School children in the Middle East at least had a good excuse as to why they couldn't get their term papers done. Somehow an underwater cable was "disrupted" and internet access across the Middle East was lost. I have yet to hear if it has been restored. Why doesn't something cool like that happen on a Monday morning here? Surely our internet here in "The Rouge" is connected through a huge cable in the Gulf of Mexico. C'mon oil companies, sever that line for us!! Speaking of oil, the annual EIA (Energy Information Administration) released its weekly oil inventory report. The report made oil trade mixed on the day because investors were digesting information on this report and what the fed was going to do with interest rates, which were cut by another 0.5% again today. The oil report showed that crude inventories rose and is starting to close in on the high end of the 30 year averages for stockpiles.
BUT there is bad news on the horizon as refiners are switching over to "summer blend" production and many analysts predict that the cost of gas is likely to skyrocket in the coming days (for California) and months ahead. MTBE, an additive that is no longer used in summer blend gasoline, has been phased out in favor of Alkylate, which is a petroleum product. Shortages of the product have driven up prices in the past two springs and it looks as though it is going to happen again. Some believe that the average price of gas will top $3.50 for the NATIONAL AVERAGE! So I guess this is our warning to start saving now. Oh yea, when is that economic stimulus check coming in the mail?
Two interesting things I think you should check out on EIA website is the weekly petroleum stock supply and the EIA Short Term Energy Outlook. The stock supply, not counting the Strategic Reserve, is somewhere around 20 days. This means that at current refinery utilization, we could run those refineries at their current 4 week average capacity and have enough feed stock for only 3 weeks. Gasoline supplies are roughly in the same neighborhood. Check out, the graphs show lots of interesting trends that you just don't hear about in the news! The second thing is the Short Term Energy Outlook. Just to wet your whistle, take a look at this excerpt.
"Global oil markets will likely remain tight through 2008, then ease moderately in 2009. EIA projects that world oil demand will continue to grow faster than oil supply outside of the Organization of the Petroleum Exporting Countries (OPEC) in 2008, leaving OPEC and inventories to offset the upward pressure on prices. In 2009, higher non-OPEC production and planned additions to OPEC capacity should relieve some of the tightness in the market. As a result, the level of surplus production capacity is projected to grow from its current level of under 2 million barrels per day (bbl/d) to more than 4 million bbl/d by the end of 2009"
Does anyone know where this extra surplus is currently being developed and will be online in '09? Interesting outlook and should be interesting to see how it pans out. The EIA also predicts that the average price of crude for '08 to be somewhere near $87 a barrel. Will we see $100 oil again soon? Bets anyone?
Finally I never thought I would write about pot in my blog, but just a mere 30 days into this project and I am writing about it. It appears that in some select locations in Los Angeles you can purchase (as long as you have the creds. man) to buy medicinal marijuana out of a vending machine. You know how vending machines tend to tease you when you purchase something; you know what I'm talking about, the little arm spins, the M&M's get close to the edge and..............opp it gets stuck right...at...the...edge. Just bang on the glass a little, and maybe they will teeter. Question is, what happens when your dime bag gets stuck? Ah the interesting converstations you could think of with that thought! :-) Cheers!
