Aren’t the rising prices going to hurt the economy’s recovery?
Storage tankers across the globe may be brimming with oil that no one is buying because of the global economic downturn, but the traditional laws of supply and demand don’t always apply to oil prices. Drivers have faced rising prices at the gas pump in recent months, as investors and oil-producing countries hoard supplies in anticipation of a global economic recovery later this year.
The 12 member countries of the OPEC cartel voted in Vienna on Thursday to maintain output at current levels rather than increase supplies in order to bring some relief to consumers, particularly in the gas-guzzling West. The OPEC oil ministers, whose countries account for about 40% of the world’s entire crude-oil supply, also renewed their commitment to stick to their agreed quotas, rather than ship extra oil, as they began doing last April when several members ignored their agreed output limits. OPEC leaders, many of whose economies are heavily dependent on oil exports, have struggled to stabilize prices at a level that suits their own economic needs amid falling demand and rising supplies.
[…]
“There is some risk we will run out of storage space in the next four to six weeks,” says Simon Wardell, director of global oil at IHS Global Insight, an energy-forecasting company in London.
[…]
Despite such dangers, investors and oil producers are betting that global demand will roar back, apparently hoping that the recession has already hit bottom. Over the past two months, investors have plowed billions of dollars into oil futures. If the U.S. and other major industrial economies rebound, oil supplies could be depleted because the recession has prompted producer nations to freeze hundreds of projects to open new oil wells or upgrade existing ones.
Ah, isn’t it wonderful how the “free” market operates?
“Why The Hell Are Gasoline Prices Going Up When Global Usage Is Down?”
Chill Uncle D. Obamaman is in charge and won’t allow this bad thing to continue.
#1 – Patrick
You get extra Dvorak points for your attack on Obama. Congrats.
#2 Where is the attack? Are you delusional? I’m just showing and spreading confidence in what he promised during the campaign…
HE’S ONLY BEEN IN OFFICE FOR LIKE 100 DAYS!
eliminating world hunger, fostering peace in the mideast, and landing on the moon come before fixing gas prices.
Buy a Prius and wait it out!
OPEC is NOT a free market.
Yup, it sure sounds like time for a Prius, or Volt, or Bicycle, or something…
By the way, did anyone else notice the “plowed billions of dollars into oil futures.”?
This is exactly what drove the prices up last year. It was criminal then, it is criminal now.
Why do speculators think we are going to be driving everywhere for vacations this summer? The easiest way to cut back on expenses in these uncertain times is to put off that summer getaway.
I have heard a number of analysts say they expect the price of gas to be appreciably less over the 4th of July holiday than this past weekend.
#8
Memorial weekend in San Diego? Free parking spaces around many beach parks, excluding Mission Bay. That was a sight I thought I never live to see! In almost 40 years one always have to fight to get a parking space 😛 Now, you don’t even have to worry.
How about because it’s not oil prices that are rising, but the dollar that is falling in value?
Plus there have been some additional restrictions on oil drilling.
It is called greed!
#6:
“it sure sounds like time for a Prius”
Why not just spend $5k on a used car and use the money saved to hedge against rising gas prices?
Why are gasoline prices going up?
Because they can.
Why do we tolerate this cartel?? Why not threaten them and break them up? Or seize a cartel country or two to reduce their price power?? What’s the use of having a military if we don’t use them to protect our interests…
Attack, Conquer, Kill, Move On..
Attack, Conquer, Kill, Move On..
Attack, Conquer, Kill, Move On..
As an Obama fan I hate to say it but I think I’ll scold him on this one. CAFE standards are a piss poor way to try and get the US to make and buy efficient cars. A big ass gas tax is the best WTG, keeping gas at or over $5 a gallon would do this just fine and let the free market works its magic. Tell people that gas will have a 50¢ a gallon tax increase each year for the next 6 years. This will get them to think about MPG when its buy that next vehicle. No need to outlaw big stupid SUVs the market can choose if they can survive. This would help pay for the bailout too. even if all the money was given back as a tax refund people would still think about the price at the pump when buying a car. The more efficient our fleet and the more alternative fuel cars out there the less power big oil will have.
Simple, the oil companies enjoy fucking us. I’d be willing to back over all of these assholes with the church bus.
# 16 K-car said, “keeping gas at or over $5 a gallon would do this just fine and let the free market works its magic. ”
ROFLMAO.
If you meddle in the market, there is no FREE market. No wonder, with that warped thinking you supported O’Mama.
# 9 The0ne,
The missing beach goers were at my foreclosure party in nearby Chula Vista, where citizens are allowed to put their toes into sand and drink beer at the same time.
#18
“Obama & the Fed’s policies have spooked China…so they are stockpiling oil.”
no stockpiling oil for a rainy day is prudent if you live in a country that runs on oil we do it too.
“Also future speculators see Obama’s anti US oil production as the recipe for shortages.”
US oil production will never have much effect on the global price of oil. All holding off on drilling here or there will do is save some oil for the next generations
“Finally, commodities are a hot item in an inflationary market…the trick is when to get out…just before the dollar collapses completely.”
Not going to happen so don’t hold your breath. Being in any market is gambling if you don’t have the stomach for it buy gold and egnore the dollar.
“We are all so screwed…The “Greatest Depression” is coming.”
I doubt that but go ahead and live in fear if it makes you feel better.
“We will be ruined financially…no longer a superpower save in nukes only.”
Every thing is cyclical our world stance was very high after WWII but it could not last forever no matter what.
“All Obama needed to do, to fix the economy, was NOT spend us into debt, but lift regulations and taxes that prevent business formation…and we would have recovered already and been growing…as China is.”
not that easy sorry
“Now we are all going down with the ship, finished/”
not me I can swim very well
“The only hope is 2010 stop and reverse all Obama and Fed policies, by electing people who will stop them…a slight hope.”
or throw out the rest of the obstructionist GOP.
silly question..
lets see,
1. In a word: Contango
1a. Speculators (as usual)
2. they always bump prices for
summer..
3. OPEC’s 4.2mil bbl production cut
several months ago is finally showing some teeth.
3a. Oil States other than OPEC are budgeted for $60-$75 oil (they need
the price to go up something fierce)
-As the IMF Debt/Nation Destruction Machine is stalking them like vultures
in hopes desperation sets in and they make the fatal mistake of securing a loan with the States mineral and oil
resources as collateral. (of which they will then send in the “Hitmen” to make them default on the loans, -much like they did with Argentina, to name one)
4. Goldman, Morgan Stanly, CitiGroup
and the rest of the scum that is engineering the global collapse
are almost out of Supertankers to store excess production in.
As of April, there was over 100
million barrels of oil floating around the gulf in tankers.
4a Goldman circulated rumors that oil was going to $75 by year end.
4b. Some 6 month Supertanker storage (and oil futures) contracts are up
in June. -The oil they bought in January for around $37/bbl will yield ludicrous profits sold at +$60/bbl.
(they *used to* only make $2-$8/bbl on futures-before they got the supertanker storage idea)
4c. with the threat of supertankers
being scrapped [back in December] because of the insanely upside down shipping prices. (like $200k down to
say $10k for the trip, back when the BDI was below 1000)
Ship owners jumped at the idea
of renting out a tanker for $37k/day.
The sleaze bags at Goldman Sachs
& Co. knew they could easily offset that cost with profits upwards of
$30 a barrel on a tanker holding 1
to 2 million barrels of oil. (!)
need i go on??
once again, the money changers create
wealth without actually physically producing anything.
all i can say is, i’ll dance a Charleston 2 step in Macy’s window the day someone gets the nerve to take down G&S, JPMorgan, CitiGroup,
The Fed (and all complicit politicians) on global treason criminal/corruption charges and lives to talk about it.
Only then might the planet have half a chance of being free of the cancer that is destroying our Nations.
-s
ROFL at #4 -good one brm.
-s
#18 Alfred1 The trouble with the “end-o-worlders” is that they are alway so pissed when the end of the world doesn’t come.
It’s just as possible that the Dow will come back to about $10K, the investments in all the banks the gov’t has done may actually pay moderate returns and there will be enough inflation to bring the nat’l debt down to a manageable size. Still, the next 10 years will not be a walk in the financial park… but no need to start cooking you neighbor yet.
What part of “cartel” don’t you understand? The answer to any question involving the oil industry is always, “because they can.”
#23 Alfred1 said The ripoff of GM bond holders has spooked investors…
How did they get ripped off? Because they weren’t given special treatment like the banks? Now they can take their chances in bankruptcy court.
oh, and as for:
“Oil unlikely to hit $147 a barrel again.
HA! wait until the CDS/CDO derivative bomb that was planted in GMAC explodes when GM goes bankrupt.
[of which CitiGpoup and Cerberus has a large stake in-TARP 3, anyone?]
If you knew of how intertwined those CDS/CDO’s are through out the market, you would freak.
Couple that with the pending Treasury bubble about to pop and the Iran/Israel War due in October/Nov -plus, the Freakazoid weather we’re gonna have in July/August from the “magnetic sqeeze” the solar system is experiencing from the Celestial bodies we are approaching and you have all the ingredients for a “Perfect Storm”
-Mass Exodus from the dollar and bad weather potentially screwing up the refineries and all those tankers sitting around in the Gulf..
aaah yup, we gonna have some very interesting times this summer indeed..
-s
All commodities will be inflating.
The Fed is printing money for Obama to spend.
And the dollar isn’t so attractive anymore.
The Democrat’s post-affluent America.
Why The Hell Are Gasoline Prices Going Up When Global Usage Is Down?
Greed!!
The day when all cars get 20 mpd (miles per drop), gasoline will be $3.50/drop. When the conversion to electric cars is complete, the plastic used in the vehicle will cost $45,000, and tires will be $12,500 each.
This happens every year, people. It starts around Memorial Day and ends after Labor Day. This is the annual summer vacation where millions of kids are out of school and people break out their boats and RV’s for summer activities.
This should come as no surprise to anyone. Speculators are merely speculating that, based on decades of historical data, that fuel is in higher demand during the summer.
The only problem this year is that new oil exploration was been drastically cut back since the monetary crisis last year. The supply will not be as great as last year but hopefully there will be less people on the road this year than last.
On top of all that, the EPA mandated “summer blends” of gasoline takes effect at this time of year. This causes an automatic jump in gasoline prices. The “winter blends” will return around October.
It is part consumer demand cycle and part government requirements mandate. And it will not last forever. Get used to it.
Okay they are making a bet the economy is coming roaring back.
I’m betting they are full of excreta. That means somebody is going to get tired of storing fuel or just run out of the money to do it and the price will fall and these guys will take a beating.
This time I don’t want the US gov. to bail any of the speculators out.
Um I do hope the jobless rate at least stablizes. Not sure the Fed has done much that actually helps that.