[Ninong]

Crude Oil now trading at $114.00/bbl.

[Ninong]

Crude Oil now trading above $115.00/bbl.

NEW YORK - Crude futures made their first foray past $115 Wednesday, propelled to a new record by concerns about how much gas will be available during the peak summer months.

Inventories of gas fell by 5.5 million barrels last week, according to the Energy Department's Energy Information Administration, a much bigger decline than forecast by analysts surveyed by Dow Jones Newswires. Light, sweet crude for May delivery responded by rising as high as $115.07 on the New York Mercantile Exchange, and later settled up $1.14 at a record $114.93 a barrel.

[scooterman]

time to start walking to work lol

[Ninong]

Crude Oil now trading at $117.00/bbl.

P.S. -- This is really getting out of hand. At this rate we will see $125.00/bbl oil by June. Gas will be over $4.00/gal for regular nationwide. Premium will top $5.00/gal in many areas of California in June if this keeps up.

P.P.S. -- Crude oil closed on the Nymex at $116.54 per barrel, which is a new closing record. Crude also hit a new intraday record of $117.00 in electronic trading earlier this session. Oil prices are up more than 23% this year.

[Ninong]

Crude Oil now trading above $118.00/bbl.

Crude oil hit $118.45/bbl this morning.

We will probably see $125.00/bbl before the middle of June. I have no idea when it's going to correct and pull back to around $75.00/bbl but we could easily see $150.00/bbl oil within the next 12 months.

[Ninong]

Crude Oil now trading above $119.00/bbl.

Crude oil is currently trading at $119.50 per barrel after hitting a new all-time high of $119.90.

The euro is currently trading above $1.60, which is a new high. It's now up more than 30% in the last two years vs. the dollar.

P.S. -- Since the Republicans took over the White House in January 2001, the price of gold has quadrupled, the price of crude oil has more than quadrupled and the euro has doubled in value against the dollar.

[Ninong]

California Gas Crunch

California is home to the nation's highest average gas prices. Here is a glimpse of prices across the state, according to AAA as of April 23:

• San Francisco $3.97 per gallon; last year $3.47
• Los Angeles $3.85; last year $3.32
• San Jose $3.89; last year $3.36
• Sacramento $3.86; last year $3.30
• San Diego $3.88; last year $3.35

That's for unleaded regular.





California is home to the nation's highest average gas price, $3.87 for regular unleaded; diesel is pushing $4.43 a gallon, according to Troy Green, with AAA.

San Francisco is the most expensive city, averaging $3.97 a gallon. However, a drive around the city shows many stations have jumped over $4.

The national average for regular unleaded is $3.53 and rising daily. Last year at this time, it was $2.86 per gallon. According to AAA, 24 states and the District of Columbia are averaging at or above $3.50 a gallon for regular unleaded. The state with the lowest gas is New Jersey, at $3.34 per gallon.

Here.

P.S. -- Regular gas has been above $5.00/gal along the Big Sur coast for the past several weeks.

[bguile]

Please help my feeble non-political mind understand why are gas prices just going up? In my area it goes up another $.05 every two or three days. Is everyone buying oil stocks and effecting the price or what?

[Ninong]

Gasoline prices are rising because the price of crude oil is rising. The fundamental reason that the price of any commodity rises is supply and demand. When demand rises faster than supply, prices rise. When supply rises faster than demand, prices fall. However, it's much more complicated than that with the price of oil.

Crude oil is priced in U.S. dollars and the U.S. dollar has plunged in value against other currencies in the past several years. The euro was valued as low as $0.82 in 2001 but it's valued at $1.60 today. That means that without even considering supply and demand or worldwide political risk (terrorism), you have to factor in an increase of 100% just because of the drop in the value of the dollar.

Demand is rising because the previously undeveloped Third World countries are developing at a very rapid pace (especially China and India) and they are consuming a lot more of the world's limited supply of oil than they did just five or six years ago. China's economy has been growing at double digit annual rates for the past decade. Demand is rising and supply is not keeping up. The world will run out of oil. That much is certain. The only thing that is uncertain is whether we will run out in 50 years or 100 years.

There are other factors at play, too, such as the fact that U.S. oil companies have refused to add to refinery capacity. The Bush administration has done nothing to improve the situation. In fact, in spite of President Bush's promises right after 9/11, we now import more oil today than we did on 9/11.

Recent Federal Reserve actions designed to prop up the financial sector (banks, mortgage companies, investment banks) have had the undesirable but inevitable side effect of trashing the dollar, resulting in higher prices for everything we import, including oil. Lowering interest rates will always result in a lowering of the value of your currency unless all other countries also simultaneously lower their interest rates. And the Federal Reserve has recently started pumping hundreds of billions of dollars into the money supply, which dilutes the value of the dollar. And they are now buying up the crappy mortgage-backed securities held by banks and investment banks. In order to do that, they had to open up a special facility to accomodate the investment banks because investment banks are not the same as regular banks. Some European central banks have followed suit and they are now accepting crappy mortgage-backed securities held by their banks. I used to think that the total worldwide losses from the subprime mortgage debacle would be somewhere around $400 billion but I have read some informed commentary putting the eventual total losses near $1 trillion. Not exactly chump change.

[bguile]

Originally Posted by Ninong

Not exactly chump change.

Definitely not. Ok, that makes some sense to me. So then now, it makes a lot of sense that the same drops in interest rates and "blank checks" given to mortgage companies has hurt the economy (and/or rather the dollar) more than it helped due to the abuse by mortgage companies with these ridiculous ARMs. And now they think that a measly $600-$1200 refund is just going to change ALL of this around?? Most people are probably just going to use it to pay off some type of debt, like I will. Well, actually I owed this year so I won't even see that.

[Ninong]

I found this hilarious cartoon explanation of the subprime mortgage mess. It may take a minute or two to load. It's well worth the wait. It's sort of a slide show consisting of 45 pages. You have to turn the pages. There is no sound, so I guess it's safe for work as long as no one else is reading some of the text because they do use a few 'adult' words every now and then. Highly recommended!!!

[bguile]

Oh that is hilarious. It's even sadder that it's true. I knew in my gut when I bought last year that this would happen, but I fell for the "value of your home doesn't go down" bit too. I went along because we were offered an interest only fixed loan and the mortgage was affordable, but of course life happened and my wife was on bed rest while pregnant, the original person that worked on our loan left the company and lost our original loan papers and we were basically forced into a negatively amortizing loan because the builder was ready to sell. Now we're stuck in a situation where we have to "sell off" the little bit of equity in our home to get a reasonable mortgage due to closing costs. I feel lucky to be able to have something left to even to be able to do it. A lot of people have lost their homes AND the debt doesn't just go away either.

[Ninong]

Mortgage foreclosures in California in the first quarter of 2008 are up 326% compared to the same period in 2007. That's statewide. In some hard-hit areas, foreclosures are up more than 1,000% compared to last year.

[Ninong]

I forgot to mention that another reason the dollar is going down the drain is because of our balance of trade deficit and the huge annual budget deficits being run up by the Bush administration to fund the war in Iraq and tax cuts for the very wealthiest Americans. We have been borrowing from China and Japan to fund our wars. This way the pain won't be felt by the current generation, just the children and grandchildren of the current generation. That's the Republican way.

Canada's currency, for example, has risen substantially in value against the U.S. dollar over the past five or six years but that's because Canada balances their federal budget and they don't import oil, they export it. Canada has balanced their national budget for at least the last ten years, or more, under both Conservative and Liberal governments.

[bguile]

Originally Posted by Ninong

Canada has balanced their national budget for at least the last ten years, or more, under both Conservative and Liberal governments.

Interesting. So what's our problem? Since Reagan has there been no administration that has looked out for the interests of the american people? It sounds to me like the Bloods and the Crips (Dems and GOP) are only interested in their rule of government and the rest of us peons are left to suffer the consequences. I think if you want to really help the economy, start taking money from these politicians' pensions and salaries and then see what happens. Everyone knows that a "government worker" is the biggest oxymoron in the english language and has been the running joke for as long as I can remember. Big government does nothing for the people but suck up resources to fund "facetime" projects that do nothing but cause more money to be spent. I think government jobs and offices need to be evaluated to trim the fat and I have the perfect solution. Wait until winter time rolls around and there's a huge snowstorm in DC and say everyone that's "non-essential" has the day off. Cut all the jobs of all the people that didn't show up and wallah! I'm sure that could put a couple billion back into the economy so they can stop taxing the hell out of my middle class a**. Put the money back in my pocket so I can go spend it on something I don't need and help out the economy.

Sorry for the rant.

[Ninong]

Reagan ran up enormous budget deficits. He did not have a single year with a balanced budget. We had huge budget surpluses the last three years of the Clinton administration.

[Ninong]

Another reason the price of crude oil is so high right now is because our great friends and allies, the Saudis, are not interested in doing anything about forcing OPEC to increase production limits. And, in spite of all their rhetoric, the two oilmen in the White House are quite pleased with the price of oil right now. And so are all their friends in Houston.

[bguile]

But you said earlier that the prices were raising due to inflation and demand. How does that benefit them? Particularly if we are not exporting oil.

[Ninong]

Originally Posted by bguile

But you said earlier that the prices were raising due to inflation and demand. How does that benefit them? Particularly if we are not exporting oil.

Higher oil prices translate into higher stock prices for oil companies because they are making a much higher profit margin and because the value of all their oil reserves (still in the ground) is now much, much higher.

Price of Exxon stock since we invaded Iraq in March 2003:


Price of Halliburton stock since we invaded Iraq in March 2003:


Price of Chevron stock since we invaded Iraq in March 2003:


Price of Schlumberger stock since we invaded Iraq in March 2003:


Amex Oil Index (companies in oil business) since we invaded Iraq in March 2003:


Any questions?

P.S. -- Let us not forget that Bush administration officials promised us that once we took over in Iraq, "the price of oil would drop to $20/bbl." They also promised us that "the total cost of the war would not exceed $50 billion" and that "Iraq's reconstruction would be fully funded by Iraqi oil revenues." And we would be "greeted as liberators" and offered sweets and flowers. And the entire operation would last "a matter of weeks, not months -- certainly less than six months." Those are just a few of the many things the Bush administration got wrong about Iraq.

Bush & Cheney: Wrong about everything ever!

[bguile]

wow