First up, Bruce Krasting:
...The USA has evolved into a two-tier gas market. The supply of crude from
Canada and the Bakken fields has created a lower cost of supply for the
central portion of the country. This differential is most notable in
the market spread between WTI (a futures contract that settles physical
delivery in Oklahoma) and LLS (Louisiana Light Sweet Crude) - the
pricing of crude for the big Gulf refineries....
Consider this map of the country. The green area is where the Canadian
crude is helping to keep prices lower. The dark red areas are those that
are dependent on the high-priced, imported crude.
Gas prices are north of $5 in southern California today, but they are as low as $2.95 in Ft. Collins Colorado.
While this may make the folks in Colorado and North Dakota happy, it
will crush the national economy. It doesn’t matter what happens in Co.
or N.D., they have (relatively) no cars.
A few years ago, the Highway Transportation Department put out a report
on registered vehicles by state. The total of all registered vehicles
was 244,000,000. Of that total, 33 million were on the roads of
California (13%), only 1.8 million (0.75%) were in Colorado, and a
measly 700k (0.25%) are in North Dakota. The total of vehicles on the
road in the states that are in red in the above map comes to 137
million. Fully 56% of all vehicles are in high cost states. Only 15
million vehicles (6% of total) are registered in the green states!
State GDP is directly correlated with vehicle registrations. The
red-colored states, paying the highest prices today, represented 57% of
2010's GDP. Green states, contributed only 8% GDP....MORE
From OilPrice.com:
Due to fears over the situation in Iran, amongst other things, oil
prices are at a nine month high, and petrol prices are also at near
record levels. These high prices have spurred Democratic Representatives
Ed Markey of Massachusetts, Peter Welch of Vermont, and Rosa DeLauro of
Connecticut, to write a letter to Obama in order to ask him to use oil
stockpiles to help reduce the price of oil in the US. The US holds 696
million barrels of oil, the world’s largest, government owned stockpile,
to be used in times of low oil supply.
“This most-recent run-up in prices is primarily the result of
fear driving oil markets,” Markey, Welch and DeLauro wrote to Obama. “We
urge you to consider again deploying oil” in the reserve “to combat the
rapid price escalations resulting from speculation.”...MORE
