2011 April 29

The Master Resource Report  2011-04-29

Top investment manager confronts Peak Oil.    (page 1 ) 

Electrification of transport.    (page 1 )

Consumer spending on gasoline.    (page 2 )

More U.S. drilling won’t change price.   (page 3 )

Videos on Peak Oil.   (page 4 )

Remember those rural households?

Wal-Mart is known as serving the lower income households and rural American shoppers so this remark made by the CEO should come as no surprise to readers of this report.

NEW YORK (CNNMoney) — “Wal-Mart’s core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday. — Lately, they’re “running out of money” at a faster clip, he said.”

In this week’s MRR we have provided an updated graph of gasoline sales as a percentage of total U.S. retail sales. It is clear that transportation is once again weighing down U.S. consumers. Only two unanswered questions remain; at what fuel price point will the economy crack and how bad will it be?

For some Wal-Mart shoppers at least it appears that time is now.

Crude oil prices beyond the WTI

The graphs below are based on prices reported on UpstreamOnline.com. They compare the current prices for eleven different crude oil benchmarks around the world to their respective prices one and three years ago.

The average price of these eleven crude benchmarks is $124 per barrel, twelve dollars above the WTI benchmark price that is so often quoted in the U.S. It is also very close the global benchmark Brent Blend’s price of $125 quoted this Friday morning.

With spot market prices also above $120 per barrel it is clear that at least for the immediate future prices being paid at the pump are not going down. Of course there is always demand destruction (economist speak for when people and business can no longer afford it) to bring the price down. Of course that means economic slowing.

Click graph for larger view.