NYMEX Gasoline is rising - not quite to April highs yet, but past June

[swag]

Please note again that crude oil and gasoline are two different things. But now it appears that gasoline futures are beginning to feel the impact of rising crude prices. Coming to a pump near you!

A couple of NYMEX Gasoline charts:





Bloomberg news currently shows NYMEX gasoline futures at $1.32.

[treepig]

1. for those of us with short- to medium-term memory problems

what happened last year in aug/sept to cause the dramatic drop in price?

and is a similar drop in the offing for this year? perhaps prince bandar has plans afoot?

[swag]

2. What really happened in August 2003 was a huge price spike

followed by a return to more normal levels in Sept 2003.

DOE was asked to study the matter, but please recall that DOE is just one of the federal agencies whose policy apparatus has been gutted and whose work has been "totally politicized" according to a Reagan Republican, long-term DOE analyst I know who was horrified at what she saw Cheney-Bush Junta do at DOE. (Side note: the dismantling of the policy apparati in all Depts is something the Kerry Administration is going to have to reverse in its first months in office. Policy apparati are essential in avoiding the sort of fly-by-your-ass bullshit that we have suffered under for the past 4 years of thoroughly politicized Executive Govt.

Anyway, here's what DOE came up with on the Aug 2003 gas spike. Sept resolutions mentioned later in the paper (and one must keep in mind that mentioning of these "market" and supply factors may very well be so prominent in order to mask price-gouging on behalf of the Admin's major clients in Big Oil, in much the same way that WSJ and other big-energy shills blamed Cali's electricity crisis on "flawed regulation" etc., in order to mask what was really going on in terms of Enron, et al., fucking California):

http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/gasps/gasps.pdf

"Our main findings show that all of these areas contributed significantly to the August gasoline price spike. • Inventories, which are needed to help balance unexpected changes in supply or demand, began the summer driving season at low levels and did not recover (Figure S-3). A major strike in Venezuela, the Iraq war, and unrest in Nigeria all removed crude oil from world markets in late 2002 and early 2003, creating a need for the United States to draw down both crude oil and product inventories at that time. • Demand growth was generally anemic early in the summer, which moderated prices despite low inventories and problems with refineries and pipelines that precluded a rebuilding of gasoline stocks. However, gasoline demand grew rapidly in July and August (Figure S-4). Energy Information Administration/Inquiry into August 2003 Gasoline Price Spike iv
• Supply factors played a role in the regional price spikes in August. After beginning the spring season with low inventories, refiners ran at very high utilization levels in April and May in most regions with some stock rebuilding. In June and July, refinery outages occurred in the Midwest, Gulf Coast, and West Coast. The reduction in gasoline production from the outages ended the stock build. Gulf Coast gasoline production recovered in August, but the upturn was too late to meet rising demand and prevent rapid stock declines in the East Coast and Midwest. The Midwest lost additional gasoline production in August because of the August 14 electricity blackout. On the West Coast, California production in August had recovered from earlier outages, but was unable to keep up with the added demand from Arizona due to a pipeline rupture. • In combination, August gasoline demand exceeded supply coming from U.S. refineries and from imports, resulting in a rapid decline in already-low inventories. This resulted in gasoline price surges throughout the country. Because supplies in the Midwest, East Coast, and Gulf Coast are linked, the price increases east of the Rocky Mountains were related. The California price rise was not directly linked to the other regions, but lack of supply from Gulf Coast refineries increased California‘s difficulty in acquiring additional volumes.

[swag]

3. Oh, PS. Bandar appears completely impotent this summer.

[treepig]

4. impotent - maybe. much wealthier - undoubtably.

anyhow, thanks for the information!

[snowFLAKE]

5. Gasoline and Crude Oil don't seem to be Closely Linked

As shown by this graph, if it chooses to Show Itself



The upper two lines show the price of a gallon of gasoline at Wholesale and Retail, the bottom the price of a gallon of Crude Oil prorated from a barrel (Maybe you can't do that, and that's the problem?)

6. The rise is TINY compared to the effect of house bubble...

I calculated the price of gas rising is tiny over the last year, as compared to the national rise in home prices, given flat interest rates.

So the real drag on the economy now is housing inflation--isn't that change from a year ago, when housing was contributing to the economy?

So all the talk about gas prices weighing on the consumer miss the much bigger drag!

--Now, it's true even higher gas prices will drag on the consumer more, but they won't even approach the drag of house prices--

See the story on my website...