Gas up still

[James_Mazetta]

Gas in slowly rising again as the price of a barrel of oil closes in on $110.00 a barrel. Where are all those so called experts who said last year that this year we will be around $50.00 a barrel? Starting to only beleive in Joe's charts.

[James_Mazetta]

From the Ap today....

NEW YORK (AP) -- Retail gas prices will peak near $3.60 a gallon in June, but prices at such lofty levels will make many Americans think twice about hitting the road this summer, the Energy Department said Tuesday.
ADVERTISEMENT
 
 
High prices and a weak economy are expected to cut demand for gasoline by about 0.4 percent during the peak summer driving season, the department's Energy Information Administration said in a monthly report on petroleum supplies and demand. Overall consumption of petroleum products will drop by 90,000 barrels a day this year. Previously, the EIA had projected petroleum consumption would rise by 40,000 barrels a day.

The government had previously estimated that gas prices would peak near $3.50 a gallon. Many analysts predict prices will rise higher than the EIA's latest estimate, and approach $4 a gallon.

[Maria_Lynn_Lamb]

well i think this is the kick in the butt we all need to start walking/riding a bike more.

once the weather gets nice (!!!!!) i will either walk to the circle K or WaWa, or ride my bike. yea, that should be fun LOL. the kids will like it anyways.

maybe i will get a pee-wee herman basket for my bike so i can put my milk and bread in there LOL

oh that is some visual!!!!!!!!!!!!

[Joe Parente]

It's not going to stop going up, Hawk. Outside of a little drop in Fall($3 might be the new floor price), we'll be back up higher next Spring. Figure on food prices doing the same thing. What they don't say in that article is that the US economy virtually follows gasoline consumption. When it goes up, so does the economy, when it goes down, so does the economy. Look for tourist destinations to suffer this Summer.  We could be starting that spiral down I've been harping on for a few years now. At least development around here has more or less stopped. Oh, I should have a new chart for you by the middle of next week. Just waiting on the EIA to release the new International Petroleum Monthly.

Yes Maria, ride that bike. Be thankful you don't use diesel. $4/gallon today in Farmingdale. That will end up being reflected in food costs too.

[Rick_Ryan]

Look for tourist destinations to suffer this Summer.  

Say what???

Weak dollar = INCREASED tourism.

Unless you are referring to just American tourists?  I predict a huge increase in tourism from our neighbors in Europe this summer.

Peace

[Joe Parente]

Say what???

Weak dollar = INCREASED tourism.

Unless you are referring to just American tourists?  I predict a huge increase in tourism from our neighbors in Europe this summer.

Peace

Sorry Rick. I wasn't clear. Maybe I should have said vacation spots or something. Yes, more Europeans and Japanese, etc are coming here for tourism, but even doubled, that sector is nothing compared to leisure and vacation spots that only Americans go to.

For instance, not many Europeans are planning on a trip to Point Pleasant this Summer, but you can bet that many Jersey and Pennsylvania residents are thinking of taking one or two less trips there this year. Places like that will be hurting.

Now, I promised Hawk a chart, and here it is. This is the new world crude oil production from the EIA, and the good news is that there's a new record for oil production in January. The bad news is the new record is only 168,000 barrels a day higher than May, 2005, the old record. That's an increase of 0.023%, a statistical blip.  

In any case, we still appear to be on a production plateau, in spite of $110 oil and Saudi assurances that they have another 2 million barrels per day in "spare capacity" and claim that "the market is well supplied" when poor countries can't get enough oil for heat, irrigation or cooking because they can't afford the high prices.

[Joe Parente]

The next time you hear some oil "analyst" talking about how there's plenty of oil, demand is down and the price should be coming down soon, keep these two articles in mind and wonder what the hell he's talking about.

China has shortages...
Associated Press

China Facing Renewed Fuel Shortages

By ELAINE KURTENBACH – Mar 24, 2008

SHANGHAI, China (AP) — China's leaders are facing renewed pressure over shortfalls in diesel and gasoline, with lines growing at filling stations in major cities Monday as the gap widens between international crude oil values and centrally controlled fuel prices.

The shortages, first reported in southern and inland China, appeared to be spreading to the wealthier areas in the north and east as filling stations struggled to get shipments from refiners. Four stations contacted Monday in Shanghai said their daily diesel shipments had not yet arrived.

"You could try your luck later in the day. Now, we have no diesel available at all," said a staffer at a filling station in the city's eastern Pudong district. "I can't promise you anything, though, for once it comes, it will soon run out," said the station attendant, who would not give his name because he was not authorized to speak to the media.

Staff at another filling station said they were on duty round the clock, waiting for diesel shipments.

In Beijing, which until now appeared to be relatively sheltered from such problems, staff at 20 filling stations said that due to the shortages they were not selling diesel or were rationing how much customers could buy.

Shanghai authorities were downplaying the shortages and urging drivers to remain calm and not hoard fuel.
[more at link]

And they're buying up all the oil they can, using the dollars we send over there for cheap underwear and toilet seats.
The Canadian Press

China's oil imports hit record 17.3 million tons in March, surge past 4 mln barrels a day

2 days ago

SHANGHAI, China — China's oil imports surged to a record 17.3 million tons in March, the government reported Friday, as the country nearly unseated Japan as the world's second-largest buyer of foreign crude oil.

China imported an average of just over four million barrels a day, according to calculations based on data from China's Customs Administration.

China imports nearly half of the oil it uses. The United States, which imports about 10 million barrels of oil a day, remains by far the biggest consumer.

Japan imported about 4.4 million barrels of oil a day in February, based on data from the country's Natural Resources and Energy Agency.

China's oil imports in the first quarter of this year rose 15 per cent from a year earlier, to 45.5 million tons, the customs data showed.

The value of those imports jumped 91 per cent, year-on-year, to $30 billion, as the price of crude oil surged, the customs office said.

An unexpected decline in U.S. crude and gasoline inventories drove oil prices to a trading record of $112.21 a barrel Wednesday. Crude futures held well above $100 a barrel for most of March as a weak dollar prompted investors to buy hard commodities such as oil and gold as a hedge against inflation.
[more at link]

Don't be surprised when oil and gasoline continue to go up this year. Poor Rick will never see his beer.  

[James_Mazetta]

Not getting any better and it won't sorry to say.

[James_Mazetta]

Oil hits another high at over $117.00 per barrel. Yikes.

[Pat Garaffa]

$3.29 at Wawa and $3.31 at The World Gas on West Farms Road & Route 9 this morning.   I'm sure Exxon and the other thieves are even higher.  

Thank god for zero car payments and cheap insurance.  If it wasn't for that I would have dumped my Explorer because it's losing value by the minute!   At $3.50 a gallon, I won't be able to give it away.   The value is so low now that the insurance company would consider the car "totaled" if the headlight burned out!

Two people I work with have a Navigator and an Aviator.  A fill-up must be approaching $100.  Sucks to be them.  

[Ray_Spengler]

Gasoline was $3.09 about a week ago, ah... the good old days.

[Joe Parente]

I'd venture to predict (well, it's not really a prediction since the wholesale price is already close to $3.00 a gallon) that we'll see $3.50 by the middle of May, and perhaps top out about between $3.80 and $4.00 in June, but it seems that my posts are objects of ridicule these days, so I won't bother.

Oh, I forgot, peak oil is just another of my wild fantasies, like global warming, constant growth is impossible in a finite environment and the fact that banks poof money into existence when they lend it. Never mind, gas will be under a dollar by next year and we'll get a ton of snow this winter and house prices will be up 20% next summer. Pay no attention to me...

[James_Mazetta]

I like your charts Joe even though sometimes hard to follow but you seem to be pretty much there. Like I always say, put 10 experts in a room with the same problem and you get 10 different answers. Oil is up and oil companies profits are way up. Ah the american dream. Gas prices will go up to about $4.00 like you say and who knows when they will come down if any.
Funny we use to laugh at $2.00 a gallon and say never then we laughed at $2.50 a gallon and so on. The gas priced are high enough that even $3.00 a gallon is ok to most folks.
Sorry Pat about your friends useless vehicles but that's life. We are getting around 30 mpg city driving now and looking for better. The trucks are getting bigger and bigger and the parking spaces are getting smaller.

[Pat Garaffa]

I wouldn't bet against Joe or his charts either.  World Gas up another 4 cents today to $3.35.  I'm sure that $3.00 is the new "floor" and anything lower is ancient history.  The irony is that we'll only be happier when gas plummets all the way back down to the $3.00 level.

And don't get me started on house prices.  Our predictions and estimates indicate a floor in prices in late spring of 2009 and another 10% more to go until we get there.  Maybe more.   Homes over 600K in Howell are now at a 28 month supply level.

The good part is how bad we are pummeling the banks on these prices.  They are taking some really low offers on the bank owned and pre-foreclosed properties.  Much less than we ever imagined.  (Maybe they know more than us?). Recent stats show they are getting 43 cents on the dollar if they foreclose on the property so it's in their best interest to accept offers as low as 30-35 and 40% off the mortgage amount.  The bank eats the balance.  

Anyone interested in a bargain should give me a call.  People are scared and this is just a blip. History will prove that this next 6-12 months is/was a great buying opportunity.  

I just sold a nice one in Heritage Point.  The home was on a premium lot, backed up to the woods with an inground pool for 305K and that same house was 379K only 18 months ago.  An identical home, without the big lot or pool, is currently on the market for 345K.  That's a lucky buyer!  

I have a personal offer in on a condo in Evergreen Woods.  The owner is in bankruptcy and I am dealing with the trustee.  I may pull my offer because they are still undecided after 3 weeks.  The prices have dropped so fast that my low offer is not so low anymore!  

Even the "great 343K deal" I spoke of in Lexington Crossing is not so great anymore.  Prices are dropping all around it.  Even the buyer pulled out and found something better at a lower price.   It's back on the market and available if anyone is interested and it may go lower.   4 bedrooms, 2.5 baths, garage and a full basement.  Asking price is 355K but it can be had for 340K or less.   The neighborhood was $425-450 a year ago.

Pat's sage advice - Save your money OUTSIDE your home and NEVER rely on equity for your savings or retirement.  And certainly don't tap that equity like it was a giant piggy bank unless you absolutely know what you are doing.  Want to buy another investment property? ok, go tap it.  Want to buy a depreciating asset like a Plasma TV or a boat - not ok.    

Remember "Your nest is NOT your nest egg!".      

  

[Pat Garaffa]

And another 4 cents today!  $3.39 and climbing.