Gas prices

Tilted

Tilted

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Hijinx said:
I hope someone is smart enough to top off the National reserves while it bis cheap.
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The SPR is pretty near full. We've drawn it down a little in recent years (after a longer-term push to get in filled) - something like 30 million barrels, IIRC.

I don't expect that we'll top it off now though, at least not at current prices. The Obama Administration suspended the Royalty-in-Kind program for adding oil to the reserves a couple years ago, so we'd basically be paying cash to buy the oil if we wanted to add more now (though, in reality, it doesn't matter a whole lot doing that versus accepting oil in lieu of royalties). And actually, the average cost of the oil currently in the SPR is considerably lower than current oil prices.

Anyway... filling the SPR would increase the deficit (not by a lot, but some), so the cynic in me doubts we'd do it if for no other reason than that.
 
desertrat

desertrat

0_0
Tilted

Tilted

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punjabigyrl said:
US does not get 100% of its gas from the gulf. Here is a link

http://www.npr.org/2012/04/11/150444802/where-does-america-get-oil-you-may-be-surprised

http://www.randalolson.com/2014/08/28/where-the-u-s-gets-its-oil-from/

http://www.energytrendsinsider.com/research/crude-oil/where-the-us-gets-its-oil-from/
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I don't think he was suggesting that we do get our oil (or gas) from the Gulf. But oil is, for the most part, a global commodity. There are surely local market effects (and there are kind and quality differences as well), but oil prices are primarily driven by global circumstances. Even if we produced as much oil as we consume - if we, in effect, only used our own oil - what happened elsewhere in the world, to include what Saudi Arabia did, would affect our oil prices (and what we pay for gas). Putting it simply, that's because our oil could go elsewhere (or we could get our oil from elsewhere) if our own prices didn't sufficiently reflect prices elsewhere.

I don't agree with him on the U.S. and Saudis colluding in this case though. We're doing things that have affected prices (e.g. producing more oil :lol:), but in terms of actually trying to manipulate prices right now, that's more the Saudis (and OPEC) than anyone else. They're choosing to let prices tank by not pulling back production, it's a conscious choice with an intended effect - the effect being what's driving the choice.
 
BOP

BOP

Well-Known Member
http://www.manufacturing.net/news/2015/01/energy-companies-announce-thousands-of-layoffs

The continued decline in the prices of crude oil is wreaking havoc in the oilfield services sector, where three industry giants have announced thousands of job cuts in recent days.

Last week, Schlumberger Ltd., the world's largest oil drilling services company, announced 9,000 jobs -- just over 7 percent of its global workforce -- would be cut in response to tumbling oil prices.

On Tuesday, fellow Texas companies Halliburton and Baker Hughes -- the second- and third-largest oilfield services companies, respectively -- followed suit.

Halliburton officials announced 1,000 jobs in its eastern hemisphere operations had been eliminated in the fourth quarter of 2013, while Baker Hughes -- which is in the process of being acquired by Halliburton for some $35 billion -- said 7,000 employees, or 11 percent of its workforce, would be laid off.
 
Tilted

Tilted

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Man... U.S. crude inventories continue to build despite how far prices have fallen. It might take even lower prices, or at least prices around current levels for longer than we might have previously thought, to equalize supply and demand. On the supply side, it was of course going to take a while for there to be any meaningful effect (other than the kind of thing that OPEC might have done by intentionally restricting supply). (And to be clear, I'm not talking about an effect on decisions but rather on actual production.) But on the demand side, I have to think there's already been some meaningful effect.
 
Larry Gude

Larry Gude

Strung Out
Tilted said:
Man... U.S. crude inventories continue to build despite how far prices have fallen. It might take even lower prices, or at least prices around current levels for longer than we might have previously thought, to equalize supply and demand. On the supply side, it was of course going to take a while for there to be any meaningful effect (other than the kind of thing that OPEC might have done by intentionally restricting supply). (And to be clear, I'm not talking about an effect on decisions but rather on actual production.) But on the demand side, I have to think there's already been some meaningful effect.
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I think of oil production, globally, as a bunch of super tankers; at whatever speed they were running, no matter they see the ice burgs, it simply takes a long time to slow them down let alone turn them around. It's not like manufacturing where you can shut something down, quick, and do something else somewhere else just as fast.
 
Tilted

Tilted

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Larry Gude said:
I think of oil production, globally, as a bunch of super tankers; at whatever speed they were running, no matter they see the ice burgs, it simply takes a long time to slow them down let alone turn them around. It's not like manufacturing where you can shut something down, quick, and do something else somewhere else just as fast.
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Indeed.

There is a natural diminishment in production though - if we aren't actively working to add new production, overall production is always falling. (Some places don't need to work to add production, of course - Saudi Arabia, e.g., can pretty much just decide to turn it on, at least when it comes to some additional production.) So, the decisions we make today not to work as hard to add new production (e.g. fund large projects or drill particular wells or frack the wells we do drill) can fairly quickly affect total production at the margins - those decisions can have impacts maybe 3 to 6 months out. (Sooner in theory, but typically in reality not so much.) They can have even larger impacts further out.

If we were talking about a supply excess of a few hundred thousand barrels a day, it wouldn't take long to get your figurative tankers slowed down enough. But we're probably talking about a supply excess of more like a couple million barrels a day.
 
B

BigBlue

New Member
Tilted said:
Man... U.S. crude inventories continue to build despite how far prices have fallen. It might take even lower prices, or at least prices around current levels for longer than we might have previously thought, to equalize supply and demand. On the supply side, it was of course going to take a while for there to be any meaningful effect (other than the kind of thing that OPEC might have done by intentionally restricting supply). (And to be clear, I'm not talking about an effect on decisions but rather on actual production.) But on the demand side, I have to think there's already been some meaningful effect.
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They are saying that $50 a barrel could be the ceiling not the floor of a barrel of oil .Talk of gas possibly at a $1 a gallon ( i won't bet on it)
 
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