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Volume 8-08

 Christmas in August

Crude Oil Prices Down Almost $30 a Barrel from All Time Highs
 
The price of crude oil has dropped by almost $30 a barrel since reaching its all time high of $147.27 on July 11. It closed, on  August 6, at $118.52. (Click here for updated price info) The price for crude went down more than a dollar per day.  Diesel and gas have fallen by more than 6% since reaching their all time highs on July 17 with some additional falling prices to happen as retail margins catch up to wholesale costs.  Investors appear to be on a vacation as they have been turning their attention to fundamentals in the market.  Over the past several months, during this huge climb in cost, investors would react on bullish factors like the weather and geopolitical developments.  Earlier this week, the market basically turned its head to the storm Edouard, the fact that Iran continues to ignore to U.N. sanctions on its nuclear power and the major fire at a foreign pipeline that affected supplies of U.S. crude.  Analysts still believe that this market can go in any direction at anytime.  Some feel that if the market can close below $117 then we have seen the highs for the year.  What that means is that the price could go above $117 but would not get back to $147.  Other still think that this is just a slow time of the year. Rallies in the market can still happen if some bad weather comes into play or more geopolitical tension takes place.  No one is saying $70 or $80 crude is around the corner but who knows what the future holds.  Let's enjoy the break we have received over the past 26 days and hope more of the same is headed in our direction.  It's not Christmas yet but it could be worse. 

Quote
 
"What goes up must come down."      
Greetings!
 
 
For the first time in many months we have seen a solid decrease in the cost of fuel.  Our company makes money by helping other companies buy and manage their fuel better, whether it be $2.00 per gallon or $5.00 per gallon.  Like all of you, we are appreciating the little break in cost because we have fill up our cars too.
 
We hope you enjoy this issue and please provide us with any topics or ideas you would like to address in upcoming newsletters. Your comments are always welcomed.
 
Sincerely,
 
 
Glen Signature


Glen Sokolis
In This Issue
Sokolis Solutions
DOE prices
Testimonial
Fuel Savings
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Sokolis Solutions 

 
  1. If you have a good fuel management program stick to it.                 
     
  2. If your fuel buying and management program lacks depth, improve on it.  
     Click here 
                                    
  3. Did you ever think about Price Insurance (Hedging)? Are you worried that prices could go back up?  Plan  for the worst.        
     
  4. Continue
    to put idle policies, monitor MPG and educate drivers.                                      
  5. Run your business as if diesel still costs $5.00 or more and your company will do well.                                
     
  6. No one knows where the top or bottom for fuel is going to be but having programs in place will only make your company stronger.

 

 

 

 
 
DOE  Prices
as of August 4, 2008 
 
US = $4.502
 
EastCst = $4.563
 
NewEng = $4.735
 
CenAtl = $4.672
 
LwrAtl = $4.501
 
Midwst = $4.419
 
GulfCst = $4.450
 
RkyMt = $4.605
 
WCst = $4.664
 
CA = $4.781
 
 Webinar

  All New!  
 
 
Date:  August 26, 2008
 
Time:  8AM or 4PM 
Eastern Standard Time  
 
The latest fuel industry news
 
Price insurance, how it works.
 

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Contact us online or call 267-482-6155
to request a free, preliminary
savings evaluation
 
It's never too late to start saving money. Find out how much you could be saving.
Testimonial  

"We have had nothing but a positive experience with their knowledge and customer service."
 
Paula Kasprzyk, Corp. Purchasing Agent
Edw. C. Levy Co.

 

Click here for more information
  



Fueling savings
 
By CRISSA SHOEMAKER DEBREE

AAA can change your flat tire, unlock your car when you've left your keys inside or tell you where the cheapest gas station is.
But the agency is not a fuel expert.
So when it came to managing the fuel consumed by its own 250-vehicle fleet, AAA Mid-Atlantic turned to the Sokolis Group, a Warrington-based fuel management company.
Since signing up with Sokolis in 2006, AAA Mid-Atlantic has saved an average of $12,000 a month on fuel and labor, said John Poholsky, the club's fleet director. The program's been so successful that the national automobile club has made Sokolis a recommended vendor for all of its clubs in the U.S. and Canada.
AAA Mid-Atlantic serves Delaware, Maryland, Washington, D.C., and parts of Virginia, Pennsylvania and New Jersey.
"We buy a lot of fuel each month," Poholsky said. "We buy it in seven different locations in five different states. We realized we needed some help, or we needed to do something different. We know we're not experts in the fuel industry. So we went to look for one."
That someone was Glen Sokolis, who started the Sokolis Group five years ago after 14 years of owning oil companies that provided fleet refueling services.
"A lot of companies ... really didn't understand what they're being charged and what their true costs of fuel were," Sokolis said. "There were a lot of clients that didn't know the true dynamics behind the cost of fuel."
Most consumers, for instance, see a 30-cent jump at the pump and think that's how much the price of the gasoline rose. What they don't know is how much goes into the price of a gallon of gas, including delivery charges, taxes, the station's profit and the cost of the fuel, Sokolis said.
The Sokolis Group uses the Oil Price Information Service, an online pricing service, to track gasoline costs around the country. From there, it helps clients negotiate prices with fueling companies.
"Oil is a dirty business," Sokolis said. "Dirty not just in the sense of the word 'oil.' It's a 'pennies' business. If someone can scratch out an extra penny, it could be worth tens of thousands of dollars to their business."
Most of the company's clients have commercial vehicles that require diesel fuel. They don't often use conventional gas stations to refuel, instead relying on mobile refueling stations that fill the trucks overnight, truck stops or "card locks," which are unattended fuel stations located around the country. Drivers use access cards to activate pumps and pay for the gas.

For AAA Mid-Atlantic, the Sokolis Group set up different fuel-buying programs for each of the club's seven fleet locations. In Philadelphia, the largest location, a company refuels vehicles overnight. That not only saves on gas - the club had bought fuel at retail prices and now negotiates a discount - but on labor, because drivers don't have to wait at gas pumps to fuel up, Poholsky said.
AAA Mid-Atlantic now uses card locks and has its own fueling station in at least one location. The Sokolis Group tracks the club's spending and generates reports to help it better manage the fleet.
As gas prices have risen, Sokolis said his company has gotten busier. The client base has increased by about 25 percent over the past year, he said. Clients typically save between 10 cents and 14 cents a gallon, he said.
For Sokolis, rising gas prices are a supply-and-demand issue. The world's oil consumption is growing faster than the supply.
"As a country, everybody wants to point blame: 'It's all speculation,' " he said. "I don't believe that. There's a little bit of speculation. But there's good reason to speculate. You have a supply and demand issue that's real."
Sokolis described himself as "a regular person" who's not a Republican or a Democrat, a liberal or a conservative. He drives a Honda Accord; his wife has a sport utility vehicle. He supports drilling in Alaska and developing alternative fuel sources, but he believes the country pushed ethanol too fast, and that's behind the rising food prices.
Sokolis said gas prices will keep rising until later this year and won't ever return to the $2-agallon mark.
"I think they'll go up," he said. "Sometime in the third quarter, we'll see them come down. [Then] I think they'll go up again."
To Michael Butler, every little thing his company does to save on fuel adds up. Butler is president of Victory Gardens, a Warminster company that sells and delivers mulch and other landscaping supplies.
Butler said fuel costs have doubled, while the prices he charges customers have gone up by 22 percent.
"We know what our monthly costs are, and we can keep our daily transactions," he said.
"We're getting the best freight price on fuel delivered to us. And they give you a horizon on what to look out [for] ahead."

July 13, 2008 8:25 AM


Where is fuel headed?
 
Some questions that we have been asked over the last couple of weeks
 
Q:  Will the trend of falling fuel prices continue?
A:  The oil market is extremely volatile as we have all seen over the last year.  Many factors impact the price of crude oil, including tense relations between U.S. and Iran.  There are continued issues in Nigeria, Venezuela and growth in China, India and the Middle East.  Those factors are not going to go away.  It's a difficult period.
 
Q:  Can the weather play a part in the cost of fuel?
A:  Up to this point of the year it has not played a role in fuel prices so far.  Hurricane season does not end until November 30th.  Hurricanes and tropical storms that could cause damage down in the Gulf Coast could certainly still have an impact on the price of fuel in the coming months.  If the storms are not that serve it usually just causes temporary price increases.  As we all recall from Rita and Katrina, significant storms that do a lot of damage can cause prices to skyrocket for a longer period of time.
 
Q:  Do you expect prices to go down over the next month?
A:  If we only had a crystal ball, we would like to be able to say yes or no with a lot of confidence.  The market is very unstable and it has gone down by more than $27 a barrel over the last month.  In the month of June it went up $23 a barrel.  The range of $115 to $125 seems to be a reasonable.  Since prices have fallen hard over the last couple of weeks, the retail fuel prices should continue to come down over the next month as retails will need to lower their margin. 
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