Government Warns of Sharply Higher Heating Costs(oil new record $51.85)

[RedEarth]

WASHINGTON (Reuters) - American consumers will feel the effects of record-high crude oil prices with winter home heating oil bills jumping about 28 percent and natural gas costs rising by 15 percent, the U.S. government said on Wednesday.

"This winter, tight global oil markets and elevated crude oil prices are expected to result in higher heating oil, natural gas and propane prices," the Energy Information Administration said in its annual winter forecast.

.....

President Bush has called for opening an Alaskan wildlife refuge to oil drilling to boost supplies, while Democratic challenger John Kerry has sought to focus on conservation and stricter gasoline fuel standards to cut demand. However, most of the winter heating bills will not arrive in consumers' mailboxes until after the election.

The average Northeast household will pay a total of $1,223 for heating oil this winter, double the price paid three years ago and up from $953 last year, according to the EIA

.....

U.S. crude oil prices set a new record high of $51.85 per barrel in mid-day trading on Wednesday at the New York Mercantile Exchange. Some energy analysts say prices might approach $60 a barrel in the coming weeks

http://www.reuters.com/newsArticle.jhtml?type=domesticNews&storyID=6430834

[phantom power]

1. Up 28% in one year. There's some double-digit inflation for ya

[hatrack]

2. No, no NO!! You didn't subtract the "volatile food & energy sectors"

Bad eje! BAD!! You need to make the inflation go away, just like Unca Alan!

[phantom power]

3. I hang my head, in shame...

My pessimism aids the terrorists.

[hatrack]

4. Yes, why DO you hate freedom?!?

:evilgrin:

[durablend]

9. Yes...SHAME ON YOU!

All this pessimism is a drag on the economy! There's no poor people and there's definitely NO inflation. Do I even need to mention that there's PLENTY of jobs for everyone that wants one (or two or three or FOUR). What, you can't afford your bills, your food? WELL TOO BAD!!! Not MY problem!!!!

[hatrack]

19. I swear, freedom-haters coming out of the woodwork today!!

;-)

[flatbroker]

5. Can you buy heating oil on Ebay?

I bet the studies didn't consider the effect ebay has on the oil markets.

[BiggJawn]

6. So by late February, when I'm busting the ice in the morning...

...in the toilet bowl, so I can take a whizz......

Could somebody tell me something, then maybe i could answer my girlfriend's question and she'd stop bugging me?

How do they expect people to PAY these obscene prices?
We don't ALL have pussies to sell to rich ReTHUGlicans.

[htuttle]

10. LOL!

I've done that. The chipping the ice out of the toilet thing, I mean.

[UpInArms]

7. now it's over $52 a barrel

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6431700

Oil's Rally Takes U.S. Crude Over $52

LONDON (Reuters) - Oil's record-breaking rally took U.S. crude over $52 a barrel on Wednesday, a new all-time high, fueled by the impact of Hurricane Ivan on U.S. winter inventories.

U.S. light crude (CLc1: Quote, Profile, Research) climbed to a peak of $52.02 a barrel before easing to $51.90, up 89 cents on the day. London Brent (LCOc1: Quote, Profile, Research) , the benchmark for European imports, set a record $48.02.

Oil has surged some 60 percent since the start of the year, driven by the strongest demand growth in a generation and a thinning cushion of spare capacity to cope with supply outages.

"It's frightening how bullishly the market is shaping up from a fundamental perspective," said Yasser Elguindi of Medley Global Advisors in New York.

"There's strong demand in Asia and Europe as well as the U.S. and inventories are low in all regions."

...more...

[durablend]

8. Am I delusional...

In thinking that the oil companies are in no real rush to fix those Gulf facilities? Granted, I don't know what kind of damage Ivan did but I've got a feeling they're leaving them broke on purpose (mo money mo money mo money)

[BiggJawn]

12. Well, there's only ONE place to buy spare parts....

And you can bet it's either a Halliburton of Carlyle subsidery...

Yep, gonna be cracking the ice in the toilet bowl so the turds will go down for SURE this winter.....

[UpInArms]

14. it also appears that the profit margins on those

southeastern refineries are much lower than the ones on the west coast

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=887160&mesg_id=887352&page=

It is at first glance puzzling that despite demand growth, refinery closures and high utilization rates, margins remain modest and little investment has been made in new capacity. Average capacity utilization has risen from 92 per cent in 1995 to an expected 93.5 per cent in 1997. It is argued that this is near the maximum sustainable capacity utilization, since some spare capacity is needed for maintenance down time and other contingencies.(23) However, the fact that margins have remained low suggests the explanation lies again in the phenomenon of capacity creep. Investments undertaken partly to comply with environmental requirements (see below) have contributed to this. According to one author:

In the past five years, margins haven't improved, even for those who have invested to make reformulated fuels. The intent of these refiners was to add economic value to the investments added for regulatory purposes. But these investments involved the addition of conversion equipment, which had the added effect of increasing product capacity.(24)

Average margins have fluctuated in a range of about $1.80/barrel to $1.00/barrel over the last 20 years. These averages conceal the wide gap between the Gulf Coast refineries, with average margins of $1.39 in 1993, $0.88 in 1994 and $0.33 in 1995, and the surviving West Coast plants (benefiting from the numerous plant closures which reduced capacity overhang in that market), which have enjoyed margins in the range of $3.50 to $7.00 over the same period.(25) Historically, there is a clear correlation between the level of margins and -- with a time lag of about one-and-a-half to two years -- capital expenditure on refineries.(26) This would explain why capital expenditures fell from about $7 billion in 1992 to under $4 billion in 1996 and why little additional capacity is planned in the immediate future. Already the country is a net importer of about 1 million b/d per year of oil products (including 280,000 b/d of gasoline and 150,000 b/d of distillate), and in the absence of new investments this is likely to grow after the year 2000.

[daa]

11. Another Bush recession coming

I wonder if any president ever had 2 recessions on his watch?

[radfringe]

17. call it the DUBYA dip

can we afford another four years of bush?

meanwhile -- I'll be doing winterizing, weather stripping, and stacking a few cords of wood to supplement heating the house this winter.

My Christmas list:
sweaters, thermal underwear, wool socks, flannel sheets, blankets, gloves

[aquart]

13. This is going to cause a HUGE rent increase for stabilized housing.

And nobody can argue that these bills won't crush landlords. They will. But tenants will be destroyed.

Thanks, George, for all you do.

[demnan]

15. The Enronization

of America.

[Bandit]

16. How you like your tax cuts now America?

:shrug: Throw the Bums out.

[whirlygigspin]

18. Beating the High Cost of Energy - With Corn

http://news.minnesota.publicradio.org/features/200101/31_galballye_cornstove-m/