A barrel of oil price seems to be 34 dollars... and rising.
https://markets.businessinsider.com/commodities/news/oil-price-crash-20-dollars-goldman-sachs-forecast-opec-coronavirus-2020-3-1028976234
https://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic?mod=home-page
Supposedly there is some international effort to flood the American market with cheap oil. I say pour that billion year old light crude into tanks, barrels, swimming pools, or whatever, and store it so when they jack the price we can tell them to enjoy their sudden surplus.
With all the bankrupt businesses in the USA, there must be some big containers sitting around neglected and abandoned. How about those abandoned stadiums?
We won't need it as much as they want to sell it for, not if we store up all the cheap priced oil that can be offloaded... find that warehouse that the US Govt used at the end of Indiana Jones, movie #1, and let it gather dust for a while until the prices go back up, then roll it out and send it to refineries to make gasoline.
Goldman and Sachs wants people to freak out that oil might drop to 20 a barrel. Hey, if that means 1 dollar a gallon gas for the 1st time since the spring of 1999, bring it on. I know a lot of gas hogs that wouldn't mind filling up for less than 30 dollars a tank for the first time in a long time.
According to Goldman and Sachs, oil prices are down 30%
Seems to me it's just another slow news day, and there isn't much for the news outlets to focus on, after all, politicians have dropped out of the race for the democratic nomination like shit getting knocked off a shelf by a bored cat, with leg spasms, who is aiming for the dog but missing. So, with the new flu virus (there've been about 10 in the past 10 years that the news has freaked out about) that kills less than overeating and hippos combined, there simply isn't much to "news" about on the 6pm daily freak out.
https://markets.businessinsider.com/commodities/oil-price?type=wti for that chart... you can look at the graph for months, or years, and see how the oil companies have fucked with the price.
Hey, if oil prices really actually, truely fall, then look at what they are charging at the parts store to buy some for changing the oil in your car.... I bet THAT price doesn't drop much below 25 for the cheapest stuff from a brand name like Castrol, Quaker State, Pennzoil and Valvoline
After all, I took photos at Pepboys, Walmart, O'Reillys, and Autozone of the prices on the shelf, http://justacarguy.blogspot.com/2018/08/well-i-can-tell-you-truth-pep-boys.html and plan on using those, from when oil was about 55 a barrel, to compare with, now that oil is supposedly crashed in price
https://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic?mod=home-page
Keep this is mind also, the price of oil was at 44 a barrel in 2017. The world didn't end. Gas didn't get cheaper. So, all the noise about the price of oil? Doesn't seem to result in lower prices for consumers, so it must be some bullshit about profits or forecasted profits. Boo hoo, take a vacation ya rich bastards, and cool your heels on a beach instead of your day traders office desk.
gas is $2.05 in Georgia. $1.99 at a couple of places
ReplyDeletethe democrat commies in California are screwing yall over
I had no idea that politicians in different states dictate oil price on gas stations not the company that owns them.
Deletethey don't, they happen to have made the tax on gasoline higher in some states by passing more tax laws for "highway improvement" and so people get hysterical about 5 cents more per gallon in California than other states. California happens to have a LOT more population too, and more interstate miles, etc etc.
DeleteBut don't let common sense and logic get in the way of having a fit about politicians.
Especially not during an election year.
After all, since there are no taxes on the native American reservations, they would seem to be as cheap as the cited gas in Georgia, right?
So why aren't they?
Simple, California also passed some laws a long time ago that made the gas the prime factor to blame for exhaust pollution, then they decided that the gas would be made a little bit different in the recipe, as it's this much toulane, butane, etc etc etc right?
Well, then they realized that no other states will ever make that assumption that by changing the recipe, they too could lower exhaust pollution by burning cleaner, so they made a law that prevents importing the gas from other states who have that gas that makes more pollution.
So, with only the gas made in the state of California, available to purchase, the refineries have zero competition, and no reason to not increase profits.
They reduced production, increased the price of the gas they sell to distributors, and so the gas costs more because in all of southern California for example, there is only the one refinery in El Segundo.
Compare that to the 5 in Roswell New Mexico.
So, we pay a lot more in California, because of that, and the lack of a state border to the South, or West.
Where in comparison to Georgia, they could go south to Florida to get cheaper gas, if that was indeed cheaper.
Or look at the many states that don't have an ocean on one side, who can go in any of the four directions for cheaper gas, and also import cheaper gas from the states around them.
But no, Calfornia can't import gas, and it's residents on the borders can't got West into another state, nor south.
So, where are all the people living in the highest concentrations in California?
Why the west and southern borders of course.
So, while you can get to Nevada with one tank of gas, and pay 40 cents less a gallon there, it takes a 4 hour drive, and that's 8 round trip, just to go buy cheaper gas.... if you wanted to waste time driving for it.
Anyway, most people find it easier to wail about politics and politicians.
Which isn't really logical when you know about the many factors involved.
After all, when republicans, like for example the great conservative Republican example all republicans hold in highest esteem, Ronald Reagan, was the governor, the cost only went up, not down.
So, getting all hysterical about the price of gas being the result of democrats simply shows that people don't bother acting rational when they get emotional.
I tell you, I waste more time typing out stuff when people say things, instead of having that time to find cool stuff for you guys to enjoy
Oil needs to be around $70 or more a barrel for producers to continue to explore and to operate current wells. At todays price it costs more to produce than what oil is selling for. Than means wells being shut down and drilling stops. At lot of the older stripped wells will never be turned back on after this. Dollar a gallon gas is something to be avoided. It would only result in an even higher than normal price later on.
ReplyDeleteI disagree, based on nearly 100 years of gas at less than a dollar a gallon. I suppose you might think I'm wrong, even with 100 years of 48 states full of gas stations selling gas, you see, 100 years of gas being pumped into million and millions of cars, at less than 1 dollar a gallon, has me thinking that is a lot of evidence that I'm right.
DeleteAs for what you say about wells, ummm, they all kept making billions for John D Rockefeller for decades, at less than a dollar a gallon of gas. So... seems to me that is also a lot of evidence of the profits on oil wells operating just fine, profitably, plus all the wildcat oil companies, and all the mom and pop gas stations, across the country, and oil wells in Penn, TX, Ca to name a few states with an abundance of oil, and Alaska too, so...
as for the stripped wells you talk about, maybe stripped means something different to you than it does me, but you called them stripped... to me, that means they are empty, and if they are empty, then why do you say "never be turned back on"... ummm, they are empty, there is nothing to turn on, about a "Stripped well" from what I understand, but those are your words, maybe you could have described them some other way if you meant that they are wells with oil still in them.
But, well, you also say dollar a gallon will result in higher than normal prices.
Uh, everything goes up in cost, up in price, up in value. Nothing seems to ever get less expensive, even with the abundant oil that seems to never get depleted, ever, no matter that we have more and more cars on the road, around the world, and yet, they pump out more every year, since day one.
Seems that the more the supply, the cheaper the commodity. Unless, of course, the fix is in, like the diamond market. We all know that is full of bullshit, and diamonds are not rare, they are simply marked up like mad to keep the industry in selling rings profitable.
It's not like there is a limited source, diamonds are found in the USA, and Canada, as well as the many diamond mines in Russia, and Africa.
So... gas, diamonds, it's all a bunch of rich people profiteering to maintain, or grow, their wealth, stock portfolios, etc.
You forgot to adjust for inflation.
Delete$1 a gallon in Rockefeller times would be the equivalent of $13 a gallon today.
Gas today is already VERY cheap when you adjust for inflation and fuel economy improvements!
30 cents a gallon in 1965 converts to $2.45 a gallon in 2020 when you adjust those prices for inflation over time.
At the same time average income in 1965 was $6,900 a year and in 2019 average income was $49,000 a year while avg 1965 fuel economy was 9.6 mpg an 2017 fuel economy was 24.7 mpg.
To put it in different terms: In 1965 the average american could purchase 23,000 gallons of gas (6,900/0.3) and use that gas to drive around 230,000 miles.
In 2019 the average american could purchase almost 19,000 gallons of gas at $2.6 average 2019 price and use that gas to drive 470,000 miles.
Bottom line is that at the current prices, with the current fuel economy we can go MUCH further per dollar IF you adjust for inflation and technological improvements.
Oil and gas economics and operations are very complex.
The US (and most western countries) has oil producing and operating costs that are significantly higher than Middle Eastern/OPEC countries'. When the price of oil drops for an extended period of time most OPEC producers lose some revenue in the short term but LOTS of wells will be shut down and companies will go out of business (not Exxon, the small guys that operate a well or two) in the US, UK, Norway, etc. Once a well is shut down it is very hard is not impossible to bring it back online.
The final result will likely be that the USA will no longer be energy independent (we will lose production capacity) and when the price goes back up again it will be a lot more expensive in real terms for american consumers and that money will not flow to a rig hand in Oklahoma but to a sheikh in Oman.
No, I didn't. in the year 1999, in the month of April, gas was still a dollar a gallon in San Diego. I don't need to adjust anything to arrive at that, or it's equivalent for 2020. There simply hasn't been a radical enough inflation in the past 20 years to require any adjustment for inflation.
DeleteDon't you agree?
Or do you think that the 1999 price, needs a multiplier to be corrected for 2020 prices?
Now, almost all of your comment is based on 1965. How about forgetting that, and trying this, gas... less than a dollar until May of 1999.
DeleteNothing about that is false, that is accurate info (ignoring the 1991 double pricing during Gulf War 1) and that is what my premise is based on.
While the USA costs of producing and operating are higher than in the middle east, we also don't have to transport it to the USA. It's already here.
Also, I hadn't heard of Oklahoma oil in forever, but a hell of a lot of oil production in New Mexico, Alaska, and Canada.
Meanwhile, I can look at the oil pumps in Long Beach to know that oil is still pumping out of 80 year old wells in So Cal.
From 1999 to 2020 inflation has not been significant in any given year but small annual inflation over 20 years translates to a significant difference.
Delete$1 1999 is equivalent to $1.55 in 2020. (https://www.in2013dollars.com/us/inflation/1999?amount=1)
It is the compounding effect of inflation what drives the big difference. The 3% inflation you got in 1999 has to be applied over 20 years. Every single year you get inflation on the previous years inflated price.
Also seems like your memory is playing some tricks on you. We all like to remember previous times as better than they actually were.
Average price of a gallon of gas in California was $1.34. $1.34 adjusted for inflation to 2020 dollars is roughly $2.1. Better than gas price today in constant dollars (inflation adjusted) but not as good as you like to remember.
One last note on the pump you see in Long Beach. The fact that the pump is running doesn't mean that it is pumping oil or that oil has been coming out of the same well for 80 years.
for clarification, California has about 20 million people living in the southwest corner, in Just San Diego and Los Angeles greater metropolitan areas. Then there are about 10 million in the San Francisco area, so, about 35 million on the west coast.
ReplyDeleteThat is 10% of the entire population of the 50 states.
Doing the math, few other states have any population that even comes close.
Especially if you look at the population of New York.
So, with just the two states that have the big numbers, CA and NY, making for 20%, and the other 48 states combined making about 80%,
it's also pretty easy to figure out that these two states have the highest prices for everything, because that is where the businesses make the most money, and have to pay the higher wages, and charge the highest rent, and charge the most for gasoline.
Where the other 48 states have the lowest rent, gas, wages, and amount of businesses.
There sure ain't much in Arizona, New Mexico, and Nevada. Those are all desert.
Ditto New Hampshire, Vermont, and Maine.
Nebraska, Kansas, Montana? Also mighty empty.
So, you have about 10 states that are nearly non existent in their impact on the national economy, and 2 that have an enormous impact, and then the rest have a modest amount.