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Thread: What's up with the price of gas

  1. #1
    Boolit Grand Master

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    What's up with the price of gas

    I filled up my car this morning, gas was $1.77 a gallon. What in the world are the oil companies doing? Fixing to ask the tax payer for a big "bail out " because they are on the edge of bankruptcy and are TOO BIG to fail....somethings up!
    They are known to jack up the cost of gas just because there might be a named hurricane in the Gulf of Mexico!
    Gary

  2. #2
    Boolit Buddy Kent Fowler's Avatar
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    Looks like OPEC is trying to kill fracking in the U. S. using cheap oil

  3. #3
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    it's opec.
    they are trying to force the shut down of any new wells being drilled or completed.
    right now the USofA is the number one oil producer in the world.
    we produce about double the amount the middle east produces.
    their only option to maintain some type of control over prices is to get everything shut down and that means $50 dollar [American dollar] a barrel oil prices.

    wow a $1.77 it's still 2.89 here, you'll be seeing even lower gas prices over the next few weeks as the price drop really starts getting into the supply chain.
    unfortunately this is gonna really hurt some buyers as the producers generally lock in a price for a period of time, [like say $90.00 a barrel for the next 2 years] and the buyers either get a good deal, or screwed, this is when they take a super huge loss..

    it's also gonna burn up more of the economy, I'm at the gate of being jobless and there are about 500,000 more right there with me.
    the oil industry was the only thing with a bright spot through this whole mess and it was a rough patch when our dear leader got in the second time , it delayed me going back to work almost 6 months and stopped all hiring for quite a while.
    in fact when I went back I was the only one hired during that 6 month period.
    really, really hoping I don't go through that again.

    now the upside to all of this, I am just waiting for the government to step in and be reasonable about this by wanting a tax hike on the price of gasoline.
    it's so cheap now and all of your cars are super fuel efficient [thanks to our mandates] that adding in another .15 cents would surely be reasonable to get stuff done we need done for our future...

  4. #4
    Boolit Master

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    Win-Win situation?
    Invest $10,000 in crude oil.
    Crude could double in 6 months.
    If not, you still get cheap gas.
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  5. #5
    Boolit Grand Master
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    Hope you get to keep a job Run. The cost of living in ND is thru the roof and this is going to kill a ton of jobs. Any idea how this is gonna affect BUllshop Jr.?
    You will learn far more at the casting, loading, and shooting bench than you ever will at a computer bench.

  6. #6
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    I don't profess to be an expert on this but from what I've read Kent Fowler & runfiverun seem to have good grasp on the situation.
    American oil production, particularly fracking, is only profitable when the price of crude oil is high. OPEC, led by the Saudi's this time, can produce oil far cheaper then we can. They can also sustain a loss longer than the private sector here in the U.S. can, although I don't think they operating at a loss right now. (just not making the same profit as before).
    This is the global market forces at work and it is a good thing. Russia, which derives a huge portion of its GNP from the sale of oil, is hurting.
    If you've ever read about the history of the production of oil the current situation is a common repeat of history. When OPEC drove the price of oil up in the 70's and 80's, competitors in the North Sea, Texas, Alaska, the Gulf of Mexico and others out produced OPEC and market forces drove the price back down. In fact, for a while the production from the North Sea alone eclipsed the much of the middle east.
    I don't think the current situation will last because market forces are always at work but it is interesting.
    The big downside is the short term harm to American and Canadian oil producers, They have invested billions of dollars to profitably produce oil at a certain cost per barrel and it will be a contest to see who can survive.
    I have mixed emotions about the whole thing. On one hand the decreased cost of living to the average American is good for people and most of our economy. On the other hand, failure of our oil industry will harm one of the few parts of our economy that was thriving. Decreased world oil prices will harm Russia but may help China's floundering economy......
    Lot of moving parts to this.

  7. #7
    Boolit Master sthwestvictoria's Avatar
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    Fuel prices dropping here in Australia as well, our local small town is now $AUD1.30/litre and apparently down in the state capital $AUD1.20/litre
    (about $AUD4.53 per US gallon or $USD3.68)
    I think that we rose through these prices in 2008

    There may also be geopolitical plays in place to harm Russia and obviously they are hurting. I can't imagine US producers are doing well either if they built infrastructure based on oil over 100/barrel.
    ars longa, vita brevis

  8. #8
    Boolit Master
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    Its a glut of oil on the market due (in part) to fracking. OPEC recently decided NOT to decrease production because they couldn't be sure it would increase the market price, since there's so much oil in play. They don't have as much control over it as they once did.
    Warning: I know Judo. If you force me to prove it I'll shoot you.

  9. #9
    Boolit Grand Master

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    If the low prices of gas hold thru the winter and into the spring I may drive the motorhome to Michigan to visit relatives.
    I did take it to Wyoming in 2010 when gas was just under $5 a gallon along the highways and that 2,400 mile trip cost me $2000 in gas alone. Motorhome has been worked on since then an getting a couple more miles per gallon but Michigan and back is 4,000 miles.

    My wife's 1998 Chevy Tracker 4X4 gets 27mpg on the highway but it would be a rough trip in it. I can get 19mpg or so out of my Dakota 4X4 so might use it.

    I have a friend in Wyoming that maintains oil well pumping stations. Haven't talked with him in awhile so might call him to get his take on this.

  10. #10
    Boolit Master



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    Industry figures point out that production in the Bakken and the Permian Basin will remain profitable at $40.00 a barrel.
    The Suadis are willing to "lose" billions of dollars to destroy US competition; as long as the Commerce Department refuses to allow sales of US produced crude overseas their tactics have a chance of working.
    Both the Russians and ISIS are losing economic ground rapidly due to the falling price of crude oil in the world market.
    This is reminiscent of the "gas wars" that I used to see when I was a youngster, when ARCO, Texaco and Mobil would cut prices trying to cut each others throats.
    I pumped gas at a Texaco station in New Orleans in 1960 that sold for 35 cents a gallon!
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  11. #11
    Boolit Master



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    I think the OP meant " What's DOWN with gas prices ? " !!

    $2.17 here today.

  12. #12
    Boolit Grand Master

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    Fracking success! The oil patch always overreacts to the periodic price increases in oil, and
    produces so much new oil that they (unintentionally) drive the oil prices back down. Add in that
    OPEC (pretending to be leading this, but that is BS) countries are all spending 100% of the
    money they make on oil, so are unwilling to further cut their income (already down because
    the $/barrel is down) more by reducing production -- will keep pumping like mad, some may
    even increase pumping to try to make up the cost per barrel losses by sell more barrels.
    They need money and are even more short-sighted than our leaders.

    Some shale oil will be priced out of the market, much planned drilling will not happen for
    a good while as the supply starts to match the demand more closely. Remember, gas was
    $1.35-1.50 or so in the late 90s through the 2002 time frame and was under $2 a gallon briefly
    in 2008. Collectively we have a VERY short memory on gasoline prices. I have been
    expecting "under $2" gas for a couple of years, glad to see it is here, hope it stays for
    a while - EXTREMELY good for the economies of the whole world.

    VERY welcomed news, gas and oil costs are wrapped into everything - esp things like METALS,
    perhaps copper and lead will start coming back down and ammo prices can start back to
    earth.

    Hmm - 35 cents a gallon "during gas wars of the '60s" ???? This seems pretty expensive for
    then. In rural Florida, gas wars got prices to 19.9 cents per gallon and normal prices were
    about 22-25 cents at the cheapo, no-name stations that I frequented as a broke high school
    student in small town central Fla. in 66-69. Maybe Sunoco 260 (105 octane) cost that much,
    but I couldn't afford it and didn't need it then. I had a VW at the time, 10.8 gallons in the dry
    tank. I could always fill up for about $2 when nearly out of gas. Maybe you are thinking of
    '69, I remember it had drifted up somewhat by the time I went to college, I had a better job
    then and could afford gas a lot easier! The "killer jump" happened when gas jumped up to
    about 60-65 cents a gallon in '73 as the Arabs started cutting back on production to cause a
    fake oil "shortage". The price increase was a shock, but gas stations being out of gas was the
    real problem.

    Our grandchildren will have plenty of oil, the whole "peak oil" claim and "running out" has always
    been total hogwash. Lots and lots more down there to be gotten.

    Bill
    Last edited by MtGun44; 12-19-2014 at 04:08 PM.
    If it was easy, anybody could do it.

  13. #13
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    .....The Suadis are willing to "lose" billions of dollars to destroy US competition; as long as the Commerce Department refuses to allow sales of US produced crude overseas their tactics have a chance of working......

    I know of no such U.S. government restriction on the sale of US crude.

  14. #14
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    Mtgun44 - ..."Collectively we have a VERY short memory on gasoline prices'...

    VERY TRUE !! and I would go farther and say that collectively we have VERY short memory of just about ANYTHING!

    People are stupid and yet we let them vote.

  15. #15
    Boolit Master

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    I read somewhere that the costs to get a barrel of oil out the ground ran about $18 for Saudi, $25-30 US wells, $30-50 fracking, and $50 for US offshore wells. The Saudis can push down prices a long way before the lose money.

  16. #16
    Boolit Grand Master

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    Saudis can "hold their breaths" (spend a lot less) only so long. They are like the guy that ran out
    and got in front of a parade so he could "lead it". They are on this ride the same as the rest of us,
    hanging on. By the way - the US produces more oil today than the Saudis do. Middle finger extended
    to the sheiks!

    God Bless capitalism, (moderately) free markets and the US initiative, inventiveness and hard work
    that have made fracking and other things like directional drilling (key enabling technology) that have
    made this happen. Those folks busting their butts and living in 'man camps' up in South Dakota need
    a honest thanks from the rest of us. Well done, guys!

    Unfortunately, oil patch jobs always seem to be a roller coaster ride, and I think things will be going
    down for a while. I remember when crude dropped to $10-12 years ago (late 90s?), it really killed jobs
    and investment in oil production for a while.

    Bill
    Last edited by MtGun44; 12-19-2014 at 04:34 PM.
    If it was easy, anybody could do it.

  17. #17
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    I heart cheap fuel.

  18. #18
    Boolit Master
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    Quote Originally Posted by Idz View Post
    The Saudis can push down prices a long way before the lose money.
    And now they're learning about what happens when they push the price too high. Their most recent problem is competition.
    Warning: I know Judo. If you force me to prove it I'll shoot you.

  19. #19
    Boolit Master
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    Last I heard, there are restrictions on oil exports. Without those restrictions we would have to compete with every other country on the planet for every drop of oil extracted from every U.S. source. By recognizing the fact that oil exerts as much, if not more control over our economy than banking, by exposing our oil pricing to the demands (supply and demand pricing) of other countries, you are also exposing our economy to manipulation by other countries.

    smokeywolf
    A well regulated militia, being necessary to the security of a free State, the right of the People to keep and bear arms *shall not be infringed*.

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    "While the people have property, arms in their hands, and only a spark of noble spirit, the most corrupt Congress must be mad to form any project of tyranny."
    - Rev. Nicholas Collin, Fayetteville Gazette (N.C.), October 12, 1789

  20. #20
    Boolit Grand Master

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    Quote Originally Posted by shooterg View Post
    I think the OP meant " What's DOWN with gas prices ? " !!

    $2.17 here today.
    It was an intended pun, wink-wink!
    Gary

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