The Warring States of NPF - Gas Prices to Everybody: LOL PWNT

Gas Prices Set New Record at the Pump
Monday May 14, 3:54 pm ET
By John Wilen, AP Business Writer

Gas Prices at the Pump Exceed Post-Katrina Record, While Futures Prices Slide

Quote:

NEW YORK (AP) -- Gasoline prices hit a new record at the pump on Monday, but gas futures prices fell on concerns that $3 gas will crimp demand.

Oil prices, meanwhile, rose on reports of refinery problems in the U.S. and abroad.

The average national price of a gallon of gas hit $3.073 on Monday, up almost a penny from Sunday's also record-setting price, according to AAA and the Oil Price Information Service. Gasoline is now well above the previous record of $3.057, set on Sept. 5, 2005, soon after Hurricane Katrina.

But gasoline futures for June delivery fell 5.09 cents to settle at $2.3012 on the New York Mercantile Exchange. Light, sweet crude for June delivery rose 9 cents to settle at $62.46 a barrel on the Nymex.

Heating oil futures fell 1.55 cents to settle at $1.8668 per gallon on the Nymex, while natural gas prices gained 5.3 cents to settle at $7.952 per 1,000 cubic feet.

Brent crude for June settled unchanged at $66.83 a barrel on the ICE Futures exchange in London.

Chip Hodge, energy portfolio manager at John Hancock Financial Securities, in Boston, thinks gasoline futures traders may be reacting psychologically to the fact that pump prices are setting new records.

"You just get a feeling that $3 a gallon. ... It's got to have an impact from a demand standpoint," Hodge said. "So, maybe there's a little bit of a selloff on those pressures."

While oil prices rose on the day, they settled well off their earlier highs on news that Chevron Corp. plans to restart a 42,000 barrels-per-day Nigerian oil facility, said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

"There was good news out of Nigeria after a lot of bad news," Flynn said. "They're pumping oil again."

But that good news was tempered by new reports of refinery outages, including a fire at a large Preem facility in Sweden, and a quickly resolved problem at a Valero Energy Corp. refinery in Texas last week.

"Any refinery problems anywhere on the globe now adds to concerns" that gasoline supplies won't be adequate to meet peak summer driving demand, Flynn said.

The summer driving season begins in two weeks, on Memorial Day weekend. The government reported that gasoline inventories rose slightly last week, but remain low by historical standards.

"Tightness in the U.S. gasoline situation will continue to drive the market ... because the summer driving season is right around the corner," said Victor Shum, energy analyst with Purvin & Gertz in Singapore. "There's not a lot of time for refineries to catch up with demand."

To which I would add:

Chevron profit surges past estimates
Energy giant helped by high gasoline profits

Quote:

SAN RAMON, Calif. - Coming off three straight years of record profits, Chevron Corp. on Friday reported its earnings surged yet again to start 2007 as the oil company cashed out of a Netherlands venture and cashed in on lucrative refining margins that have contributed to high gasoline prices.

The 18 percent increase in Chevron�s first-quarter profit delivered another reminder of the oil industry�s moneymaking prowess. That prosperity has added to the aggravation of motorists digging deeper to fuel the cars and renewed a political push to impose a windfall tax on the industry.

Chevron earned $4.7 billion, or $2.18 per share, during the first three months of the year, compared with net income of $4 billion, or $1.80 per share, at the same time last year.

The San Ramon-based company turned a higher profit despite a 12 percent decline in revenue, to $48.2 billion during the period.

The profit included a $700 million gain from Chevron�s sale of a minority stake in a Netherlands refinery. If not for that one-time boost, Chevron said it would have earned $1.86 per share. That figure exceeded the average estimate among analysts surveyed by Thomson Financial.

Chevron shares fell 62 cents to $77.56 in midday trading Friday on the New York Stock Exchange.

Like its industry peers, Chevron benefited from gas prices that have soared beyond $3 per gallon in some parts of the country. The company is the biggest seller of gas in California, where fuel prices have been among the highest nationwide.

Excluding the Netherlands sale, Chevron�s profits rose 59 percent to $923 million in its �downstream� operations � the company arm that refines oil and sells gasoline.

That helped the company overcome lower prices for crude oil and natural gas that contributed to a 16 percent decline to Chevron�s income from exploration and production operations during the first quarter.

Chevron probably would have made even more money during the first quarter if not for maintenance work and a fire that shut down a major refinery in Richmond for most of the period.

The oil industry can more easily afford those kinds of operating hiccups with oil selling for as much as it has in recent years. Although they have fallen from last summer�s peak of nearly $78 per barrel, oil prices remain above $60 per barrel � a level that once seemed unsustainable, said Oppenheimer & Co. analyst Fadel Gheit.

If prices continue to hover, �the oil industry won�t be in the oil business much longer. It will be in the money business,� Gheit said.

The favorable market conditions have enabled Chevron to earn $45 billion during the past three years, with its profit growing progressively higher each year.

Exxon Mobil, the only U.S. oil company larger than Chevron, has fared even better. Last year alone, Exxon Mobil earned $39.5 billion to break its own record the highest annual profit by a U.S. company. Exxon Mobil kicked off this year with a 10 percent profit increase to $9.3 billion.

Houston-based ConocoPhillips posted an 8 percent increase in its first-quarter earnings while profit at BP PLC, Europe�s second largest oil company, dropped 17 percent.

Anybody else feeling the bite?