Oil up on 'supply crunch' warning

[Bhaisahab]

Source: BBC

Oil prices have risen after the International Energy Agency (IEA) said that there could be supply shortages next year once demand picks up.

Nobuo Tanaka, the IEA's executive director, warned there could be a "supply crunch".

US light crude for March delivery rose 65 cents to $38.16 a barrel. Brent oil added 29 cents to $45.10 a barrel.

<SNIP>

"Currently the demand is very low due to the very bad economic situation," Mr Tanaka said.

"But when the economy starts growing, recovery comes again in 2010 and then onward, we may have another serious supply crunch if capital investment is not coming."

Read more: http://news.bbc.co.uk/2/hi/business/7892477.stm

[Orrex]

1. Let me see if I understand the dynamic

1. When crude oil prices go up, gas prices go up
2. When crude oil prices go down, gas prices go up


Did I miss anything?

[nc4bo]

11. Following previous logic, sounds about right to me. A bunch of bullkaka and more of the same. nt

:puke:

[Andy823]

18. You got it!

No matter what happens gas prices go up. They can use all kinds of BS about supply and demand being the cause of higher prices last summer, but reality is simple, price will go up because the prices are manipulated by those with the power, and the money!

[Psephos]

25. Gasoline price follows a different set of market dynamics

Here are a couple of recent articles that discuss it:

http://www.google.com/hostednews/ap/article/ALeqM5ghv9twSYxLLiFadLXgXpiuYzAhlQD96C54NG2

http://www.usatoday.com/money/industries/energy/2009-02-15-oil-gas-prices_N.htm

:)

[Orrex]

26. Spare me your facts

:grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr:
:grr:I'm in righteous-indignation-mode!!!!!!!!!!!1!!:grr:
:grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr::grr:

[Psephos]

27. lol - I hear you n/t

[snappyturtle]

2. Supply "crunch" or supply "threat"? nt

[CatholicEdHead]

3. So much is being held offshore until prices rise

There are many tankers out there just sitting on oil. That is partly why prices went from $1.60 here to $1.99.

[liberal N proud]

4. Hey, I have an idea! Why not build some refineries?

It will put people back to work helping the economy and it will help ebb the supply crunch they so predict.


Oh, never mind, that would make sense and wouldn't allow for price gouging and record profits on behalf of the oil tycoons.

[GoesTo11]

6. Didn't Dems agree to some offshore drilling too?

[BumRushDaShow]

12. Now on hold

http://www.usatoday.com/money/industries/energy/2009-02-10-offshoredrilling_N.htm

[Lorien]

9. Hey, I have an idea! Let's build solar power stations!

It will put people back to work helping the economy and it will help ebb the supply crunch they so predict. Oh, and curb carbon emissions and help to get us off foreign oil-which will get us out of the Middle East. :think:

Many Scientists believe that ten square miles worth of solar farms could power the entire US. Not much happening out on those salt flats.....

[FarCenter]

17. Refineries are running at under 80% of capacity

There is no need for new refineries.

[Trajan]

22. Didnt they just idle some refinery capacity ...

Because prices were dropping ?

Assholes ....

[endarkenment]

5. Hey I have an idea, why not build a green economy?

so that we are not at the mercy of wild fluctuations of oil prices in an era of scarcity?

[acmavm]

7. It's just another scam from the guys who have been robbing us

blind forever.

[Initech]

8. Obama needs to put a stop to these dipshits.

Supply and demand my ass... this is highway robbery, literally.

They no longer control the White House and the Senate, they need to shut the fuck up.

[Lorien]

10. The "crunch" being the log jam of oil tankers sitting offshore

and are owned by the robber barons, er, "banks", who are speculating on oil.

Time to stop giving our money to these dipshits and go green and renewable!

[Andy823]

19. I agree.

The best thing to do is go green, but those same "barons" will just buy up the green industries and once again we will be at their mercy! Congress has to step in and stand up for the people and get energy off the commodities market, along with food. When that gets done we may stand a chance, until then those with the money will just keep on giving us the shaft while they increase their profits and offshore bank accounts!

[Lorien]

23. Nah, if solar farms and whatnot are built with Federal dollars, they should

stay in Federal hands. Power all schools and Federal buildings for free, offer low cost energy to poor consumers, and it'll mean huge tax savings for all of us-and NOTHING for the barons!

[Bigmack]

24. Socialism! Don't you know that stuff....

you're talking about is Socialism... or Communism.. or Fascism... or something baaaad for the US?

Socialism will rot our brains, encourage the terrorists, and make us all fags.

Do I have to add the :sarcasm: tag?

[Lugnut]

13. Yeah,

Bullhockey. We're being gouged as usual.

[ixion]

14. ...

"supply crunch"

...

...

:eyes:

[happyslug]

15. First the recent price increase is normal for this time of year

For at least the last 50 years (With some exceptions) as the winter heating season ends the price of Gasoline starts to go up. The traditional rationale for this is the reduced refining of oil as the refineries switch from producing home heating oil/diesel/jet fuel to gasoline (I know home heating oil/diesel/jet fuel and gasoline are by-products of each other, you get BOTH when you refine oil, but refineries can switch which is the main product, and in the spring that switch is from home heating oil/diesel/jet fuel to gasoline).

Do to the approach of Spring, people stop buying home heating oil/diesel/jet fuel to heat their homes, this movement starts in the South and works North (and in the North Natural Gas is more a competitor to oil as a heating fuel, through it is used extensively in the south). Rural residents depend on oil more then natural gas for home heating and the South is more rural then the North (Another reason for the South's greater use of Oil and why the switch to gasoline starts BEFORE the end of the Northern heating period).

Anyway, the recent price increase in Gasoline prices seems to reflect this traditional stop in production to do the switch (and other maintenance on the equipment to do the refining). A 30 to 50 cents a gallon swing in price of Gasoline is NOT unheard of for this period of the year (One MUST adjust for the change in the overall price of Gasoline, when Gasoline was 25 cents a gallon, the switch would have been only 3-5 cents a gallon, thus when gasoline first started to hit 35 cents a gallon in the early 1970s BEFORE the oil embargo, people were already complaining about the price of gasoline do to its increase BEYOND the normal swing I am talking about, given the change in the price of Gasoline since the 1960s).

As to the reports of Tankers being kept full and out of port, such tankers cost money to run, to keep them out of port just to hold oil is expensive compared to holding oil in a land base storage tank. I have NOT heard of any increase in land based storage tanks (Through I also have STOP reading about low oil inventories not only in the US but throughout the World, which implies some storage of oil, held for a higher price). My point is the tankers are to big and cost to much to operate (And they MUST run to prevent the tanker from hitting reefs, coast lines and other ships).

Now I should comment that the price of home heating oil/diesel/jet fuel has NOT dropped as far as the price of Gasoline has dropped. This is probably do to the cold winter both in the US and Europe. Gasoline dropped as far as it did was do to the fact the price drop continued into the winter heating period (I.e. WHEN people buy oil for heating NOT when it is actually used). Since Gasoline is a by product of making home heating oil/diesel/jet fuel a surplus of gasoline was produced (this was made worse by the increase use of Diesels in Europe do to their better fuel economy). These two factors (Increase production of gasoline AND decrease demand for gasoline) continued well into December. Thus Gasoline was over produced compared to the demand for Gasoline during that period (The end of 2008) and that over production lead to how far gasoline did drop in price. Now those conditions have reversed, Gasoline usage is up AND production is down, thus the recent increase in the price of gasoline. I expect it to continue till the Summer. In the Summer we will see if the recent drop in demand is permanent, if it is NOT the price will continue to raise all summer long. If the drop in demand was permanent, the price will stop going up around Memorial Day (May 31st). Only time will tell.

[Trajan]

21. awww bullshit ....

This CRAP is part of the problem ....

There is always at least ONE DUer to pump this BS into the system here ....

[ohtransplant]

16. I'm really tired of their BS.

It might just be me but it appears (say it ain't so)to be a coordinated effort to explain why gasoline prices should rise uniformly under almost any circumstances. Don't we have laws against that sort of thing? But then again...it might be me...

It might just be me but I really hope we have the fortitude and foresight to keep pushing demand down. It's my opinion the results would be dramatic. I have my doubts about our resolve as a country. Once things "normalize" again I'm afraid we'll back to the pumps with our SUVs in record numbers but then again...it might be me...

It might just be me but I think Americans underestimate the power of our economic force. I'd love to see us we enforce fair trade policies, decrease our use of fossil fuels (wherever they come from) and place more value on our people than our corporations but then again...it might be me...

[Trajan]

20. Um .... what ?

... we may have another serious supply crunch if capital investment is not coming."

Let me guess: Amassing the GREATEST profits ever known to mankind for years on end has left them unable to provide 'capital investment' ?

Hmmm .... sounds like they need a bailout ....

[Skink]

28. I driving were to continue to decrease this year could be a turning point.