Due to a lot of other more-glamorous news topics the last few weeks, I don’t get into looking at oil and gas-pump-price bullshit very much, butÂ some indications are we might be approaching another one of those aggravating number-flux in the system: Rising crude oil prices and a fall in U.S. supplies are driving wholesale gas prices up sharply. That has yet to be fully reflected at the retail level.
What that ‘fully reflected‘ means is the big jolt is still coming, even as prices rose 7 cents this past week to a national average of $3.55 a gallon by yesterday — still more than 30 cents higher than at this same time last year.
(Illustration found here).
This morning, after I’d made my weekly visit to the laundromat, I put another $20 worth of gas in the old Jeep Comanche at $4.19 a gallon for regular. The same price for weeks.
We’re the highest in California — but of course way-up here in Humboldt County it can’t be helped, part of the culture — withÂ the state average at $3.99 a gallon for regular, up 1.3 cents in a week.
Just south of us a couple of hours, though, and the pump price a gallon drops nearly 50 cents.
Sup with that?
Maybe due to several factors, crude oil prices have supposedly jacked the last few weeks and apparently are going higher:
OIL: Global crude oil prices spiked to a 15-month high on the back of the Fedâ€™s stimulus pledge, strong US crude demand and Middle East supply fears, but ran into profit-taking heading into the weekend.
New York crude hit $107.45 — a high last seen in late March 2012 — and Brent oil jumped to $108.93, which was a level last witnessed in early April 2013.
â€œPrices have picked up almost ten percent since the start of the month on a mixture of positive economic data, reassurance of further Fed support and global supply concerns,â€ said analyst Kash Kamal at London-based brokerage Sucden.
One upward shove is the specter of supplies.
Government inventory data Wednesday showed the steepest two-week drop in crude inventories in 30 years.
Commercial oil inventories fell 9.9 million barrels from the week earlier, on top of a 10 million-barrel decline last week.
Oil prices have been rising on geopolitical concerns, with production offline in Libya and unrest in Egypt creating concerns about the Suez Canal shipping lanes.
But the decline in inventories gave it another boost.
“Going along with ‘drill, drill, drill’ is now ‘ship, ship, ship,’ ” said John Kilduff, energy analyst with Again Capital.
“The bottleneck has been addressed in Cushing [Okla]. We’re seeing those inventories plunge. We’re seeing it from all the rail movement. It’s having an impact, as are the pipeline reversals.”
Stockpiles of crude at Cushing fell by 2.69 million barrels last week, to 46.97 million barrels, the lowest level since December 2012.
Cushing is a major oil hub and delivery point for oil futures options contracts based on WTI crude.
Gasoline stockpiles fell 2.63 million barrels for the week ending July 5, while some analysts had expected to see an increase.
Despite all the chatter, fossil fuels will never, ever go away — in the sense of replacing it with something else. Something that won’t ultimately kill us. Horribly ironic, we’ve inherited an entire civilization founded and maintained by a substance that is quickly destroying our only place to live, and with all the brainic-bullshit, we can’t figure out a solution. A vicious circle humanity is caught in with no way out.
A shitload of people don’t care or don’t believe the disaster quickly approaching. Or maybe they think/believe somebody will figure out something before we all die.
In that regard, an upsetting bit of insight — Liam Halligan, chief economist at Prosperity Capital Management, in an op/ed today in the UK”s Telegraph on crude oil prices, inflation and the state of the world economy, he also noted this about fossil fuel use:
The bigger picture is that in each of the last four years, the annual rise in oil production due to shale and tar sands combined had been totally blown away by the increase in oil demand from the rest of the world — not least the fast-growing, oil-thirsty emerging markets.
Such nations are now growing slower than they were, but the IMF predicts theyâ€™re still on course to expand on average by 5pc or more over the next two years.
All that smelting, building, driving and consuming needs an awful lot of oil.
Even if Western oil demand falls over the coming years, the emerging giants of the East are sucking up crude so fast that global demand will keep rising, and at a rate much faster than â€œfrackingâ€ could hope to meet.
Of course, ‘fracking,’ is the process of gas extraction known as hydraulic fracturing, a function which has gone completely ape-shit crazy in the US and all over the last few years. But what a cost. And stupid.
Just this past week, a study on human-induced earthquakes published in Science, reports ‘fracking’ causes small earthquakes, which can lead to much-bigger ones. The surge in ‘fracking’ operations coincides with the increase in shakers — more than 300 earthquakes of magnitude 3 or greater in the central and eastern US were recorded from 2010 through 2012, compared to an average rate of 21 earthquakes per year from 1967 to 2000.
“Fortunately, there have been no deaths and damage has been limited to date, but it is obviously of concern to people as we think about the future of the energy economy,” William Ellsworth, a seismologist with the United States Geological Survey in Menlo Park, Calif., told NBC News.
Scientists have known for several decades that human activity can cause the ground to shake, but the rise in earthquake frequency paralleling the rise in production of oil and gas from shale rock formations has made the issue a hot topic, Ellsworth noted.
For one, scientists don’t know how big — and thus deadly — these induced earthquakes can be.
“We know a lot about the process that starts an earthquake — both natural and man-made ones — but what is really difficult for us to understand at this point is how far they will run once they get started,” he said.
Most induced earthquakes, like natural ones, are tiny, Ellsworth said.
But a few have been large enough to feel and caused minor damage, including a magnitude 5.7 event near Prague, Okla., on Nov. 6, 2011, that destroyed 14 homes and injured two people.
Another study, published in Science, linked it to an injection well used to dispose wastewater from oil operations.
Van der Elst and colleagues present evidence in Science for this phenomenon — called “triggered induced earthquakes” — occurring at the injection well near Prague and wells in western Texas and southern Colorado following major earthquakes in Japan in 2011 and Sumatra in 2012.
“They wouldn’t have happened if there wasn’t this pumping to raise the pore pressures, but then they would’ve happened sooner or later even without the trigger.
“The trigger makes them happen now as opposed to later,” van der Elst said.
So what do we do? We can do nothing — the oil companies are running the show, and right now the political clout just ain’t there — nothing now as opposed to pants-shitting panic later.
In a short space, however, a most-terrible situation will be obvious, but too late a trigger guard.