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| 5/25 |
| 2007/6/15-19 [Transportation/Car, Transportation/Car/Hybrid] UID:46963 Activity:nil |
6/15 Gas Prices Expected to Rise at Pump
http://biz.yahoo.com/ap/070615/oil_prices.html?.v=13
\_ Gas prices will go up and down but the long term is always up now
since there are no oil supergiant discoveries to save our behinds
left such as the North Sea in the 1970s.
\_ There's oil on the moon, I'm sure.
\_ No way! Don't you know that it was the Democrats, not the
Republicans, who took the country to the moon?
\_ Interesting graphs comparing the price of gasoline around the world
with per capita GDP. The results may surprise you.
http://europe.theoildrum.com/node/2653#more
Another data point from the same site is that US "average miles
driven" is so much higher than other countries that our
gas price advantage gets wiped out:
http://www.theoildrum.com/story/2005/10/22/235239/89 |
| 5/25 |
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| biz.yahoo.com/ap/070615/oil_prices.html?.v=13 AP Oil Settles at $68 a Barrel Friday June 15, 4:45 pm ET By John Wilen, AP Business Writer Oil Settles at $68 a Barrel, Following Gas Futures Higher on Supply Concerns NEW YORK (AP) -- Crude oil futures settled at $68 a barrel on Friday, their highest close since September, while gasoline futures extended their rally, raising the prospect that prices at the pump will stabilize and possibly even rise after falling for several weeks. Analysts say oil prices were boosted by unrest in the Middle East and a lower-than-expected core inflation figure, which encouraged investors to move money from fixed income investments to commodities. But oil futures also followed the lead of gas futures, said James Cordier, president of Liberty Trading Group, in Tampa, Fla. Gas futures have risen several days this week after a government report Wednesday that shocked traders by showing gasoline inventories remained flat as refineries used less of their capacity than they had the week before. The report was bullish for gasoline, but not for oil, which has been "trading in sympathy" with gas, Cordier said. That's because the refinery outages that are crimping gasoline supplies serve as a bottleneck for oil, which backs up behind the facilities waiting to be processed, he explained. Cordier thinks oil can't sustain a price this high, and should ease next week. Light, sweet crude rose 35 cents to settle at $68 a barrel on the New York Mercantile Exchange. "Unfortunately, I think this is about as good as it gets," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, predicting a higher price in the near future. Analysts said traders continued to react to Wednesday's report by the Energy Department's Energy Information Administration. that was just incredibly disappointing and extremely bullish," Cordier said. Analysts surveyed by Dow Jones Newswires had expected inventories to rise by 2 million barrels. The report killed any sentiment that the domestic refining industry, beset by an unusual number of outages this spring, has recovered. Analysts have warned for months that the industry is not producing enough gasoline to meet summer driving demand, which typically peaks between the July 4 and Labor Day holidays. On Friday there were new reports that Corpus Christi, Texas, refineries owned by Valero Energy Corp. and Flint Hills Resources were temporarily shutting down equipment for maintenance. "We needed some big builds (in gas inventories)," said Cordier. "We got one or two big builds, then this figure just threw cold water on it." The report attracted hedge funds and technical buying, analysts said, further adding to the price increases. He thinks futures will trade in a defined range of a few dollars for oil, and 10 to 20 cents for gasoline, rather than breaking out to new highs. "I do not believe this is the beginning of another tremendous bounce," Kloza said. Retail gas will follow suit, he said: It won't fall any further, but it also won't jump back to late May's records. Unrest in the Middle East, where Hamas consolidated its control of Gaza,also supported oil prices. Though it is not a large oil-producing area, strife in Israel and the Palestinian territories unsettles oil traders because of the possibility an oil-producing country, such as Iran, could be drawn in. "Geopolitics will rally a market at the end of the week every time," Cordier said. Cordier said energy futures prices were also supported by Friday's core inflation figure, which a government report said rose a lower-than-expected 01 percent. That dampened sentiment the Federal Reserve will raise interest rates. Investors flee equity and commodities markets for fixed income investments when interest rates are believed to be on their way up, Cordier explained. When investors think rates will hold steady or fall, they're more likely to invest in commodities, he said. "It relieves downward pressure on commodities," Cordier said. "The core figure on inflation today kind of took the cap off the market." Associated Press Writers Pablo Gorondi, in Budapest, and Gillian Wong, in Singapore, contributed to this report. The information contained in the AP News report may not be published, broadcast, rewritten, or redistributed without the prior written authority of The Associated Press. |
| europe.theoildrum.com/node/2653#more These last weeks the MSM has been reporting news that, wouldn't it be for the seriousness of the Hubbert Peak, would belong in the section of bizarre news of your local newspaper. suing foreign countries that do not supply the market with desired quantities of oil. Luckily there seems to be some sane people at the Republican White House. No, this is not a bundle of people going mad at the same time; As explained by Professor Michael T Klare, the Carter Doctrine is a legacy of the 1970s oil crisis that basically transforms resources in foreign regions into indigenous assets that will be protected and controlled, no matter what. As a hole it deployed troops in Afghanistan, and its Christian Democrat and Liberal states played along with the Iraq commission (after trying "politely" to secure Iraqi oil through the UN). The problem is that those elected don't seem to have any other way to deal with the common man on the street, demanding, complaining, raging, about gasoline prices. This is how electors get in touch with the Hubbert Peak, and being sadly clueless about it, they just cry like a baby that's losing its candy. And instead of saying "grow up, it's time to forget about the candy" those elected simply reply "daddy's gonna fetch you more candy". Searching the web it is possible to find the price of a short gallon of regular gasoline for a number of countries around the World. These prices report mainly to April and May of 2007 with a small number of them being from last summer, when oil prices were above 70 $ per barrel like today. Some variations would occur if these prices where all from the same epoch, but they are good enough to get the overall picture. It is important to note though, that South America with two countries and Africa with one are poorly represented. Looking at Figure 1 three big groups of countries can be identified: * below 3 $ / gallon - mainly composed by oil exporting countries and some developing Asian countries that facilitate the access to fuel; The United States is to be fond in no-man's land with 31 $ / gallon, closer to the countries that subsidize consumption than those that do not. But this is just half of the picture because in different countries a gallon of gasoline has different weights on the individual's budget. One way to assess this difference would be to ponder the gasoline price against the average wage of each country. This approach was not taken for two reasons: first the average wage is not as available as other statistics and second it is biased by the tax policies followed in each country (eg the average wage in Norway is considerably lower than in the US, while both countries have similar numbers for GDP per capita). GDP (Gross Domestic Product) is a measure of the wealth generated in a country during a reference period (usually one year). GDP per capita is not affected by tax policies (which broadly speaking determines which part of the GDP is managed directly by the state) and is probably a best measure of individual wealth than average wages. Click to enlarge Besides Luxembourg, there are no big surprises in this graph. It is interesting to note that most major oil exporters are yet to achieve the levels of wealth in Europe, where almost every country is above 20000 US$ / cap. Of special note is Nigeria, one of the world's largest oil exporters. This situation will likely change in consequence of the Hubbert Peak. Luxembourg seems to be in a different level, but there are explanations for that. The country is a tax safe heaven situated right in the heart of Europe (at the cross point of the axis Paris - Frankfurt and Amsterdam - Strasbourg) making it favourable territory for financial/banking institutions. Also the majority of the workforce labouring in Luxembourg lives in the surrounding countries. With this two sets of data (GDP and gasoline prices) it is possible to compute the weight of gasoline on an individual's available wealth. Figure 3 shows the cost of a short gallon of gasoline as percentage of the wealth available daily per individual. Gasoline Prices as percentage of daily GDP Figure 3 - Cost of a short gallon of gasoline as percentage of daily GDP. Again three main groups can be roughly devised: * below 15% - less wealthy countries that export oil; The cost of a short gallon of gasoline in Nigeria is a scorching 56% of daily available wealth per capita. And this is an oil exporting country, in other African countries the costs of fuel is probably too high to have real meaning, and most people live without it. Once more the US is in no-man's land, this time accompanied by Luxembourg. In both of these countries a gallon of gasoline, as a fraction of available wealth, costs close to what it costs in oil exporting countries. Table 1 tries to give further insight on the cost of gasoline in the US and Luxembourg. The prices shown are those that equal the wealth costs of a short gallon in Japan, Germany and Brasil. In light of that, Table 2 presents what the gasoline prices would have to be in France to match the wealth costs in the US, China and Brasil. Even with the half-harmonization imposed by the VAT, different states have completely different tax policies on fossil fuel consumption. Even discounting Luxembourg, gasoline in Estonia costs the double of what it costs in Ireland, and in Portugal almost the triple. Among the member states with lower gasoline costs, are some with visible commercial deficits, like Spain or Italy. This is probably an issue yet to be address in the framework of the European Construction. Looking at these numbers it doesn't seem to be the right time for the Carter Doctrine to set in. Gasoline prices are only cheaper than in the EU or the US in the countries that currently posses the base resource and that are yet to get to the western standards of wealth. Countries like Venezuela or Turkmenistan have a significantly lower population and per capita consumption than the EU or the US. Gasoline prices in these less wealthy oil producing countries can't have a visible impact on prices in the wealthy countries. Taking direct control of these countries' resources is very likely a vain strategy. Everyone that ever visited the city of Martelange, which is a Belgian city on the border of Luxembourg is surprised that one side of it's main road is really plastered with gas stations. That side of the road actually lies in Luxembourg, and the prices are considerable lower then in the surrounding countries. Martelange is a comfortable and small detour from one of the main highways of continental Europe, A2/E25, and is a known truckerstop for this reason. They are usually tax havens, trying to attract commerce and business from the neighbours. You could see them as parasitic economies, sucking money through their borders. They can be that way because they are not big, so the drain in the resources of the neighboring countries is acceptable, while they give some specialized services mostly to the higher classes: hush-hush banking, casinos, cheap electronics, luxury vacations. Luxembourg is bigger and has more of a real economy than say Monaco, but still it has these kinds of tendencies. Switzerland is an excellent example of a country which is highly stable (past 500 years) near zero interest rates. Highly trained and armed populace (14 soldiers per square km versus the USA <1) They maintained neutrality during ww1 and ww2 and have continued. Banking privacy is very important, why should anyone know how much money I have after I declare my income for a given year and pay taxes? It is said that one of the causes of WWI was the German push to obtain oil in the Middle East -- since the British had changed their naval fleet to oil-burning ships, the Germans would need to do the same. It would seem from these data that the Carter Doctrine is alive and well; the US and its satellites having won the oil wars if the previous century, currently have the lowest resource cost-- and development of the resources is limited to that planetary system as much as possible. Venezuela, and to a lesser extent, Brazil, seems to be trying to break the model. Just received an email fro... |
| www.theoildrum.com/story/2005/10/22/235239/89 It turns out we were missing some of the most interesting parts of the story... I've got incrementally more evidence that there is a causal connection between miles and GDP growth, though not an open-and-shut case, and I still can't give a plausible account of why it works so precisely. This post is part of a never-ending series on the economic response to oil shocks, which I'm doing to gain a deeper insight into likely post-oil-peak economic occurrences. Both series have then been rescaled to make 1970 be 100%. I have to say in passing that I thoroughly approve of the portion of my federal and state taxes that have been expended on assembling and publishing these statistics. So then the big question is, is the very striking agreement between these series a fluke, or is there a deep reason why it must be this way? It's definitely not the case that all things that just generally grow with the economy agree this closely with GDP. This next graph adds the time series for total US population (in green), US "economically active" population, in yellow, and number of housing units (from the Census) in purple. Clearly, these have all been generally growing, but not at the exact same rate as the GDP (though there's a very good correspondence between housing units and employed population - I guess it's hard to pay the rent if nobody in the house has a job). We've clearly got a fair amount of correlation in the annual growth rates. For pretty much every strong, oil-shock driven, recession, the driving line takes a dive right around or slightly before the GDP line, and then recovers at the same time or slightly earlier too. This, and the worst shock in 1973, did cause enough of a problem to actually drive miles down, albeit by only 2 1/2% in the latter case. So I guess once things get bad enough that people are shooting each other in the gas lines and the President is wearing a sweater on TV, they're bad enough to actually reduce driving a tiny bit. However, it's also clear that not all features of the two curves match. There's a 1982 nasty recession that the driving data totally ignore. The driving data doesn't really follow the late nineties tech bubble and subsequent crash, which is clearly visible in the GDP growth line. There's a dual peak structure around 1985 in both lines, but they disagree about which should be the bigger peak. There's a technical way to assess this known as R^2, the correlation co-efficient. This measures the percentage of the fluctuations (technically variance) in one line that can be explained by a linear rescaling of the other. So if the two lines have exactly the same shape (even if size and vertical position were different), they would have an R^2 of 100%. If the two lines were completely unrelated, they would have R^2 of 0%. So, in addition to the long-term trend being the same, 35% of the fluctuations in one line about it's long term trend are explained by the fluctuations in the other line. Before anyone gets upset that autocorrelations mess this up, the 1 year lagged autocorrelation R^2 in GDP growth is only 38%, and the 1 year lagged autocorrelation in miles growth is only 96%. These low autocorrelation R^2 values tell us these lines, in so far as they wander, wander fairly jerkily - this year's growth has very limited memory of what last year's growth was). So that maybe gives us a better sense of what this 35% correlation between the two lines means - if you want to understand this year's GDP growth, this year's mileage growth has about 10 times as much explanatory power as last year's GDP growth. And if you want to understand this year's mileage growth, this year's GDP growth has about 3 1/2 times as much explanatory power as last year's mileage growth. I think there's a little bit of a lag here - things seem to happen a little bit earlier in the mileage line. However, it's only a few months, not a whole year, so it's a bit tricky to compute a shifted R^2, even though it might be a shade lower. It's also noteworthy that there are no big features in the mileage line that are missing from the GDP line, but there are big features in the GDP line missing from the mileage line (such as the 1982 dip and the late nineties boom). This suggests that causation is more prone to run miles-to-GDP than the other way round (though I'm sure there's some feedback arc both ways). Now, in addition to the local correlations, we also have the fact that the long term trends are the same. In fact, over the whole period 1970-2003, mean GDP growth is 31%, and the mean miles growth is 30%. Obviously the fact that these growth rates are so similar is the core reason the graphs line up. We can say a little more about the significance of the similarity. In particular, if we look at the population of 32 growth observations of each type, we find that the standard deviation in both is the same value: 20%, which (given there's not much autocorrelation so we might not be hopelessly off-base to treat them as iid and divide the standard deviation by sqrt(32)), means that the expected standard error in each rate is 035%. Ie, if you just looked at the pretty large growth rate fluctuations, you'd think the mean of each of them might have come out different than it did with a fluctuation size either way of 035%. Thus the error in the difference between their two rates is sqrt larger, or 05%. So the two trends are quite close together compared to the fluctuations in their growth rates. But, if that difference were normally distributed, the chance of being at 01% different or better (ie within 02 standard deviations either way) would be 16%. So we can't say "there is statistically significant evidence that these lines are closer together than you'd expect just based on their average and fluctuations in growth" - we'd need a much longer trend. I meant to repeat this with a bootstrap Monte Carlo for good measure (since the normality assumption doesn't seem too solid), but I think I need to do a bit more work. The autocorrelation r^2 at lag 1 in this series is only 06% (ie negligible), so I built a little Monte Carlo program that takes the GDP series and builds alternative mileage series by picking a random residual, bootstrap style, from the pool of residuals in the graph and multiplying last years mileage by the gdp growth plus random residual. The idea is to then build a population of such lines and see if the closeness of our actual ones is anomalous or not. However, this process doesn't work because it produces mileage lines with too high a variance (GDP variance plus residual variance). Actually, at the rate you are going I think you are likely to reinvent granger causality tests for time series analysis. Anyway, your interpretation seems to understate significance of employment changes since GDP changes will induce employment changes with a lag. Also the trends of disposable income are important if vehicle-miles are in some sense a normal good. Indicators of Dematerialization and the Materials Intensity of Use: A Critical Review with Suggestions for Future Research . Some quotes from their conclusion include: there is no compelling macroeconomic evidence that the US economy is decoupled from material inputs....... we should view with suspicion any gross generalizations about material use that are drawn from previous work, particularly the "gut" feeling that technical change and substitution inexorably leads to decreased materials intensity and reduced environmental impact Comments can no longer be added to this story. Wonder if there is a predictive connection between %loss of oil supply and decline in miles driven and thralled GDP? Perhaps an explanation for nil effect of the tech bubble bursting was that it was responded to by the FED with massive system liquidity injections. A majority of the non-stock owning public didn't feel a thing, as billions of equities dollars disappeared. I find it particularly interesting that vehicle miles continue to grow faster than population, the two curves growing farther and farther apart. As a large fraction of passenger vehicle vehicular miles are the result of going to and from one's place of business, i... |