Gas Prices

Isn’t someone suppose to be eating their underwear? I think I read that somewhere in the politics forum.

This sucks, I just filled up my thousand gallon bulk tank when gas was 3 dollars a gallon.

[quote]JD4520 wrote:
This sucks, I just filled up my thousand gallon bulk tank when gas was 3 dollars a gallon.[/quote]

Seriously? Wow. That would last me for 3 years.

But then you’d have to defend it from theives…

Yeah, what Rainjack said, but I’d never agree with the hateful bastard in public.

[quote]Polish Rifle wrote:
rainjack wrote:

When demand dries up, prices go down.

It’s only a “sham” to those too lazy to pay attention.

RJ,

Has demand decreased in Texas? It certainly hasn’t in the Northern Midwest.

Lazy has nothing to do with it.

[/quote]

The Northern Midwest isn’t the driver of the oil market. Neither is Texas. But yes, in July, demand for gasoline went way down - everywhere. At $4/gallon people were not going and doing nearly as much.

Then the gas prices started coming down. Decreased demand = decreased prices.

The current wager (speculation) is that demand for gasoline will continue to drop.

And yes - it is lazy to just bitch about the price of gas without making an attempt to understand what is going on.

[quote]rainjack wrote:
Polish Rifle wrote:
rainjack wrote:

When demand dries up, prices go down.

It’s only a “sham” to those too lazy to pay attention.

RJ,

Has demand decreased in Texas? It certainly hasn’t in the Northern Midwest.

Lazy has nothing to do with it.

The Northern Midwest isn’t the driver of the oil market. Neither is Texas. But yes, in July, demand for gasoline went way down - everywhere. At $4/gallon people were not going and doing nearly as much.

Then the gas prices started coming down. Decreased demand = decreased prices.

The current wager (speculation) is that demand for gasoline will continue to drop.

And yes - it is lazy to just bitch about the price of gas without making an attempt to understand what is going on. [/quote]

Supposedly the Chinese market is about to go through extra tumultuous times, a few chinese companies are going to be bought out and OPEC will be behind the wheel on it.

Watch for unforcasted increases after Christmas.

I hope my z28 gets out of the shop soon. I can’t wait to burn up a full tank in a matter of hours.

[quote]FormerlyTexasGuy wrote:
Supposedly the Chinese market is about to go through extra tumultuous times, a few chinese companies are going to be bought out and OPEC will be behind the wheel on it.

Watch for unforcasted increases after Christmas. [/quote]

China has been going through a tumultuous time since the Olympics ended.

If there is a global recession (like now) buying Chinese companies is not going to to do much to increase demand.

Oil prices will go back up, but I doubt we will see $150 again for some time.

It wouldn’t bother me if it went back up to $80/$90 per barrel.

[quote]rainjack wrote:
FormerlyTexasGuy wrote:
Supposedly the Chinese market is about to go through extra tumultuous times, a few chinese companies are going to be bought out and OPEC will be behind the wheel on it.

Watch for unforcasted increases after Christmas.

China has been going through a tumultuous time since the Olympics ended.

If there is a global recession (like now) buying Chinese companies is not going to to do much to increase demand.

Oil prices will go back up, but I doubt we will see $150 again for some time.

It wouldn’t bother me if it went back up to $80/$90 per barrel. [/quote]

I didn’t get the forecasted numbers, but the rumor is that OPEC will be buying out Chinese energy companies and cutting the production, forcing greater demand for OPEC oil in China, even if it is still lower than normal. OPEC will be cutting it’s own production as well and will effectively squeeze more price out of the available oil, even at lower demand levels.

Due to a monopoly of sorts, the oil market will be operating outside of normal supply and demand forces. We have effectively lost our Bush/Saudi relationship with Obama too, who is all for squeezing oil companies out of business.

Not sure about West Texas, but the production in the gulf has been put on a freeze for most companies. No cutbacks yet, but no progress as was expected either. “Drill baby drill” isn’t financially worth it anymore, especially deepwater, and OPEC has the reigns again.

I would bet 80-90 per barrel is pretty accurate long term. A guy I went to school with is a commodity trader for Citi and deals heavily in oil. It is forecasted to stay at that level for years to come.

The conoco guys in production were forecasting a six month spike way above the norm though. They didn’t give a lot of detail unfortunately. Insider trading bullshit I would imagine.

Hopefully LNG takes off. We have plenty of gas and Texas would remain stable for decades to come. Hell, your part of the state might be brought to the present century with all the growth it would bring.

Kind of weird how Bush is about to be out of power prices drop like a rock. hmmm, no one has mentioned how someone who has deep oil ties causing highest oil prices to date…

[quote]jehovasfitness wrote:
Kind of weird how Bush is about to be out of power prices drop like a rock. hmmm, no one has mentioned how someone who has deep oil ties causing highest oil prices to date…[/quote]

If Bush is pulling private price strings, it has nothing to do with his presidency. Oil and the Whitehouse are two seperate entities. He did not pass any legislation causing oil price spikes. In fact, he used the position to negotiate lower prices through the Saudis.

I don’t think OPEC has enough influence to totally control oil prices anymore. Their members are always exceeding quotas that OPEC sets.

You also have the Russians who are substantially bigger players in the oil game than in the 70’s when OPEC was at it’s peak influence.

Thr Russians won’t play with OPEC, thereby reducing their ability to control oil prices.

I think the major driver of oil prices right now is the expectation of a worldwide economic slowdown which could be one of the worse economic periods we’ve seen in our lifetimes.

[quote]rainjack wrote:

The Northern Midwest isn’t the driver of the oil market. Neither is Texas. But yes, in July, demand for gasoline went way down - everywhere. At $4/gallon people were not going and doing nearly as much.

Then the gas prices started coming down. Decreased demand = decreased prices.

The current wager (speculation) is that demand for gasoline will continue to drop.

And yes - it is lazy to just bitch about the price of gas without making an attempt to understand what is going on. [/quote]

Okay, demand decreased over the summer months.

My point was the highways and roads are just as congested today as they were last summer, and airlines continue to pack their planes. So the bottom falls out and we see 2006 rates for gasoline across the country?

Who’s bitching? I fill my tank regardless of the rates at the pump because thankfully I can afford to. I just find it curious that the price of a barrel of oil plummeted about the same time Wall Street took a piss down it’s leg.

[quote]Polish Rifle wrote:

Who’s bitching? I fill my tank regardless of the rates at the pump because thankfully I can afford to. I just find it curious that the price of a barrel of oil plummeted about the same time Wall Street took a piss down it’s leg.
[/quote]

And why do you think Wall Street did that? The economy was tanking.

It’s not just your area you need to look at. Look at the entire world.

Things are pretty crappy all over. Combine that with the overheated speculation on oil, and you have a free fall in oil prices.

End times are near!

[quote]50_Caliber wrote:
I don’t think OPEC has enough influence to totally control oil prices anymore. Their members are always exceeding quotas that OPEC sets.

You also have the Russians who are substantially bigger players in the oil game than in the 70’s when OPEC was at it’s peak influence.

Thr Russians won’t play with OPEC, thereby reducing their ability to control oil prices.

I think the major driver of oil prices right now is the expectation of a worldwide economic slowdown which could be one of the worse economic periods we’ve seen in our lifetimes.[/quote]

Russia is in the Venezuelan waters practicing joint military moves.

[quote]malonetd wrote:
Sick Rick wrote:
I still think it’s funny that people in the US always complain about gas prices, without realising that here in Europe we easily have to pay twice as much.

Europe is also smaller, has better public transportation, and doesn’t have government regulations that discourage automakers from building cars with better gas mileage.[/quote]

We do have better public transportation, but not THAT much better.

And we have government regulations that require automakers to build cars with better mileage. The US doesn’t.

Ooops, I forgot, in the US nothing ever good comes from regulations.

Either way, gas was overpriced because of high demand and the expectancy that demand would still increase. And there probably was some speculation.
Now with the financial crisis, demand has dropped. Factories use energy, when factories decrease production or close down, demand for energy drops.
And that also means no more speculation on higher prices, so the cost is driven down even further.

[quote]FormerlyTexasGuy wrote:
jehovasfitness wrote:
Kind of weird how Bush is about to be out of power prices drop like a rock. hmmm, no one has mentioned how someone who has deep oil ties causing highest oil prices to date…

If Bush is pulling private price strings, it has nothing to do with his presidency. Oil and the Whitehouse are two seperate entities. He did not pass any legislation causing oil price spikes. In fact, he used the position to negotiate lower prices through the Saudis. [/quote]

Attacking Iraq dropped supply immediatly, and the Iraqi oil export went back up very slowly. That probably kickstarted the whole thing.

[quote]Sick Rick wrote:
I still think it’s funny that people in the US always complain about gas prices, without realising that here in Europe we easily have to pay twice as much.[/quote]

No, I am aware of the gigantic price difference.
For a large number of people here in the US, we can’t get to work without driving something that runs on gasoline, same thing goes for getting groceries, etc.

I’ve actually moved to within a 5 mile radius of work now, to facilitate cycling to work. have to get that NEPA in somewhere…

:wink:

[quote]50_Caliber wrote:
I don’t think OPEC has enough influence to totally control oil prices anymore. Their members are always exceeding quotas that OPEC sets.

You also have the Russians who are substantially bigger players in the oil game than in the 70’s when OPEC was at it’s peak influence.

Thr Russians won’t play with OPEC, thereby reducing their ability to control oil prices.

I think the major driver of oil prices right now is the expectation of a worldwide economic slowdown which could be one of the worse economic periods we’ve seen in our lifetimes.[/quote]

What you guys don’t seem to realise is this.
Suppose demand is 100, supply is 100 and the price is 100.
Now suppose demand is 5% higher than supply. What will the price be? Certainly way over 105.
Now suppose demand is 5% lower than supply? What will the price be? Certainly mush less than 95.

There’s a multiplicator effect in there.