Energy Prices Plummet As Demand Falls

[Strelnikov_]

Headline is a little misleading. The article seems to indicate that demand destruction due to high prices is occurring. So much for the happy talk this week about how the high prices are not effecting consumption or the economy.

Energy Prices Plummet As Demand Falls
http://ogj.pennnet.com/articles/article_display.cfm?Section=ONART&C=GenIn&ARTICLE_ID=234882&p=7

Total domestic petroleum deliveries, a key measure of US demand, fell by 3% in July, marking the largest year-to-year drop in 3½ years, API reported Aug. 17. Higher retail prices caused a drop of 0.8% in gasoline deliveries, said API in its monthly statistical report. It said gasoline deliveries so far this year have been nearly flat, compared with a 2% increase in 2004.

Residual fuel deliveries fell 27% in July as electric utilities and industrial users switched to cheaper alternative fuels. Deliveries of distillate fuel oil and jet fuel both increased, however. Although crude input into US refineries was down by 2.2%, distillate production increased more than 7% in July over the same period in 2004. Production of low-sulfur diesel rose 2.8% to a July record of 3.08 million b/d. Heating oil output jumped more than 20% to 1.1 million b/d, API said.

API reported gasoline production fell 2.7% to 8.62 million b/d in July, reflecting weaker demand and the availability of imports. Refinery utilization rates were still strong at nearly 94% of capacity, down from an even higher 96.8% in July 2004. Gasoline inventories fell below 210 million bbl for the first time since October, ending July at 208.5 million bbl, slightly below the 2004 average for the first time this year. But distillate inventories rose by a strong 11 million bbl in July over June to 126 million bbl, up 4 million bbl from July 2004. Crude inventories slipped by 4 million bbl from June to July to 319 million bbl, some 23 million bbl above the 5-year average.


. . .

[Tsiyu]

1. Co-workers abandoned a cross-country trip

this summer and stayed closer to home for vacation. People aren't wasting gas for non essential travel as they did even a few months ago.

It will be interesting to see where it all leads in the long run....

[ellie]

18. We are supposed to

drive across the country for our vacation starting next Friday, but gas prices are causing us to rethink it. We may stay closer to home. If we do go, I will report on who is out on the roads and how many Wastikas I see at the campgrounds in the West.

[Roland99]

20. Wastikas! LOL! BTW, on my trip to Florida from KY, I didn't notice...

much change in driving habits. I kept my cruise on about 72-74mph but I was relegated to the right lane. Constant stream of cars, SUVs, and minivans going by at 75-80mph.

Gas was about $2.20 on average throughout the trip back at the end of July.

[kestrel91316]

2. I certainly HOPE high prices cause demand to drop ....................

we have been wasting way too much for too long, and it coming time to pay the piper.

Waste not, want not. And trade in that f---ing Hummer or SUV.

[radfringe]

9. just wait until the cold weather hits

alot of people are going to be hurting with heating oil prices...
I expect we'll see a surge in purchases of wood stoves and related insulation products for homes

A co-worker asked me about the difference between now with high fuel prices and the "embargo" during the Carter administration - and where's the outrage?

few differences:

During the embargo - there was a shortage of fuel and gas lines, filling up your tank was a real hassle. Today's situation is one of high prices, you can still get gas - it's just going to cost you an arm and leg

The embargo happened during cold months of the year -- gas prices spike today is still in warm months of the year

the embargo was manufactured by OPEC holding oil back and by the oil companies keeping their tankers floating off shore. Today - we are told it's because there is a higher demand in China, shortage of refineries and market manipulation based on fears of what may happen in the future

as far as the outrage -- it's there, the daily spews choose not to report it

meanwhile - remember Perot talking about a giant sucking sound in reference to NAFTA? well - today there is a giant sucking sound - it's the sound of bush* and his oil buddies sucking the bucks from your pocket

[MaineDem]

13. Heating prices will go through the roof

They already are here in Maine.

I called to lock in a price for the winter. We'd prebuy X amount at a set price. On Monday that price (for kerosene) was $2.699. On Tuesday it was 2.799. It goes up daily. I fear for people in a cold winter. The money won't be there for some to heat their homes.

[krkaufman]

17. "purchases of wood stoves" -- not terribly helpful, overall.

I'd hope there aren't many wood stove purchases, as it's not exactly a helpful shift. Of course, lack of planning is going to have many painful short-term effects.

[radfringe]

10. just wait until the cold weather hits

alot of people are going to be hurting with heating oil prices...
I expect we'll see a surge in purchases of wood stoves and related insulation products for homes

A co-worker asked me about the difference between now with high fuel prices and the "embargo" during the Carter administration - and where's the outrage?

few differences:

During the embargo - there was a shortage of fuel and gas lines, filling up your tank was a real hassle. Today's situation is one of high prices, you can still get gas - it's just going to cost you an arm and leg

The embargo happened during cold months of the year -- gas prices spike today is still in warm months of the year

the embargo was manufactured by OPEC holding oil back and by the oil companies keeping their tankers floating off shore. Today - we are told it's because there is a higher demand in China, shortage of refineries and market manipulation based on fears of what may happen in the future

as far as the outrage -- it's there, the daily spews choose not to report it

meanwhile - remember Perot talking about a giant sucking sound in reference to NAFTA? well - today there is a giant sucking sound - it's the sound of bush* and his oil buddies sucking the bucks from your pocket

[Fovea]

3. Significant demand destruction has not happened yet

and it will take a year or more to make a significant dent. It is not about descretionary gas use, it is about CAFE standards, and new living paradigms. What we can save by not doing that road trip across the USA is nothing when compared to the increase in demand in China, Russia, India, etc.

[Psephos]

7. Especially true considering relative energy efficiencies

Chinese industry, for example, consumes more than double the amount of energy per dollar of manufactured goods produced compared to the US. Another way of saying it is that the Chinese economy is a Hummer and the US economy is a Prius, when it comes to fuel consumed per unit of output.

For those with a taste for economic comparisons, China's energy efficiency decreases logarithmically on the margin; in the US, the decline is more nearly linear. Bad dog.

Peace.

[Psephos]

8. self-delete (double post)

[countmyvote4real]

4. The US market is just catching up to the rest of the world.

Our prices have long been lower than what Europe pays at the pump. Call me silly, but I can’t believe the only gasoline refineries are located in the US. While our time to pay our fair share is long overdue, I can only fault the * administration policies for making it happen. And that includes a big sloppy wet kiss (sarcasm) to all the GOP (and DINOs) that signed off on the recemt energy bill.

Why in the world would “we” give a tax break for gas-guzzler SUVs? And that one was already on the books. Dems have got to go Green if we want to save our country.

Both underdog parties can benefit from instant voter runoff innitiatives.

[tedzbear]

5. I went Green and I'm glad I did!

The Democrats and Republicans are the parties of unchecked capitalism.

[Orsino]

19. Yeah, the Dems caught the same disease.

But unchecked? No. Dems still give unions and minorities special attention--just not nearly enough. Big Money has not yet totally consumed the Democratic Party the way it has the GOP.

I'd love to vote Green, but until we get campaign finance with teeth, I still have to vote Dem out of self-defense.

We need parliamentary government, and quickly.

[rfkrfk]

6. it takes time, for 'bankruptcy conservation' to kick in

I think there is big time fuel conservation
in the future for Delta airlines.
It just takes time for Delta's suppliers
to decide to pull the plug.

I think something like this, will happem over and over.

This could also happen for home heating oil {which is
essentially the same thing as diesel fuel}.
People could conserve by, moving to homeless shelters, etc.

[teryang]

11. This is a seasonal move

...as the summer driving season is about over. Wait till winter. The trend in energy prices isn't changed by a few days action.

Energy stocks started to recover yesterday afternoon indicating some opportunistic price manipulation. If energy stock prices drop further, I'd be a buyer.

[teryang]

12. Self delete

[Eugene]

14. Oil up on Ecuador export halt, tight US gasoline

Oil up on Ecuador export halt, tight US gasoline
Fri Aug 19, 2005 8:17 AM GMT

By Ikuko Kao

TOKYO (Reuters) - Oil regained some upward momentum on Friday, nudging
toward $64 a barrel as lingering worries over tight U.S. gasoline
supplies and a halt in Ecuador's oil exports helped the market bounce
back from a sharp mid-week rout.

<snip>

But U.S. crude oil rose 29 cents, or 0.45 percent, to $63.56 a barrel
as traders considered upside risks to the market ahead of the weekend.
London Brent crude gained 20 cents to $62.60 a barrel.

Although the peak-demand U.S. driving season has only two weeks left to
run, unusually low inventories of gasoline and a series of refinery
glitches are keeping dealers on edge.

<snip>

Ecuador worsened the lost supply by announcing it had halted exports
of about 144,000 barrels per day (bpd), most of which go to the
United States, due to protests in Amazon provinces over the level of
investment from foreign operators.

http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-08-19T061636Z_01_ALL922552_RTRIDST_0_OZABS-MARKETS-OIL-20050819.XML

[democracy eh]

15. High prices may bring short term hardship, but will drive innovation

in both behaviour - "Whoa I can fit more than one person in my commuer car" and technology - hopefully we will see the kind of advances in fuel economy that the market and CAFE demanded in the 70's and move the bar a bit higher than 1985.

[hatrack]

16. Yes, gasoline prices plummeted from $2.55 to $2.62 where I live

And it only took three days - talk about plummeting!

[NashVegas]

22. 2.55 --- > 2.75 in Nashville

for high test, and that's just in one week.

[speedingbullet]

21. Less Driving?

I've been trying to use my bike for running errands around town. Probably not much in the grand scheme of things but I'm trying to something. Less summer travel for me as well.

[The_Casual_Observer]

23. "Energy Prices Plummet" In your dreams.

[Seabiscuit]

24. "Plummet"???? The author's been sniffing gasoline fumes.