Bloomberg: "Does the Apple iPad Make Strategic Sense?"

It's hard to bet against Apple. The two things I admire most about the company are its ability to think holistically about business models (iPod + iTues, iPhone + the App store, iPad + iBookstore) and its willingness to keep innovating. Imagine how different it would have been if Apple stopped at the first generation iPod, or just rode the iPod for as long as it could. Its willingness to step out and enter into new categories is an important lesson for all companies.

via bloomberg.com

Apple is certainly one of the five most innovative companies today. They make consumer friendly products that do new as well as old tasks (email etc) for consumers. They have been seemingly able to raise the bar continually.

If one is not risking failure, one is not making the movements that lead to innovation. For the most part, it looks like Apple got past most of the challenges they came across in the development of the iPad.

Posted via web from admore's posterous

U.S. Economy Is Recovering

Jan. 21 (Bloomberg) -- The index of U.S. leading indicators rose more than anticipated in December, a sign the economy will keep growing through the first half of the year.

The New York-based Conference Board’s gauge of the outlook for the next three to six months climbed 1.1 percent, the most in three months, after increasing 1 percent in November. The gain exceeded the median forecast in a Bloomberg News survey for a 0.7 percent rise.

via bloomberg.com

This is good news. The economy is finally picking up speed and showing signs of forward progress. There are nice GDP estimates at the end of the full article on bloomberg.com.

Posted via web from admore's posterous

BLOOMBERG OIL PRICES 10/21/2009

Bloomberg.com: Energy Prices: "PETROLEUM ($/bbl)

PRICE* CHANGE % CHANGE TIME
NYMEX CRUDE FUTURE 78.68 -.44 -.56 00:57
DATED BRENT SPOT 75.93 .25 .33 01:07
WTI CUSHING SPOT 79.09 -.52 -.65 10/20

Oil has gone up quite a bit in the past month or so. Here we are in the early stages of an economic recovery and oil is again climbing in price.

Gas Pricing Analysis

 

Bloomberg has NYMEX Crude at $68.44 per barrel. There are 42 gallons per barrel.

Cost per gallon of NYMEX crude is $1.6295.

The futures price of  gasoline is 1.9546 per gallon.

NYMEX RBOB GASOLINE FUTURE 195.46

NYMEX CRUDE FUTURE 68.44

Here we have $1.9546/$1.6295 = a 19.95% premium. Previous analysis has pegged the nominal pricing premium as a 15% premium for gasoline.

Either crude is selling for less, gasoline is selling for more or some combo of both.

Things are a bit more interesting with pump prices jumping so much in the past month or so. Typically there is about a 60¢ higher cost for gasoline at the pump versus the futures price. The 60¢ is made up of taxes, distribution and profits.

A fueling station near me has 87 unleaded at $2.959.  Currently there is a larger than normal spread between futures and retail pricing. The spread is now 100¢. We are in a recession and miles driven has been declining for some time as a result.

Takeaway:

These prices are not sustainable. There are tankers full of oil parked out in the ocean. As the economy recovers, there will be a rush of oil to market to meet growing demand. Prices should be relatively stable during the growth phase. If growth is  slow as expected it is not unimaginable that crude and gasoline prices will drop considerably.

Crude Oil & Gas Prices: Futures Prices Equalized

 

A barrel of oil is 42 gallons.

Bloomberg has oil prices as “NYMEX CRUDE FUTURE 45.76” dollars/barrel

Bloomberg has Gasoline as: “NYMEX RBOB GASOLINE FUTURE 128.54” cents/gallon

The conversion of oil is to divide price 42 gallons to get the dollar price of oil. Doing so we get a price of $1.0895238. The conversion to cents per gallon is accomplished by dividing by 100. Doing so we get 108.95 cents per gallon of NYMEX Crude.

NYMEX CRUDE FUTURE price is = 108.95 cents per gallon

NYMEX RBOB GASOLINE FUTURE price is 128.54 cents per gallon

There are two ways of looking at this. Either gasoline is more expensive or oil is cheaper. The one that is probably more correct is gasoline as % more than oil. This is likely the case because gasoline is refined from crude oil. The price of gasoline reflects the cost of refining into a product that has few end uses. Crude oil can be made into many different products.

Moving on… Formula: Change in price / base.

RBOB Gasoline is 17.98% more than crude oil on a per gallon basis.

OR

NYMEX Crude oil is 15.24% less than gasoline on a per gallon basis.

SOURCE: Bloomberg Retrieved: 3/11/2009

TV SALES JANUARY 2009

Bloomberg has an interesting article on TV sales.

Jan. 30 (Bloomberg) -- With her new 46-inch flat-panel television mounted above the fireplace, Theresa Nelson is ready for the big game.

“I wanted a new TV before the Super Bowl,” said Nelson, a 45-year-old brewery engineer at MillerCoors LLC. She paid $1,499 for the Samsung Electronics Co. TV at the Best Buy in Greensboro, North Carolina. The TV, which replaced her 10-year-old set, was $600 off and better than Circuit City’s price, she said.

For the full article visit Super Bowl May Spur Fewer TV Sales as Retailers Fight Slump

THOUGHTS:

• Demand is falling
• Prices are falling to match lower demand with the hope of increasing unit sales
• If sales fall too much, capacity utilization at plants will break below the profitability point
• Expect retailers to push computers to try to stem revenue losses from slowing television sales
• Retailers will push more netbooks and second computers as well as accessories that enable consumers to do more.

GASOLINE PRICE DROP

Just saw this data from Bloomberg.

Retrieved on 12/09/2008

PETROLEUM (¢/gal)

PRICE* CHANGE % CHANGE TIME NYMEX HEATING OIL FUTURE 149.39 .35 .23 01:52 NYMEX RBOB GASOLINE FUTURE 95.38 -.80 -.83 01:10

The futures price of gasoline is less than $1. Most states have fuel taxes of between roughly 30 and 50 cents per gallon. Figure in about 10 cents a gallon for marketing, distribution and profits. 

UPDATE: from API

Some facts:  As of October 1, 2008:

• The nationwide average tax on gasoline is 48.4 cents per gallon as of October 2008, down 1 cent from July 2008.  
• The nationwide average tax on motor diesel fuel is 53.6, a decrease of 2.8 cents from the July 2008 study. 

Graphical representation of fuel taxes in July 2008.

The price of gas is going down, down, down. This is an amazing turn of events from June when prices were spiking at above $4 as a national average.

QUESTIONS FOR DISCUSSION

What are your thoughts?

What price do you think the national average price will ultimately fall to?

What month will the lowest average price occur in?

  

BLOOMBERG: "OPEC Defers Decision on Output Cut, Seeks $75 Oil "

OPEC has deferred a decision on reducing output quotas. Oil is in the low $50 range right now. This past summer it nearly hit $150 a barrel.

The United States, the largest economy in the world has entered a recession. Since the U.S. is such a large part of the world economy the rest of the world suffers as a result. The U.S. is a major consumer of other nations exports.

One of the best things to happen in the past four months has been the rapid decline in the price of gasoline. Oil is a major component in the price of gasoline. The reduction in gas prices has left more money in household budgets.

As oil falls, gasoline falls, consumers have more money to spend. As consumers resume spending the recession will slowly end and the economy will begin growing again.

Consumers need lower prices to restore their confidence in the economy and in their financial position. If OPEC were to cut output to increase prices in the short term, it is likely that the recession would linger for a longer period of time. At the same time many of the people calling for alternative energy sources will have the ears of more people. Investment in alternatives will likely increase thereby reducing demand for OPEC oil.

OPEC should hold output steady and allow prices to fall. This will get the world economy back up to speed faster. Output cuts only delay this recovery. Any production or quota reductions make OPEC look bad and gives those opposing them greater power, force and leverage. Taking action to increase prices is the wrong decision for OPEC to undertake.


What are your thoughts?



Sources for you to explore

Bloomberg: Energy Prices
Bloomberg: OPEC Defers Decision on Output Cut, Seeks $75 Oil

NYMEX CRUDE FUTURE PRICE

Bloomberg 8-5-2008

Nymex Crude Future $120.38
Change -1.03
% Change -.85
Time 00:38