Meltdown

[head-case]

I'd be worried if this wasn't all jibberish.

[BachQ]

Oil roars to record over $112 on U.S. inventory drop



Wed Apr 9, 2008 6:24pm EDT
By Matthew Robinson

NEW YORK (Reuters) - Oil surged to a record high over $112 a barrel on Wednesday after a government report showed a sharp drop in U.S. inventories ahead of the summer driving season.

U.S. crude settled up $2.37 at $110.87 a barrel after peaking at $112.21 and eclipsing the previous record of $111.80 hit March 17. London Brent settled $2.13 higher at $108.47 a barrel after hitting an all-time high of $109.50.

U.S. crude stockpiles fell 3.2 million barrels last week as imports declined, countering analyst expectations for a build, while gasoline and distillate inventories also tumbled, the U.S. Energy Information Administration reported.

U.S. gasoline and heating oil futures as well as London gas oil also hit record highs after concern about diesel supplies amid strong European and Asian demand supported crude earlier this week.

"This is a perfect storm for the energy markets, with records hit all around," said Phil Flynn, analyst at Alaron Trading in Chicago.

"But distillates are taking the center stage here because of tightness of supply of diesel and with a cold winter and the recent refinery fire in Finland." he added.

Further strength came from weakness in the dollar, which fell against the euro and the yen on views the U.S. Federal Reserve could cut interest rates by a 50 basis points this month amid worries of a possibly severe U.S. economic downturn.

The weak dollar has helped boost prices for commodities denominated in the greenback by boosting non-U.S. spending power and by luring investors seeking an inflation hedge.

High oil prices and the weakening U.S. economy have stirred demand worries in the world's largest energy consumer. The government on Tuesday forecast U.S. summer driving use would fall for the first time since 1991.

Despite calls from consuming nations for OPEC to raise oil production to help tamp record prices, cartel members insist markets remain well supplied.





Oil hits another record high

http://www.youtube.com/v/djOSq18pMj4

[BachQ]

I'd be worried if this wasn't all jibberish.

I know.  This notion of an "oil crisis" is patently absurd.

[BachQ]

Gasoline hits a new record high

Nationwide average price for a gallon of regular unleaded soared to another all-time high of $3.343, AAA survey says. Gas prices are up nearly 20% from what they were last year. A month ago, the nationwide average was $3.222 a gallon. The average price per gallon of diesel fuel rose more than a cent to $4.032, just a few tenths of a cent below the record high set in late March.  The rising price of diesel fuel has been a major concern for workers in the trucking industry. Diesel averaged $3.829 a gallon last month and $2.904 a year ago.  Costliest in California. California led the nation in pricey gas, at $3.746 a gallon. Hawaii and Alaska both maintained gas prices above $3.60 a gallon.






"The bottom line is that we still do not know what effects all these ever-more painful oil price increases are having on the U.S. economy, as reported in Fuel prices aren't done setting records (Houston Chronicle, April 9, 2008). We are still lost at sea.  ... It seems obvious that Americans can not absorb these net oil price increases over and over again, especially in a slumping economy, without incurring some very substantial losses sooner or later. Because the U.S. imports about 66% of its oil, price increases operate as a tax on consumers. Peak oil remains primarily a price phenomenon for now, but it's hard to sort out the effects because the messed up U.S. economy has multiple failures. The effects of oil price escalation on real U.S. GDP growth will be revealed over time, and it is hard to avoid the conclusion that the eventual outcome will not be salutary for American consumers."

[head-case]

I know.  This notion of an "oil crisis" is patently absurd.

No doubt supplies of oil will be exhausted eventually.  Other sources of energy will be found.  Civilization will go on.

[BachQ]

European Power Climbs to Records, Consumers May Pay the Price

By Lars Paulsson and Nicholas Larkin

April 10 (Bloomberg) -- Power prices rose to records across Europe, potentially increasing costs for consumers and industry on the continent as economic growth slows.

Power for 2009 in Germany, Europe's biggest electricity market, climbed to a record 65.50 euros ($105) a megawatt hour, gaining 1.2 percent, according to broker GFI Group Inc. The contract traded at 65.25 euros at 3:35 p.m. Berlin time. French, Dutch and U.K. contracts also rose to records.

European electricity prices are in the third year of a rally as the price of oil is surging and after the introduction of the European Union's emissions-trading program. The increased costs for the continent's 306 million people and industry may dent an economy that's being threatened by a possible U.S. recession and add to inflation pressures.

[BachQ]

Petroleum inflation could pump up price of plastic
By KARA McGUIRE, Star Tribune

April 10, 2008

The high price of oil is hitting consumers' wallets with each trip to the gas station or grocery store.

But the effect of $110 per barrel of crude oil doesn't stop there. Take a look around and chances are many of the items in the room are partially made of petroleum -- from carpet fibers, synthetic fabrics, lubricants, and mattress foam to most anything plastic.

Unlike the prices on necessities such as food and fuel, manufacturers and retailers are loath to pass on the increasing cost of discretionary goods to consumers. But energy and retail analysts say 2008 could be the turning point, when companies facing shrinking profit margins and soft consumer spending will have no choice but to raise prices and hope customers keep buying despite the unsteady economy.

To cope with squeezed profit margins and slower sales, companies will try logistics, sourcing, and shipping changes before price increases.

For instance, to ease the pain from the spike in diesel fuel used by trains and trucks, retailers might ship less frequently or source closer to home, said Piper Jaffray retail analyst Jeff Klinefelter.

"Everything moves by truck, rail, or jet," said Tom Kloza of the Oil Price Information Service. He said high diesel prices get lost in the consumer-focused fuel debate, but they're four to five times higher than in 2002 and $1 higher than in 2007. He doesn't think consumers have felt those increases yet.

Fuel surcharges are becoming the norm for companies and for individual travelers, said Thrivent energy analyst John Groton. Delta Air Lines recently increased its fuel surcharge by $5 each way. As jet-fuel prices have soared, Northwest and other major carriers also have imposed fuel surcharges on certain routes.

Manufacturers also are changing designs and packaging to reduce costs. For example, water and pop bottles are being made with thinner plastic, said Frank Esposito, a reporter for the trade publication Plastics News. Some manufacturers are using substitute materials such as waxboard for ice cream cartons, he said.

Since late 2002, the price of high density polyethylene used to make milk bottles is up 144 percent, according to Plastics News. In that same span, the price of plastic used for pop and water bottles is up 65 percent. PVC used to make plumbing and sewer pipes is now 111 percent more expensive. Esposito pointed out that plastic prices have been high since Hurricane Katrina, which hit the epicenter of the nation's plastics manufacturing industry along the Gulf Coast in 2005.

For others, squeezed profit margins mean leaving the business. Last year, General Electric sold all its plastic businesses and Dow Chemical unloaded some it owned to Middle Eastern companies with cheaper, easier access to oil and natural gas.

"Fewer and fewer plastics will be produced here long-term," Esposito predicted. Those that are sticking with the business are considering natural alternatives -- plastic made from crops such as soybeans and corn. Those alternatives would appeal to a consumer set that is saying no to plastic bags at grocery stores and to disposable diapers with plastic linings, citing geopolitical and environmental concerns, not cost.

If he were a betting man, said Kloza of the Oil Price Information Services, he'd bet crude oil, jet fuel, and diesel would decline in price shortly, but he expects gasoline prices at the pump to rise as high as $3.75 a gallon.

[BachQ]

Japan Wholesale Prices Soar at Fastest Pace in 27 Years

April 11 (Bloomberg) -- Japan's wholesale prices rose at the fastest pace since 1981, pushed by higher fuel and food costs, highlighting concern inflation may accelerate even as the economy slows. ``Rising energy and raw-material costs are hurting companies' profits and higher food prices are weighing on consumer spending.'' Higher costs of oil and food are prompting some companies to raise prices and forcing consumers to absorb them.

[BachQ]

Pemex and Mexican Peak Oil Equal Expensive Oil
By Dan Denning • April 11th, 2008

Pemex better start exploring for more oil in the Gulf of Mexico or its going to pump out all its reserves in less than ten years. Mexican President Felipe Calderon went on national television last night in Mexico and told his countrymen (in Spanish, we presume), "We have to act now because we're running out of time and out of oil." Mexico exports 1.5 million barrels per day to the U.S., putting it third behind Canada and Saudi Arabia, and just ahead of Nigeria and Venezuela.

[BachQ]

U.S. Consumer Confidence Index Falls to 26-Year Low (Update2)

By Courtney Schlisserman

April 11 (Bloomberg) -- Confidence among U.S. consumers sank to a 26-year low in April as the labor market continued to deteriorate and gasoline prices rose. The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 63.2 from 69.5 in March. The reading was below the lowest forecast in a Bloomberg News survey and the weakest since March 1982.  Americans are confronting the loss of 232,000 jobs so far this year, along with higher food and energy costs and overall weakening in the economy. Consumer spending in the first half will advance at the slowest rate in 17 years, according to economists surveyed by Bloomberg News.

``The consumer's feeling increasingly hemmed in,'' said Brian Bethune, director of financial economics at Global Insight Inc. in Lexington, Massachusetts. ``They've got higher energy bills, higher gasoline bills, higher food bills and obviously the employment markets are nowhere near as strong as they were. The economy is in a recession.''  Higher energy costs have weighed on consumers' outlooks in recent months. The average price of crude oil futures traded on the New York Mercantile Exchange in March jumped to $105.42 a barrel, from $95.01 a month earlier.  Gasoline reached a record $3.332 a gallon in the week ended April 7, according to the Energy Information Administration. The administration, which is the Energy Department's statistical arm, forecast on April 8 that gasoline will cost an average of $3.54 a gallon between April and September.

[BachQ]

How soaring fuel prices hurt kids

Across the nation, school districts are slashing spending on teachers, books and computers as filling up the school bus gets more expensive.

[BachQ]

Peak Everything, by Richard Heinberg

[BachQ]

Scrapping Skyscrapers

The problem with these sky-scraping symbols of long-term sustainability, according to Larry Hughes of Dalhousie's Energy Research Group, is "figuring out how to heat the damn things. If we assume the heat source will be oil," he says, "it's very short-sighted, naive to the extreme."

[BachQ]

Oil Price Defies Easy Calculation
Gasoline Sets Record at Pump Despite Struggles in U.S. and Overseas Economies





By Steven Mufson
Washington Post Staff Writer
Friday, April 11, 2008; Page D01

Is there a fair price for oil?

It doesn't seem that way. Over the past year, the price of crude oil has nearly doubled even though oil inventories are ample, there has been no disruption in supplies, and petroleum demand in the United States, the world's biggest consumer, has leveled off in recent weeks as the economy has slowed.  Yesterday, the AAA auto club said prices at the pump set records of $3.357 a gallon for regular unleaded gasoline and $4.045 for diesel, even though U.S. gasoline consumption fell 0.6 percent in the first quarter. ... Yesterday, Citigroup became the latest bank to raise its oil price forecasts, upping its estimate of the full-year average for 2008 by 20 percent, to $96 a barrel, and boosting its 2009 estimate by 17 percent, to $88 a barrel. When the U.S. economy is weak, banks generally lower their expectations for oil prices.

[BachQ]

A 12-member citizens group, the Vancouver Peak Oil Executive, was formed recently in Vancouver to spread word about the necessity of change. It aims "to build awareness of the imminent peak oil crisis and its potential effects on the metro Vancouver area."  The VPOE is promoting "relocalization" -- getting people to walk to work, buy locally produced food and goods, shop at corner stores.  Consequences of inaction in the face of the global crisis, says a press release issued by the group, "are enormous."  Consequences of delay are also scary. Societal change around depleting oil reserves is not something to be done in a panic. Yet vested interests and a sense of intertia seem to be delaying our day of reckoning. Even today, car manufacturing are running vehicles with V-6 and V-8 engines off their assembly lines. Gigantic new airport terminals and highways continue to be built.  North America is resisting change, sticking to comfortable habits. But, like it or not, our petroleum-fuelled existence with distant suburban neighbourhoods reached by multi-laned freeways with overpasses and arterials is going to change. There may even be a bright side. "A lot about the way we live now is unhealthy, frightening and repulsive," Kunstler says. "It probably requires a correction. And boy, are we going to get one."

[BachQ]

New York Times

April 12, 2008
Frontier Airlines Files for Bankruptcy
By GRAHAM BOWLEY

Frontier Airlines on Friday became the latest budget carrier to file for bankruptcy protection ... Frontier's shares were down $1.03, to 54 cents in late trading.

On Wednesday, Oasis Hong Kong Airlines, a long-haul budget carrier that tried to offer premium service and spacious seats at low prices, suddenly went into liquidation and canceled all flights. At that time, it was the fourth budget carrier worldwide to halt operations over a period of a week and a half. The series of bankruptcies could undermine travelers' confidence in budget airlines.

The high price of jet fuel has taken a heavy toll on the airline industry and particularly on low-margin discount carriers. The other three to shut down since March 31, all in the United States, are Aloha Airgroup, ATA Airlines and Skybus Airlines. As with most airlines Frontier has struggled with higher fuel costs. In addition, it has faced increased competition from United and Southwest at its large hub in Denver.

[Sean]

Yes I noticed about the HK airline...

[drogulus]

   We aren't going to run out of coal for several centuries. In the meantime we'll find something else. We're going to pay more for it, though, whatver it is.

[Sean]

Dm

At present, I'm still trying to fathom the enormity of the issue, and trying to understand why only a tiny handful of people care about this issue, and why our world leaders are utterly clueless, and what will be left of society when it is overpopulated by a factor of ten and runs out of every resource except for sunlight .........

I guess it is a bit strange. But my answer is that the world we're living in is really not so developed as people think and that nobody knows how to replace the simple and ancient fossil fuel base to society. There's plenty of energy in the universe but we've wasted the opportunity that oil gave us, the cushion of free energy for a few decades, that could have been used to look ahead and find something else.

Solar power is the best bet of the existing alternatives but no serious steps have been taken: 50 000 square km of Sahara could have been covered in high performance solar panels, at immense cost but at immense value to humanity's future. This cannot be done under democratic systems because most people do not have that kind of vision and will just vote for short term profligacy and waste.

Most people just do not want to know about problems they don't know how to solve, especially when they're fundamental to life and their model of the world in their heads. My own father for instance refuses to discuss the matter with me and had nothing but contempt when I said I was going to a showing of the Crude awakening documentary, trying to make out it was me who was being unrealistic about the world- and the atmosphere in the cinema was one of real disapproval and opprobrium.

I really do blame all this on democracy and the spread of democracy...

[Sean]

   We aren't going to run out of coal for several centuries. In the meantime we'll find something else. We're going to pay more for it, though, whatver it is.

That's why China's building hundreds of coal powered electricity stations.

But 99% of the world's vehicles run on petroleum, not coal.

drogulus, this problem is fundamental and massive: the window of opportunity to find something else has already been squandered.