For the oil bulls, November roared in like a Jerry Bruckheimer movie, reached a climax just before Thanksgiving Day, and then retreated like brave Sir Robin’s troupe in Monty Python & The Holy Grail.  More on the final November numbers in a moment.

   The five business days last week (November 26-30) produced a drop of more than $10 bbl in benchmark crude prices, as well as a decline of about 25cts gal in wholesale gasoline numbers coast to coast. Wholesale prices for heating oil and diesel lost about 20cts gal. If oil markets pursued the non-frenzied pace of a Merchant/Ivory film (where nothing happens!), one might expect to see U.S. retail gasoline prices retreat to less than $3.00 gal early in December.

   That might be too much to ask these days, but if the bull market doesn’t get a third or fourth wind this week, we stand about $11 bbl below the November crude pinnacle, and some 25-30cts gal below the wholesale gasoline crest in the penultimate month. This week brings a lot of headlines on the agenda, with an OPEC meeting, plenty of rhetoric from Venezuelan president Hugo Chavez, and some likely delays in fixing the pipelines that deliver brisk imports from western Canadian provinces.

   However, I’m still inclined to believe that December and January will be shaky months for gasoline and perhaps even diesel. The U.S. gasoline market is the domestic horse that leads the global gasoline cart, and demand is clearly flat stateside. Meanwhile, merchant cargoes of diesel and heating oil from all corners of the globe are descending on Europe, and the London markets have cued the rest of the world for these parts of the refined barrel. London may falter this month, and if it does, the U.S. will follow.

November Scorecard – Wholesale

   First, let me give you a preview of the Producer Price Index numbers which will be released later in the month. OPIS follows hundreds of thousands of wholesale prices and we closed the books on November, and had to wait until 12:01 A.M. on Saturday in order to calculate the results.

   Wholesale gasoline prices averaged just under $2.49 gal in November, up from $2.23 gal in October. However, the date-specific difference between the average U.S. wholesale unleaded regular price on October 31 ($2.375 gal) and November 30 ($2.3106 gal) is misleading because we ended November with a 25cts gal plunge.

  Wholesale diesel prices averaged $2.79 gal, up from October’s average of $2.49 gal. Again, the October 31/November 30 comparison is a bit misleading as prices averaged $2.63 gal on the final day of October and slumped on the final day of November to $2.72 gal. There was much weeping and gnashing of teeth in between.

November Scorecard – Retail

   Here’s where you get some interesting headline numbers. The average retail price for November 2007 unleaded gasoline at the pump was $3.07 gal (I’m rounding so as to annoy those of you who like to express Pi in 15 or more post decimal digits).

   Based on preliminary demand numbers from the Energy Information Administration,

I estimate that Americans paid about $1.2-billion per day in November 2007, or some $36-billion in the aggregate. That compares to a total outlay of $25.6-billion in November 2007 (per diem average was $852-million b/d based on a $2.225 gal retail average. It compares with a monthly November cost in 2002 of just $16-billion (or $532-million per day).

   It’s very difficult to estimate the differences for retail diesel since one can’t break out transportation demand from the bundled total that includes agricultural and industrial use as well as heating oil disappearance. But suffice it to say that wholesale diesel and heating oil prices are about five times what they were in November/December 2005.

One Quick Note On Ethanol

   A Wall Street Journal story earlier this week was heralded by many of my oil friends this week as a death knell prose for ethanol proponents.

   It is difficult to get a clear picture of ethanol’s success or failure from the extremists on both sides of this renewable argument. There are few objective voices in petroleum circles, and just as few from the agricultural lobby. Both sides follow the Chinese proverb which suggests that no one ever predicts what they do not want to happen.

   I do not have a dog in this fight and stay away from the idealogical polemics. My beef is that the WSJ piece made it sound as though ethanol is retreating like brave Sir Robin in The Grail, when the reality is that ethanol infrastructure is getting installed in many states where motorists have yet to see the E-10 (90% gasoline & 10% ethanol) blends.

   Ethanol’s cost is still some 40-50cts gal below the price of wholesale gasoline in many states east of the Rockies. Its production no longer promises grain producers windfall profits, but it is still profitable.

    I’ll repeat what I said several months ago - - if you travel from Maine to Florida next Spring, most of the fuel along your ride will include 10% ethanol.