Nella Oil Fuel Trends

Jul 19-23, 2010

Mon, 26 Jul 2010 13:38:00 -0700

     The Energy Information Administration reports that the U.S. average price for regular gasoline increased a fraction of a cent, essentially remaining at $2.72 per gallon, 26 cents higher than one year prior. On the West Coast, the average increased about two cents to $3.06 per gallon. The average in California went up almost two cents to $3.13 per gallon.
     The national average price for diesel fuel decreased for a fourth consecutive week. The price drop was so small that the price remains unchanged at $2.90 per gallon, 40 cents higher than a year ago. The largest decline took place on the West Coast, consisting of Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, where the average dropped a penny and a half to $3.04 per gallon. The diesel average in California dropped less than a penny to stay at $3.12 per gallon.
     CNNMoney.com reported that oil rose to its highest level in three weeks on Wednesday, nearing $78 a barrel, and attributed the rise to signs of growing Chinese demand for energy and a cheerier Wall Street boosted prices. Weather activity contributed to the prices, too, as Tropical Storm Bonnie was named on Thursday afternoon, causing prices to squeeze upward in response to the storm's projected trajectory toward Texas or Louisiana coastlines. Prices receded after the storm spared the region.
     Chairman of the Federal Reserve, Ben Bernanke, delivered a gloomier economic outlook than predicted. In his semi-annual address to the congress, he said the U.S. economy appears "unusually uncertain" and that interest rates would remain near zero for "an extended period" of time.
     The Energy Information Administration reported that crude stocks climbed by 400,000 barrels last week, surprising analysts who were expecting inventories to fall by 1.6 million barrels, according to a consensus estimate collected by energy information provider Platts. Gasoline inventories and distillates, used to make heating oil and gas, also rose more than expected. A stronger dollar weighed on prices Wednesday. Crude oil, like other commodities, is priced in dollars, and a stronger dollar pressures prices downward. Experts say that $70 is a reasonable price for oil, but that $80 can not be supported by current economic conditions.

Chris Nobles
Commercial Fueling
Nella Oil Company

Jul 5-9 2010

Tue, 13 Jul 2010 08:25:00 -0700

     The Energy Information Administration reports that the US average price for regular gasoline fell three cents to $2.73 per gallon, a price that is 11 cents higher than last year. Prices slipped by half a cent to $3.05 per gallon on the West Coast; with California average falling one cent to $3.12 per gallon. The West Coast business region is comprised of Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington.
     As for diesel fuel, the national average fell more than three cents to $2.92 per gallon. This was 33 cents higher than at the same time the year before. The diesel price average on the West Coast declined two cents to $3.08 per gallon. The average diesel price in California lowered a penny and a half to $3.13 per gallon.
     The Energy Information Administration's Short-Term Energy Outlook remains about the same as last month's forecasts of domestic crude oil at $79.00 for the second half of 2010 and $83.00 per barrel for 2011. Given that the price of crude oil has come down since April of this year, the forecast for fuel price average through September is $2.80 per gallon; 12 cents lower than the forecast in April.
     The Oil Price Information Service said Tuesday that, according to an agency employee, the Environmental Protection Agency is likely to approve the use of 15% ethanol blends in some motor vehicles this fall, probably in a two-step process setting the stage for introduction of E15 next year. This appears to be an effort to meet the 2005 federal Renewable Fuel Standard, the revised version of which requires the use of 15.2 billion gallons of renewable fuels in the United States by 2012. With unleaded gasoline currently mixed with a nation-wide average of 9.2 percent ethanol, our national annual consumption of ethanol is at about 12.8 billion gallons per year. At projected 2010 gasoline consumption levels, a full ten percent ethanol blend could bring the US consumption to 13.5 billion gallons per year. The challenge moving forward is how to effect the required consumption of 36 billion gallons of renewable fuel by 2022.

Chris Nobles
Commercial Fueling
Nella Oil Company

Jun 21-25 2010

Mon, 28 Jun 2010 10:57:00 -0700

Last week, for the first time in six weeks, the U.S. average price for regular gasoline increased, moving up four cents to settle at $2.74 per gallon, according to the Energy Information Administration. This is 5 cents higher than last year at this time. The West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington) average climbed four cents to $3.03 per gallon, while the price in California moved up nearly a nickel to $3.10 per gallon.

     The national average price for diesel fuel rose for the first time since May 10, 2010, climbing three cents to $2.96 per gallon, 35 cents above the price a year ago. The West Coast price moved up four cents to $3.09 per gallon and the average in California jumped six cents to $3.13 per gallon.
     An Oil Price Information Service news report Friday noted that Congress had finally agreed on a bill to overhaul U.S. financial regulations and went on to say what the legislation might mean to the energy industry. The legislation included a provision that would limit federally insured banks' ability to trade derivatives, including energy swaps. With that news, domestic crude oil was up about a dime to around $76.60/bbl, and closed at $78.61 Friday.
     On Thursday Growth Energy announced that Underwriters Laboratory (UL) has issued certifications to two major fuel dispenser manufacturers for equipment dispensing any range of fuel ethanol from E-0 through E-85. This might help grow the higher-blend ethanol fuel markets, although providing specific infrastructure for ethanol blends beyond the standard Regular Unleaded rate (10% in California and Nevada) is another obstacle.
     Experts say the brewing storms in the Gulf of Mexico had an upward effect on the energy prices Friday, since roughly 25% of domestic oil and natural gas sources are located there.
     Earlier this week, a federal judge in Louisiana made news by overturning the Obama Administration's 6-month suspension of deep water drilling. Oil production in the region is an integral part of the economy in the Gulf states along with the tourism and seafood industries, which have also been hurt by the spill

Chris Nobles
Commercial Fueling
Nella Oil Company

Jun 14-18 2010

Mon, 21 Jun 2010 07:04:00 -0700

    The U.S. average price for regular gasoline has declined for five consecutive weeks. Prices dropped by more than 2 cents to hit $2.70 per gallon, 3 cents higher than a year ago. Over the last five weeks, the U.S. average price for regular gasoline has decreased by more than 20 cents per gallon. The prices on the West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington) and in California dipped a penny and a half to $2.99 per gallon and $3.05 per gallon, respectively.
    The national average price for diesel fuel also fell for the fifth week in a row, dropping two cents to $2.93 per gallon, 36 cents above a year ago. The average on the West Coast slid less than half a cent to $3.05 per gallon. In California, the average was unchanged at $3.07 per gallon.
    The American Petroleum Institute summarized oil product demand for May, reporting that gasoline demand for the month slowed 0.4% from last year to average 9.05 million barrels per day, the lowest May level since 2003.
    API's report could dampen some of the enthusiasm portrayed in the market by the suggestion that oil demand is on the rebound. API's gasoline numbers are a reminder that gasoline demand is sensitive to price. May 2010 retail prices were some 57cts/gal higher than prior year. Diesel fuel deliveries were higher in May than the year before.
    Domestic crude oil closed at $77.18 Friday, roughly $9.00 higher than at this time last month. Despite the BP spill, crude supplies are plentiful, and the estimated number of days of supply of crude in storage remains around 24 days.
    Consumption is expected to increase in early July during Independence Day weekend, and then to fall after that due to ongoing slow demand combined with the large supply of product in storage.

Chris Nobles
Commercial Fueling
Nella Oil Company

Jun 7-11, 2010

Tue, 15 Jun 2010 14:56:00 -0700

     The U.S. Energy Information Administration reports that although the U.S. average price for regular gasoline continued to weaken, the average slipped less than half a cent, remaining essentially unchanged at $2.73 per gallon. The price was ten cents higher than last year at this time. The West Coast price rose three cents to $3.01 per gallon, while the average in California increased more than four cents to settle at $3.07 per gallon.
     The national average for diesel fuel fell for the fourth week in a row, dropping three cents to $2.95 per gallon, 45 cents above the price a year ago. The cumulative drop for the four weeks amounted to 18 cents per gallon. The average on the West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington) slid two cents to $3.06 per gallon and the California price fell less than three cents to $3.07 per gallon.
     California legislation calls for a motor vehicle fuel excise tax rate increase of 17.3 cents and a corresponding sales and use tax rate decrease from 8.25 percent to 2.25 percent on sales of motor vehicle fuel. This will go into effect July 1, 2010. At current prices, the change will have little noticeable impact on cardlock prices. On the same day, motor fuels delivered into Washoe County, Nevada will see a tax increase as directed by Assembly Bill 516. At current gasoline and diesel prices, the increase equals about three cents per gallon.
     Experts disagree on the future of domestic fuel consumption for the next few years. The Oil Price Information Service asserts that 9% of domestic refining capacity should be permanently closed in order to bring supply and demand into balance. By contrast, Macquarie Commodities Research suggests that the demise of U.S. gasoline is greatly exaggerated and that U.S. gasoline demand can be expected to grow again over the next five years.

Chris Nobles
Commercial Fueling
Nella Oil Company

Jun 1-4, 2010

Wed, 09 Jun 2010 14:19:00 -0700

     Dropping for the third week in a row for a cumulative decline of nearly 18 cents, the U.S. average price for regular gasoline fell six cents last week to $2.73 per gallon, reports the Energy Information Administration. The price was 20 cents higher than the year before. Falling three cents to $2.98 per gallon, the average on the West Coast, comprised of Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington, slipped below $3.00 for the first time since March 8, 2010. The average in California also dipped three cents to settle at $3.02 per gallon.
     Falling below the $3 mark for the first time since March 29, the national average price for diesel fuel decreased four cents to $2.98 per gallon. The price was 63 cents above the average price a year ago. Prices fell in all regions of the country. The price on the West Coast fell about a nickel to $2.94 per gallon. In California, the average fell seven cents to $3.09 per gallon.
     The Bureau of Labor Statistics released a report that shows a gain of only 20,000 new jobs, after accounting for temporary census hiring. The results sparked a round of selling (and falling prices) in the petroleum commodities markets.
     July 1, 2010 will bring fuel tax changes in California and in Washoe County, Nevada. Neither tax change is expected to impact your fuel prices.
     According to the Oil Price Information Service, BP indicates that it has spent more than a billion dollars on clean up after the explosion and resulting oil spill in the Gulf of Mexico and will continue to pay all of its obligations related to the disaster, in which 11 workers died. BP indicates that the company is solvent and will be able to continue the required 20 to 24 million dollars per day estimated spill-related costs for many weeks to come.

Chris Nobles
Commercial Fueling
NELLA Oil Company/Flyers

May 10-14, 2010

Thu, 20 May 2010 09:49:00 -0700

     The Energy Information administration reports that the retail gasoline market saw a small gain, with the national average retail price for regular motor gasoline moving up nearly a penny to $2.91 per gallon. This price is 67 cents above last year. The averages on the West Coast and in California rose two cents to $3.10 per gallon and $3.14 per gallon, respectively.
     The national average price for diesel fuel increased a half cent to $3.13 per gallon, 91 cents higher than a year ago. The West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington) price dropped a penny to $3.23 per gallon, while the average in California moved up a cent to $3.27 per gallon.
     The EIA notes that as Memorial Day weekend approaches, many consumers are starting to pay more attention to gasoline prices, which have risen by about 11 cents per gallon since the end of March. Domestic refineries, which produce most of our gasoline, have already been gearing up for the upcoming summer driving season by switching over to the production of summer-grade products and preparing for higher utilization rates. Prices are influenced by three main factors: the change in price of the major feedstock, crude oil, the higher cost to produce summer-grade gasoline, and changes in refiner margins.
     Over the past five years (2005-2009), regular gasoline retail prices have increased an average of 18 cents per gallon from April to May, when most of the country is required to switch to summer gasoline. However, the EIA says the increase is expected to be just 7 cents per gallon this year. Projected refinery utilization rates that are below seasonal norms, high inventories, and relatively low year-over-year consumption growth are key factors.
     OPIS reported that Oil futures slipped back Wednesday morning to some $76/bbl and as of Friday, Oil prices have dropped to levels not seen since February. Associated Press said Friday that analysts expect oil prices will fluctuate for months in a volatile market created by plentiful oil supplies, sluggish demand and European financial woes that have weakened the euro and strengthened the dollar. Oil, like most commodities, is priced in dollars. A stronger dollar makes crude more expensive for overseas traders holding other currencies.
     The oil spill in the Gulf of Mexico gushing 200,000 barrels a day has so far not affected oil prices, according to analysts. It has not interfered with tankers carrying imported crude to Gulf ports or those taking refined products from there to other parts of the country. There is concern though that the spill could eventually slow shipments if vessels must be scrubbed of oil before they reach port.
     The Energy Department said this week that crude supplies in the U.S. rose by almost 2 million barrels and were well above the average range for this time of year. This means that despite the oil spill, crude prices remain low. Prices at the pump are poised to fall in response.

Chris Nobles
Commercial Fueling
Nella Oil Company

May 3-7, 2010

Tue, 11 May 2010 08:44:00 -0700

     The Energy Information Administration reports that the U.S. average price for regular gasoline increased five cents to $2.90 per gallon in the reporting period ending last week. The price was 82 cents above last year at this time. The average price on the West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington) rose two cents to $3.08 per gallon, while the average in California moved up three cents to $3.12 per gallon.
     Diesel fuel prices also increased in all regions of the country, with the national average moving up more than four cents to $3.12 per gallon, 94 cents higher than last year. The West Coast and California averages each increased three cents to $3.24 per gallon and $3.26 per gallon, respectively.
     As of Friday, the stock market slid for a fourth day, erasing 2010 gains for U.S. benchmark numbers. The price of crude oil sank to $75.11, capping the biggest weekly drop since 2008. Experts attribute the brief, 900-point drop in the Dow Industrial Average to a range of causes, including a glitch in an automated trading system causing erroneous trades, to "panic" selling. This was helped along by uncertainty in European financial markets as countries wrestled with whether to assemble a bailout package for debt-burdened countries who also use the Euro as currency.
     Reports Monday say that European Union countries came through with a $1 trillion emergency package of standby funds and loan guarantees for those member countries unable to secure credit elsewhere. The agreement of a bailout alone is expected to restore confidence in financial markets.
     There was good news regarding the American economy. Marketwatch reports that the US added 290,000 jobs in April, which was much better than expected despite temporary hiring for the 2010 U.S. Census. Financial markets are recovering this morning. It's been a volatile few weeks.

Chris Nobles
Commercial Fueling
Nella Oil Company

Apr. 26-30, 2010

Mon, 03 May 2010 14:37:00 -0700

     At the national level, the price for regular gasoline dipped a penny to $2.85 per gallon but was 80 cents above last year, according to the Energy Information Administration. Although the average on the West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington) dropped slightly, the change was so small that the price remained at $3.06 per gallon. The average in California remained at $3.09 per gallon following a slight decrease.
     The U.S. average price for diesel fuel increased nearly a half cent to $3.08 per gallon, 88 cents above a year ago. The average in the West Coast region increased about a penny to $3.21 per gallon, while the average in California was essentially unchanged at $3.23 per gallon.
     Two items in the news last week are expected to have some upward impact on financial markets, including energy. The Department of Commerce reported that the "real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.2 percent in the first quarter of 2010." While this was less of an increase than over the previous period, it may indicate some traction for economic recovery. The other potentially influential item is that the Greek bailout package could be finalized by the weekend.
     The Oil Price Information Service notes other factors that should allow prices to stay down. The spring U.S. gasoline market is characterized by modest consumption, increased ethanol use, high availability of imports, and high gasoline inventories. Even with refinery closures, these factors combine to provide ample supply after refinery outages are considered.
     In summary, they say, U.S refineries should be able to meet supply needs through June, with only a minimal potential for significant price impacts due to planned outages.
     Domestic crude oil was up 98 cents per barrel Friday to close at $86.15.

Chris Nobles
Commercial Fueling
Nella Oil Company

Apr. 19-23, 2010

Mon, 26 Apr 2010 14:27:00 -0700

     The Energy Information Administration reported that at $2.86 per gallon, the U.S. average price for regular gasoline was virtually unchanged from last week and was 80 cents above last year at this time. The West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington) price remained essentially unchanged at $3.06 per gallon and the average in California dipped almost a cent to $3.09 per gallon.
     The U.S. average price for diesel fuel increased half a cent but remained at $3.07 per gallon, 85 cents above last year. The West Coast average moved up less than two cents to $3.20 per gallon, while the average in California inched up nearly a penny to $3.23 per gallon.
     Crude oil rose $1.42 per barrel Friday to $85.12, which put it $1.88 above the previous Friday settlement. Experts say that the current economics would appear to dictate that crude oil remain around $70 per barrel. They speculate that crude prices were much higher last week due to continued investment from financial speculators as well as a rise in new home sales, hopeful figures for durable goods orders and perhaps worries last week of Mideast violence. In sum, they surmise, oil's attractiveness as an asset play or inflation hedge could continue to outweigh oversupplied markets.
     That being said, with prices above $80 per barrel and the economy still recovering, experts are talking of a tipping point - where high oil prices may negatively impact manufacturers and consumers and slow economic recovery.

Chris Nobles
Commercial Fueling
Nella Oil Company

Apr. 12-16, 2010

Tue, 20 Apr 2010 11:49:00 -0700

The U.S. average price for regular gasoline increased three cents to $2.86 per gallon, 81 cents above last year at this time. Moving up two cents to $3.06 per gallon, the smallest regional increase took place on the West Coast. The average in California inched up nearly a penny to $3.10 per gallon.
The U.S. average price for diesel fuel increased over a nickel to $3.07 per gallon, 84 cents above the price last year at this time. On the West Coast and in California, the prices jumped more than seven cents to $3.19 per gallon and $3.22 per gallon, respectively.

Chris Nobles
Commercial Fueling
Nella Oil Company

Apr. 5-9, 2010

Mon, 12 Apr 2010 14:44:00 -0700

     The Energy Information Administration (EIA) reports that the U.S. average price for regular gasoline increased three cents to $2.83 per gallon last week, 79 cents above last year. Growing by less than half a cent, prices on the West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington) and in California were essentially unchanged at $3.04 per gallon and $3.09 per gallon, respectively.
     The U.S. average price for diesel fuel shot up nearly eight cents, surpassing three dollars per gallon for the first time since early November 2008. At $3.02 per gallon, the price was 79 cents above last year at this time. The West Coast price jumped about nine cents to $3.11 per gallon, while the average in California moved up more than seven cents to $3.15 per gallon.
     EIA notes that refinery production of gasoline is under considerable pressure due to the increased ethanol blending with unleaded to accommodate the Renewable Fuel Standards increases. The amount of ethanol blended into gasoline increased during the summer of 2008 and ethanol is projected to average about 8.9 percent of total gasoline consumption by this summer. The Renewable Fuel Standard requires an increase in renewable fuels from a total of 10.6 billion gallons in 2009 to 12.3 billion gallons in 2010. The growth in ethanol consumption is being met primarily by domestic production.
     The Oil Pricing Information Service asserts that the price of crude oil has been dictated by the dollar and equities. Movements in these areas Friday would indicate that oil should go higher, since the dollar was weaker and equities slightly higher. A downgrade for Greek debt was seen as one of the reasons for the losses in oil last week although, some could be tied to profit-taking. Over the last three sessions, crude oil has lost close to $2 with Friday's loss of 47cts, putting settlement prices at $84.92 per barrel.

Chris Nobles
Commercial Fueling
Nella Oil Company

Mar. 29-Apr. 2, 2010

Fri, 02 Apr 2010 16:25:00 -0700

     According to the Energy Information Administration, for the first time in six weeks, the U.S. average price for regular gasoline fell, dropping two cents to $2.80 per gallon, 75 cents above last year at this time. The West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington) average price inched up less than half a cent to $3.04 per gallon and the California price slipped less than half a cent, remaining at $3.09 per gallon.
     The U.S. average price for diesel fuel also declined somewhat, slipping nearly a penny to $2.94 per gallon. The average was 72 cents above a year ago. At $3.03 per gallon, the diesel average on the West Coast was unchanged and the California price was essentially unchanged at $3.07 per gallon.
     Oil Price Information Service (OPIS) reported on Thursday that the U.S gasoline market is in better balance than most industry watchers believe, according to an equities research report on independent refiners by Macquarie Bank.
    "In general, our analysis suggests that the demise of the U.S. gasoline market as predicted by many industry observers is greatly exaggerated, at least over the next five years," the bank said.
    "We acknowledge that fuel efficiency gains of the vehicle fleet, negative impacts of future carbon legislation, and possible further penetration of biofuels could potentially erode petroleum-based gasoline fundamentals longer-term, but we believe the impacts of these factors (are) well beyond our five year window," it added.
    U.S. petroleum-based gasoline demand is expected to begin growing again over the next five years, as the number of miles traveled by the U.S. vehicle fleet has recovered from 2008 lows and demand destruction from fuel economy gains appears drastically overstated. Supply and demand are expected to remain in relative balance in 2010-11.
    Crude oil prices surpassed 18-month highs on Thursday morning and closed the week at $84.87 for domestic crude.
    OPIS reports that some of the strength for crude prices may be due to new money flowing into the market with the end of the first quarter yesterday. Typically, funds get additional money to push into the market at the beginning of each quarter.

Chris Nobles
Commercial Fueling
Nella Oil Company

Mar. 15-19, 2010

Mon, 22 Mar 2010 09:31:00 -0700

     For the fourth week in a row, according to the Energy Information Administration, the U.S. average price for regular gasoline increased. The average moved up about four cents to $2.79 per gallon and was 88 cents above last year at this time. The cumulative increase during the past four weeks amounts to 18 cents per gallon. Prices rose in all regions of the country, with the increases ranging from two cents to nearly five cents per gallon. The West Coast average grew by more than two cents to $3.01 per gallon while the California price increased a cent and a half to $3.06 per gallon.
     The U.S. average price for diesel fuel also went up for the fourth consecutive week. The increase of two cents moved the average to $2.92 per gallon, 91 cents above the year-ago price. The West Coast price was slightly higher at $3.01 per gallon and the California average moved up a penny to $3.07 per gallon.
      Crude oil prices are hovering around the $80 per barrel mark. OPIS reported that a stronger U.S. dollar against the backdrop of losses for major equities indices facilitated a drop back in crude values. When the dollar rallies, commodities become less attractive as a hedge. But Friday's close, down $1.52 to $80.68 per barrel for crude, didn't vary much from the recent range. The pattern has been for crude oil to rally over $80 per barrel and then fall back. That's just what happened last week. Softer prices are following bearish conditions for crude oil. Stocks have grown as refiners run less oil to make refined products in the climate of deteriorated demand.
     Long term, the Energy Information Association expects domestic crude prices to average above $80 per barrel this spring, rising to an average of about $82 per barrel by the end of the year and to $85 per barrel by the end of 2011.

Chris Nobles
Commercial Fueling
Nella Oil Company

Mar. 8-12, 2010

Tue, 16 Mar 2010 09:33:00 -0700

     The U.S. average price for regular gasoline increased for the third consecutive week, according to the Energy Information Administration, moving up a nickel to $2.75 per gallon. The price was 81 cents above the average last year at this time. Averages on the West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington) increased about five cents to $2.98 per gallon. The California price increased a nickel to $3.05 per gallon.
     For the third week in a row, the U.S. average price for diesel fuel increased. At $2.90 per gallon, the price went up by four cents to settle 86 cents above the price a year ago. On the West Coast, the average rose about five cents to $3.00 per gallon. The California price moved more than three cents up to $3.06 per gallon.
     Gas prices across Northern California continue to rise, due in part to optimism about the economy's short-term health, fluctuations in the strength of the US dollar, and seasonal factors, according to the American Automobile Association. Seasonal factors include the switch of refineries to summer blend fuels and investors betting on increasing consumption for summer.
     AAA Northern California's latest report shows the average gas prices in all but three Northern California metro areas are now above the $3-a-gallon mark.
     "Motorists will soon enter the traditional time of year when demand for fuel rises, as more people hit the road. This demand jump typically helps to bump up the pump price," AAA Northern California spokesman Matt Skryja said. "In the short term, demand remains quite soft, which is helping to keep gas and oil prices from drifting dramatically higher."

Chris Nobles
Commercial Fueling
NELLA Oil Company

Mar. 1-5, 2010

Tue, 09 Mar 2010 16:04:00 -0800

     The Energy Information Administration reports that for the second week in a row, the average price for regular gasoline increased in all major regions of the country, with the national average increasing nearly a nickel to $2.70 per gallon. The U.S. average price was 77 cents above last year. The price on the West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington) rose the most of any region, up seven cents to $2.94 per gallon. The price in California increased eight cents to $3.00 per gallon.
     The U.S. average price for diesel fuel moved up three cents to settle at $2.86 per gallon, 77 cents above a year ago. The West Coast price increased four cents to $2.96 per gallon as California also moved up four cents, to $3.02 per gallon.
     The earthquake in Chile last weekend paralyzed production at Chile's two major oil refineries and affected U.S. distillate prices somewhat, since the U.S. is a regular exporter of diesel to Chile with the Gulf Coast supplying ultra-low-sulfur diesel and the West Coast supplying high-sulfur diesel, according to the Oil Pricing Information Service. The U.S. oil market reacted bullishly early on Monday to the Chilean demand news before giving back the early gains to settle lower.
     In the U.S., inventories rose 4.1 million barrels, according to this week's Department of Energy report. The 341.6 million barrels of crude stocks are well above the average range for this time of year.
     The increased crude inventories come in tandem with increased refinery utilization. Refineries nationwide were operating at 81.9% last week, up 0.7% from the prior week. Typically that would cause crude stocks to decrease with more crude needed for refinery input.
     Last week also saw 9 million barrels per day of crude imported into the U.S. -- the first time since September that back-to-back crude imports have seen above 9 million barrels per day. Normally, that would have pushed crude prices and the rest of the complex lower. However, domestic crude seemed shrugged off the stock gains and rose higher. Crude oil settled at $80.87 per barrel, up $1.19 per barrel. That's the highest settle since Jan. 11.

Chris Nobles
Commercial Fueling
NELLA Oil Company

Feb. 22-26, 2009

Mon, 01 Mar 2010 11:55:00 -0800

     Rising nearly a nickel to $2.66 per gallon, the U.S. average price for regular gasoline was up for the first time since January 11. The price was 75 cents above last year at this time. The West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington) average moved fractionally higher to $2.87 per gallon. The price in California dipped nearly a penny to $2.92 per gallon.
     After five weeks of decline, the U.S. average price for diesel fuel rose about eight cents to settle at $2.83 per gallon. The average is 70 cents above a year ago. Diesel prices rose in all regions of the country. The average on the West Coast increased seven cents to $2.92 per gallon, while the California price moved up eight cents to $2.98 per gallon.
     On Monday the Oil Pricing Information Service crude price reached the $80 per barrel mark amid some headlines perceived as bullish for oil markets. The U.S. dollar edged lower, and the U.S. Central Bank was expected to keep interest rates low. A French refinery workers strike and Iran's nuclear plans were also cited as events deemed influential in pumping up the price. The price for domestic crude sagged during the week and then picked up $1.49 on Friday to close at $79.66 per barrel.
     San Antonio-based AGE Refining filed for Chapter 11 protection on Feb. 8. The company ceased operations last week, following the failure to secure letters of credit to purchase crude supplies. One expert expressed surprise that more small, independent refineries have not yet filed for bankruptcy. It is estimated that approximately 5 percent of US petroleum refining capacity has shut down. Analysts estimate that the permanent shut down of about 10% of petroleum refining capacity in the U.S. needs would boost the ailing crude processing margins to define a true change in the refining industry.
     Since prices of crude purchased for refining and the sell price of finished products are both volatile, some companies cease operations only temporarily, waiting until the markets change and refining is profitable again. Crude oversupply and increased refining capacity around the world are two factors experts point to as putting long-term pressure on US refiners. According to a recent report by an energy consulting firm, size is the key factor influencing refinery survivability and next is location. Large-scale refiners have a better chance of making the economics work.The smaller capacity refineries have been feeling the economic pinch lately, especially those on the Gulf coast.
    One more thing - March is when refineries change to summer-grade gasoline. This typically causes gasoline prices to rise. You can count on it.

Chris Nobles
Commercial Fueling
Nella Oil Company

Feb. 15-19, 2009

Mon, 22 Feb 2010 11:07:00 -0800

     For the fifth consecutive week, the U.S. average price for regular gasoline fell, according to the Energy Information Administration (EIA). Settling at $2.61 per gallon, the average dipped more than four cents but was 64 cents above one year ago. Prices were lower in all regions, with the average on the West Coast, comprised of Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, dropping about three cents to $2.86 per gallon. The price in California dipped three and a half cents to $2.93 per gallon.
     Also dropping for the fifth week in a row, the U.S. average price for diesel fuel slipped a penny to $2.76 per gallon, 57 cents above the price a year ago. Diesel prices fell in all regions of the country. At $2.85, the average on the West Coast slipped more than a penny, while the price in California dropped two cents to $2.90 per gallon.
     Gasoline demand last week fell to 8.521 million barrels per day, reflecting the lowest single week for gasoline demand since Jan. 30, 2004. The rolling four-week average demand level of 8.630 million barrels per day represents the lowest number on that basis since Feb. 13, 2004. For further perspective, consider that from 2006 through 2008, these numbers were regularly above 9 million barrels per day.
     Experts say that supply figures support the contention that a sequence of storms, and not high prices or a soft economy, are the culprit in the latest slide. The Middle Atlantic region, where snowfall totals were measured in feet, saw gasoline inventories increase by 2.6 million barrels. The rest of the country saw a modest decrease in stocks.
     The EIA notes that the United States' net imports of gasoline, including net imports of both finished gasoline and blending components, increased significantly over the 1997 to 2007 period, peaking in 2007 at more than 1 million barrels per day, or 11 percent of total U.S. gasoline consumption. Since then, however, gasoline imports have fallen to an estimated 751 thousand barrels per day in the period from January through November 2009. This decline reflects a decrease in gasoline consumption due to relatively high prices at the pump, the increasing ethanol in U.S. gasoline blends, and the global economic downturn in 2008 and 2009.

Chris Nobles
Commercial Fueling
Nella Oil Company

Feb. 8-12, 2010

Mon, 15 Feb 2010 13:18:00 -0800

     The Energy Information Administration reports that the U.S. average price for regular gasoline fell for the fourth week in a row, dropping less than a penny to reach $2.65 per gallon, which was still 73 cents above last year. The West Coast average (Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington) dropped almost 2 cents to $2.90 per gallon and the price in California decreased more than a penny to $2.96 per gallon.
     Diesel prices also dropped for the fourth consecutive week, with the national average falling more than one cent to $2.77 per gallon, which was still 55 cents above a year ago. West Coast prices decreased almost two cents to $2.86 per gallon, while the average in California slipped three cents to $2.92 per gallon.
     In the news, persistent blizzards in the eastern United States kept drivers off the road and kept the pressure off of gasoline prices. The storms did little to raise heating oil prices, however, as inventories for distillates, the fuel category including heating oil and diesel, are still high.
    Last Friday's crude oil price drop to below $70 per barrel was not repeated this week, but early week advances to $75-$76 bbl also could not be sustained, and domestic crude oil closed at $74.15, down $1.15/bbl for the day but up $2.94/bbl from last Friday.

Chris Nobles
Commercial Fueling
Nella Oil Company

Feb. 1-5, 2010

Wed, 10 Feb 2010 15:33:00 -0800

     The Energy Information Administration reports that for the third week in a row, the U.S. average price for regular gasoline declined. Settling at $2.66 per gallon, the average fell more than four cents, to 77 cents above last year. The West Coast average, consisting of prices from Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, fell three cents to $2.91 per gallon and the price in California slipped three cents to $2.98 per gallon.
     Diesel prices also dropped for the third consecutive week in all regions of the country, with the national average falling a nickel to $2.78 per gallon, still 54 cents above a year ago. A drop of four cents took the average on the West Coast to $2.88 per gallon, while the average in California slipped four cents to $2.95 per gallon.
     In early January domestic crude oil reached $82.74 per barrel, but Friday the product settled at $71.19 per barrel, down $1.95 for the day and some $1.80 below last Friday's settlement. This downward price trend appears to make sense considering the plentiful supply of crude oil in storage and continuing low refinery runs.
     The Oil Price Information Service (OPIS) reports that oil prices experienced one of their biggest single-day drops in six months on Thursday. Crude oil was down by nearly $4 per barrel, possibly attributed to another wake of jobless data that pointed to more claims than expected.
     Domestic refiners ran their plants at a 77.7% clip, a drop of 0.8% from the previous week. The operating rate is the lowest since storm-inspired refinery downtime in September of 2008. Looking beyond storm-related shutdowns, the operable capacity is the lowest on record for U.S. refiners as EIA data goes back as far as 1990.
     OPIS points out another multi-year low that stood out was the four-year gasoline demand average. Over the last four weeks, gasoline demand averaged 8.644 million bbl, down a half-percent versus last year. But the most recent four-week average of 8.644 million barrels per day is the lowest since the four weeks ending Feb. 13, 2004.

Chris Nobles
Commercial Fueling
Nella Oil Company

Jan. 25-29, 2010

Wed, 10 Feb 2010 15:32:00 -0800

     As reported by the Energy Information Administration, the U.S. average price for regular gasoline dropped three cents to $2.71 per gallon, declining for the second week in a row. This was 87 cents more than the average a year ago. On the West Coast, which includes Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, the average slipped a penny to $2.94 per gallon. In California, the average fell two cents to $3.01 per gallon.
     Diesel prices also decreased for the second consecutive week, with the national average dropping four cents to $2.83 per gallon. The average is 57 cents more than the price a year ago. In fact, diesel prices declined throughout the country. On the West Coast, the average dropped about three cents to $2.92 per gallon, with the California price dipping two cents to $2.99 per gallon.
     The Oil Price Information Service (OPIS) reports that the five-week low price of crude oil represents a market that remains overpriced due to influences of the dollar and economic optimism, according to analysts. "Miserable" oil demand and China's bid to have large banks raise their reserve ratios are cited as big contributors to the recent $10 per barrel decline in domestic crude prices.
     OPIS goes on to report that the latest data from the California Energy Commission shows refiners cutting crude oil runs again as profit margins dwindle. According to the Weekly Fuels Watch for the week ending Jan. 22, refiners processed 10.065 million bbl of crude oil, a decrease of just over 650,000 bbl from the previous week. Crude runs were the lowest last week since the week ending July 31 of last year.
     As late as December 3^rd, Reuters reported that investment bank Goldman Sachs predicted the $90 per barrel of crude for 2010 with prices rising to $110 for 2011. Some experts see the factors noted above as a reason to expect lower prices for crude, from $72 in the near term to $65 and as low as in the $40's for a barrel of oil long-term. Other experts state that very long-term the financial markets will support $50, but not much lower.

Chris Nobles
Commercial Fueling
Nella Oil Company

Jan. 18-22, 2010

Mon, 25 Jan 2010 10:28:00 -0800

     The U.S. Energy Information Administration reports that last week the U.S. average price for regular gasoline dropped a penny to $2.74 per gallon, which is 89 cents higher than the average a year ago. The West Coast, comprised of Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington saw the average move down more than a penny to $2.95 per gallon. The average in California also fell, slipping two cents to $3.03 per gallon.
     Diesel prices also declined somewhat, with the national average falling a penny to $2.87 per gallon, 57 cents above the price last year. On the West Coast, the average dropped about two cents to $2.95 per gallon. The average in California dipped two cents to $3.01 per gallon.
     Reuters news reported Tuesday that according to a company spokesman, Chevron Corp. plans to restructure its refinery operations, cutting some jobs and exiting some markets.
     U.S. refiners have been shutting down operations as the rising costs for crude oil squeeze margins and outpace increases in prices for refined products such as gasoline, heating oil, diesel fuel and jet fuel.
     In fact, experts report that refineries have cut production down to a little more than 78 percent of capacity and that we should expect more cuts over the next quarter. This compares with an average refinery production pace of about 87 percent over the past 5 years.
     This month California went to a mandatory 10 percent blend of cleaner-burning ethanol in gasoline. Diesel is not affected. Increased ethanol blending displaces gasoline, further eroding demand, even when drivers are purchasing the same amount of fuel. These factors would seem to be allowing not only crude, but the "street price" of fuel to drop. Indeed, domestic crude closed Friday at under $74.25 - back in the $70-$75 range - and financial experts are predicting a soft, or "bear" financial market in the near term due to better weather for the time of year and disaster attention shifting from oil-producers Iran and Russia to Haiti. So we might see some prices easing over the next two months before the usual seasonal increase by late March/early April.

Chris Nobles
Commercial Fueling
Nella Oil Company

Jan. 11-15, 2010

Mon, 18 Jan 2010 15:14:00 -0800

     The U.S. average price for regular gasoline rose for the third week in a row, according to the Energy Information Administration, advancing nearly nine cents to settle at $2.75 per gallon. Despite an increase of more than 16 cents over the past three weeks, the average remains $1.36 per gallon less than the all-time high price set on July 7, 2008. Prices on the West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington) increased by nearly seven cents, to $2.97. In California, the average rose six cents to $3.05 per gallon.
      National average diesel prices also increased sharply, moving up eight cents to $2.88 per gallon, 57 cents above the price a year ago. The smallest increase took place on the West Coast, where the price rose six cents (as compared with seven to ten cents in other parts of the country) to $2.97 per gallon. In California, the average went up seven cents to $3.03 per gallon.
     Experts note that the upward price trend for gasoline and diesel fuel has lagged behind crude's 20 percent price-spike over the last few weeks. These increases have been fed by new money coming into the commodities market, along with a stretch of cold weather globally that has extended from China to Europe and the U.S., increasing demand for distillates.
    Financial markets can't ignore the large amounts of surplus fuel in storage both in the U.S. and at crude sources, as OPEC countries store oil in an effort to comply with lower production quotas designed to prop up the per-barrel price. Ongoing sluggish demand makes these efforts less effective, however, and OPEC spokespeople reportedly are pleased with crude prices between $70 and $80 per barrel.
     West Texas crude closed at $82.74 on Tuesday of last week, but slid all week to hover around $78.00 per barrel on Monday.

Chris Nobles
Commercial Fueling
Nella Oil Company

Jan. 4-8, 2010

Mon, 11 Jan 2010 09:47:00 -0800

     As reported by the Energy Information Administration, the U.S. average price for regular gasoline increased six cents to $2.67 per gallon, 98 cents higher than the price a year ago. Prices rose in all regions of the country. On the West Coast, comprised of Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, the average increased four cents to $2.90 per gallon. The average in California increased over a nickel to $2.99 per gallon.
     The national average price for diesel fuel gained nearly seven cents to settle at $2.80 per gallon, 51 cents per gallon higher than last year at this time. The average on the West Coast went up about seven cents to $2.91 per gallon, while the price in California rose six cents to $2.96 per gallon.
     According to the Department of Energy, gasoline supplies saw a big build at 3.7 million, mostly on the West Coast and in the Midwest. But despite a surplus of stocks, demand numbers continue to be dismal, with experts reporting a drop in demand of as much as 333,000 barrels per day to 8.741 million barrels per day for gasoline. Diesel demand didn't fare much better, dropping 11,000 barrels per day over the week. "That's the lowest [gasoline] demand figure I've seen in years," said one paper trader.
     The Oil Price Information Service says that despite high stocks and low demand, crude still gained $3.39 bbl on the week, putting prices at their highest level since the second half of October 2008, even on Friday, when the U.S. dollar lost about 0.6% in value.
     The Wall Street Journal ran an interesting article by Ben Casselman on Tuesday about drilling for oil in progressively deeper water. He reports that Western oil companies have announced tapping significant volumes of crude in the Gulf of Mexico as well as off the coasts of Ghana and Brazil. Only the major oil companies have the enormous amounts of money required to try to find oil - and not always to succeed - in harder to reach places. These successes are good news for the end consumers if the economics are allowed to play out. Unfortunately, Wall Street has incentive to make revenue directly from the rising price of crude oil, without the responsibility of actually handling the product. Domestic crude oil was up to $79.39 per barrel at the end of the reporting period last week and experts in the financial industry express hope for $85.00 per barrel prices later this year. Let's hope otherwise.

Chris Nobles
Commercial Fueling
Nella Oil Company

Dec. 28-31, 2009

Mon, 04 Jan 2010 14:34:00 -0800

     The Energy Information Administration reports that the U.S. average price for regular gasoline increased two cents to $2.61 per gallon, 99 cents higher than the price a year ago. Prices rose in all regions of the country except the Rocky Mountains, where the price slipped less than a penny. On the West Coast, which includes Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, the average increased one cent to $2.86 per gallon. The California average price rose two cents to $2.93 per gallon.
     For the first time in eight weeks, the national average price for diesel fuel increased. It rose by such a small amount, however, that the nearest-penny average remained unchanged at $2.73 per gallon. The diesel average is now 41 cents per gallon higher than at this time last year. The average on the West Coast went up about two cents to $2.84 per gallon. Finishing at $2.90 per gallon, the California average rose a penny.
     The total US stored supply of gasoline is down slightly to an estimated 29.6 million barrels, according to the EIA. This figure has remained quite consistent over the last six weeks, and represents 3 million barrels more than at this time last year. In terms of days' worth of supply, the gasoline in storage would last the country approximately 23.9 days at the current level of consumption. This is almost a day more than the estimate one year ago.
     Described by industry experts as an effort by financial investors to push up the price during an otherwise low-volume week, crude oil traded briefly at $80.00 on Thursday and then retreated to close at $79.36. Experts predict further settling of the crude price back to the mid-seventies or lower in the next few weeks.

Chris Nobles
Commercial Fueling
Nella Oil Company

Dec. 21-24, 2009

Mon, 28 Dec 2009 16:58:00 -0800

     According to the Energy Information Association, the U.S. average retail price for regular gasoline totaled $2.59 per gallon as of December 21, 2009, one cent lower than last week but 94 cents above a year ago. The West Coast, comprised of Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, continued as the highest regional price, dwindling only slightly to stay at $2.85 per gallon. The average price for regular grade in California moved slightly higher to $2.91 per gallon, a cent over last week and $1.11 per gallon more than last year.
    The retail diesel fuel price declined for the seventh straight week, falling 2 cents to $2.73 per gallon, but still 36 cents higher than last year. The West Coast price fell 3 cents to $2.83 per gallon. California prices slipped 2 cents to fall to $2.89 per gallon.
     The EIA also reports that as the end of 2009 approaches, retail gasoline prices sit squarely in the middle of a 5-year range, having slowly declined over the last two months. The U.S. average retail price for regular gasoline fell to $2.59 per gallon as of December 21, 2009, a drop of more than 10 cents from the year's high of $2.69 per gallon seen on November 2. Although the average gasoline price is currently 94 cents higher than a year ago (when prices had fallen to their lowest level in nearly 4 years), it is slightly below the average of $2.65 per gallon over the 2005-2009 period.
     Overall, gasoline prices in the second half of 2009 have been relatively steady in comparison to recent years. After the roller-coaster ride of 2008, which saw a high of $4.11 per gallon, and a low of $1.61, this year has been comparatively calm. Gasoline prices in 2009 rose more than $1 per gallon from early January to late June, but since then have stayed between $2.46 and $2.69, a range of only 23 cents.
     As for crude oil, at $73.30, the price for a barrel of domestic crude is $70.13 more than this time last year. Once again, we note that crude prices seem to be stable around the $70 to $75 range. Domestic production is up to 5.524 million barrels per day - more than half a million barrels more than one year ago. Crude oil imports, however, are down from 9.118 million barrels per day at this time last year to 7.707 million barrels per day last week. A marked decrease on foreign oil is the real silver lining, and the increase in domestic production bodes well for our economy.

Chris Nobles
Commercial Fueling
Nella Oil Company

Dec. 7-11, 2009

Mon, 14 Dec 2009 14:58:00 -0800

     At $2.63 per gallon, the U.S. average price for regular gasoline was half a cent above last week and 94 cents higher than a year ago, according to the Energy Information Administration. The average on the West Coast, which includes Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington, slipped half a penny to $2.86 per gallon. The average in California fell a penny to $2.91 per gallon.
     Recording the fifth consecutive weekly decrease, the national average price for diesel fuel slipped a fraction of a cent to $2.77 per gallon. The average is 26 cents per gallon higher than the average last year at this time. The price for diesel fuel in California fell less than one cent.
     Fuel demand advanced again above 9 million barrels per day last week and on a four-week basis is 1.2% above last year. Experts suggest that at the end of 2009 the level of stored motor fuel may be the highest since 2004 (214.3-million bbl), and that there is a reasonable chance current levels of 216.3 million bbl might be sustained. This would result in the highest year-end inventory since 1993. Even though demand is improving, the high amounts of fuel in storage and sagging crude prices have allowed retail fuel prices to decline.
     OPEC output has reportedly increased to its highest levels in about a year, estimated at about 60% of stated quotas. Although much of the increase has been absorbed by Chinese demand, the sharp price decline of the past month along with higher output would indicate that the price of crude will continue to be weak. From the third week of October until the first week of December, OPEC weekly average oil prices have oscillated within a narrow range from 75.79 to 77.11 dollars per barrel. In the five trading days last week, however, the OPEC price dropped constantly from 75.76 U.S. dollars to 70.85 U.S. dollars per barrel.

Chris Nobles
Commercial Fueling
Nella Oil Company

Nov 30 - Dec 4, 2009

Wed, 09 Dec 2009 10:50:00 -0800

     The U.S. average price for regular gasoline slipped a penny to $2.63 per gallon, $0.82 higher than the price a year ago. The average on the West Coast, which includes Alaska, Arizona, California, Hawaii, Nevada, Oregon and Washington, slipped a cent and a half to $2.87 per gallon and the price in California dropped two cents to $2.92 per gallon.
      The national average price for diesel fuel dipped a cent to $2.78 per gallon, the lowest level in over a month. The average is $0.16 per gallon higher than last year. The highest average occurred on the West Coast at $2.89 per gallon. The average price in California was $2.95 per gallon, a drop of less than a penny from last week.
      Jobless numbers eased to ten percent in November, according to the US Bureau of Labor Statistics. While this would seem to point to economic recovery, some labor analysts point out that this may be due to job seekers becoming ineligible for unemployment or taking part-time or temporary work.
      If holiday spending is any indication, then things may be looking up, indeed. Retailers registered about $10.66 billion in sales Friday, up 0.5% from a year ago, according to a report Saturday from sales and traffic tracking firm ShopperTrak. Online sales were up an estimated 35 percent over 2008 figures.
      The domestic crude oil price finished last week's reporting period at $75.95, down 88 cents from the week prior and almost $20.00 less than one year ago. The estimated number of days' supply in storage has crept up to 24.5 days, compared with 21.9 days worth of fuel one year ago. This doesn't appear to bother OPEC, which has expressed satisfaction with current crude oil price levels.

Chris Nobles
Commercial Fueling
Nella Oil Company

Nov 23-27, 2009

Mon, 30 Nov 2009 13:38:00 -0800

     Moving up a penny to $2.64 per gallon, the U.S. average price for regular gasoline increased for the first time in three weeks, according to the Energy Information Administration. The average was 75 cents more than the price a year ago. In the West Coast region, which includes Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, the average slipped a penny to $2.88 per gallon. The average in California dropped two cents to $2.94 per gallon.
     Although the national average price for diesel fuel slipped a fraction of a cent, it was relatively unchanged at $2.79 per gallon. The average is 12 cents per gallon higher than last year at this time. In the West Coast region, the average slipped a fraction of a cent, to remain essentially unchanged at $2.90 per gallon. The price in California dipped a penny to $2.95 per gallon.
     Since supply is a solid factor affecting fuel prices, the government monitors potential supply issues. As required under Section 804 of the Energy Independence and Security Act of 2007, scheduled oil refinery maintenance outages are reported to the EIA. The EIA then issues a report estimating the potential effect of the outages on fuel stocks. This year supplies of stored fuel are plentiful and refinery outages are not expected to impact consumers. Demand for petroleum products is low due to the poor economy, and increased use of ethanol as an oxygenate to promote cleaner burning of the fuel has reduced petroleum use even further.
     As we have seen, news stories can affect prices, too. On Wednesday, Dubai World, the city-state's largest corporate entity, asked for a six-month stay on the repayment of its debts. After this news caused a sharp intraday-loss on Friday, oil prices have now returned to the trading range that they have maintained since the middle of October.
     "Prices remain well entrenched in the $75-$80 a barrel band in the absence of any macroeconomic or financial discontinuity, with oil price volatility... having subsided significantly as the year has progressed," said Barclays Capital to investors, according to the Dow Jones Newswire today.
     Domestic crude oil today is priced at $76.28.

Chris Nobles
Commercial Fueling
Nella Oil Company

Nov 16-20, 2009

Mon, 23 Nov 2009 11:05:00 -0800

     For the second consecutive week, the U.S. average price for regular gasoline decreased, according to the Energy Information Administration. The national average slipped about four cents to $2.63 per gallon, $0.56 above the price a year ago. The West Coast average slipped a penny to $2.89 per gallon, while the price in California dropped two cents to $2.96 per gallon.
     Also dropping for the second week in a row, the national average price of diesel fuel fell a cent to $2.79 per gallon. The average is two cents per gallon below the price last year. The average in California decreased about a penny to $2.96 per gallon. Despite the drops, the average on the West Coast was higher by $0.13 than a year ago.
     The EIA also reported gasoline demand at 170,000 gallons more than the week prior, perhaps indicating the start of holiday travel. The American Automobile Association expects 38.4 million people will travel 50 miles or more during the four-day weekend. This would represent a 1.4 percent increase compared to last year.
     Crude prices are maintaining just above $75.00 with a finish at $76.34 last week, down $1.06 from the week prior, and up from $57.18 the year prior. Investors holding stronger currencies can buy more dollar-based crude when the U.S. currency falls.
     Although crude prices are higher, refiners' finished products remain low-priced due to weak demand, so refineries are cutting back. The Associated Press reports that Friday Valero Energy became the latest to shut down a refinery, the largest U.S. facility shut down so far this year. Other refiners, like Sunoco and Western Refining, have shut down plants in recent months and laid off almost 1,000 workers.

Chris Nobles
Commercial Fueling
Nella Oil Company

Nov 9-13, 2009

Tue, 17 Nov 2009 09:12:00 -0800

The U.S. average price for regular gasoline decreased last week, according to the Energy Information Administration, slipping three cents to $2.67 per gallon, but staying 44 cents above a year ago. Prices declined across all the regions. The prices on the West Coast were relatively unchanged at $2.60 and $2.91 per gallon, respectively. In California, the average slipped about a penny to $2.98 per gallon.

The national average price for diesel fuel went down a penny to $2.80 per gallon, 14 cents per gallon below last year. Prices decreased in most regions of the country. Prices on the West Coast slipped only a fraction of a cent, remaining at $2.75 and $2.91, respectively. The average in California was essentially unchanged at $2.97 per gallon.

According to the Oil Price Information Service, the diminished demand for fuel is having lasting effects on the refining industry. The period of prolonged low refining margins has started to generate plant mergers and permanent idling in the U.S. refining business, including on the West Coast, where demand and supply has traditionally been balanced, if delicately. While mergers and acquisitions may make good business sense, California's very strict antitrust laws may forbid future business combinations.

The refining business world-wide is subject to government requirements to improve fuel quality, generally through removing impurities and contaminants. The cost of compliance with these rules can be enormous, and it is often the impending capital expenditure required to meet a new regulation that forces refineries to merge, convert to terminals or to shut down entirely.

Refiners processed slightly more crude oil last week than the previous week, according to data from the California Energy Commission. Still, crude oil stocks saw a small build to 15.846 million bbl. The oil inventories were behind last year by a fairly small amount of around 100,000 bbl. The price for crude oil ended at $77.40 for the period last week, up 36 cents over the prior week and $16.34 more than at this time last year.

Chris Nobles

Commercial Fueling

Nella Oil Company

Nov 2-6, 2009

Mon, 09 Nov 2009 13:39:00 -0800

     The U.S. average retail price for regular gasoline gained 2 cents last week to reach $2.694 per gallon, the highest level this year. This surpassed the previous 2009 weekly high of $2.691 per gallon seen on June 22. The national average is now 29 cents per gallon higher than it was a year ago. Prices increased in all regions of the country last week. The price rose a bit over two cents in the West Coast region. Prices ranged from a low of $2.56 in the Gulf Coast to a high of $2.91 in the West Coast. The average in California was essentially unchanged at $2.99 per gallon.
     The national average price of diesel fuel inched up about a penny to $2.81 per gallon. Despite a cumulative increase over the past four weeks of 23 cents per gallon, the average remains 28 cents per gallon below a year ago. Prices increased in most regions of the country. The West Coast price edged up about a penny to $2.91 per gallon. In California, the average rose about a penny to $2.97 per gallon.
     Experts say that gasoline prices may have reached their cost-based peak relative to crude oil prices. If crude oil remains in the $80.00 range, then gasoline prices should not fluctuate too far from current levels. Commodities market analysts note reluctance above $80/bbl for crude oil as investors move in and out of commodity assets.
     Petroleum prices were pushed higher last week by Department of Energy data that showed stock draws for products and crude, and exceptionally low crude oil imports. Energy Information Administration data is by no means constructive to higher prices across the board, however. The rest of the world may indeed be seeing a demand recovery but the U.S. is still in the energy demand doldrums.

Chris Nobles

Commercial Fueling

Nella Oil Company

Oct 26-30, 2009

Mon, 02 Nov 2009 15:11:00 -0800

For the first time since October 20, 2008, the national average price is now higher than it was the year before. The U.S. average price for regular gasoline increased for the third consecutive week, shooting up ten cents to $2.67 per gallon, according to the Energy Information Administration. Still, this is $1.44 below the all-time high in July of 2008. Prices increased in all the major regions of the country last week. The smallest increase occurred in the West Coast, where the average rose just under two cents to $2.89 per gallon. The price in California was essentially unchanged at $2.99 per gallon.
The national average price of diesel fuel climbed to $2.80 per gallon, an increase of a dime. Despite the rise, the average remained $0.49 below the price a year ago. Prices increased in all regions of the country. On the West Coast, the average went up eight cents to $2.90 per gallon and the California price jumped nine cents to $2.97 per gallon.

Counteracting the upward price pressure is excess supply. According to the Energy Information Association, domestic gasoline production increased over the week before. Along with continued lagging consumption, this added up to gasoline inventory supplies registering at 200,000 barrels more than the week prior.

The Commerce Department said Thursday that the economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes. The report delivered the strongest signal yet that the economy entered a new, though fragile, phase of recovery. It appears that the stronger economy and the weak dollar are pushing crude prices, and fuel prices, higher.

Chris Nobles

Commercial Fueling

Nella Oil Company

Oct 19-23, 2009

Mon, 26 Oct 2009 13:56:00 -0700

     The U.S. average price for regular gasoline jumped nearly nine cents to $2.57 per gallon last week. Even with the increase, that price remained 34 cents below a year ago and $1.54 less than the all-time high price set on July 7, 2008. While the rest of the country was up in gasoline prices, the West Coast was down. The price dipped more than two cents to $2.87 per gallon. The average in California also fell, dropping three cents to $2.99 per gallon.
     The national average price of diesel fuel increased nearly 11 cents to $2.71 per gallon but remained $0.78 below last year and $2.06 below the all-time high price set on July 14, 2008. On the West Coast, the average for diesel increased nine cents to $2.82 per gallon and the price in California jumped eight cents to $2.87 per gallon.
     Gasoline supplies have declined slightly over the last two weeks, perhaps due to cuts in refinery runs. One news story last week reported that the refinery production rate was at 80.9 percent of capacity. Refineries might be reducing output in an effort to support gasoline prices. When crude prices are up and gasoline prices are down, refinery profits diminish or disappear.
     Experts seem to agree that there was no sound economic reason for the prices of different grades of crude to close last week at $74.58 and $78.54. They cite the weak U.S. dollar as responsible for driving more investment money into commodities such as oil. Experts are still predicting a high crude price of around $84.00, which would push gasoline prices upward. This is in spite of the fact that stored crude supplies are maintaining almost two million barrels higher than a month ago and 28 million barrels than a year ago, and that consumption remains down. The Energy Information Administration estimates that there is almost 24 days of crude oil supply in storage. This represents two days more than at this time last year, and should, in theory, weaken prices. In the same week, however, domestic crude rose in price more than $6.00.

Chris Nobles
Commercial Fueling
NELLA Oil Company

Oct 12-16, 2009

Mon, 19 Oct 2009 09:56:00 -0700

     The U.S. average price for regular gasoline increased for the first time since the week of August 10, 2009, according to the Department of Energy. Although the price rose two cents to $2.49 per gallon, the national average remained 66 cents below the price one year ago. Changes were mixed across the country, with prices continuing to fall in the Rocky Mountains and the West Coast while increasing in the East Coast, the Midwest, and along the Gulf Coast. The price on the West Coast dropped the most of any region, falling a nickel to $2.90 per gallon. The average in California also fell a nickel to settle at $3.02 per gallon.
     For the first time in six weeks, the national average price of diesel fuel increased. Moving up two cents to $2.60 per gallon, the average was $1.06 less than last year. On the West Coast, the average moved up a penny to $2.73 per gallon and the average in California was essentially unchanged at $2.79 per gallon.
     Experts expressed surprise at the data in the weekly Department of Energy report. Gasoline stocks fell more than expected while production also fell. Analysts noted that none of the decline in gasoline stocks was associated with demand improvement. The gasoline supply continues to maintain a sizable surplus compared with averages and refinery activity reportedly dropped by more than 4% of capacity.   While a notable decline in the runs may have been interpreted by some as a reason for prices to increase, it may be more of an indication of continued weak product demand.
     Crude oil prices settled at a one-year high on Wednesday, propped up by the falling dollar. The Dollar Index, which IntercontinentalExchange Inc. uses to track the currency against those of six major U.S. trading partners, dropped 0.2 percent to 75.422 last week, it's lowest point in more than a year, and was accompanied by assorted reports of oil demand recovery. In fact, bullish economic news flourished. Stocks rallied on better-than expected earnings reports with the Dow cracking 10,000 for the first time in a year.   Minutes from a Federal Open Market Committee meeting last month suggested that overall economic activity was beginning to pick up.
      Factors that should be keeping the crude price down include the Dow Jones Industrial Average losing 50 points to dip back below the 10,000 mark, Bank of America reporting a $2.24 billion loss, and a slight resurgence of strength in the dollar. Late in the week, however, crude oil prices were up sharply. Experts feel that crude prices may reach the $83 to $84 level over the long term if the dollar continues to weaken.

Chris Nobles
Commercial Fueling
NELLA Oil Company

Oct 5-9, 2009

Mon, 12 Oct 2009 10:27:00 -0700

     Last week the U.S. average price for regular gasoline dropped for the eighth consecutive week, dipping three cents to $2.47 per gallon for a total reduction of 18 cents over the eight weeks. The national average was $1.02 below a year ago. Prices fell in all regions of the country. The price on the West Coast slipped four cents to $2.95 per gallon, and in California, the average decreased three cents to $3.07 per gallon.
     Diesel prices also declined in all regions of the country, with the national average dropping two cents to $2.58 per gallon, $1.29 less than last year. On the West Coast, the average slipped two cents to $2.72 per gallon. California's price slipped about two cents to $2.79 per gallon.
     News reports have surfaced again that some Gulf Arab states are seeking to move toward trading oil in currencies other than the U.S. Dollar. Major oil producing nations denied these talks, but crude oil prices gained, regardless. Experts maintain that any change in oil pricing would likely be years away.
     For now, the weak dollar is the only bullish factor currently available to the oil market as the crude supply continues to be plentiful, even though OPEC members are reportedly producing less than at this time last year. Recent cuts at refineries due to maintenance and to poor economics are expected to decrease output slightly. Seasonal considerations would also favor some run reductions as refinery activity has tended to drop during this particular week with the exception of those years following hurricanes when activity has been rebounding. Runs would be reduced during a time when there is likely to be an upswing in crude imports during the coming weeks. This might improve economics for the refiners to increase production again.

Chris Nobles
Commercial Fueling
NELLA Oil Company

Sept 28-Oct 2 2009

Wed, 07 Oct 2009 08:04:00 -0700

The U.S. average price for regular gasoline declined for the seventh consecutive week. The average slipped five cents to $2.50 per gallon, bringing the cumulative drop for the past seven weeks to almost 15 cents. The national average was $1.13 below a year ago as prices fell throughout the country. The price on the West Coast slipped below $3 for the first time since August 31, falling five cents to $2.98 per gallon. The price in California dropped four cents to $3.10 per gallon.
For the fourth week in a row, the national average price for diesel went down. The price slipped two cents to $2.60 per gallon, $1.36 less than last year. Prices continued to decrease throughout the country. The West Coast price fell four cents to $2.74 per gallon, and in California, the average slipped two cents to $2.81 per gallon.

     Wednesday saw a price spike of 7 percent for crude oil, but experts predict that for the next few weeks increases will be negated. In fact, recent changes up or down have been repeatedly countered by market forces bringing it back to around the $70 mark.
     Despite some conciliatory movement regarding Iran's nuclear program, this geopolitical condition appears to remain a bullish consideration that is likely to support prices until either sanctions or the level of Iranian cooperation acquire more definition during the coming weeks.
     Factors to the downside are that the US market is viewed as oversupplied by at least 10-12 percent when crude and all products are combined, and other regions of the globe appear to be experiencing similar bearish patterns. Although demand strength is apparent within the Asian economies such as China and India, consumption is lagging. At the same time, indications that OPEC exports have been stepped up appreciably during the past month only add to the downward pressure on prices. Meanwhile, reports that Russian production advanced to a record level in excess of 10 million barrels per day last month provide another element suggesting continued bearish pressures through the balance of this year and well into next.

Chris Nobles
Commercial Fueling
NELLA Oil Company

Sept 14-18, 2009

Fri, 25 Sep 2009 09:25:00 -0700

     Crude oil futures prices fell Thursday to a nine-week low. The sell off was due to a report by the Department of Energy indicating a higher than expected inventory level and weak demand. Crude oil fell 4.5%, or $3.62 per barrel to close at $65.89 per barrel. That put prices at the lowest level since July 29, and Thursday's drop was the biggest since that date. Thursday's drop followed a nearly 4% decline Wednesday in response to a sharp rise in stockpiles and slowing consumption. Crude prices have dropped $6.41 per barrel in the two days.
     Refiners, pressured by the weakest margins this year, continue to keep production at a minimum. Since refineries have kept production low, it has done nothing to reduce high inventory levels of crude. Low demand and high inventories helps put pressure on crude oil prices to move lower. Unemployment in August was at 9.7%, the highest level since 1983. This has kept inventories high, especially for gasoline, the most widely used petroleum product.
     Oil's recent rise to $75 a barrel was fueled by investors tracking sentiment in the currency and equities markets and overlooking increasingly bearish supply/demand fundamentals in the U.S. oil market. Gains in stock prices gave traders hope for a recovery, which would lift oil demand. Oil continues to be used as a safety net against the weakening dollar. As long as Wall Street continues to use oil as a hedge against the dollar and as an investment play, without ever taking procession of the product, crude will continue to remain volatile.
     For the sixth week in a row, the U.S. average price for regular gasoline decreased. The average dipped two and a half cents to $2.55 per gallon, bringing the cumulative drop for the past six weeks to nearly 10 cents. The price on the West Coast declined for the first time since August 24, dropping a penny to $3.03 per gallon. The price in California also fell a penny, to $3.14 per gallon.
     The national average price for diesel declined for the third straight week, dropping more than a penny to $2.62 per gallon. On the West Coast, the average dipped a penny to $2.78 per gallon and the California price moved down two cents to $2.83 per gallon.

Dave Jackson
Director of Commercial Fueling
NELLA Oil Company

Aug 24-28, 2009

Thu, 03 Sep 2009 16:02:00 -0700

       Falling for the third straight week, the U.S. average price for regular gasoline dropped one cent to settle at $2.61 per gallon. The average price on the West Coast regained the penny it had lost the previous week, making it the only major region to post a price gain, settling at $2.96 per gallon. The average price in California rose about a penny to $3.04 per gallon.
     The national average price for diesel went up for the sixth consecutive week to $2.67 per gallon. Despite a cumulative increase over the past six weeks of 18 cents, the average price was $1.45 below the price last year. On the West Coast, the price increased almost two cents to $2.80 per gallon, and in California the average moved up a penny to $2.89 per gallon.
     Oil prices rose today after two days of decline. The American Petroleum Institute said in a report yesterday that crude supplies dropped by 3.19 million barrels last week. Sentiment has been riding high over the last few months on hopes the economy is turning around. The drop in supply is bolstering optimism that fuel demand is in fact rebounding.
     U.S. crude oil production is expected to rise this year for the first time in nearly two decades. The new production coming online is mostly from offshore projects in the Gulf of Mexico and so far this year the Atlantic hurricane season has been mild.   The new production is a step in the right direction to reduce our dependence on foreign oil. Unfortunately, we have a long way to go to eliminate imports.

Dave Jackson
Director of Commercial Fueling
NELLA Oil Company

Aug 17-23, 2009

Wed, 26 Aug 2009 16:06:00 -0700

    The nation's average price for regular gasoline slipped a penny for a second straight week, settling at $2.63 per gallon. The national average was $1.06 below the year-ago price. The average on the West Coast dipped a penny to $2.95 per gallon, while the price in California slipped two cents to $3.03 per gallon.
     The national average price for diesel fuel rose for the fifth consecutive week with an increase of nearly two cents taking the price to $2.67 per gallon. Despite a cumulative increase over the past five weeks of more than 17 cents, the average price was $1.48 below this time last year. The largest price increase last week took place on the West Coast where the average increased four cents to $2.79 per gallon. In California, the average moved up a penny to $2.88 per gallon.
     Crude oil dropped 3.1 percent Tuesday, marking the first decline we have seen in six days. It touched $75 following a report from the Conference Board that confidence among U.S. consumers increased in August as people became less worried about labor.
Yesterday's drop was partly due to the American Petroleum Institute's reporting an unexpectedly large increase in crude inventories last week. Signs that reduced lending in China may dampen demand in the world's fastest-growing energy-using country also pressured prices.
     The only news that continues to prop up the crude oil price is a new threat of a tropical storm in the Atlantic.   If the crude market follows fundamentals it should continue to retreat. However, normal trading factors have been somewhat ignored this year.

Dave Jackson
Director of Commercial Fueling
NELLA Oil Company

July 20-24, 2009

Mon, 17 Aug 2009 11:55:00 -0700

     It was just two weeks ago that the price of crude oil fell below $60 per barrel and provided modest relief for consumers at the pump. But that was two weeks ago. Friday, the price of oil briefly crossed $68 per barrel, so the big question on many minds is, "What happened?"
     Sentiment on the economy has shifted noticeably away from the bearishness that had gripped traders at the beginning of the month. Earnings have topped expectations and multinationals have said they are seeing signs of stabilization. The stock market has been rising as well, gaining 12 percent in the last 2 weeks. Because expectations now have a bullish tilt, investors are warming to stocks. Forecasts that the global economy will bottom in the near term are raising hopes that demand for crude oil will eventually rise and mop up the excess supply. Consequently, traders are once again looking favorably at commodities, including crude oil.
     Despite a bullish trend surrounding the increase in the stock market, some analysts feel the upside in crude prices will be short lived. Refineries are still cutting production and inventory levels remain high. Some experts are skeptical that prices will continue to rise, in fact, they think we may see a pull back similar to the one we had in June.
     This week the five-week trend of decreasing gas prices slowed to a crawl, and in some areas even reversed, according to the American Automobile Association. The average price of self-serve regular gasoline nationally was $2.51 per gallon on Friday, which represents a 3-cent increase over the previous week.   For California and other parts the West Coast, retail self-serve prices remained flat. Some areas were up 1-2 cents while other areas were down a few cents. California's average price for regular unleaded gasoline remained the same as the week before, at $2.84 per gallon.
     Diesel fuel prices nationally were flat as well. California prices fell by 5 cents per gallon, from $2.80 to $2.75 per gallon. Nationally, diesel cash prices last week remained the same as the previous week, at $2.60 per gallon.

Dave Jackson
Director of Commercial Fueling
NELLA Oil Company

Aug 3-7, 2009

Mon, 17 Aug 2009 11:40:00 -0700

     The U.S. average price for regular gasoline jumped nine cents last week to settle at $2.65 per gallon. Gasoline has had a cumulative increase of 18 cents over the past three weeks. West Coast gasoline shot up thirteen cents to $2.95 per gallon. In California, the average price surged fourteen cents to reach $3.04 cents per gallon.
     The national average price for diesel fuel increased eight cents last week to $2.63 per gallon. On the West Coast, the average price increased six cents to $2.70, while the average in California jumped eight cents to $2.84 per gallon.
     The primary reason for these increases seems to be sentiment that demand will pick up soon. This is surprising because gasoline inventory levels continue to rise, and refineries are continuing to slow production. The improvement in the stock market has a big influence on the direction of energy prices. Traders' buying trends are generally based on the economy and not on the fundamentals.
     There was a second tropical depression that formed in the Atlantic this morning. If the first storm strengthens further it will become Tropical Storm Ana. The second storm appears to have more potential to hit the U.S. and could threaten the East Coast late next week. Storms always have an impact on fuel prices, especially when they have the potential to come ashore in the Gulf region. Crude oil prices were up today on that news, as expected.
     A report out by OPEC notes that, in order to take advantage of the strong price of crude, OPEC members may be pumping more than the previously agreed-upon volumes. Production of crude has increased worldwide by two percent since April. We have no additional capacity to store crude oil; gasoline inventories continue to build and remain high; we have refineries slowing production; there has been no increase in demand; and OPEC members appear to be cheating on their production quotas. These fundamentals indicate a bearish trend. So why are prices up? The real question is what is going to happen when all the governments around the world stop pouring stimulus money into their economies.

Dave Jackson
Director of Commercial Fueling
NELLA Oil Company