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Gasoline Plummets In US, JetA Next?  
User currently offlineIkramerica From United States of America, joined May 2005, 21511 posts, RR: 60
Posted (8 years 10 months 1 week 3 days 20 hours ago) and read 3345 times:

In two weeks, US gasoline prices have dropped over 25 cents due to refining capacity back online and decreased demand.

Will JetA follow? Refining capacity should be back up, and the fall also means a temporary decrease in demand until the holidays here in the USA, no?


Of all the things to worry about... the Wookie has no pants.
53 replies: All unread, showing first 25:
 
User currently offlineUsnseallt82 From United States of America, joined Jan 2004, 4891 posts, RR: 52
Reply 1, posted (8 years 10 months 1 week 3 days 20 hours ago) and read 3318 times:

Quoting Ikramerica (Thread starter):
Will JetA follow?

No.

Signed,
Exxon  bigthumbsup 



Crye me a river
User currently offlineWjcandee From United States of America, joined Jun 2000, 5154 posts, RR: 22
Reply 2, posted (8 years 10 months 1 week 3 days 20 hours ago) and read 3289 times:

No. Jet fuel is similar to diesel oil. That's why WN hedges against heating oil; it's a similar product and the prices move together. This is the *heating* season now, and all the trader assh***s will pull the same crap they did this summer with gasoline: crying "the sky is falling" and worrying about "shortages" of heating oil (this summer it was "shortages of gasoline", which of course never materialized), because the moment that it gets cold in NYC, they'll talk about the "harsh" northeast winter. It's all crap, and it's all designed solely to drive up prices on the futures markets. Think of it: there's MORE fuel, even with these disruptions, than last year, and there's LESS demand, but prices are HIGHER. It's good to see some traders getting burned, though, with the lower prices that we ARE seeing. This is how the burst of the tech bubble happened. We can only hope.

User currently offlineOPNLguy From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 10 months 1 week 3 days 20 hours ago) and read 3277 times:

Quoting Ikramerica (Thread starter):
Will JetA follow? Refining capacity should be back up, and the fall also means a temporary decrease in demand until the holidays here in the USA, no?

I certainly hope so. While fall sees a decline in gasoline use, demand for home heating oil goes up as people prepare for winter, so Jet-A availablity/cost might not change as much as we think. Hope I'm wrong on that one...


User currently offlineIkramerica From United States of America, joined May 2005, 21511 posts, RR: 60
Reply 4, posted (8 years 10 months 1 week 3 days 19 hours ago) and read 3214 times:

I also meant that fall sees a decline in JetA demand during the travel lulls in the US before the holiday/winter route restructuring.


Of all the things to worry about... the Wookie has no pants.
User currently offlineTornado82 From , joined Dec 1969, posts, RR:
Reply 5, posted (8 years 10 months 1 week 3 days 19 hours ago) and read 3183 times:

Heating Oil futures have also fallen appreciably (about 15%) in the past 2 weeks. However these declines were nowhere near the declines of Unleaded Gasoline futures, which were nearer to 25%. Unleaded gas started lower, and fell further, so it's significantly lower right now.

User currently offlineMham001 From United States of America, joined Feb 2005, 3617 posts, RR: 3
Reply 6, posted (8 years 10 months 1 week 3 days 19 hours ago) and read 3153 times:

I heard a report on the radio last week that jet fuel peaked at $5/gl and was now at about $3.60. Shouldn't be too hard to check...

User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12136 posts, RR: 51
Reply 7, posted (8 years 10 months 1 week 3 days 18 hours ago) and read 3070 times:

Quoting Wjcandee (Reply 2):
No. Jet fuel is similar to diesel oil.

Well, not exactly. Jet fuel (Jet-A, Jet-B, JP-4, JP-5, JP-8, etc.) is "wide cut gasoline". It is more like karoscene, than any other fuel type. It is refined just like heating oil and the black oil used in ships, but goes through an additional refinery step (a process called "cracking").

Quoting Mham001 (Reply 6):
I heard a report on the radio last week that jet fuel peaked at $5/gl and was now at about $3.60. Shouldn't be too hard to check...

Wow!. Actually, as usual, the news media missed the boat, again. But, hay, why let facts get in the way of a good story?

Here at DFW, Jet-A was being sold to the GA community at $4.06 per gallon, that price included the airport's handling charges of 15%. The airlines at DFW, like AA & DL were paying $2.98 per gallon, at the highest price. The current prices, the airlines pay at DFW is $2.60 per gallon, or about a 17% price reduction, but include an airport handling charge of 5%.

Quoting Wjcandee (Reply 2):
That's why WN hedges against heating oil; it's a similar product and the prices move together.

WN just contracted for new fuel prices with Exxon, this past Friday. The contract price is $37 per barrel of jet fuel and the price is good through 2009. This contract covers about 35% of the fuel WN buys, that is because, not every airport pumps fuel from Exxon. They have Exxon fuel at DAL, but here at DFW, the fuel is from Arco.


User currently offlineIkramerica From United States of America, joined May 2005, 21511 posts, RR: 60
Reply 8, posted (8 years 10 months 1 week 3 days 16 hours ago) and read 2997 times:

These "handling charges" in percentages need to be regulated. I'm not a big government guy, but they are allowed by law in the first place, and there's no reason why if the price of fuel doubles the handling fee should also double.

Same sort of thing happens with telephone bills and local gas and electricity and the % model for fees. Fees should be a fixed charge, not dependent on the price of the commodity.



Of all the things to worry about... the Wookie has no pants.
User currently offlineIowaman From United States of America, joined May 2004, 4390 posts, RR: 6
Reply 9, posted (8 years 10 months 1 week 3 days 16 hours ago) and read 2977 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Quoting Ikramerica (Thread starter):
two weeks, US gasoline prices have dropped over 25 cents due to refining capacity back online and decreased demand

Good, still not where they were a couple years ago unfortunately.

Quoting Ikramerica (Reply 8):
These "handling charges" in percentages need to be regulated. I'm not a big government guy, but they are allowed by law in the first place, and there's no reason why if the price of fuel doubles the handling fee should also double.

Same sort of thing happens with telephone bills and local gas and electricity and the % model for fees. Fees should be a fixed charge, not dependent on the price of the commodity.

I totally agree.



Next flights: WN DSM-LAS-PHX, US PHX-SJD. Return: US SJD-PHX, WN PHX-MDW-DSM
User currently offlineIkramerica From United States of America, joined May 2005, 21511 posts, RR: 60
Reply 10, posted (8 years 10 months 1 week 3 days 16 hours ago) and read 2946 times:

Quoting Iowaman (Reply 9):
Good, still not where they were a couple years ago unfortunately.

Considering it's the largest drop ever recorded by the organization that measures it, I'd say it's still a big deal, and likely not to be the end of the decline.

$2 a gallon by january? That would be interesting. After all, the oil companies and speculators will be sufficiently artificially increasing winter heating bills to "compensate." But they've determined how much we can be forced to pay in overall energy costs before we start to really cut back on use. Over the last 5 years, they seem to have refined this art.  Sad



Of all the things to worry about... the Wookie has no pants.
User currently offlineN1120A From United States of America, joined Dec 2003, 26444 posts, RR: 75
Reply 11, posted (8 years 10 months 1 week 3 days 16 hours ago) and read 2935 times:

Quoting Ikramerica (Reply 4):
I also meant that fall sees a decline in JetA demand during the travel lulls in the US before the holiday/winter route restructuring.

There is really only a moderate decline in JetA demand, and it is nowhere near the swings gasoline sees, particularly in colder climates. Also, the decline in JetA demand is offset and some by the rise in heating oil prices.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineWjcandee From United States of America, joined Jun 2000, 5154 posts, RR: 22
Reply 12, posted (8 years 10 months 1 week 2 days 2 hours ago) and read 2667 times:

Quoting Wjcandee (Reply 2):
This is the *heating* season now, and all the trader assh***s will pull the same crap they did this summer with gasoline: crying "the sky is falling" and worrying about "shortages" of heating oil (this summer it was "shortages of gasoline", which of course never materialized), because the moment that it gets cold in NYC, they'll talk about the "harsh" northeast winter.

OMG!!!!!! Up go prices today. Why? I can't believe how prescient the post above was. Here's what they said: ""We've gone away from worrying about supply and are concerned that demand may be stronger than anticipated if we get an early winter and stay cold through March," said Phil Flynn, analyst at Alaron Trading." OH, PUHLEEEZE!!!!! I'm going to be SO happy when these people lose their shirts.


User currently offlineTornado82 From , joined Dec 1969, posts, RR:
Reply 13, posted (8 years 10 months 1 week 2 days 1 hour ago) and read 2628 times:

Quoting Wjcandee (Reply 12):

OMG!!!!!! Up go prices today. Why? I can't believe how prescient the post above was. Here's what they said: ""We've gone away from worrying about supply and are concerned that demand may be stronger than anticipated if we get an early winter and stay cold through March," said Phil Flynn, analyst at Alaron Trading." OH, PUHLEEEZE!!!!! I'm going to be SO happy when these people lose their shirts.

It's still lower today than when you made your original post a week ago, well, except for natural gas.


User currently offlineSirOmega From United States of America, joined Sep 2005, 735 posts, RR: 0
Reply 14, posted (8 years 10 months 1 week 2 days 1 hour ago) and read 2568 times:

The futures market finally figured out they can use fear-based tactics to control the market, just like the government uses fear-based tactics to control the population. And no one will stand up to it. I dont expect a big price break until Jan. 2009... maybe...

User currently offlineIkramerica From United States of America, joined May 2005, 21511 posts, RR: 60
Reply 15, posted (8 years 10 months 1 week 2 days 1 hour ago) and read 2550 times:

Isn't this the same old story though of deregulated supply and regulated demand at the consumer level? No competition in gas or electricity supply, so you pay what they say, so why should they balk at overpaying for the fuel they use to supply you your energy? no matter what, they're profit is assured, the employees are assured pay raises (37% in Los Angeles this year), so just pass the cost along.

BTW - gasoline dropped another 12 cents or so, making the three week drop at the 35 cent level.



Of all the things to worry about... the Wookie has no pants.
User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 16, posted (8 years 10 months 1 week 2 days ago) and read 2486 times:

Quoting Wjcandee (Reply 2):
It's good to see some traders getting burned, though, with the lower prices that we ARE seeing.

Aside from being an unkind thought toward people who take enormous risk and provide much needed liquidity to the market, the statement above demonstrates profound ignorance. When prices go up, some traders make money and some lose money. When prices stay level, some traders make money and some lose money. When prices go down, some traders make money and some lose money. Traders who more or less correctly predict the future make money. Those who incorrectly predict the future lose money. All of them provide liquidity to the market which helps keep prices down for consumers like us.

Also, without traders, airlines wouldn't have anyone to hedge against. Would you like ticket prices to be not only higher on average, but more volatile as well? That's what you'd have without the traders: higher and more volatile airline ticket prices.


User currently offlineHalibut From , joined Dec 1969, posts, RR:
Reply 17, posted (8 years 10 months 1 week 2 days ago) and read 2458 times:

Quoting Ikramerica (Reply 10):
Considering it's the largest drop ever recorded by the organization that measures it, I'd say it's still a big deal, and likely not to be the end of the decline.

 crossfingers 

http://www.foxnews.com/story/0,2933,171553,00.html
http://www.foxnews.com/story/0,2933,170118,00.html

BILL O'REILLY, HOST: Thanks for staying with us. I'm Bill O'Reilly.

In the "Unresolved Problem" segment tonight, as you know "The Factor" is urging Americans to conserve gas and energy and not to buy gasoline on Sundays as a symbolic protest against the oil companies, which we believe have taken advantage of the hurricanes and the war on terror to jack up prices.


User currently offlineIkramerica From United States of America, joined May 2005, 21511 posts, RR: 60
Reply 18, posted (8 years 10 months 1 week 2 days ago) and read 2442 times:

Quoting Ikramerica (Reply 15):
No competition in gas

I mean natural gas fed to homes, not gasoline, just to be crystal clear, before someone like N1111whatever decides it's his place to correct the comment.



Of all the things to worry about... the Wookie has no pants.
User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 38
Reply 19, posted (8 years 10 months 1 week 1 day 23 hours ago) and read 2424 times:

Quoting Ikramerica (Reply 8):

These "handling charges" in percentages need to be regulated. I'm not a big government guy, but they are allowed by law in the first place, and there's no reason why if the price of fuel doubles the handling fee should also double.

I don't know. Some costs will rise along with increases in fuel prices. It all depends what this handling fee is supposed to cover.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineVV701 From United Kingdom, joined Aug 2005, 7471 posts, RR: 17
Reply 20, posted (8 years 10 months 1 week 1 day 23 hours ago) and read 2409 times:

Quoting Wjcandee (Reply 2):
there's LESS demand, but prices are HIGHER

This could be a very myopic view. There may well be less demand in the USA, but we are talking about an international commodity. Hence, for example, the price of gas went up in the UK after hurricane Katrina reduced US refining capacity. Of course none of the gas we consume in the UK or Europe is refined in the US. But immediately post-Katrina traders were exporting refined gas to the US and continued to do so until European prices equaled American prices plus the trans-Atlantic freight cost.

So it is clear that it matters not whether the total demand in the US is down or up. All that matters is the total worldwide demand. So it matters to us here in Europe not only whether we have a cold winter and not only whether there is a cold winter in the north east of the USA. It increasingly matters as to whether they have a cold winter in the PRC.

China's population is roughly four times that of the US and their economy is growing by 9 per cent or more per year. That is one heck of an increase in demand. And then there is India with an even larger population and a fast growing economy (but thankfully they do not have cold winters). Finally we in Europe have a hopefully temporary refining capacity problem and a cold winter hear could see US prices for refined product follow ours up even if the north east USA stays relatively warm.

So the overall demand is on an upward trend and this winter could be critical because of worldwide refining capacity.


User currently offlineWjcandee From United States of America, joined Jun 2000, 5154 posts, RR: 22
Reply 21, posted (8 years 10 months 1 week 1 day 23 hours ago) and read 2373 times:

Quoting VV701 (Reply 20):
This could be a very myopic view.

But it's not. Funny how *world* oil prices are moving almost entirely based upon relatively-trivial stuff that happens in the U.S. My point is that there's a lot of stupid money in the oil market, just like there was lots of stupid money in biotech stocks and later tech stocks. And the media just eat up the lunacy dished out by bullish analysts ("No really, it could be at $100/barrel by August 2005." Riiiiiight.)


User currently offlineBond007 From United States of America, joined Mar 2005, 5413 posts, RR: 8
Reply 22, posted (8 years 10 months 1 week 1 day 23 hours ago) and read 2368 times:

Great, once Jet-A prices are lower we can expect to see all the legacy carriers out of Chapter 11 and making hundreds of millions again!

After all, that was the reason most of 'em are losing millions/billions right  Yeah sure



Jimbo



I'd rather be on the ground wishing I was in the air, than in the air wishing I was on the ground!
User currently offlineVV701 From United Kingdom, joined Aug 2005, 7471 posts, RR: 17
Reply 23, posted (8 years 10 months 1 week 1 day 23 hours ago) and read 2359 times:

The US is the worlds's largest economy and the world's largest consumer of oil based products. So the US market more strongly influences oil prices than any other single market. But you are living in cloud cuckoo land if you believe that events in the rest of the world do not influence US domestic prices. And if these views are widely held in the US it does explain why US airlines troop in and out of bankruptcy protection regularly.

User currently offlineTornado82 From , joined Dec 1969, posts, RR:
Reply 24, posted (8 years 10 months 1 week 1 day 23 hours ago) and read 2310 times:

While Wjcandee does have a point, VV701, that the bullish naysaysers attribute more to prices than anything, his views in they're entirety about the oil markets aren't "widely held in the US," at least I hope not or people may start burning down my apartment since I indirectly work in the industry.

But the naysayers running their mouths do cause alot of trouble over nothing. Just like today, a few snowflakes fly in the mountains of SW PA, WV, and Western MD (which isn't *too* out of the ordinary this time of year) and suddenly natural gas prices spike because they're expecting all this cold weather all winter long and acting like this is the beginning of winter. Bullcrap, just an upper low causing some trouble early in the season. Likewise, BP announces, which was pretty known in the industry already considering it's already the 25th and the problems they've had there in the past, that they were missing target dates for reopening a refinery, and then gasoline/distillate prices jump. Just to prove that they were thinking out of their asses today, crude also jumps. Absolutely NOTHING happened today to affect crude prices, other than market speculation. At least you could say a refinery might be the cause of gasoline/distillates, and if you're a real idiot you could think that because it's cold in the NE today that it's the beginning of a long hard winter for NG... but NOTHING happened to cause crude to spike. And so goes another day in the life of the consumers of the world.

Quoting Ikramerica (Reply 15):
they're profit is assured, the employees are assured pay raises (37% in Los Angeles this year), so just pass the cost along.

I wish I was getting that! Hell, I'd settle for the 7%.


25 Jetdeltamsy : How do you mean? Similar in pricing? Or similar in composition? Jet fuel is much more refined than diesel.
26 AIR757200 : Per AA's Jetwire Service: Monday's closing price: Crude Oil was $60.32 a barrel, down $0.31 Jet Fuel Price was $77.39 a barrel, down $4.00
27 VV701 : But is this not because the balance today between supply and demand not just for refined oil products but for natural gas has never been on quite suc
28 Stirling : Gallons in a barrel? Unleaded regular was at $2.75 today. It was $2.92 at the same station when I filled up on Sunday. Arco/BP station...Carpenter Ro
29 Tornado82 : Well if its a shortage of refining capacity.. why would crude prices rise? That's my point. There would be a glut of crude that nobody can do anythin
30 DLKAPA : Good thing DRO uses Valero!
31 Ikramerica : While it may go toward insurance in part, and it would cost more to insure against loss of product if it costs twice as much to get, that isn't a big
32 JAXFLL : 55
33 Post contains links Tornado82 : No, as I said, 42 gallons of oil/products in a barrel. http://arc.norfolkne.com/math.htm http://www.energy.ca.gov/gasoline/gasoline_q-and-a.html
34 HPRamper : Why focus on JetA which we can't control anyway? We should be paying more attention to how much actual gasoline and diesel is wasted on running ground
35 Ikramerica : Good point. Airlines would be very smart to turn to hybrid/diesel technology for many of these things. hybrids are full of torque and their added weig
36 FutureFO : Where do you live that gas has plummeted, we are lucky that is back to affirdable. Sean from MCO and STL
37 Ikramerica : 35 cents in three weeks is a plummet. that's a national average. if you are in MCO, likely not, since you had that hurricane thingy in the south disru
38 Vegasplanes : WN is already operating electic gorund equipment at some airports. Southwest Airlines Cleans Up with Electric Ground Support Equipment at Tulsa Inter
39 HPRamper : It's a start. ATS here uses equipment, including tugs, that run on propane.
40 MD80fanatic : Since 9-11, gasoline prices have risen 100%. And now a 25 cent drop is considered a plummet? LOL Oil company profits exceeded 30% over last year....an
41 HAJFlyer : There is a parallel in the short term. But today's proven reserves with low finding and development costs need to be replaced by new reserves that wi
42 VV701 : Crude oil prices have risen because the growth in demand - primarily from major developing countries like the PRC and India - has temporarily outstri
43 Socalfive : YES! Exactly! However, at the end of the day, the prices on fuel are still market driven, they can instill fear and get the spikes and-even as we've
44 TAN FLYR : Recent articles in the WSJ indicated there is at least 100yrs of recoverable oils from the Tar Sands of Canada. There is a study ongoing to determine
45 Ikramerica : Well, that's just shifting the deck chairs around. Propane is used because it is cleaner burning, but it's not really saving energy in the same way a
46 Ikramerica : Current US gas prices don't have much to do with demand in China. It is estimated that $60 oil SHOULD lead to $2 gasoline at the highest in the US, w
47 Post contains images HPRamper : But what does the transport cost on supertanker to the US where it then has to be refined? I saw this firsthand a few years ago when our good friends
48 Incitatus : I've heard gas prices at Chinese pumps are half the price of gas in the US. If true, that explains a lot about oil prices. The US has finally come ac
49 Post contains links MD80fanatic : Well here you go. A 89% increase in profit. That is criminal my fellow aviation enthusiasts. Wanna know who is really hurting the aviation industry (w
50 TAN FLYR : From Canada it would be shipped via pipeline..No supertakers available from landlocked Alberta.
51 HPRamper : I was referring to the oil coming from the Persian Gulf. What are the overseas transport costs compared to pipeline fees from Canada?
52 Tornado82 : Pipelines are relatively efficient compared to other means of transport. And they're quicker to recover from an event like a hurricane since they're
53 Apodino : People say there haven't been any new refineries built. How come no one talks about the 100 or so refineries that have closed down in recent years as
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