U.S. crude oil prices high, likely to go higher

[Tom Yossarian Joad]

NEW YORK – Instability in oil producing nations like Iraq, Venezuela and Nigeria helped boost U.S. crude oil prices to an average of $31 a barrel in 2003, the highest yearly average in more than 20 years, energy experts said yesterday.

Without a jump in imports in 2004, prices are likely to remain red hot, according to the government.

"Ultimately, more imports will be needed in 2004 to bring inventories back to levels high enough to relieve some of the price pressures experienced in 2003," the U.S. Department of Energy said in a report.

U.S. benchmark oil prices on the New York Mercantile Exchange futures market averaged $30.98 a barrel in 2003, up 19 percent from the average in 2002, according to Reuters data.

More: http://www.signonsandiego.com/news/business/20040101-9999_1b1oil.html

[kalian]

1. Ummm.....

yeah, oil is going to get more expensive, especially if OPEC
starts accepting only Euros for oil payments. People keep forgetting
about how worthless the greenback is becoming...

[RoeBear]

2. Does anyone doubt...

...that gas prices at the pump will be much lower, oh about, October of this year?

[Unforgiven]

3. Oh....

...........of course, did you think it would be any other way?

[pfitz59]

7. They'll be jacked up first!

Gone up 8 cents in last week!

[Minstrel Boy]

4. I wonder how much cheap oil the average American thinks remains

to be pumped, and how long it will last at the current rate of consumption?

The global oil production peak is likely upon us, and the architects of fear in the White House know it. How many at the pump, cursing the price, are aware? How high will the price go before they do?

[cliss]

5. The lines of supply and demand

have crossed each other. We now have a case of demand outstripping the supply. The only thing that can happen is that the price will go up.

What's happening with Iraq? Did we just invade that country to "sit" on the oil, and keep it as our "Private Reserve" for when the rest of the world is desperate, and we will dole it out to our "friends"?

Also, I think this is going to be a hard blow for China. I know the're wanting to get in the "oil game", and start consuming oil like the rest of us junkies. They will have a hard time paying for gas if it's $2.00 per gallon.

But -- so will we.

[RoeBear]

6. Just a thought...

...wht is the 'actual' cost of a gallon of gas these days? I paid a buck forty the last time I filled up here in Michigan, but how much of that is tax?

It must be the same in other countires too, if they are paying two bucks a gallon then they must have an extra sixty cents a gallon tax.

[peterh]

8. For the sake of brevity/simplicity…..

In California, I do the following to arrive at an estimated cost at the pump:

Alaska North Slope (ANS) crude is the most widely used, though most refiners will blend a variety of crudes to optimize a particular “price/yield” for their unique refinery.

ANS, on Wednesday, was assessed at 31.29 per bbl or 74.5 cpg
For the cost of refining the crude plus overhead, I use $6 per bbl or 14.3 cpg
I round off State & Federal excise taxes plus sales tax plus transportation to around 50.0 cpg
There’s an added cost for our newly required oxygenate, ethanol, but that cost is all over the board and for simplicity, I’ll just plug in 3.0 cpg
The overhead for a retail store varies, but I tend to use 10.0 cpg….
Thus, you have 74.5 + 14.3 + 50.0 + 3.0 + 10.0 = 151.8 cpg

If the 76 station down the street from me that is posting 156 for regular, is a company-op, i.e., owned by ConocoPhillips and is doing say, 200,000 gallons per month, then Conoco is grossing about $8,000+ per month at that store. If the store is a dealer-op, i.e., owned by the dealer, but branded 76, then the economics change a bit.

[mbperrin]

9. Here's a link to the Dallas Fed

http://www.dallasfed.org/eyi/usecon/0105gas.html