 |
NEW CFTC DATA ON
SPECULATION RAISES CONCERNS FOR OIL COMMODITY MARKETS
The recent Commodity Futures Trading
Commission (CFTC) data reclassification of
speculative positions in oil markets has
raised some serious concerns for oil
commodity markets. The CFTC learned that one
energy commodity trading firm, which had
been registered as a commercial entity
because the firm executed trades primarily
for industrial firms that needed oil to run
their businesses, was actually taking
speculative positions on behalf of itself.
At one point, the firm’s portfolio held 11
percent of the open interest for crude oil
contracts on the regulated New York
Mercantile Exchange (NYMEX). The newly
reported data has raised concerns for
several lawmakers including Congressman John
Dingell (D-MI) who stated, “It is now
evident that speculators in the energy
futures markets play a much larger role than
previously thought, and it is now even
harder to accept the agency’s laughable
assertion that excessive speculation has not
contributed to rising energy prices.”
According to CFTC data this firm, which the
CFTC has not released its name, was one of
the most active traders on NYMEX which
acquired a huge holding in oil contracts
speculating that oil prices would rise. The
contracts were equal to 57.7 million barrels
of oil which is almost three days worth of
U.S. oil consumption. The recent CFTC
reclassification has added fuel to the fire
that speculation is playing a much larger
role in oil commodity markets than
previously thought.
On September 15, 2008, the CFTC will provide
a detailed report to Congress on whether
speculation in commodity markets is driving
prices to unprecedented levels. PMAA hopes
the CFTC report will not be biased towards
Wall Street investors and instead provide a
fair and accurate assessment of energy
commodity speculation.
On Thursday, PMAA sent another letter to
members of Congress urging them to pass much
needed legislation aimed at curbing
excessive speculation in the oil commodity
markets. Please view the
Senate version and
House version of the letter to Congress.
PMAA OUTLINES FUTURES
MARKET CONCERNS ON CNBC
Last Friday afternoon PMAA President Dan
Gilligan appeared live on the CNBC Streets
Signs show to discuss PMAA concerns with
excessive speculation in energy markets. He
stressed the importance of Congress
providing the CFTC the tools to create a
reliable transparent futures market with
aggregate position limits on non-physical
traders. CNBC Host Melissa Lee was
especially focused on recent admissions by
NYMEX that the speculative influence in
energy markets was greater than previously
reported.
Responding to the NYMEX story, Dan pointed
out that the NYMEX numbers are only a
portion of the market. PMAA is alarmed that
the CFTC has no way of knowing the extent of
speculative influence in the
Over-The-Counter (OTC) markets.
Video is now
available at
this website.
HOUSE SPEAKER MAY ALLOW
VOTE ON OFF-SHORE DRILLING
Speaker Nancy Pelosi (D-CA) announced
recently that she may allow a vote on
off-shore drilling which would grant
Republicans and some Democrats their wish,
the legislation would also include a number
of provisions such as repealing up to $30
billion in tax breaks for oil companies, the
creation of a federal renewable portfolio
standard, releasing oil from the strategic
petroleum reserve, and a provision aimed at
tackling excessive speculation in the oil
markets.
On Monday, House Republicans said that they
would refuse to consider any energy bill
that came straight to the floor from
Democratic leadership’s offices. Republicans
want any energy bill to go through committee
markups which can be a lengthy process.
Congress is still in August recess and will
return the second week in September for
three weeks. Please urge your members of
Congress to pass the speculation bill: S.
3268 and H.R. 6604 without delay!
LEGISLATION WOULD INCREASE
BIOFUEL DISPENSING INFRASTRUCTURE TAX CREDIT TO $100,000
Reps. Herseth Sandlin (D-SD) and John Shimkus (R-IL) introduced
bipartisan legislation that would increase the Alternative Fuel Vehicle
Refueling Property credit which allows gas station owners to claim a 30
percent tax credit for the cost of installing clean-fuel vehicle
refueling properties up to a maximum of $30,000.
The E85 and Biodiesel Access Act would raise the amount of the credit
from 30 percent of the cost of qualifying property to 50 percent up to a
maximum of $100,000, and allows station owners to claim the value for
the entire cost of dual purpose fuel dispensers (currently the IRS
limits the credit to the amount a dual purpose fuel dispenser exceeds
the cost of equivalent conventional refueling dispensers).
H.R. 6734 does not yet have a Senate companion bill, but the E85 and
Biodiesel Access Act is likely to be rolled into a larger energy package
next year. PMAA supports passage of this legislation.
MAINE SENATOR INTRODUCES
AN ENERGY ASSISTANCE BILL FOR STRUGGLING
HOMEOWNERS
Senator Susan Collins (R-ME) introduced the
Energy Assistance Act of 2008 (S. 3349)
legislation that would provide an additional
$1.8 billion for FY 2009 in funding to
low-income families for weatherization
programs, grant dollars for low-income
families who do not qualify for energy
efficiency tax credits, low interest loans
for middle-income consumers, and an
extension of tax incentives for renewable
energy programs. Specifically, S. 3349 would
establish an “Energy Assistance Revolving
Fund” that will make low-interest loans to
individuals and small businesses for energy
efficiency improvements. Individuals who
make less than 115 percent of the median
area income would be able to apply for
low-interest loans to cover the difference
between the tax credits available for energy
efficiency improvements and up to 90 percent
of the cost of those improvements. The
federal agencies would provide these loans
directly or through their lender networks.
The low interest loans would also be
available to businesses to purchase and
install any qualified alternative fuel
vehicle refueling property.
TWO NEW BILLS TO ADDRESS
SKYROCKETING HOME ENERGY PRICES
Before Congress adjourned for August recess, three Connecticut
representatives introduced two pieces of legislation aimed at assisting
families and small businesses with high energy costs. Rep. Christopher
Shays (R-CT) introduced the Home Heating Oil Assistance Act of 2008
(H.R. 6784) which will provide a refundable credit against income tax to
help struggling families heat their homes this winter. H.R. 6784 would
provide a refundable tax credit of up to $500 or 33 percent of an
individuals’ residential home heating costs. The amount would be reduced
by five percent of an individual’s adjusted gross income if it exceeds
$200,300 for a joint return; $182,400 for a head of household; $164,550
for an unmarried individual; and $100,150 for the taxable year when a
married taxpayer files a separate return.
The same day Rep. Shays introduced his piece of legislation,
Representatives Joe Courtney (D-CT) and Christopher Murphy (D-CT)
introduced another energy tax relief bill, H.R. 6804, which would
provide a temporary refundable credit of 50 percent of the individual’s
annual residential energy costs up to $750 for individuals and $1,500
for joint return for either the 2008 or 2009 tax year. For taxpayers
with adjusted gross income over $75,000 or $150,000 for a joint return,
the credit would be reduced. Small businesses with gross receipts of up
to $20 million without regard to the $5 million limit in the Internal
Revenue Code Section 448(c) would be allowed a temporary credit for the
2008 and 2009 tax years to offset high fuel costs which would equal 15
percent of the amount paid during the taxable year for fuel used for
business needs. Also, H.R. 6804 would make permanent the credit for
non-business energy property and would amend Section 25C(b)(3) to
increase to $1,500 the credit for qualified oil furnaces. With heating
oil season around the corner, Congress needs to pass legislation to help
those who need it most.
PMAA PARTNER SPOTLIGHT
FEATURING: GILBARCO INC.
REGISTER NOW: September 10th Webinar on
PCI & Payment Security
Gilbarco, Inc. is pleased to offer their
first FREE webinar as a PMAA National
Partner! The Payment Security Solutions
topic will be presented at 1:00pm EST on
Wednesday, September 10th.
Please see
Gilbarco’s flyer on the webinar and
register today. Should you have additional
questions, please contact your local
Gilbarco distributor.
FINAL REMINDER TO MAKE
YOUR HOTEL RESERVATIONS FOR PMAA’s FALL MEETING OCTOBER 3-4
PMAA will hold its Fall Meeting in conjunction with
the NACS Show on October 3-4 at the Hilton Chicago. Please delete your
browsing history prior to viewing
PMAA’s Housing link.
NACS Housing Customer Care Center can be reached at
1.800.448.6227 Monday through Friday from 9am to 9pm Eastern Standard
Time. Housing registration closes August 29, 2008;
however, PMAA will release the remainder of our
rooms to NACS for the general public at 9:00AM EST Tuesday, August 26th!
Please view the
Conference Schedule and
register for PMAA’s Fall Meeting.
The NACS Show registration is
separate from the PMAA Meeting Registration and early bird registration
closes August 15th!
PMAA MEMBER SERVICES
SPOTLIGHT FEATURING: LABORCHEX
A Cover Sheet For Your Job Application
Instead of handing someone a simple job application that is generic in
nature, we suggest that clients add a cover sheet on top. When you go
this extra step, you are letting the applicant know that you appreciate
his/her desire to work for you, but in order to keep the workforce, your
customers and the community safe, you conduct background checks. This
serves as a ‘warning’ to the applicants that, if considered for
employment, they will be checked out.
Once an applicant reads this, he/she might just get up and leave for
fear of having negative details revealed, such as a damaging criminal
record. After all, think of all the time your business has wasted in the
past just accepting job applications from people who should not have
walked in your door to begin with. LABORCHEX can offer you a free
sample cover sheet that you can customize in any way you like.
LABORCHEX provides employment background screening services to PMAA
members nationwide at discounted pricing. For more information,
review PMAA’s
program or contact Steven J. Austin at 800.880.0366 or at
suastin@laborchex.com.
ETHANOL BLEND SUPPLIERS
SHOULD MARK SHIPPING PAPERS TO AVOID LIABILITY
The U.S. EPA issued a letter several weeks
ago to gasoline retailers warning that it is
illegal to sell ethanol blends above E-10
for use in gasoline-only vehicles and
engines. The EPA went on to explain
that ethanol blends up to E-85 may be
sold for use in flexible-fuel vehicles
and engines. According to the EPA,
the illegal sale of blends over E-10 to
consumers with gasoline-only vehicles and
engines exposes retailers, and possibly
their suppliers, to significant civil
penalties under the Clean Air Act.
The EPA letter recommended dispenser label
warnings and other measures for blends over
E-10 to prevent retailer liability for
misfueling. However, the agency was silent
on steps suppliers should take to prevent
liability for misfueling that occurs on the
retail level (liability is based on
introducing an unregistered fuel into trade
or commerce). A supplier may
potentially be held liable for misfueling if
the supplier knew or should have known that
ethanol blends delivered to the retail site
were being used to fuel gasoline-only
vehicles and engines.
While it is not a federal requirement,
PMAA is recommending to suppliers who wish
to avoid potential liability
for misfueling to place the following
warning on all product transfer documents
for ethanol blends over E-10 delivered to
retail facilities: “Not for Use in
Gasoline-only Vehicles and Engines.”
Also, as a reminder, the U.S. DOT HAZMAT
shipping paper entry requirements for
ethanol blends recently changed. The
following shipping entries must be used
(followed by the quantity of fuel):
|
Blends |
Shipping Paper Entry Under New Rule |
Gasoline up to 10%
ethanol content. |
Gasohol, 3, NA1203, PG II
Gasoline, 3, UN1203, PG II |
|
Over E-10 up to E-85 |
Ethanol and Gasoline Mixture, 3,
UN3475, PG II |
|
Alcohol up to 5% |
Alcohols, n.o.s., 3, UN1987, PG
II |
|
Gasoline |
Denatured Alcohol, 3, NA1987, PG
II
Ethanol and Gasoline
Mixture, 3, UN3475, PG II |
NEW ALASKAN DRILLING
LEASES
The Bureau of Land Management has announced the opening of more than 4.8
million acres in Alaska’s National Petroleum Reserve for oil and gas
exploration. The lease sale is the fifth offered in the 23 million acre
reserve since 1999 and will include land that had previously been
offered for leasing in the past. Currently, about three million acres of
the petroleum reserve is under lease. Exploration drilling has occurred
over recent years, but there has not yet been any commercial production.
The Interior Department estimates that the entire petroleum reserve
holds potential for 10 billion barrels of recoverable oil and 70
trillion cubic feet of natural gas.
MARKET MANIPULATION RULE
The Federal Trade Commission (FTC) issued a proposed rule
last week that would prohibit market manipulation in the petroleum
industry. The commission was given authority to promulgate regulations
prohibiting market manipulation in wholesale petroleum markets under the
Energy Independence and Security Act enacted in December 2007.
The rulemaking process began on May 1 with an Advanced Notice of
Proposed Rulemaking that drew over 150 comments from interested parties.
FTC's proposed rule would make it unlawful for any person to use or
employ any device, scheme, or artifice to defraud; to make any untrue
statement of a material fact or to omit a material fact necessary in
order to make a statement not misleading; or to engage in any act,
practice or course of business that operates or would operate as a fraud
or deceit upon any person.
PMAA is examining the proposed rule closely and will file comments with
the FTC.
FROM THE U.S. ENERGY
INFORMATION ADMINISTRATION
U.S. Average Retail Gasoline Price -
The U.S. average retail price for regular
gasoline fell for the fifth consecutive week
sliding another 7.1 cents to hit 380.9 cents
per gallon, a cumulative loss of 30.5 cents
from the all-time high of July 7. Falling
more than any other region, the price on the
East Coast plunged 8.9 cents to 379.9 cents
per gallon. The smallest drop of any region
– 4.1 cents – was in the Midwest where the
price slipped to 373.1 cents per gallon.
Dropping 8.1 cents to 368.5 cents per
gallon, the Gulf Coast price remained the
lowest regional price. The price in the
Rocky Mountain region fell 5.3 cents to
395.3 cents per gallon. The West Coast price
dropped 8.3 cents to 405.7 cents per gallon,
a cumulative plunge of 40.3 cents from the
all-time high in the region set on June 23.
The average price in California retreated
another 8.7 cents to 411.8 cpg.
U.S. Average Retail Price for Diesel Fuel
- Average U.S. retail diesel prices
continued their downward trek for a fourth
week tumbling another 14.9 cents to 435.3
cents per gallon. Despite losing more than
41 cents since hitting the all-time high on
July 14, the average U.S. price was still
150.6 cents higher than last year at this
time. The average price on the East Coast
fell 14.3 cents to 442 cents per gallon. The
price in the Midwest remained the lowest of
any region plunging 15.2 cents to 426.7
cents per gallon. The average price in the
Gulf Coast dropped 15.1 cents to 429.9 cents
per gallon. Once again, the price drop in
the Rocky Mountains was the smallest for any
region tumbling 13.2 cents to 447.3 cents
per gallon. Receding another 15.3 cents, the
West Coast price hit 451.1 cents per gallon
down nearly 40 cents from the record set
July 14. In California, the average price
plummeted 17.4 cents to 460.7 cents per
gallon. |
|
