Heads Up-fuel Prices On The Rise Again

[greatam]

BP is shutting down part of the Alaska Pipeline (400,000 barrels per day) http://www.msnbc.msn.com/id/14219844/

 

I received email late last night from the main transportation industry group in the US-ATA (America Trucking Association).

 

To paraphrase parts of the email:

 

"notify your customers immediately that the current fuel surcharge will be insufficient to sustain operations. Inform them that an ADDITONAL fuel surcharge of approx. 9% will be added on. ATA will continue posting spot market prices. For those of you on hedges, please verify your contracts. Expect diesel fuel price averages in December/January to be $3.50+ gallon, which is a 17% increase over current prices."

 

All of this info can be easily extrapolated to airlines. Prices WILL GO UP and this time, I would guess significantly.

[hdawson]

Excellent post granam. Fortunately there is a current worldwide excess inventory but that won't last long.

[hdawson]

Greatam. The shut down will reduce domestic production by 8%. President Bush has agreed to open up the National Defense Emergency supplies to refiners to ease the effect.

[greatam]

I know 8% doesn't seem like a lot, but with the problems escalating in the Mid East, almost no imports from Venezuela, and China gobbling up absolutely every barrel to be found, we could be in deep doo doo very soon. Opening up the Strategic Petroluem Reserves MAY be a smart thing to do. Only time will tell. Let's hope we don't need that oil for food transport or military needs.

 

Colorado is having problems with diesel supply right now. Not particularly caused by the pipeline, but it will only escalate to other states. http://www.ttnews.com/members/topnews/0015876.html

 

Saw it happen in 1973-trucks couldn't buy fuel in Indianna (no supply), so they started buying fuel in Ohio and Kentucky. Pretty soon those states were also limiting fuel. Wyoming right now is getting tight on supply. And one of my guys called in from Albuquerque a few hours ago. The truck stop at the junction of I-40 and I-25 was backed out in the street with trucks waiting to fuel. Lots of meat trucks run that corridor out of Colorado.

 

And wait until China starts building the oil platforms off the Cuban coast-within 20 miles of Miami. We will REALLY be kicking ourselves in the butts. Makes you wonder how we could be so stupid.

[greatam]

http://www.dfw.com/mld/dfw/business/15223773.htm