Crude prices surge in early trade, hitting a seven and a half month record due to increasing tensions between Iran and the West.
London's Brent crude on Monday rose 54 cents to $71.11 after touching a new record-high of $71.40.

"The drama over Iran's face-off with the West, the rise of insurgency in Nigeria and gasoline supply concerns in the U.S. ahead of the driving season are keeping a high floor under oil," said Victor Shum at consultancy Purvin & Gertz in Singapore.

Amazingly stuff like this seems to happen as the US goes into its "busy" season EVERY FREAKING YEAR.

Score another one for huge oil company profits!!!!

Fun huh Rover....

They're applying the old Supply and Demand line to us before the Demand is even higher...

Kinda corrupts that model imho.

Fandros

This stuff hurts.

We have a local plant that manufactures replacement tires. Summer is the busy season (when alot of folks replace tires before vaccation).

2 things affect their sales:

1. New car discounts (when folks are buying new cars, they aren't keeping their old ones and buying tires). The GM employee discount program and Ford's friends and family pricing really put a hurting one em.

2. High gas prices. Less folks travel when gas goes through the roof so they need fewer tires.

What really irks me is the fact that when oil prices go up, we see it at the pumps overnight even though they are selling oil that was purchased at a lower price from their reserves. But when prices drop, gas prices stay high because they claim they are selling oil that was purchased at the higher prices.

I remember doing an 18 month stint in San Antonio. During that time a first class one way ticket went from $832 to over $1100. The price increase was due to "increased fuel costs" A few months later, when fuel prices decreased, that ticket prices didn't follow suit.

Annoying to say the least.

It sickens me that the oil companies had the BALLS to report record profits in a time when peoples number one gripe atm nationally is gas prices. I know they have to report these things, but you think they would try and hide it a little.

I hope soon that the US government steps in and does something about it. It is killing the economy. I love the fact that hawaii took the initiative and made limitations to gas prices, think other stats should follow.

I read somewhere that the average monthly spending on gas is now the #2 expediture for american house holds behind mortgage and rent.....WTF is that...looking at my expenses i pay $225 a month in gas, equivilant to my car payment...

Throw in the fact the demand for Ethenol is up as well because more and more states are using it now...another reason why gas prices went up lately. They are predicting a major drought in the midwest (area of the country who grows the most corn) so one can imagine $4.00 a gallon in the near future.

Ethenol FTW.
Although I do agree the oil companies are getting richer, what is the comparative costs of today's production, to say the 1970's production?
Doesn't it cost more to drill for oil now days than it did in the 70's? Refining, ect too?
I know the actual dollars are up, but what is the cost to manufacturing ratio?
Just an inquiring mind, and yes, the prices always seem to go up just before the "travel season".

You know, several years ago there was a lot of talk about why we used imported oil. The reason given was that it was cheaper to let the folks in the Middle East pump it out of the ground and ship it to us than for us to pump oil out of the ground HERE in this country.

I think at $70 a barrel, we can afford to pump our own now.

To that end.... let's start pumping oil out of the ground here at home... stop ALL oil imports and let them choke on the excess. Once their economy starts to sink like a rock.. then tell them we will buy their oil... at $25 a barrel. If they don't like it.. then enjoy starvation.

/rant off

Sorry... gas was over $2.65 a gallon this weekend and it really chaps me that oil companies record record profits while the average working man can't hardly afford to put gas in his vehicle to get back and forth to work.

The bulk of my mutual funds are in Oil, Gold, overseas markets, and real estate...... I'm okay with all of this :)

You know, several years ago there was a lot of talk about why we used imported oil. The reason given was that it was cheaper to let the folks in the Middle East pump it out of the ground and ship it to us than for us to pump oil out of the ground HERE in this country.

I think the Environmentalists have a strangle hold on no more new drilling in the continental US arguement.
There's plenty of oil off the coast of Florida, and lots in Alaska we haven't even touched.
Although they are 10 years off from being viable, why not start now, along with alternative energy sources being pumped up like Hydrogen and Ethanol....?

why not start now, along with alternative energy sources being pumped up like Hydrogen and Ethanol....?


You mean like Carter suggested back in the '70s?

The standard defense by those who enjoy $3/gallon is that while the profits sound big, the profit margins are very small and shouldn't bother us. I'll let the more economically astute pick that argument apart, but there it is.

I can see the emotional argument for why it's lame that they're making more money off our losses, but that's business. I don't blame them at all for not cutting their profit margins.

The demand for their product is going up and the supply is going down.... Of course they are going to be making massive amounts of loot.

And remember kids, those massive profits are hard at work in Washington DC keeping the status quo!

We could always open ANWR...

*sigh*

For the record, I think all the greenies who have been in the way of opening it every time should die, in a fire.

Sadly, we pump the oil here (Alaska), refine the oil here, and then ship it to foreign countries. And buy our gas from other countries

What the FUCK?!

Obviously, Elemak, the solution is that the foreigners who buy our oil need to die, in a fire. Then we wouldn't have anyone to sell the oil to!

supply is going down because they regulate how much is produced....When KAtrina hit, the Worlds oil people, gave something like 300billion gallons of oil to help offset costs due to golf region disaster, this was less than 1% of the oil reserves....

For a good dose of irony, we could use the gasoline they sold us...

Hah!

Now we have crude oil up at over $70 a barrel (http://www.usatoday.com/money/industries/energy/2006-04-17-oil-70_x.htm?POE=NEWISVA). Gas prices have gone up about 10 cents in the last week. If you're driving a car that gets 15 miles per gallon that means that you're spending less than three-fourths of one penny more for every mile you drive. If you have a 15 mile commute to work, this 10 cent rise in gas prices is costing you 20 cents a day. Wow! I can see why you're so upset!
With these gas prices going up politicians are seeing another golden opportunity to demagogue the oil companies. Hitler blamed the Jews. Demagogue politicians blame the oil companies. They know they're blowing smoke, but they also know that the average American was educated in government schools and is simply too ignorant to understand the truth about gas prices and oil company profits.

Most government school graduates can't even so much as explain the difference between a profit and a profit margin. Let's say that you're selling a widget for $10 and you're making a 10% profit. Your profit is $1.00. Your profit margin is 10%. Now let's say that your costs go up by $9 a widget. So, you double the price at the widget store. Now widgets are selling for $20. Your costs are $18 per widget, so you're making $2.00 on every sale. Your profit has doubled to $2.00 per widget, but your profit margin is still 10%. You're still making the same profit on every dollar that you invest in your business, but your profits have doubled! So ... as surely as wet streets follow rain ... along comes the politician to demagogue you for doubling your profits. He starts to talk about a windfall profits tax to take that extra dollar away from you. Oh, to be sure, he knows what the real story is here --- but he also knows that his poorly educated constituents don't know. The playing field is set for some grandstanding and pandering ... and our politico is off to the races!

Sometimes it makes you wonder what the real purpose of our hideous government school system is. Are those schools there to educate Americans to the greatest extent possible? Or are those schools there to educate people just to the point that they can become good little servants of our increasingly-powerful Imperial Federal Government?

http://boortz.com

Don't drive American cars!

Sixee, thanks for yet another inane, inductive overly generalized post. If you’re going to throw an insult out to a vast majority of people in this country, you should really raise the thought level of your posts.

Most government school graduates can't even so much as explain the difference between a profit and a profit margin.

Did you really think you needed to came here and explain this incredibly simplistic concept....or was it something you needed to do to get it straight in your mind?

Sometimes it makes you wonder what the real purpose of our hideous government school system is. Are those schools there to educate Americans to the greatest extent possible? Or are those schools there to educate people just to the point that they can become good little servants of our increasingly-powerful Imperial Federal Government?

Public schools are here to do the best job they can with the money and dysfunctional children given them and the federal and state red tape that hinders them. Some public schools do a better job than others...but isn't it strange that if you look at the public schools doing a better job, they are primarily in areas that have a higher overall income. And please don't even get me started on private schools. They pick and choose who they admit...which ends up to be only fairly well off/educated people that can afford them. When they expel a kid, they aren't required by law to continue to educate that kid like public schools are. They haven't almost any government regulations hindering them.

.....and now back to the thread...my apologies for hijacking a bit.

I agree with Thormir and....shrug...Sixee. Overall profits are going to be higher when the price goes up and the usage stays the same (or even increases). The overall price of gas is the issue...it's relatively minor incovienience for most individuals..but it can greatly effect or ecomony (i.e shipping costs, et. al.) especially when there are sharp spikes in the cost.

Correction...$72.00 a barrel!

it's relatively minor incovienience for most individuals

It depends where you live, and the proximity of things like food and work. Florida is a pretty spread out state, even if you live in JAx, Tampa, Miami, Orlando they traffic is a PITA and there is no real good forms of mass transit.

Utah is very spread out and has a pisspoor mass transit system at the moment. Good news on that front tho, they are adding light rails to the heavily commuted routes and hopefully that'll ease up the gas useage here.


Fandros

As egotistical as it sounds I thank every day that the price per gallon goes up that I traded in that beast of an SUV I used to drive for my more efficient AWD wagon. When gas goes up I see how much I am saving.

But it's funny the other night my local station was doing one of those "investigative" reports about the rising cost of gasoline. The reporter made it sound like the reason it's going up is b/c the cost to make gas cleaner has increased the cost at the pump. Something about ethanol(sp?) Any truth to that?

I believe I said that at about the 5th post on this thread...anyways Ethenol is just a quick fix for MTBE thats causing some serious pollution problems so gasoline companies are resorting to Ethenol to fill that gap. Personally I think Ethenol is a cool alternative but 1) it cost more than gasoline itself about $4.00 a gallon for straight ethenol (not E85) 2) its made from corn so we are dependant on good crops heaven forbit we don't get that draught thats being predicted.

Another problem with Ethenol it absorbs water and cannot be pipped acrossed America like gas can so its trucked and railed to gasoline compainies causing a huge bottle neck for the increased demand for this wonderful problem solving shit called Ethenol.

Utah is very spread out and has a pisspoor mass transit system at the moment. Good news on that front tho, they are adding light rails to the heavily commuted routes and hopefully that'll ease up the gas useage here.


Fandros

I thought wagon trains were the standard mode of transportation there.

Howard Gensler just retired from Exxon with a 400 million severance package. They said he got basically 144k for every day he worked there. Things must be tuff at the gas company.

Ethanol supply is not at a low becausue more states are using it.

Last year's energy bill did not include immunity for oil refiners to lawsuits concerning MTBE, an additive that oil companies put in gasoline at refining time to make the "summer blends" many states require. As a result, oil companies are phasing out the use of MTBE in gasoline because it has been found to be carcinogenic.

The replacement for MTBE is ethanol. so this is the first year that "summer blends" have more ethanol in them and less or no MTBE. so there are some ethanol shortages which is creating gasoline shortages. Prices usually spike a bit this time of year as the switchover to "summer blend" gasoline hits the pipeline.

Well I just assumed that states who where using MTBE in its gas not Ethenol are now using Ethenol in replacement. Either way the supply is taking a hit and the logistics of getting the Ethenol around the country is turning out to be a bit of problem. MTBE was not allowed in Wisconsin for years (at least iv'e been lead to believe so) and thats why we have been on Ethenol for probably 5+ years already.

Looks like the rest of the country will be looking at the midwest for some fuel sources. I hope it lowers the over all cost. Though they have been predicting that costs will continue to increase through out the summer. Maybe I should convince the wife to go back to doing in home daycare.

Just a side note; ANF = America Needs Farmers. The Iowa Hawkeyes have had it on their football helmets for about 20 years. Though it wasn't done for these exact reasons it would be a good reason. Alternative energy sources. Just a thought.

Heres a prediction.


Gasoline prices will continue to rise somewhat through the labor day weekend. With temporay spikes suddenly appearing around Memorial Day, The 4th of July and Labor Day.

After Labor Day there will suddenly be a reason that gas will drop about .30 cents or so per gallon.

In December there will be a sudden issue that will see a rise in fuel oil and natural gas prices which will suddenly end in about March 2007.

Then starting in April 2007 some Middle Eastern nation will experience an issue that will suddenly see oil prices rise as we head into the summer vacation season.

NOTE: Through all this we see a rise in price of oil that is pumped in the North sea, Alaska, South America, Mexico etc..

I'm guessing that this is caused by the Al Qaeda and/or insurgent attacks on those places making it difficult for oil to be pumped and transported from those non-middle eastern places.

It could be that I missed the headlines about the attacks on oil wells and pipelines in Alaska, South America etc...
I mean the fact that ALL oil increases due to issues in the mid east couldnt possibly be taken as opportunistic profiteering by the caring people in charge.

You forgot to claim that GWB and Cheney are using weather control devices developed at Area 51 to steer hurricanes into the oil refinieries of their competition.

Sanchek, don't be ridiculous. Bush only directs his weather control device towards Louisiana.

US oil companies control 2% of the worlds oil. Not a fuck of a lot they can do to the prices. Blame OPEC if anyone.

They have most of the oil.. but they realize they are running out. Something like 21 out of the 33 oil producing nations are on the downside of oil supply. They are going to gouge people for every nickle they can.. because they know when the golden goose stops laying the eggs... they are fucked 5 ways to Sunday

Once the wells dry up in the middle east, anyone have any idea of the pool on which super power turns the sands to glass first? Russia, China and the U.S. have all been plagued by the fanatic extremists of the Muslim faith, so once the energy resource is not there to protect them, i don't think they are going to have a prayer.

I place my bets on China. And Lleauric is right, Opec is the 1 to blame. They manipulate the oil prices. Makes the Diamond pricing system seem tame by comparison.

As egotistical as it sounds I thank every day that the price per gallon goes up that I traded in that beast of an SUV I used to drive

I wish I could go that route. Unfortunately, with 5 kids we have to have something that seats 7. We did trade the other 2 cars for compacts (I have to cover 14 counties and get paid mileage rather than get a state vehicle). Now that has bit us in the ass as my wife totaled out our SUV a few days ago. new plan is to own 2 and leave one parked mainly as an emergency back up :p

But it's funny the other night my local station was doing one of those "investigative" reports about the rising cost of gasoline. The reporter made it sound like the reason it's going up is b/c the cost to make gas cleaner has increased the cost at the pump. Something about ethanol(sp?) Any truth to that?

As someone else pointed out, alcohol is more expensive than gas. The other thing that isn't mentioned as much is that alcohol has less stored energy. Burning gasahol (10% alcohol, 90% gas) give you less MPG. Converting to burn 100% alcohol usually requires increasing the jet size in carburetors to adjust the mix.

Wait a second. I thought the US invaded Iraq for the oil... At least thats what people were saying the real motive was.

Yeah that was a shot. :D

Oh yeah and a tip for those looking to get away from the gas guzzlers they have and not having a huge budget to work with. Talk with one of the smaller used car dealers in your area. Tell them what you are looking for, and they can and probably will be able to get one for you for a small finders fee. Usually resulting in you buying a car below NADA avg trade, sometimes avg loan value if it's not a high demand vehicle. Mini vans are great for those big families. Better MPG, lower price, insurance, registration fees, etc.

Of course, getting rid of a gas guzzler that's paid off for a used vehicle that you have to shell out cash for doesn't make economic sense.

Very true, unless you don't need the room. In which case it would be something to consider. Everyone situation will be different. I didn't want to do a IF this do this for every situation. Frankly I don't have that much spare time at work at the moment. Heavy car buying season is right now.

I switched from a small, japanese car to a Grand Cherokee, and get better gas mileage. SUVs to save the environment?

Seriously though, SUVs draw a lot more criticism than they deserve. I think anything the average suburban SUV type is likely to replace it with will be just as bad. Most any vehicle in the price range has a 6 or 8 and is pushing a couple tons.

I am in the process of buying 2 1967 bugs one will run on gas the other will run on oil as in frying oil. I also have my Tahoe but it will stay parked as i will release the inner hippie inside me and drive my lil bugs !

Always wanted to find a desel bug and burn french fry oil like you are doing lol.

My First 2 cars were VW Beetles.
I loved them, but they were a pain to keep running.
I wished I could get my hands on 1 from Mexico, but they closed the plant down there a few years back.

:(

I just wanted to bump this thread.... I , personally , think oil will go to 100 over the next year (or less).... Hopefully the Irianians won't calm down anymore.... :)

I need to move closer to work...

What would you consider a long commute on a bicycle? 10 - 15 miles? I might buy a bike...

I certainly could use the excersize. :p

I'm about a 10 minute drive from work.
While I wouldn't mind the exercise, I think my coworkers might not like the smelly, sweaty tech guy all day long....

Scooter or Motorcycle?

There are about 5 (men and women) people in my building who ride either a scooter or a motorcyle to work everyday.

Motorcycle!
Scooters are for Euro-trash....

Course you could go for the classic look with a Vespa scooter.

Or to save $$ mouch rides off of coworkers and never chip in for gas. We have someone here who does that. His car is always being worked on or his buddy has it. Glad I live on the other side of town so he doesn't ask for a ride everyday.

I ride 100 miles a week on my road bike..... but I am a sweaty mofo.... and usually it is workout quality :)

but I am a sweaty mofo....

Ewwww... TMI. But is that ride for fun/working out? Not as a means to get too and from work??

this kinda cool

http://yaleglobal.yale.edu/display.article?id=6817

Ewwww... TMI. But is that ride for fun/working out? Not as a means to get too and from work??

Correct, I cycle as part of my hobby which is triathlons. And the 100 ish miles isn't at one time, usually broken down into 2-4 rides.

I'm a Registered Nurse so they would frown on me with sweat dripping off my nose ..... plus it is 39 miles interstate drive to my place of employment.

Sometimes you just need a motorized vehicle :)

Oil is just the tip of the iceberg. Don't get me wrong, peak oil makes a lot of sense and is slowly going to occur, but that's not the end-all-be-all of explanations.

Energy prices surge many times when we have massive credit expansion. Ladies and gents, the last 7 years have represented the biggest expansion of credit since just before the depression. M3 is currently withheld withheld now thanks to the FED. Hurray.

Watch oil tumble as the largest worldwide credit bubble in history unravels as it is doing presently--viewed through worldwide stock markets, down 5% to 10% with a long way to go. Commodities are dropping like a sack of soybeans--best exemplified in gold.

And housing, don't even get me started. If you bought "investment" properties or even your own residence on some crazy credit terms (NegAM, I/O, ARM) you are about to get ass raped. Inventories up 4x over last year in so many bubble cities it's not even funny. Fannie and Freddie with their Enron like accounting--can you say, "taxpayer bailout?" Why rent from the bank when you can rent from a desparate flipper for half the price?

The only way out is for the FED to further flood the markets with liquidity and inflate our way out of massive debts on all levels. That would be horrible, too. In my opinion, we have only a choice of evils.

Have fun in the greater depression.

Thanks for the space to put my rant. <3

I just took a job 10 miles from my house and my first thought was Motorcycle.


Rev