Gas prices.

Forum for posts that are not hockey-related.

Moderators: Three Stars, dagny, pfim, netwolf

Re: Gas prices.

Postby meow on Fri Dec 05, 2014 1:51 pm

PensFanInDC wrote:I am still failing to see the downside to any of this. I'm not saying there isn't one but I am having a hard time noticing it from an uneducated standpoint.

There isn't really a downside. It is just another hump in the roller coaster of global oil prices.
meow
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,049
Joined: Sat Feb 24, 2007 3:02 pm
Location: ¯\_(ツ)_/¯

Re: Gas prices.

Postby mac5155 on Fri Dec 05, 2014 1:53 pm

Parked my 42 MPG diesel VW and driving my 28MPG honda since it's about the same price to drive now, but the VW isn't paid off and is more expensive to maintain. Wife drives the VW to work every other week.
mac5155
NHL Third Liner
NHL Third Liner
 
Posts: 48,728
Joined: Wed Dec 20, 2006 8:06 pm
Location: governor of Fayettenam

Re: Gas prices.

Postby dodint on Fri Dec 05, 2014 2:00 pm

PensFanInDC wrote:I am still failing to see the downside to any of this. I'm not saying there isn't one but I am having a hard time noticing it from an uneducated standpoint.


It isn't a downside in and of itself, but it's a strong indicator that the global economy is weakening which is the problem. Part of the reason the demand side is decreasing is because China is producing less which lowers its consumption of petroleum. OPEC responding by not decreasing supply just floods the market and drives prices even lower. As a consumer it's cool, but the economist and foreign policy part of you should observe cautiously. One of the big losers here is Putin's Russia and instability over there is never a great thing.
dodint
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,615
Joined: Sun Jul 07, 2013 6:57 am
Location: Sparta, WI

Re: Gas prices.

Postby meow on Fri Dec 05, 2014 2:19 pm

dodint wrote:
PensFanInDC wrote:I am still failing to see the downside to any of this. I'm not saying there isn't one but I am having a hard time noticing it from an uneducated standpoint.


It isn't a downside in and of itself, but it's a strong indicator that the global economy is weakening which is the problem. Part of the reason the demand side is decreasing is because China is producing less which lowers its consumption of petroleum. OPEC responding by not decreasing supply just floods the market and drives prices even lower. As a consumer it's cool, but the economist and foreign policy part of you should observe cautiously. One of the big losers here is Putin's Russia and instability over there is never a great thing.

That is one take on it. Another take, one in which I believe to be true is that OPEC is lowering the price of a barrel to lower the profit per barrel. Several of the big production shales in the US are still expensive, comparatively so, to drill and maintain wells in. OPEC's goal is to lower the profit margin to a point that these expensive US wells are not profitable enough to have American companies continue drilling them.
meow
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,049
Joined: Sat Feb 24, 2007 3:02 pm
Location: ¯\_(ツ)_/¯

Re: Gas prices.

Postby dodint on Fri Dec 05, 2014 2:33 pm

Yours sounds more like conspiracy, but this isn't an issue I'm close to so I'll consider it until something more plausible than both of ours comes to light.
dodint
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,615
Joined: Sun Jul 07, 2013 6:57 am
Location: Sparta, WI

Re: Gas prices.

Postby meow on Fri Dec 05, 2014 2:35 pm

It sounds like a conspiracy because it is OPEC and conspiracy is in the first line of their doctrine.
meow
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,049
Joined: Sat Feb 24, 2007 3:02 pm
Location: ¯\_(ツ)_/¯

Re: Gas prices.

Postby Grunthy on Fri Dec 05, 2014 2:36 pm

Grunthy
AHL All-Star
AHL All-Star
 
Posts: 6,328
Joined: Sat Dec 01, 2007 8:08 pm

Re: Gas prices.

Postby slappybrown on Fri Dec 05, 2014 2:36 pm

Why do you think it sounds conspiratorial? Lower profit margins in the short term to ensure reduced competition over the long term and higher profit margins once the US manufacturer balk at the costs to expand operations and construct extraction infrastructure. Seems like exactly the type of economically rational business risk a cartel would take.
slappybrown
NHL Fourth Liner
NHL Fourth Liner
 
Posts: 20,279
Joined: Thu Feb 26, 2009 10:08 am
Location: its like bologna with olives in it

Re: Gas prices.

Postby dodint on Fri Dec 05, 2014 2:39 pm

Nysveen said the breakeven crude oil price for U.S. shale producers is around $50 or $55. Despite the recent plunge, oil is still well above that at the $70 range.


OPEC would really have to cut off its nose to spite its face. Not only do they have to cut more, but they'd have to get below the breakeven, not meet it. And do so long enough for NA oil producers to feel the effects. If that's their plan it's pretty poor since shale producers will likely only get better and more efficient in the meantime.
dodint
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,615
Joined: Sun Jul 07, 2013 6:57 am
Location: Sparta, WI

Re: Gas prices.

Postby dodint on Fri Dec 05, 2014 2:40 pm

slappybrown wrote:Why do you think it sounds conspiratorial? Lower profit margins in the short term to ensure reduced competition over the long term and higher profit margins once the US manufacturer balk at the costs to expand operations and construct extraction infrastructure. Seems like exactly the type of economically rational business risk a cartel would take.


I know you couldn't see my last post, but I don't think the 'short term' will be short enough without the cartel hurting itself too much in the process.
dodint
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,615
Joined: Sun Jul 07, 2013 6:57 am
Location: Sparta, WI

Re: Gas prices.

Postby Grunthy on Fri Dec 05, 2014 2:40 pm

Good thing I heard recently that most of our producers can handle all the way down to 40 dollars a barrel.
Grunthy
AHL All-Star
AHL All-Star
 
Posts: 6,328
Joined: Sat Dec 01, 2007 8:08 pm

Re: Gas prices.

Postby slappybrown on Fri Dec 05, 2014 2:41 pm

dodint wrote:
slappybrown wrote:Why do you think it sounds conspiratorial? Lower profit margins in the short term to ensure reduced competition over the long term and higher profit margins once the US manufacturer balk at the costs to expand operations and construct extraction infrastructure. Seems like exactly the type of economically rational business risk a cartel would take.


I know you couldn't see my last post, but I don't think the 'short term' will be short enough without the cartel hurting itself too much in the process.

Right -- definitely a risk, but I could see it being the play.
slappybrown
NHL Fourth Liner
NHL Fourth Liner
 
Posts: 20,279
Joined: Thu Feb 26, 2009 10:08 am
Location: its like bologna with olives in it

Re: Gas prices.

Postby dodint on Fri Dec 05, 2014 2:43 pm

I'll grab some popcorn. Like I noted before, as a consumer this is gangbusters.
dodint
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,615
Joined: Sun Jul 07, 2013 6:57 am
Location: Sparta, WI

Re: Gas prices.

Postby meow on Fri Dec 05, 2014 2:44 pm

dodint wrote:
Nysveen said the breakeven crude oil price for U.S. shale producers is around $50 or $55. Despite the recent plunge, oil is still well above that at the $70 range.


OPEC would really have to cut off its nose to spite its face. Not only do they have to cut more, but they'd have to get below the breakeven, not meet it. And do so long enough for NA oil producers to feel the effects. If that's their plan it's pretty poor since shale producers will likely only get better and more efficient in the meantime.

What other options do they have? They have to try to stymie the competition somehow. The US oil and gas industry is on an absolute rocket up. The more powerful OPEC nations have enough money in their coffers for 5 generations to not even have to think about money. Do you think they care about losing their shorts for a few months?
meow
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,049
Joined: Sat Feb 24, 2007 3:02 pm
Location: ¯\_(ツ)_/¯

Re: Gas prices.

Postby dodint on Fri Dec 05, 2014 2:46 pm

Isn't that a self-defeating premise? They care enough about money because they don't have to care about money?

Maybe the cartel will fold and each country will try and be competitive alone, who knows. I don't have the answer.
dodint
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,615
Joined: Sun Jul 07, 2013 6:57 am
Location: Sparta, WI

Re: Gas prices.

Postby meow on Fri Dec 05, 2014 2:53 pm

They can easily survive a temporary price cut if it snuff outs future competition is what I am saying.
meow
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,049
Joined: Sat Feb 24, 2007 3:02 pm
Location: ¯\_(ツ)_/¯

Re: Gas prices.

Postby Troy Loney on Fri Dec 05, 2014 2:53 pm

The prolonged high Oil prices have finally gotten to where there has been enough entrants into the market to cur the demand on OPEC's supplies enough for them to do this. It seems to me to be OPEC trying to prevent more supply creation so that they're position can be reestablished in the future when the production from the new sites fall.
Troy Loney
NHL Third Liner
NHL Third Liner
 
Posts: 28,922
Joined: Tue Mar 13, 2007 8:10 am
Location: Pittsburgh

Re: Gas prices.

Postby BuckintheLou on Fri Dec 05, 2014 2:55 pm

Still $3.69 in my part of Illinois today.
Probably close to $3.30 something across the river in Mo.
Thanks Obama.
BuckintheLou
Junior 'A'
Junior 'A'
 
Posts: 345
Joined: Fri Mar 01, 2013 2:24 pm
Location: St. Louis (by way of Greene Co, Pa)

Re: Gas prices.

Postby meow on Fri Dec 05, 2014 2:56 pm

Troy Loney wrote:The prolonged high Oil prices have finally gotten to where there has been enough entrants into the market to cur the demand on OPEC's supplies enough for them to do this. It seems to me to be OPEC trying to prevent more supply creation so that they're position can be reestablished in the future when the production from the new sites fall.

Precisely.

Image
meow
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,049
Joined: Sat Feb 24, 2007 3:02 pm
Location: ¯\_(ツ)_/¯

Re: Gas prices.

Postby meow on Fri Dec 05, 2014 2:57 pm

BuckintheLou wrote:Still $3.69 in my part of Illinois today.
Probably close to $3.30 something across the river in Mo.
Thanks Obama.

Illinois has a fairly high state tax on gasoline if I recall correctly.
meow
NHL Healthy Scratch
NHL Healthy Scratch
 
Posts: 10,049
Joined: Sat Feb 24, 2007 3:02 pm
Location: ¯\_(ツ)_/¯

Re: Gas prices.

Postby BuckintheLou on Fri Dec 05, 2014 3:06 pm

meow wrote:
BuckintheLou wrote:Still $3.69 in my part of Illinois today.
Probably close to $3.30 something across the river in Mo.
Thanks Obama.

Illinois has a fairly high state tax on gasoline if I recall correctly.



It does. I thought taxes were tough in Pa. while growing up.
FOR SALE: 4 Bdrm ranch, 3 baths, (half of basement finished w/fireplace)
6' privacy fence, 2 car garage in quiet neighborhood
built: 1997 Appliances included
Will trade for a nice Gibson Les Paul. Anything to get me out of ILLINOIS!
BuckintheLou
Junior 'A'
Junior 'A'
 
Posts: 345
Joined: Fri Mar 01, 2013 2:24 pm
Location: St. Louis (by way of Greene Co, Pa)

Re: Gas prices.

Postby BigMcK on Fri Dec 05, 2014 3:06 pm

Also set to lose are purchasing managers that speculate fuel costs for the transportation industry if they overshot the market not seeing a downturn.

If rates do remain low, expect to see some type of political pressure to increase rates in an effort to recoup taxes that are not being collected on the reduced consumer price.
BigMcK
AHL'er
AHL'er
 
Posts: 2,502
Joined: Thu Mar 25, 2010 3:23 pm
Location: Drawing 1 line in the sand, followed by another, and another, and another. TIC TAC TOE

Re: Gas prices.

Postby columbia on Fri Dec 05, 2014 3:52 pm

The production costs vary quite a bit across the US....

http://www.bloomberg.com/news/2014-12-0 ... costs.html
columbia
NHL Third Liner
NHL Third Liner
 
Posts: 51,889
Joined: Tue Feb 19, 2008 11:13 pm
Location: دعنا نذهب طيور البطريق

Re: Gas prices.

Postby Kaizer on Fri Dec 05, 2014 4:00 pm

Its been hovering around 2.90 around Seattle, except at shell stations, who are still charging 3.35
Kaizer
AHL Hall of Famer
AHL Hall of Famer
 
Posts: 9,553
Joined: Tue Aug 01, 2006 10:02 am
Location: Crazy Town

Re: Gas prices.

Postby Grunthy on Fri Dec 05, 2014 4:03 pm

Tulsa, OK 2.41! WOO!
Grunthy
AHL All-Star
AHL All-Star
 
Posts: 6,328
Joined: Sat Dec 01, 2007 8:08 pm

PreviousNext

Return to NHR

Who is online

Users browsing this forum: No registered users and 8 guests


e-mail