BIKE: coupla observations

[Roger Baker]

Why is gasoline still mysteriously cheap? I don't know, but I'l look 
for such info on the energyresources list, where the energy watchdogs 
post everything.

The Saudis are almost certainly lying about their reserves, so we're 
living on borrowed time:

http://www.ocnus.net/artman/publish/article_13527.shtml

Whatever the details, its certain that the current situation is 
unsustainable because $42 dollar a barrel oil sent the price up over $2 
a gallon on average about a month ago, and its now up to $47 again with 
no relief in sight, and the whole world now producing at capacity, so 
it must be headed up above $2 a gallon again before long.

You can bet the Bushies are working overtime behind the scenes to keep 
the price down, because gasoline prices are such a high profile factor 
to the average person. Would guys who steal elections stoop to covertly 
tapping the strategic reserves or military stockpiles to help keep the 
price down? Nah.

Another explanation might be that accumulated stocks and supply 
contracts are holding the price down until they run out. -- Roger



On Aug 19, 2004, at 10:46 AM, Lane S. Wimberley wrote:

> watcyc writes:
>> 2) any thoughts that while crude oil prices have hit record highs 
>> recently,
>> retail gasoline prices have been remarkably stable, and even under 
>> their
>> recent highs?  Roger, any insights?
>
> I believe there are several factors at play here.  First, gasoline
> demand has been somewhat depressed over the past several weeks, only
> beginning to pick up recently.  (It was reported yesterday that
> U.S. gasoline stocks took a larger than expected hit over the past
> week.)  Also, part of the run-up in gasoline prices in May/June was
> due to refinery problems.  I believe that refineries have been going
> full-bore in recent weeks, with very few outages.  It's also quite
> likely that the oil purchased on the international market to produce
> July/August gasoline was probably not purchased on the recent spot
> market at very high prices, but was purchased months ago on the
> futures market, at lower prices.
>
> Given the up-tick in gasoline demand, the reduction in stocks, and the
> persistently high recent oil prices, I expect to see gasoline prices
> begin to climb in the coming weeks, although the rate of increase
> might be low.
>
> -Lane