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5 dollar gas...are we ready?

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Re: 5 dollar gas...are we ready?

unh_hockey said:
So my question to those who study this market more than I do are this:

1- Are low oil prices here to stay? Will they increase, but not to old levels?
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Oil prices, low or high, are never "here to stay." Too volatile. The current slide will find its floor (I'm guessing prices have a little further to fall) and by early spring will begin a climb back towards where they were 6 months ago. I wouldn't be surprised at all to see gas average $3.00 a gallon again in the USA by next Independence Day. At some point soon OPEC will override the wishes of the Saudis and curtail production significantly.
 
Re: 5 dollar gas...are we ready?

WeAreNDHockey said:
Oil prices, low or high, are never "here to stay." Too volatile. The current slide will find its floor (I'm guessing prices have a little further to fall) and by early spring will begin a climb back towards where they were 6 months ago. I wouldn't be surprised at all to see gas average $3.00 a gallon again in the USA by next Independence Day. At some point soon OPEC will override the wishes of the Saudis and curtail production significantly.
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I think OPEC is unified on this, since "cheap" oil turns all those shale operations into cost losers for western powers, and cripples Russia. They can bear the brunt more easily. Hurt the Americans, Canadians and Russians for as long as possible - maybe drive some competition out of business - and then jack the price back up. Of course, that all may happen on your timetable...
 
Re: 5 dollar gas...are we ready?

FadeToBlack&Gold said:
Hahahah...ha...

Wait, what?

In all seriousness - does humidity matter when it's 110+? :)
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Absolutely. The further one gets from a comfortable temperate humidity becomes even more impactful as it reduces the benefit of sweating. Imagine Vegas one day when it's in the 90s and compare that to Minneapolis. Now that's not 110, but when I lived in Bahrain where 100F was common they had a heat index (think wind chill factor) that factored temp, wind (a warm wind off the gulf can be just as discomforting as a cold wind in Fargo) and humidity to project a, "feels like" temp and the higher the humidity the worse it felt.
 
Re: 5 dollar gas...are we ready?

WeAreNDHockey said:
Oil prices, low or high, are never "here to stay." Too volatile. The current slide will find its floor (I'm guessing prices have a little further to fall) and by early spring will begin a climb back towards where they were 6 months ago. I wouldn't be surprised at all to see gas average $3.00 a gallon again in the USA by next Independence Day. At some point soon OPEC will override the wishes of the Saudis and curtail production significantly.
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gas would be lower now anyhows compared to july 4th since winter blends are much cheaper.
 
Re: 5 dollar gas...are we ready?

mookie1995 said:
gas would be lower now anyhows compared to july 4th since winter blends are much cheaper.
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Yes, but sources differ on the price per gallon difference to refine summer blends versus winter blends. Some say it is a penny or two, some say it might be as much as $0.15 per gallon. But if gas is back to where it was 6 months ago in another 6 months, production and worldwide demand will account for the vast majority of the increase, not refining costs.
 
Re: 5 dollar gas...are we ready?

joecct said:
WaPo map on falling gas prices.
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That's a fascinating map. One would think that price decreases driven by greater supply would affect everybody equally -- the other factors that determine price, like taxes, transportation cost, etc, would be unchanged and cancel out. Well, thinking about it more you'd expect transportation costs to go down with energy costs (with some latency), so states farthest from supply would tend to decrease more.
 
Re: 5 dollar gas...are we ready?

Kepler said:
That's a fascinating map. One would think that price decreases driven by greater supply would affect everybody equally -- the other factors that determine price, like taxes, transportation cost, etc, would be unchanged and cancel out. Well, thinking about it more you'd expect transportation costs to go down with energy costs (with some latency), so states farthest from supply would tend to decrease more.
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not all oil is priced the same. plus not all get shipped from the same place. the middle part of the country and south get texas/gulf. new england is more apt to get north sea.
 
Re: 5 dollar gas...are we ready?

WeAreNDHockey said:
Yes, but sources differ on the price per gallon difference to refine summer blends versus winter blends. Some say it is a penny or two, some say it might be as much as $0.15 per gallon. But if gas is back to where it was 6 months ago in another 6 months, production and worldwide demand will account for the vast majority of the increase, not refining costs.
Click to expand...

thus the $0.15 difference
 
Re: 5 dollar gas...are we ready?

Kepler said:
That's a fascinating map. One would think that price decreases driven by greater supply would affect everybody equally -- the other factors that determine price, like taxes, transportation cost, etc, would be unchanged and cancel out. Well, thinking about it more you'd expect transportation costs to go down with energy costs (with some latency), so states farthest from supply would tend to decrease more.
Click to expand...

You also have to look at refinery capacity when figuring in fuel prices. Not too long ago the Midwest had supply issues due to refineries being knocked out of service, driving up prices in the area. Now that those refineries are back at full capacity, coupled with the dropping crude prices, and we're reaping that benefit. Other states have a gas tax that's a percentage of price while others fix it at certain dollar value per gallon. Those with a percentage tax will again see a greater benefit. Then there's the different types of oil sources, like mookie stated. When you go across the country, it's not really an apples-to-apples comparison with regards to fuel prices.
 
Re: 5 dollar gas...are we ready?

True?
“Democrats, almost universally, mocked the GOP plan. In 2012, President Obama called it ‘a slogan, a gimmick, and a bumper sticker … not a strategy.’

‘They were waving their three-point plans for $2-a-gallon gas’ Obama told a laughing audience during an energy speech in Washington. ‘You remember that? Drill, baby, drill. We were going through all that. And none of it was really going to do anything to solve the problem.’

‘Drill, baby, drill’ won’t lower gas prices today or tomorrow,’ Rep. Janice Hahn, D-Calif., echoed on the floor of Congress in 2012. ‘But it will fuel our addiction to fossil fuel.'”
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