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Re: $4 Gas - Here We Come
Old 08-31-2005, 09:25 PM   #21
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Re: $4 Gas - Here We Come

U.S. Releases Oil
From Stockpile
To Ease Crunch

By JOHN J. FIALKA in Washington, RUSSELL GOLD in Dallas and RAFAEL GERENA-MORALES in New York
Staff Reporters of THE WALL STREET JOURNAL
September 1, 2005

With fuel prices rising amid fears of 1970s-style shortages emerging in the aftermath of Hurricane Katrina, the Bush administration scrambled to ease the pain by releasing oil from government stockpiles and suspending air-pollution rules to gin up extra gasoline supplies.

Gasoline prices are now likely to stay above $3 a gallon the rest of the year, according to the Petroleum Industry Research Foundation. Yesterday, there were scattered reports of price increases -- from Ohio to Maine -- that pushed pump costs above that level.

More disturbing were signs of fuel-supply disruptions, as pipeline and refinery outages continued for a third day. Petroleum Traders Corp., one of the country's largest independent gasoline wholesalers, said BP PLC, one of the nation's biggest gasoline suppliers, had said it was cutting off delivery.
I've been doing this for 26 years and I have yet to see a national disruption of this scope," said Michael Himes, president of closely held Petroleum Traders, of Fort Wayne, Ind. He added that he has gasoline-station owners calling him saying they will pay "any price, I just need the fuel."

A BP spokesman said it doesn't comment on individual customers, but said it isn't unusual during natural disasters for refiners to first supply their contracted customers. He said suppliers who don't have contracts and shop around for the best price run the risk of supply disruptions.

Red Cavaney, president of the American Petroleum Institute, which represents most segments of the oil industry, warned that the impact on oil and natural-gas supplies "will be significant and protracted." Making a rare pitch for people to drive sparingly, Mr. Cavaney said: "Right now will be a good time for people to ramp up their energy conservation."

Hoping to avert a wide-scale energy crisis, the Bush administration announced an emergency, temporary easing of some pollution-control standards on gasoline and diesel fuel. "It is clear the consequences of the hurricane have become more widespread," said Stephen Johnson, head of the Environmental Protection Agency as he announced the moves. Under existing federal air pollution rules, many cities must have special "reformulated" gasoline to curb smog, which requires refiners to make and store a variety of different fuel blends. Yesterday's waiver allows existing supplies to be marketed over broader areas.

Meantime, Energy Secretary Samuel Bodman said his agency has already given one major oil company permission to borrow crude oil from the 700 million barrel Strategic Petroleum Reserve and was working out the details of similar swaps with several other companies.

But some of the government's emergency stockpile must travel through the same immobilized pipelines that normally supply oil from the Gulf, so it was not clear how quickly the government aid might ease the supply shortfall. "You can't put products in the pipeline if you don't have any pressure," Mr. Cavaney said. He also noted that refineries must undergo a period of testing, once their electricity and supplies are restored, before they can begin to produce gasoline.

Another prospect for stretching gasoline stocks in the Eastern U.S. would be importing gasoline from Europe, where refiners have excess stocks because much of Europe's fuel demand is for diesel oil. But John Felmy, the petroleum institute's chief economist, said that it will take two weeks or more to get additional gasoline from Europe.

The big unknown is whether recovery will take days or weeks. Storm flooding and widespread electricity outages in the Gulf area kept key pipelines shut down that would supply both crude oil to the region's refineries and ship refined products, including gasoline and heating oil north to the Midwest and the East Coast.

The key problem will be the lag before new supplies reach major gasoline markets. Transportation Department teams scrambled yesterday to hook up dozens of emergency generators to oil pipelines in an effort to get the Gulf's oil circulation system running again. Meanwhile, according to the API, 25% of the nation's domestic oil production -- most of it coming from platforms in the Gulf -- remained shut down.

Also immobilized, for lack of electricity, was the Louisiana Offshore Oil Port, the docking facility for supertankers 28 miles offshore in the Gulf that is the main offloading point for supertankers bringing imported crude oil to the U.S. Some officials were concerned that Port Fourchon, La., which is the major ingress point for pipelines, and which supplies crews and supplies to offshore oil rigs, could be closed for as long as a month because the storm drove silt into its shipping lanes.

Widespread flooding and power outages conspired to keep eight refineries shut down yesterday morning and a ninth, Exxon Mobil Corp.'s gigantic Baton Rouge facility, on a reduced run. Crews were unable to reach at least four major refineries because of flooding.

Mr. Felmy said that until supplies began moving again, gasoline, propane, heating oil and other products could be in short supply, especially in the Midwest and upper East Coast, areas which are normally fed with both crude oil and refined products from the Gulf.

Paul Fiore, executive vice president of Service Station Dealers of America and Allied Trades -- which represents state service stations around the country -- says he hasn't heard of any supply shortages or outages among gasoline retailers. He said, however, that he has heard prices at the pump rose by as much 50 cents to more than $3 per gallon overnight, an increase he hasn't seen in 25 years in the industry.
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Re: $4 Gas - Here We Come
Old 08-31-2005, 09:27 PM   #22
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Re: $4 Gas - Here We Come

Quote:
Originally Posted by Marshac
If we actually do hit $4 fuel within a week or two (even it's just the premium that hits $4), the psychological impact on the consumer of reaching $4 so quickly after passing $3 will be huge.

In the grand scheme of things, $3 or $4 gas doesn't really crimp my style, and I drive 80 miles a day for work (so it's ~+$60/month per dollar increase). It will however impact consumers who are already at the margin, and in this era of underemployment, those ranks are growing. Anyone want to guess which Q GDP growth goes flat?
Agreed, what concerns me is being able to get gas.
I just came from the garage to check fuel levels..I'm up near full, but I was prepared to go out and get some...My memory is still very strong of when we had shortages back when...
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Re: $4 Gas - Here We Come
Old 08-31-2005, 09:39 PM   #23
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Re: $4 Gas - Here We Come

Don't feel sorry for truck drivers - we will eventually pay the higher price for their higher costs.
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Re: $4 Gas - Here We Come
Old 08-31-2005, 09:41 PM   #24
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Re: $4 Gas - Here We Come

Not much comfort in this but you can bet the oil companies will pull out all the stops to get oil production and refinery operations back up to speed ASAP. With prices at the levels we're fearing expecting, they will have huge incentive$ to be up and running again in short order.

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Re: $4 Gas - Here We Come
Old 08-31-2005, 10:00 PM   #25
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Re: $4 Gas - Here We Come

Quote:
I needed to gas up tonight and I have been hearing the s-word ("shortage") about some local markets in the midwest, etc.
Yep yep. Alive in well. In fact it could get real ugly when it comes to deciding who gets what. Plus some midwest areas have higher EPA standards so that has bumped up the price as well. However, EPA announced it would lower the standards for the time being. Legs sure are tired from walking
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Re: $4 Gas - Here We Come
Old 08-31-2005, 10:35 PM   #26
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Re: $4 Gas - Here We Come

Quote:
Originally Posted by DanTien
Agreed, what concerns me is being able to get gas.
I just came from the garage to check fuel levels..I'm up near full, but I was prepared to go out and get some...My memory is still very strong of when we had shortages back when...
I bought 5 gallons at the Arco station today... while all of the other stations in town were $2.89+, they were still at $2.69. Did someone not check the voicemail this morning? "Add 20 cents!!!"
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Re: $4 Gas - Here We Come
Old 08-31-2005, 10:57 PM   #27
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Re: $4 Gas - Here We Come

Quote:
Originally Posted by Marshac
Anyone want to guess which Q GDP growth goes flat?

OK! Last January, maybe the January before. To my mind, we have not been told the real CPI or GDP for quite some time. I think real inflation is running over 3% higher than we have been told . . . so . . . last January, maybe longer. And I'm being optimistic because I'm only including a small portion of the housing increases and a tiny bit of the oil price increases that the gov't refuses to include in their calculations.

--Greg
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Re: $4 Gas - Here We Come
Old 08-31-2005, 11:05 PM   #28
 
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Re: $4 Gas - Here We Come

Quote:
When I lived in the SF Bay Area..many of us would line up at key spots in the suburbs and strangers would pull up and take us to downtown SF....they needed 3 in a car to take the sane lanes and avoid the Bay Bridge toll
Time out for a story. My wife and I used to do that when we lived in Oakland, and both worked in SF. One day a fancy car stops to pick us up. Just as we're getting into the car, my wife unknowingly steps in some dog poop. So we're in the car for a minute and it's "what is that smell!!!" Made for a long drive across the bridge.
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Re: $4 Gas - Here We Come
Old 08-31-2005, 11:05 PM   #29
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Re: $4 Gas - Here We Come

Filled up the tank tonight at $3.09 with a smile, a thank you, and a "have a good night" to the gas station owner.
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Re: $4 Gas - Here We Come
Old 08-31-2005, 11:19 PM   #30
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Re: $4 Gas - Here We Come

I just heard a rumor this PM from my tenant that NO is the only supertanker off-load port we have on the eastern side of the US. No wonder they released the reserves for use. Otherwise, we would have had refineries ready to go but no product to put thru. An American oil choke point if true. Keep an eye on when they're ready to take ships again.

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Re: $4 Gas - Here We Come
Old 08-31-2005, 11:25 PM   #31
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Re: $4 Gas - Here We Come

Quote:
Originally Posted by Apocalypse . . .um . . .SOON
I just heard a rumor this PM from my tenant that NO is the only supertanker off-load port we have on the eastern side of the US. No wonder they released the reserves for use. Otherwise, we would have had refineries ready to go but no product to put thru. An American oil choke point if true. Keep an eye on when they're ready to take ships again.

--Greg
Greg, see posts 16 & 20...
The whole Gulf oil infrastructure appears to be in disarray for the time being...

Louisiana Offshore Oil Port - docking facility for supertankers 28 miles offshore in the Gulf that is the main offloading point for supertankers bringing imported crude oil to the U.S. remains shut due to lack of power, but the company indicated on Tuesday that there was no serious damage. LOOP moves about 1 million barrels a day of oil, 10% of U.S. imports.
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Re: $4 Gas - Here We Come
Old 09-01-2005, 06:48 AM   #32
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Re: $4 Gas - Here We Come

Releasing crude from the SPR is pretty much meaningless at this point. The problem is refining capacity and messed up transport infrastructure for refined products, not crude. Shows how desparate the administration is to show they "care" about the little people.

I would suggest to any of you who heat with oil or propane that it is time to fill up if you haven't already.
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Re: $4 Gas - Here We Come
Old 09-01-2005, 09:00 AM   #33
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Re: $4 Gas - Here We Come

we blew through $4 last night - I've seen $5.59 per gallon in Atlanta suburbs.
This mornig (after the governor's ban) it back to "normal" $3.39 same station.
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Re: $4 Gas - Here We Come
Old 09-01-2005, 09:52 AM   #34
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Re: $4 Gas - Here We Come

We're seeing some shortages in Raleigh, NC. Stations closed, bags on pumps. Rumor has it that the pipelines that supply us will be flowing tomorrow, which means that gas may get to stations in 4-5 days. Got 5 gallons (half tank) this morning at $2.999. I don't really care what the price is, as long as I can get gas if I'm willing to pay the price. I happen to have an opportunity to make a lot of cash (not drug dealing) on Saturday for a few hours work. This requires driving 300 miles which will require gas. I can still make tons of money even if I have to pay $10/gallon, so I'll do it, unless our meddling governor decides to cap prices. Supply and demand will work at some point. Price caps set at artificially low levels will result in shortages (simple economics).

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Re: $4 Gas - Here We Come
Old 09-01-2005, 09:54 AM   #35
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Re: $4 Gas - Here We Come

Quote:
Originally Posted by sailor
we blew through $4 last night - I've seen $5.59 per gallon in Atlanta suburbs.
This mornig (after the governor's ban) it back to "normal" $3.39 same station.
DW and I have spent an average of $175/month on gas. I'm guessing that may work out to 70 gallons a month or so. I don't suspect that even a major rise is going to affect us that much - plus we'll do considerably less driving the last 3 months of the year.

Real problems will occur when people realize that most coffee is imported through New Orleans. I think I'll stock up today.
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Re: $4 Gas - Here We Come
Old 09-01-2005, 10:06 AM   #36
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Re: $4 Gas - Here We Come

This picture is not from Bagdad...

http://www.timesonline.co.uk/article...759825,00.html
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Re: $4 Gas - Here We Come
Old 09-01-2005, 10:41 AM   #37
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Re: $4 Gas - Here We Come

I car pool, but DW's work is near a trolley station, my work is close enough to bicycle (~11 miles), so we can cut consumption a lot more than we already have if need be.
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Re: $4 Gas - Here We Come
Old 09-01-2005, 06:43 PM   #38
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Re: $4 Gas - Here We Come

General Motors in Denial? Toyota realistic?

GM, Toyota Differ
On Future Direction
Of Gasoline Prices

By NEAL E. BOUDETTE
Staff Reporter of THE WALL STREET JOURNAL
September 1, 2005 3:43 p.m.

DETROIT General Motors Corp. said on Thursday that it expect gasoline prices to decline "significantly" by the end of the year after the recent spike in prices as a result of the hurricane damage to oil production facilities in the southern U.S.

Paul Ballew, GM's executive director of global market and industry analysis, said the car maker doesn't believe gasoline prices will remain above $3 a gallon.

"Let's be very clear about that. The markets don't believe they will and the forecasters don't believe they will," Mr. Ballew said in a conference call with reporters.

"If you look at the future and forward markets on in December, everybody anticipates that the constraint will be relieved and that gas prices will be coming back down rather significantly," he said.

The recent spike in wholesale gasoline prices to $2.60 to $2.70 "is abnormal relative to demand, relative to supply. It's being driven by the fact that we've taken 10% of our refining capacity off the market for the short term."

GM believes "the market in total is smarter than any of us individually and if you look at the market in total it expects prices to come back down rather significantly by year end," Mr. Ballew said.

In contrast to GM, a top executive from Toyota Motor Corp. said the Japanese car maker expects gas prices to rise.

"The cost of oil is going to continue to increase," Jim Press, president and chief operating officer of Toyota's U.S. sales unit. "In the long term and the short term."

Mr. Press said this view is based on the fact that demand for oil is rising and even before Hurricane Katrina U.S. refineries were operating at full capacity. "As we look forward, the fact is our country doesn't have the cushion in refining capability," Mr. Press said.

He added that oil companies are now reopening older oil wells they had previously abandoned. Since it will probably be more costly to get the remaining oil out of these wells, "they are investing capital for higher-cost oil," Mr. Press said.
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Re: $4 Gas - Here We Come
Old 09-01-2005, 06:58 PM   #39
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Re: $4 Gas - Here We Come

Quote:
Originally Posted by Laurence
I car pool, but DW's work is near a trolley station, my work is close enough to bicycle (~11 miles), so we can cut consumption a lot more than we already have if need be.*
I got my vacation/sick time balance sheet today- I have >30 days of sick time stored up... I figure a few days without gas wouldn't be so horrible
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Re: $4 Gas - Here We Come
Old 09-01-2005, 10:35 PM   #40
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Re: $4 Gas - Here We Come

Didn't expect the high gas prices to last long - its too much of a panic situation.
Anyway the prices should come down / stabilize soon

Hurricane Katrina Update: LOOP Unloading First Tanker
http://biz.yahoo.com/bw/050901/16089.html?.v=1

that's the Louisiana Oil Port

-h
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