Chryler has Fallen Down, Can it Get Back Up?

Chrysler heading down the Chapter 11 walk to restructuring the company assets to begin hopeful turnaround? I’m not so sure that is going to happen, the turn around that is. Yes, they have done it before but that was in a total different environment. It can’t be a fun walk by the way and I do feel for everyone at Chrysler.

Chrysler like many other companies especially the U.S. automakers reminds me of our current economy. They didn’t recognize the changes to the industry until it was too late. When foreign car makers started making strong in roads in the U.S market in the 70’s, those companies have basically stayed with what got them to the dance and now dominance. The built regular size cars, that got good miles per gallon, were reliable vehicles and priced right. The other big key for them, I believe is that they had a brand or two and very few models along with very few bells and whistles that could be added.

For many years almost all U.S. car companies kept making new brands, new models and yes, you need that to stay fresh to a point. What the car makers really needed was to take a hard line stance on the UAW. I am not against unions by no means but year after year when your business keeps losing market share and you (the union) keeps asking for more, eventually something has to give.

When the United States and most of its people spend more than they make, something has to give. That is where we are at today. This is not a happy day to see Chrysler head down this walk because other companies will suffer both short term and long term. I don’t think they will come out of Chapter 11. I think total bankruptcy or sell off is next. They had a hard enough time selling cars before. I certainly don’t think you know a lot of people that will be running out today to buy one. I wish them luck.

This article has nothing to do with gas or diesel fuel unless you connect the dots that say Chrysler vehicles run on those fuels. New fuel news and fuel information coming soon. May’s newsletter will be out Tuesday.

Sokolis Group is a fuel management & fuel consulting company that can be reached at www.sokolisgroup.com or 267-482-6155.

Could Swine Flu Slow Economic Recovery

Pig’s get Fat, hogs get slaughtered; OPEC made a ton of money last summer, could they pay for it this summer by a Pig Flu?

Oil has traded near $50 a barrel this month, about a third of its record high in July, as the global economy remains weak and traders grapple with an uncertain outlook for recovery.

On Sunday, Abdalla el-Badri, Secretary General of the Organization of Petroleum Exporting Countries, warned that oil prices of $50 per barrel are "insufficient for continued investment" and urged a $70 barrel.

Algerian Energy Minister Chakib Khelil predicted on Sunday that prices would rise to $60 a barrel by the end of this year.

But Kuwaiti Oil Minister Sheik Ahmed Al Abdullah Al Sabah said Sunday that a price of around $50 a barrel is "reasonable" for crude considering the global economic slowdown. He said OPEC should wait for the results of massive stimulus packages by governments around the world before deciding whether to cut production at the cartel's next meeting on May 28.

Irony maybe, OPEC which in the world of other sports knocked the cover off the ball for most of last year with fuel price over $100 and reaching almost $150 fuel, had many chance last year to slow that dramatic raise. Instead because of their own piggish creed got fat rich and happy during that period.

Now with the economy in a slump partly because of them, they OPEC are begging for $60 or $70 a barrel. The old expression that I know is pigs get fat and hogs get slaughtered. With the Swine Flu hitting Mexico and at this point we are only talking about 100 people, so say this could slow world economic recovery. Could a pig that took so much from us last year, this year really get slaughtered by an actual pig disease?

Wow!

For future help in your fuel management, fuel consulting and latest news on pigs in the fuel market please reach out to us Sokolis Group. We can be reached at www.SokolisGroup.com or (267) 482-6160.

Earth Day, What Does It Mean?

Before hitting on oil, let's give the Earth its props today. It is Earth Day after all. The day really doesn't get a ton of attention. Maybe if we made it a holiday that would help. Heck, the USPS would have the day off which would help them save money on their fuel budget.

Global Warming is real, we are all part of the problem, and we must all be part of the solution. The average American is responsible for a whopping 24 tons of CO2 a year. How do we create that much carbon? Let’s take a look planes, trains, cars, lights and pretty much anything that uses power and energy. So what can you do conserve, recycle, be mindful. If we all do our own little part things will get better. Not overnight but it took us more than overnight to get here. As firm believers to a better place Sokolis Group wants you to do your part and help.

What’s Up With Oil!!

U.S. fuel demand has now drifted down to its lowest level since May 14, 1999 and there are concerns that a bottom may be weeks if not months away. Thanks mostly to the descent of on-road diesel fuel usage and jet fuel, the U.S. total fuel demand number hit 18.16 million b/d last week. One has to go back 119 months to find a lower number, and now that heating oil season is over the 10-year low could soon be threatened. If this is market economic 101. Supply and Demand. We just have a lot of supply and not a lot of users of petroleum. At least not as many users as we had when the economy was rolling along a year or so ago.

Gas stocks rose by 802,000 bbl to 217.3-million bbl despite a fairly robust demand increase of 192,000 b/d to 9.136-million b/d. Imports continued to stream into the U.S., with arrivals of gas and gas blendstock at 1.117-million b/d. Distillate stocks rose by 2.68-million bbl to 142.3-million bbl, and the build occurred largely because demand was a thoroughly miserable 3.452-million b/d.

We still believe the fuel market is going into the mid 40’s for a barrel of crude in the short term. Are we projecting a strech with that number, who knows. At Sokolis Group we believe if you have a solid fuel management program in place which is making sure you have good fuel deals, fuel discounts, a hedging program if that works for your company, you are better prepared then most of the companies out there.

Go outside and enjoy some SUN. Remember to put sunscreen on because we have already burnt off part of the Earth's atmosphere.

$50, $50, $50 Do We Move?

Oil Prices have taken on a new pattern called $50. Fuel price for crude oil continues to stay around $50 for the past week or so. Maybe up a little or down a little but basically $50 is the number.

Don't take me wrong, $50 is a nice number. Seems fair to me to have $2 gas prices per gallon and $2.25 a gallon diesel fuel prices. I think fleet fuel customers as well as casual drivers can live with those fuel rates. Are they going anywhere? Only looks like its going to go down from here. Mid $40's is my bet by the end of the month. Why? Why not? What's going to spark a fuel buying spree.

What's your thoughts?

Sokolis Group can help you reduce your fuel cost, fuel margins and increase your fuel rebates.

Earth Day is coming next week. We support the Green Move. Another company that we just started to do business with that supports Go Green is www.360FuelCard.com. Visit there new web site, I think you will like what you see.

Sokolis Group can be found at www.sokolisgroup.com for all your diesel fuel and gas price help.

OPEC Cut Fuel Prices? We Don't Think So!

Will OPEC Cut Again? Heck No!!

Oil has recovered to a $47 to $54 range for the past four weeks from a low of $32.40 in December. It is still down by almost $100 from a record high above $147 last July.
News Saudi Arabia would in May trim oil supplies to some of its Asian customers and one European buyer suggested the world's top exporter was concerned about high inventories and helped to limit selling.

Saudi Arabia has been largely responsible for OPEC's high level of compliance—estimated at around 80 percent—with agreements to reduce output by a total of 4.2 million bpd since September last year.

The kingdom and other members of the producer group have lowered their price ambitions, saying oil at around $50 a barrel is a good compromise given the weakness of the global economy.

Well it's no wonder OPEC will say they can live with fuel cost at $50. They really don't have a choice do they? If they drop production and prices increase, then who is going to buy the fuel? Don't get me wrong we need gas and diesel fuel to operate in this country but people will cut back even more.

The mighty OPEC will have to sit on the sidelines and wait for the economy to recover just like the rest of us. It was only a couple of years ago they were thrilled with $30 a barrel, have they had that much inflation, I think not.

To have your fuel cost locked in for the next year is not the worse thing you can do in the world. Fuel cost will probably go up slightly along with gas prices and diesel fuel so better to be safe then sorry.

Sokolis Group can help you every step of the way in your fuel management program. As fuel experts, we have the knowledge to scope a program just for your company. Visit us at Sokolis Group www.sokolisgroup.com or give us a call 267-482-6155.

Fuel Demand for 2009, Projections Cut?

If you read yesterday's Fuel Advise, Sokolis Group basically said what is keeping these fuel prices high. We had no real answer, we wish we did but it's been a bullish fuel market, which has made fuel cost raise. Now new fuel news today.

Fuel fell to settle near $50 a barrel on Monday after the International Energy Agency cut deeply its forecast for fuel demand, offsetting the impact of data showing Chinese crude imports rose to their second highest ever.

The IEA said on Friday world oil demand would fall by 2.4 million barrels per day (bpd) this year compared with 2008 as the rate of contraction in fuel consumption reached levels last seen in the early 1980s.

Does this really surprise anyone? The World is in a recession and unless you are in a cave in Afghanistan you have known this for several months now. It's called basic supply and demand principles. Not enough demand for fuel to meet the building supply for fuel.

So now what is going to happen? Dealers will be listening for any confirmation of the IEA's demand forecast this week. The U.S. Energy Information Administration releases its short-term energy outlook on Tuesday and OPEC publishes its monthly view on Wednesday. If the market feels the fuel projection numbers are wrong by the IEA and the others project a more promising future for fuel cost to go higher, than the fuel market will take off later this week.

On the other hand, if they all come in saying basically the same thing that the economy is in the drain and fuel prices will remain in the drain as long as the economy does or until OPEC cuts products, then we could see this market fall to under $40 a barrel fairly quickly over the next week.

If you just want to make sure that you are buying gas and diesel fuel at the best rate possible along with having a company with full fuel knowledge not only looking over you shoulder but sitting on it, then you want to hire Sokolis Group for our nationwide outsourced fuel management & fuel consulting programs. We clear all of the mess out of the way, so all you get is fuel cost facts, gas price information, diesel fuel discounts and a completely professional fuel managed program. www.SokolisGroup.com or call one of our fuel friendly customer service professionals at 267-482-6155.

Bad Economy, Plenty of Fuel & Fuel Prices Climb?

We have a fuel surplus of 45 million barrel. That's a lot of fuel oil. Economic data released Wednesday showed wholesalers cut their inventories in February by the steepest amount in more than 17 years as companies struggle to reduce stockpiles amid slowing sales. The Commerce Department said wholesale inventories dropped 1.5%, the most on record dating back to January 1992 and more than double analysts' expectations.

What gives? More fuel, higher fuel cost at the pump, less fleet transportation, less mileage being driven by car and bad economic data results with increase crude oil prices. Unfortunately, this market has a knack for ignoring fundamentals.

With refiners holding back production and some unexpected refinery outages the bullish market has driven up fuel prices over this past week.

At Sokolis Group and with a lot of other fuel management companies we all believe that the market will continue around the $50 a barrel market. The fundamentals of the fuel markets say it can't go higher but could it? Sure. It's Oil, anything can happen.

Sokolis Group is a nationwide outsource fuel management and fuel consulting company. We assist our fleet clients in buying fuel and managing their fuel supply chain on a daily basis. For more information contact www.sokolisgroup.com or 267-482-6155. Get control of your fuel purchasing today.

Flat, Fuel Cost. What is wrong with that?

Fairly steady crude oil prices and little change in supply and demand caused the gas price and diesel fuel cost to flatten last week.

Nationally, the average price for a gallon of regular unleaded gasoline was $2.04, down half a cent from last week. Diesel fuel was up one cent to $2.268.

"We still expect to see gradual increases in retail gas prices due largely to the supply and demand fundamentals that always contribute to an upward trend for fuel prices at this time of year," Gregg Laskoski, a spokesman for AAA Auto Club South. “A surge in consumer demand, which is likely as Memorial Day weekend approaches, could push prices higher.” That will be determined if people have jobs and money to take them anywhere.

Diesel fuel volume at national truck stops have dropped by a national average of nearly 20 percent. Those bullish on oil point to the inevitability of "peak oil," arguing that the time will come when we hit the peak of global oil production. From that point on, we'll be able to pump less fuel and less oil out of the ground. In economic terms, we'll face decreasing fuel supply.

Meanwhile, bulls argue that fuel demand will increase greatly, as China and other emerging markets fuel their economic growth with oil. On average, each person in the U.S. consumes about 25 barrels of oil a year; each person in China consumes just more than two. That's a lot of possible future fuel demand.

And all of us amateur economists know what happens when you restrict fuel supply while simultaneously increasing fuel demand: prices rise. Um, weren't these the same arguments made when oil was at $147 a barrel? Yup. At that price, all these favorable supply and demand assumptions were baked in, and then some. The subsequent fuel price fall highlights that we'll only make great returns if we buy at low prices.

In other words, looking at fuel price movements by themselves just isn't that helpful. We need to estimate oil's intrinsic value. How do we do that? Great question? Stay tune for another issue when we will look further into fuel cost and fuel management.

Sokolis Group a outsourced fuel management & fuel consulting company, likes to keep clients and potenial clients up to speed in the fuel market. www.sokolisgroup.com