Gas prices are as high as they were a few weeks ago when it was on the news all the time, but there seems to be no mention of it anywhere. I know it dropeed for a short while, but now its back to where it was and no one is saying anything. Is it just in Ohio that the prices have sky-rocketed again?

Crude broke two records last week. Prices are headed north again. They can't seem to keep the Iraq pipeline up for more than a couple of days, at the same time that supply is remaining constant, demand is up in China and the US.

The Iraq pipeline has been the achilles heal of the whole occupation. The entire pipeline is above ground. It will take 5 years to bury it. In the meantime, its a sitting duck for anyone with a grenade. Posting soldiers in the middle of the desert every 20 feet costs more than the oil is worth.

Get ready for $2.50 a gallon regular.

FUTURES MOVERS

Oil futures edge closer to $42 a barrel

Traders assess output view against OPEC, Iraq backdrop

By Myra P. Saefong, CBS.MarketWatch.com
Last Update: 1:40 PM ET July 19, 2004


SAN FRANCISCO (CBS.MW) -- Oil futures edged closer to $42 a barrel Monday afternoon, as traders assessed the market's production outlook against a backdrop of a higher OPEC quota and continued threats to output from violence in Iraq.



"The threat of Iraqi attacks and potential summer refinery problems make a defense of lower prices a difficult," Michael Fitzpatrick, an analyst at Fimat USA, told clients in a research note.

A fuel truck rigged with explosives exploded near a police station in Baghdad Monday, killing nine people. And over the week, a top Iraqi defense ministry official was killed. See CBS News for more.

Despite the threat to the oil infrastructure of Iraq, home of the world's second-largest petroleum reserves, it is going to be harder for the market to break to new highs, "because of the potential for rising supply and slackening macroeconomic conditions," Fitzpatrick said.

Crude for August delivery traded as high as $41.90 a barrel on the New York Mercantile Exchange. At last check it was up 55 cents at $41.80 a barrel, off the session's high, but well above the day's low of $40.85.

The contract hasn't traded at levels this high since June 1, the day the exchange saw an all-time intraday futures record of $42.38 and a record close of $42.33.

Petroleum-product prices also gained ground. August heating oil traded at $1.109, up 1.31 cents. August unleaded gasoline rose 0.95 cent at $1.31 a gallon.

Taking a look at the bigger picture, "there are just too many factors that are pointing to much higher prices right now, and there is little to encourage traders on the short side of the market that their positions are going to get much relief," said Kevin Kerr, a senior trader at Kwest International.

Crude prices will probably "continue to creep higher, and as it approaches record levels this week, we may see significant short covering," said Kerr.

Still, "it's very likely that by the middle of the week, if the supply data [Wednesday] is bullish, that crude could be trading in the $43 to $44.75 range," he said. See more of his comments.

OPEC said Thursday that its members have agreed to go ahead with an increase in production quotas of 500,000 barrels per day to 26 million barrels as of August 1. The move comes after the July 1 increase of 2 million barrels per day to the output target. The cartel also canceled a special meeting that would've been held Wednesday in Vienna. The next meeting will be on Sept. 15.

On Monday, OPEC said it expects a 1.7 million barrels-per-day rise in global crude oil demand in 2005, according to IFR Energy Services.

"This may add to the increasing anxiety that with production from the cartel now close to full capacity, there is little spare to cover possible disruptions," said Fitzpatrick.

Natural gas falls

Natural-gas futures on Nymex continued lower, despite a turnaround in crude prices by the afternoon.

August natural gas fell 3.7 cents to stand at $5.85 per million British thermal units.

"Fundamentals remain weak -- abundant storage, with more coming every week, and extraordinarily mild summer temperatures," said Fitzpatrick.

In equities, meanwhile, energy shares were narrowly lower, with the CBOE Oil Index ($OIX: news, chart, profile) leading the decline. See full story.

In the Nymex metal pits, gold futures fell, but remained above the $400 level ahead of comments on the economy from Federal Reserve Chairman Alan Greenspan on Tuesday and Wednesday. See Metals Stocks.

The Reuters/CRB index, a broad-based measure of commodity futures markets, was up 0.3 percent at 273.21.

I dunno about that. SF fuel prices have been losing a couple of cents a week. I don't have to go on safari to fill the S420 for less than $2.50/gallon these days.

Sixto
95 S420
87 300SDL