Well I suppose they will take advantage of this situation to raise gasoline prices even higher. No problem for me... My "fat belly" could use a bit of bike riding. Hummm... I guess I don't exercise that when bike riding?
Cat 5 Hurricanes are. Lives will be lost, which is even worse.
Speaking of worse, at least it didn't hit Galveston, TX.
Come to sunny CA, where 3.15 is common for low grade gas now.
This is Turtle.
Edwin , New Orleans does off load a good amount of import oil but there is other ports that can take up any slack New Orleans may fall behind on. Sabine Pass/ Houston and Lake Charles / cameron can take in what New Orleans takes in today. Both of these are running at 50 % to 60% of their ability.
And another thing : Where they off load tankers at in New Orleans it will not be hit by the high water and tidel wave. All this docking to do this is inland and not exposed to the gulf. The water will rise in that area and then go back down and they can go back to off loading the oil. Also about 1/2 the oil that is off loaded at New Orleans . The ships go on up to Baton Rouge to off load about 60 miles inland from New Orleans. Only the Super tankers have to stop in New Orleans. Also just about all the refinerey are not in the city but up on high ground out of the city.
It's just a bunch of hooppla going on here.
TURTLE
"Shell also said 1.345 billion cubic feet per day, or Bfd, of natural gas had been shut by Saturday."
"Chalmette Refining LLC, which operates a New Orleans-area refinery, was shutting down production in preparation for the approach of the hurricane, which is predicted to produce winds near 131 mph (210 kph) when it charges ashore on Monday. "
When you add in the refineries in So La and the offshore rigs it does look significant on the short term. I filled up everything I have that holds gas. It was $2.62 today, lets see how that investment works out ;-)
Bad time to be a Hummer dealer. Or an owner too I guess.
Ed, If you can afford a hummer, you can afford the gas at most any price. I don't know if that goes for all the owners of those other big SUVs too.
Stretch
Click on the site below, and enjoy!
Dunno, but it's playin' hell with a lot of connections at my online poker site.
You also have to worry about the very large refinery in Pascagoula, MS. It might be offline for a while if damaged.
I just heard the mayor of New Orleans talking on CNN. He said that the hurricane is likely to shut down 1/3 of the gasoline and natural gas imports to the United States this week, and that the shutdown would last for months to come. This sounds like some serious shit.
They shut down the off shore drilling rigs and the shipping lanes from South America are blocked or disrupted for a time. I don't know how real it all is, but you can be sure the price will go up.
Gas today was 2.629 here in CT. Home heating oil is 2.27 to 2.35. I was able to lock in at 2.35 for the season, up from 1.60 last year.
Bad time to be a Hummer dealer. Or an owner too I guess.
Sigh, the young ones don't know their history. CNN is Chicken Noodle News.
You don't really believe anything you hear on the Communist News Network, do you?
S1
This is Turtle.
Yes , You get $3.15 a Gallon Price but also you don't allow any offshore drilling for oil and gas and no producing of oil products from you inland shores. Expect price jumps when you have to buy your oil and gas from other states.
TURTLE
I always suspect that reasons are given for higher prices that in reality aren't true.
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Experts disagree on why oil prices go up Kathleen Pender
Sunday, August 28, 2005
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Kathleen Pender Recent Columns Experts disagree on why oil prices go up 08/28/2005 Providian takeover contested 08/25/2005
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You can't open a newspaper without reading about the housing bubble, but there's another market that's looking pretty frothy: oil.
Even though the price of West Texas crude has risen this year by almost $23 per barrel, more than 50 percent, you don't hear many people calling it a bubble.
Searching the Factiva news database for the past three months, I found only
55 mentions of an oil bubble, compared with 1,981 references to a housing bubble.Maybe that's because a lot of energy analysts say the recent spike in oil is being driven almost entirely by fundamentals.
They say that worldwide demand is increasing at a time when there is little excess production capacity. Because it takes many years to bring new production online, there could soon be shortages of petroleum products, especially if there is a supply disruption in one of the major oil-producing countries, many of which are as stable as a two-legged stool.
Their theory: Oil prices won't come down until consumers, especially Americans, reduce their demand. Given that oil prices today are still cheaper, in inflation-adjusted dollars, than they were in the 1970s, prices could go even higher before demand falls.
In March, a team of Goldman Sachs analysts said we might not return to an era of excess capacity like the one we had in the late 1980s and 1990s until the price of crude -- which closed just above $66 on Friday -- stays between $50 and $105 for several years and U.S. gasoline prices top $4 per gallon.
But a separate group of experts says this idea of a looming oil shortage is overblown. Based on fundamentals, they say oil should be trading in the $30- $40 range and anything above that is largely the result of speculators. When they exit the market, prices will fall back to more reasonable levels.
"I don't see how anybody in their right mind can say this is based on fundamentals," says Kyle Cooper, an energy analyst with Citigroup Global Markets in Houston.
Who's right? Only time will tell. Here's a look at the arguments.
The bulls: There is no question that oil consumption has increased faster than oil companies can bring it out of the ground and turn it into gasoline, heating oil, diesel fuel and other products.
Between 2003 and 2004, world oil demand increased by 3.2 percent, more than twice the normal annual growth rate of around 1.5 percent, says Jonathan Cogan, an expert with the Energy Information Administration. Much of that new demand has come from the United States, the world's largest oil consumer, and fast-growing China, which now ranks No. 2.
"Growing demand is pushing up against stable production capacity," says Cogan. "There is no excess capacity anywhere but Saudi Arabia. Now we are sort of operating at capacity. It makes any uncertainty about political or other turmoil magnified. That uncertainty does get factored into the price."
The Goldman Sachs team created a stir in March when it published its report predicting a "super spike" in oil prices to $105 per barrel. At that time, oil was in the mid-$50s, and the team, led by Arjun Murti, wrote, "We believe oil markets may have entered a super-spike period, a multi-year trading band of oil prices high enough to meaningfully reduce energy consumption and re-create a spare capacity cushion, only after which will lower energy prices return."
The team noted four fundamental reasons for the increase in West Texas Intermediate crude, the light-sweet oil best for making gasoline:
-- It's costing more to find and pump oil, due to geologic maturity in many oil-producing regions, along with rising service and materials inflation. Figuring that these forces will increase the long-term cost of production, hedgers and speculators have bid up the price of long-dated futures contracts (for oil deliveries in five or six years). That, in turn, has increased the price of shorter-term contracts and the spot price of oil.
-- The price of light-sweet crude oils is growing faster than the price of heavy-sour grades, which are prevalent in the Middle East, "due to high and rising (Organization of the Petroleum Exporting Countries) production volumes, limited complex refining capacity and increasingly strict sulfur specifications in the U.S. and Europe."
-- Significant increases in energy efficiency since the 1980s have allowed world economies to withstand high oil prices more easily.
-- Geopolitical turmoil in key oil exporting countries keeps foreign oil companies from developing resources in a timely manner.
The analysts said that in 1980-81, gasoline spending in the United States averaged 4.5 percent of gross domestic product, 7.2 percent of consumer expenditures and 6.2 percent of disposable income.
Today, gasoline accounts for a much smaller share of income, expenditures and GDP -- roughly 3 percent or less.
"Our new $50-$150 super-spike range perhaps conservatively corresponds to gasoline spending in the United States that reaches 3.6 percent of forecasted GDP, 5.3 percent of consumer expenditures and 5 percent of personal disposable income. If we were to assume that gasoline spending needs to reach the highs of the 1970s, our upside super-spike estimate would be $135," the report says.
It added that gasoline would need to reach $4 per gallon before Americans would swap their SUVs for more fuel-efficient cars.
The Goldman authors said that speculation (i.e. hedge fund activity), "has played a negligible role in global oil markets beyond day-to-day trading noise."
Colorado energy consultant Phil Verleger agrees. He says the impact of speculators "is zip. It's too dangerous" to speculate.
He said prices have been driven up somewhat by the entry of pension funds into the market, but they are likely to be long-term investors, not speculators.
He said a recent paper co-authored by Wharton School economist Gary Gorton is encouraging pension funds to diversify into oil and other commodities. It showed that an index of commodities futures could produce returns equal to stocks with slightly less risk.
"The biggest problem we have today is a shortage of refining capacity" because U.S. refiners built no new plants while Detroit was busy rolling out SUVs, Verleger says.
He predicts that if the economy keeps growing, oil prices could reach $80 or $90. "Probably we are going to see $4 gasoline," he says.
The bears: Citigroup's Cooper says the run-up in oil prices "is based on fear of what could happen," not what's happening today.
"During the last 24 months, the world has added over 200 million barrels to petroleum inventories around the globe. How is that supply not keeping up with demand? Demand has grown significantly. Supply has met and exceeded demand by 200 million barrels."
In the United States, inventories of all energy products (excluding the Strategic Petroleum Reserve) were 4 percent higher in mid-August than they were the same time last year, according to the Energy Information Administration.
Gasoline inventories were lower than they were last year, mainly because refiners had switched to making heating oil early in the summer.
Cooper acknowledges that demand has grown and that it has gotten more expensive to produce oil. He says we will probably never see $20 oil again. But on a fundamental basis, it should be trading for $35 to $40.
The difference between that price and today's price, he says, is due largely to speculators.
"I think you had a massive redistribution of financial assets away from stocks, bonds and traditional assets, with an increasing focus on commodities, " he says.
He compares the price of West Texas Intermediate, which has an active futures market, with the price of residual fuel oil, which has no futures market. Residual fuel is what's left from a barrel of oil after gasoline, diesel and jet fuel and other products are made.
Before 2004, residual fuel typically traded at a $3 to $4 discount to oil. Today, it's $20 cheaper.
Cooper attributes the difference to the fact that hedge funds and other speculators can buy futures on oil prices, but not on residual fuel.
He says energy companies are approving projects that are economical if oil is at least $35 per barrel. Those projects, he says, have barely begun to add to the oil supply. If prices stay above $35, the world could be awash in oil.
People predicting $100 oil are ignoring inventories, just as investors ignored price-earnings ratios and other historical relationships during the dot-com days, he says. "Then, PEs didn't matter. Today inventories don't matter. Guess what? PEs do matter."
There is one difference between then and now. For dot-coms, "the entry cost was three college kids and a server. The entrance into the oil market is billions of dollars and a cadre of highly trained people," Cooper says.
Even so, "if inventories continue to rise, it tells you there's a glut, and the hype (about shortages) is not real," he says.
Thorsten Fisher of Economy.com says that based on fundamentals, oil prices should be around $40 per barrel. He agrees that speculators have pushed prices higher, but believes that as is true in any bubble, it's hard to know prices will end.
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Katrina cuts oil output by a third As storm gathers strength and heads toward land, there's plenty to fear in the oil patch. August 28, 2005: 5:27 PM EDT
HOUSTON (Reuters) - U.S. energy companies said U.S. Gulf of Mexico crude oil output was cut by more than one-third on Saturday as Hurricane Katrina appeared poised to charge through central production areas toward New Orleans.
The Gulf of Mexico is home to roughly a quarter of U.S. domestic oil and gas output, with a capacity to produce about 1.5 million barrels per day of crude and 12.3 billion cubic feet per day of gas.
As of Saturday, 563,000 barrels daily crude output had been shut in due to the threatening storm.
Shell Oil Co., which was evacuating all 1,019 of its offshore workers in the central and eastern Gulf on Saturday, had the bulk of closed Gulf daily oil production, with 420,000 barrels turned off.
Shell also said 1.345 billion cubic feet per day, or Bfd, of natural gas had been shut by Saturday.
Total daily Gulf natural gas output shut on Saturday was 1.9 billion cubic feet.
Chalmette Refining LLC, which operates a New Orleans-area refinery, was shutting down production in preparation for the approach of the hurricane, which is predicted to produce winds near 131 mph (210 kph) when it charges ashore on Monday.
Chalmette is a joint venture between Exxon Mobil Corp. and Venezuelan state oil company Petroleos de Venezuela SA and operates a 190,000-bpd refinery 9 miles east of downtown New Orleans.
The shutdown was to be completed by Katrina's predicted landfall on Monday afternoon, said Chalmette spokeswoman Nora Scheller.
Other southeast Louisiana refineries were operating on Saturday but were reducing staff and preparing for possible shutdowns, the companies said.
Ship traffic along the Mississippi River from the Gulf of Mexico to New Orleans was halted on Saturday when ship pilots said conditions were already unsafe to continue moving vessels along the waterway.
The U.S. Coast Guard was warning mariners of possible waterway closures along the Louisiana, Mississippi and Alabama coasts as early as Sunday afternoon.
The Louisiana Offshore Oil Port LLC stopped offloading tankers in the Gulf of Mexico at midday on Saturday. The LOOP, which is the only U.S. offshore oil port, takes an average 1 million barrels in foreign crude from tankers in the Gulf.
While offloading is halted, the LOOP is supplying refiners via pipeline with crude stored on shore.
Katrina was a Category 5 hurricane on the five-step Saffir-Simpson scale, with catastrophic winds of 175 mph (284 kph), just before 2 p.m. EDT (1800 GMT) on Sunday, said the U.S. National Hurricane Center in Miami.
Its central pressure -- a measure of a storm's intensity -- fell to 906 millibars, making Katrina the second strongest storm on record after the Labor Day hurricane of 1935 that hit the Florida Keys. That storm recorded a minimum central pressure of 892 millibars on landfall.
"If it stayed at this intensity, it would be one of the two or three strongest to ever hit this country," Ed Rappaport, deputy director of the hurricane center, told CNN. "And on top of that of course we have a special concern for the area -- New Orleans is below sea level."
Katrina was 180 miles south-southeast of the mouth of the Mississippi River and heading northwest at 13 mph (21 kph). Hurricane force winds could be felt 105 miles out from the center.
The hurricane center warned of destructive winds along the Gulf Coast from the Florida-Alabama border, through Mississippi and west to Morgan City in Louisiana, and said Katrina could bring up to 15 inches of rain.
Its track would send it through key U.S. oil and gas areas in the Gulf of Mexico, and Katrina seemed likely to affect already sky-high gasoline prices. Oil rigs were evacuated.
The last Category 5 to strike the area was Hurricane Camille in 1969. Camille, which registered a minimum pressure of 909 millibars at landfall, just missed New Orleans but devastated Louisiana and Alabama, killing hundreds. Hurricane Andrew, which destroyed the city of Homestead south of Miami in 1992 and ranks as the costliest natural disaster in U.S. history, was also a Category 5. Its central pressure was 922 millibars.
Katrina was originally projected to take a path west across southern Florida, turn north in the eastern Gulf and strike the Florida Panhandle as a minimal hurricane.
As late as Friday afternoon, many producers were taking a wait-and-see approach common with eastern Gulf storms, where oil and gas drilling and production are sparse.
But the storm's long drift westward Friday afternoon and evening meant it was gaining intensity from deep, warm Gulf waters and would not turn north in time to avoid production areas.
Katrina is expected to reach land sometime Monday morning, according to CNN meteorologist Brad Huffines.
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NEW YORK - With crude oil prices already near record levels, Hurricane Katrina (search) targeted the heart of America's oil and refinery operations Sunday, shutting down an estimated 1 million barrels of refining capacity and sharply curbing offshore production in the region.
It is an area crucial to the nation's energy infrastructure - offshore oil and gas production, import terminals, pipeline networks and numerous refining operations throughout southern Louisiana and Mississippi.
The impact was immediate Sunday night when electronic trading resumed on the New York Mercantile Exchange (search), as crude oil futures spiked $4.50 per barrel, putting the cost above $70 for the first time since oil began trading there in 1983.
The Category 5 storm was still churning in the Gulf of Mexico but was on a path to hit New Orleans early Monday.
Last September, Hurricane Ivan (search) also swept across the region causing heavy damage and reducing the region's output for months.
Katrina's winds were fiercer.
Oil companies evacuated workers and shut down more than 600,000 barrels of daily production in the Gulf. Refiners closed down more than 1 million barrels of refining output by Sunday, but that amount could be higher because not every producer reports data, said Peter Beutel, an oil analyst with Cameron Hanover.
"This is the big one," he said. "This is unmitigated, bad news for consumers."
Gasoline futures soared more than 20 cents per gallon, above $2.12 per gallon, and natural gas was up $2.20 per 1,000 cubic feet in the opening minutes of trade. The "out of control" buying is spurred by the prospect that the region's numerous refineries could be idled for weeks by flooding, power outages, or both, Beutel said.
The U.S. has ample crude oil supplies, even if major hurricane destruction trims Gulf oil output and foreign imports, but refining capacity is extraordinarily tight. As a result, prices for gasoline, heating oil, jet fuel and other products have flirted with records and could go even higher this week.
"If this thing knocks out significant quantities of refining capacity ... we're going to be in deep, dark trouble," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York.
The market has been on edge for months, with traders and speculators buying on the slightest fear. With Katrina, all those fears could be realized, Beutel said.
"Basically I could spill a can of oil at my local gas station and you'd see the price of crude go up by $1 per barrel," he said.
Crude settled at $66.13 a barrel Friday on the New York Mercantile Exchange, down $1.36 after hitting $68 last week.
On Friday, Katrina had been expected to be inconsequential to the energy industry, with many traders selling. That all changed Saturday, when the system gained power and charged west, directly toward areas of offshore oil production.
ChevronTexaco Corp. completed evacuations of all workers in the eastern and central Gulf of Mexico and nonessential workers in the western Gulf late Saturday, company spokesman Matt Carmichael said.
Chevron has about 2,100 employees and contractors working in the Gulf, Carmichael said. Chevron will continue to produce 90 percent of its normal production by remote as long as weather cooperates, he said.
The Louisiana Offshore Oil Port, which processes loads from tankers too large for mainland ports, evacuated all workers and stopped unloading ships on Saturday morning said Mark Bugg, the terminal's manager of scheduling. The LOOP, 20 miles offshore, is the nation's largest oil import terminal and handles 11 percent of U.S. oil imports.
Royal Dutch-Shell Group evacuated more than 1,000 offshore workers by Saturday. Only those in the far west remained, the company said on its Web site. BP PLC and ExxonMobil Corp. also brought workers ashore Saturday.
Shell estimated 420,000 barrels of oil and 1.35 million cubic feet of gas per day will be shut in at its central and eastern Gulf facilities. Exxon Mobil said it has ceased daily production of 3,000 barrels of oil and 50 million cubic feet of gas.
Valero Energy Corp. evacuated all but a few workers at its
260,000-barrel-a-day St. Charles refinery on Saturday. Murphy Oil Corp. also shut down its 120,000-barrel-a-day Meraux, La., refinery, and Exxon Mobil Corp. planned to shut down its 183,000-barrel-a-day refinery in Chalmette, La.Motiva Enterprises, a joint venture of Royal Dutch Shell PLC and state-owned Saudi Arabian Oil Co., began implementing hurricane contingency plans at its
225,000-barrel-a-day Norco refinery on Saturday. Motiva also was exploring contingencies for its 235,000-barrel-a-day Convent refinery, about 45 miles west of New Orleans, Dow Jones Newswires reported.begin 666 service_ap_36.gif M1TE&.#EA70`1`+,``'!PSL[):6EJ"@H'EY>8.#@^+BXJFIJ;R\\O,C( MR+*RLHR,C-G9V69F9O___R'Y! ``````+ ````!=`!$```3_\\,E)J[TXZ\\V[ M_V HCF1IGFBJG@JSK$^+*0J'(%3+,$.=#@Y 8-5X778 M`%]]`H1#=0N!N@=(0*U;AU%/O$NMG!I
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