Page 4 of 6 FirstFirst ... 23456 LastLast
Results 31 to 40 of 56

Thread: $1.99 gas .

  1. #31
    Registered User
    Member Since
    Feb 2013
    Location
    California MD
    Posts
    1,129
    Quote Originally Posted by SG_Player1974 View Post
    I really do not buy this....

    So, you are buying the idea that, after nearly 10 years of increasing prices at the pump and oil-per-barrel, that in the last 12 months there is suddenly a windfall of oil and a new-found oil production capacity that was not there?! So after an alleged 10 year steady increase in "demand" and "worldwide usage" there is a sudden and sharp 35% decrease?!

    Sounds like another "story" to me.
    I blame the show Backyard Oil, now everyone with an acre of land in Kentucky is drilling. While I am sort of kidding I do bet the show had a small impact on US oil production just like shows such as Auction Hunters flooded the storage auctions with people trying to find 1 container that would make them rich.

  2. #32
    Quote Originally Posted by SG_Player1974 View Post
    I really do not buy this....

    So, you are buying the idea that, after nearly 10 years of increasing prices at the pump and oil-per-barrel, that in the last 12 months there is suddenly a windfall of oil and a new-found oil production capacity that was not there?! So after an alleged 10 year steady increase in "demand" and "worldwide usage" there is a sudden and sharp 35% decrease?!

    Sounds like another "story" to me.
    Who has suggested a 35% decrease in demand? Or, really, anything near that?

    If you're suggesting that such a large drop in prices, if we're going to attribute it to changes in supply-demand realities and/or expectations (which would be a correct attribution), necessarily implies a similarly large drop in supply or increase in demand, then that suggestion is misguided. That's not how supply-demand dynamics work, that's not how markets work. Yes, it's possible in some circumstances that the percent increase or decrease in price lines up pretty well with the percent increase or decrease in supply or demand, but that's not going to be the typical case - and it's likely more happenstance than anything in those particular cases. And it's certainly not going to be the case when it comes to some markets and some products in particular - e.g., global oil.

    For a number of reasons that I'd be happy to walk through with you, there is great inelasticity in global oil pricing. Small differences in the supply - demand balance, if they are (or are likely to be) sustained over a significant period of time, can mean huge differences in prices. We aren't talking about a huge (relative) spike in global oil supply or a huge (relative) drop in global oil demand. We're talking about fairly small (a percent or two perhaps) shifts in those things that have evolved over recent months and years. The reality of those shifts have hit global markets - and become unavoidable (or undeniable) - in the last 6 months of so. So, prices have adjusted as will be needed to rebalance supply and demand (again, huge price differences to effectuate smallish supply and demand adjustments). Prices have not only corrected, they've over-corrected. And, by the way, in the past such smallish (would-be) shifts have often been met with some market manipulation, so to speak (e.g. intentional cuts or increases in production), such that they didn't eventually result in large price swings. That's part of why global oil prices had been so stable over the preceding four or so years.

    It can't be emphasized enough - for legitimate, natural, reasons - oil pricing happens at the margins. What's going on at the margins of supply and demand determines, for the most part, pricing. And various things happen to change the outlook at those margins, so without someone or someones actively manipulating the margins of the market, oil prices can be quite volatile. The story here (not the long-term story, but the immediate story) is that no one has stepped in (read: OPEC, Saudia Arabia in particular, has not stepped in) to offset natural developments in oil markets in order to stabilize prices.
    Nearly all success in electoral politics boils down to convincing people that you recognize that they are not the problem, that someone or something else is.

  3. #33
    Quote Originally Posted by Bustem' Down View Post
    They don't need to pump, just drill the hole. That way, when OPEC says "You've had enough" we are ready to ramp up our own production. Like hiding snickers in the sock drawer.
    Drilling the hole, as we're oversimplifying the process here, is what costs money - what requires capital expenditures and is done based on decisions which are based in part on, among other things, the expected price that will be got for the oil that might be produced. The process of deciding whether or not it makes fiscal sense to take the risk to drill a given hole (or, more realistically, a given project of holes) is greatly affected by the consideration of what future oil prices might be. The pumping part, as we're oversimplifying the process here, isn't the issue. If you've drilled the hole, it's probably greatly profitable to pump no matter what the price is. But at certain prices, it doesn't make sense to drill the hole to begin with - especially considering the risks involved and thus the potential upside needed to offset the risks such that it makes sense to green light a particular project.
    Nearly all success in electoral politics boils down to convincing people that you recognize that they are not the problem, that someone or something else is.

  4. #34
    Quote Originally Posted by bilbur View Post
    I blame the show Backyard Oil, now everyone with an acre of land in Kentucky is drilling. While I am sort of kidding I do bet the show had a small impact on US oil production just like shows such as Auction Hunters flooded the storage auctions with people trying to find 1 container that would make them rich.

    A LOT of "closed/old" wells and properties were put in production (or back in to production) as the price of oil kept increasing steadily over the past 6 or so years. Heck, I'm a 1/5 owner of an oil property in Texas that had its wells closed down in the early 60s..and just two years ago, out of the blue, a drilling company tracked us down and negotiated a new lease deal to open it up again. Guess I won't be seeing any big royalty check on that now..
    You can't be a real country unless you have a beer and an airline. It helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer. -Frank Zappa

  5. #35
    Quote Originally Posted by PsyOps View Post
    I think we could be, and should be, experiencing gas below $1.00 if this government would get our dependency off foreign oil, start drilling here at home/offshore, stand up more refineries, approve the Keystone Pipeline... And if we had been doing this from the beginning we should have never gone above $1.00.
    PsyOps, what are you basing this belief on? That we could have $1 / gallon gasoline? I'd curious to know, because I think it is completely implausible.

    Yes, we can have sudden swings and prices can drop really low (though not that low, I don't think) for a short period of time. But big picture, current realities (e.g. relating to global demand and global participants, the nature of much of the new production sources that are available to us) just wouldn't allow for it. At $1 / gallon gas (and the corresponding barrel oil prices that would be needed) for an extended period of time, the world just wouldn't produce as much oil as it would consume. And that's a physical impossibilities (i.e. we can't consume more oil than we produce, save for using up the relatively smallish amount of oil that might be stored in various infrastructure at a given time), so prices can't be that low for long.

    Now, to qualify what I'm saying, it's assuming we don't have the ability or inclination to take over various global oil production sources. That is to say, we don't get to make OPEC, e.g., do whatever we want. If we had the resources that Saudi Arabia and the UAE and Kuwait have, then yeah - maybe we could develop enough additional cheap oil sources to move prices lower and keep them there for a bit. But we aren't going to do that, and it isn't in their interests to flood the market with enough new oil to allow prices to be as low as you suggest (and keep them there for a longer period of time).

    And more refineries isn't really the issue now (though refinery margins have improved considerably more recently), nor would the Keystone Pipeline (the XL that I assume you're referring to) likely make a big difference when it comes to prices in general.
    Nearly all success in electoral politics boils down to convincing people that you recognize that they are not the problem, that someone or something else is.

  6. #36
    Quote Originally Posted by Gilligan View Post
    There isn't a coordinated effort; rather there is simply a worldwide glut of oil and oil production capacity. What is somewhat unusual is that OPEC has been irrelevant and ineffective this time around, and not able to coordinate a reduction in member-country output. There is some speculation that the Saudis are refusing to cut their production in an effort to undermine the US operations, many of which have much higher break-even points (some as high as $80/barrel) than what the Saudis get out of their fields. Saudi production costs are really low.

    The economic "shot in the arm" for the US is huge...yes indeed. For everyone except the oil industry anyway.
    That's about right, but it isn't so much that OPEC hasn't been able to coordinate a reduction in output. It's that the real power in OPEC hasn't wanted to coordinate a reduction in output. If they wanted to, they could do so - hell, Saudi Arabia could do it on its own if it wanted to - enough so to stabilize prices and head them back upward.

    Representatives of the various OPEC power brokers have been quite clear about their intentions. We don't really need to speculate. They've said - paraphrasing here - that they didn't cause this oversupply problem, that other oil producers have been irresponsible and done so. So they aren't going to be the ones to fix the problem, at least not by themselves. Those suppliers that have increased production and oversupplied the market (e.g. shale producers, perhaps Russia) are going to pay the price for their irresponsibility and are going to have to be the ones to cut back on production. Saudi Arabia has suggested, however, that it might be willing to participate in production cuts IF non-OPEC members would agree to do so as well. They're willing to help fix the problem, so to speak, but they aren't willing to fix it all by themselves.
    Nearly all success in electoral politics boils down to convincing people that you recognize that they are not the problem, that someone or something else is.

  7. #37
    Quote Originally Posted by Tilted View Post
    PsyOps, what are you basing this belief on? That we could have $1 / gallon gasoline? I'd curious to know, because I think it is completely implausible.

    .
    I think it entirely implausible too. My own rough estimate is that something "around" 3.00/gal is sustainable over a longer term. But not a whole lot less than that.
    You can't be a real country unless you have a beer and an airline. It helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer. -Frank Zappa

  8. #38
    Quote Originally Posted by Gilligan View Post
    The economic "shot in the arm" for the US is huge...yes indeed. For everyone except the oil industry anyway.
    I don't think we can keep saying this enough. As a plain working stiff, I'll take the benefits of this "economic shot in the arm" over seeing the DOW close over 18000 any day. Hopefully this will last long enough to see other prices drop as well.
    "Pain heals. Chicks dig scars. Glory... lasts forever." - Shane Falco

  9. #39
    Quote Originally Posted by stgislander View Post
    As a plain working stiff, I'll take the benefits of this "economic shot in the arm" over seeing the DOW close over 18000 any day.
    Bingo. I get sick and tired of seeing some point to the DJIA and chortle about how great that means the economy is doing. I've yet to figure out how to fry up and eat a stock certificate.
    You can't be a real country unless you have a beer and an airline. It helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer. -Frank Zappa

  10. #40
    I Need a Life
    Member Since
    May 2008
    Location
    Over the Hills and Far Away..
    Posts
    2,094
    Quote Originally Posted by Tilted View Post
    Representatives of the various OPEC power brokers have been quite clear about their intentions. We don't really need to speculate. They've said - paraphrasing here - that they didn't cause this oversupply problem, that other oil producers have been irresponsible and done so. So they aren't going to be the ones to fix the problem, at least not by themselves. Those suppliers that have increased production and oversupplied the market (e.g. shale producers, perhaps Russia) are going to pay the price for their irresponsibility and are going to have to be the ones to cut back on production. Saudi Arabia has suggested, however, that it might be willing to participate in production cuts IF non-OPEC members would agree to do so as well. They're willing to help fix the problem, so to speak, but they aren't willing to fix it all by themselves.
    Thank you for agreeing with my main point that the recent fluctuations of oil and thus, gas prices at the pump, are basically politically influenced and NOT due to the old "supply and demand" BS.

Members who have read this thread: 0

There are no members to list at the moment.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Search:     Advanced Search
Search HELP

| Home | Help | Contact Us | About somd.com | Privacy | Advertising | Sponsors | Newsletter |

| What's New | What's Cool | Top Rated | Add A Link | Mod a Link |

| Announcements | Bookstore | Cafe | Calendar | Classifieds | Community |
| Culture | Dating | Dining | Education | Employment | Entertainment |
| Forums | Free E-Mail | Games | Gear! | Government | Guestbook | Health | Marketplace | Mortgage | News |
| Organizations | Photos | Real Estate | Relocation | Sports | Survey | Travel | Wiki | Weather | Worship |