Spot Market

Just when you thought it was getting safer to go back to the gas pump, guess who you have to thank for lowering prices? None other than Saddam Hussein. Gas pump prices have been dropping in the Philadelphia area, as they have been across the nation, since the United Nations agreed more than five weeks ago to allow Saddam to sell oil to buy food and medicine for Iraq's distressed population. "If you just watch the pump prices as you drive to work, you can see the prices coming down," said Sun Company spokesman Paul Durkin.

IN THEIR ongoing search for a bogeyman to blame for the price of oil, much of the media and many politicians have been calling for restrictions on the trading of oil futures as a way to reduce oil prices. This reflects a misunderstanding of the way the oil markets really work. Oil is sold in two ways: "Spot" transactions where price is determined by supply and demand or long-term contracts in which buyer and seller negotiate a price that holds over the life of the contract. The buying and selling of oil futures contracts is very different because they typically don't involve any actual oil. Consider a futures contract to deliver oil on a particular date (the "delivery" or "settlement" date)

To the city and to the workers at the old ARCO refinery, John Deuss is something of a savior. To anti-apartheid activists, Deuss is an agent of the South African government. The Soviet Union says he's a criminal. Johannes Christiaan Martinus Augustinus Maria Deuss, who rescued the doomed ARCO refinery only to sell it off to Sun Co. in a $513 million deal announced yesterday, is nothing if not mysterious. His bio reads like the description of a character in a pulp novel: Reclusive international businessman who made his fortune in the oil business.

There's no doubt the School District made a slick move when it started buying heating oil for its buildings last year. The question is whether the move is saving the district money, or burning up the bucks. One-time Republican mayoral candidate George Bochetto this week filed a taxpayer's lawsuit against the district, saying the district will lose up to $360,000 this school year because of the way it buys heating oil. But district officials said Bocchetto's suit is just blowing smoke, because their new buying strategy means more savings as temperatures drop and oil prices heat up. The district predicts it will save $300,000 compared to its normal yearly outlay for heating oil. Bochetto filed the suit on behalf of Michael J. Matkovic, of East Falls, an investment salesman.

Public Service Electric & Gas Co. has asked the New Jersey Board of Public Utilities to approve a $46.4 million rate decrease for the company's 1.5 million gas customers. If allowed, the reduction would give PSE&G customers their lowest gas bills since 1981. The proposal would reduce the bill for the typical residential-heating customer to $58.91 a month from the current level of $61.41, a decline of 4.1 percent. Most of the decrease is the result of the continuing fall in the price of natural gas. PSE&G filed the rate adjustment with the BPU late Thursday.

The spot market in crude oil faces turmoil, with several trading companies threatening to default in the face of huge losses brought on by the recent dive in world prices, traders and brokers said yesterday. While only a handful of firms are involved at the moment, the ripple effect could hit almost every trader involved in the highly speculative market for Britain's North Sea Brent grade, they said. Trading halted briefly yesterday as some traders could not deliver cargoes bought in advance for delivery now, and as others haggled over terms of agreements.

It will be some time - no one seems to know when - before Philadelphia motorists will be paying less than a buck a gallon for gasoline. Outside Philadelphia, it's a different story. Some gas station dealers in both Pennsylvania and New Jersey suburbs said they reduced the price of some of their brands to under a dollar nearly a month ago. Crude oil prices on the spot market and the futures market have declined from a high of $28.65 a barrel in December to $14.21 last week.

Rising energy costs - driven partly by higher costs for oil - are taking the glow out of some of the bright new savings available to Pennsylvania consumers under electricity deregulation. Starting next month, tens of thousands of Conectiv Energy customers in the Philadelphia area will pay more for their juice - an increase that might cost a typical household an extra $57 a year. The bill would be even more in homes with electric heat. The Wilmington firm, one of the larger suppliers in the local deregulated market, also has stopped taking new energy customers in the Southeast Pennsylvania territory served by Peco Energy, at least until the end of summer.

Oil prices plummeted on the New York Mercantile Exchange yesterday amid further evidence the United States could be headed for a gasoline glut because demand at the pump has been weaker than expected. West Texas intermediate - the bench mark U.S. crude for immediate delivery on the Merc - tumbled 77 cents to $13.10 a barrel for the lowest finish in almost six weeks. On the U.S. spot market, where oil is sold to the highest bidder, West Texas intermediate fell 75 cents to $13.15 a barrel.

In the days since the Alaska oil spill, gasoline prices have skyrocketed - especially on the West Coast - but service station operators say the spill is less of a reason than an excuse. Gas prices at the pump have gone up since the March 24 spill by as much as 27 cents a gallon at some Los Angeles-area stations, where the average price for regular unleaded gas is now about $1.10 a gallon. In Philadelphia, the average price is about 96 cents a gallon, up five cents since the spill, and in Chicago, the average retail price has increased by nine cents to $1.07 a gallon.

IN THEIR ongoing search for a bogeyman to blame for the price of oil, much of the media and many politicians have been calling for restrictions on the trading of oil futures as a way to reduce oil prices. This reflects a misunderstanding of the way the oil markets really work. Oil is sold in two ways: "Spot" transactions where price is determined by supply and demand or long-term contracts in which buyer and seller negotiate a price that holds over the life of the contract. The buying and selling of oil futures contracts is very different because they typically don't involve any actual oil. Consider a futures contract to deliver oil on a particular date (the "delivery" or "settlement" date)

Rising energy costs - driven partly by higher costs for oil - are taking the glow out of some of the bright new savings available to Pennsylvania consumers under electricity deregulation. Starting next month, tens of thousands of Conectiv Energy customers in the Philadelphia area will pay more for their juice - an increase that might cost a typical household an extra $57 a year. The bill would be even more in homes with electric heat. The Wilmington firm, one of the larger suppliers in the local deregulated market, also has stopped taking new energy customers in the Southeast Pennsylvania territory served by Peco Energy, at least until the end of summer.

There's no doubt the School District made a slick move when it started buying heating oil for its buildings last year. The question is whether the move is saving the district money, or burning up the bucks. One-time Republican mayoral candidate George Bochetto this week filed a taxpayer's lawsuit against the district, saying the district will lose up to $360,000 this school year because of the way it buys heating oil. But district officials said Bocchetto's suit is just blowing smoke, because their new buying strategy means more savings as temperatures drop and oil prices heat up. The district predicts it will save $300,000 compared to its normal yearly outlay for heating oil. Bochetto filed the suit on behalf of Michael J. Matkovic, of East Falls, an investment salesman.

Just when you thought it was getting safer to go back to the gas pump, guess who you have to thank for lowering prices? None other than Saddam Hussein. Gas pump prices have been dropping in the Philadelphia area, as they have been across the nation, since the United Nations agreed more than five weeks ago to allow Saddam to sell oil to buy food and medicine for Iraq's distressed population. "If you just watch the pump prices as you drive to work, you can see the prices coming down," said Sun Company spokesman Paul Durkin.

A currency-trading firm that allegedly bilked millions from investors in Philadelphia is being investigated by the Securities and Exchange Commission, with criminal charges also being considered. AYM Financial Corp. collected an estimated $10 million or more from investors, 30 percent to 40 percent of them from the Philadelphia area, before closing its doors in February, according to Merri Jo Gillette of the SEC in Philadelphia. AYM had promised that those who invested $10,000 or more would reap fantastic returns from trading foreign currencies such as Deutsche marks and yen on the spot, or cash, market, according to a complaint filed last month by the U.S. Commodity Futures Trading Commission in Washington.

Hey, your personal investments should do as well. Those newspapers piling up in your kitchen, or basement, or garage are worth 13 times as much as last year. And your local government couldn't be happier. Earlier this year, the Borough of Swarthmore found itself paying through the Dumpster to get its used newspapers hauled away; it had just about decided to shut down its recycling program. But then the same paper brokers who had been charging Swarthmore $5 a ton to haul the old papers away started offering to pay the town $20 a ton for those papers, and to commit to two-year contracts.

In the days since the Alaska oil spill, gasoline prices have skyrocketed - especially on the West Coast - but service station operators say the spill is less of a reason than an excuse. Gas prices at the pump have gone up since the March 24 spill by as much as 27 cents a gallon at some Los Angeles-area stations, where the average price for regular unleaded gas is now about $1.10 a gallon. In Philadelphia, the average price is about 96 cents a gallon, up five cents since the spill, and in Chicago, the average retail price has increased by nine cents to $1.07 a gallon.

To the city and to the workers at the old ARCO refinery, John Deuss is something of a savior. To anti-apartheid activists, Deuss is an agent of the South African government. The Soviet Union says he's a criminal. Johannes Christiaan Martinus Augustinus Maria Deuss, who rescued the doomed ARCO refinery only to sell it off to Sun Co. in a $513 million deal announced yesterday, is nothing if not mysterious. His bio reads like the description of a character in a pulp novel: Reclusive international businessman who made his fortune in the oil business.

Public Service Electric & Gas Co. has asked the New Jersey Board of Public Utilities to approve a $46.4 million rate decrease for the company's 1.5 million gas customers. If allowed, the reduction would give PSE&G customers their lowest gas bills since 1981. The proposal would reduce the bill for the typical residential-heating customer to $58.91 a month from the current level of $61.41, a decline of 4.1 percent. Most of the decrease is the result of the continuing fall in the price of natural gas. PSE&G filed the rate adjustment with the BPU late Thursday.

In 1973, when Arab nations cut off oil supplies to the United States, Americans panicked, gasoline prices surged and gas-hoarding motorists formed long lines at filling stations. Five years later, when Iran's Ayatollah Ruhollah Khomeini seized control of his country's oil supplies and U.S. fuel prices again shot skyward, many Americans scrambled to trade in their V-8 models for high-mileage Japanese cars. Today, a gallon of unleaded regular gasoline sells for an average of 81 cents, down from the 97-cent average paid in 1975.