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GiantEvil
 Post subject: Why the price of gas?  |  Posted: Sat Jan 10, 2015 9:05 pm

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 I know there is at least one economic guru around here, so this question. Why the price of gas? _________________It is wrong always, everywhere, and for anyone, to believe anything upon insufficient evidence.-W. K. Clifford-
iNow
 Post subject: Re: Why the price of gas?  |  Posted: Sun Jan 11, 2015 2:11 am

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 GiantEvil wrote:I know there is at least one economic guru around here, so this question. Why the price of gas?OPEC. Seems they are over producing right now. Also, US production of shale gas. Short story, supply currently is flooding the market with demand remaining unchanged (or even being slightly lower such as in the US). The open question is why hasn't OPEC cut production to bring prices back up. Many speculate it's because they want to hurt the shale gas economy is the US, as they need price per barrel/gallon above a specific number to remain profitable (see infographic from the Economist below). Others speculate it's to hurt Russia or Iran. It's also strange given how much countries like Saudi Arabia and Qatar and Bahrain and others use subsidies and perks funded by high oil revenues (they have huge growth, great infrastructure, practically no unemployment, zero income taxes) to placate their people and essentially buy off the populace so they don't revolt, organize for democracy, and have another Arab Spring. It's hard to know for sure what someone's motivations are.Regardless of why OPEC has not slowed production to limit supply and bring prices back up, the reason prices are down is because there is more supply than demand right now. The market is currently flooded with oil.Got 2 minutes?[youtube]http://youtube.com/watch?v=SUPTIhHy21E[/youtube]http://www.economist.com/news/internati ... nt-critics^click to enlargeNote: As of the time of this post, Brent Crude price per barrel is even lower than represented in the graphic above and at market close yesterday (Friday) was just barely above $50 (after dipping to$49 during trading). _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan
GiantEvil
 Post subject: Re: Why the price of gas?  |  Posted: Sun Jan 11, 2015 2:49 pm

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 [MOD NOTE: Some posts have been split off to a new thread and can be found here >> topic1739.html ]Uh... Rory, I asked about gas prices. Which are tied to inflation/deflation, but we seem to be going off topic. There is a thread elsewhere for that.I like that lower prices are helping out the little guy, but I worry about consumption going back up and a slowdown to adoption of alternative technologies. And also it is my impression that production from shale and tar sands has a much larger ecological footprint.I'm hoping that the electric genie is out of the bottle already and too late to stop. I suppose it's also possible that lower oil prices might be passed onto electric consumers, but I suspect private producers will just pocket the extra. Will low gas prices hurt Elon Musk? _________________It is wrong always, everywhere, and for anyone, to believe anything upon insufficient evidence.-W. K. Clifford-
iNow
 Post subject: Re: Why the price of gas?  |  Posted: Sun Jan 11, 2015 6:43 pm

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Joined: Thu Aug 04, 2011 11:40 pm
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Location: Iowa

 GiantEvil wrote: I worry about consumption going back up and a slowdown to adoption of alternative technologies. As do I, but I also suspect the lower prices are quite temporary and will go back up relatively soon. This doesn't strike me as a long term thing.I also think we've finally reached a point where the uptake of green energy and renewables is somewhat decoupled from the price of oil. More people each day recognize the longer term costs of oil and factor that into their thinking. It's just that not many of them are in vocal positions of power to do anything about it yet, but the tide is surely shifting.GiantEvil wrote:Will low gas prices hurt Elon Musk?I don't think so. He still occupies a bit of a niche market with his Teslas and has relatively low sales volume. People who buy a model S tend to do so because they have enough money to afford one (so are less directly impacted by shifting fuel prices) and because the cars are perceived as very cool and moral (saving money on gas is more the icing on the cake than the core reason for purchase).I do think, however, that lower fuel prices will hurt the hybrid and electric segments of the other major manufacturers like Ford and GM and Nissan and all of the others... at least in the short term. While CAFE standards are increasing in the coming years and that will certainly help, the best thing that could happen for sales of and demand for more efficient vehicles is for fuel prices to go up and we probably will see a temporary dip in sales volume of efficient cars overall... I just don't think Tesla will be hugely impacted given they can barely keep up with demand and have a waiting list already. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan
Rory
 Post subject: Re: Why the price of gas?  |  Posted: Sun Jan 11, 2015 7:14 pm

Joined: Wed May 07, 2014 6:02 am
Posts: 1921

 Apologies, GiantEvil. Increased supply. End of thread. _________________If you are doomed to be boring - make it short. Andre Geim
GiantEvil
 Post subject: Re: Why the price of gas?  |  Posted: Sun Jan 11, 2015 9:31 pm

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Joined: Sat Aug 06, 2011 10:19 am
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 No worries Rory. I'm gonna derail to electrics here myself.There appears to be an underground of electric car garage hackers; https://www.youtube.com/watch?v=369h-SEBXd8Tesla's are definitely high end. What about the market for low end electric run about econoboxes?Could a business be built from modifying used chassis to electric? _________________It is wrong always, everywhere, and for anyone, to believe anything upon insufficient evidence.-W. K. Clifford-
iNow
 Post subject: Re: Why the price of gas?  |  Posted: Mon Jan 12, 2015 1:25 am

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Joined: Thu Aug 04, 2011 11:40 pm
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Location: Iowa

 It's feasible, but I suspect the market for it is still quite small so it would be tough to process enough customers and have enough volume to turn a profit. If you earn more than you make and have a relatively constant stream of new customers, though, then surely a business could be made. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan
billvon
 Post subject: Re: Why the price of gas?  |  Posted: Mon Jan 12, 2015 6:29 am

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

 GiantEvil wrote:There appears to be an underground of electric car garage hackers; https://www.youtube.com/watch?v=369h-SEBXd8Tesla's are definitely high end. What about the market for low end electric run about econoboxes?In California you can get a Mitsubishi i-MiEV for under $13,000.Quote:Could a business be built from modifying used chassis to electric?Sure. In fact many people make businesses out of that - build adapter plates, sell inverters and chargers, sell batteries and provide instructions. You can even pay people to do such conversions for you. But since each will be a one-off, there's not going to be much in the way of standard product out there. And of course since each one is custom, you'll have to take on most of the maintenance yourself. iNow  Post subject: Re: Why the price of gas? | Posted: Mon Jan 12, 2015 5:11 pm Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  iNow wrote:OPEC. Seems they are over producing right now.Realize I should clarify this. It's mostly Saudi Arabia, and it seems to be both a (excuse the pun) crude business decision and a political statement.http://www.washingtonpost.com/blogs/won ... ld-normal/Quote:Third, there is Saudi Arabia. The kingdom is the driving force behind the drop in prices because it has grown weary of cutting its own oil output in order to prop up prices enjoyed by other countries, both in OPEC and especially outside of OPEC.How determined is Saudi Arabia? Very. It is now waiting for low prices to discourage investments in new projects such as Russia’s Arctic, Canada’s oil sands, U.S. shale drilling, and Brazil’s costly sub-salt projects in deep offshore waters. Yes, these are long-term projects that rely on long-term oil prices, but companies still tend to pay a lot of attention to what’s happening now.And Saudi Arabia can afford to wait. Even though prices have tumbled, Saudi Arabia – unlike Venezuela – has a large treasure chest of savings from past years and can weather a long period of low prices. The government is assuming a 32 percent drop in oil-related revenues. In addition, Saudi Arabia has some of the world’s lowest production costs, rivaled only by Iraq and some parts of Russia. Production costs in Saudi Arabia are about$4 to $5 a barrel, Naimi said recently.The Saudi oil minister al-Naimi’s interview in Argus Global Markets should send chills down the spines of oil producers. He noted that “sooner or later, however much they hold out” high cost oil projects such as wells in Brazil’s sub-salt offshore region, off the coast of west African, and in the forbidding Arctic would have to scale back in response to low prices. “Will this be in six months, in one year, two years, three years? God knows," said Naimi. "I say Gulf countries, and particularly the kingdom, have the ability to hold out.”Naimi also brushed aside the plight of Russia and Iran, saying that they were not only suffering from low oil prices but also “from their political behavior” that had led to sanctions. “Their problem is more basic” than oil prices, he said. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan GiantEvil  Post subject: Re: Why the price of gas? | Posted: Mon Jan 12, 2015 8:51 pm Original Member Joined: Sat Aug 06, 2011 10:19 am Posts: 786  billvon wrote:Sure. In fact many people make businesses out of that - build adapter plates, sell inverters and chargers, sell batteries and provide instructions. You can even pay people to do such conversions for you. But since each will be a one-off, there's not going to be much in the way of standard product out there. And of course since each one is custom, you'll have to take on most of the maintenance yourself.I could see operating such an effort as a non-profit. Personally, a modest salary would make me feel like a king. And lack of transportation is a poverty trap, and a health crisis factor for many Americans. Using a standardized component set for the drive conversion would help with maintenance concerns, although maintenance on electric drive trains is minimal compared to IC. Since the units would primarily be distributed to the poor, we are talking about a group where the average member most likely has practical experience with most chassis procedures. Such as changing out brake wear components, packing wheel bearings, and R&R'ing CV's and U-joints. Not to mention the availability of used, junkyard, and rebuilt/reconditioned components from common production models. I think the battery part is probably the largest hurdle, although most battery acids are pretty benign after an encounter with some baking soda.iNow wrote:Realize I should clarify this. It's mostly Saudi Arabia, and it seems to be both a (excuse the pun) crude business decision and a political statement.It actually seems like a brilliant business decision to me, but I know little of practicality in these matters. I find it quite ironic that Saudi Arabia appears to be screwing OPEC over with free market practices. Everything would be just dandy except for the global climate change. Too bad "peak oil" is a myth. If it were true, it would solve a huge problem. _________________It is wrong always, everywhere, and for anyone, to believe anything upon insufficient evidence.-W. K. Clifford- billvon  Post subject: Re: Why the price of gas? | Posted: Mon Jan 12, 2015 10:12 pm Joined: Thu Oct 02, 2014 5:23 pm Posts: 86  GiantEvil wrote:And lack of transportation is a poverty trap, and a health crisis factor for many Americans. Using a standardized component set for the drive conversion would help with maintenance concerns, although maintenance on electric drive trains is minimal compared to IC. Since the units would primarily be distributed to the poor, we are talking about a group where the average member most likely has practical experience with most chassis procedures.Wait a minute, we are talking an expensive conversion here. You can get a used car with a blown engine for$500 - but then you have to add batteries, controllers, a motor, a DC/DC converter, a charger, the motor plate etc etc. You are NEVER going to compete with a ten year old $1000 used gas car. There are no batteries, motor controllers or motors in junkyards.If low cost vehicles for the poor is the goal, then used cars are the way to go.Quote:Since the units would primarily be distributed to the poor, we are talking about a group where the average member most likely has practical experience with most chassis procedures.Most people don't have that knowledge, much less the knowledge/skill to assemble a wiring loom for an EV. You could surely hire someone else to do it, but people with those skills don't work for free. kojax  Post subject: Re: Why the price of gas? | Posted: Tue Jan 13, 2015 2:36 pm Original Member Joined: Mon Aug 15, 2011 11:43 am Posts: 582  iNow wrote:Many speculate it's because they want to hurt the shale gas economy is the US, as they need price per barrel/gallon above a specific number to remain profitable (see infographic from the Economist below). Others speculate it's to hurt Russia or Iran. It's also strange given how much countries like Saudi Arabia and Qatar and Bahrain and others use subsidies and perks funded by high oil revenues (they have huge growth, great infrastructure, practically no unemployment, zero income taxes) to placate their people and essentially buy off the populace so they don't revolt, organize for democracy, and have another Arab Spring. It's hard to know for sure what someone's motivations are.The first one of those seems the most likely. OPEC can profitably produce oil very close to a dollar a barrel. Shaling, on the other hand, is only profitable when oil prices are very high. Shaling also requires investment, which means it needs to be generating a profit in order to keep up on the loans it will most likely have taken out. If OPEC drops the price of oil, they can starve out the shale industry. Indeed, they can do this to almost any alternative fuel initiative. Quote:Regardless of why OPEC has not slowed production to limit supply and bring prices back up, the reason prices are down is because there is more supply than demand right now. The market is currently flooded with oil.Oil companies are always trying to piss in our bucket and then tell us it's raining. It is true that supply/demand is the direct reason. However OPEC controls so much of the supply that they can pretty much manipulate the supply/demand ratio whatever way they want. The question is, why is OPEC choosing to let the price go down? iNow  Post subject: Re: Why the price of gas? | Posted: Tue Jan 13, 2015 5:34 pm Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  GiantEvil wrote:Uh... Rory, I asked about gas prices. Which are tied to inflation/deflation, but we seem to be going off topic. There is a thread elsewhere for that.There is now. Posts regarding inflation/deflation have been split off and can be found here: topic1739.html _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan iNow  Post subject: Re: Why the price of gas? | Posted: Tue Jan 13, 2015 5:38 pm Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  kojax wrote:The question is, why is OPEC choosing to let the price go down?OPEC is suffering, too, though. This seems to be all Saudi Arabia making a shrewd decision to accept short-term losses, live off the war chest they've been building up in the last several years, and kill US shale while reasserting dominance over political instigators in Russia and Iran. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan kojax  Post subject: Re: Why the price of gas? | Posted: Fri Jan 16, 2015 4:53 am Original Member Joined: Mon Aug 15, 2011 11:43 am Posts: 582  I think the people who run OPEC are unbelievably smart, businesswise. (Not necessarily ethical, but definitely smart.)They know they've only got a finite amount of oil under their feet. They're wise enough to be able to see the problem in terms of centuries, instead of years, months, or quarters. Also, in their business, there is no need to always be making huge amounts of revenue. They simply own the oil. They're not even the ones pumping it. (Most of the actual machinery is owned and operated by American oil companies, and American workers living in Saudi Arabia.) If all their oil production stopped today, the interest they're still earning on the money they've made so far (and then re- invested in stocks and bonds and etc... ) would keep them going indefinitely. The oil money is just a bonus now. iNow  Post subject: Re: Why the price of gas? | Posted: Tue Jan 20, 2015 11:00 pm Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  Groan. GiantEvil clearly had a valid point when expressing his concern.http://www.washingtonpost.com/blogs/won ... your-401k/Quote:Is cheap gas making us buy less fuel efficient cars?For liberals, one major fear is that so much cheap gas will bring back bad driving habits – and big, bad, fuel-inefficient vehicles. The concern has merit: Economists would definitely say that, as oil and gas get cheaper, the incentives are for people to drive more, and to purchase more gas guzzlers. In fact, that is already happening. SUV sales were up 12 percent in 2014, according to the National Automobile Dealers Association.Moreover, according to the University of Michigan's Transportation Research Institute, the average fuel economy of newly purchased vehicles has actually already slipped due to decreasing gas prices, from 25.3 miles per gallon in Sept-November 2014 to 25.1 miles per gallon in December 2014. And it was really high, 25.8 per gallon, back in August.So declining gas prices already mean people are buying cars that guzzle more. And actually, the same researchers have already found that the emissions per individual driver have also gone up (again, since an all-time low in August).It is important to emphasize, though, that overall, vehicle fuel economy has really improved a ton since 2007, and emissions have gone way down. In that context, these recent changes are merely slight regressions and don’t dramatically mar that trend – yet.But the longer this goes on, the more super-low gas prices will shape behavior. So this turns out to be a pretty legitimate concern. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan Rory  Post subject: Re: Why the price of gas? | Posted: Tue Jan 20, 2015 11:52 pm Joined: Wed May 07, 2014 6:02 am Posts: 1921  Apologies in advance if this comment does not satisfy GiantEvil's criteria for relevance But PM David Cameron has recently suggested that businesses benefitting from reduced oil prices pass on some of those financial gains to their employees, as a means of addressing the cost-of-living crisis. Reactionary self-serving politics if ever I saw it. _________________If you are doomed to be boring - make it short. Andre Geim 15uliane  Post subject: Re: Why the price of gas? | Posted: Wed Jan 21, 2015 6:00 am Original Member Joined: Wed Aug 10, 2011 9:09 pm Posts: 110 Location: Boston  Quote:The first one of those seems the most likely. OPEC can profitably produce oil very close to a dollar a barrel.You're right on everything else kojax, but I don't think this is true. While Saudi Arabia is able to produce oil at about$2 a barrel (according to this article: http://www.marketwatch.com/story/opec-is-wrong-to-think-it-can-outlast-us-on-oil-prices-2014-12-02), it cannot sustain prices even close to that low. This is because they have spending commitments that take up a big chunk of oil profits. In 2014 they were counting on $85/barrel Brent crude to balance their budget. That makes the current price of ~$50 very painful indeed.
kojax
 Post subject: Re: Why the price of gas?  |  Posted: Fri Jan 23, 2015 5:03 am
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 It's a "fixed costs" vs. "variable costs" issue then. The variable cost of production is probably less than a dollar a gallon for the Saudis, because they don't even pump their own oil. The only costfor them is the paperwork associated with granting permission to the American oil companies to pump it. However the fixed cost of production is the cost of maintaining their government so they can continue to claim soveriegnty over the oil wells in the first place.The volume they sell, multiplied by the price per barrel, needs to come to a certain minimum total in order for them to balance their budget and maintain political control over the region (which includes the wells). And they know the "volume" component of that equation can only be so high before the "price per barrel" component of the equation will begin to drop. (And also there is a practical limit on volume due to infrastructure limitations.)The problem for their competition, on the other hand, is mostly the "variable costs" of production. Each barrel of oil extracted from shale costs money to extract because of all the labor and stuff that goes into extracting it. If the cost per barrel gets too low, they can't make a profit no matter how much volume they do.
iNow
 Post subject: Re: Why the price of gas?  |  Posted: Fri Jan 23, 2015 5:11 pm

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 kojax wrote:The variable cost of production is probably less than a dollar a gallon for the Saudis, because they don't even pump their own oil. The only costfor them is the paperwork associated with granting permission to the American oil companies to pump it. No need to guess or speculate absently. We pretty know well.http://qz.com/311179/the-real-reason-wh ... -us-shale/Quote:Western experts say that Saudi production costs average $10-$20 a barrel, give or take a few dollars either way. Of course, there are no hard public numbers when it comes to most Saudi oil data, only estimates from industry experts.But Saudi Aramco is only superficially comparable to Continental Resources. It is an arm of the Saudi government; the oil that it drills funds roughly 80% of the palace budget, which by extension covers Saudi education subsidies, low-priced energy, housing allowances and other benefits, not to mention lavish support for the lives and schemes of every royal family member. Here is how this works across the oil patch.When you add all that up, Saudi Arabia’s production cost is at least $86 a barrel of oil, or double Continental’s at the low end. The social costs can’t really be considered separately from those of the actual oilfield, because they are the mechanism by which various regimes stay in power; one is inextricably linked to the other. Saudi Aramco—like its brothers across OPEC—must earn those break-evens or eventually risk a collapse.To the larger point, they have time and aren't as worried about immediate revenues or profits as those in US shale and elsewhere like Russia and Venezuela or Nigeria, so discussing such things is a bit peripheral to what's happening right now, IMO.Quote:Saudi has socked away roughly$750 billion from the days when prices were high, including the average $106 a barrel that it earned for the three years prior to the current price plunge. The richest cartel members—Saudi Arabia, Qatar, Kuwait and the UAE—can test shale’s mettle not because their oil is cheap, but because they are willing to draw down on their tens and hundreds of billions of dollars in the bank. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan GiantEvil  Post subject: Re: Why the price of gas? | Posted: Sat Jan 24, 2015 6:53 am Original Member Joined: Sat Aug 06, 2011 10:19 am Posts: 786  iNow wrote:Groan. GiantEvil clearly had a valid point when expressing his concern.http://www.washingtonpost.com/blogs/won ... your-401k/Quote:Is cheap gas making us buy less fuel efficient cars?For liberals, one major fear is that so much cheap gas will bring back bad driving habits – and big, bad, fuel-inefficient vehicles. The concern has merit: Economists would definitely say that, as oil and gas get cheaper, the incentives are for people to drive more, and to purchase more gas guzzlers. In fact, that is already happening. SUV sales were up 12 percent in 2014, according to the National Automobile Dealers Association.Moreover, according to the University of Michigan's Transportation Research Institute, the average fuel economy of newly purchased vehicles has actually already slipped due to decreasing gas prices, from 25.3 miles per gallon in Sept-November 2014 to 25.1 miles per gallon in December 2014. And it was really high, 25.8 per gallon, back in August.So declining gas prices already mean people are buying cars that guzzle more. And actually, the same researchers have already found that the emissions per individual driver have also gone up (again, since an all-time low in August).It is important to emphasize, though, that overall, vehicle fuel economy has really improved a ton since 2007, and emissions have gone way down. In that context, these recent changes are merely slight regressions and don’t dramatically mar that trend – yet.But the longer this goes on, the more super-low gas prices will shape behavior. So this turns out to be a pretty legitimate concern.It's just a guess, but I suspect any environmental impact of consumer habits will be well offset by delaying or preventing shale and tar sands oil extraction and development. I haven't researched it very deeply yet, but I understand that extracting from those sources has a much larger footprint than drilling and pumping light sweet crude. Which is what the Saudis have. More power to the Saudis on this one. The longer non standard oil can be delayed, the greater the chance of the alternative/renewable technology genie to come busting out of the bottle and make the whole fossil energy thing obsolete. Knowledge spreads at the speed of information, nowadays that's sometimes almost 3*10^8 m/s. _________________It is wrong always, everywhere, and for anyone, to believe anything upon insufficient evidence.-W. K. Clifford- Futilitist  Post subject: Re: Why the price of gas? | Posted: Sat Feb 07, 2015 8:44 am Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  iNow wrote:GiantEvil wrote:I know there is at least one economic guru around here, so this question. Why the price of gas?OPEC. Seems they are over producing right now. Also, US production of shale gas. Short story, supply currently is flooding the market with demand remaining unchanged (or even being slightly lower such as in the US). The open question is why hasn't OPEC cut production to bring prices back up. Many speculate it's because they want to hurt the shale gas economy is the US, as they need price per barrel/gallon above a specific number to remain profitable (see infographic from the Economist below). Others speculate it's to hurt Russia or Iran. It's also strange given how much countries like Saudi Arabia and Qatar and Bahrain and others use subsidies and perks funded by high oil revenues (they have huge growth, great infrastructure, practically no unemployment, zero income taxes) to placate their people and essentially buy off the populace so they don't revolt, organize for democracy, and have another Arab Spring. It's hard to know for sure what someone's motivations are.Regardless of why OPEC has not slowed production to limit supply and bring prices back up, the reason prices are down is because there is more supply than demand right now. The market is currently flooded with oil.The Saudi's did not start this problem and they can't fix it either. Saudi oil production has been basically flat for the last few years. It is US tight oil production that has increased rapidly to create the current glut. The reason the Saudi's don't cut production to raise oil prices is that they can't afford to. Just like us. They have been very straight forward in saying that they are defending their market share against the US frackers. Since the Saudi's can produce oil much more cheaply than we can, they should win the price war. Also, you take great pains to emphasize that the glut is only due to overproduction and not falling demand. But this is a false narrative. Demand might be only slightly lower in the US, as you say, but it is a lot lower lately in Europe and China (and basically every place else). Also, every oil producing country in the world is producing at the maximum rate they can right now, yet without US tight oil production, overall world oil production would already be in decline! That's right. If you add up all of the oil production in the world, except US tight oil only, we are already in irreversible decline. Thus, when the frackers are out of business, world oil production will instantly be past peak and on a downslope that the IEA projects will eventually reach 9% per year.Please check out:http://peakoilbarrel.com/peak-oil-right-now/to see the details of why we are at peak oil right now.So the good news is that the current glut will fix itself. The bad news is we won't like the way it fixes itself.---Futilitist iNow  Post subject: Re: Why the price of gas? | Posted: Sat Feb 07, 2015 2:30 pm Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  Futilitist wrote: The Saudi's did not start this problem and they can't fix it either. <...> The reason the Saudi's don't cut production to raise oil prices is that they can't afford to. This is trivially false on both fronts. Saudi Arabia averaged production of 9.7m barrels per day across the entire year, yet in 4Q14 alone ramped production to 11.7m barrels per day and has repeated their intent to maintain this level of production for the foreseeable future.They also have over$740B in reserve assets, yet are only projecting a deficit of $145B this year and next. This is simple arithmetic and it's clear they will be just fine for several years even at current prices.Futilitist wrote:.Demand might be only slightly lower in the US, as you say, but it is a lot lower lately in Europe and China (and basically every place else). This is also trivially false. While the rate of growth in demand may have slowed, demand itself is very much up in all of those places, +3.5% YoY in China alone.In addition, global oil demand is very much up despite your suggestion to the contrary, even though rate of growth may have slowed relative to historical norms: https://www.iea.org/oilmarketreport/omrpublic/Futilitist wrote:...to see the details of why we are at peak oil right now.This isn't a thread about peak oil. Further posts about peak oil in this thread will be moved into one of the countless many others you've already created on that topic, or more likely just to the Trash Can. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan Futilitist  Post subject: Re: Why the price of gas? | Posted: Sat Feb 07, 2015 7:30 pm Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  iNow wrote:Futilitist wrote: The Saudi's did not start this problem and they can't fix it either. <...> The reason the Saudi's don't cut production to raise oil prices is that they can't afford to. This is trivially false on both fronts. Saudi Arabia averaged production of 9.7m barrels per day across the entire year, yet in 4Q14 alone ramped production to 11.7m barrels per day and has repeated their intent to maintain this level of production for the foreseeable future.You have some incorrect data there, iNow. The real production numbers do not support your conclusions. Here is a graph of Saudi oil production:The latest data point is December, 2014. The Saudi's clearly did not ramp production to 11.7m barrels in 4Q14. Besides, the drop in oil prices began in June of 2014. Based on this, what actual evidence can you present that the Saudi's started this? iNow wrote:They also have over$740B in reserve assets, yet are only projecting a deficit of $145B this year and next. This is simple arithmetic and it's clear they will be just fine for several years even at current prices.I think the Saudi's can certainly outlast the US frackers in a price war. And they have openly stated their intentions to do so. There is no mystery. Whether they would be "just fine" for several years is a bit of an overstatement, IMO. iNow wrote:Futilitist wrote:.Demand might be only slightly lower in the US, as you say, but it is a lot lower lately in Europe and China (and basically every place else). This is also trivially false. While the rate of growth in demand may have slowed, demand itself is very much up in all of those places, +3.5% YoY in China alone.In addition, global oil demand is very much up despite your suggestion to the contrary, even though rate of growth may have slowed relative to historical norms: https://www.iea.org/oilmarketreport/omrpublic/The entire commodities complex has been dropping along with oil. Industrial metals are down just as much as oil, a clear sign of general weakness in the global economy. Copper is sometimes referred to as Dr. Copper because when copper is falling it is a sign that the economy is sick. World economic growth has been declining steadily since 2009 and is now under 3%. Europe is facing a triple dip recession. The world economy is not doing so great. You may be seeing the glass as half full and may I see it as half empty, but my statement, above, is clearly not "trivially false". iNow wrote:Futilitist wrote:...to see the details of why we are at peak oil right now.This isn't a thread about peak oil. Further posts about peak oil in this thread will be moved into one of the countless many others you've already created on that topic, or more likely just to the Trash Can.Wow. OK.---Futilitist iNow  Post subject: Re: Why the price of gas? | Posted: Sun Feb 08, 2015 12:47 am Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  Futilitist wrote:You have some incorrect data there, iNow. The real production numbers do not support your conclusions. Here is a graph of Saudi oil production:Interestingly, your graph stops immediately before the period I was describing. I mentioned 4Q14 and your image ends in Sept 2014. My point remains valid.Futilitist wrote:The latest data point is December, 2014. The Saudi's clearly did not ramp production to 11.7m barrels in 4Q14. Again, trivially false: http://www.politifact.com/truth-o-meter ... -producer/Futilitist wrote:Besides, the drop in oil prices began in June of 2014.The total drop from June to October was from 100 to 92, which hardly seems relevant in context of the drop from October to January from 92 to 45. http://www.nasdaq.com/markets/crude-oil ... meframe=1yFutilitist wrote:Whether they would be "just fine" for several years is a bit of an overstatement, IMO. Why? The math is clear. Their reserves allow them to operate at a deficit for at least 5 years. That's just arithmetic. No opinion needed. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan Futilitist  Post subject: Re: Why the price of gas? | Posted: Sun Feb 08, 2015 10:06 am Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  iNow wrote:Futilitist wrote:You have some incorrect data there, iNow. The real production numbers do not support your conclusions. Here is a graph of Saudi oil production:Interestingly, your graph stops immediately before the period I was describing. I mentioned 4Q14 and your image ends in Sept 2014. My point remains valid.The graph I supplied clearly showed December of 2014 as the final data point. iNow wrote:Futilitist wrote:The latest data point is December, 2014. The Saudi's clearly did not ramp production to 11.7m barrels in 4Q14. Again, trivially false: http://www.politifact.com/truth-o-meter ... -producer/No, iNow, you are not correct. Here is the graph from the article you reference:iNow wrote:Saudi Arabia averaged production of 9.7m barrels per day across the entire year, yet in 4Q14 alone ramped production to 11.7m barrels per dayNot only is that ramp up you mentioned not evident in the graph from your own source, but the data is only up to 3Q14! From the article you linked:"In the third quarter of 2014 -- the most recent available data -- the United States produced 14.2 million barrels of oil per day; Saudi Arabia produced 11.7 million per day"9.7m barrels a day is accurate for crude oil production. That has remained basically flat for all of 2014. The 11.7 million per day from your article seems to refer to crude+condensate. But it has also remained flat for all of 2014 (as your graph illustrates). Neither your graph nor mine shows any ramp at all during 2014 (both actually show a gradual decline). The main point here is that, as I said, the Saudi's did not do anything to precipitate the oil price collapse. And you have not presented any evidence that they did. Ironically, your graph shows that it was the US surge in oil production that actually caused the oil glut! And since the US has recently overtaken Saudi Arabia to become the world's leading oil producer, why is it up to the Saudi's to cut their production to fix the glut? Shouldn't the US do the right thing and cut production? ---Futilitist iNow  Post subject: Re: Why the price of gas? | Posted: Sun Feb 08, 2015 5:25 pm Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  Futilitist wrote:No, iNow, you are not correct. Here is the graph from the article you reference:Is it possible that your challenges with reading comprehension extend also to your ability to accurately read charts? I said Saudi production was 11.7m barrels. The image supports this. Clarify for all of us, why precisely do you feel the chart negates this fact? It clearly doesn't, but I'm open to the possibility (although it's unlikely) that I may be missing something. Futilitist wrote:9.7m barrels a day is accurate for crude oil production. That has remained basically flat for all of 2014. The 11.7 million per day from your article seems to refer to crude+condensate. More irrelevant quibbling. Supply is up which explains why prices are down. Saudi production is the obvious reason supply has not come down in the face of dropping prices, and they've repeatedly conceded this fact themselves openly and consistently. Futilitist wrote:Ironically, your graph shows that it was the US surge in oil production that actually caused the oil glut! So just to be clear, your position is that US producers are responsible for the very oversupply that's driving them out of business and causing their operations to collapse en masse, not Saudi Arabia who has publicly stated time and again that this over supply is driven by Saudi Arabia as part of a longer term strategy to drive US producers out of business, inflict economic pain on Russia, Iran, Venezuela and related bad actors, and regain their dwindling market share, correct?Here's a more rounded (and IMO, more accurate) view: http://www.nytimes.com/2015/01/13/busin ... .html?_r=0Futilitist wrote:And since the US has recently overtaken Saudi Arabia to become the world's leading oil producer, why is it up to the Saudi's to cut their production to fix the glut? Shouldn't the US do the right thing and cut production? They are and have, from BHP to Baker Hughes to Schlumberger and others. Were you not aware of this? http://money.cnn.com/2015/01/21/investi ... rot-davos/http://m.ibtimes.com/us-manufacturers-a ... ck-1781256 _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan Futilitist  Post subject: Re: Why the price of gas? | Posted: Sun Feb 08, 2015 8:43 pm Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  iNow wrote:Futilitist wrote:No, iNow, you are not correct. Here is the graph from the article you reference:Is it possible that your challenges with reading comprehension extend also to your ability to accurately read charts? I said Saudi production was 11.7m barrels. The image supports this.I agree that the image shows that Saudi production was 11.7m barrels. But that is not what you originally claimed. Here is what you claimed your graph would show:iNow wrote:Saudi Arabia averaged production of 9.7m barrels per day across the entire year, yet in 4Q14 alone ramped production to 11.7m barrels per dayYour graph does not match your statement at all. Where do you see 9.7m barrels on your graph? It's not there! Where do you see a ramp up in Saudi production? It's not there! Where do you see a data point for 4Q14? It's also not there! Is it possible that you are the one having trouble reading charts? iNow wrote:Clarify for all of us, why precisely do you feel the chart negates this fact? It clearly doesn't, but I'm open to the possibility (although it's unlikely) that I may be missing something.I am glad that you are open to the possibility that you may be missing something. You clearly are in this case, as I just showed, above. It is good to admit mistakes. iNow wrote:More irrelevant quibbling. Supply is up which explains why prices are down.Correct. And your chart proves that it is the recent rise in US production which is responsible for the oversupply. iNow wrote:Saudi production is the obvious reason supply has not come down in the face of dropping prices...That does not make any sense. There is no reason to expect the Saudi's to cut production every time the US increases it! iNow wrote:Futilitist wrote:Ironically, your graph shows that it was the US surge in oil production that actually caused the oil glut! So just to be clear, your position is that US producers are responsible for the very oversupply that's driving them out of business and causing their operations to collapse en masse, not Saudi Arabia who has publicly stated time and again that this over supply is driven by Saudi Arabia as part of a longer term strategy to drive US producers out of business, inflict economic pain on Russia, Iran, Venezuela and related bad actors, and regain their dwindling market share, correct?Saudi Arabia has never claimed that they started this. They claim that the US did. They are right. They have also absolutely denied that this has anything to do Russia, etc. (others have made that claim). They are candid in hoping to drive the US frackers out of business by continuing to do what they have been doing all along. That is their long term strategy. The US might really want the Saudi's to sacrifice billions in revenue to help keep US frackers alive, but they are under no obligation do so.So, yes, just to be clear, my position is that US producers are responsible for the very oversupply that's driving them out of business and causing their operations to collapse en masse. And the graph you presented clearly shows that I am right. Thanks. iNow wrote:Futilitist wrote:And since the US has recently overtaken Saudi Arabia to become the world's leading oil producer, why is it up to the Saudi's to cut their production to fix the glut? Shouldn't the US do the right thing and cut production? They are and have, from BHP to Baker Hughes to Schlumberger and others. Were you not aware of this? http://money.cnn.com/2015/01/21/investi ... rot-davos/http://m.ibtimes.com/us-manufacturers-a ... ck-1781256Clearly I am very aware of this. That is why I said that the situation would resolve itself:Futilitist wrote:So the good news is that the current glut will fix itself. The bad news is we won't like the way it fixes itself.---Futilitist iNow  Post subject: Re: Why the price of gas? | Posted: Mon Feb 09, 2015 12:22 am Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  Discussion with you really is futile. 9.7m average across the year came from another source. Core point is that there is a glut of supply, prices are consequently down, and Saudi Arabia is the key since it is their move that's out maneuvering US producers. US production surpassed Saudi production in 2012, yet it was only in Q4 last year (2014) that prices tanked. Ergo, your suggestion that the US is directly responsible for the current drop in prices fails to stand up to even remedial scrutiny and I've supported this argument throughout the thread already. Quibble if you want. Ignore the evidence and facts on the ground if you choose. You are welcome to have a different opinion. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan Futilitist  Post subject: Re: Why the price of gas? | Posted: Mon Feb 09, 2015 2:24 am Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  iNow wrote:Discussion with you really is futile.I have a LOT more knowledge about this subject than you do, so I'm sure it must feel futile to you. I'll take it as a compliment.iNow wrote:9.7m average across the year came from another source.Yeah, I pretty much figured that. You saw the number difference and assumed there must have been a price jump. But your mistake was not simply that the two numbers come from different sources, as you claim above. The larger error is in not realizing that the two different numbers are actually counts of two different things! Like I said, the 9.7m average is correct for crude only. The other number is obviously crude+condensate, though the article did not specify. I have no idea how you managed to conclude that a 2m barrel a day spike (that never actually happened) must have occurred in the last quarter of 2014 (especially when the graph and the article both showed the last data point as Q3, mister reading comprehension)! But all of this certainly doesn't strengthen your contention that Saudi Arabia somehow precipitated the price collapse, or has any practical power to stop it. iNow wrote:Core point is that there is a glut of supply,True.iNow wrote:prices are consequently down,Also true.iNow wrote:and Saudi Arabia is the key since it is their move that's out maneuvering US producers.Totally false. What move? As your own graph demonstrated, Saudi production has been very slightly declining all during 2014. So how does Saudi production remaining basically steady constitute any sort of "move"? The Saudi's are out maneuvering the US producers by standing still! It makes no sense at all. Yet even after your evidence is shown to be false, you stand right back up and make the same claim. Whatever. iNow wrote:US production surpassed Saudi production in 2012, yet it was only in Q4 last year (2014) that prices tanked. Ergo, your suggestion that the US is directly responsible for the current drop in prices fails to stand up to even remedial scrutiny...Wow, iNow. It is very easy to answer this. The US surpassing Saudi production is was not sufficient, in and of itself, to cause a glut, because there are many other producers in the world. When the US continued to drastically increase increase it's production after that, a glut was the eventual result. Duh. iNow wrote:Quibble if you want. Ignore the evidence and facts on the ground if you choose. You are welcome to have a different opinion.Thanks.---Futilitist iNow  Post subject: Re: Why the price of gas? | Posted: Mon Feb 09, 2015 3:38 am Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  Futilitist wrote:I have a LOT more knowledge about this subject than you do <...> I have no idea how you managed to conclude that <...> mister reading comprehension)! <...> It makes no sense at all. <...> Whatever. <...> Wow, iNow. It is very easy to answer this. <...> Duh. I agree that increased US production has increased overall supply. You agree that increased supply is the reason for the decreased prices we're currently seeing. I see your point about the production numbers measuring different things and appreciate the correction, but it's essentially moot since its peripheral to my core point. Historically, when prices drop, producers scale back production to stabilize the price and right now Saudi Arabia has openly acknowledged they are prioritizing a desire for market share over over a desire for higher price and hence will not cut production for the foreseeable future. I disagree with your underlying premise that the US is directly responsible for the current drop in prices, as does essentially every reporting agency and expert (Including the BIS who regularly reports on such matters), even though I stipulate that US contributions to global oil supply and their growing market share were likely motivating factors in this decision being made by Saudi Arabia and other OPEC countries not to cut back production until enough damage is done to other producing nations.Again though, you are welcome to hold your own opinion, even about what you think I do and do not know about the subject. Also, for future reference, when someone says they feel that having a discussion with you is futile, it would be an error to treat such a comment as complimentary. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan Futilitist  Post subject: Re: Why the price of gas? | Posted: Mon Feb 09, 2015 8:06 am Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  iNow wrote:Futilitist wrote:I have a LOT more knowledge about this subject than you do <...> I have no idea how you managed to conclude that <...> mister reading comprehension)! <...> It makes no sense at all. <...> Whatever. <...> Wow, iNow. It is very easy to answer this. <...> Duh. I agree that increased US production has increased overall supply. You agree that increased supply is the reason for the decreased prices we're currently seeing. I see your point about the production numbers measuring different things and appreciate the correction, but it's essentially moot since its peripheral to my core point. Historically, when prices drop, producers scale back production to stabilize the price and right now Saudi Arabia has openly acknowledged they are prioritizing a desire for market share over over a desire for higher price and hence will not cut production for the foreseeable future.You are correct that historically, OPEC, and Saudi Arabia in particular, have been able to maintain production quotas to control price. But conditions have changed substantially since Saudi Arabia had that kind of control. We may have gotten used to that kind of producer behavior up till now, and we may have come to see it as normal, or even natural, producer behavior, but it is not. Quite the opposite, actually. The natural producer response to low oil prices is to produce flat out in order to outlast your competition and maintain (or even grow) market share. That is common sense. That is what game theory predicts. And that is exactly what every producer in the world is doing right now. Under current conditions, it is just not in Saudi Arabia's self interest to voluntarily give up market share and revenue to the US frackers. So it is just not realistic to expect the Saudi's to cut production. The meme that this whole thing is somehow the Saudi's fault is just desperate finger pointing and disinformation. It is amazing how widely held this false belief is among Americans. But it probably has a lot to do with how often it keeps popping up in the mainstream news. I think it is basically propaganda (public opinion control to justify possible future military actions over oil). iNow wrote:I disagree with your underlying premise that the US is directly responsible for the current drop in prices,That is not my underlying premise. My underlying premise is that the US production surge combined with rapidly shrinking demand in China and Europe to create the glut. But I don't believe the US is "directly responsible" any more than I believe the Saudi's are. I just wanted you to flip the problem around in your head to see that, of course, neither the Saudi's nor the Americans can rationally act against their own self interests, so it makes no sense to expect either one to do so. The oil market is a natural system. It will shake itself out and the glut will resolve itself naturally. Some producers will go out of business. Since the US frackers are the most marginal producers, they will most likely be the big losers. iNow wrote:as does essentially every reporting agency and expert (Including the BIS who regularly reports on such matters)As I mentioned above, mainstream news, approved experts, and government agencies tend to be government mouthpieces. It is not good to completely depend upon so called "authoritative sources" to tell you what you need to know. iNow wrote:even though I stipulate that US contributions to global oil supply and their growing market share were likely motivating factors in this decision being made by Saudi Arabia and other OPEC countries not to cut back production until enough damage is done to other producing nations.That makes sense. Basic game theory in action. iNow wrote:Again though, you are welcome to hold your own opinion, even about what you think I do and do not know about the subject. Also, for future reference, when someone says they feel that having a discussion with you is futile, it would be an error to treat such a comment as complimentary.iNow, that is a genuinely funny comment. Bravo! I mean it. I will take your advice.---Futilitist billvon  Post subject: Re: Why the price of gas? | Posted: Mon Feb 09, 2015 5:31 pm Joined: Thu Oct 02, 2014 5:23 pm Posts: 86  iNow wrote:Discussion with you really is futile. Several of us have discovered this. Futilitist  Post subject: Re: Why the price of gas? | Posted: Mon Feb 09, 2015 6:38 pm Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  billvon wrote:iNow wrote:Discussion with you really is futile. Several of us have discovered this.Normally I would thank you for the complement, but as iNow so helpfully pointed out, it is probably an error for me to treat your statement as a compliment. [MODNOTE] Unnecessary invective removed[/MODNOTE].---Futilitist Last edited by iNow on Mon Feb 09, 2015 9:37 pm, edited 1 time in total.Inflammatory comment to billvon has been deleted Futilitist  Post subject: Re: Why the price of gas? | Posted: Mon Feb 23, 2015 5:35 am Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  iNow wrote:Futilitist wrote:Demand might be only slightly lower in the US, as you say, but it is a lot lower lately in Europe and China (and basically every place else).This is also trivially false. While the rate of growth in demand may have slowed, demand itself is very much up in all of those places, +3.5% YoY in China alone.In addition, global oil demand is very much up despite your suggestion to the contrary, even though rate of growth may have slowed relative to historical norms: https://www.iea.org/oilmarketreport/omrpublic/We had the above interchange a while back. I would like to present some new evidence that you are incorrect that a drop in demand did not cause the oil price plunge. Here is a good analysis showing that a drop in demand was the only thing that could have led to the steep drop in oil prices:Oil's "Surprise" Collapse: It's The Demand, Stupidhttp://www.zerohedge.com/news/2015-02-2 ... and-stupidQuote:Given the cumulative assessments here, it seems far more likely that if some variable has changed, and done so dramatically, it is not a “surprise” surge in crude supply but rather a sudden and sharp drop in demand that had reasonably matched growing supply until only more recently.The analysis sure makes a lot of sense. If true, the future implications are also interesting. Oil prices may not rebound (as most believe and expect). They may, instead, drop a lot further.Please look over the article and explain to me why they are wrong. Thanks.---Futilitist billvon  Post subject: Re: Why the price of gas? | Posted: Mon Feb 23, 2015 6:50 pm Joined: Thu Oct 02, 2014 5:23 pm Posts: 86  Futilitist wrote:The analysis sure makes a lot of sense. If true, the future implications are also interesting. Oil prices may not rebound (as most believe and expect). They may, instead, drop a lot further.That would only be a worry if you believe demand will continue to drop. Historically oil demand does the opposite during times of cheap oil. Futilitist  Post subject: Re: Why the price of gas? | Posted: Thu Feb 26, 2015 6:29 pm Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  billvon wrote:Futilitist wrote:The analysis sure makes a lot of sense. If true, the future implications are also interesting. Oil prices may not rebound (as most believe and expect). They may, instead, drop a lot further.That would only be a worry if you believe demand will continue to drop. Historically oil demand does the opposite during times of cheap oil.I do believe demand will continue to drop. This time things are different!* *I thought you would like that one PS--WTI Crude spot price just fell back under$49.00 to $48.84 as I was writing this. ---Futilitist iNow  Post subject: Re: Why the price of gas? | Posted: Thu Feb 26, 2015 11:58 pm Original Member Joined: Thu Aug 04, 2011 11:40 pm Posts: 5700 Location: Iowa  I've heard some projections suggesting crude could go lower still, maybe as low as$20 or $30 per barrel. We won't know until it happens, though. Probably best not to rest too heavily on specious opinions and uncertain forecasts. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan Futilitist  Post subject: Re: Why the price of gas? | Posted: Fri Feb 27, 2015 3:02 am Joined: Fri Sep 14, 2012 9:33 pm Posts: 656  iNow wrote:I've heard some projections suggesting crude could go lower still, maybe as low as$20 or \$30 per barrel. We won't know until it happens, though. Probably best not to rest too heavily on specious opinions and uncertain forecasts.Ok. That makes sense.Informally speaking, what is your gut instinct on the price of oil? Will prices recover in time to save the frackers? Will we have another spike?---Futilitist
iNow
 Post subject: Re: Why the price of gas?  |  Posted: Fri Feb 27, 2015 3:46 am

Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5700
Location: Iowa

 My gut tells me prices will ultimately rebound, but I'm unsure how soon or how high. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan
Futilitist
 Post subject: Re: Why the price of gas?  |  Posted: Fri Feb 27, 2015 9:37 pm

Joined: Fri Sep 14, 2012 9:33 pm
Posts: 656

 iNow wrote:My gut tells me prices will ultimately rebound, but I'm unsure how soon or how high.Do you think it is likely they might go down a lot before they recover?---Futilitist
iNow
 Post subject: Re: Why the price of gas?  |  Posted: Fri Feb 27, 2015 11:55 pm

Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5700
Location: Iowa

 It's possible, but I can't comment on likelihood. _________________iNow"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan
Futilitist
 Post subject: Re: Why the price of gas?  |  Posted: Sat Feb 28, 2015 1:38 am

Joined: Fri Sep 14, 2012 9:33 pm
Posts: 656

 iNow wrote:It's possible, but I can't comment on likelihood.It's kinda fun to speculate, though.---Futilitist
Futilitist
 Post subject: Re: Why the price of gas?  |  Posted: Sat Feb 28, 2015 1:40 am

Joined: Fri Sep 14, 2012 9:33 pm
Posts: 656

 If it goes down, then a lot of producers will go out of business. This might lead to a big oil spike.---Futilitist
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