Oil prices jump past $32 a barrel: U.S. inventories remain at 24-year low Source: The Detroit News Publication date: 2000-08-16

NEW YORK -- Oil prices surged Tuesday as concerns rose about low U.S. inventories of crude and concerns that the world's largest producer, Saudi Arabia, has curbed production. Crude oil rose more than 2 percent in New York and reached a 10- year high in London on expectations that a U.S. inventory report will show little relief for supplies that are at a 24-year low.

The increase in prices raised concerns that gasoline prices -- which skyrocketed earlier this summer in the Midwest, including Detroit, before retreating -- could soon move upward.

And there is worry that home heating oil and natural gas prices are likely to be much higher during the winter heating season because of low supplies.

Oil jumped past $32 a barrel on expectations that the American Petroleum Institute would report only a small rise in U.S. supplies.

Inventories fell in three of the past four weekly API reports, and heating oil in storage is down 39 percent from a year ago with cold weather just three months away.

"It's an extremely volatile situation," said Nauman Barakat, vice- president of global energy trading at ABN Amro Inc. in New York.

Crude oil for September delivery rose as much as 76 cents, or 2.4 percent, to $32.70 a barrel on the New York Mercantile Exchange, the highest price since June 30. The contract was recently 41 cents higher at $32.35. New York futures reached a nine-year high of $34.37 in March.

The higher prices would result in higher gas prices in the coming months.

In Metro Detroit, prices at the gas pump are the lowest they've been since early May. The area average is $1.33 per gallon, down 81.3 cents since June 19 when gas prices rose to record highs, AAA Michigan reported.

Prices may increase around Labor Day due to an expected high volume of travelers but should go back down by the fall, said Jim Rink, a AAA spokesman. "Normally when the price of oil goes up, the price of gas follows."

Analysts said U.S. refiners failed to replenish heating oil inventories because they focused on making gasoline. Demand for gasoline peaks between May and September, the driving season in the United States.

About 75 percent of residents in Michigan rely on natural gas for heating. Midwest consumers will pay about $1.30 more per 1,000 cubic feet than last year.

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=12927854&ID=cnniw&scategory=Energy

-- Martin Thompson (mthom1927@aol.com), August 16, 2000

Answers

Ahhhhh! It must be heating oil season!

It's relly time fo this country to start converting the assets we have plenty of (corn, etc.) into bio-fuel. It the veggie van can run on recycle fast-food oil, then maybe our houses can too! It may take some work to do this, but it has to be better then this foreign oil dependance. The only reason the oil companies don't get on this bandwagon is because they are making obscence profits with this shortage.

-- K (infosurf@yahoo.com), August 16, 2000.

K is right on this!

I never did understand why a diesel engine is not used to run as the boiler and the "shaft" output is used to run the pumps and spin a generator? The power used to run the pumps and fans need to come from some where - it may as well be your generator.

There are several places trying to dump their inventory of y2k generators, pickup a countryside magazine [countrysidemag.com]

some bio diesel links:

http://www.kelseyville.com/biodsl/

http://members.tripod.com/journey_to_forever/biodiesel_mike.html

http://www.vwc.edu/library_tech/wwwpages/gnoe/avd.htm

Considering the projected costs, this maybe a very smart grassroots / do-it-yourself project.

While I've not made any this stuff sure looks easy to do -- be careful your are working with some potent chemicals!

Best-o-luck,

-- (perry@ofuzzy1.com), August 16, 2000.

oops on the links, it's amazing what happens when you forget one = sign.

http://www.kelseyville.com/biodsl/

http://members.tripod.com/journey_to_forever/biodiesel_mike.html

http://www.vwc.edu/library_tech/wwwpages/gnoe/avd.htm

-- (perry@ofuzzy1.com), August 16, 2000.