Oil closed last week down from its high of $147 a barrel to $130. I am getting dizzy from the constant up and down of oil prices. I will say it was nice to see gas finally come down. Its sad that we get excited about gas dropping 10 cents from $4.35 to $4.25. Especially consider it was a $1.00 or so cheaper only a year ago. It will be interesting to see what this week brings. I do not want to jinx it but I will be praying for the current trend to continue. For those of you trying to squeeze every penny www.gasbuddy.com is a good place to go to find the cheapest gas in your area.

    On a side note and true to form it seems even if this miracle of falling oil continues Congress will soon make up for such trechery. I found and article that states not only to the possibility of a temporary elimanation of the federal gas tax fail but it is more than likely to go up. Glad I do not drive an SUV. 
Finance.Yahoo.Com - Click for Complete Story

-= Matt

     As if on queue oil is already up $2 before the market open. This time I guess it is some thing going on in Nigeria.  As they say , if it is too good to be be true it probably is. So oil is heading back up which is no surprise to me. Like I said the hedge funds and market movers likely sold it off so they could move the price down to move it back up. As such i would not do your happy dance yet.

SINGAPORE (AP) — Oil climbed back above $130 a barrel Friday in Asia as news of an output cut in Nigeria helped to halt the steady decline in prices that began three days ago.

Eni SpA said Thursday that it had shut down pipelines carrying 47,000 barrels of oil a day after a “sudden drop of pressure.”

A Nigerian military official said an explosion had damaged an Eni pipeline in the country’s oil-rich south early Thursday, although he didn’t know how severely.

“I can confirm that there was an explosion, but we don’t yet know if the pipeline was vandalized or if it was an accident,” Col. Chris Musa, the head of the Bayelsa State military, told The Associated Press.

Eni said in a statement that the causes of the incident were unknown but that it had already call in units to start repairs.

“A lot of the threat to Nigerian production has already been priced in, but that explosion may create some interest,” said Mark Pervan, a senior commodities strategist with ANZ Bank in Melbourne.

Nigeria’s major militant group – the Movement for the Emancipation of the Niger Delta – denied any involvement in the blast. Armed gangs, some with political motives, regularly attack oil installations in Nigeria’s southern river delta region.

Attacks on the region’s oil industry infrastructure in the past two years have slashed oil output by almost a quarter in Nigeria, Africa’s top crude producer. The instability has helped push worldwide crude prices to historic highs.
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   I said in a post in June, Oil and gas prices increase and no relief in sight, that oil would continue its rise and we would continue to feel the pressure as consumers. Now this happens and it make me look like a liar … or does it ? In the article one analyst states that just because oil has dropped from its high of $147 to $130, does not mean all our fears have been cured and we can get back to partying like rock stars. In fact towards the end of the article the author mentions that the AAA report average still holds at $4.114. And I second this as know of the gas stations have lowered their prices either.

    What does this mean ? I think part is as mentioned int the article the market movers our taken some of the huge gain they got in the run-up of oil futures and buying stocks that have been crushed. For instance , Bank of America ( BAC ) , was up $3.83 at closing.  Not surprising considering it still trades for $5.00 below book value. I think the other side of this is the price has to come down so they can move it up again.
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   So my strategy remains, pay off debt, and buy good stocks at a discount. Race you to a million.

-= Matt

   Unless you live in a bubble you are well aware of the constant rise in fuel prices. People with heating oil are getting a double whammy. Some time ago I posted an article, “Getting Pumped at the Pump”,  about the government seeking to impose upon manufactures  a floor for gas mileage. The minimum mpg will need to be 35 by 2010. Not sure about you, but that is not going to help pay the mortgage now, or feed my kids now.

   To try and find a way to help stem the rising costs of fuel I began doing some research on diesel. Now, off the cuff I knew Mercedes and Volkswagen both made diesel sedans. In fact they are probably the most popular because they have done it the longest. After viewing several websites and a multitude of user comments it was clear that the best fuel economy in a U.S. diesel , was a VW Jetta between 1999 and 2003. See the EPA MPG data, click here .

   However, I did come across information that said VW, BMW, Mercedes and possibly other major car producers were coming out with even better and more efficient diesels that would be US legal. Because apparently there is a Europe only VW that gets 70 miles to the gallon which is AWESOME!!! Now I know you Prius lovers out there beat the Jettas economy and then some. However, I am talking about buying used and not new. Of course if I had $22,000 to burn I would go out and buy a Prius. My point is I can buy a car for half the price, and still really save on gas.

   So I could save $873 a year ( click here and select a 2002 4 cyl Galant and a 2003 Jetta TDI Manual ), on fuel switching to a Jetta diesel. And this will probably only improve as the price of oil continues to rise.  Plus, the money I would save buying used would provide a healthier buffer against any potential out of warranty repairs. I did see that these tend to have reliability issues related to the engine, but with the cost of living sky rocketing, I feel it is a risk worth taking. In fact, I found a 2003 Jetta TDI with 68k miles listed for $11,500 which is $2,000 grand under book value. Now that is a deal!

   As I mentioned before I have no experience when it comes to diesel cars, so any further insight is welcome. If you are saving money by driving a diesel let us know your make and model and what you get on average for fuel economy. Any information on the new wave of diesels would also be welcome.

So I talked some junk in my previous post, “What your tax rebate will really buy” . It seems that despite my pessimism, the government is going to throw us a bone earlier than expected. So instead of paying $4.00 / gallon for regular gas you might be paying $3.75, but something is better than nothing. Heres an article from AP on yahoo announcing the goodish news.

AP
Bush says rebates going out Monday will boost economy
Friday April 25, 11:46 pm ET
By Tom Raum, Associated Press Writer 
Bush says tax rebates going out Monday will help people afford rising gas, food prices

WASHINGTON (AP) — President Bush said tax rebates will start going out Monday, earlier than previously announced, and should help Americans cope with rising gasoline and food prices, as well as aid a slumping economy. Democrats said they were glad the rebate checks were about to go out, but suggested that multinational oil companies were not among the businesses the stimulus package was originally designed to help.
     “Starting Monday, the effects of the stimulus will begin to reach millions of households across our country,” Bush said Friday in remarks on the South Lawn of the White House. Those first rebates will be directly deposited into people’s bank accounts.
     The Internal Revenue Service had been saying direct deposits wouldn’t start until next Friday. Bush said paper checks would begin going out on May 9, a week earlier than previously announced.

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