Jet Fuel Prices WILL Be Climbing A LOT, and Soon

[PCL_128]

Well cant argue with your "hemi" gas guzzler

I wouldn't call it a "gas guzzler." It has multi-displacement technology that shuts off half the cylinders in cruise. I average about 24 mpg, but it'll do about 29 mpg highway at 60 mph. That's pretty good, in my book. And the best part? It has 350 hp available whenever I want it.

but the car is far from a toy and 0-60 is just as fast as any other standard car.

I doubt that. What's the time? Besides, I'm not interested in a "standard car." I like a little extra pickup.

You have plug ins at your airport or the ability to get one available to you, you just want an excuse to not make a difference........

I'm pretty sure that AirTran or the airport authority isn't going to spring for electrical outlets in the parking lot just so I can plug in a crappy electric car with a horrible range.

 

[JumpJetter]

Just read it in a couple of articles within the last week or so. I'm sure you could find a reference with a thorough google search. I'm about to go fly, so I don't have the time to dig it up.

You find the source yet?

Don’t Blame Speculation—Commodity Prices Are Driven by Fundamentals

John Derrick
Director of Research
U.S. Global Investors Inc.
[email protected]
May 28th, 2008
U.S. Global Investors (Nasdaq: GROW) recently hosted a webcast titled “Energy and Commodities Trends: Speculative or Sustainable?” to provide a closer look at the current strength in natural resources prices. Our timing for this topic was good: oil prices hit a record $135 a barrel last week and drivers get more and more depressed every time they pull up to the gas pump.
Americans want to know how long we are going to have to put up with this. The answer to that question depends on whether one places most of the blame for today’s prices on market speculators or on a fundamental shift in global supply and demand trends.
When we answer that question, we think it’s important to offer both short-term and long-term viewpoints.
The flood of new money into energy and commodities from pension funds, hedge funds and other large investors has created some frothiness in those markets. We said recently that a short-term correction in the price of oil was likely, based on our statistical models.
But we think the long-term price trend will continue upward due to global growth.
The world is growing more populous and more prosperous. Rising living standards in the developing world are increasing demand for resources, which is driving up commodity prices across the board because supply can’t keep pace.
People around the world are consuming more calories (greater demand for food), they are buying more cars (greater demand for steel and oil), they are building bigger homes (greater demand for cement and copper), and so on.
And there are also interrelationships between these trends—for example, vast amounts of farmland in the developing world are being transformed into housing tracts, which reduces the acreage for food production. This pinches supply at the same time that demand is soaring.

The chart above clearly illustrates this prosperity trend. In China, per-capita GDP has risen from $339 in 1990 to $2,574 this year—that’s nearly an eightfold increase in less than two decades. In India and the Middle East, the numbers have more than doubled, and Brazil is close to doubling. Rising incomes lead to greater consumption of energy and commodities, which exerts pressure on prices.
Along with growing populations and growing prosperity, there is also growing urbanization. In China we're expecting roughly 500 million people to move to cities or towns over the next three decades. India’s urban population is expected to reach 540 million by 2025, roughly double today’s level.
This trend has been at work for years. About three billion people—nearly half of the world—live in urban areas right now. To give you an idea of the scale, that’s more people than the total global population in the mid-1960s. To keep up with the increase, cities are expanding their water systems, electricity grids, roadways and other infrastructure. Estimates are that $40 trillion will be needed over roughly the next 20 to 25 years to build out this infrastructure, which will exert price pressure on commodities.
Another way of weighing speculation against fundamentals is to look at metals prices.
Many metals are hard to speculate on because they are not listed on commodities exchanges—these include iron ore, steel, magnesium and cobalt. Research from Lehman Brothers found that a group of key non-exchange-traded metals shot up 600 percent between early 2002 and early 2008. During the same time, prices of listed base metals—copper, aluminum, nickel, zinc and lead—rose only 250 percent. This tells us that fundamental demand is the dominant factor in driving metals prices higher.
People want to blame speculation because that would give them hope that today’s food and energy prices will return to “normal” after the bubble bursts.
This is the way it has worked in the past, but most people don’t understand or perhaps don’t want to accept the fact that we have reached a tipping point across the board in commodities that will support even higher prices in the future.
John Derrick
U.S. Global Investors Inc.
[email protected]
May 28th, 2008
For more insights and perspectives from U.S. Global Investors, visit CEO Frank Holmes’ investment blog “Frank Talk” at www.usfunds.com/franktalk.
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

 

[jetflyer]

Supply hasn't increased hardly at all in 3 1/2 years and supply is rising at a phenomenal rate.

PCL,
You've got your head too far up your Hemi's tailpipe to realize there really is a supply/demand problem brewing.

Like the IEA says supply is increasing at 1% and demand is increasing about 3?% This can't continue.

The price has to rise to make both numbers equal.

 

[Lear70]

I didn't grow up on a farm but I don't think skiing behind a boat and blazing around on jet skis would qualify as "tending to the farm".

And I never said that farming was ALL I wanted it for; quite the opposite, I was very open that I wanted the vehicle for work and play.

YOU are the one who went off on a tangent, focused on the jet skis and boat part, then got all high-and-mighty.

Save your recrimination for someone who actually will change the way they live their life based on what YOU believe. Everyone is ENTITLED to a little R&R with their family, and I sleep just fine at night with my choice of lifestyle...

 

[Wiggums]

Unless someone can explain this LOGICALLY and MATHEMATICALLY to me exactly WHY Diesel has been skyrocketing in price, even above unleaded gas, I can only assume that this is being controlled by the oil companies.

Worldwide demand for diesel is way up, much more so then demand for gasoline, which is actually falling in the US. Outside of the US there has been a huge switch to diesel fuel, in the EU over half the new cars sold are diesels. Because of the lower demand for gasoline in the EU they have an excess some of which is shipped to the US, increasing supply and slowing the increase in price. The demand for diesel in also way up in Asia, not as much so for gasoline. If you look at the rise in oil compared to the rise in gasoline you see that gasoline has not increased as much as the price of oil, while diesel has.

 

[Wiggums]

I average about 24 mpg, but it'll do about 29 mpg highway at 60 mph.

Yeah sure you do, you average 1 mpg over the EPA (revised) highway rating?

It has 350 hp available whenever I want it.

If you do avg 24 mpg you are driving 55mph in the right lane and basically never using that 350hp.

 

[PCL_128]

Yeah sure you do, you average 1 mpg over the EPA (revised) highway rating?

It has an on-board computer that tracks the average fuel economy each tank of gas. It always ends up between 23 and 25 after using a full tank. Believe it or not, those are the facts.

If you do avg 24 mpg you are driving 55mph in the right lane and basically never using that 350hp.

I usually go somewhere between 55-65 to save gas on the highway, and yes, I very rarely use the hp. But it's nice having it there for rare occasions.

 

[Wiggums]

It has an on-board computer that tracks the average fuel economy each tank of gas. It always ends up between 23 and 25 after using a full tank. Believe it or not, those are the facts.

Too bad you can't buy the diesel version here, if you can get 24 out of the V8 then you'd be sure to get 40-45 from the diesel. Your car is still a gas guzzler, if you'd bought an Accord and drove it in the same manner you'd get 40mpg too. Sure it's not union built, but the Accord is just as American as the 300C, probably more so.

 

[jetflyer]

A Must Read From:
The Oil Drum-Europe:
Why oil costs over $120 per barrel
LINK: http://europe.theoildrum.com/node/4007#more

This is a great explanation of why oil prices have REALLY RISEN.

These geologists/experts leave no stone unturned in their analysis.

They talk about Energy Returned on Energy Invested, decline in current fields, new capacity additions, spare capacity, peak exports and the export land model, the falling dollar, and how subsidies in some countries distort the market.

Become informed,
Jet

 

[Lear70]

Where can you buy the Diesel version. Canada?

 

[Rick James]

Too bad you can't buy the diesel version here, if you can get 24 out of the V8 then you'd be sure to get 40-45 from the diesel. Your car is still a gas guzzler, if you'd bought an Accord and drove it in the same manner you'd get 40mpg too. Sure it's not union built, but the Accord is just as American as the 300C, probably more so.

Sorry, the diesel version has been around for about 20 years, it's called a Cummins. Thanks to the EPA it has becon much less efficient (14-19 mpg).
Also, the on board computers for MPG's are notoriously innacurate. The only true way to tell would be pen and paper math.

 

[RIDETHELIGHTING]

The other side of oil. Two good article why the price is so inflated

http://www.atimes.com/atimes/Global_Economy/JE24Dj02.html

http://www.theaustralian.news.com.au/story/0,25197,23743273-7583,00.html

 

[Soverytired]

More excuses.......:

What is there to fix? There is NO fuel system, oil system, cooling system, and exhast system. That leaves us with wheels, brakes, an electric motor with a battery charger and converter. Batteries typically last approximately 5 years. Mine has 13 12V batteries which equates to approximately 20/month in additional expenses. The electric "magic" boxes has no moving parts so they rarely need fixing.
charging costs 50-60 cents for most utility companies to fully charge the batteries.

I am a realist and do have a regular car for long distances.

No offense Saab, but once again, it just goes to show that when push comes to shove, people really dont want to make a difference, they are just looking for excuses.

Of course, the obvious response to this is that if every American converted to this tomorrow, the US electrical power grid would collapse.

Increased demand on the gird would mean more fuel for the electric plants, which in the US mostly means COAL, and additional carbon emissions.

Battery powered cars leave a HUGE amount of toxic waste when junked. If you create more toxic waste and burn coal at at plant 500 miles away to power your car you haven't solved anything, you've just dumped your mess on someone else.

Battery powered electric cars are a "feel good" non-solution, not an practical, multi-tiered integrated solution.

 

[jetflyer]

The other side of oil. Two good article why the price is so inflated

http://www.atimes.com/atimes/Global_Economy/JE24Dj02.html

http://www.theaustralian.news.com.au/story/0,25197,23743273-7583,00.html

Good articles Ridethelighting,

I think we're near peak oil that is for sure. I do admit that we could be getting ahead of ourselves with these prices going up so fast so soon. They're definitely slowing US consumption and may be doing the same to other countries that also don't subsidize that heavily the oil price.

Even though demand is rising there is less export oil available to importers like the U.S. because of the countries like Saudi, Russia, Qatar, UAE increasing their internal usage of the oil and exporting less. This is called the Export Land Model. I think this is the main reason for the price rises.

Is there a lot more oil coming online in the next few years? Yes. Will it be the 3-4 ANWR's needed every year to just keep oil production level? Maybe. Will we maybe eek out a gain in oil production for a couple more years with more than 4 Alaska National Wildlife Reserves added every year for a while? Maybe.

Some forecasts say 2012 or later before we really decline. A lot depends on Saudi and Russia. Both appear to be declining which could be bad and mean the declines begin now.

We'll find out in the coming months to years. Let's pray and hope for the best.

Let's hope the price stays above $100 though but in the low $100's so alternatives are still encouraged to bring about a better future. Let's also hope we have some more good years left. Good luck major airlines. One of you will be a casualty in my opinion. Let's hope your loss will precede better times for our industry and country.

Jet

 

[jonjuan]

Hi!

This is it. Peak Oil is here now. I think the fractionals are looking better and better.

http://www.ajc.com/business/content/business/stories/2007/02/20/0220bizoil.html

QUOTE]
Relentless economic pressures will send oil — now selling for just under $60 a barrel — steadily toward the stratosphere, Hamilton said. "If Saudi Arabia is in decline, then oil is way too cheap."

Saudi Arabia, the Elephant in the closet of oil production, is in decline. GM/Ford/Chrysler better pull out all the stops in getting fuel efficient vehicles and/or alternative fuel vehicles in showrooms NOW, or one or more of them is going Chapter 7.

cliff
LRD[/quote]

OOps, FLOPS just fired 200 people in part due to high fuel costs.

 

[regionalcap]

interesting article..no reason for these high prices

Oil rises despite falling demand


Oil prices moved higher Wednesday despite a stronger dollar and signs that U.S. demand for oil products is waning in light of a slumping economy and record prices.
Oil fell nearly $3 earlier in the day, but rebounded after Morgan Stanley's co-head of global economics, Richard Berner, said crude prices could easily reach $150 a barrel this year, and that high prices will not be enough to curb demand in developing countries.
"It seems that these big banks are driving oil prices, where instead it used to be the other way around," said Alaron Trading senior market analyst Phil Flynn.
As the U.S. economy has deteriorated in the past six months, many investors have engaged in speculative trading of commodities such as oil to serve as a hedge against a generally weakened dollar. Banks' predictions of rising prices only gives credence to oil traders that their investment will deliver a strong return.
Light, sweet crude oil for July delivery rose $2.18 to settle at $131.03 on the New York Mercantile Exchange. The contract fell $3.34 Tuesday, and was about $4 off its all-time high of $135.09 a barrel, which it hit last Thursday.
Slumping demand takes prices off highs
Traditionally, there is a run-up of crude oil future purchases just prior to Memorial Day as traders anticipate a strong start to the summer driving season. But since forecasts by motorist group AAA and Delloite and Touche both expected decreased travel this past holiday weekend, analysts said lower gasoline demand in the United States may finally be catching up to record oil prices.
"There is a very limited demand for fuel oil in the U.S.," said Stephen Schork, editor of energy industry newsletter The Schork Report. "Consumers are responding to high prices, which makes the rapid rise in crude oil of the last few weeks hard to sell."
Though actual numbers for Memorial Day travel will not be known for some time, evidence is pointing to fewer Americans driving due to high gas prices.
The national average price for retail gas rose 0.7 cent a gallon to $3.944 Wednesday, marking the 21st straight record, according to AAA.
The U.S. Department of Transportation said Monday that Americans drove 11 billion miles less in March 2008 than a year earlier, marking the first time that estimated March travel on public roads fell since 1979. That 4.3% decline is the sharpest year-on-year drop for any month in the history of the agency's reporting, which dates back to 1942.
According to the Energy Information Administration (EIA), a unit of the U.S. Department of Energy, gasoline demand has fallen 0.6% so far in 2008. The trend began in October 2007, and gas consumption has trailed year-ago levels in every month since, except for a very slight bump up in November. As a result, the EIA is forecasting the first year-over-year decline in U.S. gasoline demand since 1991.
"The forecast for a decline in gasoline demand is a function of prices and also lower economic growth," said EIA spokesman Jonathan Cogan.
MasterCard (MA) SpendingPulse, which reports on national retail gasoline sales based on aggregate sales activity in the company's payments network, paints an even bleaker picture for gasoline demand. The report shows the four-week average for U.S. gasoline demand down 6.3% year-over year for the week ending May 23, representing the 15th-straight week in which that measure has been in negative territory. The data couples the company's credit card sales with estimates for all other payment forms, including cash and check.
"Consumer behavior has changed dramatically this spring," said MasterCard SpendingPulse vice president Michael McNamara. "We haven't seen the spring increase that we normally do."
McNamara said one indicative trend can be found in Americans spending less on gas heading into weekends than going into the work week. He said that suggests people are cutting back on discretionary driving, while still fueling up for non-discretionary purposes.
Not just gas
Other oil-based products are also experiencing declining U.S. demand, such as jet fuel, heating oil, diesel and propane. The EIA expects demand for all finished petroleum products to fall in the United States in 2008.
Some Americans are replacing their oil product consumption with natural gas. Demand for natural gas is up in the United States, according to the EIA, and for those residents and companies that have the option, the alternative fuel source can be a cheaper option.
"Industries that can burn it are maxing out their natural gas production, since it is is cheap relative to the other commodities," said Schork. Schork noted that demand was so high this past winter, that suppliers are having trouble refilling reserves.
Foreign demand may catch up with U.S. soon
Although demand for oil products in foreign countries has steadily risen throughout 2008, that may soon change due to continually escalating prices.
Some analysts, such as Morgan Stanley's Berner, say high prices will not affect oil consumption abroad, since many foreign countries' governments subsidize oil prices for their residents. But other analysts think foreign demand will soon fall off as well.
"We're already seeing some developing countries lift their price curbs, and eventually other countries are gong to have to pass on these high prices," said Flynn. "People underestimate what kind of effect high prices are going to have there."


http://forums.flightinfo.com/showthread.php?p=1595005#post1595005

 

[crxpilot]

Of course, the obvious response to this is that if every American converted to this tomorrow, the US electrical power grid would collapse.

Increased demand on the gird would mean more fuel for the electric plants, which in the US mostly means COAL, and additional carbon emissions.

Battery powered cars leave a HUGE amount of toxic waste when junked. If you create more toxic waste and burn coal at at plant 500 miles away to power your car you haven't solved anything, you've just dumped your mess on someone else.

Battery powered electric cars are a "feel good" non-solution, not an practical, multi-tiered integrated solution.

Solar panels alone or panels with wind turbines can recharge your car easily once installed thereby negagting all your excuses above (and batteries can be recycled).

NEXT.....

 

[jetflyer]

I think this is important for people to see that Gordon Brown appears to believe we're close to peak oil.

Do you think the British Prime Minister might have better information than you or I?

British PM warns of global oil 'shock'

British Prime Minister Gordon Brown warned Wednesday that the world faced an era-defining oil "shock" that required urgent action, as European leaders struggled to contain growing protests over soaring fuel prices.
"It is now understood that a global shock on this scale requires global solutions," Brown wrote in The Guardian newspaper.

Here is a quote from Brown's opinion piece in The Guardian:
British Prime Minister Gordon Brown wrote:

.The cause of rising prices is clear: growing demand and too little supply to meet it both now and - perhaps of even greater significance - in the future.

Gordon Brown doesn't believe it's the speculators running the price up!

One good thing about Brown talking like this: Alternatives are sure to get going.....
Let's hope!!

Jet

 

[crxpilot]

A Must Read From:
The Oil Drum-Europe:
Why oil costs over $120 per barrel
LINK: http://europe.theoildrum.com/node/4007#more

This is a great explanation of why oil prices have REALLY RISEN.

These geologists/experts leave no stone unturned in their analysis.

They talk about Energy Returned on Energy Invested, decline in current fields, new capacity additions, spare capacity, peak exports and the export land model, the falling dollar, and how subsidies in some countries distort the market.

Become informed,
Jet

Y2K, Peak Oil, 2012 its alll the same............

 

[Two Feathers]

Y2K, Peak Oil, 2012 its alll the same............

I guess your 2012 reference is regarding the Mayan Long Count Calender cycle changing? 20 years of troubled times followed by?

It is actually pretty interesting considering the widow for peak oil predictions.

Y2K......not so much.