What's going on with this.

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Kerosene price is moving up fast, $1.39.9, how about fuel oil? I use kerosene to heat water, never seen it this high.

-- good (Americ@n.com), July 11, 1999


The price of gasoline has jumped about 3-4 cents per gallon in the last few days in my area of Virginia.

-- walt (longyear@shentel.net), July 11, 1999.

Crude oil was pushing $20 a barrel this week. At one time in the not to distant past it was close to $10 a barrel. If this trend continues you can look for much higher fuel prices in the near future.


-- Ray (ray@totacc.com), July 11, 1999.

gas Prices had stabalized in the Northwest for the last month or so, but they have inched up a couple of cents in the last week.

-- Jonathan Pilpat (jpilpat@mailexcite.com), July 11, 1999.

LP gas is at the lowest I have seen it at in a very long time. We are filling up everything. $.52 a gallon.

-- bulldog (sniffin@around.com), July 11, 1999.

Perhaps this is just a coincidence, but the sharp rise in crude oil prices was followed by a series of reports on how poorly prepared oil exporting nations like Nigeria, Venezuela, etc. are for the rollover. These are the same nations that before couldn't keep their OPEC engineered price quota's maintained long enough to close their sessions without cheating.

-- Sure M. Worried (SureMWorried@bout.y2k.coming), July 11, 1999.

This forecast is from the EIA/DOE website. I get it weekly as I am a crude oil analyst by trade. I will tell you that I disagree strongly with this forecast. My comments are in brackets.

World Oil Markets/Prices Prices. Despite a substantial increase in spot prices for crude oil at the very end of June, we have not significantly changed our crude price forecast for this update. We have raised our price forecast slightly for the next couple of months. However, the story is essentially the same: the combination of demand and supply changes will probably prevent even a normal seasonal increase in world oil inventories this year, resulting in a net inventory draw averaging over 800,000 barrels per day for all of 1999. [Most people aren't really aware of the inventory glut that was created by overproduction about a year and a half ago. At that time, OPEC and it's members made a flawed decision to take the brakes off and increase everyone's production quotas. This could not have been more ill timed. The market was already awash in physical barrels. Within months crude oil began a plunge that took most products prices with it declining to historic lows. The other thing that happened was that most people interpreted the situation initially as a "favorable storage" environment. Meaning, they could make money by holding cheap barrels to next month. Oops! The problem was that this never stopped and we ended up with an enormous physical glut in the market. In the industry we call it the overhang. It has taken months of compliance and hard, hard cuts by OPEC to acheive the elimination of this overhang. I did a supply demand balance about six months ago that showed we would be eating through that overhang at precisely the time Y2K hit. Not a good scenario. Unfortunately, my balance appears to have been a little conservative, we will probably eat through this sooner, say Oct. Nov.]

Prices are expected to remain more or less flat until the end of the summer when world demand begins to exhibit some of the larger year- over-year increases expected for 1999. From that point, we see prices rising gradually through 2000 as world oil inventories continue to decline toward more "normal" levels. By the end of 2000, prices would be expected to be about $17.25 per barrel (which would translate into a WTI crude price of about $19.75 per barrel). Our normal uncertainty range for crude prices suggest that expected end-2000 prices would be within about $3-$4 of the $17.25 level with a high degree of probability.

[I believe that this forecast by the EIA was done with absolutely no factoring of Y2K. Therefore it is an innaccurate forecast. My current estimates are that crude oil will be quite tight from a physical standpoint. By November most oil companies will be laying in any extra supply that they can in advance of this problem. It will be very interesting to see who does what in light of the end of year LIFO games which usually occur. There is a serious economic incentive to manage inventories, and most oil companies play the game. What you see is a juggling act at the end of the year with cargos and bbls. in order to meet LIFO targets. This year the companies will need to pull the trigger on this issue. It's either Damn the accountants, get physical bbls or Damn the supply guys we're hitting our targets! I think that by that time most will want some barrels around and we will be seeing that impact the price of crude. Is $23-$25 dollar WTI out of the question by November? No. ]

-- Crude Dude (g_gecko_69@hotmail.com), July 11, 1999.

This might make Texas very happy. (hoping for the best, etc.)

-- Mommacares (harringtondesignX@earthlink.net), July 11, 1999.

I live in the San Francisco Bay Area, and our prices are skyrocketing. My rent just went up 12%, and I just paid $1.42 per gallon. I know that we are a very high-cost area and that some refinery accidents have caused our gas prices to go up much more than the nation as a whole.

Still, I have to believe that the rising crude oil price is acceleration inflation nationwide. I would appreciate replies from others throughout the U.S. I suspect that BJ Klinton & Co. are jimmying the inflation figures to keep the stock market and their popularity up.

-- Mr. Adequate (mr@adequate.com), July 11, 1999.

This just showed up a few minutes ago:

http:// www.nytimes.com/aponline/f/AP-Gas-Prices.html

CAMARILLO, Calif. (AP) -- Gasoline prices jumped nearly 2 cents in the past two weeks because of rising crude oil prices and increased demand, an industry analyst said.

The national weighted average, including all grades and taxes, was $1.2153 Friday, up 1.93 cents a gallon from the previous survey on June 25, said Trilby Lundberg, publisher of the Lundberg Survey of 10,000 gas stations nationwide.

A main factor has been more expensive crude oil, which has risen from $13 a barrel at the beginning of the year to $20 now.

``The cost increase is (due to) crude oil, but another factor is that this is the strongest season for gas consumption, which is an impetus rather than a damper to gasoline's response to crude oil prices,'' Ms. Lundberg said Sunday.

Price increases were felt in most cities and in all parts of the country.

``The strong gasoline demand, coupled with the fact that gas hasn't caught up entirely with crude oil prices, suggests gasoline prices could rise a bit further,'' Ms. Lundberg said.

At self-service pumps, the average for regular unleaded was $1.1577, mid-grade was $1.2587 and $1.3435 for premium.

For full-service, regular was $1.5259, mid-grade averaged $1.6138 and premium $1.6869.

-- pshannon (pshannon@inch.com), July 11, 1999.

Since the three refinery problems in California earlier this yearThe price of regular in our county has remained around $1.54 per gallon. I can't believe that the damage to those installations has not been fixed.

The oil companies are out to squeeze every penny they can from the consumer. They already testified to the state legislature that they raised the price of diesel, (although uneffected by the refinery problems,) "because they could." Because of environmental restraints placed on California, it is a closed market. Seems to me that if the oil companies take advantage of the resultant lack of free competition by price gauging, then prices should be regulated.

As the public begins to preceive the potential impact of y2k on availability of oil, I see no reason why these same companies will not increase their price by leaps and bounds in the next few months.

-- marsh (armstrng@sisqtel.net), July 12, 1999.

"Fueling worries - Gas price spike could lie ahead as oil industry struggles with Y2K"


-- Linkmeister (link@librarian.edu), July 12, 1999.

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