Gasoline reserves on hand are at the highest levels since the early 1990s, which is remarkable considering the nation's refineries have been cutting back on the production of gasoline because their margins have declined. In fact, average gasoline reserves on hand have risen since this past October, while oil reserves in this country have gone up virtually every week this year?and only fog in the Houston Ship Channel that kept oil tankers from unloading their crude one week kept it from being every week.
In January of this year, the U.S. used 4% less petroleum than we did a year ago. (Oil demand was down 3.2% in February.) Furthermore, demand has been falling slowly since July of last year. Ronald Bailey of Reason Online has pointed out that worldwide production of oil has risen 2.5% in the first quarter, while worldwide demand has grown by only 2%.
As for the speculators, in 2000 approximately $9 billion was invested in oil futures, while today that number has gone up to $250 billion. Now, if any publicly traded company had an additional $241 billion put into its stock in the same period, its stock would rise out of sight too?even if the company was not worth anywhere near that amount of market capitalization.
Yep. I suspect smart speculators who saw the top of the housing bubble in 2005 started shifting their assets into commodities, especially oil. Welcome to the Oil Bubble!
O when that Bubble burst, its going to be one heck of a mess. I'll be stocking up on the degreaser and absorb all.
Ok, even with increased world supply, there is no way this bubble will last. As much as members on this site dislike ethanal, when the cellulosic ethanol comes into full production with an E85 fleet and Europe, and Asia follows suit.......
So if OPEC has nothing to do with oil prices, why do the self-same producing countries start buying things like NASDAQ? Look at what the OPEC nations are buying up on the open market. It's everything but oil, publicly.
I have a sneaking suscpicion that they have figured out a way to insulate themselves many layers deep, and are taking their profits (which are nearly 100% as they actually are in the form of taxes) and speculating on oil futures. This has made oil more than double - more than doubling their profits - in just over a year. Reinvest until the world gets sick of it....live off the increased taxes on oil! Nice ponzi scheme that only works one way.
Looking to trade for an early 1988 Honda CRX HF (Pillar mounted seat belts)
How is it that a worldwide commodity - bought by people in all corners of the globe - have their prices set by OPEC rather than what the market will sustain? It doesn't make much sense to me that the OPEC guys are responsible for this lunacy.
Furthermore, if oil prices drop next year as drastically as some here have noted, then IMO all the alternative fuel initiatives will die on the vine - pretty much like they did in the 70s. The Government cannot force consumers to demand cars with higher efficiency. On the other hand, we have first-hand evidence from 2 oil crises that when oil prices become so high as to make consumers uncomfortable/unhappy, they will demand vehicles that have better effeciency. That demand will dry up if/when oil prices fall to $60/bbl.
Here's the problem with an energy tax like that: the Government will spend it. All. So the "refund" is really a big Government wealth redistribution project to "keep the money in the United States."
IMO that's not the Government's job.
BTW, in a few years - when every Chinaman has a car - gasoline will be 8 to 10 bux a gallon anyways, so why tax the everyliving crap out of it? Market pressures will force innovations in energy sources and efficiency.