Thread: Oil Prices, Good News, For Awile Anyway

I filled up today for $1.64/gal. This is quite crazy. I hope this is the new normal!

I remember when an attendant pumped yer gas and checked the oil and yer tires and cleaned yer windshield and when you said fill er up it was a 5 buck tab. Of course I remember when Henry Ford rolled out his first model and we used to say to the broke down drivers "Get a horse".

They're just spoiling you. The second act is coming.

$2.01 here in Bradenton, FL. Drill, baby, drill! Pump away!

Originally Posted by JimmyHAD

How low can oil prices go? Welcome to the oil market’s old normal - The Washington Post

Best pump price I ever got was 19 cents per gallon back in maybe it was '65 ? Getting it for $2.19 yesterday and feeling like it was a good deal shows how much a buck is worth nowadays.

I was told by a well-connected source that after they build the Keystone-XL pipeline the oil will drop to three-buck-fiddy a barrel and the gas stations nationwide will be renamed to CocaCola/Pepsi stations where thirsty people could also buy gasoline if they feel like it.

I think Russia has a lot to do with this. I think Russia is going to cause some other eventful things in the near future too. What I keep wondering is what affect it will have on the Global market. It was starting to get cheap enough to manufacture here in the States again due to cost of shipping. I like to be the glass half full guy but I keep wondering what is coming. We are all happy and dancing about the price but I have a feeling somebody is grabbing the edge of the rug and getting ready to yank it. If it's to good to be true and all that.

Originally Posted by 10Pups

I think Russia has a lot to do with this. I think Russia is going to cause some other eventful things in the near future too. What I keep wondering is what affect it will have on the Global market. It was starting to get cheap enough to manufacture here in the States again due to cost of shipping. I like to be the glass half full guy but I keep wondering what is coming. We are all happy and dancing about the price but I have a feeling somebody is grabbing the edge of the rug and getting ready to yank it. If it's to good to be true and all that.

It will stabilize itself. At about $70/barrel, it is cost effective to continue to develop US assets. We have gone from a petroleum importer to a net exporter.

The article that Jimmy posted is quite good and captures the major factors at play.

The biggest player still is Saudi Arabia, and they're in particularly strong position due to Russia and Iran self-inflicting serious crises. The Saudis care primarily about Iran, but that aligns with the rest of their geopolitical interests. They accumulated a hefty war chest during the recent fat years, while their competitors not only didn't but overextended themselves, and now they want to use that war chest to set these competitors a bit further back.
On the plus side for US it provides the security of Saudi Arabia, so the core US interests won't be jeopardized.

The long term game is the same as always supply and demand, so the same cycles will continue. The weak oil companies in US will be bought by the big ones at a discount when the low oil prices make them unprofitable and will the oil will be pumped again when the prices climb up again.

People who now buy SUVs primarily because the gas is cheap will be cursing themselves and blaming the sitting politicians when the prices raise again. The us automakers have learned a bit from the past, so now they are much better at switching their production between gas guzzlers and fuel-efficient vehicle in response to the market conditions.

A move this big has winners and losers. "There Will Be Blood"

Canada has a crap load of oil, and if Obama would ever get around to signing the deal, North America could essentially be oil independent in time, something that I bet terrifies the Saudi's and OPEC...but somehow, Obama thinks giving money to the Saudi's is somehow clean, and Canada selling all our oil to the Chinese is a good thing...

Originally Posted by gugi

I was told by a well-connected source that after they build the Keystone-XL pipeline the oil will drop to three-buck-fiddy a barrel and the gas stations nationwide will be renamed to CocaCola/Pepsi stations where thirsty people could also buy gasoline if they feel like it.

Oil is fungible! A pipeline will have next to no effect on the global price of oil. If the price were to drop in the U.S. we would export it at a profit at global prices.