Tuesday, March 08, 2005
Oil
Oil closed within $.60 of its all-time high, today, and Venezuela announced Saturday an agreement to provide oil to India. India signs deal to operate Venezuelan oilfield The US gets about half of Venezuela's output. It appears Chavez in his dealings with India and China would like to eliminate the US as a buyer.
...Chavez, a fierce critic of Washington, has made clear he wants to diversify his country's overseas energy ties to reduce its economic dependence on the American market.
Mover Mike
In Richard Russell's Dow Theory Letter (by Subscription only), I was amazed to see that Jet-A (the normal jet fuel, basically a slightly more refined form of kerosene, much cruder than either auto or aviation gasoline), historically, contract (discount) has sold for less than car gas and less than AvGas (100 low-lead aviation gasoline).
Today, it is almost impossible to find Jet-A for under $3.00 per gallon, and $3.50/gallon is typical in the Bay Area. At a high-rent airport, such as SFO, they are charging over $5.00/gallon! Considering that planes using Jet-A typically take on hundreds, or even thousands, of gallons at a time, this is a truly staggering increase in a short period of time, far greater than the increase in the cost of a barrel of NY crude. And the price of Jet-A is now much higher than either AvGas or car gas.I checked with Flightcraft here in Portland and found the same thing: Jet-A at $4.07 per gallon and AvGas at $3.82 per gallon. Again a huge increase over last year. Consider how much FedEx, UPS, and DHL use, I would expect, if they are able to pass on the increase, that using those services is going to cost more and once again a sign that inflation is greater than our government lets on.
Mover Mike
