Turbulent futures markets today. The following is gleaned from OPIS alerts:

1. Gulf Coast sources say that refinery buyers outnumber sellers by a relatively wide margin. They suspect that any unsuspected refinery problems could send the market spiraling out of control to the upside.

Now who might think that there would be refinery problems>

April WTI hit an intra-day high of $30.60-bbl this morning in reaction to comments from Venezuela that any OPEC oil production hike would most likely not become reality until the mid-summer.

Called Clinton's bluff to release oil from the SPR, didn't they?

Also: OPIS reports an increasing number of outlets where wholesale prices have exceeded $1.00 a gallon.

Gasoline retailers are caught in a tremendous squeeze. They are not able to pass the rack price hikes through fast enough. Some are predicting that retail gasoline prices, on average, will exceed $1.50 gal in March. Rack prices at $1.00 gal would already force many markets to the $1.50 figure.

They also get the brunt of the curse words from customers.

-- rocky (rknolls@no.spam), February 29, 2000

Answers

For what it's worth: I know a MAJOR retailer of petroleum products. His company is under EXTREME pressure to lower prices and EAT THE LOSS THEMSELVES. Right now their margin is maybe a penny a gallon day to day. The "bigger boys" want the company to eat at least 30 cents a gallon for a "price reduction at the pump"!

We were talking about it, his and my's opinions are that yes, major "glitch problems" in production and refining, as in OPEC and the other producers couldn't raise production and refining right now if you held a gun to their heads. Very limited and specialized equipment. Very limited and specialized and non compliant spare parts. We're in march now almost, most interesting isn't it? Long time to "fix" something since rollover, isn't it? OPEC "agreeing" on quotas and sticking to it? Much smoking of funny weed in that thought. Quit looking at "the charts", they mean NOTHING right now. None of the "old" parameters apply, think new, or lose your shirt and walk.

Like I said, take it for what it's worth, it's anecdotal, first person to me, second to this post. Good luck.

-- seriousdoomer (prepping@daily.nogas.prettyquick.economy.tank), February 29, 2000.

I have a question for serious doomer... first please understand that I am not a newbie.. I have been on this board for almost two and a half years... but I have one question ... Why is it just the oil industry that seems to be having problems with the embeded chips??I mean if they (the embeded chips) are in millions and millions of diffrent things, why would it only effect one industry???

-- bank teller (nine to five@working.com), February 29, 2000.

bank teller,

The oil group took the rather arrogant position that "Fix on Failure" would be less costly than testing all their automated and remote systems.

Refineries are also among the most automated manufacturing plants in the world; capable of maintaining full production using skelton management crews during long strikes of production and maintenance workers.

-- Bill P (porterwn@one.net), February 29, 2000.

Bank Teller-I will have to paraphrase from a conversation I had, I asked basically "what's up with the price increases?"-the word is that they just CAN'T get more fuel to sell than what's there now, in the quantities coming in. What's coming in is basically max production. This is most disturbing, it's never happened before quite like this. Have you read all the posts for the last two months? There has been a plethora of glitches and problems in a variety of industries, just very few admited to being date related. So what, read between the lines. Get beyond a ten scale of the lights blinking out, but don't think it's a one either. It's some number in between, and will be chrinic and creeping up throughout the year. It's not just the oil industry, but the oil industry is specialized, and vulnerable. And like stated, a lot of "fix on failure" mentality, especially out in the more..."less civilized" areas is the polite term. It's very easy to stick to production quotas when you can't exceed them. And not everything, everywhere was effected, but enough was to cause..what you are seeing. That's it, not much to go on, but thought it useful to post here. Just think, being pressured to take a thirty cent a gallon pure LOSS for public media consumption and politics? When is the last time you heard of anything like that, any business? What makes sense to you? Sounds like manipulation at the highest levels from some serious problems tied in with image and politics, doesn't it?

-- totaldoomer (gottagood@gas.mileage.car), February 29, 2000.