Speaking of Oil

Going With The Flow

2008-08-08T15:31:00Z

I’ve often compared the oil futures markets to a multi-trillion dollar game of Chutes & Ladders, the Milton Bradley board game where the luck of the dice would enable someone to climb past, or slip well beneath fellow competitors. (For my British readers, the game is known as Snakes & Ladders ) Today, Friday August 8, 2008, is a day that has put a major crude oil chute on the board. If WTI crude oil futures were to close at below say $116.50 bbl, it would signal to many of the chartists...(read more)

Oil Price Hiatus

2008-07-28T21:26:00Z

If an alien economist touched down on planet earth say on July 5 th , he, she, or it might have reasonably concluded by July 25 th that the world was in a bull market for stocks and a bear market for commodities. Today’s action gives pause to that premature extrapolation. Oil and most other commodities moved higher, and financial markets moved sharply lower, with a weak Dollar and the old reliable “trouble in Nigeria” delivering déjà vu all over again as Yogi might...(read more)

200 Days of Shatner & Chipper Jones

2008-07-18T17:49:00Z

Oil price moves this week were violent, but the violence was manifest mostly to the downside. Some people were even convinced that it might be time to write the epitaph for the 2008 price spike. The change is welcome but the fat lady of oil price expansion has yet to sing her final aria, I fear. This year has provided more “false tops” than have been adorned by William Shatner and Burt Reynolds in their combined adult lifetimes. Note: I have been accused of being a “hairist”...(read more)

Cypherin' & Gezinta's

2008-07-11T19:12:00Z

Almost all of the financial discourse this week has included mention of Freddie Mac and Fanny Mae . This column aims for a much higher standard, but the constant references to Mac and Mae rendered inspiration for this week’s perspective. After hearing Fannie Mae mentioned over 1000 times, I could think only of one of the favorite characters from my black and white TV youth - - Ellie Mae Clampett . Ellie was of course a member of The Beverly Hillbillies , the nouveau riche family that struck...(read more)

Deliverance

2008-06-27T16:05:00Z

June will mercifully end on Monday, and my back-of-the-envelope calculations suggest that Americans will have spent a record $48-billion on gasoline during the month. Unfortunately, the hypothetical July invoice will probably be above $50-billion . I’ll have more on that calculation in a moment. But first, let me vent a little steam. June hasn’t brought any relief on prices, but it has delivered plenty of wind power from Washington, New York, London and other key cities that mix the ingredients...(read more)

How The Pinch May Steal Summer

2008-06-12T22:51:00Z

Earlier this week, the Federal Reserve published the always dynamic “Beige Book” and offered the salient observation that consumer spending had slowed as incomes were “pinched” by rising energy and food prices. This is probably not a book you want to take to the beach, although you could then call it the beach beige book and impress your friends. Pinch . Yes, indeed, high oil prices have pinched consumers and small businesses in much the same way that Evander Holyfield’s...(read more)

Swoon or Schvitz?

2008-05-30T21:07:00Z

Yet another record high was established today for retail gasoline prices, but some cracks in the armor of great energy bull market were uncovered this week. But more importantly, the free world is beginning a worthy polemic. Thought leaders (I just love that buzzword!), may soon examine whether commodities in general, and life blood materials such as crude oil and grain in particular, should be steered by the powerful twin engines of investment and speculation. I’ll weigh in with my thoughts...(read more)

Gaszilla 2008

2008-05-16T12:59:00Z

Within the next few days, America will cross a benchmark that I thought to be possible , but not necessarily probable this Spring. Well before Memorial Day weekend, U.S. motorists will spend more than $1.5-billion per day on gasoline. Today’s back-of-the-envelope estimated bill, calculated against a national average price of $3.787 gal, is $1.486-billion. When we get to $3.82 gal nationally, we’ll cross $1.5-billion. That level is a virtual certainty based on recent wholesale price advances....(read more)

Eight Days In May

2008-05-09T21:13:00Z

You will see much higher retail prices for gasoline, diesel, and heating oil by the end of next week thanks to a foundation laid in wholesale markets in the last eight days. Since the close of business on May 1, crude oil prices have surged some $13.44 bbl. Wholesale gasoline has spiked some 25.4-39.55cts gal, and wholesale prices for diesel are up as much as 49.33cts gal. Northeastern heating oil has gained 51.83cts gal in the same eight days. Annoying footnote: In eight days, market forces (we...(read more)

Superspike & SuperBad, or Why I Am Not A Motivational Speaker

2008-05-07T18:58:00Z

This is hastily written so forgive me if I don’t litter this post with classical references, witty attribution to pop culture, and the normal sense of humor that I generally sprinkle through these screeds. Crude oil prices closed at $123.57 bbl today, up $1.73 bbl on the day. There is some not-so-wonderful symmetry- - - the crude price on this day a year ago was $61.47 bbl, so we have now seen an increase of more than two-fold. I continue to believe that this is largely the result of speculative...(read more)

Magnum Force

2008-04-25T14:22:00Z

U.S. gasoline prices surpassed $3.57 gal last evening, and they will almost certainly advance above $3.60 gal this weekend. All of the tea leaves pointed to this April surge. May is a much more difficult month to forecast, and it could see a turn. If so, some 90% of the professional traders will be proven wrong. More on that in a moment. But first, the scorecard: Today’s retail unleaded average of $3.577 gal puts gasoline values exactly 70cts gal higher than what was witnessed on April 25,...(read more)

Straight Talk & The Caca Chronicles

2008-04-18T15:56:00Z

With inspiration from John McCain, who this week proposed a driving season fuel tax holiday, I’m presenting this post in the form of a Q&A. And much like John McCain does when he makes his various media appearances, I’m interviewing myself. (Note to zealots: this is not an endorsement or a criticism of Senator McCain. God knows, there are enough partisan posts in the ether world, and the public needs more political commentary in the blogosphere about as much as we need more coverage...(read more)

One Versus 100

2008-04-09T22:03:00Z

No, that is not a cheap plug for the NBC game show hosted by Bob Saget, where the producers pick a person who could never make it on to Jeopardy and that person tries to answer questions better than an angry mob. I prefer The Biggest Loser, if only because it makes me feel like a decathlete. The headline refers to the 100 day mark of 2008, and the measurement of oil prices during that period. Today we saw new all-time record highs for benchmark crude (whether it be the U.S. WTI grade or the North...(read more)

Gasoline And Consumer Confidence

2008-03-28T19:19:00Z

You’ll have to read this entire post to get the reference in the headline. But this has certainly been a remarkable week. Crude oil spent time above $108 barrel but it also had a cup of coffee below $100 barrel. Eight percent moves aren’t unusual these days in commodities’ markets; indeed that volatility is the straw that stirs the drink on Wall Street. And, we’re not talking about the “milk of human kindness.” No more Shakespearean references. Let’s take...(read more)

New Fundamentals & Questionable "Realities"

2008-03-17T22:13:00Z

Old news: Retail gasoline prices reached a record $3.28 gal this weekend, breaking last year’s Memorial Day record before we even concluded St. Patrick’s Day. Retail diesel blistered to a new all time national high of $4.002 gal this morning, and that includes prices of $4.18-$4.28 gal in the bookend states of California and New York. New news: Wholesale prices for gasoline plummeted today by as much as 20cts gal, and the big bulk barge and pipeline markets closed with gasoline selling...(read more)