Bob van der Valk

International Energy Association: Forced to Eat Their Optimistic Data on Future Oil Supply?

Today forecasting crude oil prices is like trying to drive a car while looking out of the back window. The latest number of what it costs to drill for and bring crude oil to the surface in the deepest part of the Gulf of Mexico is around $40 a barrel. Any price above that is pure speculation depending on demand.

The crude oil bubble is about to burst again just as it did last year. GS is still talking the price up and will be able justify themselves somehow when it goes back down. But they will do just fine since they make their money either way in the up or down markets using commodities like crude oil to hedge against the weak dollar.

An Abundance of Gasoline: A Thanksgiving Day Tradition

Shaggieman:

Crude oil prices are being driven by ICE and CME and are controlled by giant investment firms with Goldman Sachs leading the pack and being their cheerleader. Refineries on the other hand have to rely on a steady supply of crude oil related to the price those products will fetch on the open market. The short answer to the question you ask is: "Hell, yes!"


On Nov 11 10:06 AM Shaggieman wrote:

> Hey Bob, guess we don't get the big drop in WTI crude price this
> year? Are you still convinced we're going lower again?

An Abundance of Gasoline: A Thanksgiving Day Tradition

This government web site does not explain the restrictions about any environmental affects from producing gasoline in the foreign countries in which the refineries are located. The quality of gasoline does meet current standards. The Indian and Chinese refineries produce high 13 lb RVP conventional gasoline year- around. Therefor they do not have to go through expensive turn-a-rounds in order to meet the 7 lb RVP oxygenated blend component gasoline required during the summer in states like California.


On Nov 10 11:29 AM ryanclarke wrote:

> The author's article wrote, "Those refineries do not have the same
> environmental concerns as their U.S. counter parts and are able to
> produce the winter grade high Reid Vapor Pressure gasoline at very
> economical prices." I DISAGREE WITH THIS STATEMENT. To find out for
> yourself where foreign gasoline comes from go to U.S. IMPORTS BY
> COUNTRY OF ORIGIN at tonto.eia.doe.gov/dnav...

Don't Believe Long-Term Oil Forecasts

And they will!


On Nov 09 08:32 AM John Eickholt wrote:

> I hope these oil traders will have to drink the oil for their New
> Years EVE drink.

World Series of Crude Oil: Winner Decides Winter Gasoline Prices

Oct 28 01:53 PM Jack Walker wrote:

> Some of the major oil companies, such as BP, also have trading operations.
> How do we know they are not complicit and participating with Goldman
> and Morgan on the long side regardless of the supply and demand fundamentals?

Jack:

In August 2009 Oklahoma State Attorney General Drew Edmondson filed a lawsuit against BP/Arco (BP). He is accusing them of gaming the price of gasoline and crude oil since 2002. This alleged scheme had previously been brought to the attention of the Federal Trade Commission but Edmondson claims to have found fresh evidence that BP was able to manipulate gas prices by hoarding short-term motor fuel and crude oil supplies.

Bob van der Valk

Gasoline and Diesel Fuel Prices: Scaring Investors in Time for Halloween

On Oct 21 10:17 AM G. L. Turner wrote:

Once again the name gov sachs jumps up in an article as the "culprit" behind a sinister group that is 'messing with the markets', moving them away form fundamentals and controlling them for personal gain.
Where is our CFTC regs we were promised byObama?....Getting short on patience with that dude too, now.

Bob van der Valk response - Goldman Sachs paid $14 million in taxes worldwide for 2008 compared with $6 billion in 2007. The company’s effective income tax rate dropped to 1 percent from 34.1 percent. According to Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC: “Clearly they have taken steps to ensure that a lot of their income is earned in lower tax-jurisdictions”

Flattening Oil Contango: Is It a Bullish Sign?

Dian Chu - You stated that based purely on market fundamentals, crude oil should be priced around $40 a barrel without explaining what those are.

Today forecasting crude oil prices is like trying to drive a car while looking out of the back window. The latest number of what it costs to drill for and bring crude oil to the surface in the deepest part of the Gulf of Mexico is around $40 a barrel. Any price above that is pure speculation depending on demand.

The domestic petroleum industry has been going through boom and bust cycle since I have been involved in it for almost 50 years. This year has been a normal year for the oil companies and with the big money investors on the sidelines the invisible hand of competion should have its way. I have now been joined by some big name analysts i.e. Philip Verleger in calling the crude oil market in the 40's just based on the supply exceeding demand.

Prepare for a Drop in Diesel and Gasoline Prices

Yank - Before passing judgment on my forecasts please read my articles published on Seeking Alpha earlier this year. My theory that gasoline prices are now driving crude oil prices has been true since about a year ago. The US refineries are now in the middle of switching from producing summer to making winter gasoline. That puts an extra 10% of gasoline supply into the market, which is currently running flat on demand. Major oil companies are stuck with the Last In/First Out method of accounting for finished inventories by the end of each year. The same thing occurred at this time last year and the rest as they say is history. Crude oil eventually followed the free fall in gasoline prices and after bottoming out in the early part of this year regained strength in March when - guess what? - US refineries have to switch to making summer gasoline

Get ready for a drop in diesel and gasoline prices

Yank - Before passing judgment on my forecasts please read my articles published on Seeking Alpha earlier this year. My theory that gasoline prices are now driving crude oil prices has been true since about a year ago. The US refineries are now in the middle of switching from producing summer to making winter gasoline. That puts an extra 10% of gasoline supply into the market, which is currently running flat on demand. Major oil companies are stuck with the Last In/First Out method of accounting for finished inventories by the end of each year. The same thing occurred at this time last year and the rest as they say is history. Crude oil eventually followed the free fall in gasoline prices and after bottoming out in the early part of this year regained strength in March when - guess what? - US refineries have to switch to making summer gasoline.

Tiber Oilfield Spells Major Upside for Prices

The Americian oil companies are happy sitting on their crude oil reserves while importing most of the raw materials to run their refineries from abroad. The Petrobas and BP (stands for British Petroleum not Beyond Petroleum) are foreign owned oil companies investing capital into exploring and producing new oil fields.

Another hugh factor will be the fact that the Alberta Canada oil sands companies are gearing up to increase pipeline capacity to pump more crude oil to the US Gulf oil company refineries.

Good information in this article just the wrong headline. Crude oil prices will continue to fluctuate and follow the price of gasoline at the pump instead of in reverse. That is not the case with distillates with prices in lockstep with the price of crude oil. Diesel and jet fuel will move 2.5 cents per gallon for every $1 a barrel of crude oil.

BP's former chairman Sir John Browne divulged during an interview for 60 Minutes in November 2006 that the crude oil in deepest part of the Gulf of Mexico could be brought in for $40 a barrel. Any price they fetch over that will be pure profit.

Gas Prices Will Fizzle Out by October

I am spending Labor day working (now there is a concept) on my article to explain why gasoline prices will dip back down in the fall of this year. It will be posted and submitted to Seeking Alpha as soon as it has been completed.

Gas Prices Will Fizzle Out by October

John Bowman:

You can track my articles and quotes in various US and Canadian newspapers by Googling my name. I correctly called the petroleum market crude oil and fuel price adjustment in August 2008 for the fall and winter of 2008. Since then I have also called the upward movement this year.

In March 2001 I picked up early on the petroleum industry switching to pricing their raw material and finished products with the spot market. This was right after the CFTC had removed the volume limits on trading for international commodity investors.

I am still active after almost 50 years in the refining and marketing end of the petroleum industr and currently analyze fuel pricing for various clients who depend on me short term forecasts to purchase their supplies.

Lull Before the Storm for Gasoline Prices

My professional experience, which continues to this day, has all been in the refining and marketing end of the petroleum business for almost 50 years serving in various management capacities. That includes a stint as the pricing manager for Unocal Corp. in the 70's during which time I learned about the ins and outs of fuel pricing. I have written about those methods in previous articles for Seeking Alpha.

I have learned that the petroleum business runs in cycles during my time in the industry. We are currently in a down cycle but that will change as soon as our economy fully recovers.

No Clunkers for Labor Day Gas Pump Prices

It boils down to pricing at the pump being controlled by an oligopoly and they will price gasoline on the street to what the market will bear. We are awash in crude oil but most of it still in the ground waiting to be explored and produced. The extra barrels of crude oil floating on the ocean in Very Large Crude Carriers are only going to make the traders money.


On Aug 24 03:30 PM The Greatest Rip Off of our Time wrote:

> By now anyone who every considered the supply and demand theory as
> a viable reason for the huge fluctuations in the oil and gas industry
> pricing must now come to terms that is was (and still is) bogus.
> The world is a washed in crude oil today. And yet, still the price
> goes up just in time for Labor Day week-in.

The Real Price of Crude Oil

I follow the logic in your article as well as the plotting on your graphs and they are very impressive. But where in this article does it mention that supply and demand at the pump is what has been driving crude oil prices first down then up since last a year ago?

From an insider's to the petroleum industry perspective that is exactly what is happening now and will continue to happen in the absence of rampant market speculation in crude oil futures.

In a study published earlier this month Dr. Phil Verleger predicted that crude oil will get down to $20 a barrel by the end of this year. I am a little more optimistic and have posted an article on Seeking Alpha predicting $40 a barrel for WTI crude oil and under $2 per gallon pump price for gas by Thanksgiving.