Gas futures fall 8% on report of less driving

Dropped about 10 cents in S Calif in the past 2 weeks.

 

Dropped about 10 cents in S Calif in the past 2 weeks.

It looks like they may be going up again tomorrow another 7 cents here in
Illinois.

BOHICA.

 

Yesterday at Costco regular was $3.759. In general prices have been edging
back down. The local paper had an article on gas prices and how speculators
had driven up the prices.

http://www.newsobserver.com/2011/05/15/1198728/analysis-speculators-fuel-climbing.html
(link will probably only work for a few days...

.........

"No oil shortage

"Although those numbers are stark, the numbers on supply and demand make it
clear that the high prices aren't coming from there. There is no shortage of
oil stocks by historical standards. There's an estimated 3 million to 4
million barrels per day of excess oil production capacity in the world
today. That's much more than when supplies were tight in 2008.

"U.S. crude oil stocks on April 29, the date oil peaked this year above $113
a barrel, stood at 1.768billion barrels, according to the Energy Information
Administration. That's about 700,000 barrels more than in July 2008, when
oil prices hit all-time highs.

"And that's plenty to meet U.S. needs, because consumption isn't growing.

"The United States consumed 20.68 million barrels per day in 2007. Then came
the financial crisis, and consumption dipped to 19.5million bpd in 2008.
Last year, the number was 19.5million bpd. This year's projection is 19.28
million bpd.

"So if supplies are plentiful and consumer demand isn't rising, why are
prices?

"Could it be that refineries aren't able to produce enough gasoline? No.
Refiners are running their plants at below cruising speed, and they've got
lots of room to produce more if consumers need it.

"The latest data from the EIA on the rate at which refineries are utilized
showed a rate of 79.8 percent in February. That's 20 percentage points below
full-blown production. The last time the rate was lower: 1986. If demand for
gasoline was soaring, these plants would be cranking at a higher rate.

"Though evidence of speculation is increasingly obvious, the facts haven't
yet been acknowledged enough to force corrective regulatory action.
........

Read more:
http://www.newsobserver.com/2011/05/15/1198728/analysis-speculators-fuel-climbing.html

My advice remains the same - buy less gas. This will stick it to the
speculators better than anything Congress can or will do.

Ed