ikramerica
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Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 11:57 am

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.
 
usnseallt82
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 12:02 pm

Quoting Ikramerica (Thread starter):
Will JetA follow?

No.

Signed,
Exxon  bigthumbsup 
Crye me a river
 
wjcandee
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 12:08 pm

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.
 
OPNLguy
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 12:10 pm

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...
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
ikramerica
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 12:34 pm

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.
 
Tornado82
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 12:42 pm

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.
 
mham001
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 12:55 pm

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...
 
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kc135topboom
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 2:25 pm

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.
 
ikramerica
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 3:36 pm

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.
 
iowaman
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 3:47 pm

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.
 
ikramerica
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 4:14 pm

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.
 
N1120A
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RE: Gasoline Plummets In US, JetA Next?

Mon Oct 24, 2005 4:25 pm

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.
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wjcandee
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 6:24 am

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.
 
Tornado82
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 6:34 am

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.
 
siromega
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 7:18 am

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...
 
ikramerica
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 7:24 am

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.
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zvezda
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 8:08 am

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.
 
Halibut
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 8:15 am

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.
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ikramerica
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 8:20 am

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.
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atmx2000
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 8:29 am

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.
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vv701
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 8:33 am

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.
 
wjcandee
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 8:49 am

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.)
 
bond007
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 8:50 am

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
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vv701
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 8:55 am

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.
 
Tornado82
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 9:24 am

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%.
 
jetdeltamsy
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 9:37 am

Quoting Wjcandee (Reply 2):
Jet fuel is similar to diesel oil.

How do you mean? Similar in pricing? Or similar in composition?

Jet fuel is much more refined than diesel.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
AIR757200
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 10:17 am

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
 
vv701
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 10:32 am

Quoting Tornado82 (Reply 24):
But the naysayers running their mouths do cause alot of trouble over nothing.

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 such a knife edge? And you certainly could not get these sudden price hikes if nobody bought at the higher prices. And here I have to assume that the professional buyers know a lot more about the market than I do and would not buy either futures or for immediate delivery if there was no probability of a shortage.

Please correct me if I am wrong but my understanding is that for the coming winter and only for the coming winter the problem is not so much the possibility of a shortage of crude oil but the strong possibility of a shortage of worldwide refining capacity.
 
stirling
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 11:04 am

Quoting AIR757200 (Reply 26):
Jet Fuel Price was $77.39 a barrel, down $4.00

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 Road Modesto.

Petroleum consumption has dipped by 1% in California since 2003...wish I could find the source link...it was at the Modesto Bee if you want to try.
1% doesn't sound like a lot, unless you consider the amount we burn here every daily in the Dirty Golden Brown State.
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Tornado82
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 11:08 am

Quoting VV701 (Reply 27):

Please correct me if I am wrong but my understanding is that for the coming winter and only for the coming winter the problem is not so much the possibility of a shortage of crude oil but the strong possibility of a shortage of worldwide refining capacity.

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 anything with, and supply and demand would make crude fall while refined products rise through the roof. As for US refining capacity from the hurricane damage, I think we're up to 92% now. 8% off isn't too bad, we're *never* @ 100% because of scheduled downtime, just like an airplane never has 100% reliability.

Quoting Stirling (Reply 28):
Gallons in a barrel?

42.
 
DLKAPA
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 11:09 am

Quoting Usnseallt82 (Reply 1):
No.

Signed,
Exxon

Good thing DRO uses Valero!
And all at once the crowd begins to sing: Sometimes the hardest thing and the right thing are the same
 
ikramerica
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 11:12 am

Quoting Atmx2000 (Reply 19):
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.

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 part. Cost to drive the trucks around increases since fuel costs more to run the trucks, but can't be a huge part

Other overhead doesn't necessarily increase. Salary costs don't double.

But something tells me profit doubles. Just ask ALL the oil companies, seeing double and triple profits over two years ago.

So base it on a fixed cost you can NEGOTIATE plus a smaller percentage based on variable costs that is non-negotiable but regulated by the agencies that monitor the airport in the first place. This actually protects the supplier in bad times while preventing them from gouging in good times. And of course for the suppliers, good and bad are reversed compared to the rest of us...
Of all the things to worry about... the Wookie has no pants.
 
JAXFLL
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 11:15 am

Quoting Stirling (Reply 28):
Gallons in a barre

55
 
Tornado82
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 11:43 am

Quoting JAXFLL (Reply 32):
55

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

Quote:
Crude oil cost is the price paid for a barrel of crude oil on the international market divided by 42 gallons in a barrel. This will give the price of crude oil per each gallon of gasoline. As we have seen this year, this is often the most volatile price of the fuel. Crude oil is traded as a commodity, and as the price goes up, prices for gasoline can change very quickly. When prices for crude come down, the price for gasoline typically comes down -- but very slowly. This is typical for most commodities.
 
HPRamper
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 12:04 pm

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 equipment when it isn't needed. I've seen it with every airline and it's pretty much epidemic. I've seen belt loaders running for a half hour and sometimes more with nobody around, merely for their convenience when they decide to load an aircraft, as if it takes such an effort to turn the ignition before hopping into the bin.
 
ikramerica
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 1:01 pm

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 weight are a benefit to the equipment that needs to be heavy for balance and CG purposes. they get their best mileage in the kind of speeds and traffic situations at an airport as well.

or better, fuel cell/hybrid for the future of ground equipment. won't be a problem to find hydrogen filling stations at an airport compared to driving in the outside. they just need to build 1 per small airport, 2 for larger ones.
Of all the things to worry about... the Wookie has no pants.
 
FutureFO
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 2:19 pm

Where do you live that gas has plummeted, we are lucky that is back to affirdable.


Sean from MCO and STL
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ikramerica
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 2:29 pm

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 disrupting things.

I live in LA, where gas is often the highest price. it's dropping every day I drive by, and over 50 cents at some stations known for gouging (right at highway exit ramps).

It's going to keep dropping and dropping, from all indications.
Of all the things to worry about... the Wookie has no pants.
 
vegasplanes
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 4:12 pm

Quoting Ikramerica (Reply 35):
Airlines would be very smart to turn to hybrid/diesel technology for many of these things. hybrids are full of torque and their added weight are a benefit to the equipment that needs to be heavy for balance and CG purposes. they get their best mileage in the kind of speeds and traffic situations at an airport as well.

or better, fuel cell/hybrid for the future of ground equipment. won't be a problem to find hydrogen filling stations at an airport compared to driving in the outside. they just need to build 1 per small airport, 2 for larger ones.

WN is already operating electic gorund equipment at some airports.

Southwest Airlines Cleans Up with Electric Ground Support Equipment at Tulsa International Airport
Carrier is First to Use Electric Ground Support Equipment at Airport

TULSA, Okla.—Aug. 26, 1999—Southwest Airlines today introduced environmentally friendly, electric powered ground equipment at Tulsa International Airport. The carrier purchased six belt loaders, which help load luggage and cargo onto the aircraft, and seven electric tugs, which push aircraft to and from the jetway, for its Tulsa operations. Systemwide, Southwest has a total fleet of more than 20 electric belt loaders and 50 electric tugs and uses the equipment in such cities as Oklahoma City, Ontario, Phoenix, and Tulsa.

Quoting Ikramerica (Reply 37):
It's going to keep dropping and dropping, from all indications.

Not with China still growing, they are totally inefficient when it comes to producing. They use three barrels to do what the US takes 1 barrel to do. This is in regards to manufacturing and the like, I will see if I can find the Business Week article that came from.
 
HPRamper
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 7:22 pm

Quoting Vegasplanes (Reply 38):
WN is already operating electic gorund equipment at some airports.

It's a start. ATS here uses equipment, including tugs, that run on propane.
 
md80fanatic
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 7:53 pm

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....and coincidently oil prices have risen 35% over last year. I wonder if there is a parallel?

Well that is what you get when you elect oilmen as the leaders of your countries. Jeesh.
 
HAJFlyer
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RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 7:59 pm

Quoting MD80fanatic (Reply 40):
Oil company profits exceeded 30% over last year....and coincidently oil prices have risen 35% over last year. I wonder if there is a parallel?

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 will be much more costly. The rapidly rising rig count in the US is just the start of a massive investment boom in exploration and development over the next years. Oil companies need to make lots of money now so that they can invest in new ventures.

The cost of producing crude from Canadian oil sands is already about USD 25 which is way higher than the few bucks it takes to get the black gold out of the ground in Saudi Arabia.
 
vv701
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Joined: Fri Aug 19, 2005 10:54 am

RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 8:40 pm

Quoting Tornado82 (Reply 29):
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 anything with, and supply and demand would make crude fall while refined products rise through the roof.

Crude oil prices have risen because the growth in demand - primarily from major developing countries like the PRC and India - has temporarily outstripped supply. But when crude oil prices rise producers tend to turn up the wick to take advantage of the higher prices. For some, like Saudi Arabia, it is almost as easy as turning a tap on.

Now if there is a shortage of refining capacity (which is an entirely separate issue) and that capacity cannot meet demand . . . How long does it take to plan, build and commission a new refinery? And I said there was a danger of a shortage of capacity this coming winter, not last summer or even today or even the winter of 2006-07.
 
socalfive
Posts: 474
Joined: Sat Mar 10, 2001 5:37 am

RE: Gasoline Plummets In US, JetA Next?

Wed Oct 26, 2005 11:43 pm

Quoting SirOmega (Reply 14):
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...

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 seen lately-are able to maintain the spikes for quite some time, but when the smoke clears on these assholes, the market drives the price back down, and as we're going to see, drive it down dramatically; barring of course any new natural disaster anywhere on the planet.
 
Tan Flyr
Posts: 1558
Joined: Sat Aug 19, 2000 11:07 pm

RE: Gasoline Plummets In US, JetA Next?

Thu Oct 27, 2005 1:10 am

Quoting MD80fanatic (Reply 40):
Oil company profits exceeded 30% over last year....and coincidently oil prices have risen 35% over last year. I wonder if there is a parallel? [/quot

MD80..you don't seem to understand the spread berween the various costs of crude oil and the market price of the refined products. The benchmarks are always WTI or Saudi Sweet or North Sea Brent..When refiners buy higher sulpher (Sour) crudes or heavier (Kern River Crude) crudes at substantial discounts the margins increase. Also the cost increases to process these crudes. Only about 30% of the US refineries can process this heaver/sour crudes.

[quote=HAJFlyer,reply=41]The cost of producing crude from Canadian oil sands is already about USD 25 which is way higher than the few bucks it takes to get the black gold out of the ground in Saudi Arabia.

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 if Valero and a Canadian company can covert the refinery at Lima, Ohio to process all heavy Canadian oils. Cost is expected at 1 billion dollars to convert the refinery to do this.

Quoting VV701 (Reply 42):
Now if there is a shortage of refining capacity (which is an entirely separate issue) and that capacity cannot meet demand . . . How long does it take to plan, build and commission a new refinery? And I said there was a danger of a shortage of capacity this coming winter, not last summer or even today or even the winter of 2006-07.

Takes years..No new refinery has been built in the US since 1975 or so (Marathon, Garyville, LA) Check out the website for teh proposed Arizona Clean Fuels project at Yuma, AZ..first proposed new refinery. Exxon evaluating expanding the Baytown TX refinery to process almost 1 million BPD.

The US has been on the refining capacity edge for a number of years.

The time is now to design and build a number of 150,000-250,000 BPD refineries away from the gulf coast. Considering the amount of Canadian oils, Oils from Rock Shales in CO, UT & WY..maybe a few more midwest refineries would be a good idea along with say GA or NC for the southeast.
 
ikramerica
Posts: 13730
Joined: Mon May 23, 2005 9:33 am

RE: Gasoline Plummets In US, JetA Next?

Thu Oct 27, 2005 1:59 am

Quoting HPRamper (Reply 39):
that run on propane.

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 fuel cell, hybrid, electric, etc. option/combo would.

Quoting VV701 (Reply 42):
How long does it take to plan, build and commission a new refinery?

As stated, in the US due to environmental lawsuits, it takes an infinite number of years to add a refinery, or an offshore oil rig over easily extracted crude, for that matter. Infinite because for 30 years it's been impossible.

We made our own mess, and no one is willing to clean it up.
Of all the things to worry about... the Wookie has no pants.
 
ikramerica
Posts: 13730
Joined: Mon May 23, 2005 9:33 am

RE: Gasoline Plummets In US, JetA Next?

Thu Oct 27, 2005 2:02 am

Quoting Ikramerica (Reply 37):
It's going to keep dropping and dropping, from all indications.



Quoting Vegasplanes (Reply 38):
Not with China still growing

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, with present refining capacity. It was at $3 due to gouging and speculation, not Chinese demand.
Of all the things to worry about... the Wookie has no pants.
 
HPRamper
Posts: 4588
Joined: Sat May 14, 2005 4:22 am

RE: Gasoline Plummets In US, JetA Next?

Thu Oct 27, 2005 2:24 am

Quoting HAJFlyer (Reply 41):
The cost of producing crude from Canadian oil sands is already about USD 25 which is way higher than the few bucks it takes to get the black gold out of the ground in Saudi Arabia.

But what does the transport cost on supertanker to the US where it then has to be refined?

Quoting Socalfive (Reply 43):
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 seen lately-are able to maintain the spikes for quite some time, but when the smoke clears on these assholes, the market drives the price back down, and as we're going to see, drive it down dramatically

I saw this firsthand a few years ago when our good friends Enron basically invented an electricity shortage here in the Northwest...power rates skyrocketed and there were rolling blackouts and everything. Then the news came out that they had basically constructed the entire shortage to give the impression that there was really a reason for high rates. They pocketed the extra money of course.
Like the Northwest could run short on electricity! We have hydropower running out our ears.

Quoting Ikramerica (Reply 45):
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 fuel cell, hybrid, electric, etc. option/combo would.

Any form of alternative power is a step forward in my eyes. Whether it is based on price alone or if it is just cleaner. Besides, I thought propane wasn't a high demand fuel like gasoline or JetA and therefore the prices didn't spike or fluctuate the same way.
Here's to solar-powered tugs and belt loaders in PHXBig grin
 
incitatus
Posts: 2691
Joined: Wed Feb 09, 2005 1:49 am

RE: Gasoline Plummets In US, JetA Next?

Thu Oct 27, 2005 3:14 am

Quoting Ikramerica (Reply 46):
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, with present refining capacity. It was at $3 due to gouging and speculation, not Chinese demand.

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 across an adversary in its thirst for oil. Just wait until all Chinese start driving Suburbans.
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md80fanatic
Posts: 2365
Joined: Tue Apr 13, 2004 11:29 pm

RE: Gasoline Plummets In US, JetA Next?

Thu Oct 27, 2005 3:36 am

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 (who has layed off and fired many of you reading this post)....take a big guess.

http://news.yahoo.com/s/nm/20051026/...m/energy_conocophillips_earns_dc_4

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