from May 15th.
Very good read. What did you think of the senate hearing before the judiciary committee? The CEO from Shell Oil had it dead on with the drilling bans in the US as well as how other countries such as India and China subsidize the oil price to help boost their developing nations economy… which I am not saying our government should do that at all.
Open up oil fields until we find a stable solution as well as tax cuts will boost our economy and drop the cost of food in the process.
Great post,
I have to retype this because my connection dropped.
I found it dead on what CEO of Shell oil, John Hofmeister, had to say and how it applies to the current gas prices. The oil ban in searching for and producing fuels in the US is a major, if not top, factor of why prices are so absurd. I find it rather appalling how I’ve seen blogs and web sites that claim the Shell, Exxon-mobile, and others are to blame when out own government is to blame.
Other countries such as China and India are subsidizing to help develop their growing economies. I am not saying the government should pay for our gas, however a drop in the taxes on all fronts would be helpful on boosting the dollar.
VIENNA, Austria _ Oil prices spiked a new trading high Tuesday, sweeping past US$129 a barrel as supply concerns intensified the momentum buying that has lifted crude deeper into record territory.
The June contract for light, sweet crude traded as high as $129.31 in electronic pre-opening trading on the New York Mercantile Exchange before settling back to $128.75, up $1.70.
Prices are currently being driven higher by supply concerns. This latest surge comes after OPEC´s president was quoted as saying his organization won´t increase its output before its next meeting in September.
The imminent expiration of the June contract is adding to the volatility. The contract will end at the close of trading Tuesday.
The contract reached a new closing high of $127.05 Monday after Algerian Energy Minister Chakib Khelil, the current president of the Organization of Petroleum Exporting Countries, was quoted by a government newspaper as saying OPEC won´t increase its output during the U.S. summer driving season, which begins this weekend. OPEC´s next meeting is scheduled for Sept. 9.
Concern about supply has recently become the primary driver of the market, replacing earlier worries about a weakening dollar, and not even Saudi Arabia´s promise last week of an additional 300,000 barrels of crude a day could alleviate those new concerns.
Despite that pledge from the world´s leading oil producer and the U.S. move to temporarily stop filling government stockpiles, prices have shown no indication of stopping their record run.
Through Monday´s close, the front-month contract has hit nine trading or closing records in 11 sessions. Analysts have said speculative buying has also contributed to oil´s record high run.
In other news lifting prices, independent refiner Holly Corp. said a key unit at its New Mexico refinery was shut down for repairs, cutting estimated May gasoline production by as much as 756,000 gallons per day. The occurred while the fluid catalytic cracking unit was being brought back online from a previous May 7.
The refinery in Artesia, New Mexico, is Holly´s largest.
As oil prices reach new heights, so have gasoline and diesel costs.
“Average gasoline prices in the U.S. rose for an eighth straight week and for the 15th time this year, up 1.8 per cent or 6.9 cents to a record $3.791 a gallon,” noted Stephen Schork in his Schork Report. “Gasoline at the pump is averaging 28.5 per cent above last year´s pace.”
Drivers in some parts of the U.S. are paying considerably more, however. Gas pump prices in parts of California have been stuck above $4 a gallon for weeks now.
In other Nymex trading, heating oil futures rose 0.14 cent to $3.7665 a gallon while gasoline prices rose 4.89 cents to $3.2855 a gallon. Natural gas futures rose 17.9 cents to $11.133 per 1,000 cubic feet.
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