Oil briefly broke over $92 this morning.

In real terms, Crude remains below its all-time
inflation-adjusted high of $101.70 from April 1980. However, Crude has climbed 47.3%
over the past 52 weeks, and since 2001, it is up ~511 411%, from $18 to $92, or an annualized inflation rate of 31.24%. (So much for the transitory, self-limiting nature of these price increases).

Its time again to have a quick look at how and why it got here. It doesn’t take a genius to identify several obvious factors:

1. Increasing Global Demand: Booming growth in China and along the Pacific rim is only the beginning of the global story. India, Korea, Russia, Brazil, and Australia are expanding.  Even "old Europe" has experienced a spurt in growth. This may be an old story, but it has yet to fully run its course.

2. Falling U.S. Dollar: The dollar is at 15 year lows versus a basket of currencies. Blame the Federal Reserve for failing to protect the currency, and forcing capital to go where its treated better.

>
US DOLLAR INDEX

Dollar_us_2_years_sc

Fun thought of the day: Imagine if every time Treasury Secretary Hank Paulson said "We have a strong dollar policy" — and the dollar dropped yet further, his nose grew another inch, Pinocchio-style. I originally was going to suggest a college drinking game where you do a shot each time, but I wouldn’t want all those alcohol-related deaths on my conscience.   

3. Wars in Iraq, Afghanistan:  Its why I flipped bullish on Crude way back in 2002. The two hot wars in the Middle East have increased tensions, reduced Iraq’s oil output, and generally led to higher terror premiums for Crude Oil. Future administrations should take note of this simple formula:  Mid-East War = Higher Crude Prices.

4. Supply constraints: US crude oil stocks unexpectedly fell by 5.3 million barrels last week, and we have a variety of infra-structure issues contributing to this factor. Globally, there is a tight supply of ships, refineries, pipelines, and storage facilities. This contributes to a minimum amount of reserve — no buffer — which means Crude Oil Futures fluctuate even more than they might otherwise.      

5. Saber-rattling against Iran: The increased jaw-boning against Tehran in general and the Revolutionary Guard in particular. A variety of analysts have noted that threats of US sanctions against Iran and tension on the Iraqi border had also helped fuel the oil rally.

Although I am not a fan of this White House, I guess I owe them a debt of gratitude: Their tone deaf saber rattling is definitely helping my positions in energy stocks and commodities.  

Crude_oil_oct_26

Who ever would have guessed that actions have repercussions?

There’s plenty of pixels being spilled on the subject; here’s a typical excerpt:

"Oil futures rallied to a new record high on Friday, with worries about U.S. inventories and Middle Eastern tensions combining to send the benchmark energy contract past $92 a barrel.
Crude for December delivery rose as high as $92.22 a barrel in electronic trading, a day after the U.S. slapped new economic sanctions on Iran. The gains were also driven by worries about potential conflict between Turkey and the Kurds in the north of Iraq.

At 5:30 a.m. Eastern, crude had settled back a bit. It was up 82 cents to $91.28 a barrel.
Oil prices have been lifted by data, released Wednesday, showing a much higher-than-expected decline of 5.3 million barrels in crude supplies. Some believe the $100 a-barrel level is just around the corner.

"An unexpected drop in U.S. stockpiles has added to ongoing concern that supply from the Middle East may be disrupted," said analysts from Saxo Bank in Copenhagen on Friday.
Gold futures also rose to a 28-year high on Friday. Commodities across the board are getting a lift from expectations that further U.S. interest rate cuts could come as early as next week, and could fuel inflation."

>

Hey, at least the core is contained . . .  $100 Oil, here we come!

 

 

>

Sources:
Supply fears push oil above $92   
BBC, Friday, 26 October 2007, 07:01 GMT 08:01 UK
http://news.bbc.co.uk/1/hi/business/7063250.stm

Crude rallies past $92 to new record
MarketWatchLast Update: 5:50 AM ET Oct 26, 2007 
http://tinyurl.com/2w46gd

U.S. slaps new sanctions on Iran
Sue Pleming
Reuters, Fri Oct 26, 2007 6:58am BST
http://uk.reuters.com/article/topNews/idUKN2542594620071026

Crude Hits $92 on Supply Fears
By YEE KAI PIN
October 26, 2007 4:56 a.m.
http://online.wsj.com/article/SB119338625862872747.html

Category: Commodities, Currency, Economy, Federal Reserve, Inflation, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

64 Responses to “Crude Oil above $92”

  1. jmf says:

    Moin from Germany,

    Jeff Matthews sums it up


    OPEC to Fed: “Go Ahead, Make My Day”

  2. LAWMAN says:

    If the market does not trade lower today, then it never will. $92 oil…

    BTW, I noticed, really noticed, how much prices have gone up in the grocery store lately. When I went shopping this week I thought I was in the twilight zone. I don’t see how Joe Average is making ends meet.

  3. jmf says:

    Moin Lawman,

    you need to go to the CPI Cafe

    :-)

  4. Oil and the Dollar Trend in Opposite Directions

    Trends: Oil is up 511% since 2001, and the dollar hits a 15 year low. People who keep their savings in low-interest savings accounts cannot be happy, if they see what is happening. Link: The Big Picture | Crude Oil above $92. Crude remains below its al…

  5. W.Edwards says:

    There is an increase in read demand as noted in (1) but don’t forget that there is a ton of speculative demand which shouldn’t be forgotten.

    On the flip-side, supply constraints are one issue but a report just came stating that we may have already reached peak oil production in 2006 from current oil fields. Unless we’re on the verge of rapid technology improvements for getting at the harder-to-get oil, oil production will continue to decline in the face or rising demand.

    I would speculate that one of the reasons that OPEC isn’t increasing production quotas is that they can’t! All of the easy stuff has been skimmed and increasing production would require a massive capital injection.

  6. jj says:

    We should discuss the reasons for the disparity between gasoline and crude—

    On Sept. 19, 2005 gasoline averaged $2.78 a gallon – crude oil was “only” $67.39/barrel

    On April 17, 2006 gasoline also was $2.78 a gallon – and crude oil was at $70.40/barrel

    This past April 2007 gasoline was selling for $2.80 a gallon – and crude was at $61.51/barrel

    And , last week , the average price of unleaded gasoline was a little over $2.76 a gallon. That was when the price of crude oil was selling at $86.13/barrel

  7. dan says:

    BR

    I gather that you believe the underlying inflation rate is running above 2.0% to 2.5%. If so, why are fixed income investors (who may be smarter than equity investors)willing to accept only a 4.3% nominal return for the next ten years? Is it fair to say that you believe the drop in yields from 5.2% to 4.3% is a mis-pricing by fixed income investors? thx.

  8. jj says:

    that’s retail gas not wholesale

  9. David Price says:

    Hi Barry, Forget about oil. Everything is rosey. Countrywide just announced a 1.2 billion dollar loss but the future looks great!

  10. sccofer says:

    I was just going to ask the same question -

    why the disconnect between unleaded gasoline and crude prices? Price has been relatively stable for quite a while, what gives??

  11. ferd mertz says:

    my, what excitement will be engendered when the media begins to discuss peak oil with the same candor that climate change is beginning to experience. here’s another plug for the discussions at http://www.theoildrum.com.

  12. Adam says:

    Barry, don’t think it’s any coincidence that your “engergy stocks” are going up thanks to this administration’s policies. If you really want to be of service to your readers, start reporting on Hilary Clinton’s social circles and what stocks they all own.

  13. The Dirty Mac says:

    “We should discuss the reasons for the disparity between gasoline and crude—”

    Obviously, our noble political leaders have forced niceness and goodness upon the oil monopolists.

  14. Paul Jones says:

    Notice how many of your driving forces behind the 2001-2007 oil price run are government related?

    It is no coincidence since the CEO of Arbusto took office in 2001. Also not a coincidence that his vice-president was the CEO of Halliburton. Halliburton’s stock has soared along with oil prices.

    Bush bought a large chunk of land in South America and Halliburton is offshoring to Dubai. Why live like a Puritan in America where there is at least a remnant of a middle class when you can go live with your buddies in unchallenged despotisms? The only thing better would be convert America into a despotism… that would be called “hedging your bets”.

  15. Eric Davis says:

    The oil-gas disparity has to do with gas demand; Oil goes into many other products. But, it will catch up.

    My bet is America’s big Xmas present this year will be “5 gallons of gas” and not an Ipod.

    It could take 3 months for wall street to figure it out.

    Now, if only we could weaken this dollar somemore maybe we can get the dow to 16000.

    Can the dow be counted in the CPI?

    And I could be wrong.

  16. The Dirty Mac says:

    “Notice how many of your driving forces behind the 2001-2007 oil price run are government related?”

    Most or all.

    But, personally I think that for the administration to have somehow engineered higher oil prices there would have to be an amazingly high level of competence and effectiveness. I think that such a theory vastly overrates Bush et. al.

  17. UrbanDigs says:

    Forgot who it was on CNBC’s Fast Money last night that was saying oil supply is NOT a problem, and that this move in crude is momentum driven by speculative traders. He said that his company is getting calls from oil companies trying to unload crude that he is not used to.

    His opinion was that fair market valuations for crude should be around 60/barrel; the rest is trader driven.

  18. Marcus Aurelius says:

    How did things get this way?

    Politics.

    The ineptitude, incompetence, and hubris of the current maladministration of our Federal Government has resulted in trouble on all fronts – social, military, economic, and cultural. Expensive trouble. No matter the lessons of history, the wisdom of true conservative ideology, or ingrained cultural caveats (The Grasshopper and the Ant, or Polonius’ instructions to Laertes, for example), the current Executive and his Imperial court have slashed and burned a foolish and dangerous path to national insecurity.

    Bush’s lack of business accumen was clearly evident prior to his first installment as “America’s CEO”. Too bad most people don’t take due diligence more seriously.

    Now we have to take our losses.

  19. OkieLawyer says:

    In real terms, Crude remains below its all-time inflation-adjusted high of $101.70 from April 1980.

    Now, is that actual inflation, or is it by the fictional inflation ex-inflation numbers you talk about?

  20. Bob A says:

    Well I’m gonna go out and buy a new Suburban anyhow because Reverend Joel says if I just keep a positive outlook everythings gonna be ok!

  21. Pool Shark says:

    Jimmy Rogers is spot on:

    1) Get out of $USD.
    2) Get into commodities

    Year to date scorecard:

    S&P500: +7.75%
    DJIA: +10.37%
    NASD: +15.57%
    Gold: +23.26%
    Oil: +53.3%

    “What’s in your wallet portfolio?”

  22. michael schumacher says:

    OT

    Things have returned to some normalcy (I guess since the lead story is where are the chargers going to play-pretty sad)

    The issue surrounding the use of the military 0planes NEVER GOT RESOLVED. They (the CAL-FIRE people) still claim it was too dangerous even on Wednesday to fly. How this is possible when news planes and helicopters were allowed is just another example of protecting contracts. Sounds alot like the stock market.

    I found a burned piece of pine tree sitting at the base of a large tree in my front yard. This is how most of the houses in my area (rancho bernardo/Poway) were lost. Not a wholesale burning but it was completely random. Most houses located at the tops of a canyon or arroyo had damage or were burned completely. My sympathies to those who lost whatever they had.

    Bush came yesterday (about three days too late) and ALL air traffic was stopped so he could take a little tour. Pretty shitty when you consider the work yet to be done.

    I gave him the single digit salute as he flew over my house.

    MS

  23. Jim K says:

    Two words: peak oil… soon to be peak fossil energy.

    Read more at http://www.theoildrum.com

    Economics, as always, will trail reality and the markets will only work for the rich.

    The rest of us (not rich) will be cold, unemployed and probably hungry.

  24. winjr says:

    “5. Saber-rattling against Iran: The increased jaw-boning against Tehran in general and the Revolutionary Guard in particular.”

    IMO, the State Departments official classification of the Guard as a terrorist organization goes beyond mere sabre-rattling. Does this action give Bush the legal authority to strike Iran without the consent of Congress?

  25. Eric Davis says:

    We traded up on a 3% loss in Consumer Sentiment… I guess “Heck with the Consumer! Microsoft actually sold some copies of Vista… Nice when a monopoly finally does well.”

    I need to take a nap, I’m starting to fall into the: “Black Helicopter”, “Hyperinflation”, “gold bug”, “Dow is going to 20,000″ crowd. What will it take 3 more rate cuts? and 1.6 dollars to the Euro? Where is that blog?

    I jest, but not!
    Good news is…..

  26. Adam says:

    I am surprised by some of the comments claiming that the current administration is “incompetent”. George Bush may be incompetent, but his inner circle and the cronies they added are/were lethally competent. They got exactly what they wanted. They all became rich and they added socially conservative members to the Supreme Court. To hell with anyone else. 2006 derailed the gravy train slightly, but they’re still grasping at a few last straws before ’08 ends their reign completely.

  27. jkw says:

    This is why the Fed can’t encourage growth by cutting rates. The biggest risk to growth right now is non-core inflation. The more the dollar drops, the higher the non-core inflation will be. That will squeeze consumers so that they only buy non-core products (called necessities or staples by most people).

    Cutting rates in this environment raises inflation and chokes growth. The Fed has no power to help the economy. They are now engaging in class warfare. If they cut rates, poor and middle class people can’t afford to live here. If they raise rates, the investor class loses money. Of course, only the investor class actually knows what the Fed is or what they do.

  28. a guy called john says:

    why are fixed income investors [...] willing to accept only a 4.3% nominal return for the next ten years?

    i don’t know poop about poop (i was an english major at a land grant university), but isn’t a big factor that foreign buyers (china, in particular) buy treasuries to (artificially) maintain their exchange rate?

  29. michael schumacher says:

    Here’s a somewhat factual account of the “mess” the state could’nt resolve in getting these tankers flying.

    http://www.signonsandiego.com/news/metro/20071026-9999-1n26aircraft.html

    Pay attention to the comments….that tells the story.

    The “gubment” is sticking to it’s story that it was too dangerous to fly. Absolute load of crap from Tuesday morning on…

    I hope none of you have to loose property because of these inefficiencies. Many did on Tuesday

    MS

  30. Adam says:

    “why are fixed income investors [...] willing to accept only a 4.3% nominal return for the next ten years?”

    How about another possibility: are many current fixed-income investors satisifed with not incurring a real loss, as opposed to seeking a real gain? Perhaps a 4.3% (near) guaranteed return reimburses them for the 4.3% or so increase in the cost of their very content standard fo living.

  31. Fullcarry says:

    That 4.3% return is before taxes. Its more like 2.8% after taxes.

  32. JT says:

    Everyone go read “The Bottomless Well”. We are not running out of crude and we will not run out of crude oil.
    This is a speculative move up and the fact that we are discussing that it is not a speculative move up encourages me that it is a spec move.
    Basing anyhing of value off of world currency valuations is worthless. It is a piece of paper with a promise attached to it. I still do not know what the promise.
    This I do believe. We are feeling the financial pain because we are the pioneers of a new energy economy. We are beginning the process of transitioning away from crude oil. It will take time and it will hurt along the way but my belief is we will be in a much better place when we get there. Not too different than the people who left Old Europe came across an ocean and built a new and better life or the people today who come here from poverty and violence and build a better life.

  33. Estragon says:

    Another factor recently might be this story about increasing royalties in Alberta.

    Between the higher (CAD) development costs and the new royalty structure, it wouldn’t be surprising for some projects there to be put on hold.

  34. VJ says:

    4. Supply constraints: US crude oil stocks unexpectedly fell by 5.3 million barrels last week, and we have a variety of infra-structure issues contributing to this factor. Globally, there is a tight supply of ships, refineries, pipelines, and storage facilities. This contributes to a minimum amount of reserve — no buffer — which means Crude Oil Futures fluctuate even more than they might otherwise.

    Two observations:

    * Every few months, the Saudi Minister of Oil holds a press conference and among other interesting items, states that there is a worldwide glut of oil, that they have plenty of stockpiles of crude, and that there are no shortages.

    * Oil & Gas Giant BP Charged With Rigging U.S. Propane Prices

    “BP cornered the market on physical propane,” said Gregory Mocek, director of the enforcement division of the Commodity Futures Trading Commission. “They used their financial power to drive up prices.”

    This market manipulation only came to light because someone produced an actual audio recording of the collusion.
    .

  35. Red Pill says:

    Regarding BP and propane: wasn’t that around the time that Goldman Sachs had that dramatic reweighting of their energy holdings that, I think, caused a move in propane and subsequently a gap down in other energy including gas prices? There were rumors flying around that GS was maipulating gas prices to make the masses more content before the election.

  36. Greg0658 says:

    I was also wondering whats keeping the gas pump price below $3 with record oil.

    Just saw on CNBC from Mall Over America the CEO of the 3rd largest ethanol producer (forget name) he said ethanol is holding down the price because of the additive function.

    I emailed Powerlunch asking for some charts and graphs.

  37. ELS says:

    >>Saber-rattling against Iran

    You forgot saber-rattling between the Turks and the Kurds, and that Kurdish Iraq is where most of the oil is.

  38. Henry says:

    Funny — all it takes is one comment about the administration and the tinfoil hat crowd comes out of the woodwork. Never fails.

  39. blam says:

    Every time the Federal Reserve and the Treasury have taken (rescued, supported) the heat off of wall street, the price of commodities has soared. It’s funny, but the same gas was passed about natural gas in 2006 and electrical power in the 1999 – 2000 enery swindles.

    The futures market is designed for monopolistic speculation.

    Much more likely than the physical market constraints.

    You are right about the government creating an inflation spread but for different reasons. My take is

    Moral Hazard and more moral hazard
    No regulation
    Leverage and more leverage
    Financial cartels

  40. Forsooth says:

    Have you all gone collectively mad? The reason for the price increase is supply constrain discipline, driven by faith in and fear of the Saudis. Wake up sheep. Do you think 800% profit margins can be found in nature?

  41. David says:

    I guess calling terrorists terrorists is “tone-deaf sabre rattling” but the Iranians saying that Israel should be wiped off the map is….what exactly? Pacifist? And don’t you believe for one second that their comments on Israel was inspired by Bush.

    I mean, the Iranians couldn’t be helping to drive up the price of oil? Venezuela couldn’t be helping out? The decision by the Albertan gov’t to up the royalties extracted from oil sands didn’t drive up oil either?

    You don’t have to be a fan of the administration, but please, it’s not always America’s fault, dude.

  42. cdresearch says:

    Hey Barry,

    You said dollar index is at 15 year lows. I believe it’s at an all-time low, since it’s inception 22 years ago in 1985.

  43. Casual says:

    There is a problem with using inflation adjustments to measure the rise of a specific item; the rate of inflation factors the the rate of increase in the item.

    It might be better to measure the relative price of oil, then and now, using inflation less energy.

  44. VJ says:

    In real terms, Crude remains below its all-time inflation-adjusted high of $101.70 from April 1980.

    That WOULD be a valid point, if it weren’t for the fact that the overwhelming majority of American’s wages have gone backwards since 1980, making the relative cost of petroleum-based products at historic highs.

    Real (inflation-adjusted) Average Weekly Earnings declined by almost 20% during the twelve years of Reagan/Poppy Bush (1981-1992). Just as Real Wages began to rebound in the later ’90s, they either declined or were flat once again every year after 2000.
    .

  45. The Dirty Mac says:

    “Real (inflation-adjusted) Average Weekly Earnings declined by almost 20% during the twelve years of Reagan/Poppy Bush (1981-1992).”

    The Nixon-Ford boom was sure a tough act to follow.

  46. VJ says:

    And here I had always thought that the Reagan administration had followed the Carter administration.

    Go figure.
    .

  47. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  48. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  49. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  50. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  51. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  52. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  53. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  54. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  55. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  56. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  57. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  58. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  59. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  60. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  61. J&S/Illinois says:

    RE: Greg0658
    The price of gas (at the pump) is being held down by the use of ethanol. When you add a gallon of ethanol ($1.75) to a gal of (RBOB) gas ($2.27/gal.) you average the price downward. Through in $.50 + for taxes; and you’ll come close to the pump price.

    I grow the corn & the beans for ethanol & bio-diesel. I’ve invested in my own product (corn) by investing in ethanol plants. I buy my E-85 for $1.99/gal.

    Logistics is the problem. Getting my product (ethanol) from the midwest to the consumer on the coast. Have you noticed what the guru from Omaha is doing? Link;
    http://www.minyanville.com/articles/buffett-Warren-burlington-northernI-Berkshire-ethanol/index/a/14596

    As to the price of crude; there is too much liquidity in the world. Money managers are reduced to speculating ( or investing in questionable CDO’s) to provide a better rate of return for their customers.
    The Fed needs to RAISE the rates (or at least leave them alone) in order
    to provide a better choice for the investor. Don’t know if Ben B has the balls or not; but someday he’ll be forced to.
    Alan G. sure left a mess; too much accommodation. At least Paul V. had the courtesy to keep his mouth shut; realizing what a tough job it is. J&S/Illinois

  62. The Dirty Mac says:

    “And here I had always thought that the Reagan administration had followed the Carter administration.”

    Oh I forgot – Democrat very good, Republican very bad.

    I remember having a lot of free time during the prosperous Carter years. So much free time that I would spend 30-45 minutes just at the gas station sometimes.

  63. VJ says:

    You’ll have to enlighten me as to how you got from the chronology of administrations to whatever the heck it is you are rambling on about now.
    .

  64. wunsacon says:

    >> Oh I forgot – Democrat very good, Republican very bad.
    >> I remember having a lot of free time during the prosperous Carter years. So much free time that I would spend 30-45 minutes just at the gas station sometimes.

    Would that have anything to do with the check coming due to a nation for Vietnam, borrow-and-spend government, and the 1953 coup in Iran that put the Shah in power?

    Remember that when W’s check comes due in 2008-2012. (I’ll let you pick this one up?)