GAS PRICES ?

It amaze me that people disregard those with some knowledge of the market and the players and say it is just economic 101 when it is not.
The media is now 90% run by six Global Corporations intertwined with oil and the markets etc. Just because someone prints it or says it does not make it truth.

KD4UPL wrote:
It amazes me how many people choose to look anywhere except for basic economic principles when talking about economics. Conspiracy theories, rouge nations, evil government, evil corporations, etc., etc.
It's all about supply and demand. The US used to be a huge importer of oil. Mexico, Venezuela, and the Middle East sold us a lot of oil. Thanks to new discoveries of oil in the Dakotas and new drilling techniques to get it the US doesn't need to import as much oil anymore. When supply goes up and importing costs go down the price of petroleum products goes down. Oil production in this country is greater than it's ever been, largely thanks to the oil boom in North Dakota. It's basically the "drill baby, drill" philosophy that was made fun of by the left several years ago. The oil companies have indeed been drilling and prices have dropped. OPEC isn't happy about loosing market share so their dropping prices trying to keep selling us oil but we just don't need to import that much anymore.
If the Keystone pipeline gets built I would bet prices will go even lower because now the transportation costs of oil will be even lower. Domestic economic development, engineering, use of our own natural resources, etc. are leading to improved economic conditions. If more people understood these things we wouldn't be in half the economic mess we are in this country.

This is exactly what I've read and heard on the news.

wbwood wrote:

mlts22 wrote:
Here in Austin, they are back over $2.00 a gallon. I wouldn't be surprised to see them in the $4 range by Memorial Day, just because OPEC turned off the taps.

According to this, gas is still under $1.70 in the Austin area...

It depends on location. South or east Austin, gas prices may be a bit lower than north/west. I did find a place selling regular at $1.79.

I hate being doomsayer about lower gas prices, as I'm liking them as much as the other guy. However, even though oil is a market, it is completely controlled by a select few parties.

My fear is that what happens in the '80s-90s happens again, with people assuming cheap gas prices are permanent. Research and development on solar and other energy sources should not slow down just because oil prices might be at a low.

Of course, there is the long term view. The more US oil that stays in the ground, the better. If SA and other countries pump dry first, it gives domestic producers a strategic advantage, versus having to depend on imported oil.

crudeman wrote:

Water-Bug wrote:
True, but it is more economical to refine "sweet" crude. Desulfering is an additional process that costs $$$.

Yes but all refineries are not capable of a large diet of sweet crude, its just the way it is.

Agreed, it all depends on their target product. But the fact remains that the US exports low grade crude and imports sweet crude. There is a $$$ reason for that.

Water-Bug wrote:
True, but it is more economical to refine "sweet" crude. Desulfering is an additional process that costs $$$.

Yes but all refineries are not capable of a large diet of sweet crude, its just the way it is.

JMO but it's pretty obvious why a barrel of oil is so low. The Saudis won't cut back production, that along with the fracking in the U.S is why the price is so low. Saudis are trying to put fracking companies out of business. The Saudis can go lower on the cost of oil extraction than the U.S companies can. They're forcing the U.S fracking companies to either extract the shale oil at a loss or close up shop. IIRC the fracking companies are good for $70.00 a barrel. But I've also read where they can go to $40.00. Either way it's basically a game of chicken. I've also read where the Saudis have two years of revenues stock piled and are trying to outlast the fracking companies. Saudi Arabia needs oil revenue to run the government.

Last week I saw a local station at $1.72 with one across the road at $1.99. A few hours later the $1.72 station was up to $1.99. A few days later it was at $2.07. 20 miles south it was $2.14 at same branded stores. Oh well.

True, but it is more economical to refine "sweet" crude. Desulfering is an additional process that costs $$$.

Water-Bug wrote:
Truth of the matter is we export crude that would be too expensive to refine to meet our pollution standards. We're hypocrits who let the third world countries do the polluting. American diesel can only be refined from low sulfur crude, that is why it is more expensive than gas. The rest of the world doesn't care.

Diesel is refined from all crudes regardless of sulphur content, the sulphur can be lowered by desulphur units down stream. There's lots of nasty crudes distilled especially on the gulf coast.

Truth of the matter is we export crude that would be too expensive to refine to meet our pollution standards. We're hypocrits who let the third world countries do the polluting. American diesel can only be refined from low sulfur crude, that is why it is more expensive than gas. The rest of the world doesn't care.