Tuesday :: Dec 28, 2004

Forecast: Lower Temperatures And Higher Prices

by pessimist

My previous post, which looked at the disparity between reality and petroleum investor forecasts, caught a lot of contranianism from our wrong-wing friends. I thought I'd update the news covering this topic.

Many Cape Cod residents face second night without power after snowstorm
December 28, 2004

Many Cape Cod residents faced a second night without electricity after a powerful storm brought high winds and dumped up to 18 inches of snow.

Last time I took science, I recall that water freezes at 32 degrees Fahrenheit. That's significantly lower then the 50 degrees that were forecast recently. So what happened to oil prices?

Oil Prices Up After Selloff

Oil prices Tuesday partly recovered from a major selloff Monday.

And then we were also hearing that consumer confidence is up. How can this be in light of this news?

High heating oil prices to exert pressure on US retail sales
December 27, 2004

Analysts at Wachovia Securities believe that US retail sales would be under pressure during the winter season due to high heating oil prices and the resultant decline in discretionary income. In a research note published this morning, the analysts mention that the average household spending on heating oil in the US this winter is expected to increase by $407 on a y/y basis. According to EIA, approximately 8.1 million households in the US, especially in the Northeast, use heating oil during winter, the analysts say.

So who wins under this scenario? These guys:

Oil prices help boost the Basin
December 27, 2004

Record high energy prices and continued economic diversification created a favorable buzz among Odessa’s business community unlike anything heard of in decades. The unrelenting upward swing of crude oil prices prompted the sale of large blocs of oil and gas properties totaling more than $1 billion. Fifty-dollar crude finally revived drilling investments by area producers and attracted the attention of outside investors.

Few were as busy this year during the rebirth of the regional petroleum industry than Morris Burns. Burns is executive vice president of the Permian Basin Petroleum Association, which represents the business interests of about 2,000 area oil and gas producers and other oil-related businesses.

Burns said he hopes 2005 brings passage of an energy bill that offers tax credits for marginal production and deep-gas drilling. “That very well could happen with the additional (Republican) votes we picked up in the last election,” he said, referring to the defeat of former House Speaker Tom Daschle, D-S.D., and the resignations of vice presidential candidate and U.S. Sen. John Edwards and Florida Democrat Sen. Bob Graham.

The year 2004 was a landmark for über-insurance salesman Houston Copeland. “We expect the local economy to continue to improve. The high price of oil will guarantee there will be no major downturn in ’05,” Copeland said.

So dig deeper and fork over all that money that rightfully belongs to the Toppers. You've had it too long already, and they need it worse than you do.

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pessimist :: 9:43 AM :: Comments (10) :: Digg It!