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The cold weather has caused energy prices across the board to rise.
The good news is that increased production and imports are likely to prevent large price spikes, but this tells me that prices are going to keep going up at a slow pace for the foreseeable future.
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Bithead:
That don’t make a lot of sense. You said,
“once refining capacity started coming on line,stockpiles of available crude would start going down”
I have many, many times shown that there is almost a glut of crude available, so there is no reason for crude to be short. I just don’t buy the argument that “supply and demand” apply.
The reason I don’t buy it is “The oil companies control” all the supply and they can then control the stockpiles. If stockpiles decline, then it is an oil company minipulation of supply that is causing prices to rise.
As of 3:00PM today, the crude price is again below the 60.oo dollar per barrel mark. The market started to go up early today, but is now declining.
I still think that the Senate hearings should Supoena the oil company execs and put them under oath as they threatened to do a few weeks ago. Then, we might get some straight answers. Remember, the Saudis still are producing a little over a Million barrels a day over demand and cannot find buyers.
Last report I saw had at-the-pump demand fairly steady.
Then again, what gets craked for gasoline amounts to less than half the overall crude taken in a given period.
And herb, I didn’t say ‘short’, I said shortER.\A major difference, and a subtlty usually lost on peple when speaking of comodity prices.
But, you did say “stockpiles of available crude going downâ€Â
Yes, I did.
In my book, that means a short (or shorter) supply of crude.
Well, yes, and no. You’re taking it, I suppose, to mean enough to cause serious shortages. My suggestion to you is that prices will adjust long before serious shortages are an issue… in any commodity.
You may notice that as of this morning, prices were down sharply.
So, Herb, to answer your question a bit more fully, this is part of the comodity trading game…. driven as much by perception as fact.
The short spikes we see are driven, as much as anything else, by what are seen as possible shortfalls in the future. Reasons for these are the cold, and the aforementioned refining capacity coming back online, as well as other reasons neither one of us has brought up.
The press (And some bloggers) tend, collectively to wet it’s pampers every time there’s a short term spike, anymore, because it wants to create the image of the economy going to hell in a basket. Note the utter lack of hype over price DROPS, as occured before the closing bell yesterday.
