Tuesday, February 28, 2012

The Price of Gas is Too Damned High II

10 year chart of Gasoline Futures


While sitting in the bleachers at my son’s soccer match on Saturday afternoon (They won 5 to 2 and N. scored a goal) parents were talking about two things: college search efforts and the high price of gasoline. After listening to all the confusion and misconceptions regarding the pricing of gasoline I decided I should revise a January posting from my http://futuresinsights.blogspot.com/ blog entitled “Oil Supplies, Demand and the Keystone Pipeline.” In that entry I attempted to show that the primary beneficiaries of the pipeline project would be oil industry companies like Koch Industries. http://www.guardian.co.uk/environment/2011/oct/05/koch-keystone-xl-pipeline

This entry includes updated data from my January posting, some new data points and  comments regarding shifting market dynamics and relevant industry news that may have gone unnoticed by the public.

Relevant data from the EIA.org web site :
Domestic Production: In 01.01, domestic oil production was 5.9m bpd (barrels per day). In 01.09 production had fallen to 5.2m bpd.  The latest EIA data shows that US production has risen 11% from 01.09 to 5.8m bpd.



Oil rig data from Baker Hughes, an oilfield servicer who tracks industry trends, shows a 29% increase in the number of rigs in the last 3 years.




Petroleum Imports:  In 01.01, the U.S. imported 11.6m bpd. By 01.09 that amount posted a 13% increase to 13.2m bpd. The latest report EIA shows petroleum imports were running at a rate of 11.2m bpd, a 15 % reduction since President Obama took office.



Product Supplied: (Demand)


The combination of the economic slowdown and improved energy efficiency has energy demand at levels not seen since 1999. The latest product supplied figures show current usage is off about 17% from the 2008 high.



Petroleum Inventory Levels:      






Gasoline inventories are tracking on the high end of their 5 year average.





Petroleum Exports: In 01.01, the U.S. exported approximately 1m bpd of petroleum products. By 01.09 exports had increased 48% to 1.5n bpd. By 2012 exports had more than doubled and the latest 4 week average was 3.2m bpd. In 07.11 the US became a net exporter of gasoline fuels. HuffingtonPost reports that at the end of 2011 energy products were the leading export of the United States http://www.huffingtonpost.com/2011/12/31/united-states-gas-export_n_1177559.html









Taking a myopic United States centric view, one would think that US prices should be well contained. And it seems that many in the US ignore the rest of the world when it comes to energy pricing. Referring back to the US export chart, you can see that there is demand for “our” energy. 

With US production increasing and demand falling,  WTI prices are about 25% below the record highs set in the summer of 2008. Gasoline, on the other hand, is running about 15% below the summer of 08 prices.  What is the disconnect between the pricing of “oil” and gasoline?

 In the past West Texas WTI crude has been used as the world’s benchmark for oil prices and the prices of WTI and brent have closely tracked one another. but over the last few years logistical problems at the Cushing, Ok delivery point have crimped the accessibility to the oil to the marketplace and has limited the use of WTI as an accurate price indicator. This can be seen when viewing futures trading activity of the different contracts. In January ’11 10,681,994 Brent contracts trade on the ICE exchange and 17, 948,417 WTI contracts traded on the NYMEX platform. This January brent trading on the ICE increased by 7% to 11,208,911 while WTI trading fell by 30%, to 12,557,020. 


As you can see the price moves in gasoline are closely following brent oil.

A couple of other facts to bear in mind: Most exports of US petroleum products flow from oil facilities in the Gulf of Mexico where they end up in Mexico and Latin American countries like Ecuadoor (an OPEC member!)  
Because various East Coast refineries have been idled, much of the gasoline  needed on the Eastern Seaboard is imported from Europe.






More than 50% of US energy demand is met by domestic production.






Almost one half of what we do import comes from within the Western Hemisphere. Less than 20% comes from the Persian Gulf


Some other notable news items that you probably haven't heard in the media:
  1. The US government sold leases for more than one million acres offshore Texas
  2. The US and Mexico signed a treaty that makes 1.5 million acres of the US Continental shelf more accessible.
  3. The US will offer 38 million acres for lease in an area that shows great  promise.
(source http://www.platts.com/BlogDetails/oilblog of February 24, 2012


As you can see, President Obama does have an "oil" agenda. The only thing we could do differently would be to nationalize the petroleum industry and prohibit oil companies from selling their product on the "free market'.    Hey that sounds like Socialism or something 





Wednesday, February 22, 2012


Nothing much to report on, although I did have another one of those MP3 induced dreams last night....

This dream was different though... Something was going on but I'm not sure what was happening. All I know is that whatever was occurring it was making me quite uncomfortable...  I sensed that I was tossing and turning, rolling from my left-side to my right-side, never finding that comfortable spot for a peaceful sleep. I just wanted to wake-up so the dream would end.

When I finally woke-up, the last stanza of Warren Zevon's "Excitable Boy" could be heard coming from my ear buds:


"After ten long years they let him out of the Home

Excitable boy, they all said
And he dug up her grave and built a cage with her bones
Excitable boy, they all said
Well, he's just an excitable boy."

I'm thinkin' that maybe the lyrics of this song might have something to do with my dream.

I'm also thinkin' that maybe  I should make a bedtime mix of  Cello music  and Leonard Cohen tunes.

Friday, February 10, 2012

This is Now...That was Then


 Like it or not, knowingly or unknowingly and for better or worse, we often emulate our parents. I would like to think that I have my father’s “common sense” and integrity. From my mother I developed my religious and political ideologies. (Believe or not, there is a “Christian Left” and I am sure that Jesus would be down there with the OWS crowds.)
One other attribute that I share with my mother is the desire to keep things. Over the years she has collected and saved wide variety of things: ranging from rocks and pinecones; to newspapers and magazines; to personal papers like school work and shot records. In an effort to organize my mother’s basement a large box of ephemera relating to my early years was shipped off to me.

I don’t intend to catalogue the entire collection here, but I will focus on one segment that I feel is quite relevant to my blogging endeavor. The box contains a hodgepodge of my earlier writings. There is a biography I wrote in my junior year of high school about my father. “The Uncommon Common Man.”   A “string book” (a journalistic portfolio) of my articles for the school newspaper: “Lancers Drop to West” “Intramurals Begin on Friday” “Tankmen Start Strong” “Hunting the Wylie Coyote”.  

The most significant tranche is the collection of journals that I began keeping as a high school sophomore for English. I enjoyed writing them so much that I continued to “hand in” my journals to my sophomore English teacher during my junior and senior years... It was a way for me to escape from problems on the home-front. Admittedly I have been somewhat spotty on my “Prairie Ramblings” postings so I was curious to see what I wrote about way back when.
  
Here are the first two entries of my journaling career:
“Friday 09.07.73
I’m wondering if Mother Nature knows that school has started. All summer we had very little rain. The 1st weekend of school what does it do? Rain of course. The next weekend the same thing. I hope we get a good weekend soon.  

Sunday 09.09.73
In Saturdays Johnson County Scout they published letters to the editor on whether Nixon should release the “confidential” tapes. Wikipedia on Watergate Tapes
Most letters were in favor of him keeping the tapes. That stands to reason, since most residents are Republicans.
There was one letter that made me real mad. The man said that Nixon shouldn’t turn the tapes over to the FBI, CIA or other responsible government agencies. I am now wondering if Bob Haldeman is a government agency. I always thought he was a man. Unless I’m wrong, he was fired from the White House staff for alleged criminal activities.
My father and I were talking about this last night, he said he heard that all 12 hours had been listened to.

Sunday again.
I had a lot of fun last night at the football game. The most fun was after the game. We went to Pizza Hut in Metcalf South and had some pizza. They screwed up our order and this confused the waiter. A lot of my friends were there so I had a lot of fun talking with them…”

If I have trouble coming up with fresh ideas I guess I could always dip into this freshly uncovered trove of entries. I have to be honest with you though, there is your average male teenage angst about girls and parents, but you have to remember that this was the early 1970s and things were handled (or not handled) differently. I wrote about illegal events (teenage beer consumption) using whole names and there was no ramification. She told us that spelling and punctuation didn’t matter. We could write about anything and it that she would treat it the same way a psychiatrist or priest would.   A far cry from the zero tolerance policy of today.

Wednesday, February 1, 2012

Bouncers, Cowgirls and Cross-dressing GoGo Dancers



Lately I have been listening to  my MP3 player as I go to sleep for the night. (Read my blog from 01.24.11 for examples of what I am listening to.) The other night I had one of my best dreams in recent memory because of this.

Having no discernable plot, my dream consisted of a rapid succession of random memory flashes dealing with clubbing exploits from long ago.  I was so elated by this impromptu reunion where one vision seemed to spark others. 

I will describe (to the best of my ability) some of what I saw:

My initial sensation was that I was entering some sort alien night club to interview for a bartending position. 

I was answering a very simple bartending question when all of a sudden I found myself amid a crowd that was forged out of an amalgam of places, events and people from my past.  I recognized settings and characters from three separate phases of my earlier life:  A) “The Cowboy Palace” where I bartended while attending college in Manhattan, Ks; B) “Blayney’s of Westport” a favorite hangout of mine in Kansas City and; C) “The Pyramid Club” a club on the Lower East Side of Manhattan, NY (aka Alphabet City).   

The doorman in my dream was a blend of a bouncer from the Cowboy Palace and one from the Pyramid Club. These two were quite similar on the one hand and complete opposites on the other. As one would expect, both projected the macho image required of bouncers. They were solidly built and sported shaved heads. But their baldness and physical stature were about the only things they had in common.
The bouncer from Kansas, a Viet Nam vet nicknamed Stony (for his lack of facial expression, not what you are thinking), usually wore a black Jack Daniels ball-cap, faded blue jeans and cowboy boots. As apposed to the New York City cooler, who sported a dog collar around his neck, black Doc Martens on his feet and a waist length army fatigue jacket over a pink leotard & tutu combo.

Back to the dream….

I had the feeling that I was in a subterranean setting much like Blayney’s of Westport, complete with low ceilings, subdued lighting and loud music. Although there was a stuffed buffalo head mounted on the wall just like “Buffy the Buffalo” in the Cowboy Palace.  The bartenders looked familiar, but in all honesty, I’ve had so many servers over the years that the ones in my dream were a melding of them.

As I looked around, all sorts of faces jumped out at me. One was of the person sleeping next to me and others I hadn’t thought of in years. Not surprisingly, my wife was represented in the dream by the image of a whirling dervish moving through the crowd.  Aside from my wife there was a cowgirl from the Cowboy Palace; a flight attendant from New York, and that cross-dressing go-go dancer that I mentioned in the title. Each new face was accompanied by a flood of memories surrounding that person. OK, its obvious why my wife would be in my dream but is probably better that I don’t go into detail about the cowgirl or the flight attendant. It’s complicated. (I might, on a one of basis, go into greater detail on these matters after a couple shots.)

But let me take a moment to explain the cross-dressing go-go dancer thing before anyone gets too bent out of shape:
Upon relocating to New York in the early ‘80s, a childhood friend put me in touch with a fraternity brother of his who was attending Columbia University to earn his MBA. This graduate student wanted to make sure that I saw the “real” New York, not the “touristy” run of the mill uptown experience, so he volunteered to show me around. The guide and I and began our night-spot tour somewhere in the West Village.  After a beer or two the guide said that it was time to move on. Our destination was in the East Village, so we jumped in a cab and made our way across the lower tip of Manhattan. The fashionable brownstones and shops of the West Village were replaced by rundown tenement houses and abandoned buildings as we worked our way east. I really began to question the sanity of this adventure when the taxi came to a halt directly across from Thompkin Square Park (an area that, in the 80’s, was populated by the homeless and drug-users.)

There it was,  The Pyramid Club .
Getting out of the taxi I was assured that it was safe, but different, very different. Approaching the door is when I encountered that bouncer wearing the pink leotard & tutu combo. He was scanning the crowd for those that he deemed worthy enough to enter. Somehow, despite the fact that I was all prepped out in khakis, a button-down shirt and a wool Harris Tweed jacket, I was let in. I’m sure they wanted m yuppie cash. The crowd inside was more punky than I was accustomed to; there were guys and there were girls. There were guys with girls and girls with guys. There were guys with guys and girls with girls, but, hey, you get the picture…this is New York City and I wasn’t in Kansas anymore.

I was standing by the stool at the bottom of this picture
The club was dark, smoky, crowded and loud. A bar, festooned with Christmas lights stretched along the wall to the right of the door, with a dance floor and a bandstand toward the back. I made my way toward the bar and ended up standing between a blonde and a redhead, who were talking to the bartenders. The bartenders mixed them each a drink and then moved on to take care of other customers. The blonde and the redhead separated. One moved to the left end of the bar while the other moved to right. And then, to my amazement, they both placed their drinks down and proceeded to climb up on top of the bar. The crowd whooped as they began to dance. Nothing too suggestive or raunchy, they were just swaying to the band.

There I was, still attempting to get my first beer as the blonde (wearing flats, fish-net stockings, a leather miniskirt, and an unbuttoned jean jacket showing a just hint of black lingerie) danced on the bar in front of me. I tried shifting to the left or the right so I could catch the bartender’s attention but the blonde mirrored my moves. I couldn’t tell if I was being mocked or flirted with, I just needed my beer. Once served, I tried to get a better read on the situation: a crowded bar, a cold beer, live music, dancing, blondes. All was right with the world.  It was time to checkout those nice looking legs dancing in front of me. I didn’t want to seem too piggish about my ogling so I decided to go from looking at ankles and knees to making direct eye contact. So I took a sip from my beer, and being the gentleman that I am, I made it a point to look past the open jacket and aim my glance just above the cleavage area. 

 Sensing my glance, she tossed that blonde hair back, and looked directly at me. That is when I lost my Midwestern innocence…There it was, under that long blonde hair, below those smiling painted lips, the unmistakable outline of a frigging Adam’s Apple.  My world had been completely upended. I know that there was a great band playing that night but he only music my mind heard were refrains from two song:s  
 
“Holly came from Miami, F-L-A
Hitchhiked her way across the U-S-A
Plucked her eyebrows on the way
Shaved her legs and then he was a she
She says hey babe, take a walk on the wild side
Said hey honey, take a walk on the wild side
 
And the colored girls go
Doo, doo doo, doo doo, doo doo doo..
Hear "Take A Walk on the Wild Side" here

Well, I'm not dumb but I can't understand
Why she walked like a woman but talked like a man
Oh my Lola, L-L-Lola, L-L-Lola 
Well, I'm not the world's most masculine man
But I know what I am and I'm glad I'm a man
And so is Lola, L-L-Lola, L-L-Lola
Lola, L-L-Lola, L-L-Lola

Lola, L-L-Lola, L-L-Lola
Lola, L-L-Lola, L-L-Lola
Lola, L-L-Lola, L-L-Lola
Hear "Lola"  Here

I looked at him. He looked at me. He smiled at me. I shook my head from side to side.
He put on a pouty face, pursed his lips and then laughed. Needless to say, the Pyramid Club was not the best place to dance with strangers. But then again, maybe it was the best place to meet strangers, if you are into that kind of thing. Now I have always thought of myself as worldly and sophisticated, but if I’m dreaming about this thirty years later, it really must have left an indelible scar in my psyche.