Gas prices...
#571
Lexus Test Driver
Saudi Arabia is pretty ruthless. They want to absolutely positively make sure without a doubt let the world know and more specifically the U.S. that it will stay #1. They will keep pumping this record oil till it gets to $20 barrel. That'll effectively put their boot on the neck of any competitors.
Amazing all these talking heads blathering on about Buy! Buy! Buy! @ $70, $60, $50 and yet here we are at $40 and some change.
My question is when will we see $2 gas again.
Amazing all these talking heads blathering on about Buy! Buy! Buy! @ $70, $60, $50 and yet here we are at $40 and some change.
My question is when will we see $2 gas again.
Price of gas is "downstream" business. Saudi may have some impact, but really look at local factors, speculators, regulators and the NIMBY's that oppose the construction of new refining capacity whenever it is proposed. Also, look closely at the breakdown of how much of that $/gal. is going as city/state/federal taxes and road/infrastructure levies, etc. You will be surprised.
http://mediad.publicbroadcasting.net..._taxes_api.jpg
Last edited by My0gr81; 08-21-15 at 10:20 AM.
#573
Lexus Test Driver
During the 2008/2009 downturn, demand went down, everyone agreed to reduce output to put a floor on prices. Some of the OPEC and most non-OPEC members moped up the floor by keeping their output high and stealing market share from Saudi as they were unable to supply since they did reduce output. Oh, and one of those countries was US as they implemented "fracking" technology to extract even more crude from wells that would be considered "dry" using conventional pumping methods.
Last edited by My0gr81; 08-21-15 at 10:43 AM.
#574
Lexus Test Driver
iTrader: (1)
During the 2008/2009 downturn, demand went down, everyone agreed to reduce output to put a floor on prices. Some of the OPEC and most non-OPEC members moped up the floor by keeping their output high and stealing market share from Saudi as they were unable to supply since they did reduce output. Oh, and one of those countries was US as they implemented "fracking" technology to extract even more crude from wells that would be considered "dry" using conventional pumping methods.
But by this very fight they've started, they've caused significant reductions in the break even price of hydraulically fractured wells. The cost to drill and complete a well was benchmarked at $80 oil. Today, we see prices benchmarked at $65 oil. In the next six months, we'll see prices continue to come down and benchmark to $50 oil (which is pretty much the current strip price on the futures market).
By attempting to drive hydraulic fracturing out of town, all they've done is make it more cost effective, thereby eliminating the entire point of the exercise, and setting a lower ceiling price.
#575
Lexus Fanatic
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saudi flooding the market is probably affecting russia (and world security) more than anything, and it's a concern. putin simply cannot stand oil prices going much lower, or he will have a major economic collapse. although vast u.s. military spending under reagan was a big factor in crushing the old soviet union, a collapse in oil prices around that time was probably the biggest factor.
#577
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#578
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californian politicians are looting the people's pocketbooks.
#579
Lexus Fanatic
To some extent, though, the public brings it on themselves by electing (and re-electing) those politicians. The state is quite heavily Democrat, especially along the coast and in the SFO/LAX regions. Even long-conservative Orange County is no longer a Republican bastion.
And, it's not just elected politicians. The bureaucrats at CARB (the California Air Resources Board) sets strict refining/distilling regulations for gas and diesel fuel sold in the state.......and sometimes local parts of the state. That makes fuel relatively cost-inefficicient to refine and sell, compared to gas sold in other states on a much larger scale, necessitating higher fuel prices in the state for oil comanaies to recover their costs.
And, it's not just elected politicians. The bureaucrats at CARB (the California Air Resources Board) sets strict refining/distilling regulations for gas and diesel fuel sold in the state.......and sometimes local parts of the state. That makes fuel relatively cost-inefficicient to refine and sell, compared to gas sold in other states on a much larger scale, necessitating higher fuel prices in the state for oil comanaies to recover their costs.
Last edited by mmarshall; 08-22-15 at 08:49 PM.
#580
Lexus Test Driver
CA gas prices are now heading in the direction of another 17 cent increase, thanks to another TAX on us. This is for "road improvements," which we already allocated funding for from several past measures and bonds. The current crop just wants to tax us to death and see who wants to stay in Cali. At this rate, it makes me wonder if even the illegals will not find CA an attractive place to break into. Godspeed middle class, you are on the endangered species list.
#581
Lexus Test Driver
saudi flooding the market is probably affecting russia (and world security) more than anything, and it's a concern. putin simply cannot stand oil prices going much lower, or he will have a major economic collapse. although vast u.s. military spending under reagan was a big factor in crushing the old soviet union, a collapse in oil prices around that time was probably the biggest factor.
The US and Canadian government have to manage the messaging of gas prices better, specially when downward oil prices won't translate into lower gas prices.
#582
May god bless your wallet. 91 (highest in my area) is like a penny or two over/under $3.00 a gallon where I live. I can get 87 for about $2.20 or $2.15.
Last edited by CaptainAir; 08-23-15 at 04:51 PM.
#584
The highest 91 right now is $3.29, and the lowest 87 is $2.14, different stations yes but still in the same general area.
#585
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its going get even cheaper until it hits the bottom and up again
Last edited by tgold; 08-24-15 at 08:08 AM. Reason: mistake