Friday, December 24, 2010

The stockpile data is obsolete. Being in the energy industry (biomass) I can tell you the reports of high stocks of diesel, heating oil, and propane are all misleading. Supplies do no good to the consumer when they are in a salt flat in Louisianna. Homeowners, and business, even truck drivers, are not filling their tanks to full. They are only getting what they need right now because everybody is conserving cash. Bulk inventories may be record high, but the tanks outside of homes, businesses, and trucks are less than 40%. As the economy recovers you will see an increase usage, but production will not adjust accordingly. Crude will hit $100, gas will hit $3.25+, and heating oil will be at least $3.25 going into next season. Propane is already high at $2.50+. Ask any oil or propane delivering company and they will all tell you the average delivery amount is down from what is typical.. Instead of 250 gallons people are getting 100 and are waitng to the last minute.As oil prices climb as the US economy continues to improve, because the dollar falls in value to other currencies. The price of oil is not reflective of the overall economic conditions of the US. It is pure speculation. And the US gov't will allow these speculators to push oil and gasoline prices higher and eventually the US economy back into a recession. And the cycle begins again.

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