Oil tops $75/bbl to conclude week of record prices
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The usual suspects were all present this week - fear and uncertainty over the possibility of military action in
Iran, civil unrest in Nigeria, and the seemingly inelastic and insatiable demand for energy 'round the world - and oil
ended up setting record highs nearly every day this week. Friday's market close saw the black bubbly stuff top the $75
mark, topping off a five-day increase of 8.4%. As many are quick to point out, prices are still 20% lower than those of
1980 when adjusted for inflation, but give it a couple a weeks and we'll probably be there. Keep in mind that this isn't
investment advice; rather, that comes with a CNN/Money piece that recommends
two oil stocks while staying away from the auto sector.
Then there are gasoline prices, which are tracing their own upward trajectory on the heels of the MTBE-to-ethanol changeover. The "S" word - shortages - is now being thrown around the East Coast. If any readers have information on this, please speak up in the Comments.
On a personal note, we here at Autoblog had the opportunity last night to personally verify that at least one local fuel station has a pay-at-the-pump limit of $100.00 per transaction. Ouch.
[Sources: MSNBC, CNN/Money]
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Reader Comments (Page 1 of 5)
stratojet 2:38PM (4/23/2006)
Stop posting those types of comments: self-fulfilling prophecy it will become
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Andrew R. 2:53PM (4/23/2006)
Shortages? That's interesting because there seems to be no shortage of record profit on the oil company's part.
Btw typo: "tranaction"
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Philip Dunlop 2:55PM (4/23/2006)
"inelastic and unsatiable"
Please tell me they were typing mistakes?
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Tim 3:06PM (4/23/2006)
I was home to the east coast over Easter break, and there are definitely shortages. There were several stations that I pulled up to and they were out of regular. It seems that a good amount of gas stations were that way, too. It was very common to see stations with signs or pump nozzles covered where they were out.
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Tom 3:06PM (4/23/2006)
#2, people come to Autoblog to practice their writing skills. Let's not be hard on one another. Simply say,
"Dear Eric Bryant,
My name is Mr. X. First, I want to tell you I read your web log every day and it is fantastic. Keep up the good work. I am writing to you today because I noticed a little blip on your log today. I'm sure it's no big deal, but I believe you might have spelled "insatiable" incorrectly on your entry titled "Oil tops $75/bbl to conclude week of record prices". You used this word on paragraph 1, line 5 of the entry. If you happen to have the spare time, could you correct the spelling? Again, it's not really anything, so don't worry about it if you are busy. I am really enthusiastic about Autoblog, please keep it coming!
Yours,
Mr. X (no relation to the X-Men)
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Richard Lawler 3:29PM (4/23/2006)
The $100 limit is probably to stop people with stolen credit cards from filling up a bunch of cars at once.
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torcik 3:36PM (4/23/2006)
I wonder if we can blame this the UAW?
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Richard Warren 3:43PM (4/23/2006)
Strip away inflation and fuel price at the pump is about the same price it was in 1995. So, what's the problem?
Of course those who complain that the price of fuel is so high also seem to be the one's that complain about the union members (actually keeping up with inflation) and their wages, hmmmmmmmmmmmmmmmmmmm
Like no one saw this coming? Guess they don't teach any history from the 70's in school. While you've been paying less at the pump, checked your energy bills as of late? Energy is costing more each day.
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Greg 3:47PM (4/23/2006)
This entire situation can be fingered right to President Bush and the Corporate Scum that own the media outlets in the United States.
During the summer of 2005, President Bush after a meeting with Vladimir Putin in Moscow said 'I disagree with Vladimir's view of Iran having Nuclear Power, but I respect his decision'.... Bush went on ... ''We both agree (referring to Vladimir and himself) that Iran should not be allowed to possess a Nuclear 'WEAPON'.'' Not for nothing, none of this was reported by any of the networks... I only am aware of this because it was played in its entirety live on one of the CSPAN stations and I was lucky enough to have caught it.
So rather than nip the problem of Iran coming into possession of any Nuclear Technology (all of which is being supplied, and built by the Russian Nuclear Exporting department) .. Bush is playing the game, and now 'FEAR' of attacking Iran because of their Nuclear Program is driving the market with higher prices. And with talk of the United States Considering using NUCLEAR BUNKER BUSTER BOMBS.... is only excelling the speculation on wall street.
((NOTE:Kennedy back in '63 confronted the USSR over the Missiles in Cuba... 43 years later and Bush 43 won't confront Vladimir over Iran... its an insult to anyone who isn't loaded up on the Kool Aid.))
It is absolute 'MAD COW FUBAR' to hear anyone say 'shortages', or we are 'running out' out oil.
And this whole nonsense with China, please, so what, SO WHAT.. THERE ARE NO SHORTAGES!!!! January 2005 Kuwait along with the rest of OPEC decided that cutting oil production was justified (when oil was at $50 a barrel) because there was plenty of oil on the market.
And just yesterday, April 22 2006 OPEC announced that supplies are not the problem - here is the link - http://news.yahoo.com/s/nm/20060422/bs_nm/group_opec_dc_2
and to top it off... US Energy Secretary Samuel Bodman agreed.
Just to twist the knife in the wound, we are all going to hear 'refinery capacity'... that is more MADCOW FUBAR ... in the last 8 years every major oil company merged with another one... and to increase profit and lower cost they closed down refineries across the nation.
CNN, MSNBC, CNBC, FOX, ABC, NBC and CBS are all public companies owned in part by MEMBERS OF OPEC... so don't count on any of them to give you the real deal on what is going on.
CNBC actually had an honest analyst on their show about a month ago, and he confirmed some of what I have stated, and also blew a big whole in the notion that India had anything to do with it... and guess what, that was the last time I saw him and probably the last time he will ever be invited on the show.
I am so fed up with Corporate for Profit Media outlets lying to the people of the United States I could scream, but that would do nothing, so here I am blogging.
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Bruce 4:14PM (4/23/2006)
Not a fan of the President at all and I have no doubts that he'd try to help out his business supporters if he thought he could get away with it, but it's distressing how economically illiterate the vast majority of people are. Maybe we need poll tests and taxes again. Gas is up because oil is up. Oil and gas prices are up because of:
a) increased global demand. China and India are booming and they have over 2 BILLION people combined, about 7 times the population of the USA. Going from push carts to a car in every garage with that many people increases the demand for fuel. More demand with finite resources equals higher prices. Did you think they'd stay unmotorized forever?
b) Uncertainty. Potential disruptions to supply in Iran, Nigeria, etc.
c) A cartel that tries to control oil prices via reducing production. Is it Exxon, Shell? No. Try OPEC. Blame them. They have a finite amount of the stuff and try to manipulate the market to get as much as possible for each barrel. Before you get on your high horse, remember, you do the same thing in your life. I doubt you go to work and work at a frantic pace every day for the same pay as you could work at a normal pace for.
d) Resistance to allowing domestic exploration and drilling in areas like Alaska and the Gulf coast.
e) Adding a million or two new immigrants each year w/o expanding production sufficiently to meet the demand, what did you expect? More people competing for a similar amount of resources = higher prices. Econ 101.
f) sprawl. As we urbanize and our commutes get longer, we use more gas. Sitting in traffic jams isn't conducive to great mpg.
Gas prices are also up locally due to things like limited refining capacity (thanks environmentalists and Hurricane Katrina) and the switchover to the various blends mandated by the government that disrupts supply temporarily.
I probably use double what the typical US family does and have managed to not start whining. I run a small business that uses power equipment that sucks gas, have to drive a 10mpg truck to tow work stuff around in, and my wife has to make a long commute. Grow up and face facts. Sometimes stuff rises in price.
If you don't like it, go buy oil co. stock and that will offset your costs.
BTW, Exxon's profit margin was 10% last year. Hardly outrageous. Many of us would rather just dump our money in a 10% bond and play it safe. Thank your lucky stars there are people willing to risk capital to provide you fuel at even these increased prices.
When you toss out conspiracy theories w/o any research you simply make yourself look foolish and immature, like a baby pitching a fit over not getting the toy it wants. A complex combination of factors have led to increased prices. I can guarantee you that the one "solution" that won't work is going off on tangents trying to blame oil companies.
Finally, ask yourself, if these "greedy" corporations are conspiring to "fix" prices at a high level, why did they also conspire to "fix" prices at the much lower levels of last winter?
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dejal 4:27PM (4/23/2006)
Bush (and Clinton, and Bush, and Reagan...) + Congress
are responsible for the USA with fuel mileage standards that haven't moved very much in 20+ years.
I love it though, that it's Bushes fault that oil is $75 a barrel. So, riddle me this, what's the price for the rest of the world, $20, $30? Does everyone else in the world pay markedly less for a barrel?
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Greg 4:27PM (4/23/2006)
Sorry Bruce,
You are correct on OIL and Gas being connected but...
OPEC says there are no shortages of supply and our US Energy Secretary agrees.
Here is the story..
http://news.yahoo.com/s/nm/20060422/bs_nm/group_opec_dc_2
6 Paragraphs into it, you can read what our US Energy Secretary says.
Also the Iran factor is what is driving Oil prices up and it's all based on FEAR of War.
What ever happened to 'you are with us or with the terrorists?'... Bush should have demanded Russia say NO to the exporting of Nuclear Tech to Iran. If he did, there would be no reason for this 'War on Iran' talk.
Oh and by the way, how come no one is saying boo about Vietnam having the same Nuclear Facilities
http://au.news.yahoo.com/041112/3/p/rpec.html ,,, I am sure there are many in today's Vietnam that have a grudge against the United States... don't you think?
India uses COAL for their power plants by the way.
China, yes, they are rising, but again, SO WHAT, ... THERE IS PLENTY OF OIL.
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iQuack 4:36PM (4/23/2006)
Along the lines of Bruce's comments above, several people sent me a dumb email suggesting that EVERY motoris should boycott EXXON MOBIL because starving the largest oil company would lower prices, etc., etc., etc.
My response to that silly boycott email was:
Two things trouble me about this boycott:
1. In 1972, the price of regular gasoline was about .35 per gallon which, inflation adjusted, is the equivalent of $1.70 today. So, regular gas isn't yet twice as expensive as it was 34 years ago when there were fewer cars, less competition for oil from China and India, and less uncertainty from the Arab oil states who, as much as it's fun to dislike them for many good reasons, sell us the cheapest oil we can buy.
Note too, that since 1972, newer vehicles have had their fuel consumption cut by nearly half or more. A typical V8 Chevy from the early '70s averaged about 10 to 16 miles per gallon. Today's Honda Accord or Toyota Camry averages about 22 to 33 miles per gallon with similar performance unless you're trying to pull a trailer. So, for most people, gasoline is actually more affordable than it was 34 years ago after adjusting for both inflation and vehicle efficiency.
2. As a shareholder of Exxon Mobil Corp., I'd favor buying their gas over others. So, I'd rather not see--and indeed, would try to prevent--a devastating boycott of of "my" company.
Now I must figure out how I can offset your ill-advised boycott even though I don't drive much and my car's gas tank holds only 17.1 gallons.
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Greg 4:42PM (4/23/2006)
Bruce, one more thing...
You correctly state ''blame Opec''... how come Bush didn't come down hard on Kuwait last year when they led the pack in cutting production when Oil was $50 a barrel... I'll tell you why.. because they are SCUM .. AND WHERE NOT WORTH LIBERATING 16 YRS AGO!
This all goes back to Bush and his family ties with all of those Scumbags over there... and what did he do, he took out the Only threat all of them faced, Saddam Hussein.
Yes, this is all Team Bush's fault... oil was 15 dollars a barrel in the late 90's and only went up to $25 dollars a barrel when the World Bank had Bill Clinton send Energy Secretary Richardson to Saudi Arabia to ask them to cut oil production a bit so the price could get up 10 dollars a barrel .. so Venezuela could use the extra money per barrel to pay back the debt they owed to the World Bank. (this is another Fact that the for profit media outlets that the United States Citizens get their news from never reported though it was made public during a live interview on CNBC on April 15th 1999 if I remember correctly)
Now 6 years later and Oil is triple the price and with INSANE talk of Using Nuclear Weapons against Iran, come on, it is all feeding the fear factor and driving the price of oil to where it is now.
Yes it is Bush and his entire teams fault.
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iQuack 4:44PM (4/23/2006)
Typo in my post above (second line) should be MOTORIST, not "motoris."
Just want to satisfy you perfectionists out there.
I don't know what happened to the "t" and it must be around here somewhere.
I'll keep looking for it.
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iQuack 4:55PM (4/23/2006)
Per Greg: "You correctly state ''blame Opec''... how come Bush didn't come down hard on Kuwait last year when they led the pack in cutting production when Oil was $50 a barrel... I'll tell you why.. because they are SCUM .. AND WHERE NOT WORTH LIBERATING 16 YRS AGO! "
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If Kuwait had not been liberated, Saddam's army would have next moved into Saudi Arabia where most of the oil happens to be. That could not be allowed to happen.
Arab oil is the cheapest oil we can buy and its price must rise higher (how much higher I don't know) before it'll make sense to use alternate fuels.
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Greg 5:08PM (4/23/2006)
IQuack..
I totally disagree with the notion that Saddam would have invaded Saudi Arabia after Kuwait. We were totally aware that Saddam was going to invade Kuwait, Saddam made it clear he was, and the reason was because Kuwait was drilling diagnogly into his country pumping out his oil.
If that was a concern, we could have just kept our troops deployed in the deserts of Saudi to protect them.
And regarding your statements on the comparison of a price of oil in 1973 to now... first let's get something straight... Saudi Arabia was a big reason why we were cut off from oil to begin with back then because of the United States Support of Israel... so you are to tell me that they were worth protecting 17 years later?
That is the same time frame basically we can compare from Desert storm to todays 'Operation make it up as you go Along'
But another thing to consider, in 1972 the price of real estate was managable for everyday American Families with one spouse working and the other staying home watching the family. Today that is not true...
Also in 1972 there American Families had the ability to write off things like interest on new cars, credit cards, etc on their taxes.. they also weren't taxed on everything including the interest on their savings account.
But I am glad you bring up 1972,, it is time America is reminded of the BLATANT RACISTS THAT RULE AND OCCUPY THE LAND OF SAUD.... thanks for bringing it up. Those Scumbags punished America with Oil Embargo's because of our foreign policy.
Now, how many people here believe they deserved the protection of the United States 17 years later?
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Andrew 5:29PM (4/23/2006)
For those who blame Bush:
1. The SUV craze went great guns all through the Clinton administration. Gas consumption went up consistently.
2. During campaign Kerry actually said he supported Americans right to own big SUV's, but made some kind of vague statement about making them more efficient.
3. Consumption has been out-pacing new discovery for some time, see www.peakoil.net
Fact is Americans like their "big iron", many people can't imagine driving down the road without that extra ton of steel, and and anything small than a V8 is for poor people.
No matter who is in office there will be long painful adjustment to more efficient vehicles, along with lots of complaining and discussion of conspiracy theories.
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iQuack 5:38PM (4/23/2006)
Greg,
Glad you brought up the subject of taxes because that's where Bush has done his best work in trying to CUT them. The Republican Congress is shameful in not making Bush's tax cuts permanent. Repubs are likely to lose Congress this November because they're acting like tax-and-spend Democrats.
If you think taxes are too high now, wait until the Democrats are able to raise them yet higher. Democrats LOVE high taxes to pay for government programs that create worthless jobs and shower largesse on voters feeding at the public trough. Too bad that many Republicans in Congress have embraced this bad economics these days.
And please, don't tell me about "tax cuts for the rich." Taxes should be cut for the people who actually PAY taxes, not for folks whose taxes are low if any at all. As it is now, about 96% of income taxes are paid by 50 % of the taxpayers.
That's why elections are so close now--one half of the population in the U.S. is taxing the other half!
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ron wilson 5:45PM (4/23/2006)
100 dollar limit? If it reaches that much for a fill up, I will be walking...
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