World Oil Closed in on a Record $133.90 Today; How is this affecting Colombian Consumers?

tejasmarcos says on May 21, 2008, 16:08:

it takes a while for those barrel prices to hit the pumps - a few months i believe.

trying to walk a straight line on sour mash and cheap wine...

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gringoloid says on May 21, 2008, 16:22:

you won't see this $133 oil at the pumps for at least a year. we-re still at $50 a barrel oil at the pumps right now.

Who are the three blind men?

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Medellin Traveler says on May 21, 2008, 16:23:

You won't see it, but we feel it in Chicago....

By Associated Press

A BP gas station at Fullerton and Ashland Avenues sells regular grade for $4.49 per gallon
Monday. Chicago tops the nation for highest average gas prices at $4.07 per gallon of regular unleaded.

CAMARILLO, Calif. - A national survey says the average price for regular gasoline rose about 17 cents in the last two weeks, with the highest price in Chicago at $4.07 a gallon.

The average price of self-serve regular gasoline on Friday was $3.79 a gallon. Mid-grade was at $3.91, and premium was $4.02. That's according to the Lundberg Survey of 7,000 stations nationwide released Sunday.

For the first time, the survey found average prices for regular gas surged above $4 a gallon in two metropolitan areas: Chicago and on Long Island in New York.

Of the cities surveyed, the cheapest price was in Tucson, Ariz., where a gallon of regular cost $3.48 on average.

"Huevos Rancheros en Medellin, No Quiero Taco Bell." - www.medellintraveler.com

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gringoloid says on May 21, 2008, 16:26:

thats just the oil companies ripping you off. oil, like all commodities is sold and hedged under long term contracts. i saw a story on bloomberg today where the guy said it will take three years for this 133 oil to fully integrate into the economy.

Who are the three blind men?

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miamimike says on May 21, 2008, 16:27:

Diesel in my Neighborhood, which I use in my VW, has hit $4.67/gallon, in South Beach, Diesel is right around $5 Gallon on the 5th st and Washington avenue stations. They really Whack the touristsin these traps! I justify buying diesel only because I get 50 + MPG on the highway, in the city for short trips I use my scooter or bicycle.

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.

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miamimike says on May 21, 2008, 16:29:

G'loid-stations around Miami aren't waiting for the price to catch up, seems they are raising it every couple of days.

BBC LINK: "The weakness of the US dollar is also driving the oil price higher as investors look to buy commodities as a hedge against the currency, observers say.

"We've seen an about-face turn on the dollar in the last couple of days," said Mark Pervan, a Melbourne-based senior commodity strategist at ANZ Bank.

"It looked like it was starting to recover, but I think there's a less certain outlook at the minute."

Speculation that China would need to import more fuel in the aftermath of the earthquake there is also supporting prices, analysts say.

Other factors thought to be spurring the oil price include the limited supply of refined products such as diesel ahead of the US driving season. Two weeks ago, Goldman Sachs said that a barrel could fetch**** $200 by 2010****."

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.

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tejasmarcos says on May 21, 2008, 16:46:

they are gouging now because the technology is changing and gas consumption will clearly decrease once new technologies hit the market.

from today's WSJ;

Crude Logic: Spot-Market Supplies
Are Plentiful, But Futures Extend Surge
Refinery Closures
Curb Oil Demand;
Bulls for Long Term
By LANANH NGUYEN and NICK HEATH
May 21, 2008

LONDON -- While politicians urge crude-oil producers to increase output to cool off record-high prices, traders of physical crude oil say their market is suffering from too much supply, not too little.

Crude-oil futures prices have repeatedly set record highs in recent months. Futures on the New York Mercantile Exchange settled Tuesday at a record $129.07 a barrel, up $2.02 -- and up 99% from a year ago. The July contract for Brent crude stood above $127 a barrel Tuesday afternoon on the IntercontinentalExchange in London, up more than 80% from a year ago.


But traders dealing with physical cargos of crude tell a different story. They see a spot market so awash with oil that some producers, such as Iran, are starting to horde it in hopes that greater demand will lift spot prices as well.

They cite seasonal closures of refineries for maintenance and a poor return on refining operations for the lack of interest in buying spot cargoes.

Some of Europe's biggest refineries have been taken off line in recent months, including the region's largest, Royal Dutch Shell PLC's 420,000-barrel-a-day Pernis refinery. The Rotterdam, Netherlands, facility underwent partial maintenance for more than a month starting at the end of March.

Because prices for gasoline and other refined products haven't risen as much as prices for crude, refiners have had little incentive to hurry their maintenance processes, and some of those able to operate at normal levels have opted to cut back production. French investment bank Société Générale SA said Tuesday that global cracking margins -- the profits refiners garner from processing crude into high-quality end products -- have fallen to less than $7.50 a barrel this month, about half the level at this time last year.

In another sign of weakening demand for spot crude, on Tuesday the widely traded Forties crude grade was offered at a $1-a-barrel discount to the benchmark North Sea mixture. In the same period last year, contracts traded at a 50 cents-a-barrel premium to the benchmark. The North Sea benchmark price comprises a basket of four crude oils: the Brent, Forties, Oseberg and Ekofisk North Sea grades.

"There are two different dynamics in the crude-oil market," said Olivier Jakob, managing director of Swiss consultancy Petromatrix. "We're making record highs after record highs on the [futures] price -- but physical economics are not really showing any signs of distress."

Last week, Iran's departing OPEC governor, Hossein Kazempour Ardebili, said around 25 million barrels of his country's heavy, sour crude oil is being stored in 10 to 12 offshore vessels in the Persian Gulf. "There are simply no buyers because the market has more than enough oil," Mr. Ardebili said.

Meanwhile, some light, sweet crude-oil grades -- typically prized by refiners for their easy conversion into high-quality diesel and gasoline -- have also come under pressure. While light, sweet crude-future prices have showed little signs of slowing, their price structure is starting to hint at an easier short-term supply outlook. Futures prices for ICE Brent crude for the coming months flipped in early May into what's known as contango -- when near-term contracts are cheaper than contracts for delivery in the future.

A contango structure usually indicates that oil-market players expect crude supplies to be less scarce in the short term than they will be further into the future.

While demand remains low, it should pick up in coming weeks as refiners bring back the region's remaining idled refineries from maintenance and ramp up production for the summer -- when demand for motor fuels reaches its peak.

In the North Sea spot crude market, the June exchange-of-futures-for-physical contract, which lets holders of Brent crude futures swap the contract for physical crude, traded May 12 at a record low discount of 78 cents compared with the futures-contract price, according to Platts. That compared with a premium of five cents a month earlier.

The sharp decline in the EFP value represents extremely low demand for physical delivery of North Sea crude.

In the market for Russian Urals cash crude oil, cargos have traded at a $5.10 discount to the North Sea benchmark price, the lowest level since August 2006, Platts said. Urals prices could sag even further in the coming months after Middle Eastern producers lowered prices for their crude-oil grades, another trader said.

"There's various signals out there saying for right now, the markets are well supplied with crude," said Mike Wittner, global head of oil research at Société Générale in London.

But few participants say they think oversupply in the spot market will keep futures prices from continuing their relentless surge.

"There seems plenty of product around for now, but people are still long-term very bullish," said Glen Ward, an energy broker at ODL Securities in London, noting that long-term technical charts continue to point toward higher prices.

And while the discount between near-term contracts and those for delivery further into the future has widened, absolute prices are still high. Monthly Brent-crude-oil futures contracts -- which are available for the next eight years -- all settled above $125 a barrel Monday, according to the IntercontinentalExchange.

"The structure is telling you there is a little more crude available today than there is tomorrow, but the absolute level is saying the market is still tight," said Harry Tchilinguirian, senior oil-market analyst at BNP Paribas in London.

In other commodity markets:

SILVER: Prices rose more than 4% on record-high oil prices and a falling dollar. Lightly traded nearby May silver rose 69.7 cents to close at $17.671 while most-active July rose 69.7 cents to $17.725 an ounce on the Comex division of the New York Mercantile Exchange. Silver prices can experience larger jumps that gold as the gray metal trades in a smaller market and is more widely used for industrial purposes than is gold.

CORN: Futures rose on higher crude-oil prices and continued behind-average planting progress by farmers. Chicago Board of Trade July corn gained three cents to $5.8975 a bushel.

trying to walk a straight line on sour mash and cheap wine...

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gringoloid says on May 21, 2008, 16:48:

i've been telling you guys here about $200 oil from the beginning and I took a lot of heat for it. you read it here, first, on pbh, from me, long before goldman sachs and the mass media/dupe news reported on it.

if it rises by the same 26 times multiple of the the 1970's, then you'll be looking at $260 a barrel for oil. it's too early to say on that, though.

You're not going to see $6 or $8 a gallon all in one sweep, like in one day..............it's going to be gradual like it is happening now with ten cents at a time.

two problems for us oil investors though.............bush may raid the srategic oil reserve to assure a mccain victory thus using $20 a barrel oil to drop the price.....Prez Clinton did this in 1996 to get relected......................so this can lower the price.

what can drastically raise the price is an attack on Iran..................I dunno whats going to happen, I just know that there is going to be a steady upward spiral of the price of oil.

Who are the three blind men?

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vladimiro says on May 21, 2008, 17:19:

The price is arguably too low. Industrialized nations have been spoiled with cheap oil for too long. Their economies can handle higher prices. Oil must still find its real value.

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miamimike says on May 21, 2008, 18:17:

vladimiro says on May 21, 2008, 17:19: flag

The price is arguably too low. Industrialized nations have been spoiled with cheap oil for too long. Their economies can handle higher prices. Oil must still find its real value.

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Well said Vladimiro! We have had it cheap&easy in the USA on fuel prices for a long long time. I remember Gas Wars at 0.10-----0.12 per gallon with Green stamps handed out to boot to encourage Gas purchases. I belive now in denmark&norway Fuel is over $8 gallon, maybe close to $10/gallon. Norway, a major producer, wisely is reinvesting their record profits into a Alternative fuels Fund preparing their country for the day when their Reserves drop off and the need for other fuels arise,,,

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.

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BillBigD says on May 21, 2008, 21:20:

I know I will be called a fool, but there is plenty of oil guys. Numerous boats floating off of IRAN with 25 million barrels each PBR claims to have found the biggest find in the West in 30 years. Refiners working at 82%. When a company states (CLR) they increase production by just 534 barrels and the stock goes up $10 (had calls that I closed up 500%) you might say things are a little out of wack.
But just like the tech bubble alot of money can be made. Just my thoughts. Been investing in oil and Nat Gas stocks since 2004.

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tejasmarcos says on May 22, 2008, 06:55:

BigBillD - you are no fool. the article i posted above confirms what you stated as well.

trying to walk a straight line on sour mash and cheap wine...

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