Thought this was interesting:

April 13th, 2011

Goldman Sachs rocked oil markets for a second day Tuesday by calling for a nearly $20 fall in Brent crude oil, saying speculators had pushed prices ahead of fundamentals. It was the second warning of a steep market reversal from the long-term commodity bull in as many days. On Monday, Goldman recommended clients close a trade heavily weighted toward U.S. crude futures.

I’ve never been one to say that speculators are the primary driver of oil price fluctuations. Fundamentally, we are at or near the peak in conventional oil production — and that means oil prices will inevitably see higher highs and higher lows (See Science: “Peak oil production may already be here”; HSBC Bank: Oil will be gone in 50 years). And obviously we have a unique amount of unrest across North Africa and the Middle East.

But if the world’s biggest commodity trader commodity trader says speculation is playing a role, one has to listen — especially since Goldman has been predicting higher oil prices for longer than most:

Goldman was one of the first banks to predict $100 oil last decade, in March 2005 when prices were closer to $50 a barrel.

On Tuesday, Goldman chief energy analyst David Greely said the recent run-up in prices, in which Brent rallied as much as 33 percent since the start of the year, looked overdone.

“While prices are back at levels of spring 2008, supply-demand fundamentals are significantly less tight,” Greely said in an April 12 note emailed to clients.

“We believe that the market will experience a substantial correction toward our $105 a barrel near-term target for Brent crude oil in coming months,” he stated.

Oil prices were down sharply, with Brent shedding more than $3 to settle below $121 a barrel. On Monday, prices hit a 2-1/2 year high of $127.02 before reversing….

Goldman analyst Greely said that while unrest in the Middle East and North Africa remains a risk to oil markets, with Libyan exports already largely cut off, the price had been pushed too high by the large number of speculative traders currently long crude oil.

“Both inventories and spare capacity are much higher now and net speculative positions are four times as high as in June 2008,” Greely said.

Exactly how much speculation is driving up oil prices remains contentious:

Goldman estimated in a research note on March 21 that every million barrels of oil held by speculators contributed to an 8 to 10 cent per barrel rise in the oil price.

As unrest spread in North Africa and the Middle East, investors accumulated the equivalent of almost 100 million barrels of oil between mid-February and late March on top of their existing positions, adding approximately $10 to the ‘risk premium’, Goldman said.

Using Goldman’s 8- to 10-cent estimates and data on speculators’ positions from the U.S. Commodity Futures Trading Commission, Reuters calculated that as of last Tuesday, the total speculative premium in U.S. crude oil was between $21.40 and $26.75 a barrel, or about a fifth of last Tuesday’s price. The UK’s Financial Services Authority (FSA) does not publish trader data on Brent.

Goldman Sachs disputed the Reuters calculation on speculative premium.
Source: climateprogress.org

So according to the fundamentals the price per barrel should be around $70 to $90 which would put street prices in the $3.25 unl $3.40 dsl range.

Current price per barrel:

Bobby Fleet Manager Wall diesel, economic recovery, fuel price increases

Does anyone have a bugle?  I need to borrow a bugle, take some lessons, grab the music for Taps and then off to our cardlocks where today we laid the hold open latches on our gasoline nozzles to rest.  As you stand, next to your car filling it up with the world’s cleanest gasoline, you can thank VST out of Springboro, Ohio and the California Air Resources Board.  Hold tightly, don’t let go of the handle, don’t walk away, because that clean gasoline will stop flowing into your car.  Just stand there, squeeze with all your might and watch the gallons click by, watch the dollars click higher, and thank CARB and VST when you notice one of them keeps right on clicking even higher tomorrow, next week and next year. 

Until regulators are held accountable for their mistakes. Until they must actually PAY for these mistakes,  (oddly they have not offered to reimburse us for the nozzles they said we must use and no longer can use)  we will continue to have bureaucrats create rules to maintain their jobs. Rules that have very little added benefit to us the citizens, AKA their bosses, and often times rules that do more harm than good.

Come with me little one. Grab some hot coco on this cold Southern California day, snuggle up to some global warming and stay awhile. I will tell you the story of our dearly departed MTBE, mandated not too long ago…

My Best, M

Mary Fleet Manager Wall CARB, DeWitt, diesel, EVR, MTBE, Nozzle, VST

Well my older, wiser sister (pick your own emphasis) kindly pointed out that part of last week’s blog was a little cryptic. So rather than try to explain what I meant, I thought I would let you read the article I referenced for yourself.  I am a fan of Charley Reese.  He says he is conservative, but substitute Newt Gingrich in for Nancy Pelosi, and really the message of the article doesn’t change.  In fact, when it was originally written in 1985, Tip O’Neill was the Speaker named.

“But regardless of whose fault it is, most politicians today are not human beings. You want to pry open their mouths and shout into the darkness, ‘Hello! Is there a human being in there?’ Buried under all that lust for office, all that fear of offending a contributor? I know there must be.” (Charley Reese, Conservative Chronicle, September 8, 1993, p. 17)

It is not just our right to vote, it is our responsibility. My Best, Mary

THE 545 PEOPLE
RESPONSIBLE FOR ALL
OF AMERICA’S WOES
BY CHARLEY REESE

 545 PEOPLE–By Charlie Reese

 Politicians are the only people in the world who create problems and then campaign against them.  Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits? Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?

 You and I don’t propose a federal budget.  The president does. You and I don’t have the Constitutional authority to vote on appropriations.  The House of Representatives does. You and I don’t write the tax code, Congress does. You and I don’t set fiscal policy, Congress does. You and I don’t control monetary policy, the Federal Reserve Bank does.

100 senators, 435 congressmen, one president, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that problem was created by the Congress.  In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.

I excluded all the special interests and lobbyists for a sound reason.  They have no legal authority.  They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing.  I don’t care if they offer a politician $1 million dollars in cash.  The politician has the power to accept or reject it.  No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes.

Those 545 human beings spend much of their energy convincing you that what they did is not their fault.  They cooperate in this common con regardless of party.

What separates a politician from a normal human being is an excessive amount of gall.  No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The president can only propose a budget.  He cannot force the Congress to accept it.

The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes.  Who is the speaker of the House? Nancy Pelosi.  She is the leader of the majority party.  She and fellow House members, not the president, can approve any budget they want.  If the president vetoes it, they can pass it over his veto if they agree to.

It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted — by present facts — of incompetence and irresponsibility.  I can’t think of a single domestic problem that is not traceable directly to those 545 people.  When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.

If the tax code is unfair, it’s because they want it unfair.

If the budget is in the red, it’s because they want it in the red.

If the Army & Marines are in Iraq, it’s because they want them in Iraq. If they do not receive social security, but are on an elite retirement plan not available to the people, it’s because they want it that way.

There are no insoluble government problems.  Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power.  

Above all, do not let them con you into the belief that there exists disembodied mystical forces like “the economy,” “inflation,” or “politics” that prevent them from doing what they take an oath to do.

Those 545 people and they alone, are responsible. They and they alone, have the power. They and they alone, should be held accountable by the people who are their bosses.  Provided the voters have the gumption to manage their own employees…

This article was taken from the Orlando Sentinel Star newspaper. The original article was written in 1985.

Mary Fleet Manager Wall Charley Reese, DeWitt, diesel, Diesel Exhaust Fulid, National budget, Vote 2010

In the diesel fuel business, it is all about pennies.  Fifteen, twenty years ago a price increase of a penny was a big jump and there were sequences of days when fuel prices did not change.  So, when I saw the video on the link below about the National budget it really struck a chord.  I get pennies and often spend time on the far right side of the decimal but when you get up in the millions, billions and trillions frankly it is harder for me to conceptualize.  I thought this would be a great way for my kids and their friends, not to mention my coworkers, to understand the numbers we are hearing about in the news.

What I did not expect is one of the responses I got back from a friend of mine.  She requested that I not send her any more political emails. Now, I admit, I can get on my dad’s soap box and rant a bit with the occasional unsolicited opinion about the current world order.  What a scary realization- I did not even notice a political bend to the video.  If you click on the link it does show the President pledging to reduce the National budget by $100,000,000. My first response was applause and frankly, so was my last response.  (Again I like pennies, so saving even a $0.0025 is good by me!)  What my friend, who tends to lean a little more left then I do, saw in the first 15 seconds was an attack on the President and that framed her opinion of the video, not the remaining minute, twenty three seconds.

I have watched it a number of times and if it were done 3 years ago and the President at that time was featured in the first 15 seconds, I realize that I would have considered it political too.  This would have been compounded by the fact that my leftward leaning brother-in-law is the one who shared it with me!  It really is just a great learning tool.  I am a huge fan of learning, but realize my genetic skepticism would have made me miss this opportunity too.  What a great lesson for me about education.   Information is good, regardless of who shares it with you.  I still applaud budget cuts wherever we can get them, especially since we just sent in our latest donation to the state and federal government…. don’t even get me started….

 http://www.wimp.com/budgetcuts/

My Best, Mary

Mary Fleet Manager Wall DeWitt, diesel, economic recovery, fleet, fuel price increases, petroleum, policy

Hi All

I had an opportunity to hear Meg Whitman speak yesterday.  I was impressed.  Yes, I know, she does not have the greatest voting record, but when Fortune 500 companies are hiring their next CEO I would hazard a guess that they don’t limit their search to people who buy their product.  We need someone to step up and treat our state like a business.  A business with a charitable side, but a business. One that is failing and needs to be turned around.

If you have an opportunity to hear Meg, I highly encourage you to go.  She started on time, spoke briefly and then took questions. She did not ask for money.  (Did I mention she started on time….) You can submit your email on her webpage and they will update you when she is in your area.

At a minimum, follow this link, http://www.megwhitman.com/policy_magazine_distribution.php, and read her plan.  48 pages, it can be read over a cup of coffee or two, on the treadmill, while sitting in traffic… ok skip the last one, but read it.  Hiring, I mean electing, people so deeply entrenched, personally- a la the Governator- or professionally in politics is not working.  Does it scare anyone that we may regurgitate Jerry Brown. I am horrified. 

Then be sure to vote, for anyone you want but vote. Encourage friends, family, staff, and  complete strangers to vote. This is the link to apply to vote by mail http://www.sos.ca.gov/elections/elections_m.htm  Print it, hand it out, vote!

 We don’t want to leave our children with our debts. We have to try something new.

 My Best- Mary

Mary Fleet Manager Wall DeWitt, diesel, Governor, Los Angeles, Meg Whitman