Wednesday, June 4, 2008

Oil Inventory Up Imports Down Refineries Down

For the past 5 weeks oil inventories have been up and it is expected to rise again this week. At the same time reports are coming out that U S imports of foreign oil are down and production of gasoline and diesel at U S refineries are running at only 86% capacity. Unloading ships delivering oil are deliberately being delayed causing a slowdown in the delivery of crude oil to American refineries. This has forced some oil producing countries to stock pile oil on ships off their coasts, waiting in line for a delivery date. The same report says fuel consumption has steadily decreased due to high gas prices.

In the normal scheme of things when inventories are high, production is at or higher than 90%, crude oil deliveries are waiting offshore and demand has fallen an oil glut is the result. Prices fall at the both the pumps and on the open market. Something strange is happening, supply and demand is not working. There is no natural reason for refineries to be operating at only 86% of capacity. There is no excuse for ports to delay offloading ships with crude oil. This sounds more like price fixing than the normal supply and demand of a Capitalist market.

America is reaching a crisis level with the continued daily price increase at the pumps. Auto industries are falling back to the 1980's strategy of cutting the production of trucks, SUV s and next will be 4 wheel drives and mid-size autos. People are losing their jobs and foreclosures continue.

Other actions around the country are beginning to hit the news:

-Airlines are charging for every bag, raising prices and cutting services

-Airlines are considering charging passengers according to weight

-Local governments are increasing license fees for vehicles, wheel tax

-Local governments are charging school and surge charge taxes, to cover fuel price increases

-(Some) Local governments are considering extra license plate fees for older less fuel efficient vehicles

-(Some) Local governments are trying to pass obesity tax on fast food restaurants

-Restaurants are trying to charge extra for people they consider overweight

-Green taxes are being considered, the more energy (electricity, natural gas, etc.) a customer consumes the higher the tax

-Cheap dangerous imports from China are up (consumers cannot afford American made/produced products)

-The number of Americans selling their blood for gas and food are increasing daily.

We cannot wait for the promised change in '09 with a new president. This Congress had better do something, instead of spending on pork barrel projects and playing politics, or it will be too late for the next president. Like Nero's Rome, America is slowly burning.


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